June 5, 2025
Written by: Eleanor Kim, DMA Tax Counsel

DuCharme, McMillen & Associates, Inc. (DMA) provides this information relating to the 89th Texas Legislature Session. The session ended June 2, 2025, and Governor Greg Abbott has until June 22, 2025, to sign or veto the bills, or allow them to become law without his signature. The full content of all bills is available on legis.state.tx.us.

Jump to bills by tax type:

Sales/Use Tax

HB 135 (Button) amends Tax Code §151.316(a) to expand the list of items that are eligible for the agricultural exemption to include the sales of exotic animals and game animals.

  • “Exotic animal” means a species of game not indigenous to this state, including axis deer, nilga antelope, red sheep, other cloven-hoofed ruminant mammals, or exotic fowl as defined by Agriculture Code §142.001.
  • “Game animals” means mule deer, white-tailed deer, pronghorn antelope, desert bighorn sheep, gray or cat squirrels, fox squirrels or red squirrels, and collared peccary or javelina.

The Governor signed the bill on May 13, 2025, and the Act took effect May 13, 2025.

 HB 3486 (Hunter) adds Tax Code §151.433 to authorize a food service establishment to deduct from its reported taxable sales an amount equal to $5 for every 100 Texas farm-raised oysters purchased for preparation and services at the food service establishment during the reporting period. The enrolled bill was sent to Governor Abbott on May 31, 2025. Upon passage, the Act takes effect October 1, 2025.

HB 3487 (Hunter) adds Tax Code §151.434 to authorize a food service establishment to deduct from its taxable sales an amount equal to $2 for each 50 pounds of oyster shells collected at the food service establishment and recycled through a qualifying recycling program approved by the Comptroller. The enrolled bill was sent to Governor Abbott on May 31, 2025. Upon passage, the Act takes effect October 1, 2025.

 SB 1405 (Nichols) amends Tax Code §151.0101(a) to delete internet access service as a taxable service and repeals Tax Code §151.325, which provides for a $25 monthly exemption on the sale of internet access services. [Note: Because of a prohibition by federal law, Texas has not imposed sales tax on internet access service since July 1, 2020; thus, these changes to the Tax Code are non-substantive clean-up changes.] The enrolled bill was sent to Governor Abbott on June 3, 2025. Upon passage, the Act is to have immediate effect.

 SB 1415 (Hughes) amends Tax Code §151.326(a) to permanently set the start date of the sales tax holiday weekend for clothing and footwear to the first Friday in August. Governor Abbott signed the bill on May 19, 2025, and the Act takes effect September 1, 2025.

SB 266 (Perry) adds Tax Code §111.0091 to allow a taxpayer that conducts a managed audit authorized by Tax Code §151.0231 to bypass the redetermination hearing process and to file a lawsuit in district court. The taxpayer would have to file a written request for bypass within 60 days of the managed audit result and would have to state each specific factual and legal basis for disputing the managed audit results, including specifying the disputed amount. Governor Abbott signed the enrolled bill on May 24, 2025, and the Act took effect on May 24, 2025. The law change applies to managed audits that are in progress on or after the effective date of this Act, without regard to whether the taxes that are the subject of the managed audits were due before, on, or after May 24, 2025.

SB 2206 (Bettencourt) repeals Tax Code §151.3182, which currently exempts the sale of depreciable tangible personal property directly used in qualified research. [Note: The current exemption is an alternative to a franchise tax credit and is set to expire on December 31, 2026.] The enrolled bill was sent to Governor Abbott on June 1, 2025, and upon passage, the Act takes effect January 1, 2026.

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Franchise Tax

HB 4044 (Meyer) extends the inapplicability of depreciation and tax-exempt use provision of IRC §47(c)(2) in computing a franchise tax credit for certified rehabilitation of certified historic structures to an institution of higher education or university system. The enrolled bill was sent to Governor Abbott on May 28, 2025, and upon passage, the Act takes effect January 1, 2026.

 SB 263 (Perry) amends Tax Code §171.1012(o) to clarify that taxable entities whose principal business is television or radio broadcasting is entitled to claim the deduction for cost of goods sold. The enrolled bill was sent to Governor Abbott on May 27, 2025. Upon passage, the Act is to have immediate effect, but the bill provides that the change in law is a “clarification of existing law.”

 SB 1058 (Parker) amends Tax Code §171.1011 to allow a taxable entity that is a registered securities market operator to exclude from its total revenue transaction rebate payments made by the operator to a broker or dealer as part of a securities transaction. Governor Abbott signed the bill on May 19, 2025. The Act takes effect January 1, 2026, and applies only to a report originally due on or after the effective date.

 SB 2018 (Paxton) authorizes a taxable entity to claim a franchise tax credit for making a designated contribution to a certified eligible organization that promotes “strong families.” The total credit amount allowed by the state is $5 million each year, and taxable entities must apply for the credit, which the Comptroller’s office may apportion based on the number of applicants. A taxable entity is entitled to a credit equal to the lesser of the amount awarded by the Comptroller or the amount of franchise tax due. The bill prescribes eligibility requirements for an organization to be certified. The enrolled bill was sent to Governor Abbott on June 2, 2025. Upon passage, the Act takes effect on June 1, 2026, and applies to reports originally due on or after the effective date.

SB 2206 (Bettencourt) repeals the current franchise tax credit for research and development (R&D) activities, which is set to expire December 31, 2026, and replaces it with a new R&D franchise tax credit that is based on federal law.

