March 14, 2023
Written by: Eleanor Kim, DMA Tax Counsel
DuCharme, McMillen & Associates, Inc. (DMA) provides this information relating to the 88th Texas Legislature Regular Session.
Last Friday, March 10, 2023, was the deadline for filing bills other than local bills, emergency appropriations, and bills that have been declared an emergency by the governor. The number of bills filed surged as legislators rushed to meet the deadline. To illustrate, 312 bills that were identified as involving “Taxation” were filed during the last week of filing, which represents 40% of the total number of tax bills and joint resolutions filed during the entire filing period of this session.
The expiration of the filing deadline means the focus will shift to committee actions. All introduced bills are referred to a particular committee, but the committees are not required to hear all referred bills. As such, some of the introduced tax bills that we have seen to date in this session may never see any action. Also, proposals that we have not yet seen can appear as amendments to moving bills. During the session, legislators, who were unable to meet the filing deadline or who have filed bills that are stuck in the legislative process, will look for moving bills with appropriate captions that would allow their proposals to be added as amendments to those moving bills. The Texas Constitution prohibits amendments that are not germane to the caption and would materially change the bill’s original purpose. Committee activities will disclose what proposals have momentum this session.
Property tax bills make up the majority of the tax bills introduced this session, and many of them relate to residence homestead, which involve either lowering the current 10% cap on annual increase or increasing the exemption for a portion of the appraised value of the residence homestead. For the sake of brevity, DMA has not summarized bills relating to residence homestead in our updates to date, but we are monitoring them. The residence homestead bill to watch in the Senate this session is SB 3 by Paul Bettencourt, which reflects Lt. Governor Dan Patrick’s proposal. It would raise the state-mandated school tax homestead exemption from $40,000 to $70,000, adjust the current freeze for residence homestead for property owners who are over 65 years old or disabled, and hold school districts harmless for the exemption. The bill is contingent on the passage of a constitutional amendment (SJR 3). SB 3 is scheduled for hearing on March 15, 2023.
On the House side, HB 2 by Morgan Meyer is the property tax bill to watch. It is carried by the chair of the House Ways and Means Committee and has the support of House Speaker Dade Phelan. HB 2 would reduce a school district’s maximum compressed tax rate by 15 cents and would impose a 5% cap on the annual increase of an appraisal district on all real property. The House Ways & Means Committee heard HB 2 on March 13, 2023, and Chairman Meyer laid out the bill as providing tax relief statewide – “the largest reduction in state history.” A large number of interested parties testified on the bill, and it was not surprising that there were differing views on the bill. Some testified in favor of the bill, some testified against it because a cap would create disparities and would not benefit the poor, and the rest testified in favor of the tax rate compression but raised concerns that a cap is not the solution to the problem and that it would ultimately shift the tax burden to others. Chairman Meyer left the bill pending but closed with a statement to the committee members that HB 2 “is a constituent bill” that provides “real tax relief to our constituents.”
Following are tax-related bills introduced since our last update of February 21 on the 88th Texas Legislative Session.
Jump to bills by tax type:
- Sales/Use Tax
- Franchise Tax
- Hotel Occupancy Tax
- Motor Fuel Tax
- Motor Vehicle Sales Tax
- Miscellaneous Fee
- New Tax
- Severance Tax
- Property Tax
HB 300 (Howard, Donna) would: (1) amend Tax Code §151.313 to add children’s diapers, baby wipes, and baby bottles to the list of items eligible for the healthcare exemptions; (2) add Tax Code §151.3132 to exempt the sale of feminine hygiene products; (3) add Tax Code §151.3133 to exempt the sale of maternity clothes, and (4) add Tax Code §151.3134 to the exempt sale of a breast milk pumping product. [Note: The House Ways & Means Committee voted out the bill on March 13, 2023.]
HB 2535 (Turner, Chris) would amend Tax Code §151.0039(b) to exclude from taxable Insurance services a medical service performed to determine the appropriate level of benefits under the Texas Workers’ Compensation Act.
HB 3104 (Anderson, Doc) and SB 1265 (Parker, Tan) would add Tax Code §151.3596 to provide for a temporary exemption for a qualified connected data center project on certain purchases. A connected data center project undertakes the construction of refurbishment of building(s) that are primarily used to house servers and related equipment and support staff for the processing, storage, and distribution of data. To qualify, a project has to make a minimum capital investment of $500 million, create at least 40 qualifying jobs, and meet other requirements. In return, a certified project would be eligible to claim an exemption for 20 years on the purchases of: (1) electricity; (2) an electrical system; (3) a cooling system; (4) a backup electricity generation system; (5) hardware or a distributed mainframe computer or server; (6) a data storage device; (7) network connectivity equipment; (8) a rack, cabinet, and raised floor system; (9) a peripheral component or system; (10) software; and (11) a mechanical, electrical, or plumbing system that is necessary to operate any tangible personal property described in (2) through (10), including a fixture.
HB 3206 (Darby) and SB 1833 (Hinojosa, Chuy) would amend Tax Code §151.3565 to modify the maximum sales price of a portable generator that may be purchased tax-free during the emergency preparedness sales tax holiday, which takes place annually on the last weekend of April, from $3,000 to $10,000.
HB 3358 (Button, Angie Chen) and SB 1218 (Hughes, Bryan) would amend Tax Code §151.3186 to increase the annual maximum refund that the state will authorize to providers of cable television services, Internet access services, or telecommunications services from $50 million to be shared pro-rata by all claimants to the total taxes paid by each claimant on eligible purchases during the years 2024 to 2029.
HB 3374 (Button, Angie Chen) and SB 1688 (Birdwell, Brian) would (1) add Government Code §2303.499 to waive the requirement that employees of a qualified business of an enterprise project must perform at least 50% of the person’s service at the qualified business site during “Covid relief period,” which means the period from March 1, 2020 through December 31, 2021; (2) allow a qualified business that was in compliance before the COVID period to withdraw as an enterprise project by December 31, 2023, without affecting the qualified business’ eligibility to any refund of state taxes previously approved; and (3) amend Tax Code §151.429 to require the Comptroller to recognize the waiver during the Covid relief period.
HB 3541 (Dutton, Harold) would add Tax Code §151.0511 to reduce the state sales/use tax rate for a temporary period by a percentage equal to 50% of the sales tax revenue for the state’s 2021-2023 fiscal biennium but only if the sales tax revenue for state’s 2023-2025 fiscal biennium is 50% more than for 2021-2023 fiscal biennium. The lower tax rate would expire on December 1, 2025.
HB 3580 (Bumgarner, Ben) and HB 3740 (Kitzman, Stan) would amend Tax Code §151.3131 to expand the current exemption for the sale of firearm safety equipment to include the sale of a firearm, a firearm accessory, or ammunition.
HB 3622 (Lozano, Jose) and SB 2187 (Hinojosa, Chuy) would amend Tax Code §151.0101(a) to delete real property repair and remodeling from taxable services.
HB 3894 (Shine, Hugh) would amend Tax Code §151.318(a)(4) to exempt battery energy storage systems used to generate, process, or store electricity for distribution and sale, regardless of the origin of the electricity used to charge the battery energy storage system. The term “battery energy storage system” means an electrochemical device that processes, stores, and transforms electrical energy into chemical energy and processes and transforms chemical energy back into electrical energy for distribution and sale.
HB 4079 (Lozano, Jose) would amend Tax Code §151.1575 by repealing provisions that allow a Texas custom broker to verify export by obtaining documents or information from the purchaser related to the transactions, which would have the effect of requiring the issuance of a certificate of export by a Texas customer broker only if the broker or an authorized employee watches the property cross the border of the United States or watches the property being placed onto a common carrier for delivery to a location outside the United States.
HB 4094 (Oliverson, Tom) would add Tax Code §163.010 to allow a person to claim a refund of sales tax paid on the purchase of an aircraft if: (1) the person enters into a written lease agreement to transfer operational control of the aircraft to a lessee for at least 50% of the aircraft’s departures; (2) the written lease is for a term of at least 24 months; and (3) the lessee is an FAA certified flight training school. The person may claim a sales tax refund equal to the percentage of the aircraft’s departures for which operation control is transferred under the agreement.
HB 4257 (Raney, John) would amend Tax Code §151.423 to increase the vendor’s reimbursement discount from 0.5% to 1.5%.
