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HB 2220

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 Daniel Alders and 13 co-sponsors

Texas bill would eliminate school property taxes and introduce state/local value-added taxes while reforming education finance, fundamentally restructuring how the state funds schools and local services.

Referred to Ways & Means
#comptrollerofpublicaccounts(v2608) #education #commissionerof(v9954) #education--primary&secondary--finance(i0250) #foundationschoolprogram(s0541) #taxation--property-exemptions(i0793) #taxation--property-taxrate(i0794) #taxation--sales(i0800) #taxation--schooldistrict(i0785)
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Bill Summary · HB 2220

Legislative bill overview

HB 2220 proposes a comprehensive tax restructuring in Texas that would repeal or limit certain state and local taxes—particularly school district property taxes used for maintenance and operations—while introducing new value-added taxes (VAT) at both state and local levels. The bill also includes school finance reform measures tied to this tax transition.

Why is this important

This represents a fundamental shift in how Texas funds public education and local services. Property tax reform directly affects homeowners and businesses, while VAT implementation would create new consumption-based taxation affecting all residents. The outcome would reshape the state's revenue system and education funding model, with significant implications for property values, cost of living, and school budgets.

Potential points of contention

  • Regressivity concerns: VATs typically place higher tax burdens on lower-income households (who spend larger portions of income on consumption) compared to property taxes, raising equity questions
  • Implementation complexity: Shifting from property tax to VAT systems is administratively complex, with uncertain transition costs and potential revenue gaps during implementation
  • Education funding adequacy: Whether VAT revenue would sufficiently replace property tax funding to maintain current school finance levels, or if it would result in reduced education resources
  • Business and consumer impact: VAT could increase prices on goods and services, affecting business competitiveness and household budgets
  • Local government revenue: Unclear how local governments currently dependent on property tax revenue would adjust under this restructure

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

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