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Title 1. Property Tax Code
Subtitle D. Appraisal and Assessment

Chapter 23. Appraisal Methods and Procedures

Subchapter B. Special Appraisal Provisions

Sec. 23.11. Governmental Action that Constitutes Taking.
Sec. 23.12. Inventory.
Sec. 23.121. Dealer's Motor Vehicle Inventory; Value.
Sec. 23.122. Prepayment of Taxes by Certain Taxpayers.
Sec. 23.123. Declarations and Statements Confidential.
Sec. 23.124 Dealer's Vessel and Outboard Motor Inventory; Value.
Sec. 23.1241. Dealer's Heavy Equipment Inventory; Value.
Sec. 23.1242. Prepayment of Taxes by Heavy Equipment Dealers.
Sec. 23.125. Prepayment of Taxes by Certain Taxpayers.
Sec. 23.126. Declarations and Statements Confidential.
Sec. 23.127. Retail Manufactured Housing Inventory; Value.
Sec. 23.128. Prepayment of Taxes by Manufactured Housing Retailers.
Sec. 23.13. Taxable Leaseholds.
Sec. 23.14. Appraisal of Property Subject to Environmental Response Requirement.
Sec. 23.15. Intangibles of an Insurance Company.
Sec. 23.16. Intangibles of a Savings and Loan Association.
Sec. 23.17. Mineral Interest Not Being Produced.
Sec. 23.175. Oil or Gas Interest.
Sec. 23.18. Property Owned by a Nonprofit Homeowners' Organization for the Benefit of Its Members.
Sec. 23.19. Property Occupied by Stockholders of Corporation Incorporated under Cooperative Association Act.
Sec. 23.20. Waiver of Special Appraisal.
Sec. 23.21. Property Used to Provide Affordable Housing.
Sec. 23.215. Appraisal of Certain Nonexempt Property Used for Low-Income or Moderate-Income Housing.
Sec. 23.22. Land Use of Which is Restricted by Governmental Entity.
Sec. 23.225. Appraisal of Land included in Habitat Preserve and Subject to Conservation Easement.
Sec. 23.23. Limitation on Appraised Value of Residence Homestead.
Sec. 23.24. Furniture, Fixtures, and Equipment.

[Sections 23.25 to 23.40 reserved for expansion]

Sec. 23.11. Governmental Action That Constitutes Taking.

In appraising private real property, the effect of a governmental action on the market value of private real property as determined in a suit or contested case filed under Chapter 2007, Government Code, shall be taken into consideration by the chief appraiser in determining the market value of the property.

Added by 1995 Tex. Laws, p. 3271, ch. 517, Sec. 3.

Cross References:
Definition of market value, see Sec. 1.04(7).
Property appraisal generally, see Sec. 23.01.

Sec. 23.12. Inventory.

(a) Except as provided by Sections 23.121, 23.1241, 23.124, and 23.127, the market value of an inventory is the price for which it would sell as a unit to a purchaser who would continue the business. An inventory shall include residential real property which has never been occupied as a residence and is held for sale in the ordinary course of a trade or business, provided that the residential real property remains unoccupied, is not leased or rented, and produces no income.

(b) The chief appraiser shall establish procedures for the equitable and uniform appraisal of inventory for taxation. In conjunction with the establishment of the procedures, the chief appraiser shall:

(1) establish, publish, and adhere to one procedure for the determination of the quantity of property held in inventory without regard to the kind, nature, or character of the property comprising the inventory; and

(2) apply the same enforcement, verification, and audit procedures, techniques, and criteria to the discovery, physical examination, or quantification of all inventories without regard to the kind, nature, or character of the property comprising the inventory.

(c) In appraising an inventory, the chief appraiser shall use the information obtained pursuant to Subsection (b) of this section and shall apply generally accepted appraisal techniques in computing the market value as defined in Subsection (a) of this section.

(d) Subsections (b) and (c) of this section apply only to an inventory held for sale, lease, or rental.

(e) A person who owns an inventory to which Subsection (b) of this section applies may bring an action to enjoin the chief appraiser from certifying to a taxing unit any portion of the appraisal roll that lists an inventory for which the chief appraiser has not complied with the requirements of Subsection (b) of this section.

