A list of HB 3's taxes

CSHB3 would cut local property taxes by raising other state taxes. CSHB3 is designed to be "revenue neutral" – meaning that revenue raised by raising existing state taxes and creating new taxes is used only to offset local property tax cuts. The tax equity note on CSHB3 concludes that 80% of Texas families will see an increase in taxes as a result of passage of HB3. Only 20% of Texas families, those with annual incomes over $100,000, would actually benefit from the bill.

New Taxes:

-essentially created a state income tax by requiring businesses to pay a 1.15% tax on each employee's wages. The tax base is capped at $90,000 per employee per year.

Applies the sales tax to:
-billboard advertising services, previously untaxed;
-all car wash and detail services, previously untaxed;
-car repairs, previously untaxed;
-all bottled water, previously untaxed;
-newspapers, previously untaxed;
-snacks (previously untaxed) including cookies, crackers, candy bars, popcorn, and soft drinks; would be an additional 3% to the proposed sales tax, for a total of 10.25%.

Increases current taxes:

-increases state sales tax to 7.25%, one of the highest in the nation;
-vehicle sales tax to 7.35%;
-tax rate on vehicle rentals over 30 days to 7.35%;
-sales tax on boats and motors to 7.35%;
-cigarettes by $1.00, from 41 cents to $1.41;
-tax on all cigars and other tobacco products, such as chew;
-an additional fee of $0.02 per cigarette from small independent tobacco manufacturers.

CSHB3 requires the Comptroller to distribute 15% of any increase in available state revenue, plus the amount distributed in the previous session, to the school districts to ensure future property rate reductions.

CSHB3 requires that a purchaser or grantee of property subject to taxation (e.g., a home or commercial property) must file a Sales Price Disclosure Report with the chief appraiser to allow the chief appraiser to determine true property values. A Disclosure Report would not be required for non-market sales and the bill would prohibit the disclosure of confidential information contained in the report.

CSHB3 would allow communication companies to add a monthly pass-through charge to customers’ bills to recoup the amount they are charged to increase the TIF. CSHB3 would lift the limit on the amount of money that can be assessed on telecommunication utilities. CSHB3 would require that all assessments be deposited in the general revenue fund. The fund was created to advance technology in schools, hospitals, libraries and other public institutions. Last session the TIF was changed to fund the Technology Allotment that is used by schools to purchase electronic text and instructional materials.