Texas Senate Bill SB411

Texas 2019 - 86th Regular

Caption

Relating to the appraisal for ad valorem tax purposes of tangible personal property held for sale at retail.

Impact

The bill proposes significant changes to how tangible personal property held for sale is assessed for tax purposes. By mandating that market value be determined based on sales performance over the previous year, it introduces a more dynamic and potentially fairer system for retailers. This could alleviate the financial burden on business owners, particularly those with fluctuating sales, ensuring that tax obligations are more closely aligned with actual business performance and economic conditions. However, it also requires prompt filing of declarations to avoid penalties, placing certain responsibilities on retail owners.

Summary

SB411 addresses the appraisal for ad valorem tax purposes of tangible personal property held for sale at retail. The bill outlines specific definitions related to retail inventory, including what constitutes a retailer and the methodology for appraising retail inventory. Specifically, it emphasizes that the market value of a retailer's inventory is to be calculated based on total annual sales, adjusted for sales at wholesale and sales to other retailers. This approach seeks to establish a fair valuation process for retailers operating within the state of Texas.

Contention

During discussions surrounding SB411, there was debate over the implications of altering property tax assessments for retailers. Supporters argued that the new appraisal methods would promote fairness and encourage economic growth in the retail sector, as it allows for a more realistic reflection of inventory value. Conversely, opponents raised concerns that the bill could lead to administrative burdens for small businesses in terms of compliance and ongoing reporting requirements, as well as the potential for uneven impacts across various sectors of retail depending on their sales volumes.