There are different types of exemptions for different types of property.
Business Personal Property
Freeport Exemption. In 1989, the voters of Texas approved a means by which certain tangible personal property transported out of the state of Texas within 175 days could qualify for an exemption of value based on a percentage transported out. These personal property items must be detained in Texas for assembling, storing, manufacturing, fabrication, or for processing purposes. The law provides that counties, cities, towns, school districts and junior college districts may opt to continue to tax these items, essentially opting out of granting the Freeport exemption, therefore, the Freeport exemption is not universally granted in Texas.
Goods in Transit Exemption. HB 621, effective January 1, 2008
A “goods in transit” exemption applies to property acquired inside or outside the state of Texas and forwarded to a location inside or outside the state within 175 days. To qualify, the goods must be detained at a location, not owned by the owner of the goods, for purposes of assembling, storing, manufacturing, processing or fabricating by the person who acquired the goods or brought them into the state. It does not apply to oil, natural gas, petroleum products, aircraft, dealer’s motor vehicle inventories, dealer’s vessel and outboard motor inventories, heavy equipment inventories or retail manufactured housing inventories. Equipment, machinery, and materials which are added to the goods, but which themselves were not “goods in transit,” are not entitled to the exemption. A taxing entity may elect to opt out of this exemption. A party claiming this exemption is not entitled to claim a Freeport exemption on the same goods.
Absolute Exemption Religious Organization
An absolute exemption is available to any religious organization that are organized and operated primarily for the purposes of engaging in religious worship or promoting the spiritual development or well-being of individuals. The organization must direct that the assets of the organization upon discontinuance of the organization be transferred to the State of Texas. Absolute exemptions relate to the exempting of value for real and personal property if they qualify. Certain requirements must be met to qualify for the exemption.
Absolute Exemption Charitable Organization
An absolute exemption is also available to any charitable organization whose overall purpose of the organization is to perform exclusively religious, charitable, scientific, and literary or education functions. Absolute exemptions relate to the exempting of value for real and personal property if they qualify. Certain requirements must be met to qualify for the exemption.
Historic Site Exemption
Property must be designated as a Texas Historic Landmark by the Texas Historical Commission.
Special Use Agricultural Deferral
Landowners may apply for special appraisal based on their land’s productivity value rather than what the land would sell for on the open market. Typically, a productivity value is lower than market value, which lowers property taxes. Landowners must use their land in agriculture, for timber products, as public access airport property or for recreational park or scenic land to receive a special appraisal. Requirements for each type of use vary. There is a rollback tax for taking such land out of its productivity use.
Abatements and other Economic Development Exemptions
Abatements of property tax and incentives offered as economic development exemptions start with the City in which you choose to do business. The state may also offer certain economic incentives. Both types of exemption are typically based on several factors: the $ amount of the investment made by the business, the number of employees hired or will be hired at completion of the project; and certain levels of employment guaranteed for a certain number of years. These types of exemptions require annual filings to determine guaranteed commitment, set forth in the Agreement for any Abatement or Economic Development Exemption. For more information on qualifying for specific incentives, Contact Us.
