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Signed Into Law
Signed June 12, 2025Effective 2025-06-12
HB9

Regular Session

Relating to an exemption from ad valorem taxation of a portion of the appraised value of tangible personal property that is held or used for the production of income.

Government Affairs & Regulatory Compliance Analysis

HB9: Government Affairs Overview

HB9 creates a conditional exemption from ad valorem taxation for Business Personal Property (BPP) valued under $125,000, effective January 1, 2026, contingent on voter approval. This legislation shifts the compliance burden from financial payment to strict asset reporting; businesses must now aggregate values across "Related Business Entities" at shared locations, with criminal penalties attached to incorrect certifications.

Rep. Morgan Meyer·House Bill·Regular Session

Critical
Low Cost
Effective:2025-06-12
Business Impact

Who HB9 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: critical

Significant regulatory changes (effective 2025-06-12). Review with your legal and compliance teams to understand implications.

🏢

Real Estate

Affected business types:

  • Property developers
  • Commercial landlords
  • Property managers
  • Real estate investors
View all real estate legislation

Key Operational Considerations

  • 1Triple Net (NNN) Leases: Tenants must audit CAM charges to ensure landlords receiving this exemption are passing through the tax savings and not billing for BPP taxes they no longer pay.
  • 2Tax Consultant Agreements: Renegotiate scopes of work. If your assets are clearly under $125,000, you should pay for a simple certification filing, not a complex rendition schedule.
  • 3Franchise Agreements: Franchisors must update manuals to define how franchisees report assets, specifically regarding equipment owned by the franchisor but located at the franchisee's site.
  • 4Signatory Risk: CFOs and Controllers must be trained on the new criminal liability (Class A Misdemeanor/State Jail Felony) for false statements.

Estimated Cost Impact

lowMinimal cost impact anticipated.

Enforcing Agencies

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HB9
Relating to an exemption from ad valorem taxation of a portion of the appraised value of tangible personal property that is held or used for the produ...
Critical Urgency
Passed with Opposition
House Vote133 - 10
YEA
93% in favor143 voting
Senate Vote31 - 0
YEA
100% in favor31 voting
10
Total Opposition Votes
Cost Impact
Low
Effective
2025-06-12
Enforcing Agencies
County Appraisal DistrictsCounty Tax Assessor-CollectorsTexas Comptroller of Public Acco...
Primary Author: Rep. Morgan Meyer
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: January 1, 2026 (Contingent on passage of HJR 1 in the November 2025 election).
  • Compliance Deadline: April 15, 2026 (First deadline to file the new exemption certification or full rendition).
  • Agency Rulemaking: The Texas Comptroller must prescribe updated rendition forms including "Related Business Entity" checkboxes and non-rendition certifications prior to January 1, 2026.

Immediate Action Plan

  • Map Your Entities: Immediately identify all legal entities sharing a physical address and sum their BPP values. If the total exceeds $125,000, you are not exempt.
  • Review D&O Insurance: Confirm your Directors & Officers liability policy covers defense costs for criminal allegations, as the new penalty for false certification falls under the Penal Code.
  • Prepare Provisional Values: By Q4 2025, have a firm estimate of asset value. If you are borderline ($120k-$130k), plan to file a full rendition to avoid the risk of a false certification charge.
  • Monitor November 2025 Election: Implementation is strictly contingent on voters approving HJR 1. If it fails, standard taxation applies.

Operational Changes Required

Contracts

  • Triple Net (NNN) Leases: Tenants must audit CAM charges to ensure landlords receiving this exemption are passing through the tax savings and not billing for BPP taxes they no longer pay.
  • Tax Consultant Agreements: Renegotiate scopes of work. If your assets are clearly under $125,000, you should pay for a simple certification filing, not a complex rendition schedule.
  • Franchise Agreements: Franchisors must update manuals to define how franchisees report assets, specifically regarding equipment owned by the franchisor but located at the franchisee's site.

Hiring/Training

  • Signatory Risk: CFOs and Controllers must be trained on the new criminal liability (Class A Misdemeanor/State Jail Felony) for false statements.
  • Entity Mapping: Finance teams must be trained to identify "Related Business Entities" (common enterprise at the same address) rather than treating legal entities as siloes.

