84R10984 CJC-F
By: Phillips H.B. No. 2591
A BILL TO BE ENTITLED
AN ACT
relating to the appraisal for ad valorem tax purposes of certain
dealer's heavy equipment.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 23.1241(a)(1), (2), (7), (8), and (9),
Tax Code, are amended to read as follows:
(1) "Dealer" means a person engaged in the business in
this state of selling[, leasing, or renting] heavy equipment. The
term does not include a bank, savings bank, savings and loan
association, credit union, or other finance company. In addition,
for purposes of taxation of a person's inventory of heavy equipment
in a tax year, the term does not include a person who renders the
person's inventory of heavy equipment for taxation in that tax year
by filing a rendition statement or property report in accordance
with Chapter 22.
(2) "Dealer's heavy equipment inventory" means all
items of heavy equipment that a dealer holds for sale at retail [,
lease, or rent] in this state [during a 12-month period]. The term
includes items of heavy equipment that are leased or rented for a
term of 12 months or less and subject to a purchase option by the
lessee or renter.
(7) "Sales price" means:
(A) the total amount of money paid or to be paid
to a dealer for the purchase of an item of heavy equipment; or
(B) for a lease or rental with an option to
purchase, the total amount of the lease or rental payments plus any
final consideration, excluding interest.
(8) "Subsequent sale" means a dealer-financed sale of
an item of heavy equipment that, at the time of the sale, has been
the subject of a dealer-financed sale from the same dealer's heavy
equipment inventory in the same calendar year. The term includes a
lease or rental of an item of heavy equipment for a term of 12 months
or less that is subject to a purchase option by the lessee or renter
if, at the time of the lease or rental, the item has been the subject
of a lease or rental from the same dealer's heavy equipment
inventory in the same calendar year. [The term does not include a
rental or lease with an unexercised purchase option or without a
purchase option.]
(9) "Total annual sales" means the total of the[:
[(A)] sales price for each sale from a dealer's
heavy equipment inventory in a 12-month period[; and
[(B) lease and rental payments received for each
lease or rental of heavy equipment inventory in a 12-month period].
SECTION 2. Sections 23.1241(b) and (e), Tax Code, are
amended to read as follows:
(b) For the purpose of the computation of property tax:
(1) [,] the market value of a dealer's heavy equipment
inventory on January 1 is the total annual sales, less sales to
dealers, fleet transactions, and subsequent sales, for the 12-month
period corresponding to the preceding tax year, divided by 12; and
(2) a sale is considered to occur when possession of an
item of heavy equipment is transferred from the dealer to the
purchaser.
(e) A dealer is presumed to be an owner of a dealer's heavy
equipment inventory on January 1 if, in the 12-month period ending
on December 31 of the preceding year, the dealer sold[, leased, or
rented] an item of heavy equipment to a person other than a
dealer. The presumption is not rebutted by the fact that a dealer
has no item of heavy equipment physically on hand for sale from the
dealer's heavy equipment inventory on January 1.
SECTION 3. Sections 23.1242(b), (e), and (f), Tax Code, are
amended to read as follows:
(b) Except for an item of heavy equipment sold to a dealer,
an item of heavy equipment included in a fleet transaction, or an
item of heavy equipment that is the subject of a subsequent sale,
[or an item of heavy equipment that is subject to a lease or
rental,] an owner or a person who has agreed by contract to pay the
owner's current year property taxes levied against the owner's
heavy equipment inventory shall assign a unit property tax to each
item of heavy equipment sold from a dealer's heavy equipment
inventory. [In the case of a lease or rental, the owner shall
assign a unit property tax to each item of heavy equipment leased or
rented.] The unit property tax of each item of heavy equipment is
determined by multiplying the sales price of the item [or the
monthly lease or rental payment received for the item, as
applicable,] by the unit property tax factor. [If the transaction
is a lease or rental, the owner shall collect the unit property tax
from the lessee or renter at the time the lessee or renter submits
payment for the lease or rental. The owner of the equipment shall
state the amount of the unit property tax assigned as a separate
line item on an invoice.] On or before the 10th day of each month
the owner shall, together with the statement filed by the owner as
required by this section, deposit with the collector an amount
equal to the total of unit property tax assigned to all items of
heavy equipment sold[, leased, or rented] from the dealer's heavy
equipment inventory in the preceding month to which a unit property
tax was assigned. The money shall be deposited by the collector to
the credit of the owner's escrow account for prepayment of property
taxes as provided by this section. An escrow account required by
this section is used to pay property taxes levied against the
dealer's heavy equipment inventory, and the owner shall fund the
escrow account as provided by this subsection.
(e) The comptroller by rule shall adopt a dealer's heavy
equipment inventory tax statement form. Each month, a dealer shall
complete the form regardless of whether an item of heavy equipment
is sold[, leased, or rented]. A dealer may use no other form for
that purpose. The statement may include the information the
comptroller considers appropriate but shall include at least the
following:
(1) a description of each item of heavy equipment
sold, [leased, or rented] including any unique identification or
serial number affixed to the item by the manufacturer;
(2) the sales price of [or lease or rental payment
received for] the item of heavy equipment[, as applicable];
(3) the unit property tax of the item of heavy
equipment, if any; and
(4) the reason no unit property tax is assigned if no
unit property tax is assigned.
(f) On or before the 10th day of each month, a dealer shall
file with the collector the statement covering the sale[, lease, or
rental] of each item of heavy equipment sold[, leased, or rented] by
the dealer in the preceding month. On or before the 10th day of a
month following a month in which a dealer does not sell[, lease, or
rent] an item of heavy equipment, the dealer must file the statement
with the collector and indicate that no sales[, leases, or rentals]
were made in the prior month. A dealer shall file a copy of the
statement with the chief appraiser and retain documentation
relating to the disposition of each item of heavy equipment sold
[and the lease or rental of each item of heavy equipment]. A chief
appraiser or collector may examine documents held by a dealer as
provided by this subsection in the same manner, and subject to the
same conditions, as provided by Section 23.1241(g).
SECTION 4. Section 23.1241(b-1), Tax Code, is repealed.
SECTION 5. This Act applies only to ad valorem taxes imposed
for a tax year beginning on or after the effective date of this Act.
SECTION 6. This Act takes effect January 1, 2016.