| 1 | 1 | | 89R14135 JBD-D |
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| 2 | 2 | | By: Vo H.B. No. 4389 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | |
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| 6 | 6 | | |
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| 7 | 7 | | A BILL TO BE ENTITLED |
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| 8 | 8 | | AN ACT |
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| 9 | 9 | | relating to the adjustment of the amount of the exemption from ad |
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| 10 | 10 | | valorem taxation of income-producing tangible personal property |
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| 11 | 11 | | having a value of less than a certain amount to reflect inflation. |
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| 12 | 12 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 13 | 13 | | SECTION 1. The heading to Section 11.145, Tax Code, is |
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| 14 | 14 | | amended to read as follows: |
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| 15 | 15 | | Sec. 11.145. CERTAIN INCOME-PRODUCING TANGIBLE PERSONAL |
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| 16 | 16 | | PROPERTY [HAVING VALUE OF LESS THAN $2,500]. |
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| 17 | 17 | | SECTION 2. Section 11.145, Tax Code, is amended by amending |
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| 18 | 18 | | Subsection (a) and adding Subsection (c) to read as follows: |
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| 19 | 19 | | (a) 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 if that property has a taxable value |
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| 22 | 22 | | that does not exceed the amount calculated for the applicable tax |
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| 23 | 23 | | year under Subsection (c) [of less than $2,500]. |
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| 24 | 24 | | (c) For the 2026 tax year, the exemption provided by |
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| 25 | 25 | | Subsection (a) applies to tangible personal property described by |
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| 26 | 26 | | that subsection that has a taxable value that does not exceed |
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| 27 | 27 | | $2,500. For each subsequent tax year, the comptroller shall adjust |
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| 28 | 28 | | the taxable value used to determine whether the exemption provided |
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| 29 | 29 | | by Subsection (a) applies to reflect inflation by using the index |
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| 30 | 30 | | that the comptroller considers to most accurately report changes in |
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| 31 | 31 | | the purchasing power of the dollar for consumers in this state. As |
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| 32 | 32 | | soon as practicable after making the adjustment required by this |
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| 33 | 33 | | subsection, the comptroller shall publish in the Texas Register and |
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| 34 | 34 | | post on the comptroller's Internet website the adjusted taxable |
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| 35 | 35 | | value to be used for purposes of this section. |
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| 36 | 36 | | SECTION 3. The change in law made by this Act applies only |
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| 37 | 37 | | to an ad valorem tax year that begins on or after January 1, 2026. |
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| 38 | 38 | | SECTION 4. This Act takes effect January 1, 2026. |
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