Some Questions and Answers Concerning the Freeport Exemption

Business personal property that is only located in Texas for a temporary period of time (less than 175 days) is considered freeport goods. Depending on the taxing jurisdiction where a business is located, such goods may qualify for the freeport exemption allowed by the Texas Constitution and the Texas Tax Code.

However, the freeport exemption appears to be one tax reduction opportunity most overlooked by business owners.

Freeport goods consist of personal property that is "acquired in or imported into" Texas to be forwarded to a location outside of Texas. The key qualification requirements are that the property must be in Texas for the purpose of "assembling, storing, manufacturing, processing, or fabricating" by the taxpayer and that the property must exit Texas within 175 days after the acquisition or import of the property.

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PROPERTY TAX TIP

Certification Date is Deadline for Some Filings

Appraisal review boards are required to certify each county's appraisal roll no later than July 20, though property tax accounts still under administrative protest may be excepted from certification until a later date.

The date that the primary roll is certified is also the deadline for the filing of a good cause hearing relating to a late-filed protest under Chapter 41 of the Tax Code. Furthermore, the certification date is the deadline to file late freeport exemption applications and late applications for special valuation of agricultural land, open space land, and timber land. A late application for special appraisal incurs a 10 percent penalty if the application is granted.

It is important to remember that July 20 is the last day on which the review board can approve the roll, but there is nothing that prevents an earlier certification. It is the certification date and not July 20 that is the deadline for the good cause and late applications described above.

Upcoming deadlines

July 20
Deadline for review board to hear substantially all protests and approve appraisal records

Certification Date
The date on which the review board certifies the appraisal records (with a deadline of July 20) is also the deadline to file a good cause motion on a late protest and the deadline to file some exemption and special appraisal applications

July 31
Deadline to file for September 1 inventory valuation