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,
and related school finance reform; imposing taxes.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. STATE VALUE ADDED TAX
SECTION 1.01. DEFINITIONS. In this article:
(1) "Input tax" means the aggregate amount of all
state and local value added taxes imposed under this Act that have
accrued with respect to services and property supplied to a
taxpayer during a calendar quarter and used or held for use by the
taxpayer in the ordinary course of the taxpayer's trade or
business.
(2) "Output tax" means the aggregate amount of all
state and local value added taxes imposed under this Act that have
accrued with respect to services and property supplied by a
taxpayer during a calendar quarter in the ordinary course of the
taxpayer's trade or business.
(3) "Taxpayer" means a person on whom the value added
tax is imposed.
(4) "Value added tax" means the tax imposed under
Section 1.02 of this article.
SECTION 1.02. VALUE ADDED TAX IMPOSED. A value added tax is
imposed on each person in this state who supplies any service or
property in the ordinary course of a trade or business in which the
person engages for profit.
SECTION 1.03. RATE OF TAX. The rate of the value added tax
is 6.72 percent of the taxpayer's taxable receipts from the supply
of services or property.
SECTION 1.04. DETERMINATION OF TAX PAYABLE. The total
amount of state and local value added taxes under this Act payable
by a taxpayer for a calendar quarter is the amount, if any, by which
the taxpayer's output tax exceeds the taxpayer's input tax.
SECTION 1.05. EXEMPTIONS. (a) The comptroller by rule
shall exempt from the value added tax:
(1) small businesses;
(2) governmental entities; and
(3) religious, educational, and public service
organizations.
(b) The comptroller shall refund the amount of any input tax
that has been accrued by an entity exempt under Subsection (a) of
this section.
SECTION 1.06. EXCLUSIONS. The comptroller by rule shall
exclude the following services and property from the value added
tax:
(1) monetary instruments, financial assets, and
investments;
(2) intercompany services;
(3) employment services;
(4) incidental transactions;
(5) transfers of common interests in property;
(6) services and property taxed by other law,
including Chapters 201 and 202, Tax Code; and
(7) services and property this state is prohibited
from taxing by federal law or the Texas Constitution.
SECTION 1.07. RULES. The comptroller shall adopt all rules
necessary to implement, administer, and enforce the state value
added tax and all local value added taxes under this Act.
SECTION 1.08. DISPOSITION OF REVENUE. All proceeds from
the collection of the value added tax shall be deposited to the
credit of the general revenue fund.
SECTION 1.09. EFFECTIVE DATE OF ARTICLE. This article
takes effect January 1, 2030.
ARTICLE 2. LOCAL VALUE ADDED TAXES
SECTION 2.01. LOCAL SALES AND USE TAXES PROHIBITED.
Notwithstanding any other law, a political subdivision may not
impose a sales or use tax on or after the effective date of this
article.
SECTION 2.02. LOCAL VALUE ADDED TAXES. (a) A political
subdivision that was authorized to impose a sales and use tax
immediately before the effective date of this article may impose a
local value added tax on and after the effective date of this
article.
(b) A local value added tax is administered, collected, and
Statutes affected: Introduced: The following provisions of the Tax Code 6.01, The following provisions of the Education Code 6.02 (The following provisions of the Tax Code 6, The following provisions of the Education Code 6)