Subtitle E. Collections and Delinquency
Chapter 33. Delinquency
Subchapter A. General Provisions
Sec. 33.01. Penalties and Interest.
Sec. 33.011. Waiver of Penalties and Interest.
Sec. 33.02. Installment Payment of Delinquent Taxes.
Sec. 33.03. Delinquent Tax Roll.
Sec. 33.04. Notice of Delinquency.
Sec. 33.05. Limitation on Collection of Taxes.
Sec. 33.06. Deferred Collection of Taxes on Residence Homestead of Elderly or Disabled Person.
Sec. 33.065. Deferred Collection of Taxes on Appreciating Residence Homestead.
Sec. 33.07. Additional Penalty for Collection Costs for Taxes Due Before June 1.
Sec. 33.08. Additional Penalty for Collection Costs for Taxes Due on or After June 1.
Sec. 33.09. Transfer of Delinquent County Education District Taxes.
Sec. 33.10. Restricted or Conditional Payments of Delinquent Taxes, Penalties, and Interest Prohibited.
[Sections 33.11 to 33.20 reserved for expansion]
(a) A delinquent tax incurs a penalty of six percent of the amount of the tax for the first calendar month it is delinquent plus one percent for each additional month or portion of a month the tax remains unpaid prior to July 1 of the year in which it becomes delinquent. However, a tax delinquent on July 1 incurs a total penalty of twelve percent of the amount of the delinquent tax without regard to the number of months the tax has been delinquent. A delinquent tax continues to incur the penalty provided by this subsection as long as the tax remains unpaid, regardless of whether a judgment for the delinquent tax has been rendered.
(b) If a person who exercises the split-payment option provided by Section 31.03 of this code fails to make the second payment before July 1, the second payment is delinquent and incurs a penalty of twelve percent of the amount of unpaid tax.
(c) A delinquent tax accrues interest at a rate of one percent for each month or portion of a month the tax remains unpaid. Interest payable under this section is to compensate the taxing unit for revenue lost because of the delinquency. A delinquent tax continues to accrue interest under this subsection as long as the tax remains unpaid, regardless of whether a judgment for the delinquent tax has been rendered.
(d) In lieu of the penalty imposed under Subsection (a), a delinquent tax incurs a penalty of 50 percent of the amount of the tax without regard to the number of months the tax has been delinquent if the tax is delinquent because the property owner received an exemption under:
(1) Section 11.13 and the chief appraiser subsequently cancels the exemption because the residence was not the principal residence of the property owner and the property owner received an exemption for two or more additional residence homesteads for the tax year in which the tax was imposed;
(2) Section 11.13(c) or (d) for a person who is 65 years of age or older and the chief appraiser subsequently cancels the exemption because the property owner was younger than 65 years of age; or
(3) Section 11.13(q) and the chief appraiser subsequently cancels the exemption because the property owner was younger than 55 years of age when the property owner's spouse died.
(e) A penalty imposed under Subsection (d) does not apply if:
(1) the exemption was granted by the appraisal district or board and not at the request or application of the property owner or the property owner's agent; or
(2) at any time before the date the tax becomes delinquent, the property owner gives to the chief appraiser of the appraisal district in which the property is located written notice of circumstances that would disqualify the owner for the exemption.
Amended by 1981 Tex. Laws (1st C.S.), p. 168, ch. 13, Sec. 127; amended by 1991 Tex. Laws, p. 2893, ch. 836, Sec. 5.3; amended by 1997 Tex. Laws, p. 2854, ch. 906, Sec. 3, and p. 3913, ch. 1039, Sec. 33.
Delinquency date, see Sec. 31.02.
Annual interest rate for rollback taxes on agricultural, timber and recreational lands, see Secs. 23.46, 23.55, 23.76, 23.86 & 23.96.
Interest added for omitted property, see Sec. 26.09(d).
Penalty and interest on balance after partial payments, see Sec. 31.07.
Tax lien secures payment of penalty and interest, see Sec. 32.01.
Additional collection cost penalty allowed, see Sec. 33.07.
Penalties and interest waived or cancelled, see Secs. 33.011 & 33.04.
FDIC was required to pay the delinquent ad valorem taxes and statutory interest but not attorney's fees, costs, and special assessments on properties held in federal receivership. Travis County v. Resolution Trust Corporation, 61 F. Supp.2d 581 (W.D. Tex 1999).
