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Bill

HB 5478

Relating to the exemption from ad valorem taxation of property owned by an organization engaged primarily in performing charitable functions.

89th Legislature (2025) Introduced by Helen Kerwin

HB 5478 expands property tax exemptions for nonprofits performing charitable work, reducing local tax revenue while providing financial relief to qualifying organizations.

Placed on General State Calendar
#comptrollerofpublicaccounts(v2608) #charitable&nonprofitorganizations(i0055) #taxation--property-appraisals&appraisaldistricts(i0792) #taxation--property-assessment&collection(i0798) #taxation--property-exemptions(i0793)
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Bill Summary · HB 5478

Legislative bill overview

HB 5478 modifies Texas property tax law to expand or clarify exemptions from ad valorem (property value-based) taxation for organizations that primarily perform charitable functions. The bill specifically addresses which nonprofit organizations qualify for tax-exempt status on their real property holdings.

Why is this important

Property tax exemptions for charities reduce local government revenue and shift tax burden to other property owners, while potentially affecting the sustainability of community services these organizations provide. The bill's scope determines how much property value escapes taxation and which charitable activities receive public financial support through tax relief.

Potential points of contention

  • Definition precision: Disagreement over what "primarily" performing charitable functions means—does a 51% charitable focus qualify, or should a higher threshold apply?
  • Local government revenue impact: Cities and counties may oppose broader exemptions since they lose property tax revenue needed for schools, emergency services, and infrastructure
  • Verification and oversight: Questions about how organizations prove charitable status and whether adequate monitoring exists to prevent abuse or mission drift

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

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