Letter to Governor Rick Perry: Veto HB 1845

The Honorable Rick Perry


P.O. Box 12428

Austin, Texas 78711

Dear Gov. Perry:

On behalf of our 48,000 individual members of Texas Citizens for a Sound Economy, I am writing today to strongly encourage you to veto HB 1845. This bill provides little support to the future tax revenue of our state and no protection for Texas consumers and taxpayers. In fact, if enacted, this legislation would open the door to more oppressive tax collection methods brought to bear on Texans by tax officials from other states. We strongly urge your veto of the legislation.

In particular:

The ostensible reason to enact this law is to encourage “sales tax simplification.” However, the primary purpose of the legislation is to encourage participation in a multi-state tax organization that has proposed a cartel among tax collectors to increase tax revenues. New revenues would be realized by subverting a long-held doctrine of citizen protection from out-of-state tax collectors by the Supreme Court. We already have the power to simplify – and reduce – the sales and use tax rates of Texas. Empowering the comptroller to enter a cartel with other states to tax consumers more is the wrong step to take at this – or at any – time.

The type of proposal that the state comptroller may negotiate and enter into on behalf of the citizens of Texas must “set restrictions to limit over time the number of state rates” for sales and use taxes. However, this is precisely the opposite direction that public policy should go. Competition improves quality, lowers prices and creates innovation. Competition between nearby states and localities has the same effect. There are consumer benefits to every citizen in a jurisdiction with a low tax rate. In addition, there are secondary benefits to the citizens of nearby jurisdictions where a downward pressure on tax rates is created to compete with the low-tax jurisdiction. HB 1845 would eliminate this benefit to taxpayers.

Despite claims to the contrary by the Streamline Sales Tax Project, a multi-state tax agreement envisioned by this legislation would require federal approval under the Compact Clause – Article 1, Section 10 – of the U.S. Constitution. Absent Constitutional authority, it would be prudent for Texas to put on hold ingenious new ideas on how to tax the Internet and electronic commerce. Many pillars of economic growth buttress a strong economy. The high-tech economy that has found a home around Austin and throughout Texas should neither be punished nor singled out for new interpretations of the Constitution’s Commerce Clause because revenue officials would like to collect more money from consumers.

Thank you. CSE’s work on Internet taxation is now in its fourth year. Interest and activism is as high as our research and analysis is deep.

Please veto SB 1654. Thank you for your consideration of our request and thank you for your leadership and service to the citizens Texas.


Peggy M. Venable

State Director