The Federal Deposit Insurance Corporation (FDIC) is not liable for penalties owed on taxes that become delinquent while the FDIC owns the property. Penalties and interest that accrued before the FDIC became the property's owner cannot be collected while the FDIC owns the property; however, a lien for penalties and interest remains on the property and may be enforced after the FDIC disposes of the property. Irving Independent School District v. Packard Properties; Carrollton-Farmer's Branch Independent School District v. Johnson & Cravens 13911, Inc., 970 F.2d 58 (5th Cir. 1992).
The FDIC is not liable for penalties, interest, and collection costs on delinquent taxes owed by failed savings and loan associations. Irving Independent School District v. Packard Properties, Ltd., 741 F.Supp. 120 (N.D. Tex. 1990).
The FDIC is exempt from foreclosure, sale, fines, and/or penalties in connection with taxes on real estate when it acts as receiver. Ft. Bend County MUD No. 30 v. Gayle, 755 F. Supp. 746 (S.D. Tex. 1990).
The statutory requirement of Section 26.15(d) of preparing and mailing a corrected tax bill did not include postponing the delinquency date in Section 31.04(a), and the corrected tax bill did not void the original tax bill. Richardson Independent School District v. GE Capital Corporation, 58 S.W.3d 290 (Tex. App. - Dallas 2001, no pet.).
Partial tender of assessed taxes prior to the delinquency date was sufficient to preclude imposing penalty and interest on the unpaid balance and to avoid any effort to collect the balance due pending the resolution of the property valuation suit. House Bill 2201 (1997) deleted the unconstitutional portion of Section 42.08(b) and amended Section 42.42 for the due date of a post-appeal supplemental tax bill and the penalty and interest on such bill. By changing the delinquency date for pending valuation cases not yet reduced to judgment, the Legislature did no more than remit a penalty, not release an indebtedness or liability owed to a political subdivision of the State. HB 2201 is not an unconstitutional release of an indebtedness under Article III, Section 55, Texas Constitution. Jefferson County, et. al v. Clark Refining & Marketing, Inc., 7 S.W.3d 324 (Tex. App. - Beaumont 1999, no pet.).
Penalties and interest that accrued as a matter of law while a previous owner of property was in bankruptcy were only voidable, not void, because of the automatic stay provisions in the bankruptcy code. Therefore, only the bankruptcy court had power to invalidate the penalties and interest. Since the bankruptcy court did not do so, the lien for the penalties and interest were still valid, so the new owner could not obtain a refund of the amounts. Walker Country Place v. Central Appraisal Dist. of Taylor County, 867 S.W.2d 111 (Tex. App.-Eastland 1993, no writ).
Summary judgment should not have been granted to a taxpayer where there was an unresolved question of fact regarding how much the taxpayer owed the taxing unit under an earlier delinquent tax suit. Nueces County v. Com Four, 865 S.W.2d 538 (Tex. App.-Corpus Christi 1993, writ requested).
A water recreation district may not waive penalties and interest due on delinquent taxes because it does not have the specific authority to do so. Tex. Att'y Gen. LO-03-58 (1993).
(a) The governing body of a taxing unit:
(1) shall waive penalties and may provide for the waiver of interest on a delinquent tax if an act or omission of an officer, employee, or agent of the taxing unit or the appraisal district in which the taxing unit participates caused or resulted in the taxpayer's failure to pay the tax before delinquency and if the tax is paid not later than the 21st day after the date the taxpayer knows or should know of the delinquency; and
(2) may waive penalties and provide for the waiver of interest on a delinquent tax if the property for which the tax is owed is acquired by a religious organization that qualifies the property for exemption under Section 11.20 before the first anniversary of the date the religious organization acquires the property.
(b) If a tax bill is returned undelivered to the taxing unit by the United States Postal Service, the governing body of the taxing unit shall waive penalties and interest if:
(1) the taxing unit does not send another tax bill on the property in question at least 21 days before the delinquency date to the current mailing address furnished by the property owner and the property owner establishes that a current mailing address was furnished to the appraisal district by the property owner for the tax bill before September 1 of the year in which the tax is assessed; or
(2) the tax bill was returned because of an act or omission of an officer, employee, or agent of the taxing unit or the appraisal district in which the taxing unit participates and the taxing unit or appraisal district did not send another tax bill on the property in question at least 21 days before the delinquency date to the proper mailing address.
(c) For the purposes of this section, a property owner is considered to have furnished a current mailing address to the taxing unit or to the appraisal district if the current address is expressly communicated to the appraisal district in writing or if the appraisal district received a copy of a recorded instrument transferring ownership of real property and the current mailing address of the new owner is included in the instrument or in accompanying communications or letters of transmittal.
