Texas 2019 - 86th Regular

Texas Senate Bill SB411 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	86R489 CJC-F
2	2	By: Hughes S.B. No. 411
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the appraisal for ad valorem tax purposes of tangible
8	8	personal property held for sale at retail.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Sections 23.12(a) and (f), Tax Code, are amended
11	11	to read as follows:
12	12	(a) Except as provided by Sections 23.121, [23.1241,]
13	13	23.124, 23.1241, 23.1244, and 23.127, the market value of an
14	14	inventory is the price for which it would sell as a unit to a
15	15	purchaser who would continue the business. An inventory shall
16	16	include residential real property which has never been occupied as
17	17	a residence and is held for sale in the ordinary course of a trade or
18	18	business, provided that the residential real property remains
19	19	unoccupied, is not leased or rented, and produces no income.
20	20	(f) The owner of an inventory other than a dealer's motor
21	21	vehicle inventory as that term is defined by Section 23.121, [a
22	22	dealer's heavy equipment inventory as that term is defined by
23	23	Section 23.1241, or] a dealer's vessel and outboard motor inventory
24	24	as that term is defined by Section 23.124, a dealer's heavy
25	25	equipment inventory as that term is defined by Section 23.1241, a
26	26	retail inventory as that term is defined by Section 23.1244, or a
27	27	retail manufactured housing inventory as that term is defined by
28	28	Section 23.127 may elect to have the inventory appraised at its
29	29	market value as of September 1 of the year preceding the tax year to
30	30	which the appraisal applies by filing an application with the chief
31	31	appraiser requesting that the inventory be appraised as of
32	32	September 1. The application must clearly describe the inventory
33	33	to which it applies and be signed by the owner of the inventory. The
34	34	application applies to the appraisal of the inventory in each tax
35	35	year that begins after the next August 1 following the date the
36	36	application is filed with the chief appraiser unless the owner of
37	37	the inventory by written notice filed with the chief appraiser
38	38	revokes the application or the ownership of the inventory changes.
39	39	A notice revoking the application is effective for each tax year
40	40	that begins after the next September following the date the notice
41	41	of revocation is filed with the chief appraiser.
42	42	SECTION 2. Subchapter B, Chapter 23, Tax Code, is amended by
43	43	adding Section 23.1244 to read as follows:
44	44	Sec. 23.1244. RETAILER'S RETAIL INVENTORY; VALUE. (a) In
45	45	this section:
46	46	(1) "Chief appraiser" means the chief appraiser for
47	47	the appraisal district in which a retailer's retail inventory is
48	48	located.
49	49	(2) "Declaration" means a retailer's retail inventory
50	50	declaration form adopted by the comptroller under this section.
51	51	(3) "Retailer" means a person who is engaged in the
52	52	business in this state of selling retail inventory. For purposes of
53	53	this section, the term does not include a bank, savings bank,
54	54	savings and loan association, credit union, or other finance
55	55	company. In addition, for purposes of taxation of a person's retail
56	56	inventory in a tax year, the term does not include a person who
57	57	renders the person's retail inventory in that tax year by filing a
58	58	rendition statement or property report under Chapter 22.
59	59	(4) "Retail inventory" means all tangible personal
60	60	property that a retailer holds for sale in this state during a
61	61	12-month period and for which the retailer is not otherwise
62	62	entitled to an exemption from taxation. For purposes of this
63	63	section, the term does not include:
64	64	(A) real property; or
65	65	(B) inventory that qualifies for appraisal under
66	66	Section 23.121, 23.124, 23.1241, or 23.127.
67	67	(5) "Sales price" means the total amount of money paid
68	68	or to be paid to a retailer for the purchase of an item of retail
69	69	inventory.
70	70	(6) "Total annual sales" means the total of the sales
71	71	price from every sale from a retailer's retail inventory for a
72	72	12-month period.
73	73	(b) For the purpose of the computation of property tax, the
74	74	market value of a retailer's retail inventory on January 1 is the
75	75	total annual sales, less sales at wholesale and sales to retailers,
76	76	for the 12-month period corresponding to the preceding tax year,
77	77	divided by 12.
