What’s changed is how online shopping has transformed tax rebates into money-making machines for a growing number of businesses and Texas communities.
HOW IT ALL BEGAN: In Texas, tax incentives were often against the lawĪ wide variety of incentives can be offered under such agreements, and rebates on sales taxes are nothing new. There’s no limit on the duration of each deal no minimal job-creation requirements and no reporting on how much the agreements ultimately cost taxpayers. Known as “Chapter 380” for cities and “Chapter 381” for counties, the laws were passed during the recession of the 1980s without the typical safeguards that lawmakers placed on other economic incentive programs. "I feel like it should have gone to the town where I was living in, you know?"īest Buy’s tax incentives were made possible by obscure Texas laws that allow cities and counties to sign such deals with few restrictions - even if it means taking tax money from Texans who have no say in the agreements. "It does bother me," Kadiwal said in a recent interview after he learned how his tax dollars were spent. Total payments to Best Buy since 2017: more than $40 million. Under economic incentive agreements signed with Best Buy, San Marcos and Hays County gave 75 percent of the net tax revenue to the company after it opened an “e-commerce sales operation” and hired up to 112 new full-time employees.
The true number is probably higher because some cities are trying to withhold that information.Īnd most of the tax dollars collected by the city and county weren’t spent on fixing streets, paying firefighters or funding other essential government services. More than $220 million in sales-tax rebates have been paid to retailers.Much of that tax revenue goes right back to huge online retailers such as Dell, Kohl's and Best Buy thanks to economic incentive agreements made possible by an obscure Texas law.Online shoppers across Texas are paying millions in sales taxes to a handful of cities and counties - even if they don't live in those communities.
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