S.B. No. 878
AN ACT
1-1 relating to the value of certain types of property for purposes of
1-2 property taxation and to the prepayment of property taxes by
1-3 certain taxpayers; creating offenses and providing penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subsection (a), Section 23.12, Tax Code, is
1-6 amended to read as follows:
1-7 (a) Except as provided by Section 23.12A of this code, the
1-8 <The> market value of an inventory is the price for which it would
1-9 sell as a unit to a purchaser who would continue the business. An
1-10 inventory shall include residential real property which has never
1-11 been occupied as a residence and is held for sale in the ordinary
1-12 course of a trade or business, provided that the residential real
1-13 property remains unoccupied, is not leased or rented, and produces
1-14 no income.
1-15 SECTION 2. Subsection (f), Section 23.12, Tax Code, is
1-16 amended to read as follows:
1-17 (f) The owner of an inventory other than an applicable
1-18 inventory as that term is defined in Section 23.12A of this code
1-19 may elect to have the inventory appraised at its market value as of
1-20 September 1 of the year preceding the tax year to which the
1-21 appraisal applies by filing an application with the chief appraiser
1-22 requesting that the inventory be appraised as of September 1. The
1-23 application must clearly describe the inventory to which it applies
2-1 and be signed by the owner of the inventory. The application
2-2 applies to the appraisal of the inventory in each tax year that
2-3 begins after the next August 1 following the date the application
2-4 is filed with the chief appraiser unless the owner of the inventory
2-5 by written notice filed with the chief appraiser revokes the
2-6 application or the ownership of the inventory changes. A notice
2-7 revoking the application is effective for each tax year that begins
2-8 after the next September 1 following the date the notice of
2-9 revocation is filed with the chief appraiser.
2-10 SECTION 3. Subchapter B, Chapter 23, Tax Code, is amended by
2-11 adding Section 23.12A to read as follows:
2-12 Sec. 23.12A. SPECIAL INVENTORY; VALUE. (a) In this
2-13 section:
2-14 (1) "Applicable inventory" means an inventory that is
2-15 held for resale and that consists of individual units of personal
2-16 property, each unit of which must, as a matter of law, be titled in
2-17 the name of the retail purchaser and be registered with the Texas
2-18 Department of Transportation through the office of the county tax
2-19 assessor-collector.
2-20 (2) "Dealer" means a person who holds a dealer's
2-21 general distinguishing number issued by the Texas Department of
2-22 Transportation under the authority of Article 6686, Revised
2-23 Statutes.
2-24 (3) "Excluded inventory" means that part of an
2-25 applicable inventory that:
3-1 (A) is included in a transaction consisting of
3-2 five or more units sold to a single business entity that has a
3-3 manufacturer's or distributor's fleet identification number
3-4 authorizing the entity to make fleet purchases;
3-5 (B) is included in a transaction between
3-6 dealers; or
3-7 (C) consists of vehicles classified as medium or
3-8 heavy duty trucks of 16,000 pounds gross vehicular weight or more.
3-9 (4) "Owner" means the person responsible for the
3-10 payment of property taxes levied against a special inventory.
3-11 (5) "Sales price" means the total amount of money paid
3-12 or to be paid for the purchase of a motor vehicle as set forth in
3-13 the form entitled "Application for Texas Certificate of Title"
3-14 promulgated by the Texas Department of Transportation.
3-15 (6) "Special inventory" means that part of an
3-16 applicable inventory that remains after subtracting units included
3-17 in excluded inventory.
3-18 (7) "Total annual sales" means the total of the sales
3-19 price from every sale of units from a special inventory for a
3-20 12-month period or for that portion of a 12-month period for which
3-21 the owner of a special inventory is responsible for the payment of
3-22 property taxes levied against the special inventory.
3-23 (b) Except as provided by Subsection (c) of this section,
3-24 for the purpose of the computation of property tax, the market
3-25 value of a special inventory on January 1 is the total annual sales
4-1 from the special inventory for the 12-month period corresponding to
4-2 the prior tax year, divided by 12.
4-3 (c) For the purpose of the computation of property tax, the
4-4 market value of a special inventory with respect to which sales
4-5 were not made for the entire 12-month period corresponding to the
4-6 prior tax year, the chief appraiser may estimate the market value
4-7 of the special inventory. In making the estimate allowed by this
4-8 subsection the chief appraiser shall extrapolate using sales data,
4-9 if any, generated from the special inventory in the prior tax year.
