Nikki Laing (J.D. 2011, Baylor) has published An Income Tax by Any Other Name Is Still an Income Tax: The Constitutionality of the Texas ‘Margin’ Tax as Applied to Partnerships and Other Unincorporated Associations, 62 Baylor L. Rev. 573 (2010). Here is part of the Conclusion:

In 2006, the Texas legislature passed H.B. 3, imposing a margin tax on partnerships and other unincorporated entities, to take effect on January 1, 2008. This margin-tax calculation, as explained above, is essentially the same as an income-tax calculation. H.B. 3 should have included a provision requiring a statewide referendum on the tax for two reasons. First, the constitutional amendment passed only a few years prior explicitly prohibits an income tax on a natural person’s share of partnership and unincorporated-association income. Second, H.B. 3 imposes a tax on partnership and other unincorporated entities owned by natural persons that consists of the same basic calculations as an income tax. Because H.B. 3 did not include a statewide referendum, and the tax imposed by H.B. 3 was not approved by Texas voters, the margin tax is unconstitutional when applied to the earnings of partnerships and other unincorporated associations owned by natural persons.