TEXAS SALES & PROPERTY TAX

Transcription

1 TEXAS SALES & PROPERTY TAX By IRA A. LIPSTET DuBois, Bryant & Campbell, LLP 700 Lavaca, Suite 1300 Austin, Texas (512) Ira A. Lipstet, All rights reserved. State Bar of Texas 29 TH ANNUAL ADVANCED REAL ESTATE LAW COURSE July 12-14, 2007 San Antonio CHAPTER 13

2 TABLE OF CONTENTS I. Property Subject to Taxation A. All real and tangible personal property that state has jurisdiction to tax unless exempt. (Texas Tax Code ( Tax Code ) 11.01(a))... 1 B. With selected exceptions, intangible personal property not taxable. (Tax Code 11.02(a), (b)) C. Leasehold interests typically not subject to property tax. (See, e.g., Irving ISD v. Delta Airlines, Inc., 534 S.W.2d 365, writ ref d n.r.e.). There are a number of exceptions to general rule:... 1 D. Definitions. (Per Tax Code 1.04)... 1 II. Exemptions from Property Taxation... 4 A. Eligibility for exemption depends upon nature of entity or activity... 4 B. Administration of Exemptions... 9 III. Situs of Property (Tax Code Chapter 21) A. Real property is generally taxable by a taxing unit if located in the unit on January 1. (Tax Code 21.01). Exceptions are provided by Chapter 36, Education Code B. Situs Rules. In general (and except as provided by Tax Code , and 21.05), Tax Code provides that tangible personal property ( TPP ) is taxable by a taxing unit if: IV. Renditions (Tax Code Chapter 22) A. Rendition requirements. In general, a person is required to render for taxation all TPP used for production of income (i.e., business personal property) owned or managed as of January 1. (Tax Code 22.01) B. Rendition statements must include: C. Significant penalties for failure to render added effective January 1, D. Person may file information report showing decreased value pertaining to other than normal depreciation. (Tax Code 22.03) E. Inspection of Property F. Procedural requirements for rendition: V. Appraisal Methods and Procedures (Tax Code Chapter 23) A. General rule: all taxable property is appraised at its market value as of January 1. (Tax Code 22.01(a)) B. Market valuation methods C. Special Appraisal Provisions - Pertain to Particular Types of Situations VI. Agricultural, open space and other related appraisal value alternatives i

3 A. Specific appraisal methodologies provided for certain land uses can result in greatly reduced valuation amounts. Several of those alternative valuation methods are often lumped together and are commonly referred to as agricultural exemptions. Each of these appraisal value methodologies has somewhat different characteristics and requirements, as set out below B. Land Designated for Agricultural Use (Tax Code ) C. Qualified Open-Space Land Designation 1-D-1 (Tax Code ) D. Wildlife Management. Another type of land usage that may result in a qualified open space designation. (Tax Code 23.51(2)) E. An application is required to be filed by a person claiming open space valuation. To be valid the application must: F. Open-space land rollback provisions. Additional tax imposed on change in use of open-space (i.e., 1-D-1) designated land. Sanctions referred to as rollback tax, this tax is imposed on the land equal to: G. Appraisal of Timber Land (Tax Code ) and Restricted Use Timber Land (Tax Code ) H. Appraisal of Recreational, Park and Scenic Land (Tax Code ) I. Appraisal of Public Access Airport Property (Tax Code ) VII. Local Appraisal Requirements (Tax Code - Chapter 25) A. Chief Appraiser required to prepare appraisal records listing all properties taxable in the district and stating the appraised value of each by May 15, or as soon after as practicable. (Tax Code 25.01(a)) B. Written Notice of Appraised Value to be delivered to property owner by May 15 or as soon as practicable thereafter (per Tax Code 25.19) if: C. Notice of Appraisal Value is required to contain (among other things) information separating real from personal property, a list of taxing units in which the property is taxable, the appraised value of the property in the preceding year, the assessed and taxable value of the property in the preceding year for each taxing unit taxing the property, the appraised value of the property for the current year and amount of partial exemption, if any, approved for the current year, if the appraised value is greater than it was in the preceding year, the amount of tax that would be imposed on the property on the basis of the tax rate for the preceding year, and a brief explanation of the time and procedure for protesting the value. (Tax Code 25.19(b)) D. Omitted property may be added to the appraisal rolls by the Chief Appraiser within the following periods: E. Correction of Appraisal Roll (Tax Code 25.25). Provides methods for correcting appraisal roll other than formal protests and litigation per Tax Code Chapters 41 and ii

4 VIII. Assessment (Tax Code Chapter 26) A. Submission of rolls to taxing units are required to be prepared by Chief Appraiser and certified to the assessor for each taxing unit participating in the district of that part of the appraisal roll for the district that lists the property taxable by the unit. This is required to be done by July 25 of the taxable year. (Tax Code 25.01(a)) B. Correction or change of tax rolls cannot be done after the rolls are completed except as follows: IX. Collection (Tax Code Chapter 31) A. With minor exceptions, assessor for each taxing unit required to prepare and mail a tax bill to each person in whose name the property is listed on the tax roll, or to the person s designated agent. The bill is to be mailed by October 1 or as soon thereafter as practicable. (Tax Code 31.01(a)). For real property, tax and valuation for the five years prior to the tax year (as well as for the tax year) is required to be provided by the tax assessor. (Tax Code 31.01(c)) B. With limited exceptions, taxes are due upon receipt of the tax bill and are delinquent if not paid by February 1 of the year following the year in which imposed. (Tax Code 31.02(a)) C. Conditional payments D. Property tax withholding required on purchase of a business or inventory E. Refunds (Tax Code 31.11) F. Payment of Tax Under Protest (Tax Code ) X. Taxpayer Protests (Tax Code Chapter 41) A. Right of Protest (Tax Code 41.41) - a property owner is entitled to protest before the appraisal review board ( ARB ) the following actions: B. Protest of failure to give notice (Tax Code ) C. Person acquiring property after January 1 and before deadline for filing protests may pursue a protest in the same manner as the January 1 owner could; the same is true for a successor owner during the pendency of a protest. (Tax Code ) D. Protest by Person Leasing Property (Tax Code ) E. Notice of Protest (Tax Code 41.44) F. Hearing on Protest (Tax Code 41.45) G. Notice Requirements H. Determination of Protest (Tax Code 41.47) I. Hearing Procedures (Tax Code 41.66) J. Evidence at Hearing (Tax Code 41.67) iii

5 XI. Appeal Through Binding Arbitration (Tax Code Chapter 41A) A. Alternative method for protesting certain real property values through binding arbitration implemented. (Tax Code 41A.01-41A.13) B. Specifics of appeal through binding arbitration process are as follows: C. Appeal through binding arbitration is effective as of September 1, XII. Judicial Review (Tax Code Chapter 42) A. Right of Appeal by Property Owner (Tax Code 42.01) B. A person leasing property who is contractually obligated to reimburse the property owner for taxes imposed on the property is entitled to appeal an order of the ARB determining protest brought under Tax Code (a). (Tax Code ) C. The chief appraiser, an affected county and/or a taxing unit may all appeal decisions of the ARB. (Tax Code 42.02, 42.03, ) D. Notice of Appeal (Tax Code 42.06) E. Cost of Appeal may be charged by the reviewing court to any of the parties. (Tax Code 42.07) F. Forfeiture of Remedy for Nonpayment of Taxes (Tax Code 42.08) G. Appeal of ARB Decision to District Court H. Post Appeal Procedures iv