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A BILL TO BE ENTITLED
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AN ACT
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relating to the qualifications for the exemption from ad valorem |
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taxation for certain tangible personal property located in this |
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state for a limited time. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 11.251, Tax Code, is amended by amending |
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Subsections (b), (c), (e), (g), and (k) and adding Subsection (l) to |
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read as follows: |
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(b) A person is entitled to an exemption from taxation by a |
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taxing unit of the appraised value of that portion of the person's |
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inventory or property consisting of freeport goods as determined |
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under this section for the taxing unit. |
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(c) The exemption provided by Subsection (b) is subtracted |
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from the market value of the inventory or property determined under |
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Section 23.12 to determine the taxable value of the inventory or |
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property for the taxing unit. |
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(e) In determining the market value of freeport goods that |
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in the preceding year were assembled, manufactured, repaired, |
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maintained, processed, or fabricated in this state or used by the |
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person who acquired or imported the property in the repair or |
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maintenance of aircraft operated by a certificated air carrier, the |
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chief appraiser shall exclude the cost of equipment, machinery, or |
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materials that entered into and became component parts of the |
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freeport goods but were not themselves freeport goods or that were |
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not transported outside the state before the expiration of 175 |
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days, or the greater number of days adopted by the taxing unit as |
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authorized by Subsection (l), after they were brought into this |
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state by the property owner or acquired by the property owner in |
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this state. For component parts held in bulk, the chief appraiser |
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may use the average length of time a component part was held in this |
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state by the property owner during the preceding year in |
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determining whether the component parts were transported out of |
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this state before the expiration of 175 days, or the greater number |
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of days adopted by the taxing unit as authorized by Subsection (l). |
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(g) If the property owner or the chief appraiser |
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demonstrates that the method provided by Subsection (d) |
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significantly understates or overstates the market value of the |
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property qualified for an exemption under Subsection (b) in the |
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current year, the chief appraiser shall determine the market value |
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of the freeport goods to be exempt by determining, according to the |
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property owner's records and any other available information, the |
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market value of those freeport goods owned by the property owner on |
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January 1 of the current year, excluding the cost of equipment, |
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machinery, or materials that entered into and became component |
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parts of the freeport goods but were not themselves freeport goods |
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or that were not transported outside the state before the |
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expiration of 175 days, or the greater number of days adopted by the |
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taxing unit as authorized by Subsection (l), after they were |
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brought into this state by the property owner or acquired by the |
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property owner in this state. |
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(k) Property that meets the requirements of Article VIII, |
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Sections 1-j(a)(1) and (2), of the Texas Constitution and that is |
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transported outside of this state not later than 175 days, or the |
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greater number of days adopted by the taxing unit as authorized by |
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Subsection (l), after the date the person who owns it on January 1 |
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acquired it or imported it into this state is freeport goods |
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regardless of whether the person who owns it on January 1 is the |
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person who transports it outside of this state. |
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(l) The governing body of a taxing unit, in the manner |
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provided by law for official action, may extend the date by which |
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freeport goods must be transported outside the state to a date not |
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later than the 730th day after the date the person acquired or |
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imported the property in this state. An extension adopted by |
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official action under this subsection applies only to the exemption |
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from ad valorem taxation by the taxing unit adopting the extension |
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and applies to: |
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(1) the tax year: |
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(A) in which the extension is adopted if |
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officially adopted before June 1 of a tax year; or |
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(B) immediately following the tax year in which |
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the extension is adopted if officially adopted on or after June 1 of |
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a tax year; and |
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(2) each tax year following the year of adoption of the |
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extension until rescinded by the governing body in the manner |
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provided by law for official action. |
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SECTION 2. Section 11.253(a)(2), Tax Code, is amended to |
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read as follows: |
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(2) "Goods-in-transit" means tangible personal |
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property that: |
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(A) is acquired in or imported into this state to |
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be forwarded to another location in this state or outside this |
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state; |
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(B) is stored under a contract of bailment by a |
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public warehouse operator at one or more public warehouse |
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facilities in this state that are not in any way owned or controlled |
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by the owner of the personal property for the account of the person |