4-10 (d) Excluded inventory described in Subsection (a)(3)(C) of
4-11 this section is appraised as provided by Section 23.12(a) of this
4-12 code.
4-13 SECTION 4. Subchapter B, Chapter 23, Tax Code, is amended by
4-14 adding Section 23.12B to read as follows:
4-15 Sec. 23.12B. PREPAYMENT OF TAXES BY CERTAIN TAXPAYERS.
4-16 (a) In this section:
4-17 (1) "Chief appraiser" means the chief appraiser for
4-18 the appraisal district in which is located an applicable inventory.
4-19 (2) "Collector" means the county tax
4-20 assessor-collector in the county in which is located a special
4-21 inventory.
4-22 (3) "County aggregate tax rate" means the combined tax
4-23 rate of all relevant taxing units in a county.
4-24 (4) "Owner" has the meaning given it in Section 23.12A
4-25 of this code.
5-1 (5) "Relevant taxing unit" means a taxing unit,
5-2 including the county, authorized by law to levy property taxes
5-3 against a special inventory.
5-4 (6) "Sales price" has the meaning given it in Section
5-5 23.12A of this code.
5-6 (7) "Special inventory" has the meaning given it in
5-7 Section 23.12A of this code.
5-8 (8) "Special inventory tax statement" means the form
5-9 promulgated by the comptroller of public accounts as required by
5-10 this section.
5-11 (9) "Total annual sales" has the meaning given it in
5-12 Section 23.12A of this code.
5-13 (10) "Unit property tax value factor" is one-twelfth
5-14 of the most recent county aggregate tax rate for the county in
5-15 which a special inventory is located.
5-16 (b) An owner shall assign a unit property tax value to each
5-17 unit sold from a special inventory. The unit property tax value of
5-18 each unit is determined by multiplying the sales price of the unit
5-19 by the unit property tax value factor. On or before the 10th day
5-20 of each month the owner shall deposit with the collector a sum
5-21 equal to the total of unit property tax value assigned to all units
5-22 sold from the special inventory in the prior month. The money
5-23 shall be deposited by the collector in or otherwise credited by the
5-24 collector to the owner's escrow account for prepayment of property
5-25 taxes as provided by this section. An escrow account required by
6-1 this section is used to pay property taxes levied against the
6-2 special inventory, and the owner shall fund the escrow account as
6-3 provided by this subsection.
6-4 (c) The collector shall maintain the escrow account for each
6-5 owner in the county depository. The collector is not required to
6-6 maintain a separate account in the depository for each escrow
6-7 account created as provided by this section but shall maintain
6-8 separate records for each owner. The collector shall retain any
6-9 interest generated by the escrow account to defray the cost of
6-10 administration of the prepayment procedure established by this
6-11 section. Interest generated by an escrow account created as
6-12 provided by this section is the sole property of the collector, and
6-13 that interest may be used by no entity other than the collector.
6-14 (d) The owner may not withdraw the money in the escrow
6-15 account.
6-16 (e) The comptroller of public accounts shall promulgate a
6-17 form entitled a Special Inventory Tax Statement. The owner of a
6-18 special inventory shall complete the form with respect to each unit
6-19 sold from the owner's applicable inventory and may use no other
6-20 form for that purpose. The form may include the information the
6-21 comptroller deems appropriate but shall include at least the
6-22 following:
6-23 (1) a description of the unit sold;
6-24 (2) a statement as to whether or not the unit was sold
6-25 from the owner's special inventory;
7-1 (3) the sales price of the unit;
7-2 (4) the unit property tax value of the unit if the
7-3 unit was sold from the owner's special inventory; and
7-4 (5) the reason the unit was excluded from the owner's
7-5 special inventory, if no unit property tax value is assigned.
7-6 (f) On or before the 10th day of each month the owner of a
7-7 special inventory shall file with the chief appraiser the special
7-8 inventory tax statement for each unit sold by the owner from the
7-9 owner's applicable inventory in the prior month. An owner shall
7-10 retain documentation relating to the disposition of each unit sold
7-11 from an applicable inventory, including documentation relating to
7-12 the exclusion of a unit from special inventory and shall make that
7-13 documentation available to the chief appraiser upon request.