HB 4310 (Turner, Chris) would: (1) extend the exemption provided by Tax Code §151.314 (Food and Food Products) to any substance, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that is sold for ingestion or chewing by humans and is consumed for its taste or nutritional value: (2) would extend the exemption provided by Tax Code §151.326 and §151.327, for clothing, footwear, and backpacks during the “back-to-school” sales tax holiday that takes place on annually on the first weekend in August to barrettes and similar accessories, alterations to clothing, and briefcases, regardless of the sales price; and (3) would extend the exemption provided by Tax Code §151.353 (Court Reporting Services) to the preparation of documents in admiralty and chancery cases.
HB 4311 (Turner, Chris) would amend Tax Code §151.333 to expand the list of eligible energy-efficient products that may be purchased tax-free during the sales tax holiday that takes place annually on Memorial Day weekend to include a light-emitting diode (LED) lightbulb, a water heater, a clothes dryer, a freezer, a stove, an attic fan, and a heat pump.
HB 4312 (Turner, Chris) would amend Tax Code §151.314(h) to exempt all snack items sold through a vending machine and would repeal the exemption for snack items sold in individual-size portions.
HB 4371 (Shine, Hugh) would add Tax Code §151.360 to exempt from state sales tax: (1) tangible personal property and labor used to construct, refurbish, repair, restore, remodel, or modify an improvement to real property that is part of a life science campus; (2) tangible personal property purchased by a tenant or an owner of a life science campus and that is used primarily in the conduct of life science activities at the life science campus; and (3) gas and electricity purchase by the tenant or owner of a life science campus for use at the life science campus. In addition to various requirements, the bill provides that a life science campus must have a space that is at least 1,500,000 square feet and makes a capital investment of at least $1 billion.
HB 4425 (Talarico, James) would add Tax Code§151.360 to exempt the sale of household goods with a sales price of less than $200 if the sale takes place during January 5, 2024 through January 7, 2024. Household goods means clothing, furniture, linens, china, crockery, kitchenware, medical equipment and supplies, children’s toys, baby supplies, tools, pet supplies, and cleaning supplies.
HB 4531 (Schatzline, Nate) would authorize a county with a population of 2.1 million or more that contains at least two municipalities, each of which has a population of 350,000 or more, to adopt an additional 1% sales/use tax rate that would not be considered in determining the 2% cap for local sales/use tax imposed by current law.
HB 4913 (Martinez Fischer, Trey) would amend Tax Code §151.051 to reduce the state sales tax rate from 6.25% to 5.25% from October 1, 2023 to September 30, 2025.
HB 5089 (Meyer, Morgan) would change the sourcing provisions for local sales and use taxes to destination for all sales of taxable items.
HB 5141 (Cain, Briscoe) would amend the definition of a place of business in Chapter 321 (Municipal Sales/Use Tax) and Chapter 323 (County Sales/Use Tax), which currently provides that it is an established location for the purpose of receiving orders, by inserting “regardless of the method by which orders are transmitted or received.”
HB 5209 (Bhojani, Salman) would amend Tax Code §151.051 to reduce the state sales/use tax rate from 6.25% to 5.25% for a temporary period for the sale of a taxable item if: (1) payment for the taxable item is made using a decentralized network that uses smart contract functionality in the blockchain to enable instant payments across a network of participants; (2) during the calendar year in which the sale is made, the total sales/use taxes reduced by the provision in (1) is less than $400,000; and (3) the sale is made between January 1, 2024 and January 1, 2026. The bill provides that the Comptroller must notify permit holders that accept payments as described above to report taxes on a daily basis so that the Comptroller may determine when the limit of $400,000 is reached.
HB 5285 (Guillen, Ryan) would increase the state sales/use tax rate from 6.25% to 7.45%. The increase in sales tax revenue would be deposited to the credit of the foundation school fund. The bill would prohibit the imposition of a school district’s maintenance and operation property tax on residence homestead. The bill is contingent on the passage of a constitutional amendment (HJR 205) and on the voters’ approval of the constitutional amendment. [Note: The bill also increases the motor vehicle sales/use tax rates.]
HJR 168 (Turner, Chris) proposes a constitutional amendment to provide that the state sales/use tax rate may not exceed 6.25%. Upon passage, the resolution would be contingent on the voters’ approval of the constitutional amendment.
SB 1176 (Eckhardt, Sarah) would exempt the sale of a Covid-19 test kit.
SB 1769 (Eckhardt, Sarah) would amend Tax Code §151.326 and Tax Code §151.327 to increase the sales price of the items exempted during the “back-to-school” sales tax holiday that takes place annually on the first weekend of August from $100 to $175.
HB 2859 (Ashby, Trent) and SB 1243 (Huffman, Joan) would add Tax Code §171.10132 to allow a taxable entity to exclude from total revenue qualifying broadband grant proceeds for broadband deployment in Texas, to deduct the proceeds as cost of goods sold (COGS) if they are expenses that may be included in the COGS deduction, and to deduct the proceeds as compensation if they are expenses that may be included in the compensation deduction. The changes would apply retroactively to reports due on or after January 1, 2023.
HB 3542 (Dutton, Harold) would allow a taxable entity to claim a franchise tax credit if it opens an early learning and child-care center in a qualified low-income housing project. The credit amount is 50% of the franchise tax due for the report after the application of all other credits.
HB 3706 (Harrison, Brian) would add Tax Code §171.213 to provide that the Comptroller may not state that a specific amount of franchise tax must be paid in a notice that is sent to a taxable entity if the notice is solely based on the taxable entity’s failure to file a report when due.
HB 3785 (Guillen, Ryan) would allow a taxable entity to claim a credit for employing at least one qualifying apprentice, which is defined to mean an individual who is employed for the purpose of learning a vocational trade as an apprentice or while enrolled in a work-based learning program. The amount of credit is the lesser of $100,000 or the number of qualifying apprentices multiplied by the credit amount per employee that ranges from $2,000 to $6,000 based on age and veteran status.
HB 4747 (Bernal, Diego) would allow a taxable entity to claim a franchise tax credit if the taxable entity subsidizes all or a portion of the entity’s employees’ costs for child care at either a licensed child-care center operated by the entity or a licensed commercial or home-based child-care center. The credit amount is the lesser of the contributed amount or 1% of the franchise tax due for the report after the application of all other credits.
HB 4809 (Capriglione, Giovanni) and SB 2390 (Paxton, Angela) would allow a taxable entity that makes money contribution to a designated eligible organization that the contributor denotes as being made for the purpose of the strong families credit. An organization may apply to become a designated eligible organization, but it must be a 501(c)(3) organization and must have provided the following services for three years preceding the application: (1) mental health services; (2) in-home and community-based parenting services;(3) comprehensive case management services based on the assessment of family strengths and needs;(4) financial empowerment services, including financial literacy, job skills, and vocational training; or (5) in-school programs, community-based events, or online resources to assist fathers in learning and improving parenting skills or programs that provide services and resources that engage absent fathers in being more involved in their children’s lives. [Note: The bill also provides for strong families credits under Chapter 207, Alcoholic Beverage Code, Chapter 230, Insurance, and Chapter 203, Tax Code.]
HB 5263 (Lopez, Ray) would allow a taxable entity to claim a franchise tax credit if the taxable entity implements an eligible worker training program that improves a qualified employee’s job-related skills in a manner that is necessary to adapt to new demands in the workplace due to the adoption of new technology, equipment, or innovation. The amount of the credit is $500 for each qualified employee that completes the program.
SB 1061 (Schwertner, Charles) would increase the no tax due threshold from $1 million to $2 million.
SB 1605 (Paxton, Angela) would reduce the tax rate for retailers and wholesalers from 0.375% to 0.300% and the tax rate for E-Z computation filers from 0.331% to 0.265%.
SB 1614 (Perry, Charles) and HB 4384 (Price, Four) would amend Tax Code §171.1012(o) to expand the current COGS deduction that is allowed for a taxable entity whose principal business activity is film or television production broadcasting to include a taxable entity whose principal business activity is television or radio broadcasting.
HB 4482 (Moody, Joe) and SB 1748 (Johnson, Nathan) would allow a taxable entity to claim a credit for employing a former offender within a certain time period from the former offender’s release and pays the former offender a wage that meets or exceeds the federal minimum wage.
