Many states assess a personal property tax on certain items of personal property such as motor vehicles, boats, and aircraft. Business personal property taxes—taxes on tangible personal property items that are used to produce income—are often referred to as ad valorem taxes.
In Texas, personal property tax is primarily assessed at the local level, with counties, cities, school districts, and special districts having the authority to levy taxes on tangible personal property. This includes motor vehicles, boats, aircraft, and business personal property that is used to produce income. The tax is considered an ad valorem tax, meaning it is based on the value of the property. Business personal property, which encompasses items such as equipment, machinery, furniture, and inventory, is subject to taxation if it is used for the production of income. Tax rates and exemptions can vary by jurisdiction within the state. Texas does not have a state property tax, but the state does impose strict guidelines and procedures for the appraisal and assessment of property taxes at the local level to ensure uniformity and fairness.