  • “Qualified research expense” means the portion of the amount reported by a taxable entity as the entity’s total qualified research expenses on line 48 of Internal Revenue Service Form 6765 that is attributable to research conducted in this state. The amount entered on the line number must comply with federal law in effect for the federal tax year for which the form is filed with the Internal Revenue Service.
  • A taxable entity may claim an R&D franchise tax credit equal to 8.722% of the difference between: (1) the qualified research expenses incurred during the period on which the report is based; and (2) 50% of the average amount of qualified research expenses incurred during the three tax periods preceding the period.
    • The credit percentage increases to 10.903% for a taxable entity that contracts with one or more public or private institutions of higher education.
    • If a taxable entity has no qualified R&D expenses in one or more of the three preceding tax periods, the credit percentage is 4.361% of the qualified research expenses incurred during that period, or 5.451% if the taxable entity contracts with one or more public or private institution of higher education.
    • If a taxable entity incurs qualified R&D expenses during a period for which the entity owes no franchise tax, the entity may receive a refundable credit.
  • The total credit that may be claimed in a report year may not exceed 50 percent of the amount of tax due for the report before any other applicable tax credits. Any unused credit may be carried forward for up to 20 consecutive reports.
  • A combined group must claim the credit on its combined report.
  • An upper tier entity that includes the total revenue of a lower tier entity for purposes of computing its taxable margin as authorized by Tax Code §171.1015 (relating to Tiered Partnership arrangement) may claim the credit for qualified research expenses incurred by the lower tier entity to the extent of the upper tier entity’s ownership interest in the lower tier entity.
  • The credit provided may not be conveyed, assigned, or transferred to another entity unless substantially all of the assets of the taxable entity are conveyed, assigned, or transferred in the same transaction.
  • At the beginning of each regular legislative session, the Comptroller must submit a report to the state leadership providing an estimate of the total number of taxable entities that applied credits or received refundable credits, the total amount of those credits and refundable credits, and the total amount of unused credits carried forward.

The enrolled bill was sent to Governor Abbott on June 1, 2025. Upon passage, the Act takes effect on January 1, 2026, and applies to reports originally due on or after January 1, 2026.

 SB 2774 (Hinojosa, Adam) amends Tax Code §171.0001(12) to allow activities involving the rental of industrial uniforms, industrial garments, and industrial linen supplies that are classified as Industry 7213 or 7218 of the 1987 Standard Industrial Classification Manual to qualify as “retail trade,” thereby allowing taxable entities that perform such activities to qualify for a lower tax rate. Governor Abbott signed the bill on May 24, 2027, and the Act applies to reports originally due on or after January 1, 2027. [Note: The Act delayed the effective date to reduce the fiscal impact to the state.]

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General

HJR 2 (Geren) proposes a constitutional amendment to prohibit a legislature from enacting a state tax on: (1) the property of a deceased individual’s estate, including an estate, inheritance, or death tax; or (2) the transfer of an estate, inheritance, legacy, succession, or gift from an individual, family, estate, or trust to another individual, family, estate, or trust, including a tax on a generation-skipping transfer, if the tax was not in effect on January 1, 2025. The proposed amendment would not prohibit tax on a transfer of real property, a transfer of a motor vehicle by gift, or an ad valorem tax on property. The enrolled bill has been filed with the Texas Secretary of State, and the proposed constitutional amendment will be submitted to the voters at an election to be held November 4, 2025.

 HJR 4 (Meyer) proposes a constitutional amendment prohibiting the enactment of any law that imposes an occupation tax on a registered securities market operator or a tax on securities transactions conducted by a registered market operator. The prohibition would not apply to the imposition of: (1) a general business tax measured by business activity; (2) a tax on the production of minerals; (3) a tax on insurance premiums; (4) sales and use taxes on tangible personal property or services; (5) a fee based on the cost of processing or creating documents; or (6) a change in the rate of a tax in existence on January 1, 2026. The enrolled bill has been filed with the Texas Secretary of State, and the proposed constitutional amendment will be submitted to the voters at an election to be held November 4, 2025.

 HB 685 (Bell) adds Local Government Code §552.916 to prohibit a municipality from establishing a higher rate for water or sewer utility to entities that qualify for a sales tax or property tax exemption. The enrolled bill was sent to Governor Abbott on May 28, 2025, and upon passage, the Act takes effect September 1, 2025.

SB 14 (King) makes the following law changes:

  • establishes the Texas Regulatory Efficiency Office within the Governor’s office and requires the office, among others, to:
    • identify and expand opportunities for implementing efficiencies in the process by which state agencies adopt rules, conduct regulatory review, and conduct contested case processes;
    • assist state agencies in identifying unnecessary and ineffective rules; and
    • coordinate with the Texas Secretary of State and other state agencies to improve public access to information regarding state agency rules, forms, and filings.
  • amends Government Code §2001.024 to require that the notice of a proposed rule must be “to the extent practicable, written in plain language” and to include a “request for information related to the cost, benefit, or effect of the proposed rule” from interested persons.
  • repeals Government Code §2001.022(c) and §2001.0221(e), which currently allow a rule to be adopted without any legal impairment even if an agency fails to comply with the determination and/or preparation of a local employment impact statement or government growth impact statement.
  • adds Government Code §2001.042 and Government Code §2001.1721 to provide that a court is not required to give deference to a state agency’s legal determination regarding the construction, validity, or applicability of the law or a rule adopted by the state agency responsible for the rule’s administration, implementation, or other enforcement. However, a court is not prohibited from considering a legal determination made by a state agency that is reasonable and does not conflict with the plain language of the statute.

Governor Abbott signed the bill on April 23, 2025, and the Act takes effect September 1, 2025.

SB 266 (Perry) makes, among others, the following changes: (1) amends Tax Code §111.041 and Tax Code §112.202 to provide that a taxpayer must produce “sufficient” (instead of “contemporaneous”) records and supporting documentation to substantiate its claim relating to tax, penalty or interest; and (2) repeals Tax Code §111.105(e) that authorizes the Comptroller to issue a 180-day demand letter for all supporting documentation in support of a refund claim. Governor Abbott signed the enrolled bill on May 24, 2025, and the Act took effect May 24, 2025.