HB 4724 (Morrison, Geanie), HB 4983 (Klick, Stephanie) and SB 2203 (Hancock, Kelly) would: (1) amend Tax Code §171.602 to repeal the requirement that the credit for clean energy project applies only if the project is in connection with the construction of a new facility; (2) amend Tax Code §171.602 to expand the scope of the credit to capturing, storing, or reusing carbon dioxide (in addition to the sequestering as the current statute provides) in the manner that prevents at least 90% of the carbon dioxide from entering the atmosphere; and (3) increase the credit percentage from 10% to 25%; (4) change the expiration date of the credit to December 31, 2033; and (5) amend Natural Resource Code §120.001(2) to redefine clean energy project to mean a project that (A) uses storage technology for the primary purpose of capturing, storing, sequestering, using, or reusing carbon dioxide emissions to prevent carbon dioxide from entering the atmosphere; and (B) is constructed as part of, or is located adjacent to, a power generation facility, including a coal-fired generation facility, natural gas-fired power system, hydrogen-powered facility, or ammonia-powered system. [Note: The change to the definition of clean energy project would expand the eligibility of the franchise tax credit.]
SB 5 (Parker, Tan) would allow a taxable entity to claim a franchise tax credit for 20% of the property tax paid on inventory owned by the entity and located in this state. The term “inventory” means: (1) a finished good held for sale or resale, including: (A) a dealer’s motor vehicle inventory, as defined by Tax Code §23.121; (B) a dealer’s vessel and outboard motor inventory, as defined by Tax Code §23.124; (C) a dealer’s heavy equipment inventory, as defined by Tax Code §23.1241; or (D) retail manufactured housing inventory, as defined by Tax Code §23.127; (2) a raw or finished material held to be incorporated into or attached to tangible personal property to create a finished good; or (3) residential real property inventory described by Tax Code §23.12(a). [Note: This provision is part of the property tax relief exemption for tangible personal property held or used for the production of income. See SB 5 under the heading of “Property Tax” for the property tax proposals.]
(Applies to all taxes)
HB 2691 (Button, Angie Chen) would amend Government Code §403.055 to provide that the Comptroller is not prohibited from issuing a warrant or initiating an electronic fund transfer to a person that has been reported by another state agency as being indebted to the state or has a delinquency if the Comptroller has retained funds to fully deduct the amount of the person’s indebtedness to the state or tax delinquency from the amount the state owes the person.
HB 3122 (Munoz, Sergio) and HB 3885 (Munoz, Sergio) would add Tax Code §111.0512 to provide that the Comptroller shall apply a payment made by a taxpayer first to tax due before applying any portion of the payment to a penalty or interest owed by the taxpayer unless the taxpayer provides written instructions for a different application of the payment. HB 3122 would amend Tax Code §111.061 to limit the penalty assessed on delinquent tax or non-payment of tax to 5%, whereas HB 3885 would place a maximum penalty amount of $500.
HB 3395 (Capriglione, Giovanni) and SB 1541 (Parker, Tan) would add Chapter 610 to the Business & Commerce Code to provide that a state and local tax that is calculated as a percent of the amount of an electronic payment transaction and listed separately on a payment invoice or other demand for payment should not include a swipe fee that is charged for that transaction in the tax base. A swipe fee means the interchange fee, which is a fee that is charged to a merchant for the purpose of compensating the payment card issuer for the issuer’s involvement in an electronic payment transaction, and if applicable, the assessment fee, which is a fee paid directly to the payment card network for allowing a merchant to use a payment card or other payment code or device in an electronic payment transaction. A payment card network must either deduct the amount of state or local tax imposed from the calculation of swipe fees attributable to the transaction at the time of settlement or rebate the merchant an amount equal to the amount of swipe fees attributable to the state or local tax imposed on the transaction.
HB 4040 (Hayes, Richard) would: (1) add Chapter 307, Business & Commerce Code, to require a mobile telephone service provider to annually disclose on the provider’s internet website all charges, fees, assessments, surcharges, and taxes collected by the provider in the connection with the service provider. The disclosure must identity the entity that imposes the charge, fee, assessment, surcharge, or tax and the allocation of the charge, fee, assessment, surcharge, or tax revenue collected; and (2) add Utility Code §64.005 to impose the same disclosure requirements on a billing utility.
HJR 132 (Hefner, Cole) and SJR 91 (Hughes, Bryan) propose 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. Upon passage, this resolution is contingent on the voters’ approval of the constitutional amendment.
HJR 164 (Harrison, Brian) proposes a constitutional amendment to provide that if appropriations from non-dedicated state tax revenue are made for the purpose of paying for tax relief as identified by the legislature by general law, the amount should not be included as appropriations for purposes of determining whether the rate of growth of appropriations exceeds the constitutional spending limitations. Upon passage, this resolution would be contingent upon the voters’ approval of the constitutional amendment.
SB 2484 (Paxton, Angela) would prohibit a government in Texas from entering into a tax incentive agreement with foreign-owned companies that are directly controlled by the government of China, Iran, North Korea, or Russia or that are headquartered in China, Iran, North Korea or Russia.
HOTEL OCCUPANCY TAX
(Excludes bills relating to specific cities’/counties’ authorities to impose hotel occupancy tax, to be eligible to participate in revenue sharing with qualified hotel projects, or to revenue use of hotel occupancy tax.)
HB 4441 (Meyer, Morgan) would amend Tax Code §351.009 to change the due date for the report that a municipality must file with the Comptroller from February 20 to March 1 of each year and would add a new reporting requirement that a municipality must report the total amount of any city hotel occupancy tax collected in any preceding fiscal year of the municipality that has not been spent, and the amount of that unexpended revenue, if any, that is spent in the municipality’s budget for the fiscal year in which the report is due.
HB 5115 (Thierry, Shawn) and SB 2356 (Alvarado, Carol) would add Tax Code §156.054 to require an accommodations intermediary to collect hotel occupancy tax on each booking charge and on each sales price of a hotel room/space and to remit all taxes collected by the accommodation intermediary in the manner that a hotel owner or operator is required to report. “Accommodations intermediary” means a person that:(A) facilitates the rental of a room or space in a hotel in this state to a person; and (B) performs any of the following actions: (i) charges the person renting the room or space in the hotel any amount required to secure the rental; (ii) collects from the person the amount charged to rent the room or space in the hotel; or (iii) charges the person renting the room or space in the hotel a fee for the service.
MOTOR FUEL TAX
HB 2737 (Ashby, Trent) would amend Tax Code §162.227 to provide that a tax credit may be taken or a refund claim may be filed for tax paid on diesel fuel if the diesel fuel is used in Texas by auxiliary power units or power take-off equipment on any motor vehicle. If the quantity of that diesel fuel can be accurately measured while the motor vehicle is stationary by any metering device or other method designed to measure fuel use separately from fuel used to propel the motor vehicle, the Comptroller may approve and adopt the use of the device. If such measuring device is not available, then the tax credit or refund is based on a percentage that the Comptroller determines. The bill would phase in the refund provision by reducing the tax credit or refund amount by 80% for fuel purchased between September 1, 2023 through December 31, 2023, and by lowering the reduction percentage by 20% each successive calendar year until December 31, 2026. Beginning January 1, 2027, full tax credit or refund would be allowed.
HB 3599 (Thierry, Shawn) would amend Tax Code §162.104(a) and Tax Code §162.204(a) to add an exemption for gasoline or diesel fuel sold to a nonprofit food bank and delivered into (A) 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; or (B) a storage facility from which gasoline will be delivered solely into the fuel supply tanks of motor vehicles described in (A). The bill adds refund provisions for tax paid by a nonprofit food bank when it purchased gasoline and diesel fuel and used in an exempt manner.
HB 3651 (Bailes, Ernest) would amend Chapter 162, Tax Code, as follows: (1) define container to mean any receptables used to store motor fuel; (2) define “delivery” to mean any transfer of motor fuel: (a) into a fuel supply tank, cargo tank, or container; or (b) to a location or into a receptable, as specified by this chapter in connection with the term; (3) amend the definition of “motor fuel” to provide that fuel used for “a motor vehicle licensed for use on a public highway”; (4) amend 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; (5) amend 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; (6) amend 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 (7) amend 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 subsection (5) that the backup tax is imposed on a person who acquires gasoline or diesel fuel by any unlawful means, including purchase through unauthorized use of a credit card, debit card, or other money, regardless of whether tax was previously paid on the fuel or was added to the selling price of the fuel.