(f) The owner of an inventory other than a dealer's motor vehicle inventory as that term is defined by Section 23.121, a dealer's heavy equipment inventory as that term is defined by Section 23.1241, or a dealer's vessel and outboard motor inventory as that term is defined by Section 23.124, or a retail manufactured housing inventory as that term is defined by Section 23.127 may elect to have the inventory appraised at its market value as of September 1 of the year preceding the tax year to which the appraisal applies by filing an application with the chief appraiser requesting that the inventory be appraised as of September 1. The application must clearly describe the inventory to which it applies and be signed by the owner of the inventory. The application applies to the appraisal of the inventory in each tax year that begins after the next August 1 following the date the application is filed with the chief appraiser unless the owner of the inventory by written notice filed with the chief appraiser revokes the application or the ownership of the inventory changes. A notice revoking the application is effective for each tax year that begins after the next September following the date the notice of revocation is filed with the chief appraiser.

(g) Expired in 1991.

Amended by 1981 Tex. Laws (1st C.S.), p. 137, ch. 13, Sec. 58; amended by 1987 Tex. Laws, ch. 590, Sec. 1; amended by 1989 Tex. Laws, p. 3596, ch. 796, Sec. 16; amended by 1993 Tex. Laws, p. 2504, ch. 672, Secs. 1 and 2; amended by 1995 Tex. Laws, p. 4231, ch. 836, Sec. 1 and 2, and by p. 4727, ch. 945, Sec. 1; amended by 1997 Tex. Laws, p. 712, ch. 165, Sec. 31.01 (73); by p. 4248, ch. 1112, Sec. 1; and by p. 4564, ch. 1184, Sec. 1.

Cross References:
Model rendition form for business personal property, see Rule Sec. 9.3031.
Model rendition form for residential real property inventory, see Rule Sec. 9.3031.
Listing of residential real property inventory in appraisal records, see Rule Sec. 9.3004.
Determining residential real property as inventory, see Rule Sec. 9.4013.
Request for September 1 inventory appraisal, see Rule Sec. 9.3045.

Notes:
Taxpayer is able to use federal court bankruptcy proceedings to reappraise its property so long as the reappraisal is determined by using state court principles. Under Texas law, only grossly excessive values can be adjusted and the taxpayer must prove the excessive nature of the initial tax appraisal. The court cannot take into consideration conditions which arise after January 1 of the disputed tax year and/or any other factors which impact the taxpayer's actual distribution. Business value does not impact the actual value of the inventory held by that business. In Re: Quality Beverage Co., Inc., 170 Bankruptcy Reporter 310 (Southern District, Texas 1994).

An exporter that detains goods in a warehouse while awaiting overseas export is entitled to a property tax exemption under the Commerce Clause and the Equal Protection Clause of the United States Constitution. Taxation would prevent the federal government from speaking with one voice in its regulation of commercial relations with foreign governments. Vinmar, Inc. v. Harris County Appraisal District, 947 S.W.2d 554 (Tex. 1997).

Section 23.12(f), Property Tax Code, allowing property owners to choose a September 1 appraisal date for the market value of inventory, does not violate the Texas Constitution. A reasonable discrepancy between the actual value of a property and the value at which it is appraised for taxes is permissible to allow for a difference in judgment. The Legislature may constitutionally draw distinctions in the manner in which market value of property is determined for ad valorem tax purposes as long as the classifications are not unreasonable, arbitrary, or capricious. The Legislature may classify property differently to attain market value. Having two alternative appraisal dates on which inventory property may be appraised can temper the disparity caused by a single appraisal date, providing for greater equality and uniformity within a class of property. It makes no difference under Section 23.12(f) if the inventory was located within different taxing units within an appraisal district; the statute allows September 1 appraisal dependent on whether the inventory owner has property in the appraisal district rather than a particular taxing unit. H. E. Butt Grocery Company v. Jefferson County Appraisal District, 922 S.W.2d 941 (Tex. 1996) and Enron Corp., Enron Gas Marketing, Inc., Panhandle Gas Company and Houston Pipe Line Company v. Spring Independent School District, 922 S.W.2d 931 (Tex. 1996).

The appraisal district's use of the cost approach analysis in valuing jewelry inventory, in which a discount factor and transportation adjustment were applied, was a proper appraisal methodology. There was sufficient evidence to support the judgment based on expert witness testimony. Since no objection was made to the qualifications and reliability of the expert witness, the weight given to training and expertise was for the trier of fact to determine. Stuckey Diamonds, Inc. v. Harris County Appraisal District, 93 S.W.3d 212 (Tex. App.-Houston [14th Dist.] 2002, no pet.).

