By Hamric H.B. No. 1694
77R5762 JD-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the exemption from ad valorem taxation of motor
1-3 vehicles leased for personal use.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by
1-6 adding Section 11.252 to read as follows:
1-7 Sec. 11.252. MOTOR VEHICLES LEASED FOR PERSONAL USE. (a) In
1-8 this section:
1-9 (1) "Lease" has the meaning assigned by Section
1-10 152.001.
1-11 (2) "Leased vehicle" means a motor vehicle that is
1-12 subject to a lease.
1-13 (3) "Lessee" means the person to whom a leased vehicle
1-14 is leased.
1-15 (4) "Lessor" means the owner of a leased vehicle.
1-16 (5) "Motor vehicle" means a truck or passenger car
1-17 with a shipping weight of not more than 9,000 pounds.
1-18 (b) A lessor is entitled to an exemption from taxation of a
1-19 leased vehicle if:
1-20 (1) the lessee does not hold the leased vehicle for
1-21 the production of income; and
1-22 (2) the leased vehicle is used only for activities
1-23 that do not involve the production of income, other than the income
1-24 to the lessor under the lease.
2-1 (c) The comptroller by rule shall establish exemption
2-2 application requirements and appropriate procedures to determine
2-3 whether a leased vehicle qualifies for an exemption under this
2-4 section. The chief appraiser shall publicize the provisions of
2-5 this section and the requirements and procedures established by the
2-6 comptroller under this subsection.
2-7 (d) In connection with the requirements and procedures under
2-8 Subsection (c), the comptroller by rule shall prescribe a
2-9 declaration form to be completed by a lessee for a motor vehicle
2-10 for which the lessor may apply for an exemption under this section.
2-11 The form shall require the lessee to provide the lessee's full
2-12 name, permanent address, and driver's license or personal
2-13 identification certificate number and to certify under oath that
2-14 the lessee does not hold the leased vehicle for the production of
2-15 income and that the leased vehicle is used only for activities that
2-16 do not involve the production of income. The comptroller shall
2-17 include on the face of the form:
2-18 (1) instructions as to the time and manner in which
2-19 the form must be completed and returned to the lessor; and
2-20 (2) a notice of the penalties prescribed by Section
2-21 37.10, Penal Code, for making a false statement on the form.
2-22 (e) The lessor shall maintain a completed form received from
2-23 the lessee under Subsection (d) until the fifth anniversary of the
2-24 date the lease expires and shall make the form available for
2-25 inspection and copying by the chief appraiser of the applicable
2-26 appraisal district at all reasonable times. If the lessor does not
2-27 maintain a completed form relating to the leased vehicle as
3-1 required by this subsection, in each applicable tax year the
3-2 lessor:
3-3 (1) must render the leased vehicle for taxation in the
3-4 applicable rendition statement or property report filed by the
3-5 lessor under Chapter 22; and
3-6 (2) may not file an application for an exemption under
3-7 this section for the leased vehicle.
3-8 (f) In connection with each lease of a leased vehicle, the
3-9 lessor, not later than the fifth day after the date the lease is
3-10 entered into, shall provide the lessee with the declaration form
3-11 adopted by the comptroller under Subsection (d). The failure of a
3-12 lessor to provide the lessee with the declaration form as required
3-13 by this subsection is a deceptive trade practice under Section
3-14 17.46, Business & Commerce Code.
3-15 (g) If a lessor holds a completed declaration form for a
3-16 leased vehicle, in each tax year during the term of the lease of
3-17 the leased vehicle the lessor shall apply for an exemption for the
3-18 vehicle under this section in the time and manner required by
3-19 Section 11.43.
3-20 (h) A leased vehicle described on a completed declaration
3-21 form that complies with this section and is filed with an
3-22 application for an exemption under this section is presumed to be
3-23 eligible for the exemption.
3-24 (i) Notwithstanding Subsection (g) or any other provision of
3-25 this chapter, a lessor who after January 1 of a tax year enters
3-26 into a lease for a motor vehicle that otherwise qualifies for an
3-27 exemption under this section after being leased and who holds a
4-1 completed declaration form for the vehicle shall apply for and is
4-2 entitled to receive the exemption for the applicable portion of
4-3 that tax year. An exemption application under this subsection must
4-4 be filed not later than the 30th day after the date the lease is
4-5 entered into or December 31 of the year in which the lease is
4-6 entered into, whichever is later. If the chief appraiser approves
4-7 the application, the exemption for that year applies only to that
4-8 portion of the year in which the leased vehicle qualifies for the
4-9 exemption. In that event, the amount of taxes due on the vehicle
4-10 is calculated by multiplying the amount of taxes that would be
4-11 imposed for the year without the exemption by a fraction, the
4-12 numerator of which is the number of days in the year before the
4-13 date the vehicle qualifies for the exemption and the denominator of
4-14 which is 365. If the application is approved after approval of the
4-15 appraisal records by the appraisal review board, the chief
4-16 appraiser shall notify the collector for each taxing unit that
4-17 imposes taxes on the vehicle. The collector shall calculate the
4-18 amount of tax due on the vehicle in that year and shall refund any
4-19 amount paid in excess of that amount.
4-20 (j) If in any tax year ad valorem taxes are imposed on a
4-21 leased vehicle because of a lessor's failure to comply with this
4-22 section or another provision of this code, the lessor may not
4-23 directly or indirectly charge the lessee for those taxes or any
4-24 penalty or interest on those taxes. A violation of this subsection
4-25 is a deceptive trade practice under Section 17.46, Business &
4-26 Commerce Code.
4-27 (k) If in any tax year an exemption under this section is
5-1 canceled because the lessee holds the leased vehicle for the
5-2 production of income or the leased vehicle is used for activities
5-3 that involve the production of income, the lessor may charge the
5-4 lessee for any taxes subsequently imposed on the vehicle in that
5-5 year and for any penalty or interest on those taxes.
5-6 SECTION 2. This Act takes effect January 1, 2002, and applies
5-7 only to ad valorem taxes imposed on a motor vehicle that is subject
5-8 to a lease entered into on or after that date.