Texas House Bill HB2889

Texas 2023 - 88th Regular

• Filed: 2/27/23

Caption

Relating to a credit against the ad valorem taxes imposed by a taxing unit on the residence homestead of a married couple that increases in amount based upon the number of children of the couple and reimbursement to taxing units for the revenue loss incurred as a result of the credit.

Impact

This legislation mandates adjustments to state tax law, particularly regarding property taxes levied on homesteads. Notably, it requires the state to reimburse local taxing units for any loss in revenue due to these credits. This requirement may lead to significant changes in how local governments budget for tax revenue and manage their fiscal responsibilities, ensuring they remain whole despite the tax credits given to married couples. The stipulation that local taxing units can file for reimbursement adds layers of complexity to the financial interactions between state and local governments.

Summary

House Bill 2889 introduces a tax credit against the ad valorem taxes imposed on the residence homestead of qualifying married couples. This credit increases in percentage based on the number of qualifying children within the couple's household. Specifically, the measure outlines eligibility criteria for 'qualifying children' and defines a 'qualifying married couple' as a legally married man and woman without any prior divorces. The credit starts at 10% but escalates to 100% for couples with ten or more children. Each couple or surviving spouse must apply annually for the credit through the chief appraiser of their local appraisal district.

Sentiment

Support for HB2889 revolves around its potential benefits for families, particularly those with multiple children. Proponents argue it would provide essential financial relief and incentivize larger families by decreasing their tax burdens. However, there are concerns about the costs associated with these credits and potential financial implications for local governments, potentially leading to a polarized sentiment around the bill. Opponents express worries about the fairness of such tax incentives and the strain it could impose on public funding avenues, particularly for education and local services.

Contention

The primary contention surrounding HB2889 centers on its impact on local government finances and equitable tax practices. Critics argue that while the intention behind the bill is commendable, the practical implications may not align with equitable taxation. Additional concerns focus on how supporting one demographic—married couples with children—may lead to unintended shifts in the tax burden onto other taxpayers and could negatively affect community resources. As the bill moves forward, discussions are likely to continue regarding its implementation and effectiveness in achieving its goals.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 31. Collections
  • Section: New Section

Local Government Code

• Chapter 140. Miscellaneous Financial Provisions Affecting Municipalities, Counties, And Other Local Governments
  • Section: New Section