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Title 1. Property Tax Code
Subtitle E. Collections and Delinquency

Chapter 31. Collections

Sec. 31.01. Tax Bills.
Sec. 31.02. Delinquency Date.
Sec. 31.03. Split Payment of Taxes.
Sec. 31.031. Installment Payments of Certain Homestead Taxes.
Sec. 31.032. Installment Payments of Taxes on Property in Disaster Area.
Sec. 31.035. Performance of Service in Lieu of Payment of Taxes on Homestead of Elderly Person.
Sec. 31.036. Performance of Teaching Services in Lieu of Payment of School Taxes on Homestead.
Sec. 31.037. Performance of Teaching Services by Employee in Lieu of Payment of School Taxes on Property of Business Entity.
Sec. 31.04. Postponement of Delinquency Date.
Sec. 31.05. Discounts.
Sec. 31.06. Medium of Payment.
Sec. 31.061 Payment of Taxes Assessed against Real Property by Conveyance to Taxing Unit of Property.
Sec. 31.07. Certain Payments Accepted.
Sec. 31.071. Conditional Payments.
Sec. 31.072. Escrow Accounts.
Sec. 31.073. Restricted or Conditional Payments Prohibited.
Sec. 31.075. Tax Receipt.
Sec. 31.08. Tax Certificate.
Sec. 31.09 Repealed.
Sec. 31.081. Property Tax Withholding on Purchase of Business or Inventory.
Sec. 31.10. Reports and Remittances of Other Taxes.
Sec. 31.11. Refunds of Overpayments or Erroneous Payments.
Sec. 31.111. Refunds of Duplicate Payments.
Sec. 31.115. Payment of Tax Under Protest.
Sec. 31.12. Payment of Tax Refunds; Interest.

Sec. 31.05. Discounts.

(a) The governing body of a taxing unit may adopt the discounts provided by Subsection (b) or Subsection (c), or both, in the manner required by law for official action by the body. The discounts, if adopted, apply only to that taxing unit's taxes. If a taxing unit adopts both discounts under Subsections (b) and (c), the discounts adopted under Subsection (b) apply unless the tax bills for the unit are mailed after September 30, in which case only the discounts under Subsection (c) apply. A taxing unit that collects taxes for another taxing unit that adopts the discounts may prepare and mail separate tax bills on behalf of the adopting taxing unit and may charge an additional fee for preparing and mailing the separate tax bills and for collecting the taxes imposed by the adopting taxing unit. If under an intergovernmental contract a county assessor-collector collects taxes for a taxing unit that adopts the discounts, the county assessor-collector may terminate the contract if the county has adopted a discount policy that is different from the discount policy adopted by the adopting taxing unit.

(b) A taxing unit may adopt the following discounts to apply regardless of the date on which it mails its tax bills:

(1) three percent if the tax is paid in October or earlier;

(2) two percent if the tax is paid in November; and

(3) one percent if the tax is paid in December.

(c) A taxing unit may adopt the following discounts to apply when it mails its tax bills after September 30:

(1) three percent if the tax is paid before or during the next full calendar month following the date on which the tax bills were mailed;

(2) two percent if the tax is paid during the second full calendar month following the date on which the tax bills were mailed; and

(3) one percent if the tax is paid during the third full calendar month following the date on which the tax bills were mailed.

(d) Repealed by Acts 1983, 68th Leg., p. 4876, ch. 862, Sec. 3, eff. Sept. 1, 1983.

Acts 1979, 66th Leg., p. 2285, ch. 841, 1, eff. Jan. 1, 1982. Amended by Acts 1981, 67th Leg., 1st C.S., p. 167, ch. 13, 124, eff. Jan. 1, 1982; Acts 1983, 68th Leg., p. 16, ch. 5, 2, eff. March 14, 1983; Acts 1983, 68th Leg., pp. 4875, 4876, ch. 862, 2, 3, eff. Sept. 1, 1983; Acts 2005, 79th Leg., ch. 1126, 9, eff. Sept. 1, 2005.

