SB1352

Regular Session

Relating to the deadline for filing an application for certain ad valorem tax exemptions or allocations and the calculation of the penalty for filing a late application for such an exemption or allocation.

ModeratePlan for compliance

Low Cost

Effective:2025-09-01

Enforcing Agencies

County Appraisal Districts (Chief Appraisers) • Local Taxing Units

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: September 1, 2025.
Compliance Deadline: April 1, 2026. This is the operational deadline to request a Rendition extension for the 2026 tax year, which is the trigger required to utilize the new automatic extension for exemption filings.
Agency Rulemaking: The Texas Comptroller is not required to issue new rules, but County Appraisal Districts (CADs) must update their internal software and compliance matrices before January 1, 2026, to recognize the linked deadlines.

Immediate Action Plan

1. Update 2026 Tax Calendar: Move the internal deadline for Freeport and Allocation data collection to align with the May 15 Rendition extension date.
2. Audit Consultant Scopes: Ensure your external tax agent's Scope of Work explicitly requires them to file the Rendition Extension request to trigger the Exemption extension.
3. Establish Proof Protocols: Mandate that the Rendition Extension approval letter be saved in the permanent tax file for the corresponding asset year.
4. Review Pending Litigation: Note that this law is not retroactive. Do not attempt to apply these penalty caps to disputes regarding tax years prior to 2026.

Operational Changes Required

Contracts

Third-Party Tax Consultants: Renegotiate Master Service Agreements (MSAs) immediately. If fee structures are based on "penalty avoidance" or a percentage of "tax savings," the value of these services has decreased due to the statutory penalty cap.
Triple Net (NNN) Leases: Landlords must review lease terms to ensure the new, lower administrative penalties can still be passed through to tenants if the penalty results from tenant delays in reporting inventory data.

Hiring/Training

Cross-Departmental Synchronization: Finance teams (handling Renditions) and Tax/Legal teams (handling Exemptions) must be integrated. Staff must be trained that obtaining a Rendition extension now creates a mandatory legal extension for Exemption filings.
"Good Cause" Documentation: Compliance officers must be trained to document operational failures (e.g., IT outages, records destruction) immediately to support potential "good cause" extension requests.

Reporting & Record-Keeping

Affirmative Defense File: You must retain the written Rendition Extension Approval (Section 22.23(b)) physically and digitally. This document must be attached to any Exemption application filed between May 1 and May 15 to force CAD acceptance.
Forms: Utilize Form 50-113 (Freeport) and Form 50-144 (Allocation). No new forms are mandated, but cover letters must now reference the Rendition extension.

Fees & Costs

Penalty Reduction: The law eliminates the risk of penalties exceeding the tax bill itself. Penalties are now capped at the lesser of 10% of the tax savings or 10% of the tax imposed.
Budgeting: Adjust reserve funds for tax disputes downward for the 2026 cycle due to the lowered liability cap.

Strategic Ambiguities & Considerations

The "Automatic" Link: The law requires an automatic extension for Exemptions if a Rendition extension is granted. However, CAD software systems are often siloed. There is a high risk that the Exemption department will not see the Rendition extension and will erroneously flag filings as late.
"Good Cause" Definition: The statute allows further extensions (60 days for Freeport, 30 for Allocation) for "good cause," but leaves the definition to the Chief Appraiser's discretion. Expect strict interpretation from major CADs (Harris, Dallas, Tarrant); do not rely on this as a standard operating procedure.

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Legislative Timeline

This bill's path through the Texas Legislature

TopicsTaxation Taxation--property-appraisals & Appraisal Districts Taxation--property-assessment & Collection Taxation--property-exemptions

Official Analysis

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BILL ANALYSIS

Senate Research Center	S.B. 1352
89R3710 MLH-F	By: Hinojosa, Adam
	Local Government
	3/14/2025
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Current law imposes a penalty for late interstate allocation and freeport exemption applications equal to 10 percent of the difference between the tax imposed with and without the exemption. This has resulted in penalties significantly exceeding the tax liability, including cases where a $20,000 tax liability incurred a $1 million penalty.

Personal property tax returns receive an automatic extension to May 15 upon request, but interstate allocation and freeport exemption applications require a separate request with demonstrated good cause. This proposal caps late penalties at 10 percent of the tax imposed (with the exemption) and automatically extends the filing deadline to May 15 when the personal property tax return extension is granted.

