Texas House Bill HB3138

Texas 2017 - 85th Regular

Caption

Relating to the definition of intangible personal property for ad valorem tax purposes.

Impact

The impact of HB3138 is significant for both the state’s tax revenues and businesses operating within Texas. By establishing a clear definition of intangible personal property, the bill aims to standardize the tax implications for these assets, potentially enhancing revenue predictability for the state. This clarity can also help businesses better understand their tax obligations and financial planning related to intangible assets, fostering an environment more conducive to investment and growth.

Summary

House Bill 3138 seeks to amend the definition of 'intangible personal property' under the Texas Tax Code specifically for ad valorem tax purposes. This redefinition is crucial as it impacts how various forms of intangible assets are assessed and taxed in Texas. Intangible properties include entities that cannot be physically perceived, yet hold value, which may be evidenced by documentation. Under the new provisions, assets such as stocks, bonds, franchises, and goodwill would fall under this category, thereby clarifying their tax treatment and value assessment.

Contention

While the bill provides clarity, it may also face scrutiny from various stakeholders, particularly those in the financial and business sectors. Critics may argue that the new definition could lead to increased tax burdens on businesses that heavily rely on intangible assets. Additionally, there could be concerns regarding fair valuation and the potential impacts on small businesses that might lack the resources to navigate the complexities of intangible asset valuation under the amended tax code.