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 they are prohibited from imposing sales or use taxes. Additionally, school districts can adopt a school district enrichment VAT, capped at 0.5%, which must be used exclusively for school enrichment activities and facilities.

The bill also includes provisions for the repeal of various sections of the Tax Code and Education Code, specifically targeting existing laws related to school district maintenance taxes. Notably, the prohibition on school district maintenance and operations ad valorem taxes will take effect only if a constitutional amendment is approved by voters. The comptroller is tasked with implementing the new VAT system, including the collection and allocation of revenues, and must prepare a report on necessary changes to support the bill's implementation. The effective date for most provisions is set for January 1, 2030, contingent upon the approval of the constitutional amendment.

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)