Cross References:
Constitutional authorization for discounts, see art. VIII, Sec. 20, Tex. Const.
Tax bill must include explanation of discount payment option, see Sec. 31.0l(c)(8).
Postponement of delinquency date, see Sec. 31.04.
Partial payment not allowed discount, see Sec. 31.07.

Notes:
A school district may not offer an early payment discount to its taxpayers if the school district contacts with a county for tax collection services and the county does not offer early payment discounts for county taxes. Op. Tex. Att'y Gen. No. GA-0225 (2004).

Under Sec. 31.05(a), Tax Code, a county education district's board of trustees may adopt the discounts provided for the timely payment of taxes under subsections (b) and (c) only if all taxing units that collect the county education district's taxes have adopted the discounts. The board of trustees of an independent school district that is a part of a county education district and collects its own taxes in addition to the county education district's taxes may adopt the discounts. Op. Tex. Att'y Gen. No. DM-171 (1992).

Sec. 31.06. Medium of Payment.

(a) Except as provided by Section 31.061, taxes are payable only in currency of the United States. However, a collector may accept a check or money order in payment of taxes, and may accept payment by credit card or electronic funds transfer. A collector and a person may enter into an agreement under which the person pays taxes by electronic funds transfer. The agreement must:

(1) be in writing;

(2) be signed by the collector and the person; and

(3) specify the means or format of payment by electronic funds transfer.

(b) Acceptance by a collector of a check or money order or of payment by credit card constitutes payment of a tax as of the date of acceptance if the check, money order, or credit card invoice is duly paid or honored. If the check, money order, or credit card invoice is not duly paid or honored, the collector shall deliver written notice of nonpayment to the person who attempted payment by check, money order, or credit card. Until payment is made in full by cash or by a check, money order, or credit card that is duly paid or honored, the lien securing payment of the tax remains in effect, whether or not the person receives notice of nonpayment.

(c) If a tax is paid by credit card, the collector may collect a fee for processing the payment. The collector shall set the fee in an amount that is reasonably related to the expense incurred by the collector or taxing unit in processing the payment by credit card, not to exceed five percent of the amount of taxes and any penalties or interest being paid. The fee is in addition to the amount of taxes, penalties, or interest.

(d) If a check or money order accepted in payment of taxes or the invoice for a payment of taxes by credit card is not duly paid or honored, the amount of any charge against the taxing unit for processing the check, order, or credit card invoice is added to the amount of tax due in the same manner as penalties and interest are added for taxes that are delinquent. The tax lien on the property also secures payment of the amount of the charge.

Amended by 1981 Tex. Laws (1st C.S.), p. 167, ch. 13, Sec. 125; amended by 1989 Tex. Laws, p. 3300, ch. 737, Sec. 1; amended by 1993 Tex. Laws, p. 2738, ch. 697, Sec. 1; amended by 1999 Tex. Laws, p. 3146, ch. 606, Sec. 1; amended by 2001 Tex. Laws, p. 1030, ch. 529, Sec. 2.

Cross References:
Tax lien, see Sec. 32.01.
Tax receipt information, see Rule Sec. 9.1001.
County hot check fees, see Secs. 118.0215 and 118.171, Local Government Code.

Notes:
When a check is accepted as conditional payment and is paid in due course, payment relates back to date of delivery of check; however, use of check to pay taxes is always at risk of taxpayer. Muldrow v. Texas Frozen Foods, 299 S.W.2d 275 (Tex. l957).

When the appraisal district failed to send notices of appraised value to a taxpayer for a number of years after the recording of deeds on purchased property, that failure of notice constituted a denial of due process, thus making the assessment of penalties and interest void. The fact that the taxpayer later paid the void taxes did not cause them to be unrecoverable. The voluntary payment rule cannot be applied to taxes imposed without due process. The award of attorney fees to the taxpayer was upheld as within the guidelines concerning declaratory judgments and was supported by evidence. Appraisal Review Board of the El Paso Central Appraisal District v. Fisher, 88 S.W.3d 807 (Tex. App.-El Paso 2002, pet. denied).

