Bill > HB260

This bill establishes a joint interim committee to study the comprehensive replacement of ad valorem taxes (property taxes) with local sales and use taxes in Texas. The committee will consist of five representatives from the House and five senators, appointed by the House Speaker and Lieutenant Governor by February 1, 2026. The committee's primary task is to conduct an extensive study on how to replace local tax revenue lost by abolishing property taxes, including evaluating the potential sales tax rates needed to generate equivalent revenue for different political subdivisions. The committee will examine whether local governments could impose sales and use taxes, assess potential tax rate adjustments, consider revenue redistribution mechanisms to address disparities, and identify any implementation challenges. By December 1, 2026, the committee must submit a written report with study results and recommendations to the legislature. The bill is contingent on a constitutional amendment abolishing ad valorem taxes being approved by voters, with the committee and initial provisions taking effect in January 2026 and the actual tax abolition set for January 2031. The bill also explicitly repeals Title 1 of the Tax Code and prohibits the state and its political subdivisions from imposing ad valorem taxes after the specified date.