June 6, 2023
Written by: Eleanor Kim, DMA Tax Counsel
DuCharme, McMillen & Associates, Inc. (DMA) provides this information relating to the 88th Texas Legislature Regular Session.
The 88th Texas Legislative Session ended May 29, 2023, without significant changes to taxes. The legislature worked with a record budget surplus but ignored many introduced tax bills that had a fiscal impact to future tax revenue. On the tax front, property tax relief was the main focus of the legislature, but the Senate and the House were unable to agree on the form of the property tax relief. The Senate proposed to increase the residence homestead exemption and to extend an exemption to business personal property, whereas the House favored placing a cap on the appraised value of all real property. Neither the Senate’s nor the House’s property tax relief bills passed. On the last day of the regular session, Governor Greg Abbott called a Special Session to address two specific topics:
- Legislation to cut property tax rates solely by reducing the school district maximum compressed tax rate in order to provide lasting property tax relief for Texas taxpayers.
- Legislation solely for the purpose of increasing or enhancing the penalties for certain criminal conduct involving the smuggling of persons or the operation of a stash house.
The first week of the Special Session has revealed the two houses still disagree on the property tax relief approach. The House passed its bill (see HB 5, below) to compress property tax rates and promptly adjourned without considering the Senate’s bill that would increase the residence homestead exemption. If the Senate refuses to accept the House’s bill, it would result in Governor Abbott having to call a second Special Session for property tax relief.
Following are tax-related bills that were enrolled during the regular legislative session. Governor Greg Abbott has until June 18, 2023, to sign or veto the bills, or allow them to become law without his signature. If you want to review the content or status of any of the bills, they are available at www.legis.state.tx.us.
Jump to bills by tax type:
SB 65 (Zaffirini, Judith) amends Tax Code §151.0038 to exclude from taxable information services the furnishing of an academic transcript. The Governor signed the bill on May 23, 2023, and the Act takes effect October 1, 2023.
SB 379 (Huffman, Joan) amends Tax Code §151.313 to expand the list of eligible items that are exempt from tax as healthcare supplies to include:
- A wound care dressing. A product is a wound care dressing if the product is used to prevent bacterial contamination of a wound by absorbing wound drainage, protecting healing tissue, or maintaining a moist or dry wound environment. The term includes individual sterile adhesive bandages, sterile rolls or pads of gauze, and surgical and medical tape used to secure a wound care dressing to a patient. The term does not include general-purpose absorption items, such as cotton balls, cotton swabs, tissues, or appliances or devices used to drain bodily fluids or irrigate body cavities, such as drains, suction catheters, or irrigation systems.
- an adult or a child diaper. A product is a diaper if the product is an absorbent garment worn by humans who are incapable of, or have difficulty, controlling their bladder or bowel movements. A product is a children’s diaper if the product is marketed to be worn by children, and a product is an adult diaper if the product is a diaper other than a children’s diaper.
- a baby wipe. A product is a baby wipe for purposes of this section if the product is a moistened and disposable tissue or towel intended for cleansing the skin of a young child.
The enrolled bill was sent to the Governor on May 29, 2023, and the Act is to take effect September 1, 2023.
SB 1122 (Schwertner, Charles) amends Tax Code §151.0039(b) to exclude from taxable Insurance services a medical service, examination, or test required or authorized under Chapter 408, Labor Code (The Texas Workers’ Compensation Act), for the purpose of determining the appropriate level of benefits under that chapter. The bill was sent to the Governor on May 23, 2023, and the Act is to take effect immediately upon passage.
HB 1058 (Goldman, Craig) allows a taxable entity to claim a franchise tax credit if the taxable entity owns a direct or indirect interest in a qualified development.
- The term “qualified development” means a development in Texas for which the Texas Department of Housing and Community Affairs:
- awards or allocates a federal tax credit through the issuance of a carryover allocation agreement or determination notice;
- that has not had an allocation of federal tax credits terminated by or at the direction of the department;
- that is the subject of a recorded restrictive covenant requiring the development to be maintained and operated as a qualified development that has not been terminated and is not subject to termination through any process other than the natural expiration of the covenant’s extended use period;
- that meets all applicable requirements of the qualified allocation plan, as defined by Section 2306.6702, Government Code; and
- for the duration of the extended use period established in the land use restriction agreement, as defined by Section 2306.6702(a)(9), Government Code, follows: (i) all accessibility and adaptability requirements for a federal tax credit; and (ii) Title VIII of the Civil Rights Act of 1968 (42 U.S.C. Section 3601 et seq.).
- The Texas Department of Housing and Community Affairs determines the total amount of credits and issues an allocation certificate indicating the credit amount, which must be the minimum amount necessary for the financial feasibility of the qualified development, but it may not exceed the total federal tax credit awarded to the owner or owners of the qualified development over the 10-year federal tax credit period. The franchise tax credit period, with respect to a building that is part of a qualified development, is the period of 10 tax years beginning with the tax year in which the building is placed in service.
- If a taxable entity is eligible for a credit that exceeds the annual limitations, the taxable entity may carry the unused credit back three tax years or forward for 10 consecutive reports following the tax year in which the allocation certificate was issued.
- The Texas Department of Housing and Community Affairs may begin reserving credit amounts for the purpose of issuing allocation certificates in an open cycle beginning on January 1, 2024, and a taxable entity may apply the credit against a franchise tax report originally due on or after January 1, 2026, and before January 1, 2036.