Trial court was correct in deciding as a matter of law, not as a question of fact, that federal reserve notes are dollars and are an acceptable unit of value and legal tender for payment of all debts where a taxpayer sought to enjoin the appraisal district from appraising his property in dollars or from collecting taxes based on such appraisal. Rothacker v. Rockwall County Appraisal District, 703 S.W.2d 235 (Tex. App.-Dallas 1985, writ ref'd n.r.e.).

Sec. 31.061. Payment of Taxes Assessed Against Real Property by Conveyance to Taxing Unit of Property.

(a) An owner of real property may, subject to the approval of the governing body of all of the taxing units, by deed convey the property to the taxing unit that is owed the largest amount of the taxes, penalties, and interest assessed against the property in payment of the taxes, including delinquent taxes, penalties, and interest assessed against the property by each taxing unit. The taxing unit acquiring the property holds title to the property on behalf of each taxing unit. The lien of each taxing unit on the property conveyed is extinguished at the time of the conveyance. The taxing unit acquiring the property may, subject to the approval of the governing body of another taxing unit, by deed convey the property to that taxing unit. The taxing unit acquiring the property holds title to the property on behalf of each taxing unit.

(b) A taxing unit acquiring property under this section may sell the property. The sale may be conducted in a manner provided by Section 34.05. If the taxing unit sells the property within six months after the date the owner conveys the property, the taxing unit shall pay to each taxing unit its proportionate share of the sale proceeds according to each taxing unit's share of the total amount of the taxes, penalties, and interest owed at the time of the acquisition.

(c) A taxing unit that does not sell property acquired under this section within six months after the date the owner conveys the property shall pay to each taxing unit its proportionate share, as determined under Subsection (b), of the appraised market value of the property as shown on the most recent tax roll, less the value of all encumbrances burdening the property. On making the payment provided by this subsection, the taxing unit owns the property outright and not on behalf of each taxing unit. The period during which a taxing unit may hold title to the property on behalf of each taxing unit may be extended subject to the approval of the governing body of each taxing unit.

(d) The collector shall credit against the taxes, penalties, and interest owed each taxing unit:

(1) the taxing unit's share, as determined under Subsection (b), of the sale price if the property is sold within six months after the date the owner conveys the property; or

(2) the taxing unit's share, as determined under Subsection (b), of the appraised market value of the property as shown on the most recent tax roll, less the value of all encumbrances burdening the property, if the property is not sold within six months after the date the owner conveys the property.

(e) The owner remains personally liable to each taxing unit to the extent the amount of the taxes, penalties, and interest owed each taxing unit exceeds the amount credited under Subsection (d). The owner is entitled to a refund from each taxing unit to the extent the amount credited under Subsection (d) exceeds the amount of the taxes, penalties, and interest owed the taxing unit.

(f) A conveyance of property to a taxing unit under this section is voidable by the taxing unit at any time that the taxing unit owns the property and determines that the condition of the property on the date the owner conveyed it was or may have been in violation of a federal or state law, regulation, rule, or order. If the taxing unit voids the conveyance:

(1) the taxing unit shall execute a quitclaim deed of the property to the owner, file the deed in the county records, and give notice of the deed and its filing to the owner;

(2) the collector shall remove the credit against the taxes, penalties, and interest owed each taxing unit made under this section;

(3) a taxing unit that does not acquire the property shall refund the payment made to it by the taxing unit that acquires the property and reinstate the taxes, penalties, and interest owed the taxing unit; and

(4) the lien of each taxing unit is reinstated as of the date it originally attached.

Added by 1993 Tex. Laws, p. 2738, ch. 697, Sec. 2; amended by 1997 Tex. Laws, p. 4246, ch. 1111, Secs. 1 and 8.

Cross References:
Tax lien, see Sec. 32.01.

Sec. 31.07. Certain Payments Accepted.

(a) A person may pay the tax imposed on any one property without simultaneously paying taxes imposed on other property he owns.

(b) A collector shall accept payment of the tax imposed on a property by a taxing unit that has adopted the discounts under Section 31.05 of this code separately from taxes imposed on that property by other taxing units using the same collector, even if the taxes are included in the same bill. The collector may adopt a policy of accepting separate payments in other circumstances. If the tax paid is included in the same bill as other taxes that are not paid, the collector shall send a revised bill or receipt to reflect the tax payment, if a discount applies to the payment, and may send a revised bill or receipt to reflect the tax payment in other circumstances. The sending of a revised bill does not affect the date on which the unpaid taxes become delinquent.

