                             ATTORNEYGENERALOF TEXAS
                                          GREG       ABBOTT




                                           November 21,2006



The Honorable William M. Jennings                      Opinion No. GA-0484
Gregg County Criminal District Attorney
101 East Methvin Street, Suite 333                     Re: Whether motor vehicles excepted from
Longview, Texas 75601                                  property-tax-rendition requirements under Tax
                                                       Code section 22.01(k) are thereby exempt from
                                                       taxation (RQ-0476-GA)

Dear Mr. Jennings:

         On behalf of the Gregg County Appraisal District, you ask whether certain motor vehicles
that are used for both business and personal purposes, which need not be rendered for taxation under
Tax Code section 22.01(k), aretherebyexemptfromtaxation.’      See TEX.TAXCODEANN.        5 22.01(a),
(k) (Vernon Supp. 2006).

         In general, under section 22.01(a) of the Tax Code, the owner of tangible personal~property
that is used to produce income must render the property for taxation on January 1 of each year. Id.
$22.01(a). Undersection22,01(k),however,         “an individual who owns and is the primary operator
of one or more passenger cars or light trucks in the course of the individual’s occupation or
profession and also operates those vehicles for personal activities that do not involve the production
of income is not required to render the vehicles forktaxation.” Id. § 22.01(k).

         Consistently with section 22.01(k)‘s plain language, the owner of a car or light truck used
for both business and personal purposes is not required to render the vehicle for taxation. Cf:
Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864,865 & n.6 (Tex. 1999) (stating
the “cardinal law in Texas that a court construes a statute[] ‘first, by looking to the plain and
common meaning of the statute’s words”‘) (quoting Liberty Mut. Ins. Co. v. Garrison Contractors,
Inc.; 966 S.W,2d482,484 (Tex. 1998)). But section22.01Q       doesnot expressly exemptthevehicle
from taxation. See TEX. TAX CODE ANN. 5 22.01(k) (Vernon Supp. 2006). Given that property
 exempt from taxation is not subject to rendition, you ask in effect whether the converse is true:
whether vehicles that are exempt from rendition requirements are thereby exempt from taxation. See
 id. 5 22.01(j); Request Letter, supra note 1, at 2.


          ‘See Letter from Janie L. Johnson, Assistant Gregg County Criminal District Attorney, to Honorable Greg
Abbott, Attorney General of Texas (Apr. 12, 2006) (on file with the Opinion Committee, also available aT
http://www.oag.state.tx.us);   Le5ter from Thomas R. Hays, Chief Appraiser, Gregg County Appraisal District, to
Honorable Greg Abbott, Attorney General of Texas (Mar. 24, 200[6]) (on tile with the Opinion Committee, also
available at http://www.oag.state.tx.us)  [hereinafter Request Letter].
The Honorable William M. Jennings       - Page 2       (GA-0484)




         Under article VIII, section 1 of the Texas Constitution, “[tlaxation shall be equal and
uniform,” and all “tangible personal property in this State, unless exempt as required or permitted
by this Constitution.    shall be taxed in proportion to its value.” TEX. CONST. art. VIII, $ l(a)-(b).
The constitution specifically requires the legislature to exempt from ad valorem taxation household
goods and personal effects not held or used to produce income and permits (but does notrequire) the
legislature to exempt an individual’s personal property homestead, other tangible personal property
not used to produce income, a leased motor vehicle that is not used primarily to produce income, and
tangible personal property that is used to produce income but that “has a taxable value of less than
the minimum amount sufficient to recover the costs of the administration of the taxes on the
property.” Id. 3 l(d), (g).

          In accordance with article VIII, section l.of the Texas Constitution, chapter 11 of the Tax
Code directs that all tangible personal property is taxable unless exempt by law. See TEX. TAX CODE
ANN. 5 11.01(a) (Vernon 2001). Section 11.14 exempts tangible personal property that is not used
to produce income, and section 11.145 exempts tangible personal property that is used to produce
income but that has a taxable value of less than $500. See id. $§ 11.14(a) (Vernon Supp. 2006),
 11.145(a) (Vernon 2001). See generally CAROLEKEETON STRAYHORN,TEXAS COMPTROLLEROF
PUBLICACCOUNTS,WINDOWONSTATEGOVERNMENT,TAXFO~SONLINE,~~~~~~://~~~.~~~~~~
.state,tx,us/taxinfo/taxforms/93-forms.html     (listing the available applications for exemptions from
taxation) (last visited Nov. 14,2006).

