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Texas bill replaces school property taxes with a 6.72% state value-added tax and directs comptroller to study local property tax replacement

Original title: 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, related school finance reform, and directing the comptroller to identify alternatives to local ad valorem taxes; imposing taxes.

Last action · July 17, 2025: FiledSponsor: Jay Dean

Introduced
Committee
Floor Vote
Passed
Law

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What This Bill Proposed

Texas school districts are prohibited from levying property taxes starting January 1, 2030, contingent on voter approval of a constitutional amendment. To replace the lost revenue, a new 6.72% state is established to fund public education operations.

Who It Would Have Affected

Groups the bill's text would have affected, as described in the record. Being affected is not a position for or against it.

Directly affected

school districts

School districts are prohibited from levying maintenance and operations ad valorem taxes beginning with the 2030 tax year.

Directly affected

consumers

Directly affected

comptroller of public accounts

The comptroller is tasked with adopting rules to administer the tax and delivering a study on local property tax replacement by December 1, 2026.

Key Facts

You don't have to trust us. Each fact below is taken straight from the official document - click any one to see the exact passage, highlighted in the original.

Frequently Asked Questions

What is the comptroller required to do regarding local property taxes?
The comptroller must conduct a comprehensive study on replacing all local property taxes—including those levied by counties, municipalities, and special districts—with local es and submit a report with recommendations by December 1, 2026.

What else do you want to know?

News Coverage

No news coverage found yet. Articles are indexed twice daily.

Where This Stands

This bill did not become law - Died at adjournment · introduced in the House.

Procedural history

1 action
  1. Jul 17, 2025HouseIntroduced
    Filed

Version history

Only one version on file - nothing to compare yet. As later stages (committee substitute, engrossed, enrolled) are captured, the redline appears here.

View official text →

Lobbying Activity

No state lobbying filings in our records match this bill. Federal lobbying reports (LDA) cover Congress, so they are not listed on state bills.

Full breakdown

Who this bill affects and the strongest case for and against it, written only from the bill’s own text.

Sponsors

Discoveries

1 pattern noticed across the record

Patterns POLISCOPE noticed across the record. These are observations to investigate, not conclusions.

policy shift98% confidence

Transition from Property Tax to Value-Added Tax

The bill establishes a dual framework: an immediate statutory transition for school district M&O taxes tied to a constitutional amendment in 2030, and a mandated study by the comptroller to extend the same replacement model to all local government property taxes.

Connected Entities

Foundation School Fund, Jay Dean, Comptroller of Public Accounts
OrganizationFoundation School Fund“Receives all revenue generated by the state VAT to fund public education”Map →
PersonJay Dean“Author of House Bill 116”Map →
OrganizationComptroller of Public Accounts“Directed to conduct a study and adopt rules for the value-added tax”Map →

Sources

Open source document

capitol.texas.gov

Analysis Score

0–100
  • Significance20
    Lowered because this bill did not pass (its text scored 90)
  • Controversy85
    Intensity of disagreement among stakeholders
  • Entertainment15
    Compellingness for a non-policy-wonk reader
  • Buzz75
    Current news / social attention level

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