(c) A collector may adopt a policy of accepting partial payments of property taxes. A payment option provided by Section 31.03 of this code or a discount adopted under Section 31.05 of this code does not apply to any portion of a partial payment. If a collector accepts a partial payment on a tax bill that includes taxes for more than one taxing unit, the collector shall allocate the partial payment among all the taxing units included in the bill in proportion to the amount of tax included in the bill for each taxing unit, unless the collector under Subsection (b) has adopted a policy of accepting payments of a taxing unit's taxes separate from the taxes of other taxing units included in the same bill and the taxpayer directs that the partial payment be allocated in specific amounts to one or more specific taxing units. Acceptance of a partial payment does not affect the date that the tax becomes delinquent, but the penalties and interest provided by Section 33.01 of this code are incurred only by the portion of a tax that remains unpaid on the date the tax becomes delinquent.

(d) Notwithstanding Subsection (c), a collector shall accept a partial payment of property taxes on a tax bill that includes taxes for more than one taxing unit if one or more of the taxing units has adopted the discounts under Section 31.05 of this code, the taxpayer directs that the partial payment be allocated first to the payment of the taxes owed one or more of the taxing units that have adopted the discounts, and the amount of the payment is equal to or greater than the amount of the taxes owed the taxing units designated by the taxpayer.

Amended by 1983 Tex. Laws, p. 4827, ch. 851, Sec. 21; amended by 1985 Tex. Laws, p. 4151, ch. 493, Sec. 1; amended by 1989 Tex. Laws, p. , ch. 539, Sec. 1, and p. 3328, ch. 745, Sec. 2; amended by 1993 Tex. Laws, p. 2023, ch. 539, Sec. 1.

Cross References:
Assessor-collectors for more than one taxing unit, see Sec. 6.23.
Consolidation of assessment and collection through election, see Sec. 6.26.
Accrual of penalties and interest, see Sec. 33.01.
Split payment of taxes, see Sec. 31.03.
Discounts for early payment, see Sec. 31.05.

Notes:
A land tax is a separate and distinct tax against the land, and the owner has the right to pay the amount assessed against one tract which has been separately assessed without offering to pay the taxes on other tracts. Richey v. Moor, 249 S.W. 172 (Tex. 1923).

A tax collector was not bound to accept a part of taxes due upon the owner's claim that the amount tendered was the whole amount due. Lufkin Land & Lumber Co. v. Noble, l27 S.W. l093 (Tex. Civ. App.-1910).

Sec. 31.071. Conditional Payments.

(a) The collector of a taxing unit shall accept conditional payments of taxes before the delinquency date for property taxes that are subject to a pending challenge or protest.

(b) A property owner whose property is subject to a pending protest or challenge may pay the tax due on the amount of value of the property involved in the pending action that is not in dispute or the amount of tax paid on the property in the preceding year, whichever is greater, but not to exceed the amount of tax that would be due on the appraised value that is subject to protest or challenge. The collector of the taxing unit shall provide the property owner with a temporary receipt of taxes paid under this section.

(c) If the property is no longer subject to a challenge, protest, or appeal at any time before the delinquency date, the collector shall apply the amount paid by the property owner under this section to the tax imposed on the property and shall refund the remainder, if any, to the property owner. If the property is still subject to an appeal on the last working day before the delinquency date, or at an earlier date if so requested by the property owner, the collector shall apply the amount paid under this section to the payment required by Section 42.08(b) of this code and shall retain the remainder, if any, until the appeal is completed. When the appeal is completed, the collector shall apply any amount retained under this section to the tax ultimately imposed on the property that is not covered by the payment under Section 42.08(b) and shall refund the remainder, if any, to the property owner.

Added by 1987 Tex. Laws, ch. 999, Sec. 1.

Cross References:
Payment for appealing, see Sec. 42.08(b).
Temporary tax receipt, see Rule Sec. 9.3043

Sec. 31.072. Escrow Accounts.

