Bill > HB4389

This bill modifies the Texas Tax Code to adjust the exemption for income-producing tangible personal property by establishing an inflation-based mechanism for determining the value threshold for tax exemption. Specifically, the bill sets the initial exemption threshold at $2,500 for the 2026 tax year and directs the Texas Comptroller to annually adjust this amount to reflect changes in consumer purchasing power using an appropriate inflation index. Under the new law, property owners would be exempt from taxation on tangible personal property used for income production if the property's taxable value does not exceed the annually adjusted threshold. The Comptroller is required to publish the updated exemption value in the Texas Register and on their website each year. The changes will apply to ad valorem (property) tax years beginning on or after January 1, 2026, providing a dynamic approach to maintaining the real value of the tax exemption over time by accounting for inflation.

Budget and Finance

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB4389