Relating to the ad valorem taxation of certain dealer's heavy equipment inventory.

Contracts

• Asset Purchase Agreements (M&A): You must update standard deal documents to include a provision invoking Section 23.1242(k). This allows a buyer to utilize the seller’s unit property tax factor for the remainder of the tax year. Without this contractual agreement and subsequent joint notice, the buyer may face immediate tax rate resets.
• Federal Government Leases: The law prohibits collecting unit property tax from the United States government or its agencies. Review and amend active master lease agreements with federal entities to cease these line-item charges by the effective date.

Hiring/Training

• Accounting Staff: Accounts Payable/Tax teams must be retrained to stop monthly escrow remittances. They must implement controls to hold collected tax funds for three months without commingling them with operating cash, as the remittance schedule is now quarterly.
• Inventory Management: Staff responsible for inventory data entry must ensure records are precise enough to support a 4-year audit, as the submitted tax form will no longer contain the line-item detail required to prove the math during an audit.

Reporting & Record-Keeping

• Filing Destination: Cease sending copies of tax statements to the Chief Appraiser. Filings go only to the County Tax Assessor-Collector.
• New Form Format: The new Comptroller form will require aggregate data (total sales/lease income and total tax assigned) rather than itemized lists.
• Retention Policy: You must retain internal documentation identifying the specific disposition of each item (sold, leased, rented) for four years. The burden of proof shifts entirely to your internal records.

Fees & Costs

• Cash Flow: There are no new fees. However, holding tax escrow funds for a full quarter increases your cash-on-hand. Ensure treasury management protocols are updated to manage these larger, temporary balances.