(a) The collector for a taxing unit may enter a contract with a property owner under which the property owner deposits money in an escrow account maintained by the collector to provide for the payment of property taxes collected by the collector on any property the person owns.

(b) A contract may not be made before October 1 of the year preceding the tax year for which the account is established. The collector may agree to establish a combined account for more than one item of property having the same owner on the property owner's request. If a collector collects taxes for more than one taxing unit, an account must apply to taxes on the affected property for each of the taxing units.

(c) A contract under this section must require the property owner to make monthly deposits to the escrow account until the amount set in the contract under Subsection (d) of this section accrues in the account or until the tax bill for the property is prepared, whichever occurs earlier.

(d) On request by a property owner to establish an escrow account under this section, the collector shall estimate the amount of taxes to be imposed on the property by the affected taxing units in that year. A contract to establish an escrow account must provide for deposits that would provide, as of the date the collector estimates the tax bill for the property will be prepared, a total deposit that is not less than the amount of taxes estimated by the collector or the amount of taxes imposed on the property by the affected taxing units in the preceding year, whichever is less. The collector may agree to a deposit of a greater amount on the property owner's request.

(e) The county tax assessor-collector shall maintain the escrow account in the county depository. Any other collector shall maintain the escrow account in the depository of the taxing unit or other entity that employs the collector. The collector is not required to maintain a separate account in the depository for each escrow account but shall maintain separate records for each escrow account.

(f) The property owner may withdraw from the collector the money the owner deposited in an escrow account only if the withdrawal is made before the date the tax bill is prepared or October 1 of the tax year, whichever occurs earlier. On and after that date and until the taxes are paid, the collector must agree to a withdrawal by the taxpayer. The property owner may not withdraw less than the total amount deposited in the escrow account.

(g) When the tax bill is prepared for property for which an escrow account is established, the collector shall apply the money in the account to the taxes imposed and deliver a tax receipt to the taxpayer together with a refund of any amount in the account in excess of the amount of taxes paid. 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 taxpayer a tax receipt for the partial payment and a tax bill for the unpaid amount. If the escrow account applies to more than one taxing unit or to more than one item of property, the collector shall apply the amount to each taxing unit or item of property in proportion to the amount of taxes imposed unless the contract provides otherwise.

(h) Notwithstanding Subsection (a), if the property owner requesting a collector to establish an escrow account under this section is a disabled veteran as defined by Section 11.22 or a recipient of the Purple Heart, the Congressional Medal of Honor, the Bronze Star Medal, the Silver Star, the Legion of Merit, or a service cross awarded by a branch of the United States armed forces and the escrow account is to be used solely to provide for the payment of property taxes collected by the collector on the property owner's residence homestead, the collector shall enter into a contract with the property owner under this section.

Added by Acts 1989, 71st Leg., ch. 737, 2, eff. Aug. 28, 1989. Amended by Acts 2005, 79th Leg., ch. 85, 1, eff. May 17, 2005.

Sec. 31.073. Restricted or Conditional Payments Prohibited.

(a) restriction or condition placed on a check in payment of taxes by the maker that limits the amount of taxes, penalties, or interest owed to an amount less than that stated in the tax bill or shown by the tax collector's records is void unless the restriction or condition is authorized by this code.

Added by Acts 1993, 73rd Leg., ch. 539, 2, eff. Sept. 1, 1993. Amended by Acts 2005, 79th Leg., ch. 1126, 10, eff. Sept. 1, 2005.

Cross References:
Certain payments accepted, see Sec. 31.07.
Conditional payments, see Sec. 31.071.
Medium of payment, see Sec. 31.06.
Payment under protest, see Sec. 312.115.

Sec. 31.075. Tax Receipt.

(a) At the request of a property owner or a property owner's agent, the collector for a taxing unit shall issue a receipt showing the taxable value and the amount of tax imposed by the unit on the property in one or more tax years for which the information is requested, the tax rate for each of those tax years, and the amount of tax paid in each of those years. The receipt must describe the property in the manner prescribed by the comptroller. If the amount of the tax for the current year has not been calculated when the request is made, the collector shall on request issue to the property owner or agent a statement indicating that taxes for the current year have not been calculated.

