Texas doesn’t have a state income tax, but it does tax business personal property. That means the equipment, furniture, fixtures, computers, tools, machinery, vehicles, and inventory your business owns or controls are all subject to property tax. If you have tangible assets used in your business, you’re likely required to report them and pay tax on their appraised value.

Every year, businesses must file what’s called a rendition with their county appraisal district. A rendition is simply a report listing the business personal property you owned or managed as of January 1 of that year. In the Greater Houston area, that means filing with the Harris County Appraisal District, Brazoria County Appraisal District, or Fort Bend County Appraisal District depending on where your business operates. Pearland businesses could fall under Brazoria or Harris County depending on which side of the line they sit on.

The rendition deadline is April 15, with an automatic extension available to May 15 if you request it in writing before the original deadline. Missing the filing entirely can result in a 10% penalty on the taxes owed for that year. Filing a fraudulent rendition bumps the penalty to 50%.

What gets taxed covers more than most business owners expect. Desks, chairs, computers, printers, shelving, point-of-sale systems, tools, commercial kitchen equipment, vehicles titled to the business, leasehold improvements in some cases, and any inventory on hand. Leased equipment may also need to be reported depending on the terms of the lease. If it’s tangible and used in your business, it probably belongs on the rendition.

You report the original cost and year of acquisition for each item or category of items. The appraisal district then determines market value, typically using depreciation schedules. You have the right to report your own good-faith estimate of value, and if you disagree with what the district comes back with, you can file a protest. Protesting is worth doing when the appraised values don’t reflect actual condition or market reality, especially on older equipment that’s lost significant value.

Tax rates depend on your specific location because they’re set by local taxing entities like school districts, cities, counties, and special districts. Rates in the Houston area generally fall somewhere between 2% and 3% of appraised value. That adds up fast if you have expensive equipment or carry significant inventory.

One thing that surprises people is that this applies even if you work from home. Business equipment at your residence is still subject to the rendition requirement. A laptop and printer might not amount to much, but a home-based business with serious equipment should be filing.

The property taxes you pay on business assets are deductible on your business tax return, so make sure those payments are tracked and categorized correctly throughout the year.

Keeping accurate fixed asset records makes the entire rendition process manageable. If your small business bookkeeping and tax services already track when assets were purchased, what they cost, and when they were sold or disposed of, pulling together the rendition is straightforward. Without those records, you end up guessing at values and missing items, which either costs you in overpayment or puts you at risk during an audit by the appraisal district.