Samsung Electronics Co., one of the largest taxpayers in Travis County, could double its $13 billion investment here over the next five years, a company official said Wednesday. Or not. A crucial factor in whether future fabs are built here or in the company's home country of South Korea rests with the Texas Legislature, said Catherine Morse, a company spokeswoman. If lawmakers don't reauthorize the so-called Chapter 313 tax break that allows steep discounts on school property taxes for qualified companies, those additional billions in investment might not come to Central Texas, Morse said.
The law allows school districts to defer for eight years the time before new projects go on the tax roll at full value. Since 2001, local school trustees have granted property tax breaks to qualifying businesses locating or expanding in their districts, and the state has covered the districts' lost revenue by increasing their state aid. The estimated cost to the state is about $400 million over its two-year budget. The Select Committee on Economic Development heard testimony Wednesday that Texas' low-tax reputation doesn't apply across the board.
The lack of a personal income tax helps individuals and small businesses, but it also forces the state to rely heavily on sales and property taxes — the two biggest taxes that Texas businesses pay. Dale Craymer, president of Texas Taxpayers and Research Association, cited a 2011 study by the Minnesota Taxpayers Association and the Lincoln Institute of Land Policy.
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