HomeMy WebLinkAboutPublic Hearing to Tax Goods
Public Hearing to Tax Goods-in-Transit In 2007, the 80th Texas Legislature enacted Texas Tax Code § 11.253 (House Bill 621) which implemented the goods-in-transit exemption authorized
by Texas Constitution, Art. 8 section 1-n. That bill defined “goods-in-transit”, in part, as tangible personal property detained in a location in this state whose owner did not have
direct or indirect ownership of the facility at which the property was assembled, stored, manufactured, processed, or fabricated. On October 9, 2007, the City Council adopted Resolution
07-240 which authorized the continued taxing of this property. The 82nd Legislature has now enacted Senate Bill 1, amending § 11.253 and, through that amendment, has narrowed the definition
of “goods-in-transit.” The amendment is effective October 1, 2011 and it applies to tax years 2012 and subsequent. The only exemption now authorized relates strictly to those goods being
stored. Senate Bill 1 redefines “goods-in-transit” as it relates to the property tax exemption, as tangible personal property that is stored under contract of bailment at a public warehouse
operator at one or more public warehouse facilities in Texas that are not in any way owned or controlled by the owner of the personal property. Senate Bill 1, under the new subsection
(j-1) of Section 11.253, also requires that if a taxing unit wishes to tax the newly defined goods-in-transit, then it must take affirmative action do so, even if the taxing unit previously
acted under House Bill 621 back in 2007. The governing body of a local taxing entity may elect to tax goods-in-transit, but only after holding a public hearing for the purpose of providing
our taxpayers the opportunity to express their opinion on the subject. This is the purpose of the public hearing this morning. If the City of Port Arthur chooses to tax goods-in-transit
for the tax year 2012 and subsequent years, the Council must act no sooner than October 1, 2011 and no later than December 31, 2011. If the City elects to tax goods-in-transit, those
goods will remain taxable until the governing body takes action to rescind or repeal its previous action and grant the exemption