Texas HB5268 limits penalties for delinquent taxes and tax reports to $500 and prioritizes tax payments toward outstanding taxes.

Texas HB5268 amends the Tax Code to set a maximum penalty of $500 for taxpayers who fail to pay taxes or file required reports on time. This cap does not apply to penalties specified elsewhere in the code. The bill also mandates that taxpayer payments first cover any outstanding taxes before being applied to penalties or interest, unless the taxpayer specifies otherwise in writing. These changes apply only to taxes or reports due on or after the bill's effective date of September 1, 2025.

Texas HB5268 limits penalties for delinquent taxes and tax reports to $500 and prioritizes tax payments toward outstanding taxes.

Texas HB5268 amends the Tax Code to set a maximum penalty of $500 for taxpayers who fail to pay taxes or file required reports on time. This cap does not apply to penalties specified elsewhere in the code. The bill also mandates that taxpayer payments first cover any outstanding taxes before being applied to penalties or interest, unless the taxpayer specifies otherwise in writing. These changes apply only to taxes or reports due on or after the bill's effective date of September 1, 2025.