88R6758 CJC-F
By: Murr H.B. No. 3769
A BILL TO BE ENTITLED
AN ACT
relating to the ad valorem taxation of certain dealer's heavy
equipment inventory.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 23.1242, Tax Code, is amended by
amending Subsections (b), (e), (f), (g), (j), (k), and (n) and
adding Subsection (b-1) to read as follows:
(b) 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. 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 sales price of the item or the monthly lease or
rental payment received for the item, as applicable, by the unit
property tax factor. Except as otherwise provided by this
subsection, if [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. If the item of heavy equipment is leased or rented to the
United States or an agency or instrumentality of the United States,
the owner of the equipment may not collect the unit property tax
from the lessee or renter and may not include the amount of the unit
property tax assigned as a separate line item on an invoice provided
to the lessee or renter. On or before the 20th day of the month
following each calendar quarter [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 calendar quarter [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.
(b-1) Not later than December 15 of each year, the collector
shall provide written notice to each owner for whom the collector
maintains an escrow account under Subsection (c) of the unit
property tax factor for the following tax year for each location in
which the owner's heavy equipment inventory is located.
(e) The comptroller by rule shall adopt a dealer's heavy
equipment inventory tax statement form. Each calendar quarter
[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 heavy equipment
sold, leased, or rented including any unique identification or
serial number affixed to the item by the manufacturer;
(2) the 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 20th day of the month following each
calendar quarter [month], a dealer shall file with the collector
the statement covering the sale, lease, or rental of each item of
heavy equipment sold, leased, or rented by the dealer in the
preceding calendar quarter [month]. On or before the 20th day of
the [a] month following a calendar quarter [month] in which a dealer
does not sell, lease, or rent an item of heavy equipment, the dealer
must file the statement with the collector and indicate that no
sales, leases, or rentals were made in the preceding calendar
quarter [prior month]. A dealer shall [file a copy of the
statement with the chief appraiser and] retain documentation
relating to the disposition of each item of heavy equipment 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 calendar
quarter [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).
(j) The collector shall remit to each appropriate taxing
unit the total amount collected by the collector in deficiency
payments. The assessor of each taxing unit shall apply those funds
to the taxes owed by the owner. Taxes that are due but not received
by the collector on or before February 28 [January 31] are
delinquent. Not later than March 31 [February 15], the collector
shall distribute to each appropriate taxing unit in the manner
provided by this section all funds collected under authority of
this section and held in escrow by the collector under this
section. The [This section does not impose a duty on a] collector
shall [to] collect delinquent taxes as required by this section
regardless of whether [that] the collector is [not] otherwise
obligated by law or contract to collect the delinquent taxes.
(k) A person who acquires the business or assets of an owner
may, by contract, agree to pay the current year heavy equipment
inventory taxes owed by the owner. The person who acquires the
business or assets of the owner may use the same unit property tax
factor that the owner who owes the current year tax would use when
paying the current year tax. The owner who owes the current year
tax and the person who acquires the business or assets of the owner
shall jointly notify the chief appraiser and the collector of the
terms of the agreement and of the fact that the other person has
agreed to pay the current year heavy equipment inventory taxes owed
by the dealer. The chief appraiser and the collector shall adjust
their records accordingly. Notwithstanding Section 23.1241, a
person who agrees to pay current year heavy equipment inventory
taxes as provided by this subsection is not required to file a
declaration until the year following the acquisition. This
subsection does not relieve the selling owner of the tax liability.
(n) An owner who fails to remit unit property taxes due as
required by this section shall pay a penalty of five percent of the
amount due. If the amount is not paid within 10 days after the due
date, the owner shall pay an additional penalty of five percent of
the amount due. Notwithstanding this section, unit property taxes
paid on or before February 28 [January 31] of the year following the
date on which they are due are not delinquent. The collector, the
collector's designated agent, or the county or district attorney
shall enforce this subsection. A penalty under this subsection is
in addition to any other penalty provided by law if the owner's
taxes are delinquent.
SECTION 2. Section 31.02(a), Tax Code, is amended to read as
follows:
(a) Except as provided by Subsection (b) of this section and
by Sections 23.1242, 31.03, and 31.04 [of this code], taxes are due
on receipt of the tax bill and are delinquent if not paid before
February 1 of the year following the year in which imposed.
SECTION 3. This Act applies only to ad valorem taxes imposed
for an ad valorem tax year that begins on or after the effective
date of this Act.
SECTION 4. This Act takes effect January 1, 2024.