The enrolled bill was sent to the Governor on May 30, 2023, and the Act is to take effect January 1, 2025. [Note: The bill also provides for a credit against state premium tax liability incurred under Chapters 221 through 226.]
SB 604 (King, Phil) amends Chapter 954, Occupations Code, to modify the definition of “land services” to include “other energy sources” to reflect current industry practices and extends the definitional change to franchise tax by amending Tax Code §171.1011(g-11), which currently allows a taxable entity that is primarily engaged in “landman services” to exclude from its total revenue subcontracting payments made to nonemployees. The term “other energy sources” is defined as “a natural resource other than a mineral that is necessary to produce energy, including geothermal, hydroelectric, nuclear, solar, and wind energy.” The Governor signed the bill on May 24, 2023, and the Act takes effect May 24, 2023. The changes to franchise tax apply to tax reports originally due on or after January 1, 2024.
SB 1013 (Hughes, Bryan) transfers the provisions relating to franchise tax credits for certified rehabilitation of historic structures from Chapter 171, Texas Tax Code, to Chapter 172, Texas Tax Code. The bill modifies the definition of “eligible costs and expenses” to provide that the depreciation and tax-exempt use provisions of Section 47(c)(2), Internal Revenue Code, do not apply to costs and expenses incurred by an entity from the federal income tax under Section 501(a), Internal Revenue Code. The bill continues the authorization that an entity that incurs eligible costs and expenses related to the credit, and that is subject to one of the state insurance premium taxes, to claim all or part of the credit against that tax. The Governor signed the bill on May 19, 2023, and the Act takes effect September 1, 2023.
SB 1243 (Huffman, Joan) adds Tax Code §171.10132 to allow a taxable entity to exclude from total revenue qualifying broadband grant proceeds for broadband deployment in Texas and to include qualifying expenses paid with the grant proceeds to be included in costs of goods sold (COGS) or compensation that may be deducted in computing total revenue. The bill defines “qualifying broadband grant” to mean a grant for broadband deployment in Texas that a taxable entity received under the following programs:
- the Broadband Equity, Access, and Deployment Program established under 47 U.S.C. Section 1702;
- the State Digital Equity Capacity Grant Program established under 47 U.S.C. Section 1723;
- under the Digital Equity Competitive Grant Program established under 47 U.S.C. Section 1724;
- the provisions of 47 U.S.C. Section 1741 providing for middle mile grants;
- the broadband loan and grant pilot program authorized under Section 779, Title VII, Div. A, Consolidated Appropriations Act, 2018 (Pub. L. No. 115-141, 132 Stat. 399), from funds made available for that program under the heading “Distance Learning, Telemedicine, and Broadband Program,” “Rural Utilities Service,” “Rural Development Programs” in Title I, Infrastructure Investments and Jobs Appropriations Act (Title I, Div. J, Pub. L. No. 117-58, 135 Stat. 1351);
- Section 905, Division N, Consolidated Appropriations Act, 2021 (Pub. L. No. 116-260, 134 Stat. 2136); or
- a plan from a state, territory, tribal government, or unit of local government to the extent the grant was: (A)funded by amounts provided under 42 U.S.C. Section 802, 803, or 804; and (B) provided for the stated purposes of making investments in broadband infrastructure.
(Applies to all taxes)
HB 2691 (Button, Angie Chen) amends Government Code §403.055 to authorize the Comptroller to release any held payments owed to a person that is in excess of the person’s outstanding debt to the state as reported by another state agency. The bill requires a state agency that reports any debt to the Comptroller to notify the debtor (other than a person who owes child support) that the debts are being reported to the Comptroller and that any payments that may be due to the person from the state will be held as a result of the outstanding debt. The notice must:
- be given in a manner reasonably calculated to give actual notice to the person;
- state: (1) the name of the indebted or delinquent person; (2) the amount of the person’s indebtedness or delinquency; (3) the agency’s contact information; and (4) any options available to eliminate the indebtedness or delinquency;
- include a statement that the person’s indebtedness or delinquency: (1) has been reported to the Comptroller; and (2) may prohibit the Comptroller from issuing a warrant or initiating an electronic funds transfer to the person for any amount owed to the person by the state.
The Governor signed the bill on May 23, 2023, and the Act takes effect September 1, 2023.
HJR 132 (Hefner, Cole) proposes a constitutional amendment that would prohibit the legislature from imposing a tax based on the wealth or net worth of an individual or family, including a tax based on the difference between the assets and liabilities of an individual or family. The proposed constitutional amendment has been filed with the Texas Secretary of State and will be submitted to the voters for approval at an election to be held on November 7, 2023.
SB 61 (Zaffirini, Judith) amends Tax Code §111.0047 to authorize the Comptroller to send electronic notices of suspension or revocation of any permits or licenses that the Comptroller issues. Service by electronic means is complete when the Comptroller transmits the notice using the contact information provided by the permit holder as shown in the Comptroller’s records. The bill further provides that if the Comptroller mails the notice, the service by mail is complete when the notice is deposited by the Comptroller in a United States Postal Service post office. The bill makes similar changes specifically to sales/use tax permits by amending Tax Code §151.203 and to franchise tax by amending Tax Code §171.251 and §171.256 to authorize the Comptroller to issue electronically a notice of the forfeiture of corporate privileges. The enrolled bill was sent to the Governor on May 29, 2023, and the Act takes effect September 1, 2023.
HOTEL OCCUPANCY TAX
HB 1034 (Stucky, Lynn) amends Tax Code §352.002 and §352.003 to authorize Wise County to impose a county hotel occupancy tax up to 2%. The enrolled bill was sent to the Governor on May 26, 2023, and the Act takes effect September 1, 2023.
