The bill proposes a significant change to the ad valorem taxation of tangible personal property used for income production by exempting up to $250,000 of its appraised value, a substantial increase from the previous threshold of $2,500. This amendment to Section 11.145 of the Tax Code also introduces a requirement that individuals must only render their income-producing tangible personal property for taxation if its aggregate market value exceeds the newly established exempted amount. The implementation of these changes is contingent upon the approval of a constitutional amendment, which, if passed, would allow the provisions to take effect for the 2025 tax year.

Additionally, the bill includes new guidelines for the calculation of appraisal rolls and tax rates in light of the proposed exemption, including the creation of provisional appraisal rolls and the calculation of no-new-revenue and voter-approval tax rates as if the exemption were already in effect. It also introduces a new provision regarding the timing of tax payments for supplemental tax bills, stating that such taxes are due upon receipt and become delinquent if not paid by March 1 of the following year, with this provision set to expire on December 31, 2026. The bill will take effect immediately if it receives a two-thirds majority vote; otherwise, it will take effect on September 1, 2025.

Statutes affected:
Introduced: Tax Code 11.145, Tax Code 22.01, Tax Code 26.01, Tax Code 26.04, Tax Code 26.08, Tax Code 26.09, Tax Code 26.15, Tax Code 31.01, Tax Code 31.02 (Tax Code 11, Tax Code 26, Tax Code 22, Tax Code 31)