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Bettencourt Passes Senate Bill 1006 Unanimously That Saves Time and Money For Small Businesses

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Bettencourt Passes Senate Bill 1006 Unanimously That Saves Time and Money for Small

Businesses

SB1006 will increase the business personal property tax exemption from $500 to $2,500 to

provide much needed tax relief

AUSTIN — Senator Paul Bettencourt (R-Houston) passed SB1006 on Thursday, a refile from the
85th session, to the House to bring property tax relief to small businesses around the state, an
important piece of the Texas economy. This bill increases the exemption amount for business
personal property from $500 to $2,500. The limit has not been adjusted since 1995. This bill was
passed unanimously, 30-0, through the full Senate. There is bipartisan support for SB1006, as
joint-authors include Senator Brandon Creighton (R-Conroe), Senator Angela Paxton (R-
McKinney), Senator Kelly Hancock (R- North Richland Hills), and co-authored by Senator Juan
“Chuy” Hinojosa (D-McAllen).
 
“This bill will save time and money for businesses and government both,” Senator
Bettencourt said. “It will keep small businesses from having to turn renditions forms in, so
the government will not have to process them, and the tax offices will not have to collect
them,” he continued.
Under current law, taxpayers with less than $500 of business personal property do not have to
pay taxes on the property. SB1006 raises the exemption to $2,500 to reflect that the cost of
appraising and assessing taxes on a business’ tangible personal property worth less than $2,500 is
greater than the revenue received on the property. This allows appraisal districts and tax
assessors to put their resources to better use in other areas.
 
“This is a recognition of the obvious. The cost of collecting property taxes under a certain
amount exceeds the amount of revenue collected by those taxes,” said Senator
Bettencourt. “This is a win-win. It will cut down compliance costs, reduce paperwork and
allow small businesses to focus their efforts on their customers and not the Tax Man,” he
added.
 
The savings to everyone results from the offset due to not collecting taxes on these small
businesses that are ultimately insufficient to cover the cost of collection. The Harris County
Appraisal District predicts SB1006 would allow almost 40,000 businesses, with $37,475,518 in
business personal property, to not need to report or pay any tax on these Di Minimis values of
property. On average, each of these 40,000 accounts would have $937 worth of business
personal property and have a tax bill of $23.
 
β€œIn the 21st century, we can recognize that saving time for small businesses and
government is saving taxpayers money all around.” concluded Senator Bettencourt.
 
SB 1006 updates the exemption to reflect the changing realities that face small businesses in the
present, and into the future.

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