As proposed, S.B. 1352 amends current law relating to the deadline for filing an application for certain ad valorem tax exemptions or allocations and the calculation of the penalty for filing a late application for such an exemption or allocation.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 11.43, Tax Code, by adding Subsection (d-1) as follows:

(d-1)� Requires the chief appraiser, if the chief appraiser extends the deadline for a property owner to file a rendition statement or property report to May 15 under Section 22.23(b) (relating to requiring the chief appraiser to extend a deadline for filing a rendition statement or property report to May 15), to also extend the deadline for the property owner to file an application for an exemption under Section 11.251 (Tangible Personal Property Exempt) to May 15. Authorizes the chief appraiser, for good cause shown, to further extend the deadline for filing an exemption application by written order for a single period not to exceed 60 days from the deadline prescribed by Subsection (d) (relating to requiring a person required to claim an exemption to file a completed exemption application form before May 1 and to furnish the information required by the form).

SECTION 2. Amends Section 11.4391(b), Tax Code, as follows:

(b)� Provides that, if the application for an exemption for freeport goods is approved, the property owner is liable to each taxing unit allowing the exemption for a penalty in an amount equal to the lesser of:

(1) creates this subdivision from existing text and makes a nonsubstantive change; or

(2)� 10 percent of the amount of tax imposed by the taxing unit on the inventory or property, a portion of which consists of freeport goods.

SECTION 3. Amends Section 21.09, Tax Code, by adding Subsection (b-1), as follows:

(b-1)� Requires the chief appraiser, if the chief appraiser extends the deadline for a property owner to file a rendition statement or property report to May 15 under Section 22.23(b), to also extend the deadline for the property owner to file an allocation application form to May 15. Requires the chief appraiser, for good cause shown, to further extend the deadline for filing an allocation application form by written order for a period not to exceed 30 days from the deadline prescribed by Subsection (b) (relating to relating to requiring a person claiming an allocation to apply for the allocation each year the person claims the allocation).

SECTION 4. Amends Section 21.10(b), Tax Code, as follows:

(b)� Provides that, if the application for an allocation under Section 21.09 (Allocation Application) is approved, the property owner is liable to each taxing unit for a penalty in an amount equal to the lesser of:

(1)� creates this subdivision from existing text and makes a nonsubstantive change; or

(2)� 10 percent of the amount of tax imposed by the taxing unit on the property with the allocation.

SECTION 5. Makes application of Section 11.43(d-1), Tax Code, as added by this Act, and Section 11.4391(b), Tax Code, as amended by this Act, prospective.

SECTION 6. Makes application of Section 21.09(b-1), Tax Code, as added by this Act, and Section 21.10(b), Tax Code, as amended by this Act, prospective.

SECTION 7. Effective date: September 1, 2025.

Senate Authors

Sen. Adam HinojosaRepublican · Primary Author

House Sponsor

Rep. Giovanni CapriglioneRepublican · Primary Sponsor

Bill Text(with markup)

S.B. No. 1352

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	AN ACT
	relating to the deadline for filing an application for certain ad
	valorem tax exemptions or allocations and the calculation of the
	penalty for filing a late application for such an exemption or
	allocation.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Section 11.43, Tax Code, is amended by adding
	Subsection (d-1) to read as follows:
	(d-1) If the chief appraiser extends the deadline for a
	property owner to file a rendition statement or property report to
	May 15 under Section 22.23(b), the chief appraiser shall also
	extend the deadline for the property owner to file an application
	for an exemption under Section 11.251 to May 15. For good cause
	shown, the chief appraiser may further extend the deadline for
	filing an exemption application by written order for a single
	period not to exceed 60 days from the deadline prescribed by
	Subsection (d).
	SECTION 2. Section 11.4391(b), Tax Code, is amended to read
	as follows:
	(b) If the application is approved, the property owner is
	liable to each taxing unit allowing the exemption for a penalty in
	an amount equal to the lesser of:
	(1) 10 percent of the difference between the amount of
	tax imposed by the taxing unit on the inventory or property, a
	portion of which consists of freeport goods, and the amount that
	would otherwise have been imposed; or
	(2) 10 percent of the amount of tax imposed by the
	taxing unit on the inventory or property, a portion of which
	consists of freeport goods.
	SECTION 3. Section 21.09, Tax Code, is amended by adding
	Subsection (b-1) to read as follows:
	(b-1) If the chief appraiser extends the deadline for a
	property owner to file a rendition statement or property report to
	May 15 under Section 22.23(b), the chief appraiser shall also
	extend the deadline for the property owner to file an allocation
	application form to May 15. For good cause shown, the chief
	appraiser shall further extend the deadline for filing an
	allocation application form by written order for a period not to
	exceed 30 days from the deadline prescribed by Subsection (b).
	SECTION 4. Section 21.10(b), Tax Code, is amended to read as
	follows:
	(b) If the application is approved, the property owner is
	liable to each taxing unit for a penalty in an amount equal to the
	lesser of:
	(1) 10 percent of the difference between the amount of
	tax imposed by the taxing unit on the property without the
	allocation and the amount of tax imposed on the property with the
	allocation; or
	(2) 10 percent of the amount of tax imposed by the
	taxing unit on the property with the allocation.
	SECTION 5. Section 11.43(d-1), Tax Code, as added by this
	Act, and Section 11.4391(b), Tax Code, as amended by this Act, apply
	only to an application for an exemption for freeport goods under
	Section 11.251, Tax Code, filed on or after the effective date of
	this Act.
	SECTION 6. Section 21.09(b-1), Tax Code, as added by this
	Act, and Section 21.10(b), Tax Code, as amended by this Act, apply
	only to an application for an allocation under Section 21.09, Tax
	Code, filed on or after the effective date of this Act.
	SECTION 7. This Act takes effect September 1, 2025.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


