Rendering Property in 2004Tax Code Sets Out New Required Information, Penalties
Comptroller's Report Comptroller’s Property Tax Rules 2004 ARB Law Changes 2004 Property Tax Calendar Attorney General Opinion & Request Appraisal Review Board Members Beginning January 1, 2004, the Texas Legislature amended Tax Code Chapter 22 to add enforcement provisions to the state’s mandatory rendition requirements. A rendition identifies, describes and gives the location of taxable property on January 1. Property owners must render annually to appraisal districts all tangible personal property used for the production of income in Texas. At their option, owners may render other types of property.
New penalties
Senate Bill (S.B.) 340, 78th Texas Legislature, Regular Session, added Tax Code Sections 22.28, 22.29 and 22.30 to address penalties for rendering late, not rendering or rendering fraudulently.
Late or no filing. Under Section 22.28, the chief appraiser is required to charge a penalty of 10 percent of the annual taxes on property rendered late or not rendered. The chief appraiser may retain up to 20 percent of this penalty to cover collection costs and distributes the remainder of the penalty to the taxing units who tax the property, in proportion to each unit’s taxes to total taxes on that property. The taxing units are those that participate in that appraisal district.
The new law does not address the collection method for this penalty. The penalty does not accrue interest for nonpayment, nor does it create a tax lien on the property. Each chief appraiser must determine the appropriate means to collect the penalty, whether by his or her own initiative or in cooperation with tax collectors.
Fraud. Section 22.29 addresses penalties for fraud or the intent to evade taxation. The chief appraiser must impose an additional penalty of 50 percent if a court finally determines that:
- the person filed a false statement or report with the intent to commit fraud or to evade taxes; or
- the person altered or destroyed records or other information in the course of proceedings before the appraisal district.
District or county attorneys initiate proceedings against taxpayers for fraud or tax evasion. The courts must consider the property owner’s compliance history; type, nature and taxability of the property involved; type of business involved; completeness of records; owner’s reliance on appraisal district advice; changes in district policies affecting renditions; and any other relevant factor.
Again, the law authorizes the chief appraiser to retain 20 percent of the penalty to pay for collection costs, with the remainder of the penalty proportionally distributed to the taxing units that tax that property and who participate in that appraisal district. While the new law does not specify the collection method, the chief appraiser may enforce collection in the same manner as general court judgments.
Penalty waiver. Section 22.30 permits the chief appraiser to waive these penalties if it is determined that the property owner exercised reasonable diligence to comply or has substantially complied with rendition requirements.
The owner must request the waiver in writing and provide any appropriate supporting documentation within 30 days of being notified of the penalty. The chief appraiser must then determine whether to waive the penalty, using the same considerations of the courts such as the property owner’s compliance history; type, nature and taxability of the property involved; type of business involved; completeness of records; owner’s reliance on appraisal district advice; changes in district policies affecting renditions; and any other relevant factor.
The owner may protest the failure or refusal of the chief appraiser to waive the penalty with the ARB.
New Penalties in Property Tax Rendition Law
Late filing 10 percent of property's annual taxes No filing 10 percent of property's annual taxes Fraud 50 percent of property's annual taxes Tax evasion 50 percent of property's annual taxes Filing deadlines
The statutory deadline to file a rendition is April 15. A property owner may file a written request on or before April 15 to request an extension of that due date. The new law requires the chief appraiser to extend that owner’s deadline to May 15, rather than the previously required April 30.
The chief appraiser also may extend the May 15 deadline another 15 days if the property owner shows in writing good cause for the additional days.
The law prohibits the chief appraiser from sending notices of appraised value, also called 25.19 notices, for business personal property until after the deadline for taxpayers to file renditions. For some taxpayers, this deadline could be late May.
If an owner fails to deliver a required rendition or requested information prior to an appraisal review board (ARB) hearing, the owner has the burden of proving the property’s value to the ARB rather than the appraisal district. If the property owner fails to provide sufficient evidence that convinces the ARB of the property’s value, the ARB must determine the protest in favor of the appraisal district.
Rendition information
Rendition statements must contain the following information:
- the property owner’s name and address;
- a general property description by type or category;
- if inventory, a description and general estimate of quantity;
- the property’s physical location or taxable situs; and
- the owner’s good faith estimate of the property’s market value or, at the owner’s option, the historical cost when new and the year of the property’s acquisition.
Property with an aggregate value of less that $20,000, in the owner’s opinion, is an exception to the above requirements. For property with an aggregate value of less that $20,000, the property owner must render only the owner’s name and address, a general property description by type or category and the property’s physical location or taxable situs.
Rendition forms may not require—but may permit—a property owner to furnish other information not specifically required to be reported by Chapter 22. For example, a property owner who is not required to give an estimate of value may, at the owner’s option, provide that opinion.