SJR 18 (Perry) proposes a constitutional amendment prohibiting the legislature from imposing a tax on the realized or unrealized capital gains of an individual, family, estate, or trust, including a tax on the sale or transfer of a capital asset that is payable by the individual, family, estate or trust selling or transferring the asset. The proposed amendment would not prohibit the imposition of property tax or sales tax or use tax on the sale or purchase of goods or services. The enrolled bill has been filed with the Texas Secretary of State, and the proposed constitutional amendment will be submitted to the voters at an election held on November 4, 2025.

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Hotel Tax

HB 2313 (Tepper) makes the following changes: (1) amends Tax Code §351.1015(a)(4) to authorize the city of Corpus Christi, which has designated a project finance zone before December 31, 2024, to redesignate a contiguous geographic area that is less than or equal to the maximum area allowed under Tax Code §351.1015(a)(4)(B) that contains a qualified project as a project finance zone; and (2) reenacts Tax Code §351.1015(b) to apply to the city of Lubbock to receive incremental hotel-associated revenue from all hotels within the zone’s boundaries. The enrolled bill was sent to Governor Abbott on May 31, 2025, and upon passage, the Act takes effect September 1, 2025.

SB 529 (Sparks) amends Tax Code §351.157 to add to the list of municipalities that are eligible to receive city hotel occupancy tax revenue from certain establishments to include a municipality described by Section 351.152(12) that has a population of 130,000 or more. [Note: This would apply to the city of Midland.] Governor Abbott signed the bill on May 30, 2025, and the Act took effect May 30, 2025.

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Insurance Premium Tax

HB 2517 (Barry) amends Insurance Code §221.001 and §252.005 to exempt the Texas Windstorm Insurance Association and the Texas FAIR Plan Association from the property and casualty insurance premium tax and from the fire and allied lines insurance maintenance tax. The enrolled bill was sent to Governor Abbott on May 31, 2025, and upon passage, the Act takes effect September 1, 2025.

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Motor Fuel Tax

HB 1109 (VanDeaver) amends provisions in Chapter 162, Tax Code, to exempt the sale of gasoline or diesel fuel to a county in Texas for the county’s exclusive use and to allow a credit or a refund of tax paid on exempt fuel. The enrolled bill has become law without Governor Abbott’s signature, and the Act takes effect July 1, 2025.

SB 771 (Hinojosa, Juna) amends Tax Code §162.227 to allow for a credit on tax paid on diesel fuel used in Texas by auxiliary power units or power take-off equipment on any motor vehicle. The Comptroller may approve a metering or other measuring device that will accurately measure diesel fuel used in determining the tax credit or refund. If there is no separate metering device or other approved measuring method, a credit or refund may be based on a percentage of the diesel fuel consumed by each motor vehicle equipped with an auxiliary power unit or power take-off equipment. The Comptroller shall determine the percentage of diesel fuel for which the credit or refund may be claimed. The enrolled bill became law without Governor Abbott’s signature, and the Act takes effect on September 1, 2025.

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Motor Vehicle Sales Tax

HB 4226 (Morales Shaw) adds Tax Code §152.094 and §152.095 to exempt a motor vehicle purchased, used, or rented by a nonprofit food bank or by a provider of housing and related services to homeless individuals. The enrolled bill was sent to Governor Abbott on May 31, 2025, and upon passage, the Act takes effect September 1, 2025.

SB 2064 (Perry) adds Tax Code §152.094 to provide an exemption for the transfer of a motor vehicle from an estate to a distribute or under an authorized rights of survivorship agreement. The enrolled bill was sent to Governor Abbott on May 27, 2025. Upon passage, the Act takes effect September 1, 2025, and applies to a transfer of a motor vehicle that occurs on or after September 1, 2025.

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Severance Tax

HB 3159 (Darby) adds Tax Code §202.062 to exempt from gas production tax and oil production tax hydrocarbons produced from a restimulation well that has been certified by the Railroad Commission as a qualifying well. The exemption ends on the earlier of: (1) the last day of the 36th consecutive month following the month in which the well first produces hydrocarbons after a restimulation treatment is completed; or (2) the date on which the cumulative amount of the exempted taxes and any allowed credits equals the lesser of the restimulation costs or $750,000.

  • Definitions:
    • “Restimulation well” means a previously completed oil or gas well that, following production of hydrocarbons, became an inactive well and subsequently received a restimulation treatment.
    • “Restimulation treatment” means the treatment of an oil or gas well with an application of fluid under pressure for the purpose of initiating or propagating fractures in a target geologic formation to enhance the production of hydrocarbons from the well.
  • Excluded from the exemption are oil or gas wells that: (1) have less than 60 months of production reported before the restimulation treatment date; (2) are part of an enhanced oil recovery project, as defined by Natural Resource Code §89.002; (3) are drilled but not completed and that do not have a record of hydrocarbon production reported; or (4) are not an inactive well (as described by Natural Resource Code §89.002) immediately before the restimulation treatment.
  • The operator of a restimulation well would have to apply for certification to the Railroad commission at any time after the first day the well produces hydrocarbons following the date a restimulation treatment is completed.
  • The person responsible for paying tax must apply to the Comptroller for tax exemption by submitting a copy of the Commission’s certification and a report of the restimulation costs incurred to perform the restimulation treatment. The person who pays tax after the Commission’s certification but before the Comptroller’s approval may seek a credit against tax due under Chapter 201 or Chapter 202, Tax Code.
  • The bill imposes penalties for making false or untrue statements on the applications or claiming an exemption knowing the exemption does not apply.

The enrolled bill was sent to Governor Abbott on May 28, 2025, and upon passage, the Act takes effect on January 1, 2026. The bill provides that it applies to hydrocarbons produced on or after the effective date.

