TexasVoters could approve a local sales tax partly tied to property tax relief
Municipalities and counties could ask voters to approve a local sales and use tax of up to 1%, with half the revenue counted toward property tax relief.
What it does
A municipality or county could ask voters to adopt a local sales and use tax of up to 1%, or to abolish it. Adoption would depend on voter approval.
Half of the tax money would count toward property tax relief under state law. The local government could use the other half for any purpose allowed for its general funds.
Property tax bills would estimate the extra property taxes that would have been imposed if an equal amount had instead come from property taxes.
Argument forVoters could approve a tax that directs half its revenue toward property tax relief, which may help local governments reduce property tax rates.
Argument againstShoppers could pay more sales tax if voters approve the tax, while local governments could use half the revenue for general purposes.
More detail
A municipality or county could ask voters to adopt or abolish the tax. The election order must state the proposed tax rate, and the ballot must explain that the tax is for property tax relief and general government purposes. Voters must approve adoption or abolition at an election. The tax rate may not exceed 1%. Adoption or abolition would take effect on the next January 1 at least six months after the comptroller receives the election results.
The municipality or county would divide the tax revenue between property tax relief and general government use. This allocation applies to revenue from the supplemental tax imposed by the municipality or county. Half of the revenue would count as additional sales and use tax revenue under Section 26.041. The local government could use the remaining half for any purpose allowed for its general funds.
Property tax bills would show an estimate of the additional property taxes that would have been imposed without the local sales tax revenue. This applies in a municipality or county that imposes an additional sales and use tax. This bill information would apply to property tax years beginning on or after January 1, 2026.
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Where it stands
- Introduced
- Passed House
- Passed Senate
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2025
- Sep 2FiledIntroduced
Taxes & Budget