Texas has a few Texas Constitutional Amendments up for vote this year. I’m reading my way through them to try to understand what they mean. Some of them are described well enough here (pdf) that I can make sense, but a few are lacking details or just too jargon-laden for me. I’d like some help making sense of these things, or pointing me at more info.
For simplicity, I’m breaking the ones I care about into separate threads. I’m going to look at Prop 3, Prop 4, and Prop 6. This thread will be Prop 3.
Prop 3 is listed as HJR 133. HJR 133 authorizes local political subdivisions (i.e. cities, counties, etc) to extend the length of time that aircraft parts could remain in Texas before being subject to ad valorem taxation (i.e. property tax). Under current law, materials may remain for up to 175 days before being taxed as property. The intent is to allow materials to be kept in warehouses and such prior to being used in fabrication of goods or shipped to other states. This proposed amendment would extend the tax exemption window to 730 days, i.e. 2 years.
The preposal for the ballot reads:
The supporters of the proposed amendment argue
I think I understand the intent of the proposal. The supporters feel that the current law is insufficient for aircraft parts suppliers, and that aircraft parts suppliers are somehow subject to conditions that don’t apply to other industries, and as such, should have a longer window. That is an arguable opinion.
My question with regards to this preposal is the argument relating to other states and the possible competitive disadvantage. Are their other states that have longer tax exemption windows, or no taxation, for aircraft parts and materials held in inventory? Or is this a more theoretical “it could happen” kind of justification? In other words, just how real is this competitive disadvantage?