SB 266 (Perry) adds Tax Code §111.0091 to allow a taxpayer that conducts a managed audit authorized by Tax Code §201.3021 to bypass the redetermination hearing process and to file a lawsuit in district court. The taxpayer would have to file a written request for bypass within 60 days of the managed audit result and would have to state each specific factual and legal basis for disputing the managed audit results, including specifying the disputed amount. Governor Abbott signed the enrolled bill on May 24, 2025, and the Act took effect on May 24, 2025. The law change applies to managed audits that are in progress on or after the effective date of this Act, without regard to whether the taxes that are the subject of the managed audits were due before, on, or after May 24, 2025.

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Property Tax

HB 9 (Meyer, et al) makes the following changes:

  • amends Tax Code §11.145 to increase the exemption threshold for the appraised value of tangible personal property that is held or used for the production of income from $2,500 to $125,000. The bill adds that exemption applies to tangible personal property held or used for the production of income that has taxable situs at the same location in the taxing unit.
  • provides that the exemption of $125,000 applies to each separate location in a taxing unit and provides that all tangible personal property that has taxable situs in each separate location in the taxing unit is aggregated to determine the market value.
  • provides that a person who leases tangible personal property is entitled to the exemption of $125,000 on all tangible personal property that the person owns that is held or used for the production of income and is subject to a lease, regardless of whether the property is located in the taxing unit. This exemption applies to each separate taxing unit in which a person holds or uses tangible personal property for the production of income.
  • provides that a person is entitled to the exemption of $125,000 on all tangible personal property held or used for the production of income in the taxing unit if the property has taxable situs within the taxing unit at any location that is not owned or leased by the owner, regardless of where the property is located within the taxing unit. This exemption applies to each separate taxing unit in which a person holds or uses tangible personal property for the production of income.
  • applies the exemption of $125,000 to “related business entity.” If a person is a related business entity, all property that has taxable situs at the same location in a taxing unit and that is owned by the person is aggregated with the property that has taxable situs at the same location in the taxing unit and that is owned by each other related business entity that composes the same unified business enterprise to determine taxable value for the entity. The exemption applies to each separate location in a taxing unit and for the purpose of the exemption, all property that has taxable situs in each separation location in the taxing unit is aggregated to determine taxable value.
    • Definitions:
      • “Related business entity” means a business entity that: (A) engages in a common business enterprise with at least one other business entity; and (B) owns tangible personal property that: (i) is held or used for the production of income as part of the common business enterprise; and (ii) is located at the same physical address that tangible personal property owned by at least one other business entity engaged in the common business enterprise is located.
      • “Unified business enterprise” means a common business enterprise composed of more than one related business entity.
    • The chief appraiser may investigate a business entity to determine whether the entity is a related business entity and has aggregated tangible personal property.
  • adds Tax Code §22.01(j-1) to require a person to render business tangible personal property if, in their opinion, the aggregated market value of the property that has taxable situs in the same location in at least one taxing unit that participates in the appraisal district is greater than $125,000; or the aggregate market value of the property in at least one taxing unity that participates in the appraisal district is greater than the amount exempted.
    • If a person is required to render property, the person must render all tangible personal property the person owns that is held or used for the production of income and has taxable situs in the appraisal district.
    • If a person elects not to render property for taxation as authorized by (j-1), the person must file a rendition statement or property report that includes a certification that the person reasonably believes that the value of the property is not more than the amount exempted. The election takes effect beginning with the tax year following the tax year in which the rendition statement or property report is filed and continues in effect until the ownership of the person changes. However, a person must render property for taxation if required by the chief appraiser.
    • A rendition statement of a related business entity must contain the information required stated for each related entity that composes the unified business enterprise of which the related business entity that is the subject of the rendition is a part.
  • amends Tax Code §22.24(c), which requires the Comptroller to prescribe or approve different forms for different kinds of property, to create a form to meet certain prescribed criteria.

The enrolled bill was sent to Governor Abbott on May 22, 2025. The Act takes effect January 1, 2026, but only if the proposed constitutional amendment (HJR 1) is approved by the voters at an election to be held on November 4, 2025.

 HB 22 (Noblel) amends Tax Code §11.02(a) to make explicit that intangible personal property is not taxable and repeals various provisions to remove any exceptions that currently authorize the taxation of intangible personal property. Governor Abbott signed the bill on May 24, 2025, and the Act takes effect January 1, 2026.

HB 30 (Troxclair) amends Tax Code §26.042 to remove the authority of taxing units to adopt a property tax rate that exceeds the voter-approval tax rate without holding an election in the year after a disaster occurred. Governor Abbott signed the bill on May 16, 2025, and the Act takes effect January 1, 2026.

HB 103 (Troxclair) requires the Comptroller to coordinate with the Bond Review Board to develop and maintain a database of current and historical information regarding taxes imposed and bonds issued by each taxing unit in Texas. The database would include ballot language for bonds; projected tax rates for debt service; an estimate of the minimum dollar amount required to be spent annually for debt service resulting from the issuance of a bond; election results for bond approvals; lists of funded projects and accounting for bond proceeds; and tax rate changes resulting from issued bonds. The enrolled bill was sent to Governor Abbott on May 31, 2025, and upon passage, the Act takes effect September 1, 2025.

HB 148 (Turner) adds Tax Code §5.044 to require a member of an appraisal district board of directors to complete a training program before each anniversary of the date the member takes office and adds other provisions specifying training information and acknowledgment by the board of directors. The enrolled bill was sent to Governor Abbott on May 26, 2025, and upon passage, the Act takes effect September 1, 2025.

 HB 247 (Guillen) adds Tax Code 11.38 to provide an exemption for appraised value of real property owned by the person that arises from the installation or construction on the property of an improvement under a qualified border security infrastructure agreement or on land subject to a recorded easement granted by the property owner to Texas or the United States that dedicates the property for border security infrastructure purposes. The enrolled bill was sent to Governor Abbott on May 23, 2025. Upon passage, the Act takes effect January 1, 2026, but only if the proposed constitutional amendment (HJR 34) is approved by the voters at an election to be held on November 4, 2025.

