Implementing New LegislationNew Property Tax Laws Bring Questions
Comptroller's Report Appraisal Review Board Seminars State Refunds for Economic Development Timber Manual Ag and Timberland Cap Rates County appraisal districts (CADs) and local tax offices are implementing new law changes that affect 2004 property tax values and taxes. As with any new laws, questions arise. The following responses to frequently asked questions are presented here for general guidance. Because situations vary widely, CADs and tax offices should consult with their lawyers to receive legal opinions on these new laws.
Renditions
Q: If a property owner has an extended filing deadline for a rendition of business personal property, does the CAD wait to send the Tax Code Section 25.19 notice for that property?
A: The new rendition law states that a chief appraiser may not deliver a Section 25.19 written notice of appraised value for a property required to be rendered until after the applicable filing deadline. A CAD should send the notice after the extended deadline for filing the property owner’s rendition has passed.
Q: Tax Code Section 25.19 provides that the chief appraiser, with the approval of the CAD board of directors, may dispense with sending a required appraisal notice for an increasing property value if the value change is $1,000 or less. Does this provision also apply to a value change of less than $1,000 from a value rendered by a property owner?
A: Any change in value from that rendered by the property owner requires the chief appraiser to send a Section 25.19 appraisal notice. The $1,000 provision that excludes sending a notice only applies to Section 25.19(a)(1), which addresses the CAD increasing a value less than $1,000 above the preceding tax year’s value.
The CAD also is required to send a notice under Section 25.19(g), which includes a CAD reappraisal or property ownership change, even though the property’s value change may be less than $1,000.
Q: Should car, boat, heavy equipment and manufactured housing dealers file the new rendition form for their inventory that falls under the “special” inventory provisions of Tax Code Chapter 23?
A: New Comptroller Rendition Form 50-144, Business Personal Property Rendition of Taxable Property, states on Schedule A: Personal Property Valued Less Than $20,000 and on Schedule C: Inventory how to handle this “special” inventory. The footnote on these two schedules states that if a property owner is a dealer/retailer of inventory subject to Sections 23.121, 23.124, 23.1241 or 23.127 (special inventory provisions), then the dealer/retailer should list the inventory held for sale on the appropriate Dealer’s Inventory Declaration rather than on the rendition schedules.
These dealers/retailers should complete either Schedule A or Schedule C of Form 50-144 for other business property or inventories that do not qualify under the “special” inventory provision.
Q: May a CAD or property owner use a different rendition form than one adopted by the Comptroller’s office?
A: Yes. A CAD or property owner may use a different form but only if the Comptroller approves that different form in advance of its use. The CAD or owner should submit the proposed form to the Comptroller’s Property Tax Division (PTD). See the amended Comptroller’s Rule 9.3031 for details. To contact the PTD for more information about this approval process, call 1-800-252-9121, extension 5-9853, or send an e-mail to ptd.cpa@cpa.state.tx.us.
Tax limitations
Q: For the optional tax limitation that counties, cities and junior college districts may grant homeowners 65 or older or disabled, is there a deadline for taking official action so that the limitation begins for the 2004 tax year?
A: No. New Tax Code Section 11.261 does not set a deadline for action by the taxing unit’s governing board to act on this new limitation.
Delinquent tax sales
Q: According to House Bill (H.B.) 335, purchasers of property at foreclosure sales cannot owe delinquent taxes. It addresses tax sales under Tax Code Section 34.015 and foreclosure sales under Civil Practice and Remedies Code Section 34.0445. Do the three forms provided by the Comptroller’s office address foreclosure sales for the Civil Practice and Remedies Code?
A: No. The Comptroller’s model forms do not address any special provisions of the Civil Practice and Remedies Code for persons bidding on real property at court-ordered public sales.
The three forms in the October 2003 STATEMENT only address the provisions for tax foreclosures sales under Tax Code Section 34.015. Tax Code Section 5.07 requires the Comptroller to prescribe the contents of all forms necessary for the administration of the property tax system under the Property Tax Code.
Q: Does the new Form 50-309, Written Statement about Delinquent Taxes Required to Purchase at Tax Foreclosure Sale, need to be notarized?
A: If the statement is going to be recorded with property records at the county clerk’s office under the Property Code Section 12.001(b), then the county tax collector should have the statement notarized.
See the October 2003 STATEMENT article for more about buying property at a tax foreclosure sale.
Overlapping CAD property
Q: Does Tax Code Section 6.025 concerning overlapping properties also apply to agricultural productivity values and the limited homestead values under Tax Code Section 23.23?
A: The new changes to Section 6.025 address any appraised or market value on a property located in one or more CADs, including productivity values and the limited or capped homestead values. Both the productivity value and the limited value are appraised values.
Effective January 1, 2004, Section 6.025(d) requires chief appraisers that appraise the same property in an overlapping territory to agree on the appraised or market value of that property by May 1. If they do not agree, then the appraisers must use the lowest appraised or market value. This requirement does not extend to special appraisal or exemption qualifications.
Each CAD still determines if a property qualifies for any exemptions or special productivity appraisal. One CAD may grant such an application, while the other CAD may deny the application. If, however, both CADs grant the special productivity value or homestead exemptions, then any appraised values must follow the new provisions above.
Productivity values
Q: H.B. 3607 amended Tax Code Section 23.51 for appraising agricultural land. Did this bill set up a special appraisal category for land designated as wildlife management?
A: No. This bill did not set up a special productivity value for land designated as wildlife management. The bill simply states that income from hunting and recreational leases on lands qualified for wildlife management cannot be used to determine productivity values for open-space land.
For instance, a CAD has lease information on 100 tracts of native pastureland. Ten of these tracts have converted to wildlife management and have hunting leases for $10 per acre. These 10 leases cannot be used to determine the productivity value for native pastureland. Of the remaining 90 tracts, 60 tracts have hunting leases ranging from $4 to $6 per acre, along with grazing leases. The appraisers should use these 60 tracts to determine the typical hunting and lease income and expenses to determine the productivity value for native pastureland.
CADs will continue to appraise land qualified for wildlife management according to the land’s classification prior to conversion to wildlife management. The productivity value may be determined as native pastureland, irrigated cropland or some other prior classification. The only difference in calculation will be the exclusion of hunting and recreational lease income from leases on wildlife management land.
More information
Previous issues of STATEMENT, since August 2003, have included articles on the general provisions of the various new 2004 laws. Readers should review those previous issues for more details. For example, the December STATEMENT addressed the new rendition requirements, and the January STATEMENT included articles about new exemption laws and the appraisal of overlapping properties.
For other questions not addressed here, please contact the PTD’s technical assistance hotline by calling 1-800-252-9121. In Austin, call (512)305-9999. Or, e-mail questions to ptd.cpa@cpa.state.tx.us.
Statement
February 2004
February 2004