TITLE 34. PUBLIC FINANCE

PART 1. COMPTROLLER OF PUBLIC ACCOUNTS

CHAPTER 9. PROPERTY TAX ADMINISTRATION

SUBCHAPTER C. APPRAISAL DISTRICT ADMINISTRATION

34 TAC §9.419

The Comptroller of Public Accounts adopts amendments to §9.419, concerning procedures for determining property tax exemptions for motor vehicles leased for personal use, without changes to the proposed text as published in the April 23, 2021, issue of the Texas Register (46 TexReg 2701). The rule will not be republished. The comptroller adopts amendments to implement statutory requirements and new legislation.

The amendments change the heading of §9.419 from "Procedures for Determining Property Tax Exemption for Motor Vehicles Leased for Personal Use" to "Property Tax Exemption for Certain Leased Motor Vehicles".

The amendments delete subsection (a) prescribing the effective date of the rule as redundant with the legislation enacting Tax Code, §11.252 and unnecessary as the subsection states the section is effective for motor vehicles leased on or after January 2, 2001, approximately nineteen years ago.

The amendments re-letter subsequent subsections.

The amendments to re-lettered subsection (a)(1), prescribing the definition of a lease, comply with Tax Code, §11.252(h) and conform to the definition of a lease in Tax Code, §152.001(6).

The amendments to re-lettered subsection (a)(2), prescribing the definition of a lessee, conform with the definition of a lease under re-lettered subsection (a)(1).

The amendments to re-lettered subsection (a)(3), prescribing the definition of a lessor, conform with the definition of a lease under re-lettered subsection (a)(1).

The amendments to re-lettered subsection (a)(4), prescribing the definition of a Lessee's Affidavit, conform the language to newly amended Tax Code, §11.252.

The amendments to re-lettered subsection (a)(6), prescribing the definition of reasonable time, provide more concise language.

The amendment to re-lettered subsection (b)(1) delete the word "model" from the description of forms in the section.

The amendments to re-lettered subsection (b)(1)(A) conform the title of the Lessee's Affidavit to the language of newly amended Tax Code, §11.252.

The amendment to newly re-lettered subparagraph (b)(1)(B) changes the title of Form 50-288 from "Lessor's Rendition or Property Report for Leased Automobiles" to "Lessor's Rendition or Property Report Leased Automobiles".

Re-lettered subsection (b)(2) adds lessees to the parties required to use the comptroller's forms adopted by reference in the section, and states that the forms are available from the Comptroller of Public Accounts Property Tax Assistance Division. The amended forms may be viewed at comptroller.texas.gov/taxes/property-tax/rules/index.php. The comptroller amends subsection (b)(2) to amend subparagraph (A) to replace the word "model" with the word "comptroller" in reference to the forms. The comptroller further amends subsection (b)(2) to amend subparagraph (B) to replace the word "comptroller's model" with the word "comptroller" in reference to the forms.

The amendments to re-lettered subsection (b)(3) eliminate unnecessary language in order to make the subsection more concise, and add language to conform to newly amended language in Tax Code, §11.252

The amendment to re-lettered subsection (b) removes paragraph (4) as a redundant provision.

The amendments re-numbers subsequent paragraphs.

The amendments re-letter and re-number paragraph (4) to add the statutory authority for chief appraisers to enter into agreements for the electronic exchange of information under Tax Code, §1.085 and confirm that nothing in the section should be construed to limit that authority.

The amendments add new paragraph (5) to clarify that nothing in the section is to be construed to limit the electronic execution of documents according to the laws of the State of Texas.

New subsection (c) adopts appropriate procedures and requirements for a lessee's affidavit in connection with the appropriate procedures and exemption application requirements of this section to determine if a motor vehicle subject to a lease qualifies for exemption under Tax Code, §11.252.

New paragraph (1) complies with the language of Tax Code, §11.252, to require that a lessee must not hold a motor vehicle subject to a lease for the production of income, and that the motor vehicle must be used primarily for activities that do not include the production of income.

The amendments add new paragraph (2), subparagraphs (A), (B) and (C), and clauses (i) and (ii) to comply with newly amended language in Tax Code, §11.252 concerning the presumption of use primarily for motor vehicles that are not involved in the production of income

The amendments delete subsection (d).

