The $125,000 Texas business personal property exemption, explained
Texas now exempts up to $125,000 of business personal property per location. Here is how it is counted, who still has to file, and why multi-location businesses benefit most.
- Up to $125,000 of income-producing personal property is exempt at each separate location in a taxing unit.
- It applies from the 2026 tax year onward. It replaced the old $2,500 threshold.
- Below $125,000, you can skip the full rendition but must file a short certification.
Where it came from
House Bill 9, passed by the Texas Legislature in 2025, raised the business personal property exemption from $2,500 to $125,000. Because it changes what the Texas Constitution allows, it took effect only after voters approved a constitutional amendment in November 2025. It applies to tax years beginning January 1, 2026.
How the $125,000 is counted
The exemption is applied per location, per taxing unit. The law adds up all the property you hold or use at each separate location in a taxing unit and tests that total against $125,000. A business with ten stores in one county can get the exemption ten times, once per store.
A few rules matter in practice:
- Leased locations: property you lease to others gets its own exemption in each taxing unit.
- Property stored elsewhere: property kept at a site you neither own nor lease can get a separate exemption.
- Related businesses at one address are combined, so splitting one store into several entities does not multiply the exemption.
- It is not a deduction from a larger value. If a location is worth $300,000, the first $125,000 is exempt and the rest is taxed.
Do you still have to file?
If you reasonably believe a location’s property is worth less than $125,000, you do not have to file a full rendition for it. You must still file a rendition statement or property report that includes a certification saying so. The election stays in effect until ownership changes, and the chief appraiser can still require a full rendition.
Above $125,000, nothing changes: file a full rendition by April 15, or by May 15 with a written extension request. See our 2027 deadline guide.
Why the number on your register matters more now
With a $125,000 line per location, the value you report decides whether a location owes anything at all. A register that still carries a replaced fryer bank, a returned lease or a built-in cooler that belongs to the building can push a location over the line. Removing ghost assets used to trim a bill. Now it can erase one.
A worked example
| Restaurant location | On the register | After cleanup |
|---|---|---|
| Kitchen equipment in use | $98,000 | $98,000 |
| Fryer bank replaced in 2024 | $31,000 | Removed |
| Leased POS terminals (lessor reports) | $12,000 | Removed |
| Built-in walk-in cooler (real property) | $22,000 | Removed |
| Reported value | $163,000 | $98,000 |
| Taxable after exemption | $38,000 | $0 |
Illustrative figures for one location. Actual values depend on each appraisal district’s depreciation schedules and your records.
How Reserve handles it
Levy, Reserve’s agentic AI, tests every Texas location against the $125,000 line after cleaning the register, then prepares either the certification or the full rendition. A Reserve Tax Group professional reviews it, you approve it, and Reserve Tax Group files it. See business personal property at Reserve.
Sources
- Texas Legislature, House Bill 9 (89th Legislature), enrolled text
- Bexar Appraisal District, what is new in BPP (HB 9, HB 3424, SB 1352)
This article is general information, not tax or legal advice. Rules and deadlines change and vary by county. Check with the appraisal district or assessor, or ask us, before you file.
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