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Texas Agriculture Archive

December 5, 2003

Old tax law gets new teeth...

In an attempt to develop more revenue for county assessments, the Legislature passed SB 340, by Sen. Todd Staples, which adds a penalty for the failure to render personal business property accurately.

The primary impact is a 10 percent penalty for failure to render property by the deadline of April 15, and a penalty of up to 50 percent for filing a fraudulent rendition.

Since 1979, Texas tax law has required Texans to "render" the value of personal property "used for the production of income" for taxation by the local tax accessor-collector.

The legislation provides a "grace period" for businesses. If property is rendered properly (which may not have been rendered in the past), on or before Dec.1, 2003, there will be no penalty for past tax years. Taxes will only be due on the property beginning with the 2003 tax year.

Most equipment and materials used for production agriculture are exempt as "implements of husbandry." Therefore, farmers and ranchers have traditionally had little property to render for taxation. This exemption exists today.

Implements of husbandry continue to be exempt from the personal property tax. However, there has been some confusion as to what qualifies as an implement of husbandry. According to an Attorney General's Opinion, "implements of husbandry" are property designated to be exclusively used for "husbandry." Property designed for other uses may not be exempt.

At this time, Texas Farm Bureau staff is attempting to get additional information on what property is exempt as well as what is to be rendered for taxation, the goal being the establishment of consistency between appraisal districts on what is exempt and what is not.