HB 1689 (Murr, Andrew) amends Tax Code §352.005 and adds Tax Code §352.1016 to:
- authorize a county to use a certain amount of county hotel occupancy tax to create, maintain, operate, or administer an electronic tax administration system and to contract with a third party to assist in the creation, maintenance, operation, or administration of an electronic tax administration system;
- authorize a person who collects and remits a county hotel occupancy tax using the newly-created electronic tax administration system to retain up to 1% of the tax collected and remitted as reimbursement; and
- prohibit a county from using any of the hotel occupancy tax revenue to conduct audits.
The enrolled bill was sent to the Governor on May 22, 2023, and the Act is to take effect immediately upon passage.
HB 2353 (Keumpel, John) amends Tax Code §351.101 to authorize the City of Seguin to use its municipal hotel occupancy tax revenue for the promotion of tourism by enhancing and upgrading an existing sports facility or field, subject to certain budgetary requirements. The Act takes effect June 2, 2023, by operation of law without the Governor’s signature.
HB 2497 (Morrison, Geanie) authorizes the City of Bay City to use its municipal hotel occupancy tax revenue to construct, expand, or operate recreational or sports facilities and fields that it owns. The enrolled bill was sent to the Governor on May 22, 2023, and the Act is to take effect immediately upon passage.
HB 5012 (Clardy, Travis) adds certain municipalities to the list of eligible municipalities that may receive a rebate for a period of 10 years of the state hotel occupancy taxes and state sales taxes collected at qualified hotel projects. The bill provides for a “clawback” provision to ensure the state’s revenues are recouped over time in certain newly-authorized projects. The enrolled bill was sent to the Governor on May 30, 2023, and the Act is to take effect September 1, 2023.
SB 1057 (Whitmire, John) amends Tax Code §351.1015 to authorize certain municipalities and local government corporations to use tax revenue for certain qualified projects and project-associated infrastructure. The enrolled bill was sent to the Governor on May 29, 2023, and the Act is to take effect September 1, 2023.
SB 1420 (Birdwell, Brian) makes the following changes:
- amends Tax Code §351.001 to modify the definition of “convention center facilities”;
- amends Tax Code §351.009 and §352.009 to change the due date that a municipality or a county must file a report pertaining to its hotel occupancy tax with the Comptroller from February 20 of each year to March 1 of each year;
- adds the requirement that a municipality or a county must include the report the total revenue amount of its hotel occupancy tax that has been collected and unspent that is in the budget for the fiscal year in which the report is due;
- authorizes a municipality or a county to use a portion of its hotel occupancy tax to recoup costs in reporting;
- amends Tax Code §351.101 to prohibit the use of city hotel occupancy tax to acquire a site for, construct, improve, enlarge, equip, repair, staff, operate or maintain any part of a building or facility that a visitor information center unless the building or facility is exclusively used to distribute or disseminate tourism-related information to tourists;
- adds Tax Code §351.162 to require the Comptroller to recapture an amount of tax based on tax collection data; and
- adds Tax Code §351.163 to require the Comptroller to prepare a report on the status of each qualified project by December 1 of each even-number year.
The Governor signed the bill on June 2, 2023, and the Act takes effect June 2, 2023.
SB 1809 (Sparks, Kevin) amends Tax Code §352.002 to authorize Armstrong County to impose a county hotel occupancy tax and amends Tax Code §352.003 to specify that the tax rate may be up to 7%, but the tax rate may not exceed 2% if the hotel is located either within a municipality that imposes a city hotel occupancy tax or within the extraterritorial jurisdiction of a municipality that imposes a tax under Tax Code §351.0025. The Act takes effect May 27, 2023, by operation of law without the Governor’s signature.
SB 1837 (Hinojosa, Chuy) amends Tax Code §351.10691 to authorize a specific city to use city hotel occupancy tax to promote tourism by enhancing and upgrading an existing sports facility or field. The authorization applies to a city that is the county seat of a county that: (1) has a population of less than 40,000; (2) contains a portion of Lake Corpus Christi; and (3) is adjacent to a county that has a population of less than 400,000 and contains a municipality with a population of at less than 300,000. The Act takes effect September 1, 2023, by operation of law without the Governor’s signature.
INSURANCE PREMIUM TAXES
HB 1058 (Goldman, Craig) adds Chapter 233, Insurance Code, to allow an entity to claim a credit against the entity’s state premium tax liability imposed under Chapters 221 through 226, Insurance Code, if the entity owns a direct or indirect interest in a qualified development. See HB 1058 under “Franchise Tax” for the definition of a ” qualified development”. An entity that claims a credit against state premium insurance tax is not required to pay any additional retaliatory tax under Chapter 281 as result of claiming the credit. The enrolled bill was sent to the Governor on May 30, 2023, and the Act will apply to tax reports originally due on or after January 1, 2026.
HB 3345 (Bonnen, Greg) amends Business & Commerce Code §102.052(a) to impose a fee of $10 on each entry by each customer admitted to a sexually oriented business and allocates 1% of the revenue received from the mixed beverage gross receipts tax and the mixed beverage sales tax to the sexual assault program fund. The Governor signed the bill on May 24, 2023, and the Act takes effect September 1, 2023.
