Texas Proposition 3, approved by voters on November 7, 2023, added a permanent ban on state wealth taxes to the Texas Constitution. With roughly 68% support, the amendment prevents the Texas Legislature from ever imposing a tax based on the total wealth or net worth of any individual or family.1Texas Legislature Online. Texas Constitution Article VIII – Taxation and Revenue No U.S. state currently levies a wealth tax, so the measure works as a preemptive constitutional barrier rather than the repeal of an existing tax.
What the Amendment Says
House Joint Resolution 132, filed during the 88th Legislature’s regular session, added Section 25 to Article VIII of the Texas Constitution. The new section is one sentence: the legislature may not impose a tax based on the wealth or net worth of an individual or family, including a tax based on the difference between a person’s assets and liabilities.1Texas Legislature Online. Texas Constitution Article VIII – Taxation and Revenue That last clause closes a potential loophole. Without it, lawmakers could argue that taxing the gap between what you own and what you owe is somehow different from taxing net worth.
The ballot language voters saw mirrored the resolution closely: “The constitutional amendment prohibiting the imposition of an individual wealth or net worth tax, including a tax on the difference between the assets and liabilities of an individual or family.”2Texas Legislature Online. Texas Constitution Article VIII – Taxation and Revenue Because the prohibition sits in the constitution, a future legislature cannot override it with a simple majority the way it could repeal an ordinary statute.
Who Section 25 Covers
The prohibition covers individuals and families. Those two terms are the only taxable units mentioned.1Texas Legislature Online. Texas Constitution Article VIII – Taxation and Revenue The amendment does not mention LLCs, corporations, partnerships, trusts, or any other business entity. If the legislature wanted to impose some form of asset-based levy on a business entity rather than a person, Section 25 would not automatically block it.
For individuals, though, the scope is broad. A wealth tax could target any combination of assets, such as bank accounts, investment portfolios, real estate equity, vehicles, and collectibles, and then subtract outstanding debts to arrive at a taxable figure. Section 25 forbids the legislature from doing any version of that calculation to tax individuals or families.
Which Texas Taxes Are Not Affected
Proposition 3 is not a general tax cut. It blocks one specific type of tax that Texas has never actually imposed. Every existing state and local tax continues to operate normally.
Property Taxes
Ad valorem property taxes, collected by counties, cities, school districts, and special districts, have nothing to do with a person’s total net worth. Property tax is assessed on the appraised value of a specific piece of real estate or tangible personal property. Two homeowners with identical houses pay the same property tax whether one has millions in the bank and the other carries significant debt. Because property taxes target individual assets rather than overall wealth, they fall outside Section 25.
Sales and Excise Taxes
Texas collects a 6.25% state sales tax on most retail purchases, and local jurisdictions can add up to 2% more for a combined maximum of 8.25%.3Texas Comptroller of Public Accounts. Sales and Use Tax Excise taxes on fuel, tobacco, and alcohol also remain unchanged. These are transaction-based. You pay them when you buy something, not because you own something. The wealth tax ban has no effect on them.
Franchise Tax
The Texas franchise tax sometimes causes confusion because it was historically calculated based on a business’s net worth. The modern version is structured as a tax on a taxable entity’s margin, calculated from total revenue rather than asset value.4Texas Comptroller of Public Accounts. Franchise Tax Overview Because it is revenue-based and applies to business entities rather than individuals, it does not conflict with Section 25.
How the Vote Went and Why It Sticks
Proposition 3 appeared on the November 7, 2023, constitutional amendment ballot alongside 13 other proposed amendments.5Texas Legislative Council. Analyses of Proposed Constitutional Amendments It passed with 1,712,458 votes in favor (67.89%) and 809,815 against (32.11%).
The amendment took effect immediately on certification and is now part of the permanent constitutional text. Undoing it would require a new joint resolution approved by two-thirds of both the Texas House and Senate, followed by another statewide vote in which a majority of voters agreed to remove the protection.6Texas Legislative Council. Amendments to the Texas Constitution Since 1876 Any future wealth tax proposal would first have to clear that two-thirds supermajority just to reach the ballot.
Where It Fits With Other Texas Tax Bans
Proposition 3 is one of three recent Texas constitutional restrictions on tax types. In 2019, Proposition 4 amended Article VIII to prohibit the legislature from imposing a state income tax on individuals, strengthening a restriction that previously only required a voter referendum before an income tax could take effect.7Ballotpedia. Texas Proposition 4, Prohibit State Income Tax on Individuals Amendment (2019) That earlier amendment passed with roughly 74% of the vote.
In 2025, Texas voters approved Proposition 2, which bans the state from taxing realized or unrealized capital gains of individuals, families, estates, or trusts. That measure passed with about 65% support. Together, the three amendments close off income taxes, wealth taxes, and capital gains taxes at the constitutional level. The state’s revenue model remains built on sales taxes, property taxes, and the business-margin franchise tax, and changing that framework now requires clearing the highest legal bar Texas offers.