(d) A request for a waiver of penalties and interest under this section must be made before the 181st day after the delinquency date.
(e) Penalties and interest do not accrue during the period that a bill is not sent under Section 31.01(f).
(f) A property owner is not entitled to relief under Subsection (b) of this section if the property owner or the owner's agent furnished an incorrect mailing address to the appraisal district or the taxing unit or to an employee or agent of the district or unit.
(g) Taxes for which penalties and interest have been waived under Subsection (b) of this section must be paid within 21 days of the property owner having received a bill for those taxes at the current mailing address.
(h) The governing body of a taxing unit shall waive penalties and interest on a delinquent tax if:
(1) the tax is payable by electronic funds transfer under an agreement entered into under Section 31.06(a); and
(2) the taxpayer submits evidence sufficient to show that:
(A) the taxpayer attempted to pay the tax by electronic funds transfer in the proper manner before the delinquency date;
(B) the taxpayer's failure to pay the tax before the delinquency date was caused by an error in the transmission of the funds; and
(C) the tax was properly paid by electronic funds transfer or otherwise not later than the 21st day after the date the taxpayer knew or should have known of the delinquency.
Added by 1985 Tex. Laws, p. 5503, ch. 769, Sec. 1; amended by 1989 Tex. Laws, p. 3600, ch. 796, Sec. 31; amended by 1991 Tex. Laws, p. 2893, ch. 836, Sec. 5.1; amended by 1995 Tex. Laws, p. 3376, ch. 579, Sec. 11; amended by 1999 Tex. Laws., p. 3146, ch. 606, Sec. 2; amended by 1999 Tex. Laws, p. 3450, ch. 817, Sec. 1; amended by 2001 Tex. Laws, p. 1421, ch. 768, Sec. 1; amended by SB 725, 78th Tex. Leg., 2003, effective September 1, 2003.
Legislature has no power to authorize taxing unit to extinguish liability, see art. III, Sec. 55, Tex. Const.
Penalty and interest accrual, see Sec. 33.01.
Delinquency date of tax bill, see Sec. 31.02.
Delivery of tax bill to fiduciary, see Sec. 1.11.
Delivery of tax bill in mail, see Sec. 1.07.
Electronic funds transfer, see Sec. 31.06(a).
Property owner's agent, see Sec. 1.111.
Postponement of delinquency date, see Sec. 31.04.
Impositions made for delinquency for failure to pay taxes, whether these impositions are denominated "penalties," "interest," or "forfeitures," or whether prescribed without definition or name, are all in reality penalties imposed for delinquency that are not part of the tax proper and thus subject to legislative control and remittance. Jones v. Williams, 45 S.W.2d 130 (Tex. 1931).
Taxing units were required to provide evidence of mailing the five-year delinquent tax notice (now repealed) before the presumption of delivery to an individual taxpayer arises. Taxing units must also claim avoidance through waiver as an affirmative defense to a taxpayer's plea in intervention. By failing to do so, the issue was waived by the taxing units. Further, taxing units must raise a taxpayer's corporate capacity to sue defense by verified pleadings or waive the issue. WHM Properties, Inc. v. Dallas County, 119 S.W.3d 325 (Tex. App.-Waco, 2003, pet. filed). Sec. 33.011 is discretionary only; taxing units are not required to forgive penalties and interest. Amoroso v. Aldine Independent School District, 808 S.W.2d 118 (Tex. App.-Houston 1991).
Where school board refused to waive penalties and interest, taxpayer had no claim for refund under Sec. 31.01. Even if penalty and interest were illegally assessed, the voluntary payment rule barred right to refund. Sheldon v. Jasper Independent School District, 768 S.W.2d 884 (Tex. App.-Beaumont 1989).
The discretion for waiving penalty and interest on a delinquent tax rests with a taxing unit's governing body and not the court; and, for consideration of such waiver, the taxpayer must pay within 21 days of learning of the delinquency. Bryan Independent School District v. Lamountt, 726 S.W.2d 192 (Tex. App.-Houston 1987, no writ).
A county may not waive taxes, penalties, and interest on real property owned by an individual that houses a nonprofit organization. Op. Tex. Att'y Gen. No. JC-0134 (1999).
The central appraisal district acts as the agent of a taxing unit, and the unit's governing body may waive penalties and interest on a delinquent tax because of an error made by the central appraisal district. Op. Tex. Att'y Gen. No. JM-919 (1988).
