Jim Benge is a major part of the vision that brought favorite Dallas eateries like Crushcraft, Bottled Blonde and Kent and Co together. Jim is a seasoned commercial contractor and he has the experience to know what is best for the industry.
After 37 years of hard work, Jim wants to better his industry as it moves into the future, and he has found a way to do just that. The current tax law creates an unusual burden for those who remodel commercial real estate. Unlike every other type of construction contracting (new commercial construction or any residential construction), commercial remodeling projects are forced to charge clients an 8.25% tax on all labor.
The problem? Well to start, these taxes are arbitrary. Jim has yet to hear a single reason or justification for the distinction between markets. But it’s more than that.
Jim feels the Commercial Remodel Tax (Texas Administrative Code, Title 34, Part 1, Chapter 3, Subchapter O, Rule 3.357 and Rule 3.291) has two main issues.
First, it is easily avoidable. Many contractors continue to operate while never collecting this tax. This is possible because there is a massive number of contracts in Texas at any given time and it is unrealistic for comptrollers to monitor all of those jobs. This allows contractors who skirt the tax to consistently undercut prices or collect the tax but pocket the money instead of remitting it.
By simplifying how this revenue is collected from contractors, Jim believes there would be a much higher level of compliance which in turn would create more revenue for the state.
The second issue arises from clients failing to complete payments. A breach of contract is already an issue, but the state collects the commercial remodel tax at the end of a contract regardless of whether the contract has been paid in full or not. This is an issue because contractors are forced to divide their money between covering subcontractors and vendors threatening to sue, legal fees to recoup losses and paying the state for this tax.
Often, it is not profit from the job that the contractor is juggling, but money from his own pocket.
Jim believes this law cannot remain in place and that no minor reform will solve the problem. There must be a full replacement that continues creating state revenue while working for the contractors who work to generate that revenue.
He’s launched a campaign to create change and is looking for all the help he can get. Learn more at http://www.acrttexas.com
