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A BILL TO BE ENTITLED
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AN ACT
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relating to the ad valorem taxation of tangible personal property |
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held or used for the production of income by related business |
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entities. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 11.145, Tax Code, is amended to read as |
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follows: |
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Sec. 11.145. INCOME-PRODUCING TANGIBLE PERSONAL PROPERTY |
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HAVING VALUE OF LESS THAN $2,500. (a) In this section: |
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(1) "Related business entity" means a business entity |
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that: |
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(A) engages in a common business enterprise with |
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at least one other business entity; and |
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(B) owns tangible personal property that: |
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(i) is held or used for the production of |
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income as part of the common business enterprise; and |
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(ii) is located at the same physical |
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address that tangible personal property owned by at least one other |
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business entity engaged in the common business enterprise is |
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located. |
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(2) "Unified business enterprise" means a common |
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business enterprise composed of more than one related business |
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entity. |
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(b) Subject to Subsection (d), a [A] person is entitled to |
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an exemption from taxation of the tangible personal property the |
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person owns that is held or used for the production of income if |
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that property has a taxable value of less than $2,500. |
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(c) [(b)] The exemption provided by Subsection (b) [(a)] |
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applies to each separate taxing unit in which a person holds or uses |
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tangible personal property for the production of income. |
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(d) For[, and, for] the purpose [purposes] of Subsection (b) |
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[(a)], all property described by that subsection in a [each] taxing |
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unit that is owned by a person is: |
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(1) aggregated to determine taxable value; and |
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(2) if the person is a related business entity, |
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aggregated with the property described by that subsection in the |
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taxing unit that is owned by each other related business enterprise |
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that composes the same unified business enterprise to determine |
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taxable value for the entity. |
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(e) A chief appraiser may investigate a business entity to |
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determine whether the entity: |
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(1) is a related business entity; and |
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(2) has aggregated tangible personal property as |
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provided by Subsection (d)(2). |
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SECTION 2. Section 22.01, Tax Code, is amended by amending |
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Subsections (a), (c-1), and (f) and adding Subsection (n) to read as |
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follows: |
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(a) Except as provided by Chapter 24, a person shall render |
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for taxation all tangible personal property used for the production |
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of income that the person owns or that the person manages and |
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controls as a fiduciary on January 1. A rendition statement shall |
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contain: |
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(1) the name and address of the property owner; |
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(2) a description of the property by type or category; |
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(3) if the property is inventory, a description of |
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each type of inventory and a general estimate of the quantity of |
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each type of inventory; |
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(4) the physical address [location] or taxable situs |
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of the property; and |
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(5) the property owner's good faith estimate of the |
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market value of the property or, at the option of the property |
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owner, the historical cost when new and the year of acquisition of |
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the property. |
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(c-1) In this section: |
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(1) "Related business entity" and "unified business |
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enterprise" have the meanings assigned by Section 11.145. |
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(2) "Secured party" has the meaning assigned by |
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Section 9.102, Business & Commerce Code. |
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(3) [(2)] "Security interest" has the meaning |
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assigned by Section 1.201, Business & Commerce Code. |
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(f) Notwithstanding Subsections (a) and (b), a rendition |
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statement of a person who owns tangible personal property used for |
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the production of income located in the appraisal district that, in |
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the owner's opinion, has an aggregate value of less than $20,000 is |
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required to contain only: |
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(1) the name and address of the property owner; |
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(2) a general description of the property by type or |
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category; and |
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(3) the physical address [location] or taxable situs |
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of the property. |
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(n) A rendition statement of a related business entity must |
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contain the information required by Subsection (a) or (f), as |
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applicable, stated for each related business entity that composes |
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the unified business enterprise of which the related business |
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entity that is the subject of the rendition is a part. |
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SECTION 3. Section 22.24(c), Tax Code, is amended to read as |
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follows: |
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(c) The comptroller may prescribe or approve different |
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forms for different kinds of property but shall ensure that each |
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form requires a property owner to furnish the information necessary |
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to identify the property and to determine its ownership, |
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taxability, and situs. Each form must include a box that the |
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property owner may check to permit the property owner to affirm that |
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the information contained in the most recent rendition statement |
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filed by the property owner in a prior tax year is accurate with |
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respect to the current tax year in accordance with Section |
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22.01(l). Each form must include a box that a property owner that is |
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a related business entity, as defined by Section 11.145, must check |
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to identify the owner as a related business entity. A form may not |
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require but may permit a property owner to furnish information not |
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specifically required by this chapter to be reported. In addition, |
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a form prescribed or approved under this subsection must contain |
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the following statement in bold type: "If you make a false statement |
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on this form, you could be found guilty of a Class A misdemeanor or a |
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state jail felony under Section 37.10, Penal Code." |
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SECTION 4. The changes in law made by this Act apply only to |
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an ad valorem tax year that begins on or after the effective date of |
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this Act. |
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SECTION 5. This Act takes effect January 1, 2024. |