March 15, 2025

TO:	Honorable Paul Bettencourt, Chair, Senate Committee on Local Government

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	SB1352 by Hinojosa, Adam (Relating to the deadline for filing an application for certain ad valorem tax exemptions or allocations and the calculation of the penalty for filing a late application for such an exemption or allocation.), As Introduced

No fiscal implication to the State is anticipated.

The bill would require that if the chief appraiser extends the deadline for a property owner to file a rendition statement or property report to May 15, the chief appraiser is required to extend the deadline for the property owner to file an application for a freeport exemption to May 15. For good cause shown, the chief appraiser could further extend the deadline for filing an exemption application by written order for a single period not to exceed 60 days.

The bill would modify the penalty for a late filed application for freeport exemption. The property owner would be liable to each taxing unit allowing the exemption a penalty in an amount equal to the lesser of 10 percent of the difference between the amount of tax imposed by the taxing unit on the inventory or property, a portion of which consists of freeport goods, and the amount that would otherwise have been imposed, or 10 percent of the amount of tax imposed by the taxing unit on the inventory or property, a portion of which consists of freeport goods.

The bill would require that if the chief appraiser extends the deadline for a property owner to file a rendition statement or property report to May 15, the chief appraiser is required to extend the deadline for the property owner to file an allocation application to May 15. For good cause shown, the chief appraiser could further extend the deadline for filing an exemption application by written order for a single period not to exceed 30 days.

The bill would modify the penalty for a late filed allocation application. The property owner would be liable to each taxing unit a penalty in an amount equal to the lesser of 10 percent of the difference between the amount of tax imposed by the taxing unit on the property without the allocation and the amount of tax imposed on the property with the allocation or 10 percent of the amount of tax imposed by the taxing unit on the property with the allocation.

Local Government Impact

The bill would direct the chief appraiser to extend the filing deadlines for a freeport exemption or an allocation application if the chief appraiser extends the deadline for filing a rendition statement to May 15. The bill would revise the determination of the applicable late fee associated with a late filed application for a freeport exemption or allocation.

The change in the penalty structure could result in a reduction in penalty fees collected by units of local government.

Source Agencies:

304 Comptroller of Public Accounts

LBB Staff:

JMc, SZ, SD, BRI

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Frequently Asked Questions

Common questions about SB1352

What does Texas SB1352 do?

SB1352 fundamentally alters property tax compliance for Texas businesses holding interstate inventory or assets by synchronizing the filing deadlines for Freeport Exemptions and Interstate Allocations with your Business Personal Property (BPP) Rendition extensions. Effective for the 2026 tax year, this legislation also caps late-filing penalties at the lesser of 10% of the tax savings or 10% of the actual tax imposed, significantly reducing financial exposure for logistics, manufacturing, and transportation sectors. Implementation Timeline Effective Date: September 1, 2025.

Who authored SB1352?

SB1352 was authored by Texas Senator Adam Hinojosa during the Regular Session.

When was SB1352 signed into law?

SB1352 was signed into law by Governor Greg Abbott on June 20, 2025.

Which agencies enforce SB1352?

SB1352 is enforced by County Appraisal Districts (Chief Appraisers) and Local Taxing Units.

How urgent is compliance with SB1352?

The compliance urgency for SB1352 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of SB1352?

The cost impact of SB1352 is estimated as "low". This may vary based on industry and implementation requirements.

What topics does SB1352 address?

SB1352 addresses topics including taxation, taxation--property-appraisals & appraisal districts, taxation--property-assessment & collection and taxation--property-exemptions.

Legislative data provided by LegiScanLast updated: November 25, 2025

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