April 1, 2025

AUSTIN — A research report released today by the Texas Taxpayers and Research Association (TTARA) shows that property tax exemptions for business personal property would make the Texas economy more competitive and create a fairer tax system statewide.

The Texas House of Representatives is scheduled to vote Wednesday on House Bill 9, which would exempt a portion of business personal property from the tax; it would cost the state $566 million in the 2026-27 biennium.

“Texas has a well-earned reputation as a business-friendly state, but our property taxes are 10th highest in the nation,” said TTARA President Jennifer Rabb. “Exempting business personal property would provide needed tax relief to Texas employers while also making Texas more attractive for business investment.”

Business personal property includes inventory, computers, restaurant equipment, office furniture and other property belonging to businesses that sell goods or services to the public. It also includes property that adds value to products through the development, manufacturing, or processing of those products — this includes manufacturing equipment, trucks and heavy equipment.

Texas businesses had an estimated $399.4 billion in commercial, industrial and manufacturing business personal property in 2023, representing about 7% of Texas tax rolls. Business owners must pay property taxes on those items, creating headaches for taxpayers and local governments that track the property and determine its value. The process is further complicated by the nature of business personal property, which is constantly changing in quantity and value and is often in transit.

By contrast, 14 states — including Delaware, Ohio, Pennsylvania, Wisconsin, and New York — do not tax business personal property.

In addition, property tax exemptions for homesteads mean that only 43% of homestead property values are currently taxed by Texas school districts (which assess the bulk of the state’s property taxes). By contrast, 93% of business property is taxed.

By exempting all business personal property, Texas could lower the percentage of taxed business property to 78%, creating a more equitable tax system.

“Texas desperately needs to level the property tax playing field,” Rabb said. “Passing a business personal property tax exemption would contribute to a system of lower, fairer taxes, spreading the burden more equally and uniformly among a broad base of taxpayers.”

The Texas Senate is also considering a bill — Senate Bill 32 — that would exempt some business personal property from tax assessments and create a franchise tax credit for a portion of property taxes paid on business personal property. That bill was passed by the Senate Local Government Committee last week. The Senate has allocated $500 million for business tax relief in Senate Bill 1, the 2026-27 appropriations bill.

The business personal property exemptions in both House Bill 9 and Senate Bill 32 are contingent on the passage, and approval by voters, of the related constitutional amendments in House Joint Resolution 1 and Senate Joint Resolution 81, respectively.

For more information, please contact:
Steve Scheibal: steve@newwestcomms.com, 512-762-8808

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The Texas Taxpayers and Research Association (TTARA) is a non-profit, non-partisan membership-supported organization of businesses and individuals interested in state and local fiscal policies in Texas and the way those policies impact our economy.