Texas HB116 proposes to repeal school district maintenance and operations ad valorem taxes and replace them with state and local value-added taxes.
Texas HB116 seeks to replace school district maintenance and operations ad valorem taxes with a state value-added tax (VAT) and local VATs, effective January 1, 2030. The bill also mandates the comptroller to study the feasibility and impacts of replacing all local property taxes with local VATs, delivering findings and recommendations by December 1, 2026. The state VAT rate is set at 6.72% unless otherwise specified by law, with all revenue directed to the Foundation School Fund.
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