Gov. Greg Abbott officially signed two Texas tax relief bills, Senate Bill 2 and Senate Bill 3, into law on Saturday. These Texas tax relief bills were passed in a second special legislative session following a lengthy impasse between the Texas Senate and House.
Gov. Abbott Signed Texas Tax Relief Bills
According to a published article, the Texas tax relief bills which amount to $18 billion are made possible due to the State’s $34 billion budget surplus.
Under the legislation, funds will be allocated to school districts across Texas to help reduce tax rates. Moreover, the homestead exemption will be raised from $40,000 to $100,000, contingent on voters’ approval.
The key components of the $18 billion tax cut plan are as follows:
- Reduction of the school property tax rate by 10.7 cents for all homeowners and business properties, totaling over $12 billion in savings.
- Homestead exemption increase from $40,000 to $100,000 for homeowners
- Implementation of a 20% circuit breaker on appraised values for non-homesteaded properties, valued at $5 million and below, encompassing both residential and commercial properties.
- small businesses Franchise tax savings and the creation of newly elected positions on local appraisal boards. The franchise tax exemption would rise from $1 million to $2.47 million.
- Establishment of a three-year pilot program to cap increases in appraisal values for all other properties valued at $5 million or less.
Author of Texas Tax Relief Bills
State Senator Paul Bettencourt, the author of the Texas tax relief bills, expressed that the average homeowner stands to save nearly $1,400 annually, while seniors would save nearly $1,500 per year.
He emphasized that the tax reduction would be an ongoing benefit, offering a substantial 44% reduction in the tax bill for this year and continuing in the following years, which would be especially advantageous for taxpayers aged 65 and above.
Furthermore, approximately 67,000 additional small businesses would become exempt from franchise taxes. Additionally, there will be a temporary 20% cap on appraisal increases for non-homestead properties valued at $5 million or lower.
This measure aims to assist property owners with second homes, rental properties, or business properties subject to higher increases in their appraised values.
However, before the tax cuts take effect, Texas voters must provide final approval on the ballot in November. If approved, taxpayers would start witnessing the benefits of these reductions on their 2023 taxes.
In conclusion, the recently signed Texas tax relief bills hold the potential to alleviate the burden of property taxes for homeowners and businesses alike. With the State’s considerable budget surplus, this significant tax cut plan aims to provide substantial savings for the people of Texas, pending voters’ approval in the upcoming ballot.