Minerals on Mission: New Tax Exemption

November 2, 2023 - Certain charitable organizations in Texas can look forward to an additional tax exemption in 2024, as Texas House Bill 456 was signed into law this past June and will take effect on January 1st.

Charitable organizations are entitled to exemption from ad valorem taxes under Tax Code Section 11.18(a). Currently, the exemption applies only to real property such as land, tangible personal property, and buildings; the exemption does not apply to mineral interests, even though mineral rights are defined as real property under Texas law. Texas House Bill 456 amends the Code to entitle certain charitable organizations to an exemption from taxation of mineral interests. The new exemption applies to certain charitable foundations, healthcare systems, child welfare organizations, and elder care organizations. The exemption will apply if the mineral or royalty interest (1) is under land owned by the charity or (2) was donated to the charity.

This change will allow certain charities to keep more dollars and to apply those tax savings to projects and initiatives that advance their important missions. For more information about this new law or to verify if your charity is eligible for exemption, contact our gift planning team today at 214.978.3300.