Texas Tax Code

Sec. § 23.1242
Prepayment of Taxes by Heavy Equipment Dealers


(a)

In this section:

(1)

“Aggregate tax rate” means the combined tax rates of all appropriate taxing units authorized by law to levy property taxes against a dealer’s heavy equipment inventory.

(2)

“Dealer’s heavy equipment inventory,” “declaration,” “dealer,” “sales price,” “subsequent sale,” and “total annual sales” have the meanings assigned those terms by Section 23.1241 (Dealer’s Heavy Equipment Inventory; Value).

(3)

“Statement” means the dealer’s heavy equipment inventory tax statement filed on a form adopted by the comptroller under this section.

(4)

“Unit property tax factor” means a number equal to one-twelfth of the preceding year’s aggregate ad valorem tax rate at the location where a dealer’s heavy equipment inventory is located on January 1 of the current year.

(b)

Except for an item of heavy equipment sold to a dealer, an item of heavy equipment included in a fleet transaction, an item of heavy equipment that is the subject of a subsequent sale, or an item of heavy equipment that is subject to a lease or rental, an owner or a person who has agreed by contract to pay the owner’s current year property taxes levied against the owner’s heavy equipment inventory shall assign a unit property tax to each item of heavy equipment sold from a dealer’s heavy equipment inventory. In the case of a lease or rental, the owner shall assign a unit property tax to each item of heavy equipment leased or rented. The unit property tax of each item of heavy equipment is determined by multiplying the sales price of the item or the monthly lease or rental payment received for the item, as applicable, by the unit property tax factor. If the transaction is a lease or rental, the owner shall collect the unit property tax from the lessee or renter at the time the lessee or renter submits payment for the lease or rental. The owner of the equipment shall state the amount of the unit property tax assigned as a separate line item on an invoice. On or before the 20th day of each month the owner shall, together with the statement filed by the owner as required by this section, deposit with the collector an amount equal to the total of unit property tax assigned to all items of heavy equipment sold, leased, or rented from the dealer’s heavy equipment inventory in the preceding month to which a unit property tax was assigned. The money shall be deposited by the collector to the credit of the owner’s escrow account for prepayment of property taxes as provided by this section. An escrow account required by this section is used to pay property taxes levied against the dealer’s heavy equipment inventory, and the owner shall fund the escrow account as provided by this subsection.

(c)

The collector shall maintain the escrow account for each owner in the county depository. The collector is not required to maintain a separate account in the depository for each escrow account created as provided by this section but shall maintain separate records for each owner. The collector shall retain any interest generated by the escrow account to defray the cost of administration of the prepayment procedure established by this section. Interest generated by an escrow account created as provided by this section is the sole property of the collector and that interest may not be used by an entity other than the collector. Interest generated by an escrow account may not be used to reduce or otherwise affect the annual appropriation to the collector that would otherwise be made.

(d)

Except as provided by Section 23.1243 (Refund of Prepayment of Taxes on Fleet Transaction), the owner may not withdraw funds in an escrow account created under this section.

(e)

The comptroller by rule shall adopt a dealer’s heavy equipment inventory tax statement form. Each month, a dealer shall complete the form regardless of whether an item of heavy equipment is sold, leased, or rented. A dealer may use no other form for that purpose. The statement may include the information the comptroller considers appropriate but shall include at least the following:

(1)

a description of each item of heavy equipment sold, leased, or rented including any unique identification or serial number affixed to the item by the manufacturer;

(2)

the sales price of or lease or rental payment received for the item of heavy equipment, as applicable;

(3)

the unit property tax of the item of heavy equipment, if any; and

(4)

the reason no unit property tax is assigned if no unit property tax is assigned.

(f)

On or before the 20th day of each month, a dealer shall file with the collector the statement covering the sale, lease, or rental of each item of heavy equipment sold, leased, or rented by the dealer in the preceding month. On or before the 20th day of a month following a month in which a dealer does not sell, lease, or rent an item of heavy equipment, the dealer must file the statement with the collector and indicate that no sales, leases, or rentals were made in the prior month. A dealer shall file a copy of the statement with the chief appraiser and retain documentation relating to the disposition of each item of heavy equipment sold and the lease or rental of each item of heavy equipment. A chief appraiser or collector may examine documents held by a dealer as provided by this subsection in the same manner, and subject to the same conditions, as provided by Section 23.1241 (Dealer’s Heavy Equipment Inventory; Value)(g).

