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