An owner of property regulated by the Public Utility Commission, Texas Railroad Commission, Surface Transportation Board or Federal Energy Regulatory Commission complies with rendition requirements by submitting a copy of the property’s annual regulatory report and sufficient allocation information. The chief appraiser must make a written request first for that report and information.
When a “third party”—generally an appraisal firm under contract with an appraisal district—appraises the property and the property owner provides substantially equivalent information to this third party, then the owner does not have to file the rendition with the appraisal district.
Property owners also do not have to render exempt property, such as implements of husbandry used for farm, ranch and timber production. If the chief appraiser denies an exemption application, the owner must render the property within 30 days of the exemption denial.
Good faith value estimate
The chief appraiser may request a statement from the owner of property valued at $20,000 or more to explain how the owner arrived at the “good faith estimate” of market value for the subject property. The statement must summarize the information to:
- sufficiently identify the property, including physical and economic characteristics and source of information;
- specify the effective date of the value estimate; and
- explain the basis of the rendered value. If the business owner has 50 employees or less, the owner may base the estimate on depreciation schedules used for income tax purposes.
The property owner or owner’s agent must deliver the statement in writing or electronically within 21 days of the chief appraiser’s request. The statement is inadmissible in an administrative or judicial proceeding, except to determine compliance with Chapter 22, any effort at tax evasion or the owner’s protest before an ARB.
The statement is confidential, and the chief appraiser may only disclose it as provided in Section 22.27. Section 22.27 lists seven reasons that the chief appraiser may disclose the information, including during a judicial or administrative proceeding to which the property owner or the person who filed the statement or report is a party. Such an administrative proceeding would be an ARB hearing.
Failure to comply with the chief appraiser’s request will result in the same penalties as failure to render timely.
2003 amnesty filing
S.B. 340 also included a temporary provision in Section 22.23(c) for tax year 2003. It provided an amnesty period from September 1 to December 1, 2003, to encourage business owners to report business personal property that may have been omitted from the tax rolls.
If Texas business owners reported business personal property they owned in 2003 to their local appraisal district by December 1, they avoided taxes and penalties for the prior two years—2001 and/or 2002 tax years—in which those assets also may have been omitted from the tax rolls. The chief appraiser only added the property as omitted for tax year 2003.
This special Section 22.23(c) will expire January 1, 2005.
The Comptroller’s office has authority to prescribe rendition forms. Section 22.24(b), as amended, states that a person must include all information required by the newly written Section 22.01. The Comptroller’s office also is authorized to prescribe different rendition forms for different property types.
The Comptroller’s forms must contain the following statement in bold type:
“If you make a false statement on this form, you could be found guilty of a Class A misdemeanor or a state jail felony under Section 37.10, Penal Code.”The Comptroller’s Property Tax Division (PTD) proposed amendments to Comptroller Rule 9.3031 to implement these new law changes to current rendition forms. The PTD published the amended rule in the October 10 issue of the Texas Register and mailed the proposed rule and forms to appraisal districts for their written comments.
The proposed rule amendments also address changing a model rendition form. A person rendering property shall use a model form adopted by the Comptroller’s office or may use a form which is in substantial compliance with the model form if the Comptroller’s office has approved the changed form. An appraisal district or property owner cannot create a different rendition form without state approval.
Once the Comptroller adopts the final rendition forms, the PTD will mail them to appraisal districts. The forms will be available on the PTD’s Web page for property tax forms at www.window.state.tx.us/taxinfo/taxforms/02-forms.html, or by calling PTD’s Technical Assistance at 1-800-252-9121.
Comptroller’s 17 Model Rendition Forms
All forms below are PDF files. If you do not already have Adobe Acrobat Reader, you will need to download the latest version to view, fill, and print the forms.
- General Real Estate Rendition of Taxable Property (Form 50-141);
- General Personal Property Rendition of Taxable Property (Form 50-142);
- Report of Leased Space for Storage of Personal Property (Form 50-148);
- Industrial Real Property Rendition of Taxable Property (Form 50-149);
- Oil and Gas Lease Rendition of Taxable Property (Form 50-150);
- Mine and Quarry Real Property Rendition of Taxable Property (Form 50-151);
- Telephone Company Rendition of Taxable Property (Form 50-152);
- REA-Financed Telephone Company Rendition of Taxable Property (Form 50-153);
- Electric Company and Electric Cooperative Rendition of Taxable Property (Form 50-154);
- Gas Distribution Utility Rendition of Taxable Property (Form 50-155);
- Railroad Rendition of Taxable Property (Form 50-156);
- Pipeline and Right-of-Way Rendition of Taxable Property (Form 50-157);
- Business Personal Property Rendition of Taxable Property (Form 50-144);
- Watercraft Rendition of Taxable Property (Form 50-158);
- Aircraft Rendition of Taxable Property (Form 50-159);
- Mobile Homes Rendition of Taxable Property (Form 50-160); and
- Residential Real Property Inventory (Form 50-143).
Statement
December 2003
December 2003