- Filing Forms Revised
New Laws Refine Motor Vehicle, Heavy Equipment, Mobile Home Inventory
- Rylander Reports
- Amended Property Tax Rules with Forms
- House Bill 1037 - Law Changes for Property Appraised By More Than One Appraisal District
- 2000 Property Tax Calendar
- 2000 Schedule Comptroller Plans Appraisal Review Board (ARB) Training
- 2000 ARB Schedule of Dates/Places
- 1998 Refunds
Comptroller Refunds Companies $10 Million Paid in School Taxes
- Oil and Natural Gas Price Escalation Forecast
Comptroller Refunds Companies
$10 Million Paid in School Taxes
The Texas Tax Code provides for state tax refunds for economic development. Some Texas property owners are eligible to receive refunds on their net state sales and use taxes and franchise taxes for paying local school taxes. The total for all refunds collectively may not exceed $10 million, the amount made available by the Texas Legislature.Legislative report
Tax year 1997 was the first year that companies could apply for reimbursement of school taxes paid on a property that received a county or city abatement but not a school tax abatement. Ten companies received total refunds of $4,886,663 to reimburse them for paying 1997 school taxes. For tax year 1998, the Comptroller's office refunded the full $10 million to 28 companies for paying 1998 school taxes.
Tax Code Section 111.304 requires the Comptroller's office to submit an annual report to the Texas Legislature about the annual state refunds for companies who do not have school tax abatement agreements. The first report was due December 1, 1999, and on December 1st of each subsequent year.No school abatements
For tax year 1997, companies had to file their refund applications before August 1, 1998. Of the 16 individual refund applications received for 1997 taxes, the Comptroller's office approved 13 applications representing 10 companies who received total refunds of $4,886,663.
For tax year 1997 approved applications, more than 75 percent of the refunds were granted to manufacturing industries, of which the largest share was specifically in the chemicals sector. The $4.9 million in refunds were distributed in state fiscal year 1999. The resulting statewide economic impacts include approximately 45 new jobs, $2 million in additional fixed investment, and $2 million in additional personal income.
For tax year 1998, companies had to file their refund applications before August 1, 1999. Of the 41 refund applications received, the Comptroller's office approved 35 applications for 28 companies. While the approved 1998 refund requests totaled $17.5 million, these 28 companies received total refunds of $10 million (the maximum amount made available by the Texas Legislature) for paying 1998 school taxes.
For tax year 1998 approved applications, more than 90 percent of the refunds were granted to manufacturing industries. The refunds, however, covered a broader range of manufacturing sectors than in the previous year. The industry detail of the approved applications, coupled with the labor and capital intensity in those industries, accounts for the differences in the magnitude of impacts when comparing state fiscal year 1999 to fiscal 2000. The full $10 million available has been granted to eligible businesses in state fiscal year 2000. The resulting economic impacts include 170 new jobs, $6 million in additional fixed investment, and $7 million in additional personal income.
Starting in 1997, property owners were eligible to receive refunds on their net state sales and net franchise taxes. The Tax Code requires the Comptroller's office to issue state tax refunds to qualified property owners who entered into property tax abatement agreements--after January 1, 1996--with a city or county, but not a school district. Property owners with tax abatement agreements entered into on or before this date were not eligible for these state refunds.Refund requirements
To be eligible for a refund, a property owner must have established a new business in a reinvestment zone, or expanded or modernized an existing business located in the zone. The city or county must have granted a tax abatement for the owner's property, but not the school district.1999 refund application
Since entering into a city or county abatement agreement, the property owner must have increased the business's payroll by at least $3,000,000, specific to its property in Texas. Or, the owner must have increased the abated property's appraised value by at least $4,000,000. The maximum refund is the lesser of the school taxes paid or the amount of net sales and use tax and net franchise tax paid for the tax year the refund is claimed.
The property owner is barred from a refund if the company has agreed to an in-lieu-of-taxes payment--including a gift, grant, donation, or provision of in-kind services--to the city or county, if the payment exceeds $5,000 in value.
A property owner's refund equals the school property taxes paid by the owner in that tax year on property subject to a city or county abatement agreement. The refund also must be within the state's annual cap of appropriated funds for these refunds. If the school district had abated the property with terms identical to the city or county's tax abatement agreement terms, the taxpayer would not have paid those school taxes.
To claim a refund for 1999 school taxes, a property owner must submit an application to the Comptroller's office, along with the school district tax receipts showing the amount of school taxes paid on the property and other required documents. A property owner must file the refund application by July 31, 2000.
If, in any year, the total amount of all refunds claimed by property owners exceeds $10 million, the Comptroller's office must reduce each claimant's refund proportionally so that all property owners share in the $10 million.
The law provides that property owners may receive these refunds on state taxes for the lesser of five years or the duration of the tax abatement agreement with the city or county. If the property owner or the taxing unit cancels the tax abatement agreement or the property owner relocates the business outside the reinvestment zone, the owner's right to claim a refund ends.