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HJR 145

Proposing a constitutional amendment exempting tangible personal property from ad valorem taxation.

89th Legislature (2025) Introduced by Will Metcalf

Constitutional amendment would eliminate state property taxes on business equipment and inventory, requiring replacement revenue sources or cutting local government funding.

Referred to Ways & Means
#propertyinterests--personalproperty(i0600) #propertyinterests--realproperty(i0595) #resolutions--constitutionalamendments(i0661) #taxation--property-appraisals&appraisaldistricts(i0792) #taxation--property-assessment&collection(i0798) #taxation--property-exemptions(i0793) #transportation--railroads(i0821)
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Bill Summary · HJR 145

Legislative bill overview

HJR 145 proposes a constitutional amendment that would exempt tangible personal property from ad valorem (property) taxation in Texas. This requires voter approval through a statewide referendum if it passes the legislature. The amendment would fundamentally alter how Texas taxes business equipment, machinery, inventory, and other physical assets currently subject to local property taxes.

Why is this important

Ad valorem taxes on tangible personal property generate significant revenue for local governments, schools, and special districts—revenue that would need to be replaced through alternative sources or result in reduced funding. This change would primarily affect businesses that maintain substantial equipment and inventory, potentially reducing their tax burden while shifting costs to other taxpayers or reducing local government services.

Potential points of contention

  • Revenue replacement uncertainty: Local governments and school districts would lose a revenue source without a clearly identified replacement, potentially forcing cuts to services or increased taxes elsewhere
  • Unequal impact on businesses: Capital-intensive businesses would see substantial tax reductions while service-based businesses might see minimal benefit, raising fairness concerns
  • Economic incentive effects: While proponents may argue this encourages business investment, critics worry it primarily benefits established businesses rather than stimulating new economic activity
  • Regressive taxation shift: Eliminating this tax might increase reliance on income or sales taxes, which could disproportionately affect lower-income Texans

Compiled from official sources — confirm details with the bill’s official record.

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