MOTOR VEHICLE SALES TAX OR REGISTRATION FEE
HB 3599 (Thierry, Shawn) would exempt motor vehicles owned by a nonprofit food bank from motor vehicle registration fee imposed under Chapter 502, Transportation Code.
HB 4602 (Canales, Terry) and SB 1498 (Nichols, Robert) would impose tax on the gross receipts of motor vehicles rented through a marketplace rental provider. A “marketplace rental provider” means a person who: (1) operates any type of marketplace, including a store with a physical location, an Internet website, a software or mobile application, or a catalog, by which the owner of a motor vehicle lists, markets, or advertises the owner’s motor vehicle for rental by others for consideration in this state; (2) facilitates the rental of the owner’s motor vehicle by another person by communicating between the owner and the other person the terms of the agreement and the acceptance of those terms; and (3) directly or indirectly collects or processes the receipts or rental charges paid by the person renting the motor vehicle for the owner of the motor vehicle. The tax rate is 10% if the motor vehicle is rented for 30 days or less and if the owner has obtained a motor vehicle rental certificate for the motor vehicle under Tax Code §152.061 or rents at least five different motor vehicles within any 12-month period. The tax rate is 6.25% for all other rentals through the marketplace provider.
HB 5285 (Guillen, Ryan) would increase the motor vehicle sales/use tax rate from 6.25% to 9.45% and would increase the motor vehicle gross rental receipts tax for a rental term for more than 30 days from 6.25% to 9.45%. The increase in sales tax revenue would be deposited to the credit of the foundation school fund. The bill would prohibit the imposition of a school district’s maintenance and operation property tax on residence homestead. The bill is contingent on the passage of a constitutional amendment (HJR 205) and on the voters’ approval of the constitutional amendment. [Note: The bill also increases the state sales/use tax rates.]
SB 1244 (Huffman, Joan) would amend Business & Commerce Code §102.052(a) to impose a fee of $5 or a greater amount set by the legislature in the General Appropriations Act on a sexually oriented business for each entry by each customer and would allocate 1% of the revenue received from the mixed beverage gross receipts tax and the mixed beverage sales tax to the sexual assault program fund.
HB 3802 (Plesa, Mihaela) would add Chapter 164, Tax Code, to impose a tax on each commercial charging service, which is defined to mean the use of equipment to transfer electric energy from electric supply to an electric vehicle in a commercial transaction. The tax rate is $0.026 per kilowatt hour of electricity. The provider would be required to collect the tax from the purchaser and remit the tax with a report that must be filed on or before the 25th day of each month.
HB 4743 (Tinderholt, Tony) would add Chapter 164, Tax Code, to impose a tax on each money transmission out of this state to a foreign county that is facilitated by a money transmission business. The tax rate is 10% of the amount of the money transmission and is administered and collected in the same manner as sales/use tax under Chapter 151, Tax Code. The term “money transmission business” means a person required to be licensed under Subchapter D, Chapter 151, Finance Code.
HB 4772 (Thierry, Shawn) would add Chapter 164, Tax Code, to impose a tax on a person who receives an e-cigarette or alternative nicotine product for the purpose of making a first sale in Texas. The tax rate is: (1) five cents for each milliliter or fractional part of a milliliter of vapor product sold for use in an open-system e-cigarette; (2) five cents for each e-cigarette pod sold for use in a closed-system e-cigarette; (3) five percent of the wholesale cost price, exclusive of any discount, promotion, or allowance, on each closed-system e-cigarette that does not use an e-cigarette pod; and (4) $1.23 per ounce of net volume of the alternative nicotine product, as listed by the manufacturer, on each alternative nicotine product sold. The person who makes the first sale in Texas pays the tax but adds the tax to the price charged to the customer such that the ultimate consumer pays the tax.
HB 3321 (Geren, Charlie) and SB 1564 (Hancock, Kelly) would add Tax Code §201.061 to authorize a producer to claim a credit against natural gas product tax for gas produced from a qualifying well. The credit amount is $1 per million BTUs of flare mitigation that results from the operation of the flare mitigation system installed on the qualifying well, and $2 per million BTUs if the well produces sour gas. A qualifying well is a well: (A) that is: (i) connected to a pipeline on which pipeline takeaway capacity is unavailable; (ii) 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 (iii) 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; and (B) on which a qualifying onsite flare mitigation system is installed. The bill defines flare mitigation as the BTUs of heat content of gas used by a qualifying onsite flare mitigation system.
HB 4809 (Capriglione, Giovanni) and SB 2390 (Paxton, Angela) would add Chapter 203, Tax Code, to allow a producer to claim a credit against natural gas production tax (Chapter 201, Tax Code) or oil production tax (Chapter 202, Tax Code) for money contribution to a designated eligible organization that the contributor denotes as being made for the purpose of the strong families credit. An organization may apply to become a designated eligible organization but must be a 501(c)(3) organization and must have provided the following services for three preceding years: (1) mental health services; (2) in-home and community-based parenting services; (3) comprehensive case management services based on the assessment of family strengths and needs; (4) financial empowerment services, including financial literacy, job skills, and vocational training; or (5) in-school programs, community-based events, or online resources to assist fathers in learning and improving parenting skills or programs that provide services and resources that engage absent fathers in being more involved in their children’s lives. [Note: The bill provides for strong families credits under Chapter 207, Alcoholic Beverage Code, Chapter 230, Insurance, and Chapter 171, Tax Code.]
SB 1549 (Blanco, Cesar) would add Tax Code §201.061 to exempt from gas production tax gas produced from a qualifying well that is consumed on the well site and would otherwise have been lawfully vented or flared. A qualifying well is a well that is: (1) connected to a pipeline on which pipeline takeaway capacity is unavailable; (2) 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 (3) 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.
SB 2553 (Middleton, Mayes) would allow a producer to claim a credit against gas production tax (Chapter 201, Tax Code) or oil production tax (Chapter 202, Tax Code) equal to the market value of in-kind gas or oil delivered, including transportation, without charge to and accepted by this state for the purpose of strategic energy storage.
(Excludes bills relating to residence homestead or other non-business changes and to an appraisal district’s governance)
HB 2 (Meyer, Morgan) would: (1) add Education Code §48.2555 to provide for a maximum compressed tax rate for the 2023-2024 school year and require the Education Commissioner to calculate the value of a school district’s maximum compressed tax rate by reducing it by 15 cents; (2) amend Tax Code §31.072(a) to change the current option to a mandate that at the request of a property owner, the collector for a taxing unit enter a contract to escrow account the payment of property taxes; and (3) amend Tax Code §23.23 to impose a 5% cap on the annual increase of an appraisal district on all real property. The bill is contingent on the passage of a constitutional amendment (HJR 1) and on the voters’ approval of the constitutional amendment.
HB 2655 (Shaheen, Matt) would amend Tax Code §23.01 to provide that if the appraised value in a tax year is lowered after protest, the final appraised value of the property cannot be increased in the next two years unless the parties agree in writing to the increase or the chief appraiser has clear and convincing evidence after a physical inspection of the property that the appraised value should be increased as a result of a substantial improvement or there was an error in the appraised records that increases the appraised value.
HB 2667 (Rosenthal, Jon) would amend Water Code §54.602 relating to the property tax rate imposed by a municipal utility district by limiting the tax rate to a maximum of $1 per $100 of taxable value.
HB 2714 (Thompson, Ed) would amend Tax Code §26.013 to allow for the voter-approval rate to be recalculated after receipt of the certified tax roll and to use the recalculated tax rate as the voter-approval rate for the preceding year.
HB 2796 (Bucy, John) would amend Tax Code §1.06 to provide that a day on which the taxing unit is closed will not be considered in determining the tax payment deadline.
HB 2855 (Rogers, Glenn) and HB 3966 (Cook, David) would amend Government Code §403.302(c) to change the margin of error for the Comptroller’s property value study from 5% to 10%.
HB 2987 (Metcalf, Will) would amend Chapter 11, Tax Code, to remove tangible personal property from taxation beginning January 1, 2024. The bill is contingent on the passage of a constitutional amendment (HJR 129) and on the voters’ approval of the constitutional amendment.
