Inventory Tax
Treatment: Fully taxed
Inventory is part of the business personal property tax base and is assessed locally by appraisal district.
Freeport Exemption
Texas Tax Code §11.251. It is a local option — individual taxing units, counties and school districts each choose whether to grant it, which is why a 'triple freeport' jurisdiction (all three granting it) is marketed as an advantage. The owner of the goods has no direct or indirect ownership of the facility where the goods are stored. A separate Goods-in-Transit exemption exists with its own rules.
Holding period: Goods must leave Texas within 175 days of acquisition or import
Local option — adoption varies by county or municipality.
Assessment date: January 1
Filing: Annual rendition, generally due 15 April, with earlier dates and written extensions varying by appraisal district — confirm locally.
Indicative county rate range: 0.37%–2.58% of assessed value. Actual rates are set locally; confirm with the county assessor.
Exclusions: Oil, natural gas and petroleum products are not freeport goods and stay taxable.
Assessment & Filing
Assessment date: January 1
Business personal property renditions are due April 15. A written request filed by April 15 extends the deadline to May 15; for good cause, the chief appraiser may allow an additional 15 days. File with your county appraisal district, not the Comptroller.
Texas Tax Code §22.01(a) requires a person to render tangible personal property used for income production. The rendition lists inventory, furniture, fixtures, machinery, equipment, and other income-producing property owned or managed as of January 1. Assessment date per Tax Code §23.01(a).
Additional Exemptions
$125,000 Business Personal Property Exemption
As of January 1, 2026, income-producing tangible personal property is exempt up to $125,000 of appraised value per location in each taxing unit. Property at separate locations in the same taxing unit is aggregated per location. Related business entities at the same address aggregate their property, while leased property and property at locations not owned or leased by the owner receive separate $125,000 exemptions. This exemption replaced the prior exemption for property valued under $2,500. HB 9 (89th Legislature) amended Tax Code §11.145, effective January 1, 2026.
Source: https://statutes.capitol.texas.gov/Docs/TX/htm/TX.11.htm#11.145
Goods-in-Transit Exemption
Goods acquired inside or outside Texas that are detained for storing purposes and then shipped to another location (in or out of Texas) within 175 days qualify for a goods-in-transit exemption. The owner of the goods has no direct or indirect ownership of the facility where the goods are stored. The goods cannot include oil, gas, petroleum products, or special inventories such as motor vehicles or boats in a dealer's retail inventory. Taxing units may elect to tax the goods notwithstanding the exemption. Application filed with the county appraisal district.
Source: https://comptroller.texas.gov/economy/development/prop-tax/transit-exemptions.php
Frequently Asked Questions
When is Texas business inventory assessed?
January 1. Texas Tax Code §23.01(a) sets the assessment date for all taxable property, including business inventory.
When are business personal property renditions due in Texas?
Business personal property renditions are due April 15. A written request filed by April 15 extends the deadline to May 15; for good cause, the chief appraiser may allow an additional 15 days.
What is the Texas freeport exemption?
Goods that leave Texas within 175 days of acquisition qualify for a freeport exemption under Texas Tax Code §11.251. It is a local option — individual taxing units, counties and school districts each choose whether to grant it. The owner of the goods has no direct or indirect ownership of the facility where the goods are stored. Oil, natural gas and petroleum products are not freeport goods.
What is the Texas goods-in-transit exemption?
Goods acquired inside or outside Texas that are detained for storing purposes and then shipped to another location (in or out of Texas) within 175 days qualify for a goods-in-transit exemption. The owner of the goods has no direct or indirect ownership of the facility where the goods are stored. The goods cannot include oil, gas, petroleum products, or special inventories such as motor vehicles or boats in a dealer's retail inventory. Taxing units may elect to tax the goods notwithstanding the exemption.
What is the $125,000 business personal property exemption in Texas?
As of January 1, 2026, income-producing tangible personal property is exempt up to $125,000 of appraised value per location in each taxing unit. HB 9 (89th Legislature) amended Tax Code §11.145, effective January 1, 2026.
Primary Source
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This page is general information, not tax or legal advice. State tax laws and local rates change. Confirm current positions with the state revenue department, county assessor, and qualified advisors before committing to a location.