H.B. No. 399 proposes an amendment to the Texas Tax Code by adding Section 11.144, which establishes an exemption from ad valorem taxation for income-producing tangible personal property owned by small businesses for a period of three years following their incorporation. This exemption applies specifically to small businesses as defined by Section 481.401(10) of the Government Code and to individuals who file a rendition statement under Section 22.01 of the Tax Code. The bill outlines that the exemption is applicable only to tangible personal property that is held or used for the production of income.

The bill stipulates that it will only take effect on January 1, 2026, contingent upon the approval of a constitutional amendment proposed by the 89th Legislature during the Regular Session of 2025. This amendment would authorize the legislature to exempt income-producing tangible personal property from ad valorem taxation for a specified period. If the amendment is not approved by voters, the provisions of this Act will not take effect.

Statutes affected:
Introduced: ()