TITLE: Relating to the adjustment of the amount of the exemption from ad valorem taxation of income-producing tangible personal property having a value of less than a certain amount to reflect inflation.

SUMMARY: Relating to the adjustment of the amount of the exemption from ad valorem taxation of income-producing tangible personal property having a value of less than a certain amount to reflect inflation.

FULL TEXT:
AN ACT relating to the adjustment of the amount of the exemption from ad valorem taxation of income-producing tangible personal property having a value of less than a certain amount to reflect inflation. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. The heading to Section 11.145, Tax Code, is amended to read as follows: Sec. 11.145. CERTAIN INCOME-PRODUCING TANGIBLE PERSONAL PROPERTY [HAVING VALUE OF LESS THAN $2,500].SECTION 2. Section 11.145, Tax Code, is amended by amending Subsection (a) and adding Subsection (c) to read as follows: (a) A person is entitled to an exemption from taxation of the tangible personal property the person owns that is held or used for the production of income if that property has a taxable value that does not exceed the amount calculated for the applicable tax year under Subsection (c) [of less than $2,500].(c) For the 2026 tax year, the exemption provided by Subsection (a) applies to tangible personal property described by that subsection that has a taxable value that does not exceed $2,500. For each subsequent tax year, the comptroller shall adjust the taxable value used to determine whether the exemption provided by Subsection (a) applies to reflect inflation by using the index that the comptroller considers to most accurately report changes in the purchasing power of the dollar for consumers in this state. As soon as practicable after making the adjustment required by this subsection, the comptroller shall publish in the Texas Register and post on the comptroller's Internet website the adjusted taxable value to be used for purposes of this section. SECTION 3. The change in law made by this Act applies only to an ad valorem tax year that begins on or after January 1, 2026. SECTION 4. This Act takes effect January 1, 2026.