According to the Texas Property Tax Code, how is the value of inventory generally determined?

The value of inventory, according to the Texas Property Tax Code, is generally determined by the expected selling price as a unit to a purchaser continuing the business. This approach reflects the principle of fair market value, which considers how much a buyer would be willing to pay for the inventory if it was sold as part of a business operation.

This method is particularly relevant in the context of property taxation, as it allows for an assessment that aligns with how inventory would be valued in a real-world scenario where a business continues its operations. It takes into account market conditions and the potential for profitability, rather than merely sticking to historical costs or average pricing within the area.

These aspects are important because they ensure that the assessed value is reflective of current market conditions, rather than outdated values that may not represent the true worth of the inventory on hand. This is in contrast to other methods that might focus solely on historical costs or localized comparisons, which could misrepresent the actual value of the inventory being appraised.