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A BILL TO BE ENTITLED
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AN ACT
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relating to the appraisal for ad valorem tax purposes of certain |
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dealer's heavy equipment inventory. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Sections 23.1241(a)(1), (2), (7), (8), and (9), |
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Tax Code, are amended to read as follows: |
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(1) "Dealer" means a person engaged in the business in |
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this state of selling[, leasing, or renting] heavy equipment. The |
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term does not include a bank, savings bank, savings and loan |
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association, credit union, or other finance company. In addition, |
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for purposes of taxation of a person's inventory of heavy equipment |
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in a tax year, the term does not include a person who renders the |
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person's inventory of heavy equipment for taxation in that tax year |
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by filing a rendition statement or property report in accordance |
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with Chapter 22. |
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(2) "Dealer's heavy equipment inventory" means all |
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items of heavy equipment that a dealer holds for sale at retail[,
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lease, or rent] in this state [during a 12-month period]. The term |
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includes items of heavy equipment that are leased or rented but |
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subject to a purchase option by the lessee or renter. |
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(7) "Sales price" means: |
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(A) the total amount of money paid or to be paid |
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to a dealer for the purchase of an item of heavy equipment; or |
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(B) for a lease or rental with an option to |
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purchase, the total amount of the lease or rental payments plus any |
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final consideration, excluding interest. |
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(8) "Subsequent sale" means a dealer-financed sale of |
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an item of heavy equipment that, at the time of the sale, has been |
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the subject of a dealer-financed sale from the same dealer's heavy |
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equipment inventory in the same calendar year. [The term does not
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include a rental or lease with an unexercised purchase option or
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without a purchase option.] |
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(9) "Total annual sales" means the total of the[:
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[(A)] sales price for each sale from a dealer's |
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heavy equipment inventory in a 12-month period[; and
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[(B) lease and rental payments received for each
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lease or rental of heavy equipment inventory in a 12-month period]. |
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SECTION 2. |
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Sections 23.1241(b) and (e), Tax Code, are |
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amended to read as follows: |
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(b) For the purpose of the computation of property tax: |
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(1) [,] the market value of a dealer's heavy equipment |
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inventory on January 1 is the total annual sales, less sales to |
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dealers, fleet transactions, and subsequent sales, for the 12-month |
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period corresponding to the preceding tax year, divided by 12; and |
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(2) a sale is considered to occur when possession of an |
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item of heavy equipment is transferred from the dealer to the |
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purchaser. |
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(e) A dealer is presumed to be an owner of a dealer's heavy |
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equipment inventory on January 1 if, in the 12-month period ending |
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on December 31 of the preceding year, the dealer sold[, leased, or
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rented] an item of heavy equipment to a person other than a dealer. |
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The presumption is not rebutted by the fact that a dealer has no |
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item of heavy equipment physically on hand for sale from the |
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dealer's heavy equipment inventory on January 1. |
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SECTION 3. Sections 23.1242(b), (e), and (f), Tax Code, are |
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amended to read as follows: |
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(b) Except for an item of heavy equipment sold to a dealer, |
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an item of heavy equipment included in a fleet transaction, or an |
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item of heavy equipment that is the subject of a subsequent sale, |
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[or an item of heavy equipment that is subject to a lease or
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rental,] an owner or a person who has agreed by contract to pay the |
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owner's current year property taxes levied against the owner's |
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heavy equipment inventory shall assign a unit property tax to each |
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item of heavy equipment sold from a dealer's heavy equipment |
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inventory. [In the case of a lease or rental, the owner shall
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assign a unit property tax to each item of heavy equipment leased or
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rented.] The unit property tax of each item of heavy equipment is |
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determined by multiplying the sales price of the item [or the
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monthly lease or rental payment received for the item, as
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applicable,] by the unit property tax factor. [If the transaction
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is a lease or rental, the owner shall collect the unit property tax
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from the lessee or renter at the time the lessee or renter submits
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payment for the lease or rental.
The owner of the equipment shall
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state the amount of the unit property tax assigned as a separate
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line item on an invoice.] On or before the 10th day of each month |
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the owner shall, together with the statement filed by the owner as |
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required by this section, deposit with the collector an amount |
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equal to the total of unit property tax assigned to all items of |
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heavy equipment sold[, leased, or rented] from the dealer's heavy |
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equipment inventory in the preceding month to which a unit property |
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tax was assigned. The money shall be deposited by the collector to |
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the credit of the owner's escrow account for prepayment of property |
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taxes as provided by this section. An escrow account required by |
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this section is used to pay property taxes levied against the |
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dealer's heavy equipment inventory, and the owner shall fund the |
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escrow account as provided by this subsection. |
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(e) The comptroller by rule shall adopt a dealer's heavy |
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equipment inventory tax statement form. Each month, a dealer shall |
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complete the form regardless of whether an item of heavy equipment |
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is sold[, leased, or rented]. A dealer may use no other form for |
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that purpose. The statement may include the information the |
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comptroller considers appropriate but shall include at least the |
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following: |
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(1) a description of each item of heavy equipment |
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sold, [leased, or rented] including any unique identification or |
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serial number affixed to the item by the manufacturer; |
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(2) the sales price of [or lease or rental payment
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received for] the item of heavy equipment[, as applicable]; |
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(3) the unit property tax of the item of heavy |
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equipment, if any; and |
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(4) the reason no unit property tax is assigned if no |
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unit property tax is assigned. |
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(f) On or before the 10th day of each month, a dealer shall |
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file with the collector the statement covering the sale[, lease, or
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rental] of each item of heavy equipment sold[, leased, or rented] by |
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the dealer in the preceding month. On or before the 10th day of a |
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month following a month in which a dealer does not sell[, lease, or
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rent] an item of heavy equipment, the dealer must file the statement |
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with the collector and indicate that no sales[, leases, or rentals] |
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were made in the prior month. A dealer shall file a copy of the |
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statement with the chief appraiser and retain documentation |
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relating to the disposition of each item of heavy equipment sold |
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[and the lease or rental of each item of heavy equipment]. A chief |
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appraiser or collector may examine documents held by a dealer as |
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provided by this subsection in the same manner, and subject to the |
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same conditions, as provided by Section 23.1241(g). |
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SECTION 4. Section 23.1241(b-1), Tax Code, is repealed. |
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SECTION 5. This Act applies only to ad valorem taxes imposed |
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for a tax year beginning on or after the effective date of this Act. |
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SECTION 6. This Act takes effect January 1, 2016. |