 HB 851 (Plesa) requires the chief appraiser to determine the number of residence homesteads subject to the limitation on tax increase for each school district in an appraisal district and report the number for each school district to the Comptroller when the chief appraiser submits the appraisal roll for county taxes to the county-assessor-collector. The bill requires the Comptroller to report the number to the state leaders on or before November 1 of each tax year. The bill also imposes similar requirements on the chief appraiser and the Comptroller related to the number of residence homesteads that were subject to deferred tax collection, suit abatement for delinquent tax, and abatement of sale for foreclosures in the preceding tax year. The enrolled bill was sent to Governor Abbott on May 31, 2025, and upon passage, the Act takes effect January 1, 2026.

HB 1244 (Guillen) makes the following changes: (1) amends Tax Code §23.54(e-1) to provide that the ownership of agricultural land that was appraised as agricultural land in the preceding tax year does not change if after the ownership of the land is transferred from the former owner to the new owner and the new owner uses the land in materially the same way and the use of the land is overseen or conducted by the same individuals who oversaw or conducted that use during the preceding tax year; and (2) adds Tax Code §23.541(a-2) to provide that the chief appraiser shall accept a late application as timely submitted by the new owner noted above if the application is filed before the later of the delinquency date for taxes on the land for the year for which the application is filed or the first anniversary of the ownership transfer date. Governor Abbott signed the bill on May 24, 2025, and the Act takes effect January 1, 2026.

 HB 1392 (Bucy) amends Tax Code §1.06, which currently provides that the payment due date extends to the next regular business day when the due date falls on a weekend or holiday, to include the date the collector’s office is closed. Governor Abbott signed the bill on May 24, 2025, and the Act takes effect January 1, 2026.

 HB 1399 (Harrison) adds Tax Code §11.162 to allow a property owner that holds tangible personal property consisting of animal feed exempted from sales and use tax under Tax Code §151.316(a)(3) or (4) to claim an exemption from property tax of the appraised value of the tangible personal property held by the owner for sale at retail. Governor Abbott signed the enrolled bill on May 24, 2025. The Act takes effect January 1, 2026, if the proposed constitutional amendment (HJR 99) is approved by the voters at an election to be held on November 4, 2025.

 HB 1533 (Button) makes the following changes:

  • amends Tax Code §1.07(d) to provide that a notice of an appraised value of a property that was not on the appraisal roll in a prior year because of omission to be sent by certified mail.
  • amends Tax Code §1.111(k) to remove the requirement that an agent submitting designation of agent electronically to provide the Internet Protocol address of the computer used to complete the form. This change only applies to a written request for information made by a chief appraiser on or after the effective date of the Act.
  • amends Tax Code §5.041 to require the Comptroller, if it hires a service provider to assist in providing training of the appraisal review board members, that at least one trainer must be a taxpayer representative and sets forth eligibility requirements. This change applies only to a course provided on or after January 1, 2026.
  • adds Tax Code §6.17 and amends Tax Code §25.02 to require a county with a population of 120,000 or more to maintain an Internet website.
  • amends Tax Code §41.45 to change the deadline for which a property owner can request a hearing by telephone or videoconference from 10 days to 5 days before the date of the hearing. This change applies only to a protest filed on or after the effective date of the Act.
  • amends Tax Code §41.47 to require an appraisal review board that dismisses a protest on jurisdictional grounds to make a written order of its decision and state grounds for its determination. This change applies only to a protest filed on or after the effective date of the Act.
  • amends Tax Code §41.61(c) to change the deadline for issuing a subpoena from 5 days to 15 days before the date of the hearing. This change applies to subpoenas issued on or after the effective date of the Act.
  • adds Tax Code §41A.011 to allow a person that leases a property and that is contractually obligated to reimburse the owner for property tax to seek binding arbitration of an appraisal review board order. The change applies to a property with appraised value or market value of $5 million or more and to a request for binding arbitration that is filed on or after January 1, 2026.
  • amends Tax Code §42.23 to prohibit a court from ordering discovery unless the discovery is requested by a party to the appeal and to prohibit a court from imposing discovery deadlines that fall before the deadlines specified by the Texas Rules of Civil Procedures or from accelerating discovery related to an expert witness unless agreed to by the parties. This change applies to an appeal filed on or after the effective date of the Act.

The enrolled bill was sent to Governor Abbott on May 26, 2025, and upon passage, the Act takes effect September 1, 2025.

HB 2027 (Vasut) amends Special District Local Laws Code §5002.203 to provide that the commissioners court may execute a tax abatement agreement with: (1) the owner of a leasehold interest in tax-exempt real property or property owned by the district located in a reinvestment zone to exempt all or a portion of the value of the leasehold interest in the real property; or (2) with the owners of tangible personal property or an improvement located on tax exempt real property or property owned by the district that is located in a reinvestment zone designated to exempt all or a portion of the value of the tangible personal property or improvement located on the real property. The bill provides that other terms of the agreement would be governed by Chapter 312, Tax Code. Governor Abbott signed the enrolled bill on May 29, 2025, and the Act took effect May 29, 2025.

HB 2508 (Turner) adds Tax Code §11.136 to provide that the surviving spouse of a qualifying veteran is entitled to an exemption on the total appraised value of the surviving spouse’s residence homestead if the surviving spouse has not remarried since the death of the veteran. A qualifying veteran is a veteran of the U.S. armed services who died as a result of a qualifying condition or disease, regardless of the veteran’s disability rating at the time of the veteran’s death. The enrolled bill was sent to Governor Abbott on May 28, 2025. Upon passage, the Act takes effect January 1, 2026, but only if the proposed constitutional amendment (HJR 133) is approved by the voters at an election to be held on November 4, 2025.

