Businesses’ share of tax load hard to break down

Figure in Texas changes if sales taxes taken out of equation.

DON HUFFINES Statement: “Sixty-two percent of all (Texas) property taxes are paid by businesses.”

State Sen. Don Huffines, R-Dallas, all but scolded students and parents visiting the Capitol who insisted their tax dollars should help improve public schools rather than help fund private schools.

Huffines, who has pushed for private school vouchers and “school choice” legislation, asked the visitors from the Richardson school district why they think they can decide where tax dollars should go when, he said, “62 percent of all property taxes are paid by businesses,” not individuals, according to a video of his Feb. 27 appearance taken by an audience member and posted on YouTube by the pro-Democratic Lone Star Project.

Readers asked us to check the share of property taxes paid by businesses, which turned out not to be as straightforward a calcu-

lation as hoped.

An aide for Huffines said the senator drew his “62 percent” figure for the business share of property taxes from data cited in a January 2017 research report by the Texas Taxpayers and Research Association, a nonpartisan business group. The report attributed the data to the Council on State Taxation, a Washington-based trade association for corporate businesses.

“Nationally,” the Texas group reported, “business accounts for 44.1 percent of all state and local taxes. In Texas, business foots 61.5 percent of the total bill.”

That’s a bit up from what we confirmed in a 2013 fact check finding Mostly True a claim by a Texas Association of Business leader that businesses were paying roughly 60 percent of all state and local taxes — not just property taxes. At the time, a state projection indicated businesses would soon foot 52 percent of all state taxes with residents covering 48 percent.

But Huffines was speaking solely about the business share of property taxes collected by local jurisdictions, including school districts and city and county governments.

Hunting figures specific to property taxes only, we turned to the council’s December 2016 report, the same one cited by TTARA, analyzing taxes paid by businesses in the 50 states the year before. In fiscal 2015, the report says, “Texas had the largest dollar increase in business property tax revenue for the third year in a row, collecting $1.3 billion more than in 2014.”

We didn’t spot any breakdown of the business share of property taxes alone; otherwise, a chart says Texas businesses paid $35 billion in local taxes that year, amounting to 63 percent of $55.3 billion in locally levied taxes including sales and property taxes.

We had better luck with TTARA’s president, Dale Craymer, who told us its latest published foray into estimating the business share of property taxes was a May 2008 TTARA research report stating that in 2007, businesses paid 56.4 percent, or $19.5 billion, of $34.6 billion in property taxes collected statewide.

Craymer said the association estimated the business share of property taxes starting from biennial reports by the state comptroller breaking down the types of property of businesses and residents, and also drawing on research by the Bureau of Economic Analysis, which analyzes property taxes paid by different types of industry.

The comptroller’s latest data, covering fiscal 2014-15, lists categories of property taxpayers, but the data are hard to decipher because each one is further sorted by governmental jurisdictions with school districts and city governments, for instance, analyzed separately. Most of the 18 categories of property struck us as hard to divide into paid-by-business versus paid-by-others.

Fair point, said Austin economist Stuart Greenfield and TTARA analyst John Kennedy. Both said that grouping the categories presented by the comptroller into “businesses” and “residents” isn’t a black-and-white exercise. For instance, Greenfield said, property taxes classified as “multi-family residential” lumps together taxes paid by residents and business owners.

That said, the comptroller’s figures applicable to school districts alone suggest that homeowners through 2014-15 paid 43 percent of all school property taxes with others, including businesses, accounting for 57 percent.

Seeking a state estimate covering all property taxes paid by businesses, we connected with Kevin Lyons, spokesman for Comptroller Glenn Hegar, who gently said no dice. Lyons told us that the agency doesn’t track the business share of property taxes.

Then again, he pointed us to biennial comptroller reports projecting business and consumer shares of property taxes levied by type of jurisdiction two years down the road.

The latest report, published about three weeks before Huffines spoke, states that businesses in fiscal 2019, beginning Sept. 1, 2018, will likely account for 51.4 percent of what school districts raise in property taxes with individual consumers ponying up 48.6 percent.

Our ruling

Huffines said businesses pay 62 percent of all property taxes.

That figure reflects the business share of all state and local taxes including sales taxes, not property taxes alone. Most recently, in contrast, a state projection predicts businesses will account for 51 percent of what school districts raise from property taxes in 201819, a share in keeping with previous projections.

We rate this claim Half True.