January 2018 – Changes in 2018 Rendition of Business Personal Property in Texas

From 2018 reporting year, there are some important changes in rendition of business personal property (“RBPP”) in Texas State. Followings are summary of key points.

What kinds of property must be rendered?

You must render the property if all conditions below are met:
– You own the property as of Jan 1st, 2018
– The property is physically located in Texas
– You use the property to produce income or for business purposes
– The total value of property is $500 or more

Property to be rendered includes inventory, furniture, fixture, computer, machine, equipment. You are not required to render house/leasehold improvements and intangible property (software, goodwill, etc.).

For inventory, if a part of it will be sold to customers outside Texas, you can request tax exemption for that part. In this case you must submit a Freeport Exemption application to the appraisal county. You should consult a CPA about the Freeport Exemption calculation and application in order to get the best result.

When is the due date?

The due date for filing RBPP is April 1st, 2018. If you cannot complete the RBPP by this due date, you must file an extension by April 1st, 2018 and the due date will be extended to May 1st, 2018.

How to file the RBPP?

There are two ways to file:
– Mail the RBPP to your county office; or
– File it online if you have an iFile number. You can find the iFile number on the notice sent from the county at the beginning of the year.

What are penalties for failure to comply?

If you fail to file the RBPP by the due date, you will receive a penalty equal to 10% of the taxes ultimately imposed on the property. If you commit fraud or do other acts with the intent to evade taxes, you will get a penalty equal to 50% of the taxes ultimately imposed on the property.

In some cases RBPP may be simple, but in other cases it can be very time-consuming and costly if the business owner does not understand the rules or is not aware of changes in regulations. Therefore, it is a good practice to consult with your CPA every year about the RBPP.