Bill > HB4648

This bill proposes a comprehensive overhaul of Texas's tax and education funding system by eliminating ad valorem taxes (property taxes) and local sales taxes, while implementing a uniform state sales tax. Specifically, the bill prohibits the state and political subdivisions from imposing ad valorem taxes after January 1, 2026, and bans school districts from levying property taxes for maintenance or operations after that date, with a complete prohibition on property taxes for debt service by January 1, 2033. The legislation increases the state sales tax rate from 6.25% to 15% and expands the definition of taxable services to include virtually all services. The bill establishes a new funding mechanism for schools, where the Foundation School Program will be funded entirely by the uniform state sales tax revenue, and requires each school district to establish a private citizens board to help administer and distribute funding. Local governments will receive legislative appropriations to replace their lost tax revenues, and the bill repeals numerous existing tax code provisions related to local and specialized taxes. The legislation also mandates that the commissioner of education provide annual reports on school district funding, and includes provisions ensuring that existing tax liabilities prior to January 1, 2026, remain enforceable under previous laws.

Budget and Finance

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB4648