HB 2989 (Metcalf, Will) would add a 10% cap of the annual increase of an appraised value of a commercial real property with a market value of $10 million or less. Commercial real property is defined to mean real property that is held or used for the production of income but the cap would not apply to property appraised as agricultural land, timber land, recreational, park and scenic land, or airport property which are appraised under Subchapter C, D, E, F, G or H of Chapter 23, Tax Code. The bill is contingent on the passage of a constitutional amendment (HJR 131) and on the voters’ approval of the constitutional amendment.
HB 2993 (Hunter, Todd) would add Tax Code §320.002 to provide that an owner of qualifying property may not receive a property tax exemption or a limitation on appraised value under an agreement for economic development in a reinvestment zone if, on or after the date the agreement is entered into, a wind-powered energy device is installed or constructed on the property within 25 nautical miles of the boundaries of a military aviation facility. The prohibition applies regardless of whether the energy device is in the reinvestment zone.
HB 3006 (Hefner, Cole) would amend Tax Code §23.42 and Tax Code §23.51 to include hydroponic farming in the definitions of agriculture and agricultural use.
HB 3008 (Bryant, John) and SB 138 (West, Royce) would amend Tax Code §23.121(d) to provide that a chief appraiser shall appraise a dealer’s motor vehicle inventory under Tax Code §23.12 (Market Value) if the dealer holds a wholesale motor vehicle dealer general distinguishing number issued by the Texas Department of Motor Vehicles under Chapter 503, Transportation Code, and does not hold any other category of dealer general distinguishing number issued by the Department.
HB 3083 (Harrison, Brian) would amend Tax Code §11.145 to exempt $2,500 of the appraised value of tangible personal property held or used for the production of income and would amend Tax Code §22.01 to provide that a person is required to render tangible personal property held or used for the production of income only if the aggregate market value exceeds $2,500. This bill is contingent on the passage of a constitutional amendment (HJR 136) and on the voters’ approval of the constitutional amendment.
HB 3120 (Munoz, Sergio) would include a special junior college district in the definition of a special taxing unit that is subject to the voter-approval tax rate under Tax Code §26.04. The bill would define a special junior college district as a junior college district whose service area boundaries and taxing district boundaries are identical and that is located in at least one county adjacent to an international border.
HB 3127 (Ashby, Trent) would: (1) amend Government Code §403.3011(2) to delete from the definition of an “eligible school district” a school district for which the Comptroller has determined the appraisal district that appraises the property for the school district was in compliance with the scoring requirement of the Comptroller’s most recent review of the appraisal district conducted under Tax Code §5.102; and (2) amend Government Code §403.303(a) to extend the deadline to file a petition protesting the property value study from 40 days to 50 days of the date on which the Comptroller’s findings are certified to the Education Commissioner.
HB 3163 (Lozano, Jose) would amend the definition of “net to land” for the purpose of appraising agricultural land by considering cash lease only. The bill deletes the consideration of income from a share lease or any other lease.
HB 3273 (Thierry, Shawn ) would amend Chapters 25 and 26, Tax Code, to: (1) eliminate the notice requirement to visit Texas.gov/Property Tax; (2) require an appraisal district and an assessor for each taxing unit that participates in an appraisal district to post the notice prominently on their websites; (3) require that notice be given property owners as to how to register for the website and to provide updates to the property tax database to be delivered by e-mail; (4) require an appraisal district to publish notice in a newspaper of general circulation; and (5) require each appraisal district that maintains a website to deliver by e-mail updates to the database to proper owners who have registered on the website.
HB 3291 (Thierry, Shawn) and SB 1800 (Springer, Drew) would amend Tax Code §11.45 and Tax Code §23.24 to require the chief appraiser to act on an application for an exemption and an application for the designation of the land as agricultural land within a prescribed time period. In a county with a population of less than 1,000,000, the chief appraiser must act within 90 days of certain events, and in a county with population of 1,000,000 or more, the chief appraiser must act within 120 days of certain events.
HB 3355 (Landgraf, Brooks) would amend Tax Code §11.31 to expand the eligibility for the pollution control exemption by: (1) deleting the current requirement that a property must meet or exceed to the rules or regulations adopted by an “environmental protection agency” and replacing it with “any agency”; (2) adding property demonstrated to prevent, monitor, control or reduce air, water or land pollution; (3) adding property used, constructed, acquired or installed wholly or partly for the purpose of: (A) capturing, storing, sequestering, using, reusing, gathering or transporting carbon dioxide emissions to prevent carbon dioxide from entering the atmosphere; or (B) removing carbon dioxide from the atmosphere; (4) requiring the chief appraiser to appraise the value of any qualifying eligible item or facility at no less than twenty-five percent of the cost of capital of the property; and (5) recognizing a property to capture carbon dioxide without the qualification that if it is pursuant to a rule or regulation adopted by the United States Environmental Protection Agency. The bill would require a constitutional amendment that was not introduced by Representative Landgraf. However, a part of the proposal falls within HJR 175 (Paul, Dennis), which proposes a constitutional amendment that the legislature may exempt from ad valorem tax all or part of real and personal property used, constructed, acquired, or installed wholly or partly to prevent, monitor, control or reduce air, water or land pollution.
HB 3364 (Button, Angie Chen) and SB 2408 (Hancock, Kelly) would: (1) amend Tax Code §1.07 to require notices be sent by certified mail pertaining to a property that was not on the appraisal roll in the preceding year because it was omitted property; (2) amend Tax Code §6.035 to reduce the length of term for a member of the board of directors from five to three terms for counties of 120,000 or more in population; (3) amend Chapter 6, Tax Code, to require an appraisal district with a population of 120,000 to maintain a website and to post on the appraisal district’s website the appraisal records, other than records that are confidential under law, and to continuously update the posted records to include any change in the appraised value of property; (4) amend Tax Code §41.45 to change the written notice deadline requirement for a telephonic hearing from 10 days to five days; (5) amend Tax Code §41.45 to require the appraisal review board to deliver written notice of a protest hearing dismissal for failure to appear within 30 days of the scheduled hearing date; (6) amend Tax Code §41.61 to change the deadline to deliver a subpoena for good cause hearing from 5th to the 15th day; (7) amend Chapter 41A, Tax Code, to allow a person leasing the property to file an appeal through binding arbitration if the person is contractually obligated to reimburse the property owner for taxes, the owner does not appeal the order and the appraised value of the property is $5 million or less; and (8) amend Tax Code §41A.015(a) to allow a property owner to request limited binding arbitration to compel the appraisal review board or chief appraiser to either comply with the model hearing procedures prepared by the Comptroller including by rescinding procedural rules that are not in compliance with the model, or use of correct appraised values for protests on the ground of unequal appraisal of property.
HB 3653 (Guillen, Ryan) would add Tax Code §11.36 to provide for a property tax exemption of the amount of the appraised value of real property owned by the person (1) that arises from the installation or construction on the property border security infrastructure; (2) that relates to the border security infrastructure on the owners’ property; or (3) that relates to the land of the owner’s property that is dedicated for the installation or construction of border security infrastructure. The term “border security infrastructure” means a wall, barrier, fence, wire, road, trench, technology, an apparatus, or an improvement designed or adapted to surveil or impede the movement of persons or objects crossing the Texas-Mexico border outside of land ports of entry and permanently or temporarily affixed by agreement with the government of the State of Texas or the government of the United States of America to property above or below ground located in a county bordering the United Mexican States. The bill is contingent on the passage of a constitutional amendment (HJR 157) and on the voters’ approval of the constitutional amendment.
HB 3906 (Rogers, Glenn) would amend Tax Code §23.013 to require the chief appraiser to select comparable sales between the time period of 24 months before the determination date of the market value of the subject property and January 1 of the tax year. A sale that occurred earlier than 24 months may be considered only if comparable sales within the 24-month period is insufficient for a representative sample.
HB 3947 (Craddick, Tom) would add Local Government Code §43.1415 to provide for the automatic dis-annexation of an area, land, or tract in which the home-rule municipality is not providing or causing the provision of full municipal services, which means police and fire protection, emergency medical services, solid waste collection, the operation and maintenance of water and wastewater facilities and roads and streets. The dis-annexation would preclude the taxation of the properties.
HB 3968 (Cook, David) would amend Tax Code §25.18 to authorize an appraisal district to implement a plan to reappraisal of different group of property in the district in each year of a three-year period.
HB 3969 (Cook, David) would amend Tax Code §11.145 to increase the maximum threshold for the exemption of tangible personal property held or used for the production of income from $2,500 to $40,000. The bill is contingent on the passage of a constitutional amendment (HJR 158) and on the voters’ approval of the constitutional amendment.