MOTOR FUEL TAX
HB 3599 (Thierry, Shawn) amends Chapter 162, Tax Code, to:
- exempt gasoline or diesel fuel that is sold to a nonprofit food bank and delivered into the fuel supply tank of a motor vehicle with a gross vehicle weight rating of at least 25,000 pounds that is owned by the nonprofit food bank and used to deliver food;
- exempt gasoline or diesel fuel sold to a nonprofit food bank and put into a storage facility from which fuel will be delivered solely into the fuel supply tanks of motor vehicles used to deliver food.
- add refund provisions for tax paid by a nonprofit food bank when it purchased gasoline and diesel fuel and used in an exempt manner.
The enrolled bill was sent to the Governor May 24, 2023, and the Act is to take effect September 1, 2023.
HB 3651 (Bailes, Ernest) amends Chapter 162, Tax Code, as follows:
- defines “container” to mean any receptacles used to store motor fuel;
- defines “delivery” to mean any transfer of motor fuel: (1) into a fuel supply tank, cargo tank, or container; or (2) to a location or into a receptacle, as specified by this chapter in connection with the term;
- amends the definition of “motor fuel” to provide that fuel used for “a motor vehicle licensed for use on a public highway”;
- amends the definition of “motor fuel transporter” to exclude a person who is licensed under Chapter 162 as a supplier, permissive supplier, or distributor and who lawfully acquires motor fuel and retains ownership of the fuel while the fuel is being transported;
- amends the definition of “transport vehicle” to provide that it includes a motor vehicle or a motor vehicle/trailer combination that carries motor fuel over a public highway;
- amends Tax Code §162.101 and Tax Code §162.201 to clarify that tax shall be added to the selling price of gasoline or diesel fuel so that the tax is “paid by each person receiving” the fuel until it is paid by the person ultimately using or consuming it; and
- amends Tax Code §162.103(a)(4) and Tax Code §162.203(a) to clarify that a backup tax is imposed on gasoline or diesel fuel on which tax has not been paid “in an original or subsequent sale” and adds a provision that the backup tax is imposed on a person who acquires gasoline or diesel fuel by any unlawful means, including the purchase through unauthorized use of a credit card, debit card, or other money, regardless of whether the tax was previously paid on the fuel or was added to the selling price of the fuel.
The Governor signed the bill on May 24, 2023, and the Act takes effect September 1, 2023. [Note: This bill is one of the Comptroller’s legislative bills.]
MOTOR VEHICLE REGISTRATION
HB 78 (Ortega, Lina) would amend Transportation Code §502.4021 to allow certain counties to impose an additional vehicle registration fee in an amount up to $10 if the voters of the county approve the fee imposition. The bill applies only to a county that borders Mexico and contains a municipality that unilaterally created a regional mobile authority. The House passed the bill on May 2, 2023.
HB 3860 (Goldman, Craig) would amend Chapter 520, Transportation Code, to exempt a county tax assessor-collector from liability for an offense or damages arising from the misuse of license plates or other fraudulent activity related to vehicle registration and titling by an individual or business entity deputized by the county tax assessor-collector to perform titling services in accordance with adopted Texas Department of Motor Vehicles rules. The House passed the bill on May 5, 2023.
SB 505 (Nichols, Robert) would add Transportation Code §502.360 to impose an additional registration fee on electric vehicles. The term “electric vehicle” means a motor vehicle that has a gross weight of 10,000 pounds or less and uses electricity as its only source of motor power. The additional fee is $400 for the registration of a new vehicle and $200 for the registration or renewal of registration of a vehicle. The bill has passed both houses and was sent to the Governor on May 2, 2023.
HB 591 (Capriglione, Giovanni) adds Tax Code §201.061 that makes the following changes:
- exempts from natural gas production tax gas that is produced from a qualifying well that is consumed within 1,000 feet of the qualifying well and that would otherwise have been lawfully vented or
- defines the term “qualifying well” to mean: a well that is connected to a pipeline on which pipeline takeaway capacity is not expected to meet the demand for gas produced by the well; is not connected to a pipeline and for which connection to a pipeline is technically or commercially unfeasible but is operated by a well operator who has contractually dedicated the well, the gas produced from the well, or the land or lease on which the well is located to a pipeline operator; or is not connected to a pipeline and is operated by a well operator who has not contractually dedicated the well the gas produced from the well, or the land or lease on which the well is located to a pipeline operator.
- requires a well operator and a pipeline operator, as applicable, to apply to the Texas Railroad Commission for certification of a well as a qualifying well and sets out attestation requirements;
- requires the submission of the certification from the Texas Railroad Commission with the application for the tax exemption that is filed with the Comptroller.
- requires a person who qualifies for the exemption to apply for the exemption on an annual basis
The Governor signed the bill on June 2, 2023, and the Act takes effect September 1, 2023.
HB 5 (Hunter, Todd) creates an economic development program to attract jobs and investment to Texas through school district property tax abatement agreements. The bill amends Chapter 403, Government Code, to set out provisions for a property tax limitation agreement for school district maintenance and operation (M&O) property tax. The bill:
- establishes the taxable value for M&O property tax for the 10-year incentive period prescribed by the agreement at 50% of the market value of the property for that tax year, or 25% of the market value of the property if the property is located in a qualified opportunity zone that is designated as such by the United States Treasury. During construction, the property, excluding land and inventory, would be valued at zero for M&O purposes during the construction period.
