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A BILL TO BE ENTITLED
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AN ACT
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relating to the ad valorem taxation of certain dealer's heavy |
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equipment inventory. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 23.1242, Tax Code, is amended by |
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amending Subsections (b), (e), (f), (g), and (k) and adding |
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Subsections (b-1) and (f-1) 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, an item |
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of heavy equipment that is the subject of a subsequent sale, or an |
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item of heavy equipment that is subject to a lease or rental, an |
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owner or a person who has agreed by contract to pay the owner's |
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current year property taxes levied against the owner's heavy |
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equipment inventory shall assign a unit property tax to each item of |
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heavy equipment sold from a dealer's heavy equipment inventory. In |
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the case of a lease or rental, the owner shall assign a unit |
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property tax to each item of heavy equipment leased or rented. The |
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unit property tax of each item of heavy equipment is determined by |
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multiplying the sales price of the item or the monthly lease or |
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rental payment received for the item, as applicable, by the unit |
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property tax factor. If the transaction is a lease or rental, the |
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owner shall collect the unit property tax from the lessee or renter |
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at the time the lessee or renter submits payment for the lease or |
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rental. The owner of the equipment shall state the amount of the |
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unit property tax assigned as a separate line item on an invoice. |
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On or before the 20th day of the month following each calendar |
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quarter [month] the owner shall, together with the statement filed |
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by the owner as required by this section, deposit with the collector |
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an amount equal to the total of unit property tax assigned to all |
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items of heavy equipment sold, leased, or rented from the dealer's |
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heavy equipment inventory in the preceding calendar quarter [month] |
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to which a unit property tax was assigned. The money shall be |
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deposited by the collector to the credit of the owner's escrow |
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account for prepayment of property taxes as provided by this |
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section. An escrow account required by this section is used to pay |
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property taxes levied against the dealer's heavy equipment |
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inventory, and the owner shall fund the escrow account as provided |
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by this subsection. |
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(b-1) Not later than December 15 of each year, the collector |
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shall provide written notice to each owner for whom the collector |
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maintains an escrow account under Subsection (c) of the unit |
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property tax factor for the following tax year for each location in |
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which the owner's heavy equipment inventory is located. |
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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 calendar quarter |
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[month], a dealer shall complete the form regardless of whether an |
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item of heavy equipment is sold, leased, or rented. A dealer may |
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use no other form for that purpose. The statement may include the |
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information the comptroller considers appropriate but shall |
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include at least the 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 aggregate amount received by the dealer |
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attributable to the sales price of or lease or rental payments |
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[payment] received for the items [item] of heavy equipment |
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described by Subdivision (1) [, as applicable]; and |
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(3) the total amount of unit property tax assigned by |
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the dealer to the items [of the item] of heavy equipment described |
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by Subdivision (1) [, 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 20th day of the month following each |
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calendar quarter [month], a dealer shall file with the collector |
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the statement completed by the dealer 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 calendar quarter [month]. On or before |
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the 20th day of the [a] month following a calendar quarter [month] |
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in which a dealer does not sell, lease, or rent an item of heavy |
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equipment, the dealer must file the statement with the collector |
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and indicate that no sales, leases, or rentals were made in the |
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preceding calendar quarter [prior month]. |
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(f-1) A dealer shall [file a copy of the statement with the |
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chief appraiser and] retain complete and accurate records |
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documenting [documentation relating to] the disposition of each |
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item of heavy equipment sold, leased, or rented by the dealer for at |
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least four years from the date of disposition of the item [and the |
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lease or rental of each item of heavy equipment]. A chief appraiser |
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or collector may examine records [documents] held by a dealer as |
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required [provided] by this subsection in the same manner, and |
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subject to the same conditions, as provided by Section 23.1241(g). |
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(g) Except as provided by this subsection, Subsection (f) |
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applies to any dealer, regardless of whether a dealer owes heavy |
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equipment inventory tax for the current year. A dealer who owes no |
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heavy equipment inventory tax for the current year because the |
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dealer was not in business on January 1: |
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(1) shall file the statement required by this section |
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showing the information required by this section for each calendar |
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quarter [month] that the dealer is in business; and |
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(2) may not assign a unit property tax to an item of |
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heavy equipment sold by the dealer or remit money with the statement |
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except in compliance with the terms of a contract as provided by |
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Subsection (k). |
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(k) A person who acquires the business or assets of an owner |
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may, by contract, agree to pay the current year heavy equipment |
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inventory taxes owed by the owner. The person who acquires the |
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business or assets of the owner may use the same unit property tax |
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factor that the owner who owes the current year tax would use when |
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paying the current year tax. The owner who owes the current year |
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tax and the person who acquires the business or assets of the owner |
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shall jointly notify the chief appraiser and the collector of the |
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terms of the agreement and of the fact that the other person has |
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agreed to pay the current year heavy equipment inventory taxes owed |
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by the dealer. The chief appraiser and the collector shall adjust |
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their records accordingly. Notwithstanding Section 23.1241, a |
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person who agrees to pay current year heavy equipment inventory |
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taxes as provided by this subsection is not required to file a |
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declaration until the year following the acquisition. This |
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subsection does not relieve the selling owner of the tax liability. |
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SECTION 2. This Act applies only to ad valorem taxes imposed |
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for an ad valorem tax year that begins on or after the effective |
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date of this Act. |
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SECTION 3. This Act takes effect January 1, 2026. |
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