In some circumstances, book value of inventory may be probative of market value by either serving as an indication of market value or by being the same as market value; however, the two values may be entirely unrelated. The trier of fact must determine the market value of inventory according to the evidence presented on a case-by-case basis. Sears Roebuck and Company v. Dallas Central Appraisal District, 53 S.W.3d 382 (Tex. App.-Dallas [5th Dist.] 2000, pet. denied).

Generally accepted appraisal techniques that have been approved by the courts support the unit method of valuation imposed in Property Tax Code Section 23.12(a) for residential inventory appraisal. The provision is not arbitrary, capricious, or unreasonable and the legislature may establish appraisal methodologies. Travis Central Appraisal District v. FM Properties Operating Company, 947 S.W.2d 724 (Tex. App.-Austin 1997, petition denied).

The September 1st alternative appraisal date for inventory is unconstitutional because it does not allow property to be appraised in an equal and uniform manner. The provision is in violation of Article VIII, Section 1, Texas Constitution. The constitutional error allowed certain taxpayers to select a date which potentially lowered their taxable values. Spring Independent School District v. Harris County Appraisal District, 889 S.W.2d 562 (Tex. App.-Houston [14th District] 1994, rehearing overruled, error granted).

Suit challenging Sec. 23.12(a) provision concerning residential real property inventory was premature because appraisal district did not formally apply or formally refuse to apply the section before suit was filed. Any court opinion under these circumstances would be merely an advisory opinion. Jester Development Corp. et al. v. Travis County Appraisal District, 775 S.W.2d 464 (Tex. App.-Austin 1989, no writ).

A court likely would conclude that it is not unconstitutional to require a lessor to pay property taxes on a motor vehicle that the lessor leases to a person who uses the vehicle primarily for personal purposes and not for the production of income. Tex. Att'y Gen. LO-96-030 (1996).

Sec. 23.121. Dealer's Motor Vehicle Inventory; Value.

(a) In this section:

(1) "Chief appraiser" means the chief appraiser for the appraisal district in which a dealer's motor vehicle inventory is located.

(2) "Collector" means the county tax assessor-collector in the county in which a dealer's motor vehicle inventory is located.

(3) "Dealer" means a person who holds a dealer's general distinguishing number issued by the Texas Department of Transportation under the authority of Chapter 503, Transportation Code, or who is legally recognized as a motor vehicle dealer pursuant to the law of another state and who complies with the terms of Section 152.063(f). The term does not include:

(A) a person who holds a manufacturer's license issued by the Motor Vehicle Board of the Texas Department of Transportation;

(B) an entity that is owned or controlled by a person who holds a manufacturer's license issued by the Motor Vehicle Board of the Texas Department of Transportation; or

(C) a dealer whose general distinguishing number issued by the Texas Department of Transportation under the authority of Chapter 503, Transportation Code, prohibits the dealer from selling a vehicle to any person except a dealer.

(4) "Dealer's motor vehicle inventory" means all motor vehicles held for sale by a dealer.

(5) "Dealer-financed sale" means the sale of a motor vehicle in which the seller finances the purchase of the vehicle, is the sole lender in the transaction, and retains exclusively the right to enforce the terms of the agreement evidencing the sale.

(6) "Declaration" means the dealer's motor vehicle inventory declaration form promulgated by the comptroller as required by this section.

(7) "Fleet transaction" means the sale of five or more motor vehicles from a dealer's motor vehicle inventory to the same person within one calendar year.

(8) "Motor vehicle" means a towable recreational vehicle or a fully self-propelled vehicle with at least two wheels which has as its primary purpose the transport of a person or persons, or property, whether or not intended for use on a public street, road, or highway. The term does not include:

(A) a vehicle with respect to which the certificate of title has been surrendered in exchange for a salvage certificate in the manner provided by law; or

(B) equipment or machinery designed and intended to be used for a specific work-related purpose other than the transporting of a person or property.

(9) "Owner" means a dealer who owes current year vehicle inventory taxes levied against a dealer's motor vehicle inventory.

(10) "Person" means a natural person, corporation, partnership, or other legal entity.

(11) "Sales price" means the total amount of money paid or to be paid for the purchase of a motor vehicle as set forth as "sales price" in the form entitled "Application for Texas Certificate of Title" promulgated by the Texas Department of Transportation. In a transaction that does not involve the use of that form, the term means an amount of money that is equivalent, or substantially equivalent, to the amount that would appear as "sales price" on the Application for Texas Certificate of Title if that form were involved.

