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Case Against Texas Business Tax Before Top Court

Tax is a major source of funding for public education

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    flickr/Silly Jilly

    Attorneys for the state are set to defend Texas' business tax.

    Claims that it violates the Texas Constitution are part of a case starting Monday in the Texas Supreme Court.

    A Boerne insurance firm filed a lawsuit in July, claiming the tax violates a constitutional provision that requires the Legislature to get voter approval before imposing an income tax, according to a report in the Austin American-Statesman.

    The case hinges on whether the margins tax -- implemented in 2006 as part of the court-ordered school finance fix -- constitutes an income tax when applied to certain business partnerships.

    The tax is a major source of funding for public education.

    The law includes a provision that any legal challenges to the law would go straight to the Texas Supreme Court.