78	78	(b-1) Notwithstanding Subsection (b), for the nine-year
79	79	period beginning January 1, 2020, and ending December 31, 2028, the
80	80	market value of a retailer's retail inventory is the greater of:
81	81	(1) the market value of that retail inventory on
82	82	January 1 of the applicable tax year as determined under Subsection
83	83	(b); or
84	84	(2) the following percentages of the market value of
85	85	that inventory on January 1 of the applicable tax year as determined
86	86	under Section 23.12:
87	87	(A) for the 2020 tax year, 90 percent of the
88	88	market value;
89	89	(B) for the 2021 tax year, 80 percent of the
90	90	market value;
91	91	(C) for the 2022 tax year, 70 percent of the
92	92	market value;
93	93	(D) for the 2023 tax year, 60 percent of the
94	94	market value;
95	95	(E) for the 2024 tax year, 50 percent of the
96	96	market value;
97	97	(F) for the 2025 tax year, 40 percent of the
98	98	market value;
99	99	(G) for the 2026 tax year, 30 percent of the
100	100	market value;
101	101	(H) for the 2027 tax year, 20 percent of the
102	102	market value; and
103	103	(I) for the 2028 tax year, 10 percent of the
104	104	market value.
105	105	(c) For the purpose of the computation of property tax on
106	106	the market value of the retail inventory of an owner who was not a
107	107	retailer on January 1 of the preceding tax year, the chief appraiser
108	108	shall estimate the market value of the retailer's retail inventory.
109	109	In making the estimate required by this subsection, the chief
110	110	appraiser shall use sales data, if available, generated by sales
111	111	from the retailer's retail inventory in the preceding tax year.
112	112	(c-1) Notwithstanding Subsection (c), for the nine-year
113	113	period beginning January 1, 2020, and ending December 31, 2028, the
114	114	chief appraiser shall determine the market value of the retail
115	115	inventory of an owner who was not a retailer on January 1 of the
116	116	preceding tax year in the manner prescribed by Subsection (b-1) and
117	117	shall use the estimated market value determined under Subsection
118	118	(c) as the market value of the retail inventory for purposes of
119	119	Subsection (b-1)(1).
120	120	(c-2) This subsection and Subsections (b-1) and (c-1)
121	121	expire December 31, 2028.
122	122	(d) Except for retail inventory, tangible personal property
123	123	held by a retailer is appraised as provided by the other sections of
124	124	this code. In the case of a retailer whose sales from the
125	125	retailer's retail inventory are made predominately to other
126	126	retailers, the chief appraiser shall appraise the retailer's retail
127	127	inventory as provided by Section 23.12.
128	128	(e) A retailer is presumed to be an owner of retail
129	129	inventory on January 1 if, in the 12-month period ending on December
130	130	31 of the preceding year, the retailer sold an item of retail
131	131	inventory to a person other than a retailer. The presumption is
132	132	not rebutted by the fact that a retailer has no item of retail
133	133	inventory physically on hand for sale from the retailer's retail
134	134	inventory on January 1.
135	135	(f) The comptroller by rule shall adopt a retailer's retail
136	136	inventory declaration form. Not later than April 15 of each year,
137	137	or, in the case of a retailer who was not in business on January 1,
138	138	not later than 30 days after commencement of business, each
139	139	retailer shall file a declaration with the chief appraiser for each
140	140	location at which the retailer's retail inventory to be appraised
141	141	as provided by this section is located. The declaration is
142	142	sufficient to comply with this subsection if it sets forth:
143	143	(1) the name and business address of each location at
144	144	which the retailer's retail inventory to be appraised as provided
145	145	by this section is located;
146	146	(2) a statement that the retailer is the owner of
147	147	retail inventory; and
148	148	(3) the market value of the retailer's retail
149	149	inventory for the current tax year as computed under Subsection
150	150	(b).
151	151	(g) As provided by this subsection, the chief appraiser may
152	152	examine the books and records of a retailer. A request made under
153	153	this subsection must be made in writing, be delivered personally to
154	154	the custodian of the records at a location at which the retailer
155	155	conducts business, provide a period of not less than 15 days for the
156	156	person to respond to the request, and state that the person to whom
157	157	the request is addressed has the right to seek judicial relief from
158	158	compliance with the request. In a request made under this section,
159	159	the chief appraiser may examine:
160	160	(1) documentation appropriate to allow the chief
161	161	appraiser to ascertain the applicability of this section to the
162	162	person; and
163	163	(2) sales records to substantiate information set
164	164	forth in the declaration filed by the retailer.
165	165	(h) A retailer who fails to timely file a declaration under
166	166	Subsection (f) in a tax year waives any right to have the retailer's
167	167	retail inventory appraised as provided by this section in that tax
168	168	year.
169	169	(i) Section 23.123 applies to a declaration filed under this
170	170	section in the same manner in which that section applies to a
171	171	declaration filed as required by Section 23.121.
172	172	SECTION 3. The changes in law made by this Act apply only to
173	173	an ad valorem tax year that begins on or after the effective date of
174	174	this Act.
175	175	SECTION 4. This Act takes effect January 1, 2020.