|
A BILL TO BE ENTITLED
|
|
AN ACT
|
|
relating to the exemption from ad valorem taxation of rent-to-own |
|
property not held by the lessee primarily to produce income and to |
|
the method to be used to depreciate taxable rent-to-own property |
|
for tax appraisal purposes. |
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by |
|
adding Section 11.253 to read as follows: |
|
Sec. 11.253. RENT-TO-OWN PROPERTY LEASED FOR PERSONAL USE. |
|
(a) In this section, "rent-to-own property" means tangible |
|
personal property of a type intended for personal use within the |
|
home that is owned by a dealer engaged in the business of leasing |
|
that type of property to customers under rent-to-own contracts. |
|
(b) The owner of rent-to-own property that is subject to a |
|
rent-to-own contract is entitled to an exemption from taxation of |
|
the property if: |
|
(1) the lessee does not hold the property for the |
|
production of income; and |
|
(2) the property is used primarily for activities that |
|
do not involve the production of income. |
|
(c) For purposes of this section, rent-to-own property is |
|
presumed to be used primarily for activities that do not involve the |
|
production of income if the majority of the time the property is |
|
used in a year it is used for non-income producing purposes. |
|
(d) The comptroller by rule shall establish exemption |
|
application requirements and appropriate procedures to determine |
|
whether rent-to-own property subject to a rent-to-own contract |
|
qualifies for an exemption under Subsection (b). |
|
(e) In connection with the requirements and procedures |
|
under Subsection (d), the comptroller by rule shall adopt a form to |
|
be completed by the lessee of rent-to-own property for which the |
|
owner of the property may apply for an exemption under Subsection |
|
(b). The form shall require the lessee to provide the lessee's name |
|
and address and to certify under oath that the lessee does not hold |
|
the property for the production of income and that the property is |
|
used primarily for activities that do not involve the production of |
|
income. The comptroller shall include on the form a notice of the |
|
penalties prescribed by Section 37.10, Penal Code, for making a |
|
false statement on the form. |
|
(f) The owner of rent-to-own property that is subject to a |
|
rent-to-own contract shall maintain the form completed by the |
|
lessee of the property and make the form available for inspection |
|
and copying by the chief appraiser of the applicable appraisal |
|
district at all reasonable times. If the owner does not maintain a |
|
completed form relating to the property, the owner: |
|
(1) must render the property for taxation in the |
|
applicable rendition statement or property report filed by the |
|
owner under Chapter 22; and |
|
(2) may not file an application for an exemption under |
|
Subsection (b) for the property. |
|
(g) The governing body of a municipality by ordinance |
|
adopted before January 1, 2008, may provide for the taxation of |
|
rent-to-own property otherwise exempted under Subsection (b). If |
|
the governing body of a municipality provides for the taxation of |
|
rent-to-own property under this subsection: |
|
(1) the exemption provided by Subsection (b) does not |
|
apply to the taxation of the property by that municipality; and |
|
(2) the owner must render the property for taxation by |
|
that municipality in the applicable rendition statement or property |
|
report filed by the owner under Chapter 22. |
|
(h) In addition to the requirements of Subsections (d) and |
|
(e), the comptroller by rule shall prescribe a property report form |
|
to be completed by the lessor of rent-to-own property describing |
|
the rent-to-own property that the lessor owns that is subject to |
|
rent-to-own contracts. The property report form shall require the |
|
lessor to list each item of rent-to-own property the lessor owns |
|
that is subject to a rent-to-own contract on January 1, to provide a |
|
description of each item, and to provide the name of the lessee, the |
|
address at which the property is kept, and an indication of whether |
|
the lessee has designated the property as not held for the |
|
production and not used for the production of income. |
|
(i) The lessor shall provide the chief appraiser with the |
|
completed property report form adopted by the comptroller in the |
|
manner provided by Subchapter B, Chapter 22. If the lessor is |
|
required to render the property described in the completed report |
|
form for taxation, the lessor may satisfy the rendition requirement |
|
by providing the chief appraiser with the completed property report |
|
form in lieu of a rendition statement or property report as required |
|
by Chapter 22 if the completed report form complies with the |
|
requirements of that chapter for a rendition statement or property |
|
report. |
|
SECTION 2. Section 22.07, Tax Code, is amended by amending |
|
Subsection (c) and adding Subsection (c-1) to read as follows: |
|
(c) The chief appraiser may request, either in writing or by |
|
electronic means, that the property owner provide a statement |
|
containing supporting information indicating how the value |
|
rendered under Section 22.01(a)(5) was determined. The statement |
|
must: |
|
(1) summarize information sufficient to identify the |
|
property, including: |
|
(A) the physical and economic characteristics |
|
relevant to the opinion of value, if appropriate; and |
|
(B) the source of the information used; |
|
(2) state the effective date of the opinion of value; |
|
and |
|
(3) explain the basis of the value rendered. |
|
(c-1) Except as otherwise provided by this subsection, if |
|
[If] the property owner is a business with 50 employees or less, the |
|
property owner may base the estimate of value on the depreciation |
|
schedules used for federal income tax purposes. If the property is |
|
described by Section 23.12(g), the property owner shall base the |
|
estimate of value on the depreciation method prescribed by that |
|
section. |
|
SECTION 3. Section 23.12, Tax Code, is amended by adding |
|
Subsection (g) to read as follows: |
|
(g) In appraising an inventory of tangible personal |
|
property of a type intended for personal use within the home that is |
|
owned by a dealer engaged in the business of leasing that type of |
|
property to customers under rent-to-own contracts, the chief |
|
appraiser shall depreciate the property by using the straight-line |
|
method and a recovery period of three years. |
|
SECTION 4. This Act applies only to the taxation and |
|
appraisal of property for ad valorem tax purposes for a tax year |
|
beginning on or after the effective date of this Act. |
|
SECTION 5. This Act takes effect January 1, 2008, but only |
|
if the constitutional amendment proposed by the 80th Legislature, |
|
Regular Session, 2007, authorizing the legislature to exempt from |
|
ad valorem taxation rent-to-own property not held by the person |
|
renting the property primarily to produce income and to prescribe |
|
the method to be used to depreciate taxable rent-to-own property |
|
for tax appraisal purposes is approved by the voters. If that |
|
amendment is not approved by the voters, this Act has no effect. |