(12) "Subsequent sale" means a dealer-financed sale of a motor vehicle that, at the time of the sale, has been the subject of a dealer-financed sale from the same dealer's motor vehicle inventory in the same calendar year.

(13) "Total annual sales" means the total of the sales price from every sale from a dealer's motor vehicle inventory for a 12-month period.

(14) "Towable recreational vehicle" means a nonmotorized vehicle that is designed for temporary human habitation for recreational, camping, or seasonal use and:

(A) is titled and registered with the Texas Department of Transportation through the office of the collector;

(B) is permanently built on a single chassis;

(C) contains one or more life support systems; and

(D) is designed to be towable by a motor vehicle.

(b) For the purpose of the computation of property tax, the market value of a dealer's motor vehicle inventory on January 1 is the total annual sales from the dealer's motor vehicle inventory, less sales to dealers, fleet transactions, and subsequent sales, for the 12-month period corresponding to the prior tax year, divided by 12.

(c) For the purpose of the computation of property tax, the market value of the dealer's motor vehicle inventory of an owner who was not a dealer on January 1 of the prior tax year, the chief appraiser shall estimate the market value of the dealer's motor vehicle inventory. In making the estimate required by this subsection the chief appraiser shall extrapolate using sales data, if any, generated by sales from the dealer's motor vehicle inventory in the prior tax year.

(d) Except for dealer's motor vehicle inventory, personal property held by a dealer is appraised as provided by other sections of this code. In the case of a dealer whose sales from dealer's motor vehicle inventory are made predominately to dealers, the chief appraiser shall appraise the dealer's motor vehicle inventory as provided by Section 23.12 of this code.

(e) A dealer is presumed to be an owner of a dealer's motor vehicle inventory on January 1 if, in the 12-month period ending on December 31 of the immediately preceding year, the dealer sold a motor vehicle to a person other than a dealer. The presumption created by this subsection is not rebutted by the fact that a dealer has no motor vehicles physically on hand for sale from dealer's motor vehicle inventory on January 1.

(f) The comptroller shall promulgate a form entitled Dealer's Motor Vehicle Inventory Declaration. Except as provided by Section 23.122(l) of this code, not later than February 1 of each year, or, in the case of a dealer who was not in business on January 1, not later than 30 days after commencement of business, each dealer shall file a declaration with the chief appraiser and file a copy with the collector. For purposes of this subsection, a dealer is presumed to have commenced business on the date of issuance to the dealer of a dealer's general distinguishing number as provided by Chapter 503, Transportation Code. Notwithstanding the presumption created by this subsection, a chief appraiser may, at his or her sole discretion, designate as the date on which a dealer commenced business a date other than the date of issuance to the dealer of a dealer's general distinguishing number. The declaration is sufficient to comply with this subsection if it sets forth the following information:

(1) the name and business address of each location at which the dealer owner conducts business;

(2) each of the dealer's general distinguishing numbers issued by the Texas Department of Transportation;

(3) a statement that the dealer owner is the owner of a dealer's motor vehicle inventory; and

(4) the market value of the dealer's motor vehicle inventory for the current tax year as computed under Section 23.121(b) of this code.

(g) Under the terms provided by this subsection, the chief appraiser may examine the books and records of the holder of a general distinguishing number issued by the Texas Department of Transportation. A request made under this subsection must be made in writing, delivered personally to the custodian of the records, at the location for which the general distinguishing number has been issued, must provide a period not less than 15 days for the person to respond to the request, and must state that the person to whom it is addressed has the right to seek judicial relief from compliance with the request. In a request made under this section the chief appraiser may examine:

(1) the document issued by the Texas Department of Transportation showing the person's general distinguishing number;

(2) documentation appropriate to allow the chief appraiser to ascertain the applicability of this section and Section 23.122 of this code to the person;

(3) sales records to substantiate information set forth in the dealer's declaration filed by the person.

(h) If a dealer fails to file a declaration as required by this section, or if, on the declaration required by this section, a dealer reports the sale of fewer than five motor vehicles in the prior year, the chief appraiser shall report that fact to the Texas Department of Transportation and the department shall initiate termination proceedings. The chief appraiser shall include with the report a copy of a declaration, if any, indicating the sale by a dealer of fewer than five motor vehicles in the prior year. A report by a chief appraiser to the Texas Department of Transportation as provided by this subsection is prima facie grounds for the cancellation of the dealer's general distinguishing number under Section 503.038(a)(9), Transportation Code, or for refusal by the Texas Department of Transportation to renew the dealer's general distinguishing number.

