HB 4389

relating to the adjustment of the amount of the exemption from ad
valorem taxation of income-producing tangible personal property
having a value of less than a certain amount to reflect inflation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  The heading to Section 11.145, Tax Code, is
Sec. 11.145.  CERTAIN INCOME-PRODUCING TANGIBLE PERSONAL
PROPERTY [HAVING VALUE OF LESS THAN $2,500].
SECTION 2.  Section 11.145, Tax Code, is amended by amending
Subsection (a) and adding Subsection (c) to read as follows:
(a)  A person is entitled to an exemption from taxation of
the tangible personal property the person owns that is held or used
for the production of income if that property has a taxable value
that does not exceed the amount calculated for the applicable tax
year under Subsection (c) [of less than $2,500].
(c)  For the 2026 tax year, the exemption provided by
Subsection (a) applies to tangible personal property described by
that subsection that has a taxable value that does not exceed
$2,500.  For each subsequent tax year, the comptroller shall adjust
the taxable value used to determine whether the exemption provided
by Subsection (a) applies to reflect inflation by using the index
that the comptroller considers to most accurately report changes in
the purchasing power of the dollar for consumers in this state.  As
soon as practicable after making the adjustment required by this
subsection, the comptroller shall publish in the Texas Register and
post on the comptroller's Internet website the adjusted taxable
value to be used for purposes of this section.
SECTION 3.  The change in law made by this Act applies only
to an ad valorem tax year that begins on or after January 1, 2026.
SECTION 4.  This Act takes effect January 1, 2026.