The Animal-Feed Retail Inventory Exemption (Proposition 5)
Texas voters approved Proposition 5 on November 4, 2025, and implementing statute HB 1399 took effect January 1, 2026 — a business-inventory property-tax exemption for qualifying animal feed held for retail sale. It is not a homestead exemption, and it does not change the sales tax anyone pays at the register.
What actually passed
Two connected measures from the 89th Legislature, Regular Session (2025):
- HJR 99 (primary author Rep. Cody Harris) proposed the constitutional amendment authorizing the Legislature to exempt from ad valorem (property) taxation tangible personal property consisting of animal feed held by the owner for sale at retail. It appeared on the November 4, 2025 ballot as Proposition 5 and was approved by Texas voters.
- HB 1399 (author Rep. Cody Harris; Senate sponsor Sen. Robert Nichols per the official record) implemented the exemption. Contingent on voter approval — which occurred — it took effect January 1, 2026 and applies prospectively, to tax years beginning on or after that date.
What the new statute says
HB 1399 added Section 11.162 to the Texas Tax Code (“Animal Feed Held for Sale at Retail”). Per the enrolled text, the owner of tangible personal property consisting of animal feed that is exempt from sales and use taxes under Tax Code Section 151.316(a)(3) — feed for farm and ranch animals — or Section 151.316(a)(4) — feed for animals held for sale in the regular course of business — is entitled to an exemption from property taxation of the appraised value of that property if the property is held by the owner for sale at retail.
Who this actually affects
Before this change, qualifying animal feed was generally exempt from Texas sales tax, but a retailer’s feed sitting on shelves or in a warehouse was still taxable business personal property (inventory) for local property-tax purposes. Section 11.162 addresses that inventory layer. The direct beneficiaries are owners of qualifying feed held for retail sale — feed stores and similar retailers — and the appraisal districts that must apply the exemption beginning with the 2026 tax year.
What this exemption is not
It is not a residence-homestead exemption and does not change any homeowner’s property-tax bill. It is not a sales-tax change — qualifying feed was already sales-tax exempt under §151.316. It does not guarantee lower retail feed prices; any effect on what a rancher pays at the register depends on the market. And it does not exempt every feed-related item: qualification is determined by the statute’s own terms — feed within §151.316(a)(3) or (a)(4), held by the owner for sale at retail.
Don’t confuse Proposition 5 with the farm-products proposals that failed
Proposition 5 / HJR 99 / HB 1399 are separate measures from HJR 31 (89R) and HJR 21 (89(2)), the farm-products property-tax proposals concerning the “in the hands of the producer” exemption definitions. Those resolutions did not pass, never reached voters, and changed nothing — an example of why every Texas measure should be identified by both its number and its session. Details are on the Legislative Watch page.
Claiming the exemption
Property-tax exemptions in Texas are administered by county appraisal districts under the Tax Code and the Comptroller’s guidance. An owner of qualifying feed inventory should contact the appraisal district in each county where the inventory is taxable about the applicable exemption procedure and any filing requirements for the 2026 tax year forward, and verify current forms and guidance with the Texas Comptroller’s property-tax division. You can find every district through our County Resources directory.
The takeaway
With voter approval of Proposition 5 and HB 1399’s effective date of January 1, 2026, Texas Tax Code §11.162 now entitles the owner of qualifying animal feed — feed that is sales-tax exempt under §151.316(a)(3) or (a)(4) and held for sale at retail — to a property-tax exemption on that inventory’s appraised value. It is a business-inventory exemption for feed retailers, applied by appraisal districts beginning with the 2026 tax year; it is not a homestead exemption and promises no particular change in retail prices.
Official sources
- Texas Legislature Online — HJR 99 (89R): history and text
- Texas Legislature Online — HB 1399 (89R): history, text, and official analyses
- HB 1399 — final enrolled text (Tax Code §11.162)
- Texas Tax Code, Chapter 11 (exemptions — current text)
- Texas Tax Code, §151.316 (agricultural sales-tax exemptions)
- Texas Secretary of State — November 4, 2025 constitutional-amendment election records
- Texas Comptroller — property-tax exemptions guidance
Last reviewed July 22, 2026 against the official Texas Legislature Online records, the enrolled bill text, and state election records. Exemption administration details come from the Tax Code and Comptroller guidance and can change; verify current requirements with the applicable county appraisal district. Educational information only — not legal, tax, or financial advice.