7-14 (g) A relevant taxing unit shall, on its tax bill prepared
7-15 for the owner of a special inventory, separately itemize the taxes
7-16 levied against the special inventory. When the tax bill is
7-17 prepared by a relevant taxing unit for a special inventory, the
7-18 assessor for the taxing unit, or an entity, if any, other than the
7-19 collector, that collects taxes on behalf of the taxing unit, shall
7-20 provide the collector a true and correct copy of the tax bill sent
7-21 to the owner, including taxes levied against the owner's special
7-22 inventory. The collector shall apply the money in the owner's
7-23 escrow account to the taxes imposed and deliver a tax receipt to
7-24 the owner. The collector shall apply the amount to each relevant
7-25 taxing unit in proportion to the amount of taxes levied, and the
8-1 assessor of each relevant taxing unit shall apply the funds
8-2 received from the collector to the taxes owed by the owner.
8-3 (h) If the amount in the escrow account is not sufficient to
8-4 pay the taxes in full, the collector shall apply the money to the
8-5 taxes and deliver to the owner a tax receipt for the partial
8-6 payment and a tax bill for the unpaid amount together with a
8-7 statement that the owner must remit to the collector the balance of
8-8 the total tax due.
8-9 (i) The collector shall remit to each relevant taxing unit
8-10 the total amount collected by the collector in deficiency payments.
8-11 The assessor of each relevant taxing unit shall apply those funds
8-12 to the taxes owed by the owner. Taxes that are due but not
8-13 received by the collector and remitted by the collector to each
8-14 relevant taxing unit on or before January 31 are delinquent.
8-15 (j) The collector shall annually distribute among the
8-16 relevant taxing units, in proportion to the taxes levied by each
8-17 against the special inventory, funds, if any, that remain in the
8-18 escrow account after the payment of all property taxes due.
8-19 (k) Not later than February 1 of each year, or, in the case
8-20 of an owner who was not in business on January 1, not later than 30
8-21 days after commencement of business, each owner shall file a
8-22 special inventory declaration with the chief appraiser and file a
8-23 copy with the county tax assessor-collector. The declaration is
8-24 sufficient to comply with this subsection if it sets forth the
8-25 following information:
9-1 (1) the name and business address of each location at
9-2 which the owner conducts business;
9-3 (2) each of the owner's general distinguishing
9-4 numbers, if the owner has a general distinguishing number issued by
9-5 the Texas Department of Transportation;
9-6 (3) a statement that the owner is the owner of a
9-7 special inventory; and
9-8 (4) the market value of the inventory for the current
9-9 tax year as computed under Section 23.12A(b) of this code.
9-10 (l) An owner who fails to file a special inventory
9-11 declaration required by this section commits an offense. An
9-12 offense under this subsection is a misdemeanor punishable by a fine
9-13 not to exceed $500. A fine collected under this subsection may be
9-14 used only by the collector to defray the cost of enforcing this
9-15 section. Each day during which an owner fails to comply with the
9-16 terms of this subsection is a separate violation.
9-17 (m) An owner who fails to file a special inventory tax
9-18 statement as required by this section commits an offense. An
9-19 offense under this subsection is a misdemeanor punishable by a fine
9-20 not to exceed $100. A fine collected under this subsection may be
9-21 used only by the collector to defray the cost of enforcing this
9-22 section. Each day during which an owner fails to comply with the
9-23 terms of this subsection is a separate violation.
9-24 (n) An owner who fails to remit the amounts due as required
9-25 by Subsection (b) of this section shall pay a penalty of five
10-1 percent of the amount due. If the amount is not paid within 10
10-2 days after the due date, the owner shall pay an additional penalty
10-3 of five percent of the amount due. The county attorney shall
10-4 enforce the terms of this subsection, and a penalty collected under
10-5 this subsection may be used only by the collector to defray the
10-6 cost of enforcing this section. A penalty under this subsection is
10-7 in addition to any penalty that may be due if the owner's taxes are
10-8 not paid in full by January 31.
10-9 SECTION 5. This Act takes effect January 1, 1994. The
10-10 market value of a special inventory on January 1, 1994, is
10-11 one-twelfth of total annual sales from the special inventory for
10-12 tax year 1993.
10-13 SECTION 6. The importance of this legislation and the
10-14 crowded condition of the calendars in both houses create an
10-15 emergency and an imperative public necessity that the
10-16 constitutional rule requiring bills to be read on three several
10-17 days in each house be suspended, and this rule is hereby suspended,
10-18 and that this Act take effect and be in force according to its
10-19 terms, and it is so enacted.