Texas Tax Code § 23.12. states the market value of an Inventory is the price for which it would sell as a unit to a purchaser who would continue the business. An inventory shall include residential real property which has never been occupied as a residence and is held for sale in the ordinary course of a trade or business, provided that the residential real property remains unoccupied, is not leased or rented, and produces no income.

Taxpayer may elect to have the inventory appraised at its market value as of September 1 of the year preceding the tax year to which the appraisal applies. The application applies to the appraisal of the inventory in each tax year that begins after the next August 1 following the date the application is filed with the chief appraiser. Any change in election remains in effect until revoked by the owner and filed by written notice with the chief appraiser. A notice revoking the application is effective for each tax year that begins after the next September following the date the notice of revocation is filed with the chief appraiser.