Relating to the exemption of tangible personal property from ad valorem taxation; making conforming changes.
Impact
If enacted, HB3064 will significantly reshape the landscape of property taxation in Texas. It aims to facilitate tax relief for businesses and individuals possessing tangible personal property by eliminating their ad valorem tax obligations. This legislative change could encourage investment in personal property and stimulate economic activity as businesses might have more disposable income to reinvest or allocate to other expenditures due to the reduction in annual tax liabilities.
Summary
House Bill 3064 is a legislative proposal aimed at amending existing provisions in the Texas Tax Code relating to the taxation of tangible personal property. Specifically, the bill proposes an exemption from ad valorem taxation for tangible personal property starting from January 1, 2026. This exemption will mean that on and after this date, any provisions of the law that would result in the taxation of such property will have no effect, thereby relieving property owners from this tax burden.
Contention
However, there could be notable points of contention surrounding this bill. Critics may argue that the substantial loss of tax revenue from personal property could impact local governments, which rely on these funds for essential services such as education, public safety, and infrastructure maintenance. Advocates of the bill, on the other hand, argue that the removal of this tax is essential for fostering economic growth and competitiveness among Texas businesses. There may also be discussions regarding the potential need to adjust funding strategies for local governments to mitigate the effects of the proposed changes.
Texas Constitutional Statutes Affected
Education Code
Chapter 49. Options For Local Revenue Levels In Excess Of Entitlement
Section: New Section
Finance Code
Chapter 89. Miscellaneous Provisions Applicable To Savings And Loan Associations
Section: New Section
Local Government Code
Chapter 379. North American Free Trade Agreement Impact Zone
Relating to an exemption from ad valorem taxation of a portion of the appraised value of tangible personal property that is held or used for the production of income and a franchise tax credit for the payment of certain related ad valorem taxes.
Relating to an exemption from ad valorem taxation of a portion of the appraised value of tangible personal property a person owns that is held or used for the production of income.
Relating to a study of the feasibility and benefits to this state of abolishing the property tax assistance division of the office of the comptroller of public accounts and transferring its powers and duties to an independent agency.
Relating to abolishing the property tax assistance division of the office of the comptroller of public accounts and transferring its powers and duties to the newly created State Property Tax Board.