| 1 | 1 | | By: Bernal H.B. No. 399 |
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| 2 | 2 | | |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | |
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| 6 | 6 | | A BILL TO BE ENTITLED |
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| 7 | 7 | | AN ACT |
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| 8 | 8 | | relating to the exemption from ad valorem taxation of |
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| 9 | 9 | | income-producing tangible personal property for a certain period of |
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| 10 | 10 | | time. |
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| 11 | 11 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 12 | 12 | | SECTION 1. Chapter 11, Tax Code, is amended by adding |
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| 13 | 13 | | Section 11.144 to read as follows: |
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| 14 | 14 | | Sec. 11.144. INCOME-PRODUCING TANGIBLE PERSONAL PROPERTY |
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| 15 | 15 | | FOR THREE YEARS FOLLOWING INCORPORATION. (a) This section applies |
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| 16 | 16 | | only to small businesses as defined by Section 481.401(10), |
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| 17 | 17 | | Government Code, and a person who files a rendition statement under |
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| 18 | 18 | | Section 22.01, Tax Code. |
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| 19 | 19 | | (b) A person is entitled to an exemption from taxation of |
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| 20 | 20 | | the tangible personal property the person owns that is held or used |
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| 21 | 21 | | for the production of income for three years following |
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| 22 | 22 | | incorporation under Title 1 or 2, Business Organizations Code. |
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| 23 | 23 | | SECTION 2. This Act applies only to ad valorem taxes imposed |
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| 24 | 24 | | for a tax year that begins on or after the effective date of this |
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| 25 | 25 | | Act. |
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| 26 | 26 | | SECTION 3. This Act takes effect January 1, 2026, but only |
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| 27 | 27 | | if the constitutional amendment proposed by the 89th Legislature, |
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| 28 | 28 | | Regular Session, 2025, authorizing the legislature to exempt |
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| 29 | 29 | | income-producing tangible personal property from ad valorem |
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| 30 | 30 | | taxation for a certain period of time is approved by the voters. If |
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| 31 | 31 | | that amendment is not approved by the voters, this Act has no |
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| 32 | 32 | | effect. |
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