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, the official text

H.B. No. 9

AN ACT

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.

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 (f) and except as provided by

Subsection (d), a [A] person is entitled to an exemption from

taxation by a taxing unit of $125,000 of the appraised value of the

tangible personal property the person owns that is held or used for

the production of income and has taxable situs at the same location

in the taxing unit [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 location in a taxing unit in which a person

holds or uses tangible personal property for the production of

income, and, for the purposes of Subsection (b) [(a)], all property

that has taxable situs in each separate location in the taxing unit

is aggregated to determine taxable value.

(d) A person who leases tangible personal property is

entitled to an exemption from taxation by a taxing unit of $125,000

of the total appraised value of all the tangible personal property

the person owns that is held or used for the production of income

and is subject to a lease, regardless of where the property is

located in the taxing unit.

(d-1) Notwithstanding Subsections (b) and (d), a person is

entitled to an exemption from taxation by a taxing unit of $125,000

of the total appraised value of all the tangible personal property

the person owns that is held or used for the production of income in

the taxing unit if the property has taxable situs within the taxing

unit at any location that is not owned or leased by the owner,

regardless of where the property is located within the taxing unit.

(e) The exemptions provided by Subsections (d) and (d-1)

apply to each separate taxing unit in which a person holds or uses

tangible personal property for the production of income.

(f) For the purposes of Subsection (b), if a person is a

related business entity, all property described by that subsection

that has taxable situs at the same location in a taxing unit and

that is owned by the person is aggregated with the property

described by that subsection that has taxable situs at the same

location in the taxing unit and that is owned by each other related

business entity that composes the same unified business enterprise

to determine taxable value for the entity.

(g) 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 (f).

SECTION 2. Section 22.01, Tax Code, is amended by amending

Subsection (c-1) and adding Subsections (j-1), (j-2), (j-3), and

(n) to read as follows:

(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.

(j-1) Notwithstanding Subsections (a) and (b), a person is

required to render tangible personal property the person owns that

is held or used for the production of income only if, in the

person's opinion and as applicable:

(1) the aggregate market value of the property that

has taxable situs in the same location in at least one taxing unit

that participates in the appraisal district is greater than the

amount exempted under Section 11.145(b); or

(2) the aggregate market value of the property in at

least one taxing unit that participates in the appraisal district

is greater than the amount exempted under Section 11.145(d) or

(d-1), as applicable.

(j-2) A person required to render property for taxation

under Subsection (j-1) must render all tangible personal property

the person owns that is held or used for the production of income

and has taxable situs in the appraisal district. This subsection

does not apply to property exempt from taxation under a provision of

law other than Section 11.145.

(j-3) A person who elects not to render property for

taxation as authorized by Subsection (j-1) must file a rendition

statement or property report that includes a certification that the

person reasonably believes that the value of the property is not

more than the amount exempted under Section 11.145(b), (d), or

(d-1), as applicable. The election takes effect beginning with the

tax year following the tax year in which the rendition statement or

property report is filed and continues in effect until the

ownership of the person changes. Notwithstanding Subsection (j-1),

a person described by that subsection must render property for

taxation if required by the chief appraiser.

(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. Each form must

include a box that a property owner who elects not to render the

property for taxation as authorized by Section 22.01(j-1) must

check to certify that the owner reasonably believes that the value

of the property is not more than the amount exempted under Section

11.145(b), (d), or (d-1), as applicable. 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. 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 5. This Act takes effect January 1, 2026, but only

if the constitutional amendment proposed by the 89th Legislature,

Regular Session, 2025, to authorize the legislature to exempt from

ad valorem taxation a portion of the market value of tangible

personal property a person owns that is held or used for the

production of income is approved by the voters. If that amendment

is not approved by the voters, this Act has no effect.

______________________________
______________________________

President of the Senate
Speaker of the House

I certify that H.B. No. 9 was passed by the House on April 3,

2025, by the following vote: Yeas 133, Nays 10, 2 present, not

voting; and that the House concurred in Senate amendments to H.B.

No. 9 on May 19, 2025, by the following vote: Yeas 110, Nays 15, 1

present, not voting.

______________________________

Chief Clerk of the House

I certify that H.B. No. 9 was passed by the Senate, with

amendments, on May 14, 2025, by the following vote: Yeas 31, Nays

0.

______________________________

Secretary of the Senate

APPROVED: __________________

Date

__________________

Governor