Texas House Bill HB4495

Texas 2021 - 87th Regular

Caption

Relating to the allocation for ad valorem tax purposes of the value of vessels and other watercraft used outside this state.

Impact

Under this bill, the allocation of tax value will be determined by how many miles vessels operated within Texas compared to their total operational miles in the previous year. Special-purpose vessels will be taxed based on the number of days they were physically located in Texas. This change is expected to streamline the tax assessment process for businesses that operate fleets of vessels, potentially leading to increased compliance and revenue. It specifically aims to provide a more accurate of value for these vessels when used in commerce, ultimately providing a clearer framework for taxation that could enhance local tax revenues.

Summary

House Bill 4495 concerns the allocation for ad valorem tax purposes of the value of vessels and other watercraft that are used outside the state of Texas. The bill amends Sections of the Tax Code to clarify the taxation procedures for different types of vessels, specifically those used as instrumentalities of commerce and special-purpose vessels. The intent is to establish a fair market valuation methodology that considers where these vessels are physically located and how they are utilized, which can significantly impact tax revenue for local governments in Texas.

Contention

Notable points of contention around HB 4495 may arise concerning the definitions of 'vessels' and 'watercraft,' particularly how they apply to vessels that do not primarily function in transportation under the new definitions. Stakeholders, such as businesses that operate fleets or use specialized vessels, might have differing views on how their assets are taxed and the implications for their operational costs. Further discussions may involve how these changes affect local taxation authority and budget negotiations, as this could shift tax burdens or revenues among different regional entities.