(i) A dealer who fails to file a declaration required by this section commits an offense. An offense under this subsection is a misdemeanor punishable by a fine not to exceed $500. Each day during which a dealer fails to comply with the terms of this subsection is a separate violation.

(j) A dealer who violates Subsection (g) of this section commits an offense. An offense under this subsection is a misdemeanor punishable by a fine not to exceed $500. Each day during which a person fails to comply with the terms of Subsection (g) of this section is a separate violation.

(k) In addition to other penalties provided by law, a dealer who fails to file a declaration required by this section shall forfeit a penalty. A tax lien attaches to the dealer's business personal property to secure payment of the penalty. The appropriate district attorney, criminal district attorney, county attorney, chief appraiser, or person designated by the chief appraiser shall collect the penalty established by this section in the name of the chief appraiser. Venue of an action brought under this subsection is in the county in which the violation occurred or in the county in which the owner maintains his principal place of business or residence. A penalty forfeited under this subsection is $1,000 for each month or part of a month in which a declaration is not filed after it is due.

Added by 1993 Tex. Laws, p. 2504, ch. 672, Sec. 3; amended by 1995 Tex. Laws, p. 4727, ch. 945, Sec. 2, and by p. 848, ch. 76, Sec. 17.01(46); amended by 1997 Tex. Laws, p. 701, ch. 165, Sec. 30.249 and p. 1399, ch. 321, Secs. 1 to 3; amended by 1999 Tex. Laws, p. 3833, ch. 1038, Sec. 1.

Cross References:
Declaration form for appraisal of motor vehicle inventory, see Rule Sec. 9.4035.
Listing in the appraisal records, see Rule Sec. 9.3004.
No September 1 appraisal, see Sec. 23.12f.
Special forms to file, see Sec. 23.122.

Note:
A marketing agent who took bare vehicle titles, but not the vehicles, from a manufacturer and transferred them immediately to purchasers to satisfy a requirement of the department of transportation was no more than a conduit between the real seller and purchasers and did not sell the vehicles. The marketing agent, acting as a commissioned sales representative who did not carry the vehicles on his books and had no right of control or equitable ownership, was not subject to the dealer's motor vehicle inventory appraisal. Attorney fees are not available when valuation of the property is not at issue. Martin v. Harris County Appraisal District and Harris County Appraisal Review Board, 44 S.W.3d 190 (Tex. App.-Houston [14th Dist.] 2001, pet. denied).

Sec. 23.122. Prepayment of Taxes by Certain Taxpayers.

(a) In this section:

(1) "Aggregate tax rate" means the combined tax rates of all relevant taxing units authorized by law to levy property taxes against a dealer's motor vehicle inventory.

(2) "Chief appraiser" has the meaning given it in Section 23.121 of this code.

(3) "Collector" has the meaning given it in Section 23.121 of this code.

(4) "Dealer's motor vehicle inventory" has the meaning given it in Section 23.121 of this code.

(5) "Declaration" has the meaning given it in Section 23.121 of this code.

(6) "Owner" has the meaning given it in Section 23.121 of this code.

(7) "Relevant taxing unit" means a taxing unit, including the county, authorized by law to levy property taxes against a dealer's motor vehicle inventory.

(8) "Sales price" has the meaning given it in Section 23.121 of this code.

(9) "Statement" means the Dealer's Motor Vehicle Inventory Tax Statement filed on a form promulgated by the comptroller as required by this section.

(10) "Subsequent sale" has the meaning given it in Section 23.121 of this code.

(11) "Total annual sales" has the meaning given it in Section 23.121 of this code.

(12) "Unit property tax factor" means a number equal to one-twelfth of the prior year aggregate tax rate at the location where a dealer's motor vehicle inventory is located on January 1 of the current year.

(b) Except for a vehicle sold to a dealer, a vehicle included in a fleet transaction, or a vehicle that is the subject of a subsequent sale, an owner or a person who has agreed by contract to pay the owner's current year property taxes levied against the owner's motor vehicle inventory shall assign a unit property tax to each motor vehicle sold from a dealer's motor vehicle inventory. The unit property tax of each motor vehicle is determined by multiplying the sales price of the motor vehicle by the unit property tax factor. On or before the 10th day of each month the owner shall, together with the statement filed by the owner as provided by this section, deposit with the collector a sum equal to the total of unit property tax assigned to all motor vehicles sold from the dealer's motor vehicle inventory in the prior month to which a unit property tax was assigned. The money shall be deposited by the collector in or otherwise credited by the collector to the owner's escrow account for prepayment of property taxes as provided by this section. An escrow account required by this section is used to pay property taxes levied against the dealer's motor vehicle inventory, and the owner shall fund the escrow account as provided by this subsection.

