By: Springer S.B. No. 1439
(Hefner)
A BILL TO BE ENTITLED
AN ACT
relating to the ad valorem taxation of tangible personal property
held or used for the production of income by related business
entities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 11.145, Tax Code, is amended to read as
follows:
Sec. 11.145. INCOME-PRODUCING TANGIBLE PERSONAL PROPERTY
HAVING VALUE OF LESS THAN $2,500. (a) In this section:
(1) "Related business entity" means a business entity
that:
(A) engages in a common business enterprise with
at least one other business entity; and
(B) owns tangible personal property that:
(i) is held or used for the production of
income as part of the common business enterprise; and
(ii) is located at the same physical
address that tangible personal property owned by at least one other
business entity engaged in the common business enterprise is
located.
(2) "Unified business enterprise" means a common
business enterprise composed of more than one related business
entity.
(b) Subject to Subsection (d), a [A] person is entitled to
an exemption from taxation of the tangible personal property the
person owns that is held or used for the production of income if
that property has a taxable value of less than $2,500.
(c) [(b)] The exemption provided by Subsection (b) [(a)]
applies to each separate taxing unit in which a person holds or uses
tangible personal property for the production of income.
(d) For[, and, for] the purpose [purposes] of Subsection (b)
[(a)], all property described by that subsection in a [each] taxing
unit that is owned by a person is:
(1) aggregated to determine taxable value; and
(2) if the person is a related business entity,
aggregated with the property described by that subsection in the
taxing unit that is owned by each other related business enterprise
that composes the same unified business enterprise to determine
taxable value for the entity.
(e) A chief appraiser may investigate a business entity to
determine whether the entity:
(1) is a related business entity; and
(2) has aggregated tangible personal property as
provided by Subsection (d)(2).
SECTION 2. Section 22.01, Tax Code, is amended by amending
Subsections (a), (c-1), and (f) and adding Subsection (n) to read as
follows:
(a) Except as provided by Chapter 24, a person shall render
for taxation all tangible personal property used for the production
of income that the person owns or that the person manages and
controls as a fiduciary on January 1. A rendition statement shall
contain:
(1) the name and address of the property owner;
(2) a description of the property by type or category;
(3) if the property is inventory, a description of
each type of inventory and a general estimate of the quantity of
each type of inventory;
(4) the physical address [location] or taxable situs
of the property; and
(5) the property owner's good faith estimate of the
market value of the property or, at the option of the property
owner, the historical cost when new and the year of acquisition of
the property.
(c-1) In this section:
(1) "Related business entity" and "unified business
enterprise" have the meanings assigned by Section 11.145.
(2) "Secured party" has the meaning assigned by
Section 9.102, Business & Commerce Code.
(3) [(2)] "Security interest" has the meaning
assigned by Section 1.201, Business & Commerce Code.
(f) Notwithstanding Subsections (a) and (b), a rendition
statement of a person who owns tangible personal property used for
the production of income located in the appraisal district that, in
the owner's opinion, has an aggregate value of less than $20,000 is
required to contain only:
(1) the name and address of the property owner;
(2) a general description of the property by type or
category; and
(3) the physical address [location] or taxable situs
of the property.
(n) A rendition statement of a related business entity must
contain the information required by Subsection (a) or (f), as
applicable, stated for each related business entity that composes
the unified business enterprise of which the related business
entity that is the subject of the rendition is a part.
SECTION 3. Section 22.24(c), Tax Code, is amended to read as
follows:
(c) The comptroller may prescribe or approve different
forms for different kinds of property but shall ensure that each
form requires a property owner to furnish the information necessary
to identify the property and to determine its ownership,
taxability, and situs. Each form must include a box that the
property owner may check to permit the property owner to affirm that
the information contained in the most recent rendition statement
filed by the property owner in a prior tax year is accurate with
respect to the current tax year in accordance with Section
22.01(l). Each form must include a box that a property owner that is
a related business entity, as defined by Section 11.145, must check
to identify the owner as a related business entity. A form may not
require but may permit a property owner to furnish information not
specifically required by this chapter to be reported. In addition,
a form prescribed or approved under this subsection must contain
the following statement in bold type: "If you make a false statement
on this form, you could be found guilty of a Class A misdemeanor or a
state jail felony under Section 37.10, Penal Code."
SECTION 4. The changes in law made by this Act apply only to
an ad valorem tax year that begins on or after the effective date of
this Act.
SECTION 5. This Act takes effect January 1, 2024.