A few weeks ago, we posted about four bills being considered in the Texas Senate. Those bills dealt with several tax cuts, one of the most notable being a large property tax cut that would save homeowners in the state around $200 every year. The tax cut was passed by the state Senate on March 25 and is now pending in the House.
News reports indicate that House legislators are not opposed to a large scale tax cut – in fact, GOP leaders of that body have made statements supporting tax cuts of around $4 billion. The Senate bills propose total cuts of $4.63 billion. It remains to be seen whether the House and Senate agree on the details of the tax cuts, however.
The tax cuts coming out of the Senate did not include a plan to phase out the franchise tax, which was proposed by one Senator. He wanted the bills to include an amendment that would do away with the tax by 2023. The bill ended up with only a request to the state comptroller to review the tax and make recommendations on how to best end it.
Possibly the bulk of the changes from the Senate are the aforementioned property tax cuts. Specifically, the changes extend the current homestead exemptions that are related to school taxes. The change means homeowners would save $206 on average in 2016; that savings would jump to an average of $233 annually by 2017. Instead of a flat exemption of $15,000, the bill proposes an exemption based on the median home value in Texas – the new exemption would be 25 percent of that value.
Changes to tax laws can occur quickly — or very slowly — at the federal, state and local levels. Keeping up with complex changes can be difficult, which is why many individuals and businesses seek outside accounting and tax assistance.
Source: Dallas Morning News, “Big tax cuts clear Texas Senate with $200 break for homeowners,” Robert Garrett, March. 25, 2015