(c) The collector shall maintain the escrow account for each owner in the county depository. The collector is not required to maintain a separate account in the depository for each escrow account created as provided by this section but shall maintain separate records for each owner. The collector shall retain any interest generated by the escrow account to defray the cost of administration of the prepayment procedure established by this section. Interest generated by an escrow account created as provided by this section is the sole property of the collector, and that interest may be used by no entity other than the collector. Interest generated by an escrow account may not be used to reduce or otherwise affect the annual appropriation to the collector that would otherwise be made.

(d) The owner may not withdraw funds in an escrow account created pursuant to this section.

(e) The comptroller shall promulgate a form entitled a Dealer's Motor Vehicle Inventory Tax Statement. A dealer shall complete the form with respect to each motor vehicle sold. A dealer may use no other form for that purpose. The statement may include the information the comptroller deems appropriate but shall include at least the following:

(1) a description of the motor vehicle sold;

(2) the sales price of the motor vehicle;

(3) the unit property tax of the motor vehicle if any; and

(4) the reason no unit property tax is assigned if no unit property tax is assigned.

(f) On or before the 10th day of each month a dealer shall file with the collector the statement covering the sale of each motor vehicle sold by the dealer in the prior month. A dealer shall file a copy of the statement with the chief appraiser and retain documentation relating to the disposition of each motor vehicle sold. A chief appraiser or collector may examine documents held by a dealer as required by this subsection in the same manner, and subject to the same provisions, as are set forth in Section 23.121(g) of this code.

(g) The requirements of Subsection (f) of this section apply to all dealers, without regard to whether or not the dealer owes vehicle inventory tax for the current year. A dealer who owes no vehicle inventory tax for the current year because he was not in business on January 1 may neither assign a unit property tax to a motor vehicle sold by the dealer nor remit money with the statement unless pursuant to the terms of a contract as provided by Subsection (l) of this section.

(h) A collector may establish a procedure, voluntary or mandatory, by which the unit property tax of a vehicle is paid and deposited into an owner's escrow account at the time of processing the transfer of title to the motor vehicle.

(i) A relevant taxing unit shall, on its tax bill prepared for the owner of a dealer's motor vehicle inventory, separately itemize the taxes levied against the dealer's motor vehicle inventory. When the tax bill is prepared by a relevant taxing unit for a dealer's motor vehicle inventory, the assessor for the relevant taxing unit, or an entity, if any, other than the collector, that collects taxes on behalf of the taxing unit, shall provide the collector a true and correct copy of the tax bill sent to the owner, including taxes levied against the dealer's motor vehicle inventory. The collector shall apply the money in the owner's escrow account to the taxes imposed and deliver a tax receipt to the owner. The collector shall apply the amount to each relevant taxing unit in proportion to the amount of taxes levied, and the assessor of each relevant taxing unit shall apply the funds received from the collector to the taxes owed by the owner.

(j) If the amount in the escrow account is not sufficient to pay the taxes in full, the collector shall apply the money to the taxes and deliver to the owner a tax receipt for the partial payment and a tax bill for the amount of the deficiency together with a statement that the owner must remit to the collector the balance of the total tax due.

(k) The collector shall remit to each relevant taxing unit the total amount collected by the collector in deficiency payments. The assessor of each relevant taxing unit shall apply those funds to the taxes owed by the owner. Taxes that are due but not received by the collector on or before January 31 are delinquent. Not later than February 15 the collector shall distribute to relevant taxing units in the manner set forth in this section all funds collected pursuant to the authority of this section and held in escrow by the collector as provided by this section. This section does not impose a duty on a collector to collect delinquent taxes that the collector is not otherwise obligated by law or contract to collect.

(l) A person who acquires the business or assets of an owner may, by contract, agree to pay the current year vehicle inventory taxes owed by the owner. The owner who owes the current year tax and the person who acquires the business or assets of the owner shall jointly notify the chief appraiser and the collector of the terms of the agreement and of the fact that the purchaser has agreed to pay the current year vehicle inventory taxes owed by the selling dealer. The chief appraiser and the collector shall adjust their records accordingly. Notwithstanding the terms of Section 23.121 of this code, a person who agrees to pay current year vehicle inventory taxes as provided by this subsection is not required to file a declaration until the year following the acquisition. This subsection does not relieve the selling owner of tax liability.

