Bill > HB99

This bill proposes a significant overhaul of Texas's tax system, focusing on education funding and taxation methods. Specifically, the bill would eliminate school district maintenance and operations (M&O) ad valorem taxes (property taxes) beginning in 2030, contingent upon voter approval of a related constitutional amendment. To replace these property taxes, the bill introduces a state value-added tax (VAT) set at an initial rate of 6.72%, with all revenue being deposited into the Foundation School Fund to exclusively support public education. The bill also directs the Texas Comptroller to conduct a comprehensive study by December 1, 2026, examining the feasibility of replacing all local property taxes (including those levied by counties, municipalities, and special districts) with local value-added taxes. The study must analyze revenue needs, potential VAT rates, administrative models, economic impacts, and necessary legal amendments. The legislature intends to use the Comptroller's recommendations to draft legislation during the 90th Regular Legislative Session that would eliminate remaining local ad valorem taxes and replace them with local VATs, with implementation targeted for January 1, 2030. Additionally, the bill repeals various provisions in the Tax Code and Education Code related to current property tax and school funding mechanisms.

Budget and Finance

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=892&Bill=HB99