Texas House Bill HB92

Texas 2025 - 89th 2nd C.S.

• Filed: 8/15/25

Caption

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.

Impact

If passed, HB92 could significantly alter the current landscape of tax laws at both the state and local levels. The repeal of specific tax structures may lead to increased discussions about how schools and local services are financed, which could affect budgets and operations within school districts. It aims for a broader tax reform that shifts away from traditional ad valorem taxes toward value-added tax models, potentially providing a more stable revenue source for local governments and schools.

Summary

House Bill 92 aims to address the tax structure in the state by proposing the repeal or limitations on certain state and local taxes, including school district maintenance and operations ad valorem taxes. The bill intends to enact state and local value-added taxes, along with related reform in school finance mechanisms. By restructuring these tax systems, the bill seeks to generate revenue more effectively while addressing issues related to local and state taxation authority.

Contention

There are notable points of contention surrounding HB92, particularly among legislators and advocacy groups. Proponents argue that the changes will modernize the tax system and enhance the efficiency of statewide revenue generation. Conversely, critics express concern that such reforms might disproportionately impact lower-income residents and local governance, as the shift to value-added taxes may not provide adequate funding for essential services traditionally covered by ad valorem taxes. The debate also touches on the implications for local control over taxation decisions, as communities may feel threatened by shifts in funding structures dictated at the state level.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 142. Simplified Sales And Use Tax Administration Act
  • Section: New Section

Education Code

• Chapter 45. School District Funds
  • Section: 0032

• Chapter 48. Foundation School Program
  • Section: New Section
  • Section: 2551
  • Section: 2552
  • Section: 2553
  • Section: 275

• Chapter 49. Options For Local Revenue Levels In Excess Of Entitlement
  • Section: New Section