(m) A dealer who fails to file a statement as required by this section commits an offense. An offense under this subsection is a misdemeanor punishable by a fine not to exceed $100. Each day during which a dealer fails to comply with the terms of this subsection is a separate violation.

(n) In addition to other penalties provided by law, a dealer who fails to file a statement as required by this section shall forfeit a penalty. A tax lien attaches to the dealer's business personal property to secure payment of the penalty. The appropriate district attorney, criminal district attorney, county attorney, collector, or person designated by the collector shall collect the penalty established by this section in the name of the collector. Venue of an action brought under this subsection is in the county in which the violation occurred or in the county in which the owner maintains his principal place of business or residence. A penalty forfeited under this subsection is $500 for each month or part of a month in which a statement is not filed after it is due.

(o) An owner who fails to remit unit property taxes due as required by this section shall pay a penalty of five percent of the amount due. If the amount is not paid within 10 days after the due date, the owner shall pay an additional penalty of five percent of the amount due. Notwithstanding the terms of this section, unit property taxes paid on or before January 31 of the year following the date on which they are due are not delinquent. The collector, the collector's designated agent, or the county or district attorney shall enforce the terms of this subsection. A penalty under this subsection is in addition to any other penalty provided by law if the owner's taxes are delinquent.

(p) Fines collected pursuant to the authority of this section shall be deposited in the county depository to the credit of the general fund. Penalties collected pursuant to the authority of this section are the sole property of the collector, may be used by no entity other than the collector, and may not be used to reduce or otherwise affect the annual appropriation to the collector that would otherwise be made.

Added by 1993 Tex. Laws, p. 2505, ch. 672, Sec. 4; amended by 1995 Tex. Laws, p. 4730, ch. 945, Sec. 3, and by p. 848, ch. 76, Sec. 17.01(47); amended by 1997 Tex. Laws, p. 1401, ch. 321, Secs. 4 to 7.

Cross References:
Appraisal of dealer's motor vehicle inventory, see Sec. 23.121.
Listing separate in appraisal records, see Rule Sec. 9.3004.
Monthly inventory statement form, see Rule Sec. 9.4035.
Annual inventory declaration, see Rule Sec. 9.4035.
Special inventory tax bill, see Rule Sec. 9.3038.

Note:
Tax Code Section 23.122 does not preclude a tax assessor-collector from using interest earned on motor vehicle inventory tax escrow accounts to supplement the collector's own salary. The tax assessor-collector must determine first that use of the interest is a legitimate cost of administering the motor vehicle inventory tax prepayment program and serves a public purpose as required by Article III, Sections 51 and 52, Texas Constitution. The tax assessor-collector's initial determination that use of the interest monies is lawful is subject to judicial review. The county auditor is authorized to audit the interest monies, to review expenditures from the fund and to make audit reports to the commissioners court. Op. Tex. Att'y Gen. No. JC-348 (2001).

Interest earned on motor vehicle inventory escrow accounts may not be used for expenses not related to administering the prepayment process. The county tax assessor-collector, who administers the prepayment process, determines whether and to what extent a particular purchase is a legitimate cost to administering the program. The county auditor's authority is to audit the interest monies, including the review of expenditures from the fund with interest monies, and to report the audit to the commissioners court. Purchases by the county tax assessor-collector with the interest monies are not subject to the competitive bidding under the County Purchasing Act. Op. Tex. Att'y Gen. No. JC-149 (1999).

A tax assessor-collector may use interest that accrues on the motor vehicle inventory tax fund to supplement the salaries of full-time employees who administer the prepayment program if the assessor-collector determines that salary supplements are a legitimate cost of administering the prepayment program. The county auditor must audit the motor vehicle inventory tax fund, as well as interest earned on that fund. Any equipment that a tax assessor-collector purchases with interest earned on the fund is under the sole control of the assessor-collector's office. Op. Tex. Att'y Gen. No. JC-0135 (1999).