HB 3970 (Cook, David) would amend Tax Code §11.146 to increase the maximum threshold for the exemption of mineral interest from $500 to $5,000 and would apply the threshold to “each” mineral interest owned by the person rather than the aggregation of mineral interests. The bill is contingent on the passage of a constitutional amendment (HJR 159) and on the voters’ approval of the constitutional amendment.
HB 4095 (King, Ken) would add Tax Code §31.038 to authorize a credit against property tax imposed by a school district if the property owner: (1) is a business entity whose principal office is located in Texas; and (2) with the approval of the school district, donates a vehicle or equipment to the school district for use in a course that may lead to a commercial driver’s license or commercial learner’s permit issued under Chapter 522, Transportation Code.
HB 4101 (Shine, Hugh) would amend Tax Code §41A.015 to authorize a property owner who has filed a notice of protest to request for a limited binding arbitration to compel the appraisal review board or the chief appraiser to comply with: (1) the model hearing procedures prepared by the Comptroller under Tax Code §5.103; (2) the Comptroller’s Appraisal Review Board Manual in use at the time the property owner’s notice of protest; or (3) any other procedural requirements of Chapter 41 relating to a protest.
HJR 151 (Wilson, Terry) proposes a constitutional amendment prohibiting school district maintenance and operations ad valorem taxes after tax year 2043. Upon passage, the resolution is contingent on the voters’ approval of the constitutional amendment.
HB 3717 (Harrison, Brian) would amend Education Code §45.003(b-1), which currently requires a ballot proposition to state “THIS IS A PROPERTY TAX INCREASE,” to require that the statement be bolded and be in size 42 font.
HB 3745 (Goldman, Craig) would amend Tax Code §23.521 to prohibit a chief appraiser from requesting a land owner to submit a report on the implementation of a written management plan more than once during each five-year period.
HB 3769 (Murr, Andrew) would amend Tax Code §23.1242 to: (1) provide that the owner of heavy equipment that is leased or rented to the United States or an agency or instrumentality of the United States may not collect the unit property tax from the lessee or renter and may not include the amount of the unity property tax assigned as a separate line on an invoice provided to the lessee or renter; (2) change the due date for the owner of heavy equipment for filing and depositing the property tax amount equal to the total of unit property tax assigned to all items of heavy equipment sold, leased or rented from 20th day of each month to 20th day of the month following each calendar quarter; and (3) require the collector to provide a written notice by December 15 of each year to each owner from whom the collector maintains an escrow account of the unit property tax factor.
HB 3795 (Thompson, Ed) and SB 2526 (Campbell, Donna) would add Tax Code §23.27 to require a chief appraiser to use the market data comparison method using comparable sales data of unimproved land divided by 12 in appraising real property comprising a regulatory municipal solid waste landfill area or real property surrounded by a regulatory “Buffer zone” which is adjacent to the landfill boundary on property owned or controlled by the owner or operator of the landfill.
HB 3857 (Thimesch, Kronda) and SB 1455 (Paxton, Angela) would: (1) amend Tax Code §23.51 to provide that in appraising qualified open-space land, the chief appraiser shall distinguish between the degree of intensity required for various agricultural production methods; and (2) add Tax Code §23.5215 to require the Comptroller, in consultation with the Texas A&M AgriLife Extension Service, to develop guidelines for determining the degree of intensity generally accepted in the area.
HB 4042 (Hayes, Richard) would add Tax Code §23.1212 to require a chief appraiser to accept a property owner’s rendered aggregate market value of tangible personal property used for the production of income that is based on the property owner’s good faith estimate if the value is less than $20,000. The chief appraiser must accept the rendered aggregate value unless the chief appraiser has clear and convincing evidence that the owner’s good faith estimate is incorrect.
HB 4130 (Hefner, Cole) and SB 1771 (King, Phil) would add Tax Code §23.1212 to allow an electric cooperative that owns taxable real or personal property in more than one appraisal district may elect to have the property appraised for a tax year at the property’s presumptive appraised value, which is defined to mean the value equal to 20% of the net book value of taxable property on January 1 of a tax year. The electric cooperative must submit a written request by the rendition deadline and include a statement of the net book value on January 1 of the tax year. The chief appraiser may increase the value in excess of the presumptive appraised value if the chief appraiser has clear and convincing evidence to support the increase.
HB 4228 (Bryant, John) would: (1) amend Tax Code§41.43(b)(3) to change the standard as to when an appraisal district may overcome a protest on the ground of unequal appraisal of property by requiring the appraisal district to show that the appraisal ratio is equal to or less than the median appraisal ratio (in lieu of the current standard of equal to or less than median appraised value) and by requiring the selection of comparable properties within the appraisal district and the use of the value in the appraised records for determining market value; (2) amend Tax Code §41.45 Tax Code §42.23 to provide that a property owner or a chief appraiser or appraisal district may offer as evidence a third-party appraisal if the appraisal was completed within 12 months from the appraisal date; (3) amend Tax Code §42.26 to provide that the district court shall grant relief based on unequal appraisal if the appraised ratio of the property exceeds by at least 10% of the medial appraisal ratio; (4) amend Tax Code §42.29 to allow a property owner to awarded reasonable attorney’s fee if the property owner prevails and the court’s appraised value determination is less than 90% of the appraised value of the property in the appraisal roll; and (5) amend Tax Code §42.29 to limit an appraisal district’s aware of attorney fee to $100,000 if the district prevails and the court’s appraised value determination is at least 10% greater than the appraised value of the property in the appraisal roll.
HB 4263 (Cook, David) would amend Tax Code §25.25 to waive the late correction penalty due to a change of an appraisal roll if the subject property was under construction on January 1 and the error that resulted in an incorrect appraised value for the property was a result of the chief appraiser either appraising the property as though construction was complete on that date or inaccurately determining the percentage by which construction of the property was complete on that date.
HB 4325 (Bell, Cecil) would amend Tax Code §23.56 to provide that a land that is owned by a non-governmental entity and that was acquired by condemnation cannot qualify as an open-space land.
HB 4429 (Landgraf, Brooks) would add a subchapter to Chapter 312, Tax Code to allow the governing body of a school district to enter into a 10-year tax abatement agreement with an owner of a power system reliability project to exempt the project from school district maintenance and operation tax on the value of any improvements greater than $30 million in appraised value.
HB 4512 (Shine, Hugh) would amend Tax Code §31.05 to change the current provision that allows a taxing unit to adopt discounts on payments of taxes on bills mailed after September 30 by mandating that the discounts be granted to the property owners.
HB 4527 (Murr, Andrew) would provide for the formation of a joint interim committee to study, review and report to the legislature on the methods and procedures for appraising land used for wildlife management. The bill sets out what topics should be studied and requires the submission of the report by December 22, 2024.
HB 4555 (Troxclair, Ellen) would amend Tax Code §41A.015 to change the property owner’s deadline to deliver a written notice to the appraisal review board, the chief appraiser, and the taxpayer liaison of the procedural requirement alleged by the property owner to have been violated from five business days to fifteen business days.
HB 4576 (Murr, Andrew) would impose a 10% cap on the annual increase of the appraised value of land designated for agricultural use. The bill is contingent on the passage of a constitutional amendment (HJR 176) and on the voters’ approval of the constitutional amendment.
HB 4607 (Tepper, Carl) would add Tax Code §23.27 to provide that an owner of a parcel of real property that extends into two or more counties may choose a single appraisal district to appraise the property for each taxing unit that imposes ad valorem taxes on the property. The bill is contingent on the passage of a constitutional amendment (HJR 173) and on the voters’ approval of the constitutional amendment.
HB 4610 (Hunter, Todd) and SB 2230 (Lamantia, Morgan) would require the county assessor-collector to post on the county’s internet website certain information.
HB 4634 (Shine, Hugh) would: (1) amend Tax Code §41.45 to provide that an appraisal review board schedule a protest hearing as soon as practicable, but the scheduled hearing cannot be later than October 1st if the notice of protest is filed between March 1 and July 1, but for protest notice filed before March 1st or after July 1st, the hearing must be scheduled within 90 days of the protest notice filing date; and (2) amend Tax Code §41.461 to require the chief appraiser to include a brief summary of the reason for changing the property owner’s appraised value from the preceding tax year with other information that the chief appraiser is currently required to provide to the property owner at least 14 days prior to the hearing.
