Recent changes to Texas state tax law expands monthly and annual property tax reporting requirements for heavy equipment dealers to include heavy equipment rental and leasing companies as well, said John Woolard, managing partner at Morrison & Head, a property tax valuation and consulting firm based in Austin, Texas, with offices in Houston and Boerne, Texas.

Previously only heavy equipment sellers were required to file the necessary inventory declarations, tax statements, and unit property tax values while equipment rental and leasing companies were exempt, the company said, but under new rules both are subject to the same reporting requirements.

In addition to new monthly and annual reporting requirements, the rules reduce the weight threshold necessary to qualify heavy equipment from 3,000 pounds to 1,500 pounds, significantly expanding the scope of equipment that must be reported.

Woolard said, in a statement released by Morrison & Head, that the changes are “creating a lot of confusion and frustration for heavy equipment rental and leasing companies, resulting in increased workloads and substantial fines and penalties for noncompliance.” The penalties for failure to file monthly tax statements and annual inventory declarations will include fines of $500 per month for statement violations and $1,000 per month for declaration violations.

A tax lien is also attached to the dealer’s business personal property to secure payment of penalties.