AUSTIN, Texas (AP) _ The Texas Supreme Court has struck down a constitutional challenge to the state’s business tax in a case that threatened a major impact on the state budget.
The all-Republican court ruled Monday that the tax created in 2006 does not violate the state ban on personal income taxes without voter approval.
Boerne-based insurance adjuster Allcat Claims Service LP challenged the tax a personal income tax when applied to certain business partnerships.
The business tax, also known as the margins tax, is a key source of money for public education even though it has raised far less revenue that projected. It raises more than $4 billion per year.
Texas has had a constitutional ban on a personal income tax without voter approval since 1993.
(Copyright 2011 by The Associated Press. All Rights Reserved.)