Texas State Rep. Matt Krause (R–Fort Worth) has filed a bill that would give local governments in the state the option of substituting higher sales taxes in place of a property tax. House Bill 648, filed on January 4, would change the tax code so that, should a city opt to remove its property taxes, it could adjust its sales and use tax to compensate for any lost revenues from the abolition of the property tax.
“This bill could provide actual tax RELIEF,” wrote Krause on his Facebook page, “not just tax REFORM. There is a big difference and we need to work hard this session to provide the former and not the latter.”
Krause said the bill would work best for counties and cities with high sales tax revenues, citing Fort Worth, Arlington, and Tarrant County as examples. He cautioned that sales taxes in those areas might have to increase by about 2 cents per dollar. “Some may think that is too high,” he acknowledged. “Others, however, might believe that a few extra pennies for purchases you choose to make is better than an ever-growing property tax bill.”
Krause said the bill, if passed as presently written, would limit local governments to choosing one option: either higher sales or keeping property taxes. “You can’t choose both. It’s an either/or proposition.”