Reporting & Record-Keeping

  • Internal Valuation: You can no longer rely on the Appraisal District to set value. You must maintain internal depreciation schedules proving your "reasonable belief" that assets are under $125,000 to defend against audits.
  • New Certification: Eligible businesses must file a specific statement certifying value is under the limit, rather than a line-item asset list.
  • Aggregation Records: Documentation proving which entities are—and are not—part of a "common business enterprise" must be maintained for inspection.

Fees & Costs

  • Tax Savings: Elimination of BPP tax liability for aggregated assets under $125,000.
  • Admin Costs: Minimal increase in internal administrative time to verify "Related Business Entity" status.

Strategic Ambiguities & Considerations

  • The $125,000 vs. $250,000 Discrepancy: The Fiscal Note analyzes a $250,000 exemption, but the statutory text explicitly states $125,000. You must operationally plan for the $125,000 limit until a technical correction is passed.
  • "Common Business Enterprise": The statute does not strictly define what constitutes a "common business enterprise" for aggregation. Appraisal Districts may aggressively interpret shared payroll, management, or breakrooms as grounds to force aggregation and deny exemptions.
  • Leased Property Situs: The interaction between the exemption for leased property (Section 11.145(d)) and the aggregation rules is unclear. Watch for Comptroller rules clarifying how leasing companies report assets across multiple client locations.

Need Compliance Guidance on This Legislation?

JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Feb 24, 2025
Passed House
Apr 3, 2025
Passed Senate
May 14, 2025
Signed
Jun 12, 2025
Effective
Jun 12, 2025
TopicsBusiness & CommerceBusiness & Commerce--generalCity GovernmentCity Government--employees/officersCounty GovernmentCounty Government--employees/officersProperty InterestsProperty Interests--personal PropertyTaxationTaxation--property-appraisals & Appraisal DistrictsTaxation--property-exemptionsTaxation--school DistrictCounty Tax Assessor-collectorsTaxation--property-tax Rate
03

House Authors

Rep. Morgan MeyerRepublican · Primary Author
Joint Authors
Coauthors (72)

Senate Sponsors

Sen. Paul BettencourtRepublican · Primary Sponsor
Cosponsors (11)

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

Explore more bills from this author and on related topics

More from Rep. Morgan Meyer

View all bills by Rep. Morgan Meyer

Related by Topic

View more Business & Commerce legislation
Quick Reference

Frequently Asked Questions

Common questions about HB9

Q

What does Texas HB9 do?

HB9 creates a conditional exemption from ad valorem taxation for Business Personal Property (BPP) valued under $125,000, effective January 1, 2026, contingent on voter approval. This legislation shifts the compliance burden from financial payment to strict asset reporting; businesses must now aggregate values across "Related Business Entities" at shared locations, with criminal penalties attached to incorrect certifications.

Q

Who authored HB9?

HB9 was authored by Texas Representative Morgan Meyer during the Regular Session.

Q

When was HB9 signed into law?

HB9 was signed into law by Governor Greg Abbott on June 12, 2025.

Q

Which agencies enforce HB9?

HB9 is enforced by County Appraisal Districts (Chief Appraisers), County Tax Assessor-Collectors and Texas Comptroller of Public Accounts.

Q

How significant are the changes in HB9?

The regulatory priority for HB9 is rated as "critical". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of HB9?

The cost impact of HB9 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does HB9 address?

HB9 addresses topics including business & commerce, business & commerce--general, city government, city government--employees/officers and county government.

Q

What are the key dates for HB9?

Key dates for HB9: Effective date is 2025-06-12. Rulemaking: Must prescribe or approve updated rendition forms that include: 1) A checkbox for 'Related Business Entities', and 2) A certification box for owners electing not to render because they claim the exemption. (Prior to 2026 Tax Year (Jan 1, 2026)); Must prepare provisional appraisal rolls and tax bills accounting for the potential passage o

Q

What are the penalties under HB9?

HB9 establishes the following penalties: criminal penalty of Class A Misdemeanor or State Jail Felony for Making a false statement on the new rendition form certification regarding the value of property or 'Related Business Entity' status (per Section 37.10, Penal Code).. Consult with legal counsel for specific applicability to your situation.

Q

Which Texas businesses are affected by HB9?

HB9 primarily affects Texas businesses and commercial enterprises, property owners and real estate professionals. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026