(a) The collector for a taxing unit that collects its own taxes may enter an agreement with a person delinquent in the payment of the tax for payment of the tax, penalties, and interest in installments. The agreement must be in writing and may not extend for a period of more than 36 months.
(b) Interest and a penalty accrue as provided by Subsections (a) and (c) of Section 33.01 on the unpaid balance during the period of the agreement.
(c) A property owner's execution of an installment agreement under this section is an irrevocable admission of liability for all taxes, penalties, and interest that are subject to the agreement.
(d) Property may not be seized and sold and a suit may not be filed to collect a delinquent tax subject to an installment agreement unless the property owner:
(1) fails to make a payment as required by the agreement;
(2) fails to pay other property taxes collected by the unit when due as required by the collector; or
(3) breaches any other condition of the agreement.
(e) Execution of an installment agreement tolls the limitation periods provided by Section 33.05 of this code for the period during which enforced collection is barred by Subsection (d) of this section.
Amended by 1997 Tex. Laws, p. 2855, ch. 906, Sec. 5.
Statute of limitations, see Sec. 33.05.
Delinquent tax suits, see Sec. 33.41.
Personal property seizure, see Sec. 33.21.
Delinquent tax receipt information, see Rule Sec. 9.1001.
A contract for installment payment of delinquent taxes, penalties and interest by a county commissioner is not subject to Local Government Code Section 81.002, and the county commissioner has not violated the written oath that he or she will not be interested in a contract with or claim against the county. The county commissioner - as a taxpayer - has entered into the contract for installment payment of delinquent taxes, exercising a payment option available to other delinquent taxpayers. The terms of the agreement are established by statute and not by negotiations between the tax collector and taxpayer. Tex. Att'y Gen. LO-96-135 (1996).
A delinquent tax penalty adopted by a taxing unit under Sec. 33.07 does not apply to delinquent taxes subject to installment agreements entered into under Sec. 33.02 before July 1 of the year the taxes became delinquent. Since the purpose of Sec. 33.02 is to allow a taxpayer formally to agree to pay delinquent taxes and avoid the imposition of further penalties or a collection suit, the taxpayer would have little incentive to enter into an installment agreement if penalties continued to accrue or suit could be filed against him or her. Op. Tex. Att'y Gen. No. DM-235 (1993).
Each year the collector for each taxing unit shall prepare a current and a cumulative delinquent tax roll for the unit.
Electronic and physical document, see Sec. 1.10.
Notices of delinquency, see Sec. 33.04.
Delinquency date, see Sec. 31.02.
Delinquent tax roll, see Rule Sec. 9.3008.
The county assessor-collector is not entitled to retain fees in either a public or private capacity for work performed in aiding the attorney hired by the county to collect delinquent taxes. Op. Tex. Att'y Gen. No. JM-264 (1984).
At least once each year the collector for a taxing unit shall deliver a notice of delinquency to each person whose name appears on the current delinquent tax roll. However, the notice need not be delivered if:
(1) a bill for the tax was not mailed under Section 31.01(f); or
(2) the collector does not know and by exercising reasonable diligence cannot determine the delinquent taxpayer's name and address.
Amended by 1981 Tex. Laws (1st C.S.), p. 168, ch. 13, Sec. 128; amended by 1985 Tex. Laws, p. 5446, ch. 761, Sec. 1; amended by 1999 Tex. Laws, p. 5101, ch. 1481, Sec. 16; amended by 2001 Tex. Laws, p. 4822, ch. 1430, Sec. 11.
Certified appraisal roll, see Sec. 26.01.
Delivery of notice, see Sec. 1.07.
Delinquency date, see Sec. 31.02.
Accrual of penalty and interest, see Sec. 33.01.
Amendments by HB 490, 77th Tex. Leg., effective September 1, 2001, do not apply to taxes subject to a delinquent tax suit pending before this effective date. They apply to all other taxes that became delinquent before the effective date of this Act or that become delinquent on or after that date. Penalties and interest on a delinquent tax are not canceled under Section 33.04, Tax Code, for failure to deliver any notice under that section as it existed immediately before this effective date. A delinquent tax that is the subject of a collection suit filed before this effective date is governed by Section 33.04, Tax Code, as that section existed immediately before this effective date, and the former law is continued in effect for that purpose.
