Texas Tax Code

Sec. § 23.1241
Dealer’s Heavy Equipment Inventory; Value


(a)

In this section:

(1)

“Dealer” means a person engaged in the business in this state of selling, leasing, or renting heavy equipment. The term does not include a bank, savings bank, savings and loan association, credit union, or other finance company. In addition, for purposes of taxation of a person’s inventory of heavy equipment in a tax year, the term does not include a person who renders the person’s inventory of heavy equipment for taxation in that tax year by filing a rendition statement or property report in accordance with Chapter 22 (Renditions and Other Reports).

(2)

“Dealer’s heavy equipment inventory” means all items of heavy equipment that a dealer holds for sale, lease, or rent in this state during a 12-month period.

(3)

“Dealer-financed sale” means the sale at retail of an item of heavy equipment in which the dealer finances the purchase of the item, is the sole lender in the transaction, and retains exclusively the right to enforce the terms of the agreement that evidences the sale.

(4)

“Declaration” means a dealer’s heavy equipment inventory declaration form adopted by the comptroller under this section.

(5)

“Fleet transaction” means the sale of five or more items of heavy equipment from a dealer’s heavy equipment inventory to the same person in one calendar year.

(6)

“Heavy equipment” means self-propelled, self-powered, or pull-type equipment, including farm equipment or a diesel engine, that weighs at least 1,500 pounds and is intended to be used for agricultural, construction, industrial, maritime, mining, or forestry uses. The term does not include a motor vehicle that is required by:

(A)

Chapter 501 (Certificate of Title Act), Transportation Code, to be titled; or

(B)

Chapter 502 (Registration of Vehicles), Transportation Code, to be registered.

(7)

“Sales price” means:

(A)

the total amount of money paid or to be paid to a dealer for the purchase of an item of heavy equipment; or

(B)

for a lease or rental, the total amount of the lease or rental payments.

(8)

“Subsequent sale” means a dealer-financed sale of an item of heavy equipment that, at the time of the sale, has been the subject of a dealer-financed sale from the same dealer’s heavy equipment inventory in the same calendar year. The term does not include a rental or lease with an unexercised purchase option or without a purchase option.

(9)

“Total annual sales” means the total of the:

(A)

sales price for each sale from a dealer’s heavy equipment inventory in a 12-month period; and

(B)

lease and rental payments received for each lease or rental of heavy equipment inventory in a 12-month period.

(b)

For the purpose of the computation of property tax, the market value of a dealer’s heavy equipment inventory on January 1 is the total annual sales, less sales to dealers, fleet transactions, and subsequent sales, for the 12-month period corresponding to the preceding tax year, divided by 12.

(b-1)

For the purpose of the computation of property tax on the market value of the dealer’s heavy equipment inventory, the sales price of an item of heavy equipment that is sold during the preceding tax year after being leased or rented for a portion of that same tax year is considered to be the sum of the sales price of the item plus the total lease and rental payments received for the item in the preceding tax year.

(c)

For the purpose of the computation of property tax on the market value of the dealer’s heavy equipment inventory of an owner who was not a dealer on January 1 of the preceding tax year, the chief appraiser shall estimate the market value of the dealer’s heavy equipment inventory. In making the estimate required by this subsection, the chief appraiser shall extrapolate using sales data, if any, generated by sales from the dealer’s heavy equipment inventory in the preceding tax year.

(d)

Except for dealer’s heavy equipment inventory, personal property held by a dealer is appraised as provided by the other sections of this code. In the case of a dealer whose sales from the dealer’s heavy equipment inventory are made predominately to other dealers, the chief appraiser shall appraise the dealer’s heavy equipment inventory as provided by Section 23.12 (Inventory).

(e)

A dealer is presumed to be an owner of a dealer’s heavy equipment inventory on January 1 if, in the 12-month period ending on December 31 of the preceding year, the dealer sold, leased, or rented an item of heavy equipment to a person other than a dealer. The presumption is not rebutted by the fact that a dealer has no item of heavy equipment physically on hand for sale from the dealer’s heavy equipment inventory on January 1.

(f)

The comptroller by rule shall adopt a dealer’s heavy equipment inventory declaration form. Except as provided by Section 23.1242 (Prepayment of Taxes by Heavy Equipment Dealers)(k), not later than February 1 of each year, or, in the case of a dealer who was not in business on January 1, not later than 30 days after commencement of business, each dealer shall file a declaration with the chief appraiser and file a copy with the collector. The declaration is sufficient to comply with this subsection if it sets forth:

(1)

the name and business address of each location at which the declarant conducts business;

(2)

a statement that the declarant is the owner of a dealer’s heavy equipment inventory; and

(3)

the market value of the declarant’s heavy equipment inventory for the current tax year as computed under Subsection (b).

(g)

As provided by this subsection, the chief appraiser may examine the books and records of a dealer. A request made under this subsection must be made in writing, must be delivered personally to the custodian of the records at a location at which the dealer conducts business, must provide a period of not less than 15 days for the person to respond to the request, and must state that the person to whom the request is addressed has the right to seek judicial relief from compliance with the request. In a request made under this section, the chief appraiser may examine:

(1)

documentation appropriate to allow the chief appraiser to ascertain the applicability of this section and Section 23.1242 (Prepayment of Taxes by Heavy Equipment Dealers) to the person; and

(2)

sales records to substantiate information set forth in the declaration filed by the dealer.

(h)

Repealed by Acts 1999, 76th Leg., ch. 574, Sec. 2(1), eff. June 18, 1999.

(i)

Repealed by Acts 2011, 82nd Leg., R.S., Ch. 322, Sec. 8, eff. January 1, 2012.

(j)

In addition to other penalties provided by law, a dealer who fails to file or fails to timely file a declaration required by Subsection (f) shall forfeit a penalty. A tax lien attaches to the dealer’s business personal property to secure payment of the penalty. The appropriate district attorney, criminal district attorney, or county attorney may collect the penalty established by this section in the name of the collector. The chief appraiser may collect the penalty in the name of the chief appraiser. The chief appraiser or the appropriate district attorney, criminal district attorney, or county attorney may sue to enforce compliance with this section. Venue of an action brought under this subsection, including an action for injunctive relief, is in the county in which the violation occurred or in the county in which the owner maintains the owner’s principal place of business or residence. The court may award attorney’s fees to a chief appraiser, district attorney, criminal district attorney, or county attorney who prevails in a suit to collect a penalty or enforce compliance with this section. A penalty forfeited under this subsection is $1,000 for each month or part of a month in which a declaration is not filed or timely filed after it is due.
Added by Acts 1997, 75th Leg., ch. 1184, Sec. 2, eff. Jan. 1, 1998. Amended by Acts 1999, 76th Leg., ch. 574, Sec. 2(1), eff. June 18, 1999; Acts 1999, 76th Leg., ch. 1550, Sec. 1 to 3, eff. Jan. 1, 2000.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 116 (H.B. 2071), Sec. 4, eff. September 1, 2009.
Acts 2011, 82nd Leg., R.S., Ch. 322 (H.B. 2476), Sec. 1, eff. January 1, 2012.
Acts 2011, 82nd Leg., R.S., Ch. 322 (H.B. 2476), Sec. 2, eff. January 1, 2012.
Acts 2011, 82nd Leg., R.S., Ch. 322 (H.B. 2476), Sec. 8, eff. January 1, 2012.
Acts 2013, 83rd Leg., R.S., Ch. 884 (H.B. 826), Sec. 1, eff. January 1, 2014.
Source

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Jun. 7, 2021