Texas 2023 - 88th 3rd C.S.

Texas House Bill HB181

Voted on by House
 
Out of Senate Committee
 
Voted on by Senate
 
Governor Action
 
Bill Becomes Law
 

Caption

Relating to the abolition of ad valorem taxes and the creation of a joint interim committee on the abolition of those taxes.

Impact

If passed, HB 181 would lead to sweeping changes in how local governments generate revenue, fundamentally shifting reliance from property taxes to sales and use taxes. This change would necessitate careful planning to ensure that essential services funded by ad valorem taxes are not disrupted. The bill mandates the committee to analyze various factors, including the appropriate sales and use tax rates needed to generate equivalent revenue, which could lead to broader implications for local budgeting and taxation policies across Texas.

Summary

House Bill 181 aims to abolish ad valorem taxes and establish a joint interim committee to address issues related to this significant tax reform. The bill emphasizes the need for a comprehensive study to determine the most effective way to replace the local revenue that would be lost following the abolition of such taxes. It envisions the transition to local sales and use tax revenue as a substitute, thereby altering the existing fiscal landscape within Texas, particularly at the local government level.

Sentiment

The reception of HB 181 appears to be mixed among stakeholders. Proponents argue that abolishing property taxes could alleviate the financial burden on homeowners and businesses, fostering a more favorable economic environment. Conversely, critics warn about the potential risks of overhauling the tax structure, including potential revenue shortfalls that could jeopardize local services and disproportionately impact lower-income communities. This division highlights a broader conversation about equity in taxation and the role of local governments in funding public services.

Contention

A notable point of contention revolves around whether the proposed changes would adequately replace the revenue from ad valorem taxes without adversely affecting funding for essential local services. Some legislators express concern that shifting to a sales-based revenue model could lead to increased tax burdens on lower-income households, as they typically spend a higher percentage of their income on sales-taxed goods. Moreover, accountability regarding the management and redistribution of tax revenues generated through sales and use taxes is anticipated to be a significant topic of debate as the bill progresses.

Texas Constitutional Statutes Affected

Tax Code

  • Chapter 1. General Provisions
    • Section: New Section

Companion Bills

TX HJR7

Enabling for Proposing a constitutional amendment to abolish ad valorem taxes.

Previously Filed As

TX HB3455

Relating to the abolition of ad valorem taxes and the creation of a joint interim committee on the abolition of those taxes.

TX HB16

Relating to the abolition of ad valorem taxes and the creation of a joint interim committee on the abolition of those taxes.

TX HB13

Relating to the abolition of ad valorem taxes and the creation of a joint interim committee on the abolition of those taxes.

TX HB1513

Relating to the elimination of ad valorem taxes and the creation of a joint interim committee on the elimination of those taxes.

TX HB34

Relating to the elimination of ad valorem taxes and the creation of a joint interim committee on the elimination of those taxes.

TX HB29

Relating to the elimination of school district maintenance and operations ad valorem taxes and the creation of a joint interim committee on the elimination of those taxes.

TX SB1890

Relating to the elimination of school district maintenance and operations ad valorem taxes and the creation of a joint interim committee on the elimination of those taxes.

TX HB43

Relating to the repeal of or limitations on certain state and local taxes, including school district maintenance and operations ad valorem taxes, the enactment of state and local value added taxes, and related school finance reform; imposing taxes.

TX HB577

Relating to the repeal of or limitations on certain state and local taxes, including school district maintenance and operations ad valorem taxes, the enactment of state and local value added taxes, and related school finance reform; imposing taxes.

TX HB268

Relating to the repeal of or limitations on certain state and local taxes, including school district maintenance and operations ad valorem taxes, the enactment of state and local value added taxes, and related school finance reform; imposing taxes.

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