         Rendition and exemption are distinguishable concepts. Rendition “is the reporting oftaxable
property by the owner to the appraiser” and is thus procedural in nature. Harris County Appraisal
Dist. v. Tax. Gas Transmission Corp., 105 S.W.3d 88,91 n.1 (Tex. App.-Houston        [IstDist.] 2003,
pet. denied). A tax exemption, on the other hand, is not procedural but substantive, exempting from
taxation property that “would, in the absence ofthe exemption, otherwise be subject to tax.” Cosmar
Co. Y. Slaughter, 871 So. 2d 646,649 n.4 (La. App. 2004), writ denied, 883 So. 2d 987 (La. 2004).
In addition, statutory rendition requirements are separate and distinct from tax exemptions.
Exemptions from taxation are codified in Tax Code chapter 11. See generally TEX. TAX CODEANN.
ch. 11 (Vernon 2001 & Supp. 2006). Rendition requirements are, by contrast, set forth in chapter
22 of the Tax Code. See generally id. ch. 22.

         Neither article VIII of the Texas Constitution nor chapter 11 of the Tax Code expressly
exempts personal property that is not subject to the statutory rendition requirement. And neither the
constitution nor statutes expressly exempt motor vehicles that are used for income-producing as well
as personal purposes. Tax Code section 11.14(a) exempts only tangible personal property “that is
not held or used for the production of income.” Id. 5 11.14(a) (Vernon Supp. 2006); see also TEX.
CONST. art. VIII, 5 l(d) (authorizing the legislature to exempt from taxation tangible personal
property not used to produce income). Tax Code section 11.145(a) implicitly exempts motor
vehicles used to produce income, but only if the vehicle is valued at less than $500. See TEX. TAX
CODEANN. 5 11.145(a) (Vernon 2001); cf TEX. CONST.art. VIII, 5 I(g) (authorizing the legislature
to exempt from taxation tangible personal property used to produce income if the taxable value is
less than the minimum amount sufficient to recover the costs of administering the taxes on the
property). “An exemption cannot be raised by implication, but must affirmatively, appear            _”
Bullock v. Nat’1 Ban&hares Corp., 584 S.W.2d 268,272 (Tex. 1979).
The Honorable William M. Jennings        - Page 3         (GA-0484)




         Interpreting section 22.01(k) not to provide a tax exemption does not rob the section of all
meaning. Cf: TEX. GOV’T CODE ANN. § 3 11.021(2) (Vernon 2005) (enunciating the presumption
that, in enacting a statute, the legislature intends the entire statute to be effective); City of Keller v.
 Wi’lson,No. 2-00-183-CV, 20106WL 1716130, *3 (Tex. App.-Fort Worth, June 22,2006, no pet.)
(stating that a court will not construe a statute in a way that makes it meaningless); Freeman v. Town
ofFlower Mound, 173 S.W.3d 839, 840 (Tex. App.-Fort                Worth 2005, no pet.) (same). While
vehicles not subject to rendition under section 22.01 (k) are taxable, the owner may not be penalized
for failing to timely render the property or for excluding the property altogether from a rendition
report. See Tnx. TAX CODE ANN. $5 22.28(a), .29(a)(l) (Vernon Supp. 2006).

           We thus conclude that House Bill 809, passed in the Seventy-ninth Legislature, codified at
section    22.01(k) of the Tax Code, exempts cars and light trucks that are used in the course of the
owner’s     occupation or profession as well as for personal purposes from rendition for taxation, but
that the   legislation did not establish that such personal property is exempt from taxation. See Act
of May     27,2005, 79th Leg., R.S., ch. 941,2005 Tex. Gen. Laws 3189, 3189.
The Honorable William M. Jennings    - Page 4      (GA-0484)




                                     SUMMARY

                       House Bill 809, passed in the Seventy-ninth Legislature,
              codified at section 22.01(k) of the Tax Code, exempts cars and light
              trucks that are used in the course of the owner’s occupation or
              profession as well as for personal purposes from rendition for
              taxation, but that legislation did not establish that such personal
              property is exempt from taxation.




KENT C. SULLIVAN
First Assistant Attorney General

ELLEN L. WITT
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Kymberly K. Oltrogge
Assistant Attorney General, Opinion Committee
