Dealer’s Heavy Equipment Inventory Tax Declaration Instructions and Information
Heavy equipment means self-propelled, self-powered or pull-type equipment, including farm equipment or a diesel engine, which
weighs at least 1,500 pounds and is intended to be used for agricultural, construction, industrial, maritime, mining or forestry uses.
The term does not include a motor vehicle that is required to be titled under Transportation Code Chapter 501 or registered under
Transportation Code Chapter 502.
GENERAL INSTRUCTIONS: This declaration is for a dealer of heavy equipment to declare heavy equipment inventory pursuant
to Tax Code §23.1241. File a declaration for each business location.
WHERE TO FILE: Each declaration must be filed with the county appraisal district’s chief appraiser and a copy of each
declaration must be filed with the collector.
DECLARATION DEADLINES: Except as provided by Tax Code §23.1242(k), a declaration must be filed not later than February
1 of each year or, in the case of a dealer who was not in business on January 1, not later than 30 days after commencement of
the business.
PENALTIES: In addition to other penalties provided by law, a dealer who fails to file or timely file a required declaration must
forfeit a penalty of $1,000 for each month or part of a month in which a declaration is not filed or timely filed after it is due. A tax
lien attaches to the dealer’s business personal property to secure payment of the penalty.
OTHER IMPORTANT INFORMATION: The chief appraiser may examine the books and records of a dealer, including
documentation regarding the applicability of Tax Code §23.1241 and Tax Code §23.1242 and sales records to substantiate
information set forth in filed declarations.
ADDITIONAL INSTRUCTIONS
Step 1. Dealer Information. Provide information regarding the owner and the dealer, including the name of the dealer and the
owner, the mailing address, and phone number.
Step 2. Business Information. Provide the name and physical business address of the business location of the inventory that
you are declaring in this form.
Step 3. All business locations. You must attach a list with the name and business address of each location at which you
conduct business.
Step 4. Appraisal District Account Number. Give appraisal district account number if available, or attach tax bill or copy of
appraisal or tax office correspondence concerning this account.
Step 5. Breakdown of units sold, leased, or rented and transaction amount. Complete the boxes on the number of units
sold, leased or rented and the transaction amounts for the preceding year. See below for definitions.
Part I. Number of Units of Heavy Equipment: Breakdown of sales, rentals, and leases for the previous 12-month period
corresponding to the prior tax year. Provide the number of units for the business location for which you are declaring
inventory (identified in SECTION 2). If you were not in business for the entire 12-month period, report the sales, leases,
and rentals for the months you were in business.
Part II. Transaction Amount: Breakdown of sales, leases, and rentals amounts for the previous 12-month period
corresponding to the prior tax year. Provide the transaction amounts for the business location for which you are declaring
inventory (identified in SECTION 2). If you were not in business for the entire 12-month period, report the sales, leases,
and rentals for the months you were in business.
Net Heavy Equipment Inventory – Heavy equipment units that have been sold, leased, or rented less fleet
transactions, dealer sales and subsequent sales.
Fleet Transactions – The sale of five or more items of heavy equipment from your inventory to the same buyer
within one calendar year.
Dealer Sales – Sales to dealers.
Subsequent Sales – A dealer-financed sale and that, at the time of sale, has dealer financing from your
inventory in this same calendar year. The term does not include a rental or lease with an unexercised purchase
option or without a purchase option.
Step 6. Market value of your heavy equipment inventory. State the market value of your net heavy equipment inventory for
the current tax year, as computed under Tax Code §23.1241. Market value on January 1 is total annual sales (less fleet
transactions, dealer sales, and subsequent sales) for the previous 12-month period corresponding to the prior tax year divided
by 12. If you were not in business for the entire 12-month period, report the number of months you were in business and the total
number of sales for those months; the chief appraiser will estimate your inventory’s market value.
Total annual sales includes the sales price for each sale of heavy equipment inventory in a 12-month period PLUS lease and
rental payment(s) received for each lease or rental in that 12-month period. This will be the same amount as the net heavy
equipment inventory transaction amount (see Section 5, the first box in Part II) and divide by 12 to yield your market value for this
tax year. If you were not in business for the entire preceding year, the chief appraiser will estimate your inventory’s market value.
Step 7. Sign the form. By signing this declaration, you certify that the dealer identified in Step 1 is the owner of a dealer’s heavy
equipment inventory.
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