FOR IMMEDIATE RELEASE
July 13, 2023
AUSTIN, TX — Today, the Texas Senate and Texas House gave final passage to a historic tax relief package that will benefit homeowners and businesses across the state. Senate Bill 2 (SB 2), Senate Bill 3 (SB 3), and House Joint Resolution 2 (HJR 2) were authored by Senator Paul Bettencourt. Senator Juan “Chuy” Hinojosa, Vice Chair of the Senate Finance Committee, co-authored all three bills. These bills are now headed to Governor Greg Abbott’s desk for his signature. The provisions in these bills will also require voter approval in November.
One of the key provisions of SB 2 is the increase in the residential homestead exemption. Under this bill, homeowners under the age of 65 will be allowed a homestead exemption of $100,000, while homeowners over the age of 65 or disabled will receive an exemption of $110,000. This significant increase follows previous increments in 2015 and 2021, when the exemption was raised to $25,000 and $40,000, respectively. Thanks to a record budget surplus, Texas now has the opportunity to provide homeowners with even greater relief by raising the exemption to $100,000.
For properties that are not homesteads, SB 2 creates a pilot program for a circuit breaker on appraised value. The circuit breaker imposes a temporary 20% limitation on appraised value increases for non-homestead real property valued at less than $5 million. This limitation will be indexed to inflation and will expire on December 31, 2026.
This bill also establishes three new elected positions for the appraisal district board of directors in counties with a population of 75,000 or more. The membership of the appraisal review board will be determined by the appraisal district board of directors in these counties.
SB 3 focuses on providing tax relief to small and medium-sized businesses. It doubles the amount of a taxable entity's total revenue that is exempted from the franchise tax, increasing it from $1.235 million to $2.47 million. This change will exempt approximately 67,000 businesses from paying the franchise tax, allowing them to reinvest their resources into growth and job creation. SB 3 also eliminates the requirement to file a No-Tax-Due franchise tax return if that entity does not owe any franchise taxes for that year. This streamlines the tax filing process for businesses, saving them valuable time and money.
Senator Hinojosa emphasized the importance of property tax relief and highlighted that these provisions will require voter approval in November. He provided the following statement:
"The number one complaint I keep hearing from my constituents is the high cost of property taxes. Property tax relief is important to my constituents and all Texans. High property taxes place a significant burden on homeowners and businesses, making it increasingly difficult for families to afford their homes and stifling economic growth.
“These tax relief bills passed by the Texas Legislature represent a significant step towards easing the financial burden on homeowners and businesses, promoting affordability, fostering economic growth, and helping create a more prosperous future for all Texans. I was honored to co-author these important bills and appreciate the work of Senator Bettencourt and the leadership of Lt. Governor Dan Patrick and his continued push for the $100,000 Homestead Exemption.
“It is crucial for Texans to understand that their support and approval in the upcoming November election will be vital in implementing these measures. With the support of the public, these measures have the potential to bring about positive change and improve the lives of countless individuals and business owners. Together, we can ensure Texans get the tax relief we all need."