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HB 1485

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.

89th Legislature (2025) Introduced by Ben Bumgarner and 6 co-sponsors

HB 1485 replaces Texas school property taxes with state/local value-added taxes, fundamentally restructuring K-12 education financing and shifting tax burden from property to consumption.

Referred to Ways & Means
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Bill Summary · HB 1485

Legislative bill overview

HB 1485 proposes a major Texas tax restructuring that would repeal or limit school district property taxes (ad valorem taxes) while replacing lost revenue through new state and local value-added taxes (VAT). The bill is designed to reform school finance while shifting the tax base from property to consumption.

Why is this important

School property taxes fund roughly half of Texas K-12 education, so this restructuring would fundamentally change how schools are financed and potentially affect property values, business operations, and consumer costs. The shift from property to consumption taxes would redistribute the tax burden across different income groups and economic sectors, making this one of the most consequential fiscal proposals in recent Texas legislative sessions.

Potential points of contention

  • Regressive tax impact: VAT systems typically burden lower-income households more heavily than property taxes, raising equity concerns about who ultimately bears the tax burden
  • Business competitiveness: New state and local VATs could increase operational costs for Texas businesses and affect pricing competitiveness compared to other states
  • Implementation complexity: Replacing property tax revenue with VAT requires precise calibration to avoid school funding shortfalls, and VAT administration across state and local jurisdictions is administratively complex
  • Property owner relief timing: Uncertainty about when property tax reductions would occur versus when VAT implementation begins could create transition period disruptions

Compiled from official sources — confirm details with the bill’s official record.

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