Texas House Bill HJR171

Texas 2025 - 89th Regular

• Filed: 3/6/25

Caption

Proposing a constitutional amendment exempting tangible personal property from ad valorem taxation.

Impact

The proposed amendment could significantly alter Texas's property taxation landscape, especially concerning local government finances. By exempting tangible personal property from ad valorem taxes, local jurisdictions may experience revenue reductions that could affect their budgets and fiscal stability. This change could necessitate adjustments in local tax policies and funding mechanisms as municipalities seek to address potential shortfalls resulting from the tax exemption. Advocates of the measure argue it will promote economic growth by reducing financial burdens on businesses that own tangible assets, thus fostering a more favorable business environment in Texas.

Summary

HJR171 is a joint resolution proposing a constitutional amendment that seeks to exempt tangible personal property from ad valorem taxation in Texas. The resolution amends Article VIII of the Texas Constitution, eliminating ad valorem tax obligations for tangible personal property, while maintaining specific conditions under which taxes may still be collected. Notably, if a tax on tangible personal property is tied to a debt obligation and is pledged for its payment, taxes can still be levied until that debt is settled. The amendment is set to take effect on January 1, 2026, contingent upon voter approval during an election scheduled for November 4, 2025.

Contention

The primary point of contention surrounding HJR171 lies in the balance between encouraging economic development and protecting local government revenues. Proponents assert that eliminating personal property taxes will attract more businesses and stimulate economic activity by reducing the tax load on these entities. Conversely, opponents warn that such a tax exemption could lead to diminished funding for local services, undermining community resources. Critics have raised concerns about the long-term implications for local governance and service delivery, particularly as the revenue base potentially shrinks due to the exemption.