Ad Valorem Taxation of Certain Stored Property
Senate Bill 1, passed by the 82nd Legislature, made comprehensive changes to the goods-in-transit exemption. “Goods-in-transit” consist of tangible personal property stored under a contract of bailment in a public warehouse that is not owned or controlled by the owner of the personal property for 175 days or less.
Senate Bill 1 states that a governing body may not tax goods-in-transit for a tax year that begins on or after Jan. 1, 2012 unless this governing body:
- takes official action to tax the property on or after Oct. 1, 2011,
- conducts a public hearing as required by the Texas Constitution, Article VIII, Section 1-n(d), and
- takes official action to tax the property before Jan. 1 of the first tax year in which the property is to be taxed.
Goods-in-transit made subject to taxation remain so until the taxing unit rescinds or repeals its previous action to tax the property. Under certain circumstances, a taxing unit that has pledged taxes to the payment of debt may continue to tax goods-in-transit if the taxing unit took action to tax such property before Oct. 1, 2011.
Taxing units should consult with legal counsel about the new law, its implications, and whether they should take official action by a certain date.
Senate Bill 1, 82nd Legislature, 1st Call Session
Goods-In-Transit Application Form
The Application for Exemption of Goods-In-Transit is available from the Comptroller of Public Accounts.
For additional information, contact:
Division of State Funding