Bill > HB61

This bill proposes a comprehensive tax reform in Texas that would replace current local sales taxes and school district maintenance and operations taxes with a new Value Added Tax (VAT) system, effective January 1, 2030. The bill establishes a 6.72 percent state VAT that would apply to services and property supplied in the ordinary course of business, with specific exemptions for small businesses, government entities, and non-profit organizations. Local political subdivisions would be allowed to impose a local VAT with a combined rate not exceeding 2 percent, and school districts could impose an additional enrichment VAT of up to 0.5 percent, subject to voter approval. The bill would prohibit school districts from levying maintenance and operations ad valorem taxes after January 1, 2030, contingent on a constitutional amendment approving this change. To ensure continued school funding, the legislature would be required to appropriate sufficient funds through the Foundation School Program to provide a basic allotment of at least $6,160 per student in average daily attendance. The bill also includes provisions for transitioning school district finances, with the commissioner of education assisting districts in classifying expenditures as "foundational" or "enrichment" and providing state funding for foundational bonds. Additionally, the bill would repeal various sections of the Tax Code and Education Code related to the existing tax structure.

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=891&Bill=HB61