- defines “eligible project” as a project to construct or expand a new or existing facility that is:
- a manufacturing facility;
- a facility related to the provision of utility services, including an electric generation facility that is considered to be dispatchable because the facility’s output can be controlled primarily by forces under human control;
- a facility related to the development of natural resources; or
- a facility engaged in the research, development, or manufacture of high-tech equipment or technology; or
- a project to construct or expand critical infrastructure; and
- excludes from eligible projects the following:
- a project to construct or expand a new or existing non-dispatchable electric generation facility;
- a project to construct or expand a new or existing electric energy storage facility; or
- a project by a company that is ineligible to receive a state contract or investment under Chapters 808, 809, 2270, 2271, or 2274, Government Code.
- Chapter 808: Companies that boycott doing business with Israel;
- Chapter 809: Companies that boycott companies that extract fossil fuels;
- Chapter 2270: Companies that do business in Sudan or Iran or conduct business with or are partly owned by foreign terrorist organizations;
- Chapter 2271: Companies that boycott Israel;
- Chapter 2274: Companies that discriminate against firearm and ammunition industries.
- defines “eligible property” as:
- a new building or expansion of an existing building, including a permanent, nonremovable component of a building, that is:
- (i) constructed after the date the agreement pertaining to the project is entered into; and
- (ii) located in an area designated as a reinvestment zone under Chapter 311 or 312, Tax Code, or as an enterprise zone under Chapter 2303, Government Code, at the time the agreement pertaining to the project is entered into; or
- tangible personal property, other than inventory, first located in the zone after the date the agreement pertaining to the project is entered into.
- a new building or expansion of an existing building, including a permanent, nonremovable component of a building, that is:
- sets out job creation and capital investment requirements.
|Job creation by the end of the first tax year of the incentive period prescribed by the agreement
|Investment by the end of the first tax year of the incentive period prescribed by the agreement
|in a county with a population of at least 750,000:
|create at least 75 required jobs
|at least $200 million
|in a county with a population of at least 250,000 but less than 750,000
|create at least 50 required jobs
|at least $100 million
|in a county with a population of at least 100,000 but less than 250,000:
|create at least 35 required jobs
|at least $50 million
|in a county with a population of less than 100,000:
|create at least 10 required jobs
|at least $20 million
- Requires an application to be submitted to the Comptroller, but the school district reviews the application. The host school district may impose a $30,000 application fee.
- Sets out requirements that must accompany the application.
The enrolled bill was sent to the Governor on May 30, 2023, and the Act is to take effect January 1, 2024, but requires the Comptroller to adopt rules and develop forms and materials by September 1, 2023, or as soon practical thereafter. The program expires December 31, 2033.
HB 260 (Murr, Andrew) amends Tax Code §23.51(5) to provide that “wildlife or livestock disease or pest area” as that term is used in “net to life” means an area designated by a state agency as an area in which a disease or pest that affects wildlife or livestock exists or may exist, including a chronic wasting disease containment or surveillance zone and an area subject to a quarantine authorized by Subtitle C, Title 6, Agriculture Code. The Governor signed the bill on June 2, 2023, and the Act takes effect January 1, 2024.
HB 456 (Craddick, Tom) amends Tax Code §11.18(a) to add to the list of assets owned by certain charitable organizations that are exempt from property tax to include interest in a mineral in place, including a royalty interest. To qualify for the exemption, interest in a mineral in place must not be severed from the surface estate or must have been donated to the charitable organization by the previous owner of the interest. The enrolled bill was sent to the Governor on May 30, 2023, and the Act is to take effect January 1, 2024.
HB 796 (Button, Angie Chen) makes the following changes:
- amends Tax Code §26.17 to require the database to provide a link to newly-required section 41.13 that contains information regarding protest hearings conducted by the appraisal review board.
- adds Tax Code §41.13 to require each appraisal district to create and maintain a publicly available and searchable Internet database that contains information regarding protest hearings conducted by the appraisal review board established for the district;
- requires the database to provide the following information for each protest hearing:
- the name of each board member who attended the hearing;
- the date and time of the hearing;
- the account number and category for the property that was the subject of the hearing;
- the appraised value according to the appraisal district and the property owner’s asserted value of the property that was the subject of the hearing; and
- the board’s determination of the protest, including the board’s determination of the value of the property if the hearing was to consider a protest regarding appraised value.
- requires the chief appraiser of each appraisal district to update the database each year by October 1st;
- requires beginning on January 1, 2025, the database to include information for protests relating to the most recent tax year and to add the information for each tax year thereafter until the database includes protest information for the most recent five years; and
- requires beginning January 1, 2030, the database is to provide protest information for the previous five tax years.
The Governor signed the bill on May 27, 2023, and the Act takes effect January 1, 2024.
HB 1228 (Metcalf, Will) makes the following changes:
- amends Tax Code §1.085 to require a tax official to use electronic delivery of communication that is required or permitted between the tax official and a property owner if the property owner or person designated by the owner elects to exchange communications with the tax official electronically.
- defines a tax official to mean: (1) a chief appraiser, an appraisal district, an appraisal review board, an assessor, a collector, or a taxing unit; or (2) a person designated by a person listed in Paragraph (1) to perform a function on behalf of that person.
- defines “communication” to mean a notice, rendition, application form, completed application, report, filing, statement, appraisal review board order, bill, or other item of information required or permitted to be delivered under a provision of the property tax code.
- requires a tax official to establish procedures for property owners to make an election and to prominently display the information;
- provides that a tax official’s electronic delivery is timely upon delivery, and a property owner’s electronic delivery is timely if the communication is: (1) addressed to the correct delivery portal or electronic delivery system, and (2) received by the tax official’s server on or before the date on which the communication is due.
