The bill, H.B. No. 3424, amends Section 23.1242 of the Texas Tax Code to modify the ad valorem taxation process for dealer's heavy equipment inventory. Key changes include the introduction of new subsections that clarify the responsibilities of equipment owners regarding the assignment and collection of unit property taxes. Specifically, it stipulates that owners may not collect unit property tax from lessees or renters if the equipment is leased to the United States or its agencies. Additionally, the bill mandates that owners must provide written notice of the unit property tax factor to each owner maintaining an escrow account by December 15 each year.

Further amendments streamline the reporting process for dealers, requiring them to file a tax statement quarterly instead of monthly, and to summarize all items sold, leased, or rented during the quarter. The bill also clarifies that a dealer who does not owe heavy equipment inventory tax for the current year must still file a statement indicating no transactions occurred. Moreover, it allows a person acquiring a dealer's business to use the same unit property tax factor as the previous owner for tax payments, while ensuring that both parties notify the chief appraiser and collector of their agreement. The act is set to take effect on January 1, 2026, and applies to ad valorem taxes for tax years beginning on or after that date.

Statutes affected:
Introduced: Tax Code 23.1242 (Tax Code 23)