Texas House Bill HB2804

Texas 2019 - 86th Regular

Caption

Relating to the exemption from ad valorem taxation of tangible personal property consisting of certain food products held by the owner of the property for sale at retail.

Impact

The potential impact of HB 2804 on state law includes a reduction in tax liabilities for certain food retailers, which may encourage more businesses to enter or expand within the food retail market. If successfully passed and approved through the proposed constitutional amendment, the bill may lead to lower costs for consumers, as retailers might pass on savings derived from reduced tax obligations. This change is particularly pivotal in an economy where food retail is a critical element, influencing both local employment and access to affordable food products.

Summary

House Bill 2804 aims to provide an exemption from ad valorem taxation for tangible personal property that consists of certain food products and is held by the owner for sale at retail. This is a significant change as it modifies the existing tax framework under the Texas Tax Code, specifically in the context of taxation for food products that are already exempt from sales and use tax. The bill introduces a new section, Section 11.37, which details the criteria under which this exemption applies, allowing food retailers to alleviate some financial burdens by exempting the appraised value of these food products from property taxes.

Contention

Opposition to HB 2804 may arise from concerns about the effects of reducing tax revenues on local governments that rely on ad valorem taxes to fund essential services. Critics might argue that such exemptions could lead to a shift in the tax burden, ultimately affecting non-exempt property owners and other local businesses. Furthermore, discussions around the constitutional amendment required for implementation may bring about legal and political debates, influencing public perception and voting behavior during the upcoming election seasons. Stakeholders will likely engage in discussions about the fairness of tax policy adjustments, especially in economically diverse regions.