House Bill 9, authored by Rep. Morgan Meyer, R-University Park, would expand the exemption for tangible personal property from $2,500 to $250,000 of the appraised value. Personal property includes equipment, furniture and vehicles.
A closer look
Meyer said the bill would not only save taxpayers money but also eliminate exemption paperwork for businesses who are under the personal property exemption limit.
“This saves the taxpayers money,” he said. “It saves the taxpayers hassle and it saves taxing entities money and hassle as well.”
Rep. Cody Vasut, R-Angleton, who is a co-author of the bill, said this exemption is estimated to save businesses between $5,000-$10,000 annually.
“That’s money that will go to help families that own these small businesses—it’ll help them provide for their children—[and] money that goes back into the economy,” he said. “This bill helps those small businesses ensure that they can continue to operate those small businesses by exempting things that they already pay taxes on.”
Under the bill, the state would allocate $700 million to school districts to cover the loss of tax revenue from businesses if the exemption raise is passed.
Zooming out
HB 9 is a part of state lawmakers' larger initiative to further cut taxes building upon the $18 billion property tax relief package passed in 2023, Community Impact reported. The Texas Senate also passed Senate Bill 4, a tax relief bill that would raise the current homestead exemption from $100,000 to $140,000.
Additionally, Gov. Greg Abbott proposed spending $10 billion of the state’s almost $24 billion surplus on tax cuts at his Feb. 2 State of the State address, Community Impact reported.
Why it matters
A report released by the Texas Taxpayers and Research Association shows that raising the personal property exemption could help the state’s economy be “more competitive and create a fairer tax system statewide.”
Texas’ property taxes are currently ranked the 10th highest in the nation, according to the report. Across the nation, 14 states do not collect any taxes from personal property relating to business,
Although Texas has earned a reputation as a business-friendly state, TTARA President Jennifer Rabb said raising the exemption for personal property could make the state more attractive for business investment.
“Texas desperately needs to level the property tax playing field,” she said. “Passing a business personal property tax exemption would contribute to a system of lower, fairer taxes, spreading the burden more equally and uniformly among a broad base of taxpayers.”
Another note
The bill is accompanied by House Joint Resolution 1, the proposed constitutional amendment associated with HB 9, which would appear on residents’ ballots in November if passed. The proposals were sent to the Texas Senate for consideration.
