The bill amends the Texas Tax Code to increase the sales and use tax exemption for clothing, footwear, and certain school-related items. Specifically, it raises the exemption threshold from $100 to $150 for articles of clothing and footwear, as well as for school supplies and backpacks. This change will take effect during a designated sales tax holiday period each year, beginning at 12:01 a.m. on the Friday before the 15th day preceding the start of the school year and ending at midnight on the following Sunday.

Additionally, the bill introduces a provision that will automatically adjust the exemption amount annually starting in 2026, based on the percentage increase in the consumer price index from the previous fiscal year. This adjustment aims to keep the exemption amount in line with inflation, ensuring that it remains relevant over time. The bill also clarifies that the changes will not affect taxes imposed before its effective date, maintaining the previous law for those tax liabilities.

Statutes affected:
Introduced: Tax Code 151.326, Tax Code 151.327 (Tax Code 151)