Business Personal Property Tax Depreciation Schedules: Texas Guide
Business Personal Property Tax is one of the most misunderstood and most overpaid taxes in Texas. At the center of the confusion sits one deceptively simple concept: depreciation.
If you are relying on fixed asset schedules built for income tax or financial reporting, there is a strong chance your property tax depreciation does not reflect market reality. Texas appraisal districts do not follow IRS rules, and when those two worlds get blended together, valuations drift upward fast.
This guide explains how BPP depreciation schedules function in Texas, how they differ from income tax depreciation, and where sophisticated review and analysis materially impact assessed value. The goal is not to turn readers into appraisal experts, but to clarify why specialized Property Tax expertise matters.
Property Tax Depreciation vs. Income Tax Depreciation
The first mistake most businesses make is assuming depreciation is depreciation. For Texas Property Tax purposes, that assumption is costly.
Income Tax Depreciation
Income tax depreciation is designed to recover capital costs over time.
- Governed by IRS rules such as MACRS and bonus depreciation
- Accelerated for tax efficiency
- Focused on accounting recovery, not market value
Property Tax Depreciation
Property Tax depreciation is intended to estimate current market value as of January 1.
- Governed by Texas appraisal district methodology
- Typically based on standardized percent good tables
- Adjusted for condition, utilization, and obsolescence
Using income tax depreciation for Property Tax reporting almost always overstates value, especially for equipment that becomes obsolete long before it is fully depreciated on the books.
What Are Percent Good Tables in Texas?
Texas appraisal districts commonly apply percent good tables to estimate the remaining value of Business Personal Property over time. Each year of an asset’s life is assigned a remaining value percentage based on an assumed economic life.
The problem is not that percent good tables exist. The problem is that they are often applied too broadly, too aggressively, and without regard for how assets are actually used.
How Appraisal Districts Apply Percent Good Tables
Texas appraisal districts rely on internally developed percent good tables to estimate remaining value by asset age and category. These tables are not uniform statewide, and they are rarely applied with nuance unless challenged.
Rather than publishing county specific tables here, what matters for taxpayers is understanding that these schedules are starting points, not conclusions. When applied without asset level review, utilization analysis, and obsolescence support, percent good tables frequently overstate market value. Actual schedules vary by county and asset class, and minimum floor values are frequently challenged successfully when supported with evidence.
Depreciation Schedules by Asset Type
Different assets decline in value at very different rates. Applying a single schedule across all Business Personal Property is one of the most common assessment errors.
Manufacturing Machinery and Equipment
- Shorter economic lives than book schedules suggest
- Rapid functional obsolescence due to technology shifts
- Idle or underutilized equipment should depreciate faster
Computers and IT Equipment
- Extremely fast obsolescence
- Minimal resale value after a few years
Furniture and Fixtures
- Longer economic life
- Slower depreciation curve
Tools, Dies, and Specialized Equipment
- Highly specific use
- Often limited secondary market
Why Standard Depreciation Schedules Still Overstate Value
Even when percent good tables are used, they often fail to account for:
- Functional obsolescence
- External market conditions
- Equipment condition and maintenance
- Production changes or facility downsizing
Texas law allows for adjustments when evidence supports it. The issue is not what appraisal districts allow. It is what taxpayers fail to challenge.
Why Depreciation Analysis Is Not a DIY Exercise
Many taxpayers attempt to sanity check assessments using simplified calculations. While that instinct is reasonable, true Property Tax depreciation analysis goes far beyond applying a factor to original cost.
It involves reconciling appraisal district assumptions with asset specific realities, market data, operational context, and defensible valuation principles. Without that framework, calculations often miss the very adjustments that drive meaningful reductions.
This is where experienced Property Tax professionals separate surface-level reviews from outcomes that hold up under scrutiny.
What Sophisticated Depreciation Strategy Looks Like
Effective Property Tax depreciation strategy is disciplined, documented, and repeatable.
It includes:
- Asset classification that aligns with appraisal methodology, not accounting convenience
- Economic life assumptions supported by industry data
- Identification and support of functional and external obsolescence
- Consistent treatment across filings, renditions, and appeals
This level of analysis is what appraisal districts respond to, and what long term Property Tax savings are built on.
Work With Our Experts
If your Business Personal Property values are built off inaccurate tax schedules or unchallenged percent good tables, you are likely overpaying.
Work with our experts to review your BPP depreciation schedules in Texas, identify overassessment, and build a defensible Property Tax strategy that holds up year after year.
Property Tax is permanent; overvaluation does not have to be.