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ASA seeks to change Texas franchise tax law

Order Reprints

June 11, 2012—The Automotive Service Association (ASA) last week testified during a hearing before the Ways and Means Commission in Austin, Texas, regarding inequity in the current Texas franchise tax code.

Charles Parker, executive director of ASA-Texas, during the hearing said that independently owned automotive repair and collision businesses in Texas are being denied equal treatment under the law. He said automotive repair and collision shops that are owned and operated by car dealerships are taxed at half the rate compared to independently owned businesses doing identical work.

Parker said the inequity is justified in Texas’ tax code by classifying dealership sales as “retail,” and allowing their service and repair business to be included under that banner.

“Furthermore, repair shops operated by tire companies, parts stores and mass-merchandisers are also charged at half the rate paid by independent repair shops,” Parker said. “We should not be taxed at a rate different than a business performing an identical service. We should not be denied the true cost of our product by disallowing our skilled labor.”

The ASA is seeking the passage of a proposed bill in Texas, House Bill 429, and its companion Senate Bill 476, that would allow independent automotive repair shops to be taxed the same amount that dealers, parts stores and tire stores are now taxed.

The ASA advocates for Texas repairers to help gain approval of the proposed bills by contacting their state legislators and sending letters in support of the legislation.

ASA member shop operators who testified during the hearing included Johnny Bang, owner of Johnny Bangs and Bumps Shop Inc. in Tomball, Texas; Danny Sullivan, owner of Sullivan Advanced Auto Care in Kingwood, Texas; and Vince Oliva, owner of Vin’s Paint and Body Mid Co. Inc. in Nederland, Texas, and Vin’s Paint and Body Inc. in Beaumont, Texas.

“We were very pleased with the number of ASA members who took time away from their businesses to attend the hearing and demonstrate how important it is to change the current franchise tax law in Texas. We ask other shop owners in Texas to take the time to contact their legislators asking them to support ASA’s efforts,” said Denise Caspersen, collision division manager for the ASA.

For more information, visit the ASA’s legislative website, takingthehill.com.

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