Comptroller Forum – Hilderbran: Texas Needs a Taxpayer Bill of Rights

Texas is a great state and our economy is the envy of the nation. But as Chairman of the House Ways and Means Committee for the past three years, I have seen firsthand that our state’s tax collection system badly needs reform.

In the past decade, the balance of power in tax disputes has troublingly tilted toward the state and against the Texas taxpayer. That runs afoul of a fundamental fairness principle: The state should have no greater rights than the taxpayer. The goal should be to balance the playing field.

I have proposed a comprehensive Texas Taxpayer Bill of Rights, which, as Comptroller, I will implement through executive action, legislative action, and eventually push to enshrine in the Texas Constitution through a Constitutional Amendment so that these rights cannot be changed on a whim.

This is my top priority should I be elected Comptroller. Let me be specific about what my Texas Taxpayer Bill of rights would do:

• Stop cheating taxpayers on interest payments — Texas taxpayers deserve parity in the way interest is applied to tax refund claims and assessments.
• The State today treats its money as being more valuable than a taxpayer’s money. If a Texas taxpayer underpays taxes, the state charges interest on the unpaid tax at a significantly higher rate than the rate it pays when the state has to refund money to a taxpayer. This must end.
• Stop collecting tax assessments until appeals are final — Texas taxpayers deserve their day in court before they have to pay. Currently, Texas taxpayers can be faced with losing their businesses when hit with large tax assessments that may not be correct. Under the state’s “Pay to Play Scheme,” the state begins enforcement and collection actions before you can even get to the courthouse. I’ll put an end to this decades-old unfair practice.
• Quit making taxpayers wait to get their money back — the Texas economy is strong and getting stronger and taxpayers should not have to wait for their tax refunds. The current practice of long waits must end.
• Stop making taxpayers guess what the law is — Texas taxpayers should have the right to accurate tax guidance when needed. Taxpayers just want to know the correct way to report taxes, but the rules in place today almost guarantee that, in many instances, they get no guidance at all.
• End lopsided dispute and appeal processes — Texas taxpayers deserve a truly fair and impartial forum for settling tax disputes. From start to finish, the process today gives the state advantages that the taxpayer does not get. Worst of all, if a taxpayer actually wins a tax dispute before an administrative law judge, the comptroller can still — and often does — reverse the judge’s decision.

I will advance taxpayer protections on these broad principles:

If the IRS opens a federal audit, any subsequent state audit will be limited in scope and time only to that which the IRS is investigating.

If a federal audit uncovers facts that conclude a taxpayer is due a refund from the state, the state should make it easier for the taxpayer to obtain that refund.

If a legal tax protest is underway, a taxpayer does not have to pay the full tax amount until it is adjudicated.

The time requirement to file a tax protest will increase to 90 days from 30 days.

Taxpayers should receive the same interest rate on refunds due as the state charges taxpayers when collecting deficient taxes.

The statute of limitations on tax audits will be limited and cannot be continually extended.

Tax collection is part of the constitutional role of government. But tax rules must be fairly applied.

State Rep. Harvey Hilderbran is a candidate for Texas Comptroller.