H.B. No. 92 proposes significant changes to the taxation structure in Texas, particularly concerning state and local taxes, including the repeal of school district maintenance and operations ad valorem taxes. The bill introduces a state value added tax (VAT) of 6.72% on services and property supplied in the ordinary course of business, with exemptions for small businesses, governmental entities, and certain organizations. Local subdivisions may impose a local VAT, but not a sales or use tax, and the combined local VAT rate cannot exceed 2%. Additionally, school districts can adopt a school district enrichment VAT at a maximum rate of 0.5%, which must be used exclusively for school enrichment activities and facilities.

The bill also includes provisions for the prohibition of school district maintenance and operations ad valorem taxes starting January 1, 2030, contingent upon the approval of a constitutional amendment by voters. It mandates the comptroller to prepare a report on necessary changes to implement the act and outlines the transition to funding through the new VAT system. Several provisions of the Tax Code and Education Code are repealed, including those related to existing school district taxes, ensuring that the new framework is established without conflicting with previous laws. The effective date for most articles is set for January 1, 2030, with some provisions taking effect earlier.

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 Education Code 6, The following provisions of the Tax Code 6)