- adds Tax Code §25.195 to require a chief appraiser, at the request of a property owner, to provide without a fee, electronically or by mail, a copy of the records, supporting data, schedules, and other material and information the owner or the owner’s agent is entitled to under existing law. The bill also requires a private appraisal firm to provide electronically or by mail all information pertaining to the property that the firm considered in appraising the property, including information showing each method of appraisal used to determine the value of the property and all calculations, personal notes, correspondence, and working papers used in appraising the property with respect to property appraised by the firm under contract with the district.
- amends Tax Code §41.461(c) to require a chief appraiser to provide protest information electronically if the property owner or agent of the owner has elected to receive electronic communications from the chief appraiser.
- amends Tax Code §41.47(d)to require an appraisal review board to deliver the order electronically if the property owner or agent of the owner has elected to receive electronic communications.
The enrolled bill was sent to the Governor on May 30, 2023, and the Act is to take effect on January 1, 2024.
HB 1285 (Shine, Hugh) makes the following changes:
- amends Tax Code §5.06 to require the Comptroller to include in its taxpayer assistance pamphlet a description of the functions of a taxpayer liaison officer appointed for an appraisal district with a population of more than 120,000 and information on preparing and presenting a protest before an appraisal review board.
- amends Tax Code §6.052(a) and (b) to: (1) authorize the board of directors of an appraisal district to appoint one or more deputy taxpayer liaison officers to assist the taxpayer liaison officer; (2) provide that the taxpayer liaison officer is the taxpayer assistance officer for the appraisal district; (3) require the taxpayer liaison officer to assist a taxpayer in filing a complaint under Tax Code §41.66(q), which relates to hearing procedures that are not in compliance with the model hearing procedures prepared by the Comptroller and in requesting for limited binding arbitration under Tax Code §41A.015.
- adds Tax Code §6.052(b-1) to authorize a property owner to file a complaint with the taxpayer liaison officer requesting resolution of a dispute with the appraisal district or the appraisal review board (ARB). The taxpayer liaison officer may resolve a complaint by:
- referring the property owner to available information and materials or to the appropriate employee or officer of the appraisal district or appraisal review board;
- meeting with the parties to the dispute that is the subject of the complaint to facilitate an informal resolution;
- treating the matter as a complaint under Section 41.66(q), as appropriate;
- assisting the property owner in filing a request for limited binding arbitration under Section 41A.015, as appropriate; or
- recommending in writing to the chief appraiser, board of directors, chairman of the appraisal review board, or the property owner or the owner’s agent, as applicable, a course of action that the taxpayer liaison officer believes to be appropriate.
- The taxpayer liaison officer may dismiss any part of a complaint that relates to the appraised value of a property or the appraisal methodology and may dismiss a complaint that is repetitive or that fails to state a legitimate concern.
- requires the Comptroller to establish and supervise a program for training and education of taxpayer liaison officers and sets out provisions for the evaluation of the performance of taxpayer liaison officers.
- requires the chief appraiser to prominently post the name, contact information, and a description of the duties of the taxpayer liaison officer on its website if the appraisal district maintains a website.
The Governor signed the bill on June 2, 2023, and the Act takes effect January 1, 2024.
HB 2121 (Paul, Dennis) amends Tax Code §22.24(e) to add that a rendition or report can be filed on behalf of a property owner who is rendering tangible personal property used for the production of income that has a good faith estimated market value of not more than $150,000 without requiring a sworn statement. The enrolled bill was sent to the Governor on May 30, 2023, and the Act is to take effect January 1, 2024.
HB 2354 (Hefner, Cole) amends Tax Code §23.54 to provide the ownership of an agricultural land is not considered to have changed if the ownership is transferred from the former owner to the surviving spouse or a surviving child of the former owner. The enrolled bill was sent to the Governor on May 24, 2023, and the Act is to take effect January 1, 2024.
HB 2488 (Geren, Charlie) amends Tax Code §42.23 to provide that the appraisal district has the burden of establishing the appraised value of the property subject to the appeal by clear and convincing evidence if the appraised value of the property for the preceding tax year was lowered at a trial on the merits. This new provision applies only to an appeal under this chapter of an order of an appraisal review board determining a protest under Subchapter C, Chapter 41, or a motion under Section 25.25, involving an increase in the appraised value of property under the circumstances described by Section 23.01(e) or 41.43(a-3). The enrolled bill was sent to the Governor on May 30, 2023, and the Act is to take effect September 1, 2023.
HB 3273 (Thierry, Shawn) makes the following changes:
- amends Chapter 25, Tax Code, to require an appraisal district to:
- provide real-time property tax notice by prominently posting on the appraisal district’s Internet website, if the appraisal district maintains an Internet website, a notice informing each owner of property located in the appraisal district that the estimated amount of taxes to be imposed on the owner’s property may be found in the database;
- provide instructions describing how a property owner may register on the appraisal district’s Internet website, if the appraisal district maintains an Internet website, to have notifications regarding updates to the property tax database delivered to the owner by email.
- publish a notice in a newspaper of general circulation on or before August 7 or as soon thereafter as practicable.
- amends Chapter 26, Tax Code, to require the chief appraiser of an appraisal district that maintains an internet website to deliver to a property owner by email notifications regarding updates to the property tax database if the owner registers on the website to receive such notifications in that manner.
The enrolled bill was sent to the Governor on May 22, 2023, and the Act is to take effect January 1, 2024.
HB 4077 (Noble, Candy) amends Tax Code §11.43 to clarify that an individual who is 64 and is receiving a residence homestead exemption is eligible to claim a certain additional tax exemption that is available to individuals 65 or older in the following tax year without the need to apply if the individual’s information on file supports granting the exemption. The enrolled bill was sent to the Governor on May 24, 2023, and the Act is to take effect January 1, 2024.
