S.B. No. 2173 amends Section 31.08 of the Texas Tax Code to clarify the implications of a tax certificate that accompanies the transfer of certain properties. The bill specifies that if a property is transferred with a tax certificate that incorrectly states that no delinquent taxes, penalties, or interest are owed due to an erroneously granted residence homestead exemption, the tax lien on the property is extinguished. This absolves the purchaser from liability for any delinquent amounts related to the property. However, the original taxpayer remains liable for taxes, penalties, or interest for the year the tax was imposed or the property was omitted.

Additionally, the bill introduces a new subsection (d) that stipulates that if the transfer occurs between closely related individuals, an employer and employee, a parent company and its subsidiary, or a trust and its beneficiary, the erroneous tax certificate does not extinguish the tax lien for any delinquent amounts that may later be determined due. The changes apply only to tax certificates issued on or after the effective date of the Act, which is set for September 1, 2025.

Statutes affected:
Introduced: Tax Code 31.08 (Tax Code 31)
Senate Committee Report: Tax Code 31.08 (Tax Code 31)
Engrossed: Tax Code 31.08 (Tax Code 31)
House Committee Report: Tax Code 31.08 (Tax Code 31)
Enrolled: Tax Code 31.08 (Tax Code 31)