The amendments add new subsection (d) to prescribe the use of the Lessor's Rendition or Property Report Leased Automobiles (Form 50-288) to be used by the lessor to report each leased vehicle owned and whether the lessee has designated the vehicle as not held for the production and not used for the production of income in accordance with Tax Code, §11.252(i).

The amendments add new paragraphs (1)(A), (1)(B), (1)(C) and (1)(D) to require on the lessor report: the year, make, model and vehicle identification number of each leased vehicle; the name of the lessee and address at which the leased vehicle is kept; whether the lessee has designated the vehicle as not held for the production and not used for the production of income; and whether the lessor maintains a lessee's affidavit, electronic image of the lessee's affidavit, or a certified copy of the lessee's affidavit for the leased vehicle.

The amendments add new paragraph (2) to require that the lessor provide the Lessor's Rendition or Property Report Leased Automobiles (Form 50-288) to the chief appraiser in the manner provided by subchapter B, Chapter 22, Tax Code in accordance with Tax Code, §11.252(j).

The amendments add new paragraph (3) to prescribe that the lessor must use the Lessor's Rendition or Property Report Leased Automobiles (Form 50-288) to render each leased vehicle reported on the Lessor's Exemption Application Motor Vehicles Leased for Use Other than Production of Income (Form 50-286) for which the lessor does not maintain a lessee's affidavit, an electronic image of a lessee's affidavit, or a certified copy of a lessee's affidavit.

The amendments add new subsection (e) to require that the lessor to submit the Lessor's Exemption Application Motor Vehicles Leased for Use Other than Production of Income (Form 50-286) to the chief appraiser in order to apply for the exemption available under Tax Code, §11.252.

The amendments delete subsection (f). Tax Code, §11.252 does not provide authority for the lessee's affidavit to be prima facie evidence of qualification for a motor vehicle to be exempt and Tax Code, §11.252 does not authorize a limit or expansion on the chief appraiser's discretion under Tax Code, §11.43 and §11.45 in considering evidence of an exemption.

The amendments delete subsections (g) and (h). Tax Code, §11.252 does not authorize a limit or expansion on a chief appraiser's authority for review and action on an exemption application. The review and action on the exemption application is authorized for chief appraisers under Tax Code, §11.43 and §11.45.

The amendments re-letter subsequent subsections.

The amendments to re-lettered subsection (f) adds the language "...electronic images of the affidavits, or certified copies of the affidavits... " to subparagraph (A), (B) & (C) to conform to newly amended language in Tax Code, §11.252 and to combine with existing paragraph (1).

The amendments re-number existing subparagraphs A, B, C, and E to new paragraphs numbered 1 - 4.

The amendments delete subparagraph (D) as unnecessary and redundant language with subsection (b) of the section.

The amendment to re-lettered subparagraph (D) adds the language "...electronic images of the affidavits, or certified copies of the affidavits...".

The amendments delete re-numbered paragraph (2) as the exemption is for the lessor of a qualifying motor vehicle under lease and the chief appraiser has discretionary authority under Tax Code, §11.45 to act on an application for exemption and Tax Code, §11.252 does not provide separate or additional authority for a chief appraiser to request information from the lessees.

The amendment to re-lettered subsection (g) changes the title of Form 50-286 from "Lessor's Application for Personal Use Lease Automobile Exemptions" to "Lessor's Exemption Application Motor Vehicles Leased for Use Other than Production of Income (Form 50-286)".

The comptroller did not receive any comments regarding adoption of the amendment.

The comptroller adopts the amendments under Tax Code, §11.252 (Motor Vehicles Leased for use Other than Production of Income) which requires the comptroller to adopt procedural rules to establish exemption application requirements, appropriate procedures to determine whether a motor vehicle subject to a lease qualifies for an exemption under the section, adoption of a form to be completed by lessees for use by lessors in application for the exemption, and the prescription of a property report form to be used by owners of vehicles subject to a lease.

The comptroller further adopts the amendments under Tax Code, §22.24 (Rendition and Report Forms) which authorizes the comptroller to prescribe and approve forms for the rendition and reporting of property.

These amendments implement Tax Code, §11.252 (Motor Vehicles Leased for Use Other than Production of Income).

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on June 1, 2021.

TRD-202102140

Victoria North

General Counsel for Fiscal and Agency Affairs

Comptroller of Public Accounts

Effective date: June 21, 2021

Proposal publication date: April 23, 2021

For further information, please call: (512) 475-2220