Relating to the exemption from ad valorem taxation of intangible personal property.

Contracts

• M&A Agreements: For transactions closing on or after Jan 1, 2026, amend tax proration clauses to explicitly exclude intangible assets from property tax liability calculations.
• Net Leases: Review pass-through tax provisions in commercial leases. Tenants must ensure landlords do not pass through tax costs based on valuations that improperly bundle intangible value (e.g., brand value of a location) with tangible real property.

Hiring/Training

• Tax Compliance Staff: Direct internal tax teams and external consultants to cease rendering intangible assets for the 2026 tax cycle.
• Asset Management: Instruct accounting staff to strictly segregate "Intangible Assets" from "Tangible Personal Property" in fixed asset ledgers to facilitate clean reporting.

Reporting & Record-Keeping

• Rendition Modification: The 2026 Business Personal Property (BPP) rendition must exclude all intangible value.
• Audit Defense: Maintain original purchase agreements and licensing contracts. You must be prepared to prove that specific high-value assets (e.g., software licenses, customer lists) are legally classified as intangible should a County Appraisal District (CAD) attempt to reclassify them as tangible property.

Fees & Costs

• Tax Reduction: Elimination of property tax liability on previously taxed intangibles for Insurance and Savings & Loan sectors.
• Consulting Costs: Potential short-term increase in valuation consulting fees to unbundle "hybrid" assets (machinery with significant software components) before the 2026 rendition.