Texas House Bill HB135

Texas 2025 - 89th 1st C.S.

• Filed: 7/21/25

Caption

Relating to a comprehensive review of taxable goods and services.

Impact

This legislation aims to impact state laws significantly by analyzing the existing sales and use tax framework and determining its effectiveness in today's economic landscape. The comprehensive report that the comptroller is required to prepare by December 1, 2026, will provide valuable insights on the revenue effects of possible expansions to the tax base, as well as the respective impacts on different income groups and geographical regions across Texas. By doing so, it may offer pathways for future legislative adjustments to enhance state revenues as needed.

Summary

House Bill 135 mandates a comprehensive review of Texas's sales and use tax structure, which is governed by Chapter 151 of the Tax Code. The bill requires the comptroller of public accounts to inventory all goods and services currently subject to sales tax and those that are exempt. This examination includes a comparative analysis of Texas's tax base against the structures of other states, assessing what other items might be taxable according to common practices elsewhere. The focus is on evaluating goods and services that could potentially be incorporated into future tax reform proposals, targeting both existing exemptions and new sectors of the economy that are emerging in Texas.

Contention

There are several notable points of contention surrounding the perceived implications of this bill. On one hand, its proponents may argue for increased fairness in the tax system, suggesting that expanding the taxable base could lead to a more equitable tax structure that reflects current economic realities. Conversely, opponents might express concerns regarding how such taxing changes could affect small businesses and consumer behavior, potentially viewing this as a hidden tax increase aimed at expanding state revenue at the expense of taxpayers.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 151. Limited Sales, Excise, And Use Tax
  • Section: New Section