Texas House Bill HB1726

Texas 2009 - 81st Regular

Caption

Relating to the exemption from ad valorem taxation of certain tangible personal property stored temporarily at a location in this state.

Impact

If enacted, HB1726 would significantly alter the way certain tangible personal properties are taxed in Texas. Specifically, it would exempt specified goods-in-transit from taxation unless the governing body of a taxing unit has made a formal decision to levy such taxes prior to the beginning of the tax year. This change aims to streamline business operations and reduce costs for companies that rely on temporary storage solutions, thereby enhancing the state's economic competitiveness by making Texas a more attractive location for goods transit and storage.

Summary

House Bill 1726 proposes an exemption from ad valorem taxation for specific tangible personal property that is temporarily stored within the state, defined as 'goods-in-transit.' This bill amends existing tax codes, particularly focusing on property laws established in prior legislation. The intent is to encourage logistical operations by preventing taxation during the short duration these goods are held in storage for future transportation, which is capped at a maximum of 175 days post-acquisition or importation into Texas.

Contention

There may be points of contention regarding local government authority and revenue implications for municipalities. Critics may argue that such tax exemptions could result in significant budget shortfalls for local units dependent on ad valorem taxes. Proponents, on the other hand, may contend that the economic benefits stemming from increased business activity and job creation would outweigh potential revenue losses. Additionally, the requirement for public hearings before any taxing authority can impose taxes on these goods-in-transit could create a bureaucratic barrier that might complicate the imposition of future taxes on other classes of goods.