By: King of Uvalde H.B. No. 3466
A BILL TO BE ENTITLED
AN ACT
relating to the appraisal for ad valorem tax purposes of dealer's
heavy equipment inventory and the prepayment of taxes on that
inventory.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 23.1241(a)(1) and (2), 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 whose sales from
the person's heavy equipment inventory are made predominately to
dealers [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, lease, or
rent in this state during a tax year [12-month period].
SECTION 2. Section 23.1241, Tax Code, is amended by
amending subsections (b), (b-1), (c), (d), (f) and by adding
subsection (g-1) to read as follows:
(b) For the purpose of the computation of property tax, the
market value of a dealer's heavy equipment inventory on January 1 is
determined by adding the market value of that inventory as
determined by the dealer on the last day of each month of the
preceding tax year to produce a sum, and dividing that sum [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.
(b-1) A dealer shall determine the [For the purpose of the
computation of property tax on the] market value of [the dealer's
heavy equipment inventory, the sales price of] an item of heavy
equipment for a month in which the item of heavy equipment was part
of the dealer's heavy equipment inventory for only a portion of that
month in the manner provided by this subsection. The dealer shall
multiply the market value of the item of heavy equipment in that
month by a fraction, the numerator of which is the number of days
that the item of heavy equipment was part of the dealer's heavy
equipment inventory in that month, and the denominator of which is
the number of days in that month [that is sold during the preceding
tax year after being leased or rented for a portion of that same tax
year is considered to be the sum of the sales price of the item plus
the total lease and rental payments received for the item in the
preceding tax year].
(c) For the purpose of the computation of property tax on
the market value of the dealer's heavy equipment inventory of an
owner who was not a dealer on January 1 of the preceding tax year,
the [chief appraiser shall estimate the] market value of the
dealer's heavy equipment inventory is determined by adding the
market value of that inventory as determined by the dealer on the
last day of each month of the preceding tax year in which the person
was a dealer to produce a sum, and dividing that sum by the number of
months in the preceding tax year in which the person was a dealer.
[In making the estimate required by this subsection, the chief
appraiser shall extrapolate using sales data, if any, generated by
sales from the dealer's heavy equipment inventory in the preceding
tax year.]
(d) Except for dealer's heavy equipment inventory, personal
property held by a dealer is appraised as provided by the other
sections of this code. [In the case of a dealer whose sales from the
dealer's heavy equipment inventory are made predominately to other
dealers, the chief appraiser shall appraise the dealer's heavy
equipment inventory as provided by Section 23.12.]
(f) The comptroller by rule shall adopt a dealer's heavy
equipment inventory declaration form. Except as provided by
Section 23.1242(k), not later than February 1 of each year, or, in
the case of a dealer who was not in business on January 1, not later
than 30 days after commencement of business, each dealer shall file
a declaration with the chief appraiser for the appraisal district
in which the dealer's heavy equipment inventory has taxable situs
as determined under Section 21.02 and file a copy with the
collector. The declaration is sufficient to comply with this
subsection if it sets forth:
(1) the name and business address of each location at
which the declarant conducts business;
(2) a statement that the declarant is the owner of a
dealer's heavy equipment inventory; and
(3) the market value of the declarant's heavy
equipment inventory for the current tax year as computed under
Subsection (b) or (c), as applicable.
(g-1) If the chief appraiser determines that the values of
the heavy equipment as reported by the dealer are inaccurate, the
chief appraiser may reappraise the heavy equipment at its market
value, place that value on the appraisal role, and give notices and
opportunity to protest as otherwise provided in this Code.
SECTION 3. Section 23.1242(a)(2), Tax Code, is amended to
read as follows:
(2) "Dealer's heavy equipment inventory,"
"declaration," and "dealer[,]" ["sales price," "subsequent sale,"
and "total annual sales"] have the meanings assigned those terms by
Section 23.1241.
