Relating to an exemption from ad valorem taxation of a portion of the appraised value of tangible personal property a person owns that is held or used for the production of income.
relating to an exemption from ad valorem taxation of a portion of
the appraised value of tangible personal property a person owns
that is held or used for the production of income.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. PROVISIONS CONTINGENT ON CONSTITUTIONAL AMENDMENT
SECTION 1.01. The heading to 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].
SECTION 1.02. Section 11.145(a), Tax Code, is amended to
read as follows:
(a) A person is entitled to an exemption from taxation of
$250,000 of the appraised value of tangible personal property the
person owns that is held or used for the production of income [if
that property has a taxable value of less than $2,500].
SECTION 1.03. Section 22.01, Tax Code, is amended by adding
Subsection (j-1) to read as follows:
(j-1) 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, 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(a). A person required to render property for
taxation under this subsection 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.
SECTION 1.04. The changes in law made by this article apply
only to an ad valorem tax year that begins on or after January 1,
2025.
ARTICLE 2. PROVISIONS NOT CONTINGENT ON CONSTITUTIONAL AMENDMENT
SECTION 2.01. Section 26.01, Tax Code, is amended by adding
Subsections (a-2) and (a-3) to read as follows:
(a-2) This subsection applies only to the appraisal roll for
a taxing unit for the 2025 tax year. When the chief appraiser
delivers the appraisal roll to the assessor for the taxing unit, the
chief appraiser shall include a provisional appraisal roll to
account for the changes in law attributable to 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, as if those
changes were in effect. If the chief appraiser delivers a
supplemental appraisal roll or correction to the appraisal roll to
the assessor for the taxing unit before that constitutional
amendment takes effect, the chief appraiser shall include
provisional appraisal roll entries to account for the changes in
law attributable to that constitutional amendment. If that
constitutional amendment takes effect:
(1) on the date that constitutional amendment takes
effect, the provisional appraisal roll, as supplemented and
corrected, becomes the appraisal roll for the taxing unit; and
(2) as soon as practicable after that date, the chief
appraiser shall correct the taxing unit’s appraisal roll as
necessary to finally account for the changes in law attributable to
that constitutional amendment.
(a-3) This subsection and Subsection (a-2) expire December
31, 2026.
SECTION 2.02. Section 26.04, Tax Code, is amended by adding
Subsections (a-1) and (c-1) to read as follows:
(a-1) On receipt of the appraisal roll for the 2025 tax
year, the assessor for a taxing unit shall determine the total
taxable value of property taxable by the taxing unit and the taxable
value of new property as if the changes in law attributable to 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 were in effect for that tax year. This subsection expires
December 31, 2026.
(c-1) An officer or employee designated by the governing
body of a taxing unit shall calculate the no-new-revenue tax rate
and the voter-approval tax rate of the taxing unit for the 2025 tax
year as if the changes in law attributable to 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 were in
effect for that tax year. This subsection expires December 31,
2026.
SECTION 2.03. Chapter 26, Tax Code, is amended by adding
Section 26.0401 to read as follows:
Sec. 26.0401. CALCULATION OF CERTAIN TAX RATES FOR 2025 TAX
YEAR. (a) For the purposes of calculating the no-new-revenue tax
rate, the voter-approval tax rate, and any related tax rate for the
2025 tax year, a taxing unit that calculates those rates under a
provision of law other than Section 26.04 or 26.08 shall calculate
those rates as if the changes in law attributable to 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 were in effect for that tax year.
(b) This section expires December 31, 2026.
SECTION 2.04. Section 26.08, Tax Code, is amended by adding
Subsection (q) to read as follows:
(q) For purposes of this section, the voter-approval tax
rate of a school district for the 2025 tax year shall be calculated
as if the changes in law attributable to 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 were in
effect for that tax year. This subsection expires December 31,
2026.
SECTION 2.05. Section 26.09, Tax Code, is amended by adding
Subsection (c-1) to read as follows:
(c-1) The assessor for a taxing unit shall calculate the
amount of tax imposed by the taxing unit on the tangible personal
property a person owns that is held or used for the production of
income for the 2025 tax year as if the changes in law attributable
to 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 were in effect for that tax year and also as if
the changes in law attributable to that constitutional amendment
were not in effect for that tax year. This subsection expires
December 31, 2026.