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who acquired or imported the property; |
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(C) is transported to another location in this |
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state or outside this state not later than 175 days, or the greater |
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number of days adopted by a taxing unit as authorized by Subsection |
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(l), after the date the person acquired the property in or imported |
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the property into this state; and |
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(D) does not include oil, natural gas, petroleum |
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products, aircraft, dealer's motor vehicle inventory, dealer's |
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vessel and outboard motor inventory, dealer's heavy equipment |
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inventory, or retail manufactured housing inventory. |
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SECTION 3. Section 11.253, Tax Code, is amended by amending |
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Subsections (b), (c), (e), and (g) and adding Subsection (l) to read |
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as follows: |
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(b) A person is entitled to an exemption from taxation by a |
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taxing unit of the appraised value of that portion of the person's |
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property that consists of goods-in-transit as determined under this |
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section for the taxing unit. |
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(c) The exemption provided by Subsection (b) is subtracted |
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from the market value of the property determined under Section |
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23.01 or 23.12, as applicable, to determine the taxable value of the |
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property for the taxing unit. |
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(e) In determining the market value of goods-in-transit |
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that in the preceding year were stored in this state, the chief |
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appraiser shall exclude the cost of equipment, machinery, or |
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materials that entered into and became component parts of the |
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goods-in-transit but were not themselves goods-in-transit or that |
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were not transported to another location in this state or outside |
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this state before the expiration of 175 days, or the greater number |
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of days adopted by the taxing unit as authorized by Subsection (l), |
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after the date they were brought into this state by the property |
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owner or acquired by the property owner in this state. For |
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component parts held in bulk, the chief appraiser may use the |
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average length of time a component part was held by the owner of the |
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component parts during the preceding year at a location in this |
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state that was not owned by or under the control of the owner of the |
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component parts in determining whether the component parts were |
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transported to another location in this state or outside this state |
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before the expiration of 175 days, or the greater number of days |
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adopted by the taxing unit as authorized by Subsection (l). |
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(g) If the property owner or the chief appraiser |
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demonstrates that the method provided by Subsection (d) |
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significantly understates or overstates the market value of the |
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property qualified for an exemption under Subsection (b) in the |
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current year, the chief appraiser shall determine the market value |
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of the goods-in-transit to be exempt by determining, according to |
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the property owner's records and any other available information, |
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the market value of those goods-in-transit owned by the property |
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owner on January 1 of the current year, excluding the cost of |
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equipment, machinery, or materials that entered into and became |
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component parts of the goods-in-transit but were not themselves |
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goods-in-transit or that were not transported to another location |
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in this state or outside this state before the expiration of 175 |
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days, or the greater number of days adopted by the taxing unit as |
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authorized by Subsection (l), after the date they were brought into |
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this state by the property owner or acquired by the property owner |
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in this state. |
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(l) The governing body of a taxing unit, in the manner |
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provided by law for official action, may extend the date by which |
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goods-in-transit must be transported outside the state to a date |
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not later than the 730th day after the date the person acquired the |
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property in or imported the property into this state. An extension |
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adopted by official action under this subsection applies only to |
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the exemption from ad valorem taxation by the taxing unit adopting |
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the extension and applies to: |
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(1) the tax year: |
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(A) in which the extension is adopted if |
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officially adopted before June 1 of a tax year; or |
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(B) immediately following the tax year in which |
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the extension is adopted if officially adopted on or after June 1 of |
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a tax year; and |
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(2) each tax year following the year of adoption of the |
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extension until rescinded by the governing body in the manner |
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provided by law for official action. |
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SECTION 4. This Act applies only to a tax year beginning on |
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or after the effective date of this Act. |
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SECTION 5. This Act takes effect January 1, 2014, but only |
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if the constitutional amendment proposed by the 83rd Legislature, |
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Regular Session, 2013, to authorize a political subdivision of this |
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state to extend the number of days that certain tangible personal |
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property that is exempt from ad valorem taxation due to its location |
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in this state for a temporary period may be located in this state |
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for purposes of qualifying for the tax exemption is approved by the |
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voters. If that amendment is not approved by the voters, this Act |
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has no effect. |