Exemption to Town property taxes now in effect PROSPER, TX Voting unanimously in favor, the Prosper Town Council recently repealed an ordinance, on the books since 2001, allowing individuals who lease cars, trucks, and other vehicles to apply for a property tax exemption for those vehicles that qualify. The Council vote repealed Ordinance No. 01-34, passed in December 2001, which granted the Town the ability to continue collecting ad valorem taxes on leased vehicles, regardless of their use. In 2002, the state issued new rules on leased vehicle taxation, allowing for the exemption of those used primarily for personal use versus business use.
The recent repeal of the ordinance now means that if at least 50 percent of the miles driven in a year in a leased car or truck are for personal use, the car or truck qualifies for an exemption. The exemption applies to vehicles that weigh 9,000 pounds or less, and the lessor must apply for the exemption. Those leased cars, trucks and other vehicles used for income-producing purposes for 50 percent or more of annual miles driven are still subject to the local ad valorem tax. The application must be accompanied by an affidavit executed between the lessor and the leasing company which states that the vehicle is used for personal, non-income-producing, purposes, and it along with the completed application must be submitted to the appropriate appraisal office of the county in which the lessor lives. Applications for tax exemptions are due to appraisal offices between January and April of each tax year.