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AN ACT
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relating to an exemption from ad valorem taxation of a portion of |
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the appraised value of tangible personal property that is held or |
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used for the production of income. |
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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 (f) and except as provided by |
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Subsection (d), a [A] person is entitled to an exemption from |
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taxation by a taxing unit of $125,000 of the appraised value of the |
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tangible personal property the person owns that is held or used for |
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the production of income and has taxable situs at the same location |
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in the taxing unit [if that property has a taxable value of less |
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than $2,500]. |
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(c) [(b)] The exemption provided by Subsection (b) [(a)] |
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applies to each separate location in a taxing unit in which a person |
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holds or uses tangible personal property for the production of |
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income, and, for the purposes of Subsection (b) [(a)], all property |
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that has taxable situs in each separate location in the taxing unit |
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is aggregated to determine taxable value. |
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(d) A person who leases tangible personal property is |
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entitled to an exemption from taxation by a taxing unit of $125,000 |
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of the total appraised value of all the tangible personal property |
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the person owns that is held or used for the production of income |
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and is subject to a lease, regardless of where the property is |
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located in the taxing unit. |
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(d-1) Notwithstanding Subsections (b) and (d), a person is |
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entitled to an exemption from taxation by a taxing unit of $125,000 |
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of the total appraised value of all the tangible personal property |
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the person owns that is held or used for the production of income in |
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the taxing unit if the property has taxable situs within the taxing |
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unit at any location that is not owned or leased by the owner, |
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regardless of where the property is located within the taxing unit. |
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(e) The exemptions provided by Subsections (d) and (d-1) |
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apply 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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(f) For the purposes of Subsection (b), if a person is a |
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related business entity, all property described by that subsection |
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that has taxable situs at the same location in a taxing unit and |
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that is owned by the person is aggregated with the property |
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described by that subsection that has taxable situs at the same |
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location in the taxing unit and that is owned by each other related |
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business entity that composes the same unified business enterprise |
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to determine taxable value for the entity. |
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(g) 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 (f). |
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SECTION 2. Section 22.01, Tax Code, is amended by amending |
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Subsection (c-1) and adding Subsections (j-1), (j-2), (j-3), and |
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(n) to read as follows: |
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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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(j-1) Notwithstanding Subsections (a) and (b), a person is |
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required to render tangible personal property the person owns that |
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is held or used for the production of income only if, in the |
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person's opinion and as applicable: |
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(1) the aggregate market value of the property that |
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has taxable situs in the same location in at least one taxing unit |
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that participates in the appraisal district is greater than the |
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amount exempted under Section 11.145(b); or |
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(2) the aggregate market value of the property in at |
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least one taxing unit that participates in the appraisal district |
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is greater than the amount exempted under Section 11.145(d) or |
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(d-1), as applicable. |
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(j-2) A person required to render property for taxation |
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under Subsection (j-1) must render all tangible personal property |
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the person owns that is held or used for the production of income |
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and has taxable situs in the appraisal district. This subsection |
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does not apply to property exempt from taxation under a provision of |
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law other than Section 11.145. |
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(j-3) A person who elects not to render property for |
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taxation as authorized by Subsection (j-1) must file a rendition |
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statement or property report that includes a certification that the |
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person reasonably believes that the value of the property is not |
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more than the amount exempted under Section 11.145(b), (d), or |
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(d-1), as applicable. The election takes effect beginning with the |
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tax year following the tax year in which the rendition statement or |
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property report is filed and continues in effect until the |
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ownership of the person changes. Notwithstanding Subsection (j-1), |
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a person described by that subsection must render property for |
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taxation if required by the chief appraiser. |
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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. Each form must |
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include a box that a property owner who elects not to render the |
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property for taxation as authorized by Section 22.01(j-1) must |
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check to certify that the owner reasonably believes that the value |
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of the property is not more than the amount exempted under Section |
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11.145(b), (d), or (d-1), as applicable. A form may not require but |
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may permit a property owner to furnish information not specifically |
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required by this chapter to be reported. In addition, a form |
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prescribed or approved under this subsection must contain the |
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following statement in bold type: "If you make a false statement on |
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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. This Act applies only to ad valorem taxes imposed |
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for a tax year that begins on or after the effective date of this |
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Act. |
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SECTION 5. This Act takes effect January 1, 2026, but only |
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if the constitutional amendment proposed by the 89th Legislature, |
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Regular Session, 2025, to authorize the legislature to exempt from |
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ad valorem taxation a portion of the market value of tangible |
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personal property a person owns that is held or used for the |
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production of income is approved by the voters. If that amendment |
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is not approved by the voters, this Act has no effect. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I certify that H.B. No. 9 was passed by the House on April 3, |
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2025, by the following vote: Yeas 133, Nays 10, 2 present, not |
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voting; and that the House concurred in Senate amendments to H.B. |
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No. 9 on May 19, 2025, by the following vote: Yeas 110, Nays 15, 1 |
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present, not voting. |
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______________________________ |
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Chief Clerk of the House |
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I certify that H.B. No. 9 was passed by the Senate, with |
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amendments, on May 14, 2025, by the following vote: Yeas 31, Nays |
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0. |
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______________________________ |
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Secretary of the Senate |
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APPROVED: __________________ |
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Date |
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__________________ |
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Governor |