HB 2525 (Darby) amends Tax Code §11.18(d) to expand the eligibility for the property tax exemption for certain charitable organizations to include certain organizations that provide charitable housing and related services to persons who are at least 62 years of age, in an amount not less than four percent of the charitable organization’s net resident revenue. The enrolled bill was sent to Governor Abbott on June 2, 2025, and upon passage, the Act takes effect January 1, 2026.

 HB 2723 (Cunningham) adds Tax Code §11.43(t) to provide that the chief appraiser shall grant the exemption for cemeteries provided by Tax Code §11.17 even if the owner has not applied for the exemption when the chief appraiser knows or should know based on reasonable inspection of the property that the property qualifies as a cemetery and the owner of the property is not identifiable. Governor Abbott signed the bill on May 24, 2025, and the Act takes effect January 1, 2026.

HB 2730 (Darby) amends Tax Code §11.43 to provide that a chief appraiser may not require a person that holds a residence exemption to file a new application or confirm the person’s current qualification for the exemption unless the chief appraiser has reason to believe the person no longer qualifies for the exemption and has attempted to determine the person still qualifies for the exemption using public searches and delivers written notice to the person stating the specific reason for the chief appraiser’s belief that the owner no longer qualifies for the residence homestead exemption. Governor Abbott signed the bill on May 24, 2025, and the Act took effect immediately on the same date.

HB 2742 (Vasut) amends Tax Code §31.03 to provide that if a taxing unit has adopted the split-payment option, the first one-half of the taxing unit’s taxes must be paid before the first day of the next month following the first full calendar month following the date the tax bills are mailed. Governor Abbott signed the enrolled bill on May 29, 2025, and the Act took effect on May 29, 2025.

HB 2894 (Hickland) amends Local Government Code §141.011(a)(2) and (b) to expand the eligibilities of cities and counties that may seek partial reimbursement for revenue loss for granting a residence homestead property tax exemption to disabled veterans and their surviving spouse. The enrolled bill was sent to Governor Abbott on May 26, 2025, and upon passage, the Act takes effect September 1, 2025.

HB 3093 (Villalobos) makes the following changes: (1) amends Tax Code §5.07(g) to require that the forms used to calculate and submit the taxing unit’s no-new-revenue tax rate and voter-approval tax rate be in an electronic format and meet certain requirements; (2) adds Tax Code §26.012(6) to provide that “current total value” for truth-in-taxation calculations excludes the portion of the aggregate taxable value of all of the property located in the taxing unit that is included as part of anticipated substantial litigation that consists of contested taxable value. This exclusion applies to a taxing unit that is wholly or partly located in a county that has a population of less than 500,000 and is located on the Gulf of Mexico; and (3) adds Tax Code §41.48 to impose requirements on the affecting tax unit and the property owners that intend to file an appeal under Chapter 42, that is part of the anticipated substantial litigation. The enrolled bill became law without Governor Abbott’s signature, and the Act took effect May 24, 2025.

 HB 3307 (Noble) amends Tax Code §41A.061(b) to include approved continuing legal education to be counted towards that continuing education requirement for arbitrators. Governor Abbott signed the enrolled bill on May 29, 2025, and the Act takes effect September 1, 2026.

 HB 3370 (Ashby) amends Tax Code §23.751 to authorize the chief appraiser to consider a late application for the appraisal as timber land if there is a change in ownership due to the owner’s death and if the late application is filed by the owner’s surviving spouse or child, the executor or administrator of the decedent’s estate, or a fiduciary acting on behalf of the surviving spouse or child. The enrolled bill was sent to Governor Abbott on May 22, 2025, and upon passage, the Act takes effect January 1, 2026.

HB 3424 (Capriglione) amends Tax Code §23.1242 (relating to Prepayment of Taxes by Heavy Equipment Dealers) by:

  • changing the due date for an owner of certain items of heavy equipment to submit the deposit and the statement of the unit property tax assigned from 20th day of each month to the 20th day of the month following each calendar quarter.
  • requiring a collector, not later than December 15 of each year, to provide written notice to each owner for whom the collector maintains an escrow account of the unit property tax factor for the following tax year for each location in which the owner’s heavy equipment inventory is located.
  • requiring the Comptroller to adopt an inventory tax statement form that would be due each calendar quarter and that includes certain prescribed information or format.
  • requiring a dealer to retain (rather than file a copy of the statement with the chief appraiser) complete and accurate records documenting the disposition of each item of heavy equipment sold, leased, or rented by the dealer for at least four years from the date of disposition of the item.
  • authorizing a person who acquires the business or assets of the owner to use the same unit property tax factor that the owner who owes the current year tax would use when paying the current year tax.

The enrolled bill was sent to Governor Abbott on May 26, 2025, and upon passage, the Act takes effect January 1, 2026.

HB 3575 (Noble) amends Tax Code §6.032(b) to provide that in a county that requires election, a candidate for an appraisal district’s board of directors should file an application for a place on the ballot with the county clerk or, for counties having the position, the county elections administrator. The enrolled bill was sent to Governor Abbott on May 26, 2025, and upon passage, the Act is to have immediate effect.

HB 4236 (Turners) creates a school district property value study group to examine the use and effect of the school district property value study conducted by the Comptroller on the annual distribution of state financial aid for public education and develop recommendations on alternative methods for verifying that valuations of complex properties are determined appropriately and included in the study. After holding a public meeting and submitting a written report to the state leadership, the study group would be abolished January 1, 2027. The enrolled bill was sent to Governor Abbott on June 1, 2025, and upon passage, the Act takes effect.

HB 4809 (Meyer) amends various provisions to recognize the significant restrictions placed on property designated as a historic site by authorizing an owner of a property that qualifies for an exemption as a historic or archaeological site to protest the appraised value of the structure or archeological site and the appraised value of the land separately. The enrolled bill was sent to Governor Abbott on May 23, 2025, and upon passage, the Act is to have immediate effect.