HB 4101 (Shine, Hugh) amends Tax Code §41A.015 to authorize a property owner who has filed a notice of protest to request a limited binding arbitration to compel the appraisal review board or the chief appraiser to comply with the model hearing procedures adopted by the appraisal review board. The enrolled bill was sent to the Governor on May 22, 2023, and the Act is to take effect January 1, 2024.
SB 62 (Zaffirini, Judith) amends Tax Code §34.015 to require a county assessor-collector for each county to post on the county’s internet website the form that a person must use when requesting a statement of delinquency tax due on a foreclosed property for sale or to post a link to the Comptroller’s website where the Comptroller’s form may be located if the use of the Comptroller’s form is permitted. The Governor signed the bill on May 29, 2023, and the Act takes effect September 1, 2023.
- an aerial photograph that depicts more than one separately owned building;
- a street-level photograph of only the exterior of a building; or
- a field record or overhead sketch of the property that depicts only the outline of the buildings, the general landscape of the property, and the dimensions of or distances between the buildings and features depicted.
The enrolled bill was sent to the Governor on May 23, 2023, and the Act is to take effect immediately upon passage.
SB 361 (Eckhardt, Sarah) amends Tax Code §6.412 to allow a person employed by a school district as a teacher to serve on the appraisal review board of an appraisal district. The enrolled bill was sent to the Governor on May 23, 2023, and the Act is to take effect September 1, 2023.
SB 539 (Campbell, Donna) amends Tax Code §33.03 to require each taxing unit to indicate on each delinquent tax roll whether a tax delinquency is deferred or abated for residence homestead under Tax Code §33.06 (Elderly, Disabled, Disabled Veteran) or §33.065 (Appreciating Residence Homestead). The enrolled bill was sent to the Governor on May 23, 2023, and the Act is to take effect on January 1, 2024.
SB 617 (Blanco, Cesar) amends Tax Code §25.025 to add to the list of individuals whose home addresses must be kept confidential by the appraisal districts to include a customs and border protection officer or border patrol agent of US Customs and Border Protection or the spouse, surviving spouse, or adult child of a customs and border protection officer or border patrol agent. The Governor signed the bill on May 19, 2023, and the Act takes effect May 19, 2023.
SB 719 (Paxton, Angela) amends Tax Code §11.18(d) to extend the property tax exemption for charitable organizations to include an organization that provides services related to planning for the placement of or placing children in foster or adoptive homes or providing support or relief to women who are or may be pregnant and who are considering placing their unborn children for adoption. The enrolled bill was sent to the Governor on May 29, 2023, and the Act is to take effect January 1, 2024
SB 938 (Blanco, Cesar) includes El Paso County among the counties in which conservation and reclamation districts may issue bonds supported by property taxes to fund the development and maintenance of parks and recreational facilities. The Governor signed the bill on May 13, 2023, and the Act takes effect on November 7, 2023, if the proposed constitutional amendment (SJR 32) is approved by the voters at an election to be held on November 7, 2023.
SB 1145 (West, Royce) adds Tax Code §11.36 to provide an exemption for a person who owns and operates a qualifying child-care facility or the portion of the real property that the person owns and leases to a person who uses the property to operate a qualifying childcare facility. The bill sets forth requirements and definitions for eligibility of the exemption. The Governor signed the bill on May 29, 2023, and the Act takes effect on January 1, 2024, if the proposed constitutional amendment (SJR 64) is approved by the voters at an election to be held on November 7, 2023.
SB 1191 (Zaffirini, Judith) amends Tax Code §23.541 to require a chief appraiser to accept a late-filed application for agricultural exemption and act (approve or deny) on the application if the late application was filed for a land that was appraised as an agricultural land in the preceding year, the former owner died during the preceding year, and the application is filed prior to the taxes becoming delinquent by the surviving spouse or a surviving child of the former owner or the estate’s representatives. The bill would exempt such a late application from penalty imposed for a late-filed application. The Governor signed the bill on May 23, 2023, and the Act takes effect May 23, 2023.
SB 1340 (Zaffirini, Judith) makes the following changes:
- amends Government Code §403.0246 to include agreements under Chapter 312 or 313, Tax Code, in the Comptroller’s database of “local development agreements” that the agency is required to create and maintain and expands data that the Comptroller must include in the database to include:
- the name and contact information of any entity or the entity’s agent that entered into the agreement with the local government, including the business address and any assumed names of the entity;
- the date on which the agreement went into effect and the date and terms on which the agreement expires;
- the total monetary value of the agreement; and
- the source of the money used or type of tax implicated by the agreement, including a sales and use tax, ad valorem tax, or hotel occupancy tax.
- amends Tax Code §008 to require a taxing unit that maintains a website and that executes a tax abatement agreement under Chapter 312, Tax Code, to provide a direct link to the location of the agreement information published on the Comptroller’s website.
The Governor signed the bill on June 2, 2023, and the Act takes effect January 1, 2024. The changes in law made by this Act apply only to an agreement entered into, on, or after the effective date of this Act.
SB 1381 (Eckhardt, Sarah) amends Tax Code §11.43 to authorize an appraisal district to automatically transfer the exemption that is based on age 65 years of age or older upon the death of the property owner to the surviving spouse if the appraisal district learns of the death from any source, including the death records maintained by the vital statistics unit of the Department of State Health Services or a local registration official and the surviving spouse is otherwise eligible to receive the exemption. The Governor signed the bill on May 27, 2023, and the Act takes effect January 1, 2024.
