Bill to raise sales tax, lower property taxes delayed until 2021

Texas Politics

AUSTIN (Nexstar) — A bill that would increase the state sales tax to a maximum of 7.25 percent will not move forward this legislative session.

Rep. Dan Huberty, R-Humble, who chairs the House Public Education Committee, postponed the efforts until 2021, which is when the legislature will meet again. 

House Joint Resolution 3 and House Bill 4621 were aimed at providing property tax relief through a one-cent increase in the state sales tax. The state’s maximum sales tax is currently at 6.25 percent. House Bill 4621 would’ve raised it to 7.25. Cities and other taxing entities can add up to two cents to the rate.

Members of the Texas House Democratic Caucus sent a letter to Chairman Dan Huberty, R-Humble, late Monday evening, saying this effort would harm Texans who won’t be able to afford it. The letter states that while members agree on the issue that property taxes are too high, they disagree on the proposal for a sales tax for property tax swap. 

“This $5 billion-a-year tax increase will harm the Texans who can least afford it – working families, seniors living on fixed incomes and many others,” the letter says. “Combined with the existing local sales tax of up to 2 percent, most Texans would be paying a total sales tax of 9.25 percent. A state sales tax of 7.25 percent would tie us with California for the highest state sales tax in the United States.” 

Members of the Texas Senate also didn’t approve the proposal during its debate over the school finance bill. Huberty voiced disappointment as he addressed his bill Tuesday.

“There were members of the Senate demanding property tax relief for their entire legislative careers that did not vote for the only bill that actually provided tax relief this legislative session,” Huberty said.

This proposal was backed by Gov. Abbott, Lt. Gov. Dan Patrick and House Speaker Dennis Bonnen, who felt this would provide tangible results to Texans.

“We’ve gone beyond the point of hoping to reform property taxes,” Abbott said during a press conference Friday. “We’re hoping to be able to deliver true property tax relief through property tax reductions.” 

This proposal would have required voter approval. Under House Joint Resolution 3, the ballot proposal would’ve been presented to voters in November of this year. It would’ve read: “The constitutional amendment to provide property tax relief by reducing school district maintenance and operations ad valorem tax rates and increasing state sales and use tax rates.” 

“I think that one reason it was proposed as a constitutional amendment was the idea of trying to get some buy-in for cover, perhaps from both members of the Democrats and the public and when it would go to a vote in November,” Rep. Chris Turner, D-Grand Prairie, said. “But Democrats were not willing to help in that process.”

The legislative session ends May 27.

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