SB 4 (Bettencourt) amends Tax Code §11.13(b) to increase the mandatory homestead exemption for school property taxation from $100,000 to $140,000. The bill amends provisions in the Education Code to entitle districts to additional state aid as protections for a corresponding loss in revenue. The enrolled bill was sent to Governor Abbott on June 1, 2025, and upon passage, the Act is to take immediate effect, if the proposed constitutional amendment (SJR 2) is approved by the voters at an election to be held on November 4, 2025.

SB 23 (Bettencourt) amends Tax Code §11.13(c) to increase the mandatory homestead exemption for school district property taxation for persons aged 65 or older or disabled from $10,000 to $60,000. The bill amends provisions in the Education Code to grant additional state aid to school districts as protections for a corresponding loss in revenue. The enrolled bill was sent to Governor Abbott on June 1, 2025. Upon passage, the Act is to have immediate effect but is contingent on the voters approving the proposed constitutional amendment (SJR 85) at an election to be held on November 4, 2025.

SB 402 (Paxton) amends Tax Code §1.071 to require the Comptroller to prescribe a form that a person can use to request that a refund be sent to a particular address instead of the address listed on the appraisal roll. The form must contain a notice of the penalties for making or filing a form with a false statement. Governor Abbott signed the enrolled bill on May 30, 2025. The Act took effect May 30, 2025, and applies only to a request filed on or after the effective date.

SB 467 (Paxton) adds Tax Code §11.351 to provide a temporary exemption on the appraised value of an improvement to a person’s residence homestead that is completely destroyed by fire, that was a habitable dwelling immediately before the fire and that remains uninhabitable for at least 30 days after the date the fire occurs. The enrolled bill was sent to Governor Abbott on June 1, 2025. Upon passage, the Act takes effect on January 1, 2026, but only if the voters approve the constitutional amendment (SJR 84) at an election to be held November 4, 2025.

SB 850 (Middleton) makes various changes to facilitate property owners receiving a refund and interest, if applicable, without having to apply for it. The changes include the following:

  • adds Tax Code §1.072 to provide that a person may but is not required to apply for a refund of taxes due if the refund amount due is at least $20.
  • amends Tax Code §11.35(j) to remove the provision establishing that no interest is due on an amount refunded by the tax collector for a taxing unit to a person who qualifies for a temporary exemption from property taxation for qualified property damaged by a disaster.
  • amends Tax Code §11.431(b) to eliminate the requirement that the chief appraiser must pay a refund within a 60-day period of the notice of the approval of a late application for residence homestead.
  • amends Tax Code §11.438(c) establishing that a veteran organization is eligible to receive a tax refund for overpaid or erroneously paid tax.
  • amends Tax Code §11.439(b) to remove the provision setting a deadline for the collector for a taxing unit to pay a refund to a property owner whose late application for a disabled veteran’s residence homestead exemption is approved.
  • amends Tax Code §31.071 to revise the requirement for the collector for the taxing unit, if the property is no longer subject to a challenge, protest, or appeal at any time before the delinquency date, to apply the conditional payments to the tax imposed on the property and refund the remainder, if any.
  • amends Tax Code §31.072(g) to revise provisions relating to the payment of taxes for property for which an escrow account is established by setting a deadline for the collector for a taxing unit to issue a refund to the taxpayer of any amount in the account in excess of the amount of taxes paid, if applicable.
  • amends Tax Code §31.11 to provide that if a taxpayer submits a tax payment that exceeds by $1 or more the amount of taxes that the taxpayer owes for a tax year, the collector shall refund the amount of the erroneous or excessive payment after the collector determines the erroneous or excessive payment if the auditor for the taxing unit agrees with the collector’s determination.
  • amends Tax Code §31.12 to list statutory provisions relating to tax refunds and to provide that tax refund related to those statutes must be paid no later than 45 days after the date the liability for the refund arises and if a refund is not paid within the stated deadline, refund accrued interest.
  • amends Tax Code §41A.10 with respect to a refund of property taxes in the event an appeal through binding arbitration decreases the property owner’s tax liability to less than the amount of taxes paid.
  • amends Tax Code §42.43 with respect to a refund of property taxes in the event that the final determination of an appeal of a taxpayer protest through judicial review decreases a property owner’s tax liability.
  • amends Government Code §2004.913(a) with respect to a refund of property taxes in the event a final determination of an appeal to the State Office of Administrative Hearings decreases the property owner’s tax liability to an amount less than the amount of taxes paid.

The enrolled bill was sent to Governor Abbott on June 1, 2025, and upon passage, the Act takes effect September 1, 2025.

SB 973 (Eckhardt) amends Tax Code §25.027(b) to modify the exception to the prohibition against appraisal records containing images of residential properties by allowing photographs of more than one building (rather than five or more buildings under the current law) and allowing a street level photograph that depicts only certain criteria specified in the bill. The enrolled bill was sent to Governor Abbott on June 1, 2025, and upon passage, the Act will have immediate effect.

 SB 974 (Eckhardt) amends Tax Code §6.412(c) to authorize a person employed by a public school district as a teacher to serve on an appraisal district’s appraisal review board (ARB) and amends Tax Code §6.411 to create a Class A misdemeanor offense for inappropriate communication between a school district and a member. The enrolled bill was sent to Governor Abbott on June 1, 2025, and upon passage, the Act takes effect on September 1, 2025.

SB 1023 (Bettencourt) amends: (1) Tax Code §5.07(g) and §26.04(d-1) to require hyperlinks to a document that evidence the accuracy of the data entered on a tax rate calculation form; and (2) Tax Code §26.03, which relates to captured appraised value and tax increment, to require a taxing unit affected by the section to calculate taxes collected by the unit separately for each reinvestment zone in which the taxing unit participates. Governor Abbott signed the enrolled bill on May 27, 2025, and this Act takes effect January 1, 2026.