HB 4717 (Cortez, Philip) would authorize the imposition of an additional property tax for emergency service districts at a rate not to exceed five cents on $100 valuation for the acquisition of land, equipment, apparatus, or the construction of capital improvements. The bill is contingent on the passage of a constitutional amendment (HJR 178) and on the voters’ approval of the constitutional amendment.
HB 4828 (Munoz, Sergio) and HB 4829 (Munoz, Sergio) would add Tax Code §31.074 to require a taxing unit to apply a payment to the amount of tax due before applying any portion of the payment to a penalty or interest owed by the property owner, unless the property owner provides written instructions for a different application of the payment. HB 4828 would amend Tax Code §33.01 to provide that the total amount of penalties and interest that a person is liable may not exceed 5% of the delinquent tax, whereas HB 4829 would limit the penalties and interest on delinquent tax to $500.
HB 4852 (Harrison, Brian) would amend Tax Code §26.06 to require the notice of public hearing to state “Last Year’s Tax Rate $___ per $100” above the proposed tax rate.
HB 4860 (Raymond, Richard) would: (1) amend Tax Code §25.25 to provide that a property owner may file a motion to correct the appraisal roll under the ground of unequal appraisal of property; (2) amend Tax Code §41.43 to require an appraisal review board to lower the appraised value if the property owner submits evidence to support the property owner’s protest; and (3) amend Tax Code §42.26 to authorize a court to admit evidence of the market value of the property only for purposes of establishing the appraisal ratio of the property to determine whether the property owner is entitled to relief.
HB 4890 (Shine, Hugh) would add Tax Code §31.0315 to allow a business entity that has gross receipts of $7 million or less for 2023 tax year to request four equal installment payments of property tax due on real property and tangible personal property that business entity owns or leases. The threshold of $7 million is to be adjusted each year to reflect inflation.
HB 4950 (Gervin-Hawkins, Barbara) would add Tax Code §11.272 to provide for an exemption from tax on the amount of appraised value of real property that arises from the installation in the property of an energy-efficient-related improvement. The term “energy efficiency-related improvement” means an improvement or technology that reduces the amount of energy needed to perform the basic functions of a property, including: (1) a high-efficiency heating, ventilation, and air conditioning system; (2) a central air conditioning demand response technology; (3) a high-efficiency heat pump; (4) attic insulation; (5) a radiant barrier; (6) a smart thermostat; (7) a high-efficiency water heater; (8) an electric vehicle charging demand response technology; (9) high-efficiency windows; and (10) the sealing or resealing of doors, windows, or other openings. The bill is contingent on the passage of a constitutional amendment (HJR 187) and on the voters’ approval of the constitutional amendment.
HB 4980 (Noble, Candy) and SB 2355 (Bettencourt, Paul) would amend 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 and makes conforming changes in other provisions of Chapter 41A.
HB 5032 (Slaton, Bryan ) would add Tax Code §31.038 to allow a property tax credit if the property owner is a United States citizen or a business entity with a principal office in Texas and donates money to Texas in support of border security efforts. The amount of credit is the lesser of the amount of donation during the preceding 12-month period or the total amount of taxes imposed on the property by all of the taxing units that tax the property. The bill is contingent on the passage of a constitutional amendment (HJR 193) and on the voters’ approval of the constitutional amendment.
HB 5049 (Button, Angie Chen) and SB 2409 (Hancock, Kelly) would add Tax Code §41A.011 to allow a person leasing the property to file an appeal through binding arbitration if the person is contractually obligated to reimburse the property owner for taxes, the owner does not appeal the order, and the appraised value of the property is $5 million or less.
HB 5056 (Button, Angie Chen) and SB 2411 (Hancock, Kelly) would amend Tax Code §41.45(b-1) to change the deadline by which a property owner can request to appear by telephone conference call or videoconference from 10 days before the hearing date to 5 days before the hearing date.
HB 5055 (Button, Angie Chen) and SB 2414 (Hancock, Kelly) amend Tax Code §41.61 to change the deadline for the appraisal review board to deliver a subpoena from the fifth day before the good cause hearing to the 15th day before the good cause hearing.
HB 5056 (Button, Angie Chen) and SB 2413 (Hancock, Kelly) would amend Tax Code §1.111(k) to delete the requirement that an agent who electronically submits a designation of agent form to provide the Internet Protocol address of the computer the person used to complete the form.
HB 5057 (Button, Angie Chen) and SB 2415 (Hancock, Kelly) would add Tax Code §6.17 to require an appraisal district established in a county with a population of 120,000 or more to maintain an internet website and would amend Tax Code §25.02 to require such appraisal district to post non-confidential appraisal records and to continuously update the posted records to include any change in the appraised value of the property.
HB 5059 (Button, Angie Chen) and SB 2412 (Hancock, Kelly) would amend Tax Code §1.07(d) to mandate that a required notice pertaining to property that was not on the appraisal roll in the preceding year because it was omitted from the roll to be sent by certified mail.
HJR 184 (Bonnen, Greg) proposes a constitutional amendment to authorize the legislature by general law to exempt from ad valorem taxation the 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. Upon passage, the resolution would be contingent on the voters’ approval of the constitutional amendment.
SB 4 (Bettencourt, Paul ) would provide a methodology outside the normal compression methodology for the 2023-2024 school year to allow for property tax relief that could not be realized in tax year 2022 because of the 90% floor limit.
SB 5 (Parker, Tan) would: (1) amend Tax Code §11.145 to delete the de minimis threshold of $2,500 and to exempt from taxation $25,000 of the appraised value of tangible personal property that is held or used for the production of income; (2) amend Tax Code §22.01 to not require a person to render tangible personal property that a person owns that is held or used for the production of income if the aggregate market value of the property in at least one taxing unit that participates in the appraisal district is $25,000 or less; and (3) require the rendition of all tangible personal property that the person owns that is held or used for the production of income and has taxable situs in the appraisal district if the aggregate market value exceeds $25,000. [Note: The bill would allow a taxable entity to claim a franchise tax credit of 20% of the property tax paid on inventory owned by the entity and located in this state.] The bill is contingent on the passage of a constitutional amendment (SJR 2) and on the voters’ approval of the constitutional amendment.
SB 1064 (Middleton, Mayes) would amend Government Code §403.3011(2) to increase the margin of error from 5% to 10% in determining the validity of school district values in the Comptroller’s property value study and would reduce the lower limit of the margin of error for the aggregate local value of all of the categories of property sampled by the Comptroller from no less than 90% to no less than 80%.
SB 1215 (Paxton, Angela) would amend Tax Code §1.071 to provide that the Comptroller shall prescribe a refund form for a person to use to file a written request for a refund and would require a collector or tax assessor to accept the filed form and would prohibit the refusal to accept, acknowledge or process or act on the filed form unless specifically authorized by another law.
SB 1251 (Bettencourt, Paul) and SB 1819 (Bettencourt, Paul) would amend Tax Code §26.042 to provide that the governing body of a school district may not adopt a tax rate for a tax year in which: (1) the governing body previously adopted a tax rate that exceeded the district’s voter-approval tax rate; (2) an election was held for the purpose of determining whether to approve the district’s adopted tax rate; and (3) the proposition to approve the district’s adopted tax rate was not approved by the voters of the district at the election.
SB 1252 (Bettencourt, Paul) and SB 1818 (Bettencourt, Paul) would amend Election Code §52.072(e) to require a proposition that is submitted to the voters for approval to include a statement “THIS IS A TAX INCREASE” when applicable.
SB 1324 (Middleton, Mayes) would amend Chapter 26, to provide that a taxing unit specify in their publication if a majority of the voters reject the proposed tax rate, the tax rate will be the lesser of the no-new-revenue tax rate or voter-approval tax rate.
SB 1340 (Zaffirini, Judith) would: (1) amend Government Code §403.0246 to include agreements under Chapter 312 or 313, Tax Code, in the definition of “local development agreement” for inclusion of such information in the Comptroller’s database that the agency is required to create and maintain; (2) require the Comptroller to maintain additional data, including impacts on sales/use tax, ad valorem tax or hotel occupancy tax, on its website; (3) require the submission of agreements (new, amendments or renewals) to the Comptroller.