(g)

Except as provided by this subsection, Subsection (f) applies to any dealer, regardless of whether a dealer owes heavy equipment inventory tax for the current year. A dealer who owes no heavy equipment inventory tax for the current year because the dealer was not in business on January 1:

(1)

shall file the statement required by this section showing the information required by this section for each month that the dealer is in business; and

(2)

may not assign a unit property tax to an item of heavy equipment sold by the dealer or remit money with the statement except in compliance with the terms of a contract as provided by Subsection (k).

(h)

A taxing unit shall, on its tax bill prepared for the owner of a dealer’s heavy equipment inventory, separately itemize the taxes levied against the dealer’s heavy equipment inventory. When the tax bill is prepared for a dealer’s heavy equipment inventory, the assessor for the taxing unit, or an entity, if any, other than the collector, that collects taxes on behalf of the taxing unit, shall provide the collector a true and correct copy of the tax bill sent to the owner, including taxes levied against the dealer’s heavy equipment inventory. The collector shall apply the money in the owner’s escrow account to the taxes imposed and deliver a tax receipt to the owner. The collector shall apply the amount to each appropriate taxing unit in proportion to the amount of taxes levied, and the assessor of each taxing unit shall apply the funds received from the collector to the taxes owed by the owner.

(i)

If the amount in the escrow account is not sufficient to pay the taxes in full, the collector shall apply the money to the taxes and deliver to the owner a tax receipt for the partial payment and a tax bill for the amount of the deficiency together with a statement that the owner must remit to the collector the balance of the total tax due.

(j)

The collector shall remit to each appropriate taxing unit the total amount collected by the collector in deficiency payments. The assessor of each taxing unit shall apply those funds to the taxes owed by the owner. Taxes that are due but not received by the collector on or before January 31 are delinquent. Not later than February 15, the collector shall distribute to each appropriate taxing unit in the manner provided by this section all funds collected under authority of this section and held in escrow by the collector under this section. This section does not impose a duty on a collector to collect delinquent taxes that the collector is not otherwise obligated by law or contract to collect.

(k)

A person who acquires the business or assets of an owner may, by contract, agree to pay the current year heavy equipment inventory taxes owed by the owner. The owner who owes the current year tax and the person who acquires the business or assets of the owner shall jointly notify the chief appraiser and the collector of the terms of the agreement and of the fact that the other person has agreed to pay the current year heavy equipment inventory taxes owed by the dealer. The chief appraiser and the collector shall adjust their records accordingly. Notwithstanding Section 23.1241 (Dealer’s Heavy Equipment Inventory; Value), a person who agrees to pay current year heavy equipment inventory taxes as provided by this subsection is not required to file a declaration until the year following the acquisition. This subsection does not relieve the selling owner of the tax liability.

(l)

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

(m)

In addition to other penalties provided by law, a dealer who fails to file or fails to timely file a statement as required by this section 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 $500 for each month or part of a month in which a statement is not filed or timely filed after it is due.

(n)

An owner who fails to remit unit property taxes due as required by this section shall pay a penalty of five percent of the amount due. If the amount is not paid within 10 days after the due date, the owner shall pay an additional penalty of five percent of the amount due. Notwithstanding this section, unit property taxes paid on or before January 31 of the year following the date on which they are due are not delinquent. The collector, the collector’s designated agent, or the county or district attorney shall enforce this subsection. A penalty under this subsection is in addition to any other penalty provided by law if the owner’s taxes are delinquent.

(o)

A fine collected under this section shall be deposited in the county depository to the credit of the general fund. A penalty collected under this section is the sole property of the collector, may be used by no entity other than the collector, and may not be used to reduce or otherwise affect the annual appropriation to the collector that would otherwise be made.

(p)

Section 23.123 (Declarations and Statements Confidential) applies to a declaration or statement filed under this section in the same manner in which that section applies to a statement or declaration filed as required by Section 23.121 (Dealer’s Motor Vehicle Inventory; Value) or 23.122 (Prepayment of Taxes by Certain Taxpayers).
Added by Acts 1997, 75th Leg., ch. 1184, Sec. 2, eff. Jan. 1, 1998.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 116 (H.B. 2071), Sec. 5, eff. September 1, 2009.
Acts 2011, 82nd Leg., R.S., Ch. 322 (H.B. 2476), Sec. 3, eff. January 1, 2012.
Acts 2011, 82nd Leg., R.S., Ch. 322 (H.B. 2476), Sec. 8, eff. January 1, 2012.
Acts 2017, 85th Leg., R.S., Ch. 89 (H.B. 1346), Sec. 1, eff. September 1, 2017.
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Jun. 7, 2021