SB 1439 (Springer, Drew) makes the following changes:
- amends Tax Code §11.145, which exempts tangible personal property held or used for the production of income with the taxable value of less than $2,500, to include the aggregation of tangible personal property owned by a person and aggregation of such property with other related entities that are members of the same unified business enterprise;
- defines “unified business enterprise” to mean a common business enterprise composed of more than one related business entity;
- defines “related business entity” to mean a business entity that:
- engages in a common business enterprise with at least one other business entity; and
- owns tangible personal property that:
- (i) is held or used for the production of income as part of the common business enterprise; and
- (ii) is located at the same physical address that tangible personal property owned by at least one other business entity engaged in the common business enterprise is located;
- allows a chief appraiser to investigate whether a business entity is a related entity and authorized to aggregated tangible personal property; and
- amends Tax Code §01 to require the physical address of a property on a rendition statement and require a rendition statement of a related business entity to contain the information for each related business entity that composes the unified business enterprise of which the related business entity that is the subject of the rendition is a part.
The enrolled bill was sent to the Governor on May 23, 2023, and the Act is to take effect January 1, 2024.
SB 1801 (Springer, Drew) amends Tax Code §11.43 to require an appraisal district to develop a program for the periodic review of each residence homestead exemption granted by the district to confirm the exemption qualification. The program would require the review of each residence homestead exemption at least once every five tax years. The Act takes effect September 1, 2023, by operation of law without the Governor’s signature.
SB 1998 (Bettencourt, Paul) makes the following changes:
- amends Tax Code §07(g)to require the form for no-new-revenue tax rate and voter-approval tax rate be capable of including for each entry, other than an entry making a mathematical calculation, a hyperlink to a document that evidences the accuracy of the entry.
- amends Tax Code §26.03 to require certain taxing units to adjust the value of property taxable by the unit and to the amount of taxes imposed or collected by the unit prescribed by this section shall be calculated separately for each reinvestment zone in which the taxing unit participates.
- amends Tax Code §26.04(d-1) to require the designated officer or employee to a hyperlink described by Section 5.07(g)(4) for each entry on the form, other than an entry making a mathematical calculation.
The enrolled bill was sent to the Governor on May 29, 2023, and the Act is to take effect January 1, 2024.
SB 1999 (Bettencourt, Paul) amends Tax Code §26.013 to change the unused increment rate formula to simplify it by converting the rate to a dollar amount yield that a taxing unit may carry forward. The enrolled bill was sent to the Governor on May 29, 2023, and the Act is to take effect January 1, 2024.
SB 2091 (West, Royce) adds Tax Code §34.0101 to allow a taxing unit to sell seized or foreclosed property to an abutting property owner without the need for a public sale. The provision applies only to real property:
- that is seized under a tax warrant issued under Subchapter E, Chapter 33; or that is ordered sold pursuant to foreclosure of a tax lien; and
- that is: (A) a narrow strip of land or other parcel of land that because of its shape or small area cannot be used independently under its current zoning classification or under applicable subdivision or other development ordinances; (B) landlocked without direct access to a public road; or (C) located in: (i) an area designated by the Federal Emergency Management Agency under the National Flood Insurance Act of 1968 (42 U.S.C. Section 4001 et seq.) as having a two-tenths of one percent or greater annual chance of flooding; or(ii) a floodway.
A taxing unit that directs the private sale under this section of real property that abuts two or more adjacent parcels of real property having different owners must give notice of the sale to each abutting owner. The enrolled bill was sent to the Governor on May 29, 2023, and the Act is to take effect September 1, 2023.
SB 2289 (Huffman, Joan) adds Tax Code §11.36 to provide an exemption for certain tangible personal property held by a manufacturer of medical or biomedical products as a finished good or used in the manufacturing or processing of medical or biomedical products. The Governor signed the bill on June 2, 2023, and the Act takes effect January 1, 2024, if the proposed constitutional amendment (SJR 87) is approved by the voters at an election to be held on November 7, 2023.
SB 2350 (Bettencourt, Paul) amends Tax Code §23.013 to change the definition of “voter-approval tax rate” to insert the phrase “as adopted by the taxing unit during the applicable preceding tax year.” The enrolled bill was sent to the Governor on May 29, 2023, and the Act is to have immediate effect upon passage.
SB 2355 (Bettencourt, Paul) makes the following changes:
- amends Tax Code §41A.03 to replace the appraisal district with the Comptroller to whom the property owner must submit a request for a binding arbitration to appeal an appraisal review board’s order.
- provides that if a property owner files a request for binding arbitration through an electronic system, the property owner must pay the required arbitration deposit through the electronic system.
- amends Tax Code §41A.08 to allow a property owner to designate an agent to represent the owner in an arbitration proceeding on a signed form prescribed by the Comptroller. The form must be signed by the property owner or an authorized individual other than the agent designated. The designation must authorize the agent to represent the owner in an arbitration proceeding, and the designation is effective when the property owner or authorized individual signs the form.
- allows a property owner to assign to an agent the right to receive a refund of an arbitration deposit. The assignment must be made in writing on the form prescribed by the Comptroller.
- amends Tax Code 41A.11 to provide that arbitration settlement reached between the parties is considered to be a final determination of an appeal.
The Governor signed the bill on May 27, 2023, and the Act takes effect January 1, 2024.
If you have questions about the impact these bills may have on your business, contact our team today to consult with a DMA tax expert.
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