I would like to suggest the following bill ideas to the Texas Legislature. If you know someone who works in the Texas Legislature, feel free to send them a link to this post.
Suggestion #1: Fix Definition of “Data Processing” in the Comptroller’s Definition of Taxable Services
Background
The Texas Administrative Code was changed in 1988 with rule 3.330 to include data processing as a “Taxable Service.” When the law was passed, there was no World Wide Web. Since then, the Texas Comptroller has used this term to invent new taxes by defining “web design” and “web hosting” as “data processing.” In a digital age, every human activity that involves a smartphone or computer could be considered “data processing.” This poorly defined term has given the Comptroller to invent new taxes at will.
The problem:
Since this is an administratively invented tax, the Comptroller is unwilling to defend it in tax court. The result is that the Comptroller only enforces the tax against poor companies who cannot afford to challenge it in tax court. To my knowledge, every web design company that has challenged it has won and gotten exempted. The result is an uneven playing field where big wealthy companies get an advantage over small businesses.
The other problem:
Unlike physical goods, there is no significant benefit of having your website designed or hosted in Texas. One place on the Internet is the same as any other. The result is that Texas digital marketing companies are put at a disadvantage when selling to other Texas companies. This tax is particularly rough on the local Web design shop that works only with local small businesses. It has to compete with larger companies in other states who have an 8.25% price advantage.
Texas is one of the only states that taxes Web design at all. States like New York and California exempt Web design from sales taxes to protect the local small businesses from out-of-state competition. The Internet changes the game when it comes to state borders, and the tax law needs to reflect that.
Solutions:
Solution #1: Clarify the definition of “Data Processing” so that all Texas Web design/Web hosting companies have to pay the tax.
Advantage:
- Positive Fiscal impact.
- Levels the in-state playing field.
Disadvantages:
- Still puts Texas companies at a competitive disadvantage with out of state companies.
- Might destroy jobs if the big companies who currently get the exemption decide to move.
- Raising taxes doesn’t play well to the voters.
Solution #2: Remove “Data Processing” from the list of Taxable services.
This term is so antiquated it has become unhelpful. It is 2017. The days of punch cards are over, and the tax code should reflect that.
Advantages:
- Allows Texas companies to compete with non-Texas companies on a level playing field.
- Might increase jobs or bring them to Texas.
Disadvantage:
- Small negative physical impact.
Idea #2: Add an Enhancement for Domestic Violence Against Pregnant Women
Background:
Everyone thinks this law is already on the books, but it is not. The Laci Peterson bill applies only in the case of homicide.
The Problem:
Pregnant women are at greater risk of domestic violence because the abuser now has to compete for attention with the unborn child.
The Other Problem:
Violence against a pregnant woman creates two victims. Right now the law recognizes only one victim. If a man beats his pregnant girlfriend so badly she later has a miscarriage, he can only be charged with a misdemeanor.
There is no way to prove that a man is beating a woman as a form of forced abortion. But it is possible to have the law reflect that two lives are put at risk when there is violence against a pregnant woman.
The Solution
The law already has enhancement penalties for the elderly and disabled. Simply adapt these clauses to add pregnant women to the list of enhancements. It makes sense to add greater protections for those who are most vulnerable.
Idea #3: Create Standardized Grand Jury Education
The Problem
Prosecutors have to spend two days every quarter training new grand juries. This not only costs money, but it also diverts precious time away from prosecuting criminals.
The Other Problem
When a prosecutor trains a grand jury, it creates a student-teacher relationship. Most Grand Jury Eligible Americans are conditioned to submit to their teachers as authority figures. This is exactly the opposite relationship that a prosecutor should have with a grand jury. For the vast majority of felony defendants, the grand jury is the only jury they get. It is critical for a fair judicial process for that jury to be as fair as possible.
The public is often dismayed by grand juries’ decisions. This is because prosecutors have an undue influence on them due to the student-teacher relationship.
Solution
Have the state create a video Grand Jury Training Course. This training can be vetted by both judges, prosecutors, and defense attorneys to fairly convey the duties and responsibilities of the grand jury without bias or influence. The bailiff can facilitate the training. This way the grand jury and prosecutor have only one clearly-defined relationship.
While producing the training will cost money, it will save even more money by saving valuable time that is wasted on training every quarter. It will also make the grand jury process more fair, efficient, and just.
