Bill Text: TX HB9 | 2025-2026 | 89th Legislature | Enrolled

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Bill Title: 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.

Sponsorship: Moderate Partisan Bill (Republican 76-13)

Status: (Passed) 2025-06-12 - See remarks for effective date [HB9 Detail]

Download: Texas-2025-HB9-Enrolled.html

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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