Taxing units were required to provide evidence of mailing the five-year delinquent tax notice (now repealed) before the presumption of delivery to an individual taxpayer arises. Taxing units must also claim avoidance through waiver as an affirmative defense to a taxpayer's plea in intervention. By failing to do so, the issue was waived by the taxing units. Further, taxing units must raise a taxpayer's corporate capacity to sue defense by verified pleadings or waive the issue. WHM Properties, Inc. v. Dallas County, 119 S.W.3d 325 (Tex. App.-Waco, 2003, pet. filed).
A taxpayer who owes property taxes that are delinquent more than five years but who has not received proper notice is not responsible to pay any penalty and interest. The taxpayer has until the first day of the first month that begins at least 21 days after the tax collector delivers proper notice. Any accrued penalty and interest between the time the tax became delinquent and the first day of the first month that begins at least 21 days after proper notice delivery is canceled. Op. Tex. Att'y Gen. No. JC-328 (2001).
(a) Personal property may not be seized and a suit may not be filed:
(1) to collect a tax on personal property that has been delinquent more than four years; or
(2) to collect a tax on real property that has been delinquent more than 20 years.
(b) A tax delinquent for more than the limitation period prescribed by this section and any penalty and interest on the tax is presumed paid unless a suit to collect the tax is pending.
(c) If there is no pending litigation concerning the delinquent tax at the time of the cancellation and removal, the collector for a taxing unit shall cancel and remove from the delinquent tax roll:
(1) a tax on real property that has been delinquent for more than 20 years;
(2) a tax on personal property that has been delinquent for more than 10 years; and
(3) a tax on real property that has been delinquent for more than 10 years if the property has been owned for at least the preceding eight years by a home-rule municipality in a county with a population of more than 3.3 million.
Amended by 1991 Tex. Laws, p. 2893, ch. 836, Sec. 5.4; amended by 1997 Tex. Laws, p. 132, ch. 63, Sec. 1; amended by 2001 Tex. Laws, p. 1188, ch. 669, Sec. 119.
Personal property defined, see Sec. 1.04(4).
Real property defined, see Sec. 1.04(2).
Installment payment of delinquent taxes, see Sec. 33.02.
Limitation statute does not release or extinguish the debt, but merely affects the remedy when its enforcement is sought. Sam Bassett Lumber Co. v. City of Houston, 198 S.W.2d 879 (Tex. 1947).
Because the tax liens properly attached to the properties at issue during the period of time when the Federal Deposit Insurance Corporation held only a lien interest, the owner of the properties through a foreclosure sale was responsible for paying taxes upon its foreclosure and also responsible for paying penalties the lien secured to the extent that the proceeds from the foreclosure were greater than the amount of the tax liens. Tax Code Section 33.05 did not bar collecting the 1991 and 1992 taxes. PNL Asset Management Company v. Kerrville Independent School District, 37 S.W.3d 80 (Tex. App. - San Antonio [4th Dist.] 2000, pet. denied).
A court's dismissal of property tax collection suits for want of prosecution did not prevent taxing units from refiling them, subject to the 20-year statute of limitations period. City of Houston v. Robinson, 837 S.W.2d 262 (Tex. App.-Houston [1st Dist.] 1992, no writ).
This section bars a taxing unit from filing suit to recover taxes more than four years delinquent. Flowers v. Lavaca County, 766 S.W.2d 825 (Tex. App.-Corpus Christi 1989, writ denied).
Statute of limitations provided by this section is an affirmative defense. Taxpayer may not use it as the basis for a cause of action. Salvaggio v. Houston ISD, 752 S.W.2d 189 (Tex. App.-Houston 1988, writ denied).
Mineral production equipment must be appraised separately from the mineral leasehold interest. Land, improvements to land, and interests in land must be appraised separately, even though they are all included within the code's definition of "real property." The appraisals may be in one taxpayer account, but the account must reflect separate appraisals for each property. No authority supports a view that mineral production equipment to be indispensable to the production of oil and gas on the leasehold estate, and therefore taxable as an improvement, fixture, or appurtenance to the realty. Three factors determine whether a property is affixed as an improvement and considered real property: (1) the intention of the person making the annexation (the preeminent factor), (2) the mode and sufficiency of the annexation to the real estate, and (3) the adoption of the property to the real estate's uses or purposes. Determining if mineral production equipment is real or personal property for tax collection purposes must be made on a case-by-case basis. Op. Tex. Att'y Gen. No. DM-438 (1997).
Only a court may enforce statutes of limitation as the collector has no authority to forgive or forego the collection of taxes lawfully assessed. Op. Tex. Att'y Gen. No. WW-107 (1957).