 In
1989, Texas voters approved a constitutional amendment
giving local jurisdictions the option to exercise or not
exercise their authority to tax specific personal property
known as Freeport goods.
The
City of Mansfield, Mansfield Independent School District
and Tarrant County have taken action to eliminate the
tax on Freeport goods (i.e., inventory goods, goods in
process or goods in transit).
The Freeport exemption exempts certain types of tangible
personal property from taxation provided the property
is:
- Acquired
in or imported into Texas to be forwarded out of state;
- Detained
in Texas for assembling, storing, manufacturing, processing
or fabricating purposes by the person who acquired or
imported ;, and
-
Transported out of the State of Texas within 175 days
after the date the person acquired or imported it into
Texas.
A company that manufactures or distributes a product
within a jurisdiction that has adopted the Freeport
exemption will realize a significant savings if it serves
national or international markets. This is particularly
beneficial to companies that warehouse and provide an
added value to a product brought into Mansfield from
outside the State of Texas.
The
amount of the goods in transit exemption for each year
is normally based on the percentage of inventory made
up by such goods the previous year. A one-page application
requests a company to identify property owned on January
1 of each year (or September 1 of the preceding year if
the company receives a September 1 inventory appraisal).
A company must apply for the exemption each year from
the Tarrant, Johnson or Ellis County Appraisal District
(depending upon the company’s location within the
City of Mansfield) between January 1 and May 1. |
