Texas Senate Bill SB653

Texas 2025 - 89th Regular

• Filed: 12/18/24

Caption

Relating to a refund of sales and use taxes paid on the purchase or use of building materials used to construct certain subsidized housing.

Impact

Under this bill, individuals can receive refunds for up to $50,000 in building materials for single-family homes and up to $5,000 per residential unit in apartments within a specified 180-day application period. However, the total refunds granted in any fiscal year are capped at $2 million, allowing for a structured approach to fund these incentives while attempting to promote affordable housing development. The refunds are limited to certain amounts in a calendar year, ensuring that the financial impact is moderated but still significant enough to encourage engagement in affordable housing efforts.

Summary

SB653 proposes a tax refund mechanism for sales and use taxes paid on building materials used in the construction of qualifying affordable housing projects. This legislation targets housing that has received federal or state tax credits for the purpose of ensuring affordability. For projects commencing on or after September 1, 2025, the new law allows individuals constructing single-family homes or residential units within apartment complexes to receive a refund based on the costs incurred for materials used during construction.

Contention

Notably, there may be debates surrounding the financial viability of the refund amounts and the budget allocation for such initiatives. Concerns could also arise regarding whether the cap on total refunds could limit the bill's effectiveness in achieving its objective of promoting affordable housing, particularly in areas with high construction costs. Additionally, stakeholders may discuss the administrative aspects of the refund mechanism and how effectively it can be implemented by the comptroller's office, which has the responsibility of overseeing applications and disbursements under the new law.

Texas Constitutional Statutes Affected

Tax Code

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