AUSTIN (March 3, 2025) – NFIB State Director Jeff Burdett testified before the Texas House Ways & Means Committee in favor of HB 9, which would raise the personal property tax (also known as the inventory tax) exemption for businesses to $250,000, up from $2,500.

CLICK HERE to watch Burdett’s testimony (begins around the 1:28:38 mark)

In his prepared testimony, Burdett describes the cost and administrative burden of the tax on small business owners.

“When I talk with small business owners across the state, the number one issue that comes up is frustration with the Business Personal Property Tax (BPPT). If you were to take a small business, turn it upside down, and shake it, everything that falls out is subject to the BPPT. […] Due to the small $2500 exemption, virtually all business owners pay it now.

“In addition to the cost, there is also a substantial administrative burden associated with the tax. The county assessor process is burdensome – especially for small business owners. Many times, it is incumbent on the business owner to fight the appraisals, which is a time-consuming and costly process.”

CLICK HERE to watch Burdett’s testimony (begins around the 1:28:38 mark)

Background:

Texas is one of only nine states that taxes businesses on their inventory. This tax applies to anything used in the production of income, including inventory, furniture, machinery, supplies, and more – regardless of whether a business nets a profit.

NFIB has long supported efforts to increase the inventory tax exemption or completely repeal this regressive tax. In 2021, the legislature increased the exemption from $500 to $2,500, the first increase since 1995.