$2,500 business property exemption tied to inflation

The text as introduced · 318 words

89R14135 JBD-D

By: Vo
H.B. No. 4389

A BILL TO BE ENTITLED

AN ACT

relating to the adjustment of the amount of the exemption from ad

valorem taxation of income-producing tangible personal property

having a value of less than a certain amount to reflect inflation.

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

SECTION 1. The heading to Section 11.145, Tax Code, is

amended to read as follows:

Sec. 11.145. CERTAIN INCOME-PRODUCING TANGIBLE PERSONAL

PROPERTY [ HAVING VALUE OF LESS THAN $2,500 ].

SECTION 2. Section 11.145, Tax Code, is amended by amending

Subsection (a) and adding Subsection (c) to read as follows:

(a) 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 if that property has a taxable value

that does not exceed the amount calculated for the applicable tax

year under Subsection (c) [ of less than $2,500 ].

(c) For the 2026 tax year, the exemption provided by

Subsection (a) applies to tangible personal property described by

that subsection that has a taxable value that does not exceed

$2,500. For each subsequent tax year, the comptroller shall adjust

the taxable value used to determine whether the exemption provided

by Subsection (a) applies to reflect inflation by using the index

that the comptroller considers to most accurately report changes in

the purchasing power of the dollar for consumers in this state. As

soon as practicable after making the adjustment required by this

subsection, the comptroller shall publish in the Texas Register and

post on the comptroller's Internet website the adjusted taxable

value to be used for purposes of this section.

SECTION 3. The change in law made by this Act applies only

to an ad valorem tax year that begins on or after January 1, 2026.

SECTION 4. This Act takes effect January 1, 2026.