SB 1487 (Bettencourt, Paul) would amend Tax Code §1.07 to make electronic communications available at the election of the property owner, rather than by mutual agreement between the owner and local tax officials as under current law.
SB 1751 (Kolkhorst, Lois) to add Tax Code §312.022 to prohibit a taxing unit from entering into an abatement agreement to exempt a portion of the value of real property on which a virtual currency mining facility is located or is planned to be located during the term of the agreement or of tangible personal property that is located or is planned to be located on the real property during that term. The prohibition applies to a virtual currency mining facility registered as a large flexible load under Utility Code §39.360, which the bill adds to require registration by a person who enters into an agreement for retail electric service in the ERCOT power region if: (1) the person anticipates that the facility will require a total load of more than 10 megawatts before the second anniversary of the date the agreement begins; and (2) the facility load is interruptible.
SB 1890 (Springer, Drew) would: (1) add Tax Code §26.035 to prohibit a school district from imposing a tax for maintenance and operation purposes beginning January 1, 2024; (2) not affect a school district’s authority to impose an enrichment tax at a rate not to exceed $0.17 per $100 of taxable value of property in the district for educational purposes; and (3) require the formation of a joint committee to study the effectiveness of using consumption tax to replace the maintenance and operation tax and the submission of a report on or before November 1, 2024.
SB 1892 (Springer, Drew) would add Tax Code §23.5215 to authorize land used to raise bees to be designated as agricultural land.
SB 1923 (Springer, Drew) would amend Tax Code §42.23 to provide that a chief appraiser, appraisal district, or appraisal review board may not bring a counterclaim in a judicial appeal and would repeal Tax Code §42.02, which allows a chief appraiser to appeal an appraisal review board’s order determining a taxpayer’s protest or a taxpayer’s motion to change the appraisal roll.
SB 1926 (Springer, Drew) would add Chapter 310 to the Tax Code to establish the Texas Mircale Act that would allow for certain fees, authorizing certain ad valorem tax incentives for economic development, specifically certain tax relief from school district taxes for certain corporations and limited liability companies that make large investments that create jobs in this state.
SB 1997 (Bettencourt, Paul) would amend Chapter 26, Tax Code, to remove unused increment rate from the voter-approval tax rate calculation.
SB 1998 (Bettencourt, Paul) would amend Tax Code §26.03 to require a taxing unit that captured appraised value of real property related to the tax increment fund for a reinvestment zone to separately state the adjustments to the value of the property taxable by the unit and the amount of taxes imposed or collected in the tax rate form.
SB 1999 (Bettencourt, Paul) would amend Tax Code §26.013 to change the unused increment rate formula.
SB 2005 (Lamantia, Morgan) would amend Tax Code §5.07 to require the Comptroller to prescribe the form that an appraisal review board would use to a make written determination order and would amend Tax Code §25.25 and other provisions to require an appraisal review board to use the prescribed form.
SB 2118 (Creighton, Brand) and HB 4824 (Metcalf, Will) would increase by $0.01 the enrichment tax rate used in the calculation of the voter-approval tax rate for school districts that adopted a maintenance and operations tax rate for the preceding tax year that is less than the district’s maximum compressed tax rate and six cents.
SB 2131 (Miles, Borris) would amend tax Code §11.26 and 11.261 and 23.23 to repeal the provision that a replacement structure of a structure that was rendered uninhabitable or unusable by casualty or by wind or water damage is considered an improvement for appraisal purpose if the exterior of the replacement structure is of higher quality construction and composition than that of the replaced structure.
SB 2167 (Alvarado, Carol) would amend Tax Code §42.23 to impose the burden of proof on the chief appraiser and the appraisal district to support an appraisal value increase that was made after the property owner was successful in obtaining a reduction of the appraised value in the preceding tax year after protest.
SB 2350 (Bettencourt, Paul ) would amend 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.”
SB 2353 (Hughes, Bryan) would add Tax Code §42.35 to allow an appeal to a justice court if the appeal relates only to a determination of appraised value or eligibility for an exemption and the amount of taxes due on the portion of the taxable value in dispute, calculated using the preceding tax year’s tax rates, is $20,000 or less.
SB 2357 (Parker, Tan) would: (1) amend Tax Code §1.111 to allow a property owner to designate a different agent to represent the property owner in a different tax year without revoking any previous designation of an agent in connection with the same property in a previous tax year; (2) amend Tax Code §5.07 to require the Comptroller to prescribe a form for use by an appraisal review board for written determination order; (3) amend Tax Code §11.161 and Tax Code §23.51 to include hydroponic farming in agricultural uses and include products produced from hydroponic farming in farm products; (4) amend Tax Code §11.24 to allow a property owner to protest the appraised value of a structure or archeological site separately; (5) amend Tax Code §11.43 to reduce the chief appraiser’s ability to include property in the appraisal roll for erroneously allowed exemption from five preceding years to three preceding years for real property/two years for personal property; (6) add Tax Code §11.4392 to require the chief appraiser to accept and approve or deny an application for an exemption that was filed late if the application was filed before June 15 and the application is for an exemption related to city agreement or agreement under Chapter 312, Tax Code (The Property Redevelopment and Tax Abatement Act); (7) amend Tax Code §22.28(a) to change the penalty for a late-filed rendition report from 10% to 5% and amend Tax Code §22.28 to mandate waiver of penalty for a late-filed rendition report if the property owner had no previously delinquent rendition report; (8) amend Tax Code §23.52 to allow a chief appraiser to appraise a portion of a parcel of land as agricultural land even if the remainder of the parcel does not qualify; (9) add Tax Code §23.527 to allow land that was previously appraised as agricultural land but that became ineligible as a result of a solar or wind power facility developed on the land to become eligible to be appraised as agricultural land if the solar or wind power facility is no longer in operation; (10) add Tax Code §23.255 to require a chief appraiser that corrects the roll to include the appraised value of property must do so by showing the exact dollar amount of the new appraised value; (11) amend Tax Code §26.09 to provide back taxes assessed on omitted property do not incur interest; (12) amend Tax Code §41.45 to provide that a property owner who initiates a protest in person cannot be denied a hearing if both the property owner and the chief appraiser are both present in person; (13) amend Tax Code §41.67 to provide that a property owner may submit evidence electronically at any point before or during a hearing; (14) amend Tax Code §41A.09 to prohibit the arbitrator from increasing the appraised value shown on the appraisal records submitted by the appraisal review board unless requested and agreed to by the property owner; (15) amend Tax Code §42.01 to authorize the filing of an appeal by a person who owned the property in the tax year but is not the current owner; (16) amend Tax Code §42.21 to change the deadline to file a petition for review with the district court to the later of 60 days after the receipt of the final order or September 1st of the year in which the final order is entered; (17) amend Tax Code §42.23 to prohibit a chief appraiser, appraisal district or appraisal review board from filing a counterclaim; (18) add Tax Code §42.23(i) to authorize an appeal to be filed by an entity that is not registered to do business in Texas and to prohibit formal or informal request for information regarding an entity’s registration status; add Tax Code §42.23(j) to limit the third-party discovery but authorize the court to allow it if the third-party discovery is necessary under generally accepted appraisal methods and techniques to determine the property value; (19) add Tax Code §42.232 to prohibit the setting of a trial date that is less than 12 months after the date the appeal is filed and to authorize, upon the property owner’s request, the transfer of the case to the State Office of Administrative Hearings; and (20) prohibit the trial court from increasing the appraised value shown on the appraisal district’s appraisal records submitted.
SB 2427 (Zaffirini, Judith) would amend Tax Code §23.51 to provide that land qualifies for appraisal as qualified open-space land only if the land: (A) is currently devoted principally to wildlife management to the degree of intensity generally accepted in the area and has been devoted principally to agricultural use or to the production of timber or forest products for three of the preceding five years; or (B) is currently devoted principally to raising or keeping bees for pollination or for the production of human food or other tangible products having a commercial value to the degree of intensity generally accepted in the area and has been devoted principally to agricultural use or to the production of timber or forest products for three of the preceding five years.
SB 2516 (Bettencourt, Paul ) would change the voter-approval tax rate formula by reducing the factoring number from 1.035 to 1.025.
SJR 4 (Bettencourt) proposes a constitutional amendment to provide that appropriations paying for school district property tax relief that the legislature by general has provided are not included as appropriations subject to the constitutional spending limit. Upon passage, the resolution would be contingent on the voters’ approval of the constitutional amendment.
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