Texas Codes

Tex. Tax Code § 23.12 (2026)

Inventory

✓ current as of May 2026

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Sec. 23.12. INVENTORY. (a) Except as provided by Sections 23.121, 23.1241, 23.124, and 23.127, the market value of an inventory is the price for which it would sell as a unit to a purchaser who would continue the business. An inventory shall include residential real property which has never been occupied as a residence and is held for sale in the ordinary course of a trade or business, provided that the residential real property remains unoccupied, is not leased or rented, and produces no income.

(b) The chief appraiser shall establish procedures for the equitable and uniform appraisal of inventory for taxation. In conjunction with the establishment of the procedures, the chief appraiser shall:

(1) establish, publish, and adhere to one procedure for the determination of the quantity of property held in inventory without regard to the kind, nature, or character of the property comprising the inventory; and

(2) apply the same enforcement, verification, and audit procedures, techniques, and criteria to the discovery, physical examination, or quantification of all inventories without regard to the kind, nature, or character of the property comprising the inventory.

(c) In appraising an inventory, the chief appraiser shall use the information obtained pursuant to Subsection (b) of this section and shall apply generally accepted appraisal techniques in computing the market value as defined in Subsection (a) of this section.

(d) Subsections (b) and (c) of this section apply only to an inventory held for sale, lease, or rental.

(e) A person who owns an inventory to which Subsection (b) of this section applies may bring an action to enjoin the chief appraiser from certifying to a taxing unit any portion of the appraisal roll that lists an inventory for which the chief appraiser has not complied with the requirements of Subsection (b) of this section.

(f) The owner of an inventory other than a dealer's motor vehicle inventory as that term is defined by Section 23.121, a dealer's heavy equipment inventory as that term is defined by Section 23.1241, or a dealer's vessel and outboard motor inventory as that term is defined by Section 23.124, or a retail manufactured housing inventory as that term is defined by Section 23.127 may elect to have the inventory appraised at its market value as of September 1 of the year preceding the tax year to which the appraisal applies by filing an application with the chief appraiser requesting that the inventory be appraised as of September 1. The application must clearly describe the inventory to which it applies and be signed by the owner of the inventory. The application applies to the appraisal of the inventory in each tax year that begins after the next August 1 following the date the application is filed with the chief appraiser unless the owner of the inventory by written notice filed with the chief appraiser revokes the application or the ownership of the inventory changes. A notice revoking the application is effective for each tax year that begins after the next September following the date the notice of revocation is filed with the chief appraiser.

(g) Expired.

Acts 1979, 66th Leg., p. 2253, ch. 841, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1981, 67th Leg., 1st C.S., p. 137, ch. 13, Sec. 58, eff. Jan. 1, 1982; Acts 1987, 70th Leg., ch. 590, Sec. 1, eff. Aug. 31, 1987; Acts 1989, 71st Leg., ch. 796, Sec. 16, eff. Sept. 1, 1989; Acts 1993, 73rd Leg., ch. 672, Sec. 1, 2, eff. Jan. 1, 1994; Acts 1995, 74th Leg., ch. 836, Sec. 1, 2, eff. Jan. 1, 1996; Acts 1995, 74th Leg., ch. 945, Sec. 1, eff. Jan. 1, 1996; Acts 1997, 75th Leg., ch. 165, Sec. 31.01(73), eff. Sept. 1, 1997; Acts 1997, 75th Leg., ch. 1112, Sec. 1, eff. Jan. 1, 1998; Acts 1997, 75th Leg., ch. 1184, Sec. 1, eff. Jan. 1, 1998.

Notes of Decisions

Cited in 17 cases (1 in the last 5 years), 1989–2025 · leading case: Enron Corp. v. Spring Indep. Sch. Dist., 922 S.W.2d 931 (Tex. 1996).

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Enron Corp. v. Spring Indep. Sch. Dist., 922 S.W.2d 931 (Tex. 1996). · cites it 2× “Laws 3591, 3596 (amended 1993 and 1995) (current version at Tex.Tax Code § 23.12(f)). 1 The dispute is when this gas may be valued for ad valorem tax purposes.”

ETC Mktg., Ltd. v. Harris Cnty. Appraisal Dist., 528 S.W.3d 70 (Tex. 2017). “Tex. Tax Code § 23.12(f). . In reality, every state that borders Texas appraises property as of January 1, meaning the "hypothetical identical tax” is not so hypothetical after all.”

