Texas House Bill HB987

Texas 2021 - 87th Regular

Caption

Relating to an exemption from ad valorem taxation of all or a portion of the value of a person's income-producing tangible personal property depending on the value of the property.

Impact

If passed, this bill would significantly modify the existing tax exemptions. One of the primary changes includes raising the threshold for tax exemptions from $500 to $5,000, allowing more individuals and businesses to benefit from these tax breaks. Furthermore, the bill would enable property owners to receive multiple exemptions based on the value thresholds outlined, which might encourage investments in income-generating assets and foster local economic development.

Summary

House Bill 987 aims to amend the Texas Tax Code by providing a tax exemption on a portion of the value of a person's income-producing tangible personal property. This bill specifically targets property values that are less than $5,000 and those valued between $5,000 and $500,000, resulting in a potential 20% tax exemption on the latter category. The goal of the legislation is to alleviate the tax burden on individuals and businesses who own property that produces income, thereby promoting economic activity and growth within the state.

Contention

There may be contention surrounding HB 987 regarding its fiscal impact on local governments and school districts that rely on ad valorem taxes for funding. Critics could argue that providing such exemptions might result in reduced revenue for essential public services if a substantial number of taxpayers qualify for these breaks. Thus, while proponents of the bill assert its benefits for economic stimulation, there are valid concerns over potential adverse effects on public finance and the reliance on property taxes, especially as exemptions for income-producing properties increase.