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Signed Into Law
Signed May 14, 2025Effective 2025-05-14
HJR2

Regular Session

Proposing a constitutional amendment prohibiting the legislature from imposing death taxes applicable to a decedent's property or the transfer of an estate, inheritance, legacy, succession, or gift.

Government Affairs & Regulatory Compliance Analysis

HJR2: Government Affairs Overview

HJR2 proposes a constitutional amendment to permanently prohibit the Texas Legislature from enacting a state-level "death tax" (estate, inheritance, or gift tax). While Texas currently has no estate tax, this measure locks the status quo into the Constitution, preventing future revenue grabs on succession without voter approval. The amendment preserves the existing $10 motor vehicle gift tax and does not impact ad valorem property taxes.

Rep. Charlie Geren·House Bill·Regular Session

Low
Low Cost
Effective:2025-05-14

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HJR2
Proposing a constitutional amendment prohibiting the legislature from imposing death taxes applicable to a decedent's property or the transfer of an e...
Low Urgency
Heavily Contested
House Vote112 - 29
YEA
NAY
79% in favor141 voting
Senate Vote27 - 3
YEA
90% in favor30 voting
32
Total Opposition Votes
Cost Impact
Low
Effective
2025-05-14
Primary Author: Rep. Charlie Geren
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: May 14, 2025 (Date the resolution takes effect for ballot placement purposes only).
  • Voter Approval Date: November 4, 2025 (The amendment must be approved by voters to become law).
  • Compliance Deadline: Immediate maintenance of status quo. No new taxes are imposed; however, businesses must continue current federal filings and specific state transaction fees.
  • Agency Rulemaking: None immediately required. If passed, the Comptroller may issue guidance clarifying that the ban applies to "entity interest transfers" (e.g., LLC units) to prevent legislative workarounds.

Immediate Action Plan

  • Audit Insurance Policies: Review "Key Person" and liquidity policies. Ensure you are not over-insured for a state tax liability that is constitutionally prohibited.
  • Update Standard Forms: Revise client communication regarding estate tax liabilities to specify "Federal Only."
  • Maintain Title Procedures: Issue a memo to title departments confirming that motor vehicle gift tax procedures remain in full force.
  • Vote: Ensure organizational leadership is aware of the November 4, 2025 ballot date to secure this protection.

Operational Changes Required

Contracts

  • Buy-Sell Agreements: Review definitions of "Estate Taxes" in existing partnership and shareholder agreements. Ensure clauses explicitly distinguish between Federal estate taxes (active) and State death taxes (prohibited). Remove or revise formulas that withhold funds for "potential state inheritance liability."
  • Trust Instruments: Strengthen "Situs of Trust" clauses to anchor trusts in Texas, leveraging this constitutional protection against other jurisdictions that may attempt to assert tax nexus.

Hiring/Training

  • Title & Automotive Staff: Train staff that the "Ban on Gift Taxes" does not apply to the $10 Motor Vehicle Gift Tax. Staff must continue to collect this fee and require the Affidavit of Motor Vehicle Gift Transfer (Form 14-317).
  • Estate Planning: Advisors must educate clients that this is a state-level ban only; Federal Form 706 obligations remain unchanged.

Reporting & Record-Keeping

  • Motor Vehicle Gifts: Maintain strict documentation for Form 14-317. Because the state is constitutionally barred from taxing general gifts but *permitted* to tax vehicle gifts, auditors will scrutinize these transactions to ensure they are not disguised sales.
  • Succession Planning: Document that liquidity plans are based on zero state tax liability.

Fees & Costs

  • No New Fees: The measure prevents the creation of new fees.
  • Existing Fee Maintenance: The $10 tax on motor vehicle gifts remains enforceable.

Strategic Ambiguities & Considerations

  • The "Transaction" Loophole: The amendment bans taxes on the *transfer* of an estate. It does not explicitly define if the state could impose a "documentary stamp tax" or "filing fee" on the re-titling of assets following a death. Watch for future legislative attempts to tax the *paperwork* rather than the *transfer*.
  • Property Tax Pivot: The amendment explicitly protects Ad Valorem taxes. Businesses holding significant real estate in trusts should anticipate that if the state cannot raise revenue through inheritance taxes, pressure may increase on property tax appraisals for estate-held assets.
  • Motor Vehicle Tax Expansion: Unlike other taxes which are frozen at Jan 1, 2025 levels or banned, the Legislative Budget Board indicates the amendment does *not* prohibit future changes to the rate or applicability of the motor vehicle gift tax.

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

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Legislative Timeline

This bill's path through the Texas Legislature

Filed
Feb 26, 2025
Passed House
Apr 29, 2025
Passed Senate
May 12, 2025
Signed
May 14, 2025
Effective
May 14, 2025
TopicsResolutionsResolutions--constitutional AmendmentsTaxationTaxation--inheritance
03

House Authors

Rep. Charlie GerenRepublican · Primary Author
Joint Authors
Coauthors (14)

Senate Sponsors

Sen. Charles PerryRepublican · Primary Sponsor
Cosponsors (5)

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

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More from Rep. Charlie Geren

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Quick Reference

Frequently Asked Questions

Common questions about HJR2

Q

What does Texas HJR2 do?

HJR2 proposes a constitutional amendment to permanently prohibit the Texas Legislature from enacting a state-level "death tax" (estate, inheritance, or gift tax). While Texas currently has no estate tax, this measure locks the status quo into the Constitution, preventing future revenue grabs on succession without voter approval. The amendment preserves the existing $10 motor vehicle gift tax and does not impact ad valorem property taxes.

Q

Who authored HJR2?

HJR2 was authored by Texas Representative Charlie Geren during the Regular Session.

Q

When was HJR2 signed into law?

HJR2 was signed into law by Governor Greg Abbott on May 14, 2025.

Q

How significant are the changes in HJR2?

The regulatory priority for HJR2 is rated as "low". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of HJR2?

The cost impact of HJR2 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does HJR2 address?

HJR2 addresses topics including resolutions, resolutions--constitutional amendments, taxation and taxation--inheritance.

Q

What are the key dates for HJR2?

Key dates for HJR2: Effective date is 2025-05-14. Consult with legal counsel regarding applicability.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026