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Integrity • Tenacity • Clarity
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[Speaker 1] (00:00:00)
Welcome to the ITC Tax Podcast, where we cut through the complexity of taxes and help businesses plan smarter, save money, and stay ahead.
Each episode, we’ll dive into real conversations about things that matter right now.
Data centers, site selection, incentives, property tax, and more.
If your business is growing or planning big projects, you don’t have to navigate it alone.
Let’s get into it.
[Speaker 2] (00:00:24)
Hi, Dawn. How are you?
Hi, Trudie. I’m good. How can I help you?
Oh, I heard there’s a new Texas exemption for business personal property.
I wonder if you heard about any of that?
Oh, I have. It’s new this year. The legislature just passed it.
And it began in January of 2026. Do you want me to tell you about it?
And yeah, so what is that exemption is about?
Like, is it big things or important that we need to know?
It’s a really simple exemption.
You don’t even have to file an application for it. It’s automatic.
So the legislature wanted to make filing easier for small businesses and also take some of the pressure off of the appraisal districts because they have to go out and find property.
Not all owners know that they’re supposed to render.
So they passed this exemption in House Bill 9, and it exempts the first $125,000 worth of value of your business personal property.
And the great thing about it is you get $125,000 exemption per location and per taxing jurisdiction.
Oh, wow. So when is it going to be effective?
It’s effective for this year. So when you file your returns for 2026, they have altered the form.
They’ve made a new form, and there’s two new boxes on it.
And one box says, select your property’s total market value, and you can check $125,000 or less and more than $125,000.
And if you check the $125,000 or less, you have to also click a box certifying that that is true, that your value, that your property at that location is worth less than $125,000.
And then you don’t have to go any further on the form.
You don’t have to list all of your assets and the year acquired and the cost like you used to have to do in the past.
If you check the box that says more than $125,000, you still need to fill out the form.
But the first $125,000 of your value at that location will be exempt.
So it’ll just come off of the value.
The great news is that if you’re a small business and you have less than $125,000 and nothing changes the next year, it’s still less than that.
A lot of counties are putting in the rule that you do not have to render the next year.
You don’t have to file a rendition again until you believe the value has gone up over that or the chief appraiser asks you to file a new rendition.
So it really will take the pressure off of small businesses, small inventory locations, and also the appraisal district.
They won’t have as many accounts that they have to value and notify and then people protest, etc.
What if a company leaves assets to multiple businesses in one county?
How does it work with this new exemption?
That’s a good question.
So if you own the property, then it’s $125,000 exemption per location.
But if you lease property to others, it’s a total of $125,000 per jurisdiction.
So let’s say you lease out vehicles and you have three of them in the county and all three of them are less than $125,000 in value, then that account would still be exempt.
It’s different than if you own the assets and have multiple locations.
Each of those locations is exempt for $125,000.
But with leased property, it’s the total of the aggregate value.
It’s a very simple process.
You were supposed to file a rendition anyway, and now you don’t have to fill out all that information.
You can just check the box, as I said.
The issue for 2026 is that this is new to the chief appraisers and the appraisal districts as well.
And they’re still trying to figure out exactly how it’s going to work.
So you need to still look out for your notice of value.
If you think it’s too high or you shouldn’t have gotten one, you need to protest.
Don’t assume that you don’t need to file a rendition next year.
A lot of the counties are letting you know that you don’t.
It’s part of the rendition.
But if you have any questions like that, just call ITC Tax because we’ll get the answer for you rather than you having to try to figure it out the hard way during a protest.
One of my concerns is that do you think it’s best practice to continue filing the rendition, even though they would be less than 125,000 next year?
Do you think it should be a best practice to continue filing that so that it will help the customer or our client or their internal company to keep track with their asset as well as for us, agent, represent them to be able to answer the assessor questions anytime.
As a client of ITC, we’re still going to request that data from you every year so that you stay in compliance.
And we will decide for you what level of compliance is appropriate for that year for each location.
Every county is going to be a little different this year.
And so you really want to make sure that you know what your county says about filing in subsequent years.
Thanks, Dawn.
So how about what if I own multiple businesses in the same county?
If you own multiple businesses in the county, each location will have its own exemption.
But if you own three companies, let’s say, at one location.
So you have one location, but you have three business entities, different names, but you own them all.
Those are considered related entities, and they only get the exemption once.
Yes.
And the reason for that is to make sure that people aren’t dividing their company into little companies, each worth $125,000 or less.
So let’s say you own a bakery.
You can’t own a cupcake shop, a cookie shop, and a donut shop and use the exemption three times.
So on the form, it will ask you, are these related entities?
And so you would declare, yes, you have other related entities at that location.
That’s good to know, because I was thinking about, I have a client and they own probably five different entity names under one address.
And I was thinking that, oh, maybe this would be a good beneficial tax saving for them for this new exemption.
But it’s clear now.
Thanks, Dawn.
Yes, we just want to make sure that everybody seeks answers to their questions if they don’t know the answer clearly.
And you can call ITC Tax, and we’ll be happy to find the answer for you.
Okay, good to know.
[Unknown] (00:08:03)
Thank you.