Texas September 1st Inventory Election Available

By: Paige Cole | Director of Personal Property – Compliance

In Texas, business personal property taxpayers are required to report the market value of their inventory as of December 31st. For many seasonal businesses, their December 31st inventory value can be significantly higher than the previous 11 months ending inventory values. Texas Tax Code Section 23.12 allows certain business owners (not including Dealer’s Inventory) to elect to have their inventory appraised at its market value as of September 1st of the year preceding the tax year to which the appraisal applies. Should a taxpayer determine that their September 1st inventory value is consistently less than their December 31st inventory value, then an application may be filed with the chief appraiser of the county in which the inventory is located requesting that the inventory be appraised as of September 1st. The application must be submitted by July 31st of the preceding tax year. The application applies to the appraisal of inventory in each tax year that begins after the next August 1st following the date the application is filed with the chief appraiser. The filing will continue until the owner revokes the application in writing to the chief appraiser or if the ownership of the inventory changes.

For Example: The application would have to be filed by July 31, 2024, to notify the county of the decision to make the change which would be effective as of the 2025 tax year. Instead of reporting the December 31, 2024, inventory value, the taxpayer would report the Sept 1, 2024, inventory value on the 2025 tax year rendition.

For assistance with navigating the correct inventory valuation date, contact our Texas business personal property tax team. With decades of experience understanding the nuances of varying jurisdictions and respective tax laws, our team has the requisite knowledge to help not only determine your optimal inventory election date, but also to manage your renditions with proactively embedded savings year after year. Contact us today for a complimentary desktop review to understand your current landscape and begin reducing your business personal property tax liabilities.