HB9 - Relating to an exemption from ad valorem taxation of a portion of the appraised value of tangible personal property that is held or used for the production of income.

      H.B. No. 9         AN ACT   relating to an exemption from ad valorem taxation of a portion of   the appraised value of tangible personal property that is held or   used for the production of income.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 11.145, Tax Code, is amended to read as   follows:          Sec. 11.145.  INCOME-PRODUCING TANGIBLE PERSONAL PROPERTY   [ HAVING VALUE OF LESS THAN $2,500 ]. (a) In this section:                 (1)     "Related business entity" means a business entity   that:                       (A)     engages in a common business enterprise with   at least one other business entity; and                       (B)  owns tangible personal property that:                             (i)     is held or used for the production of   income as part of the common business enterprise; and                             (ii)     is located at the same physical   address that tangible personal property owned by at least one other   business entity engaged in the common business enterprise is   located.                 (2)     "Unified business enterprise" means a common   business enterprise composed of more than one related business   entity.           (b)     Subject to Subsection (f) and except as provided by   Subsection (d), a [ A ] person is entitled to an exemption from   taxation by a taxing unit of $125,000 of the appraised value of the   tangible personal property the person owns that is held or used for   the production of income and has taxable situs at the same location   in the taxing unit [ if that property has a taxable value of less   than $2,500 ].           (c)  [ (b) ]  The exemption provided by Subsection (b) [ (a) ]   applies to each separate location in a taxing unit in which a person   holds or uses tangible personal property for the production of   income, and, for the purposes of Subsection (b) [ (a) ], all property   that has taxable situs in each separate location in the taxing unit   is aggregated to determine taxable value.           (d)     A person who leases tangible personal property is   entitled to an exemption from taxation by a taxing unit of $125,000   of the total appraised value of all the tangible personal property   the person owns that is held or used for the production of income   and is subject to a lease, regardless of where the property is   located in the taxing unit.           (d-1)     Notwithstanding Subsections (b) and (d), a person is   entitled to an exemption from taxation by a taxing unit of $125,000   of the total appraised value of all the tangible personal property   the person owns that is held or used for the production of income in   the taxing unit if the property has taxable situs within the taxing   unit at any location that is not owned or leased by the owner,   regardless of where the property is located within the taxing unit.           (e)     The exemptions provided by Subsections (d) and (d-1)   apply to each separate taxing unit in which a person holds or uses   tangible personal property for the production of income.           (f)     For the purposes of Subsection (b), if a person is a   related business entity, all property described by that subsection   that has taxable situs at the same location in a taxing unit and   that is owned by the person is aggregated with the property   described by that subsection that has taxable situs at the same   location in the taxing unit and that is owned by each other related   business entity that composes the same unified business enterprise   to determine taxable value for the entity.           (g)     A chief appraiser may investigate a business entity to   determine whether the entity:                 (1)  is a related business entity; and                 (2)     has aggregated tangible personal property as   provided by Subsection (f).          SECTION 2.  Section 22.01, Tax Code, is amended by amending   Subsection (c-1) and adding Subsections (j-1), (j-2), (j-3), and   (n) to read as follows:          (c-1)  In this section:                (1)   "Related business entity" and "unified business   enterprise" have the meanings assigned by Section 11.145.                 (2)   "Secured party" has the meaning assigned by   Section 9.102, Business & Commerce Code.                 (3)  [ (2) ]  "Security interest" has the meaning   assigned by Section 1.201, Business & Commerce Code.           (j-1)     Notwithstanding Subsections (a) and (b), a person is   required to render tangible personal property the person owns that   is held or used for the production of income only if, in the   person's opinion and as applicable:                 (1)     the aggregate market value of the property that   has taxable situs in the same location in at least one taxing unit   that participates in the appraisal district is greater than the   amount exempted under Section 11.145(b); or                 (2)     the aggregate market value of the property in at   least one taxing unit that participates in the appraisal district   is greater than the amount exempted under Section 11.145(d) or   (d-1), as applicable.           (j-2)     A person required to render property for taxation   under Subsection (j-1) must render all tangible personal property   the person owns that is held or used for the production of income   and has taxable situs in the appraisal district. This subsection   does not apply to property exempt from taxation under a provision of   law other than Section 11.145.           (j-3)     A person who elects not to render property for   taxation as authorized by Subsection (j-1) must file a rendition   statement or property report that includes a certification that the   person reasonably believes that the value of the property is not   more than the amount exempted under Section 11.145(b), (d), or   (d-1), as applicable. The election takes effect beginning with the   tax year following the tax year in which the rendition statement or   property report is filed and continues in effect until the   ownership of the person changes. Notwithstanding Subsection (j-1),   a person described by that subsection must render property for   taxation if required by the chief appraiser.           (n)     A rendition statement of a related business entity must   contain the information required by Subsection (a) or (f), as   applicable, stated for each related business entity that composes   the unified business enterprise of which the related business   entity that is the subject of the rendition is a part.          SECTION 3.  Section 22.24(c), Tax Code, is amended to read as   follows:          (c)  The comptroller may prescribe or approve different   forms for different kinds of property but shall ensure that each   form requires a property owner to furnish the information necessary   to identify the property and to determine its ownership,   taxability, and situs. Each form must include a box that the   property owner may check to permit the property owner to affirm that   the information contained in the most recent rendition statement   filed by the property owner in a prior tax year is accurate with   respect to the current tax year in accordance with Section   22.01(l). Each form must include a box that a property owner that is   a related business entity, as defined by Section 11.145, must check   to identify the owner as a related business entity.   Each form must   include a box that a property owner who elects not to render the   property for taxation as authorized by Section 22.01(j-1) must   check to certify that the owner reasonably believes that the value   of the property is not more than the amount exempted under Section   11.145(b), (d), or (d-1), as applicable.  A form may not require but   may permit a property owner to furnish information not specifically   required by this chapter to be reported. In addition, a form   prescribed or approved under this subsection must contain the   following statement in bold type: "If you make a false statement on   this form, you could be found guilty of a Class A misdemeanor or a   state jail felony under Section 37.10, Penal Code."          SECTION 4.  This Act applies only to ad valorem taxes imposed   for a tax year that begins on or after the effective date of this   Act.          SECTION 5.  This Act takes effect January 1, 2026, but only   if the constitutional amendment proposed by the 89th Legislature,   Regular Session, 2025, to authorize the legislature to exempt from   ad valorem taxation a portion of the market value of tangible   personal property a person owns that is held or used for the   production of income is approved by the voters. If that amendment   is not approved by the voters, this Act has no effect.       ______________________________ ______________________________      President of the Senate Speaker of the House                   I certify that H.B. No. 9 was passed by the House on April 3,   2025, by the following vote:  Yeas 133, Nays 10, 2 present, not   voting; and that the House concurred in Senate amendments to H.B.   No. 9 on May 19, 2025, by the following vote:  Yeas 110, Nays 15, 1   present, not voting.     ______________________________   Chief Clerk of the House               I certify that H.B. No. 9 was passed by the Senate, with   amendments, on May 14, 2025, by the following vote:  Yeas 31, Nays   0.     ______________________________   Secretary of the Senate      APPROVED: __________________                   Date                       __________________                 Governor