Preventing the Recognition of Terrorist States Act of 2023 This bill prohibits U.S. official recognition of the Taliban-controlled government of Afghanistan. No federal department or agency may take any action that states or implies recognition of the Taliban's claim of sovereignty over Afghanistan. The bill also bars the Department of State, the U.S. Agency for International Development (USAID), and the Department of Defense from using federal funds to prepare or implement any policy that extends diplomatic recognition to the Taliban-controlled government of Afghanistan. The State Department must designate (1) the Taliban-controlled government of Afghanistan as a state sponsor of terrorism, and (2) the Taliban as a foreign terrorist organization.