SB 1025 (Bettencourt) amends Election Code §52.072(e) to require the use of the language “THIS IS A TAX INCREASE” on a ballot if a proposition is submitted to the voters for approval of the imposition or increase of a tax rate for cities, counties, and special purpose districts. Governor Abbott signed the enrolled bill on May 24, 2025, and the Act took effect May 24, 2025.

 SB 1062 (Kolkhorst) amends Government Code §2051.044 to allow governmental entities to publish notices in a digital newspaper in lieu of a regular newspaper if the digital newspaper: (1) has an audited paid-subscriber base; (2) has been in business for at least three years; (3) employs staff in the jurisdiction of the governmental entity; (5) provides news of general interest to people in the jurisdiction of the governmental entity; and (6) updates its news at least once each week. Governor Abbott signed the enrolled bill on May 19, 2025, and the Act took effect May 19, 2025.

 SB 1106 (Parkers) amends Tax Code §26.17(b) to require each public improvement district established under Chapter 372 or 382, Local Government Code, to include in its database certain information such as the district’s name, total assessments, annual assessments, and if any, periodic installments. Governor Abbott signed the enrolled bill on May 19, 2025, and the Act takes effect January 1, 2026.

SB 1352 (Hinojosa, Adam) changes current law, which imposes a penalty for late interstate allocation and freeport exemption application to the 10 percent of the difference between the tax imposed with and without the exemption, as follows:

  • amends Tax Code §11.43 to provide that if the chief appraiser extends the deadline for a property owner to file a rendition statement or property report to May 15, the chief appraiser must also extend the deadline for the property owner to file an application for a freeport exemption to May 15. For good cause shown, the chief appraiser may further extend the exemption application for a single period not to exceed 60 days.
  • amends Tax Code §11.4391(b) to impose a penalty for an approved late freeport exemption application equal to the lesser of: (1) 10% of the difference between the amount of tax imposed by the taxing unit on the inventory or property, a portion of which consists of freeport goods, and the amount that would otherwise have been imposed; or (2) 10% of the amount of tax imposed by the taxing unit on the inventory or property, a portion of which consists of freeport goods.
  • amends Tax Code §21.09 to provide that if the chief appraiser extends the deadline for a property owner to file a rendition statement or property report to May 15, the chief appraiser must also extend the deadline for the property owner to file an allocation application form to May 15. For good cause shown, the chief appraiser shall further extend the deadline for filing an allocation application form by written order for a period not to exceed 30 days.
  • amends Tax Code §21.10(b) to impose a penalty on an approved late application equal to the lesser of (1) 10 percent of the difference between the amount of tax imposed by the taxing unit on the property without the allocation and the amount of tax imposed on the property with the allocation; or (2) 10 percent of the amount of tax imposed by the taxing unit on the property with the allocation.

The enrolled bill was sent to Governor Abbott on May 27, 2025, and upon passage, the Act takes effect September 1, 2025.

SB 1453 (Bettencourt) amends Tax Code §26.05 to authorize the governing body of a taxing unit to approve a debt rate that exceeds the rate for the taxing unit to service the unit’s debt determined under certain conditions. The rate must be set out in a motion that states certain prescribed information, and the motion must be approved by at least 60 percent of the governing body’s members. If the governing body approves the proposed rate for a tax year, the approved rate is considered to be the taxing unit’s current debt rate for that tax year. The enrolled bill was sent to Governor Abbott on May 27, 2025, and upon passage, the Act takes effect January 1, 2026.

SB 1502 (Bettencourt) adds Tax Code §26.042 to provide that the governing body of a school district may not adopt a tax rate for a tax year in which the governing body previously adopted a tax rate that exceeded the district’s voter-approval tax rate and that was not approved by the voters at a ratification election. Governor Abbott signed the enrolled bill, and the Act takes effect January 1, 2026.

SB 1951 (Paxton) amends Tax Code §22.28 to require the chief appraiser to send a notice of the imposition of penalty by first class mail no later than June 1 to a person who fails to timely file a required rendition statement and to state the penalty amount on a separate line item from the tax amount. The bill requires the notice to be sent by certified mail if the property was not listed on the appraisal roll in the preceding year. The enrolled bill was sent to Governor Abbott on May 23, 2025, and upon passage, the Act takes effect January 1, 2026.

SB 2068 (Bettencourt) amends Tax Code §11.48 to provide that the name, age, home address, or home telephone number of a child provided in any application for an exemption is confidential. The enrolled bill was sent to Governor Abbott on May 22, 2025, and upon passage, the Act takes effect September 1, 2025.

 SB 2173 (Parker) amends Tax Code §31.08 to provide that a tax lien is extinguished if the transfer of property is accompanied by a tax certificate that erroneously indicates no delinquent tax is due if the tax lien securing the payment is determined to be due because a residence homestead exemption was erroneously allowed and was subsequently cancelled. The lien extinguishment would not apply to a transfer of property between: (1) two individuals who are related within the first degree by consanguinity or affinity; (2) an employer and an employee; (3) a parent company and a subsidiary; or (4) a trust and a beneficiary. Governor Abbott signed the enrolled bill on May 28, 2025, and the Act takes effect September 1, 2025.

SB 2520 (Bettencourt) amends Tax Code §11.26 to provide that in the tax year immediately following the first tax year an individual qualifies for the disabled or over 65 years old exemption, the amount of the limitation equals the lesser of the following: (1) the amount of the limitation for that tax year as computed under provisions prescribing the method of computation of the amount of the limitation if in 2024 or a subsequent tax year an applicable elderly or disabled individual qualifies for the limitation; or (2) the amount of tax imposed by the district on the residence homestead, calculated without regard to the limitation on tax increases provided by the applicable state law, in that tax year. The enrolled bill was sent to Governor Abbott on June 1, 2025, and upon passage, the Act takes effect January 1, 2026.

If you have questions about the impact these bills may have on your business, contact our team today to consult with a DMA tax expert.

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