Travis Cent. Appraisal Dist. v. FM Props. Operating Co., 947 S.W.2d 724 (Tex. App. 1997). · cites it 2× “See Tex. Tax Code Ann. § 23.12 (a) (West Supp.”

Briggs Equip. Trust v. Harris Cnty. Appraisal Dist., 294 S.W.3d 667 (Tex. App. 2009). “See Tex. Tax Code Ann. § 23.12 (a) (Vernon 2008).”

Dallas Cent. Appraisal Dist. v. Tech Data Corp., 930 S.W.2d 119 (Tex. App. 1996). “See Tex Tax Code Ann. § 23.12 (Vernon 1992 & Supp.”

Sears Roebuck & Co. v. Dallas Cent. Appraisal Dist., 53 S.W.3d 382 (Tex. App. 2000). “” Tex. Tax Code Ann. § 23.12 (Vernon Supp.2000).”

H.E. Butt Grocery Co. v. Jefferson Cnty. Appraisal Dist., 922 S.W.2d 941 (Tex. 1996). · cites it 3× “1 valuation date dependent on whether the inventory owner has property in a district, rather than the existence of property in any particular taxing unit: “The owner of an inventory may elect to have the inventory appraised at its market value as of September 1 of the year…”

Jester Dev. Corp. v. Travis Cnty. Appraisal Dist., 775 S.W.2d 464 (Tex. App. 1989). “1 In 1987 Jester Development Corporation requested that the Travis County Appraisal District value its property as inventory pursuant to the 1987 amendments to Tex.Tax Code Ann. § 23.12(a) (Supp. 1989).”

In Re Quality Beverage Co., Inc., 170 B.R. 310 (Bankr. S.D. Tex. 1994). · cites it 2× “The market value of an inventory is given slightly different treatment under § 23.”

MARATHON ASHLAND PETRO. LLC v. Galveston Cent. Appraisal Dist., 236 S.W.3d 335 (Tex. App. 2007). “See TEX. TAX CODE ANN. § 23.12(f) (Vernon 2001).”

Spring Indep. Sch. Dist. v. Harris Cnty. Appraisal Dist., 889 S.W.2d 562 (Tex. App. 1994). “See Tex.Tax Code Ann. §§ 23.12(f), (g) (Vernon Supp.”

Lack`s Stores, Inc. v. Gregg Cnty. Appraisal Dist. & Gregg Cnty. Appraisal Review Bd. (Tex. App. 2011). · cites it 2× “The fifth issue argues that the court erred (presumably in its judgment at the trial) by ruling that Gregg CAD had complied with TEX. TAX CODE ANN. § 23.12 (West 2008), in its assessment of value, although it had admitted its failure to adhere to what Lack‘s Stores maintained…”

Show all 17 citing cases →

— Tex. Tax Code § 23.12(a) — 3 cases

In Re Quality Beverage Co., Inc., 170 B.R. 310 (Bankr. S.D. Tex. 1994). “The market value of an inventory is given slightly different treatment under § 23.”

Lack`s Stores, Inc. v. Gregg Cnty. Appraisal Dist. & Gregg Cnty. Appraisal Review Bd. (Tex. App. 2011). “The fifth issue argues that the court erred (presumably in its judgment at the trial) by ruling that Gregg CAD had complied with TEX. TAX CODE ANN. § 23.12 (West 2008), in its assessment of value, although it had admitted its failure to adhere to what Lack‘s Stores maintained…”

— Tex. Tax Code § 23.12(f) — 7 cases

Enron Corp. v. Spring Indep. Sch. Dist., 922 S.W.2d 931 (Tex. 1996). “Laws 3591, 3596 (amended 1993 and 1995) (current version at Tex.Tax Code § 23.12(f)). 1 The dispute is when this gas may be valued for ad valorem tax purposes.”

H.E. Butt Grocery Co. v. Jefferson Cnty. Appraisal Dist., 922 S.W.2d 941 (Tex. 1996). “1 valuation date dependent on whether the inventory owner has property in a district, rather than the existence of property in any particular taxing unit: “The owner of an inventory may elect to have the inventory appraised at its market value as of September 1 of the year…”

MARATHON ASHLAND PETRO. LLC v. Galveston Cent. Appraisal Dist., 236 S.W.3d 335 (Tex. App. 2007). “See TEX. TAX CODE ANN. § 23.12(f) (Vernon 2001).”

In Re Quality Beverage Co., Inc., 170 B.R. 310 (Bankr. S.D. Tex. 1994). “The market value of an inventory is given slightly different treatment under § 23.”

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