SECTION 4. Sections 23.1242(b), (d), (e), (f), and (g), Tax
Code, are amended to read as follows:
(b) An [Except for an item of heavy equipment sold to a
dealer, an item of heavy equipment included in a fleet transaction,
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
that is in the dealer's inventory on the last day of the preceding
month. [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 market value [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.
(d) The [Except as provided by Section 23.1243, the] owner
may not withdraw funds in an escrow account created under this
section.
(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 dealer's heavy
equipment inventory, [sold, leased, or rented] including any unique
identification or serial number affixed to the item by the
manufacturer;
(2) the market value of [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 required under Subsection
(e). The statement must include the market value of the dealer's
heavy equipment inventory for [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 has no heavy equipment in the
dealer's inventory [does not sell, lease, or rent an item of heavy
equipment], the dealer must file the statement with the collector
and indicate that, during [no sales, leases, or rentals were made
in] the prior month, the dealer had no heavy equipment in the
dealer's inventory. A dealer shall file a copy of the statement
with the chief appraiser and retain any documentation relating to
the market value [disposition] of each item of heavy equipment
included in the statement [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).
(g) Except as provided by this subsection, Subsection (f)
applies to any dealer, regardless of whether a dealer owes heavy
equipment inventory tax for the current year. A dealer who owes no
heavy equipment inventory tax for the current year because the
dealer was not in business on January 1:
(1) shall file the statement required by this section
showing the information required by this section for each month
that the dealer is in business; and
(2) may not assign a unit property tax to an item of
heavy equipment [sold by the dealer] or remit money with the
statement except in compliance with the terms of a contract as
provided by Subsection (k).
SECTION 5. Section 41.44(a), Tax Code, is amended to read as
follows:
(a) Except as provided by Subsections (b), (b-1), (c),
(c-1), and (c-2), to be entitled to a hearing and determination of a
protest, the property owner initiating the protest must file a
written notice of the protest with the appraisal review board
having authority to hear the matter protested:
(1) before May 1 or not later than the 30th day after
the date that notice to the property owner was delivered to the
property owner as provided by Section 25.19, if the property is a
single-family residence that qualifies for an exemption under
Section 11.13, whichever is later;
(2) before June 1 or not later than the 30th day after
the date that notice was delivered to the property owner as provided
by Section 25.19 in connection with any other property, whichever
is later;
(3) in the case of a protest of a change in the
appraisal records ordered as provided by Subchapter A of this
chapter or by Chapter 25, not later than the 30th day after the date
notice of the change is delivered to the property owner; or
(4) in the case of a determination that a change in the
use of land appraised under Subchapter C, D, E, or H, Chapter 23,
has occurred, not later than the 30th day after the date the notice
of the determination is delivered to the property owner[; or
[(5) in the case of a determination of eligibility for
a refund under Section 23.1243, not later than the 30th day after
the date the notice of the determination is delivered to the
property owner].
SECTION 6. Section 42.01(a), Tax Code, is amended to read as
follows:
(a) A property owner is entitled to appeal:
(1) an order of the appraisal review board
determining:
(A) a protest by the property owner as provided
by Subchapter C of Chapter 41;
(B) a [determination of an appraisal review board
on a] motion filed under Section 25.25; or
(C) [a determination of an appraisal review
board] that the property owner has forfeited the right to a final
determination of a motion filed under Section 25.25 or of a protest
under Section 41.411 for failing to comply with the prepayment
requirements of Section 25.26 or 41.4115, as applicable; or
[(D) a determination of an appraisal review board
of eligibility for a refund requested under Section 23.1243; or]
(2) an order of the comptroller issued as provided by
Subchapter B, Chapter 24, apportioning among the counties the
appraised value of railroad rolling stock owned by the property
owner.
SECTION 7. The following provisions of the Tax Code are
repealed:
(1) Sections 23.1241(a)(3), (5), (7), (8), and (9);
(2) Section 23.1243; and
(3) Section 41.47(c-1).
SECTION 8. This Act applies only to ad valorem taxes imposed
for a tax year beginning on or after the effective date of this Act.
SECTION 9. This Act takes effect January 1, 2018.