Death, Taxes, and Senate Bill 1: Texas Legislative Restaurant Update

Sevy’s co-owner Amy Severson makes this claim: “A full-service, lunch-and-dinner- liquor-serving business generates more taxes per-square-foot than most industries.” Below she wonders why the Texas State Legislature continues to penalize small to mid-sized restaurant owners. Hear her roar.

Imagine if you were sitting down for coffee with Uncle Sam, and the conversation started like this:

Uncle Sam: “Hey, we’re having a little budget problem and we’re going to collect your next month’s taxes out of your next paycheck.”

You: “But I might not have a job next month, and this month I have a mortgage that needs to be paid, utilities, car payment, kids in college [the list goes on]. How can I pay you ahead of time if I haven’t earned the money yet?”

Uncle Sam: “Whatever.”

Certainly this scene would not be appetizing to any taxpayer – individual or business – especially in a state that touts its tax friendliness. So it was a surprise to read in the 2011 Legislative Update issued by Susan Combs Comptroller of Public Accounts, that the State of Texas has cooked their books with a recipe for disaster for small restaurants. They’ve added Senate Bill 1, an “advance tax payment” plan to balance their biannual budget.  This follows a revised state franchise tax that burdens restaurants with a very high effective-net-income rate. They are literally trying to kill us.

Gory details below.

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