Contributed Editorial

This small business week, take notice of the front porches in your neighborhood. Of the schoolyards and courthouses you pass on your way to work. Although they’re all different places, they typically share one thing in common: the stars and stripes fluttering in the wind.

It’s very possible those flags were made right here in Texas.

For more than 20 years, Eagle Mountain has called Wimberley home. As flag dealers, we offer our customers a host of different products all made right here in the U.S.A. and specialize in turnkey solutions for residential and commercial facilities.

But owning and operating a small business like ours has not come without its share of challenges.

Not only do I have to compete with fellow flag dealers, but I must compete with Texas, which has several resources at its disposal. The state can sell flags at or below cost, which puts at least 30 independent flag and flagpole dealers at a significant disadvantage.

As if the state wasn’t already selling flags for a steal – they also dodge the taxes they levy on their competition. The inventory tax, for example, only exacerbates this uneven playing field. Although our state has a long tradition of championing the entrepreneurial spirit, this tax risks undermining future innovation and opportunity for our state.

Take, for instance, our new, groundbreaking product: the RePatriot flag. Available in both the American and Texas colors, we offer our customers a unique flag product made entirely from post-consumer recycled plastic bottles.

We’re the only dealers in the country to stock this innovative flag.

But this was no small feat. We had to invest $300,000 in physical inventory for our manufacturer to justify production. In doing so, we more than tripled our physical inventory. Because Texas taxes that inventory – and everything else in our business – regardless of whether it turns a profit, the check we cut to the state increased by 33 percent.

As one of only nine states that levies a tax on inventory, Texas is ceding its economic might to neighboring states with much more reasonable tax codes.

With a $33 billion budget surplus, the inventory tax is nothing more than a mere drop in the bucket for the state. But for me, it’s a slap on the wrist for pursuing innovation and offering a unique product. It’s also terrible for consumers, who always shoulder the burden of high taxes.

Readers are familiar with the economic challenges that small businesses face. They’re feeling the pinch too.

Both Governor Greg Abbott and Lieutenant Governor Dan Patrick have committed to delivering real property tax relief this legislative session, and both the House and the Senate have passed their respective proposals. However, we’re less than one month from the end of session and at gridlock. Small businesses can’t afford to wait for negotiations. As the economy remains uncertain – and the chances of tax reform remain up in the air – the more challenging it becomes to predict and plan ahead.

If the Texas Legislature wants to take a stand for local job creators this small business week, tax relief is a great place to start. Any tax relief would help level the playing field and make it easier for us to keep our flags flying high for every small business in the state.

Lisa & Dan Pitcher own and operate Eagle Mountain Flag & Flagpole in Wimberley, Texas.