bill exempting new small business equipment from property taxes

The text as introduced · 225 words

By: Bernal
H.B. No. 399

A BILL TO BE ENTITLED

AN ACT

relating to the exemption from ad valorem taxation of

income-producing tangible personal property for a certain period of

time.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 11, Tax Code, is amended by adding

Section 11.144 to read as follows:

Sec. 11.144. INCOME-PRODUCING TANGIBLE PERSONAL PROPERTY

FOR THREE YEARS FOLLOWING INCORPORATION. (a) This section applies

only to small businesses as defined by Section 481.401(10),

Government Code, and a person who files a rendition statement under

Section 22.01, Tax Code.

(b) A person is entitled to an exemption from taxation of

the tangible personal property the person owns that is held or used

for the production of income for three years following

incorporation under Title 1 or 2, Business Organizations Code.

SECTION 2. 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 3. This Act takes effect January 1, 2026, but only

if the constitutional amendment proposed by the 89th Legislature,

Regular Session, 2025, authorizing the legislature to exempt

income-producing tangible personal property from ad valorem

taxation for a certain period of time is approved by the voters. If

that amendment is not approved by the voters, this Act has no

effect.