A county tax assessor-collector's approval of a contract pursuant to Section 6.24(b) for collection of the inventory tax would not constitute an unlawful delegation of the collector's Section 23.122 authority. Given that a collector may approve a contract pursuant to Section 6.24, the interest earned from the escrow account goes to the county assessor-collector for the purpose of defraying administrative costs. Even if another taxing unit or contractor administers the inventory tax collection, the interest from the escrow accounts must be allocated to the county tax collector. The collector, however, might then use the interest as a source of funds to pay for the Section 6.24(b) contract for collecting the inventory tax. Section 23.122(p) clearly requires the deposit of fines imposed for failure to file monthly tax statements to the county general fund. There is no authority that would require otherwise or that would transform a taxing unit that collects the taxes pursuant to a Section 6.24(b) contract into the county. Letter Op. Tex. Att'y Gen. No. DM-98-085 (1998).

Legislation effective September 1, 1995, expressly authorized car rental companies to disclose registration fees and property taxes to renters as a separate, identified charge. There is no legal prohibition prior to September 1, 1995, against the collection of a reimbursement charge by car rental companies. Tex. Att'y Gen. LO-97-013 (1997).

A county tax assessor-collector may expend funds accrued as interest under Tax Code Section 23.12B (now Section 23.122 as renumbered by the 74th Texas Legislature)without the approval of the county's commissioners court. The assessor-collector setting up a special account for the interest from these escrow accounts and spending that interest is analogous to the hot-check fund administered by the district attorney. The administration of the hot-check fund is wholly outside of the county budgeting process. Legislative intent appeared to remove the funds from the control of commissioners court by Section 23.122(c), specifically stating that the interest in the inventory escrow account was the sole property of the collector and not to place the interest within the county general fund. These interest funds are public moneys, subject to audit by the county auditor. The funds may be used to defray the cost of administration of the prepayment procedure and may not be used for general office expenses of the assessor-collector unrelated to the cost of administering the program. Op. Tex. Att'y Gen. No. DM-398 (1996).

Sec. 23.123. Declarations and Statements Confidential.

(a) In this section:

(1) "Collector" has the meaning given it in Section 23.122 of this code.

(2) "Chief appraiser" has the meaning given it in Section 23.122 of this code.

(3) "Dealer" has the meaning given it in Section 23.121 of this code.

(4) "Declaration" has the meaning given it in Section 23.122 of this code.

(5) "Owner" has the meaning given it in Section 23.121 of this code.

(6) "Statement" has the meaning given it in Section 23.122 of this code.

(b) Except as provided by this section, a declaration or statement filed with a chief appraiser or collector as required by Section 23.121 or Section 23.122 of this code is confidential and not open to public inspection. A declaration or statement and the information contained in either may not be disclosed to anyone except an employee of the appraisal office who appraises the property or to an employee of the county tax assessor-collector involved in the maintenance of the owner's escrow account.

(c) Information made confidential by this section may be disclosed:

(1) in a judicial or administrative proceeding pursuant to a lawful subpoena;

(2) to the person who filed the declaration or statement or to that person's representative authorized by the person in writing to receive the information;

(3) to the comptroller or an employee of the comptroller authorized by the comptroller to receive the information;

(4) to a collector or chief appraiser;

(5) to a district attorney, criminal district attorney or county attorney involved in the enforcement of a penalty imposed pursuant to Section 23.121 or Section 23.122 of this code;

(6) for statistical purposes if in a form that does not identify specific property or a specific property owner;

(7) if and to the extent that the information is required for inclusion in a public document or record that the appraisal or collection office is required by law to prepare or maintain; or

(8) to the Texas Department of Transportation for use by that department in auditing compliance of its licensees with appropriate provisions of applicable law.

(d) A person who knowingly permits inspection of a declaration or statement by a person not authorized to inspect the declaration or statement or who discloses confidential information contained in the declaration or statement to a person not authorized to receive the information commits an offense. An offense under this subsection is a Class B misdemeanor.

Added by 1995 Tex. Laws, p. 4733, ch. 945, Sec. 4; amended by 1999 Tex. Laws, p. 3833, ch. 1038, Sec. 2.

Cross References:
Dealer's heavy equipment inventory, see Sec. 23.1242(p).
Dealer's manufactured housing inventory declaration, see Sec. 23.127(l).
Dealer's manufactured housing inventory tax statement, see Sec. 23.128(p).
Dealer's motor vehicle inventory declaration, see Sec. 23.121.
Dealer's motor vehicle inventory tax statement, see Sec. 23.122.
Confidential rendition and property reports, see Sec. 22.27.
Public Information Act, see ch. 552, Government Code.
Forms for special inventory, see Rule Sec. 9.4035.