SECTION 2.06. Section 26.15, Tax Code, is amended by adding
Subsection (h) to read as follows:
(h) The assessor for a taxing unit shall correct the tax
roll for the taxing unit for the 2025 tax year to reflect the
results of the election to approve 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. This
subsection expires December 31, 2026.
SECTION 2.07. Section 31.01, Tax Code, is amended by adding
Subsections (d-2), (d-3), (d-4), and (d-5) to read as follows:
(d-2) This subsection and Subsections (d-3) and (d-4) apply
only to taxes imposed by a taxing unit on the tangible personal
property a person owns that is held or used for the production of
income for the 2025 tax year and only if the changes in law
attributable to 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 would lower the taxes imposed by the taxing
unit on the property for that tax year. The assessor for the taxing
unit shall compute the amount of taxes imposed and the other
information required by this section as if the changes in law
attributable to that constitutional amendment were in effect for
that tax year. The tax bill or the separate statement must indicate
that the bill is a provisional tax bill and include a statement in
substantially the following form:
“If the Texas Legislature had not enacted property tax relief
legislation during the 2025 legislative session, your tax bill
would have been $____ (insert amount of tax bill if the changes in
law attributable to 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 were not in effect for
that tax year). Because of action by the Texas Legislature, your
tax bill has been lowered by $____ (insert difference between
amount of tax bill if the changes in law attributable to that
constitutional amendment were not in effect for that tax year and
amount of tax bill if the changes in law attributable to that
constitutional amendment were in effect for that tax year),
resulting in a lower tax bill of $____ (insert amount of tax bill if
the changes in law attributable to that constitutional amendment
were in effect for that tax year), contingent on the approval by the
voters at an election to be held November 4, 2025, of 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. If that constitutional amendment is not approved by the
voters at the election, a supplemental tax bill in the amount of
$____ (insert difference between amount of tax bill if the changes
in law attributable to that constitutional amendment were not in
effect for that tax year and amount of tax bill if the changes in law
attributable to that constitutional amendment were in effect for
that tax year) will be mailed to you.”
(d-3) A tax bill prepared by the assessor for a taxing unit
as provided by Subsection (d-2) and mailed as provided by
Subsection (a) is considered to be a provisional tax bill until the
canvass of the votes on 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. If that constitutional
amendment is approved by the voters, the tax bill is considered to
be a final tax bill for the taxes imposed on the property for the
2025 tax year, and no additional tax bill is required to be mailed
unless another provision of this title requires the mailing of a
corrected tax bill. If that constitutional amendment is not
approved by the voters:
(1) a tax bill prepared by the assessor as provided by
Subsection (d-2) is considered to be a final tax bill but only as to
the portion of the taxes imposed on the property for the 2025 tax
year that is included in the bill;
(2) the amount of taxes imposed by each taxing unit on
the tangible personal property a person owns that is held or used
for the production of income for the 2025 tax year is calculated as
if the changes in law attributable to that constitutional amendment
were not in effect for that tax year; and
(3) except as provided by Subsections (f), (i-1), and
(k), the assessor for each taxing unit shall prepare and mail a
supplemental tax bill, by December 1 or as soon thereafter as
practicable, in an amount equal to the difference between the
amount of the tax bill if the changes in law attributable to that
constitutional amendment were not in effect for that tax year and
the amount of the tax bill if the changes in law attributable to
that constitutional amendment were in effect for that tax year.
(d-4) Except as otherwise provided by Subsection (d-3), the
provisions of this section other than Subsection (d-2) apply to a
supplemental tax bill mailed under Subsection (d-3).
(d-5) This subsection and Subsections (d-2), (d-3), and
(d-4) expire December 31, 2026.
SECTION 2.08. Section 31.02, Tax Code, is amended by adding
Subsection (a-1) to read as follows:
(a-1) Except as provided by Subsection (b) of this section
and Sections 31.03 and 31.04, taxes for which a supplemental tax
bill is mailed under Section 31.01(d-3) are due on receipt of the
tax bill and are delinquent if not paid before March 1 of the year
following the year in which imposed. This subsection expires
December 31, 2026.
ARTICLE 3. EFFECTIVE DATES
SECTION 3.01. Except as otherwise provided by this article:
(1) this Act takes effect immediately if this Act
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution;
and
(2) if this Act does not receive the vote necessary for
immediate effect, this Act takes effect September 1, 2025.
SECTION 3.02. Article 1 of this Act takes effect on the date
on which 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 takes effect. If that amendment is not
approved by the voters, Article 1 of this Act has no effect.