(b) In any judicial proceeding, including a suit to collect delinquent taxes under Chapter 33 of this code, a tax receipt issued under this section that states that a tax has been paid constitutes prima facie evidence that the tax has been paid as stated by the receipt.

Added by Acts 1987, 70th Leg., ch. 52, 1, eff. May 6, 1987. Amended by Acts 1991, 72nd Leg., ch. 836, 5.5, eff. Aug. 26, 1991; Acts 1991, 72nd Leg., 2nd C.S., ch. 6, 48, eff. Sept. 1, 1991; Acts 2005, 79th Leg., ch. 1154, 2, eff. Sept. 1, 2005.

Cross References:
Receipt form and content, see Rule Sec. 9.1001.
Conditional payment, see Sec. 31.071.

Sec. 31.08. Tax Certificate.

(a) At the request of any person, a collector for a taxing unit shall issue a certificate showing the amount of delinquent taxes, penalties, interest, and any known costs and expenses under Section 33.48 due the unit on a property according to the unit's current tax records. If the collector collects taxes for more than one taxing unit, the certificate must show the amount of delinquent taxes, penalties, interest, and any known costs and expenses under Section 33.48 due on the property to each taxing unit for which the collector collects the taxes. The collector shall charge a fee not to exceed $10 for each certificate issued. The collector shall pay all fees collected under this section into the treasury of the taxing unit that employs the collector .

(b) Except as provided by Subsection (c) of this section, if a person transfers property accompanied by a tax certificate that erroneously indicates that no delinquent taxes, penalties, or interest are due a taxing unit on the property or that fails to include property because of its omission from an appraisal roll as described under Section 25.21, the unit's tax lien on the property is extinguished and the purchaser of the property is absolved of liability to the unit for delinquent taxes, penalties, or interest on the property or for taxes based on omitted property. The person who was liable for the tax for the year the tax was imposed or the property was omitted remains personally liable for the tax and for any penalties or interest.

(c) A tax certificate issued through fraud or collusion is void.

Acts 1979, 66th Leg., p. 2286, ch. 841, 1, eff. Jan. 1, 1982. Amended by Acts 1983, 68th Leg., p. 662, ch. 149, 1, eff. Sept. 1, 1983; Acts 1987, 70th Leg., ch. 105, 1, eff. Sept. 1, 1987; Acts 2005, 79th Leg., ch. 846, 2, eff. Sept. 1, 2005; Acts 2005, 79th Leg., ch. 1126, 11, eff. Sept. 1, 2005.

Cross References:
Information required on tax certificate, see Rule Sec. 9.3040.
Assessor-collectors for more than one taxing unit, see Sec. 6.23.
Consolidation of assessment and collection through election, see Sec. 6.24.
Tax lien, see Sec. 32.01.
Bona fide purchaser exception to personal property tax lien, see Sec. 32.03.
Personal liability for property tax, see Sec. 32.07.
Current and cumulative delinquent tax rolls, see Sec. 33.03.

Notes:
The 2005 amendment to Subsection (b), Section 31.08, Tax Code, applies only to a tax certificate issued on or after the September 1, 2005. A tax certificate issued before said effective date is covered by the law in effect on the date of issuance, and that law is continued in effect for that purpose.

The statutory liability for property taxes imposed on a purchaser of a business is not limited to a pro-rata amount. Instead, the tax liability cannot exceed the total value of the property; with the purchaser still being liable for all taxes imposed for the year, including penalties and interest assessed. Dan's Big & Tall Shop, Inc. v. County of Dallas, 160 S.W.3d 307 (Tex. App.-Dallas 2005, pet denied).

The chief appraiser has the responsibility to correct appraisal rolls for erroneously granted homestead exemptions. A tax lien is created based on back appraisal, even though the party who benefited from the erroneously granted exemption had sold the property. The liens would be extinguished, however, if tax certificates were issued at the time of the property transfer. Dallas Central Appraisal District v. Wang, 82 S.W.3d 697 (Tex. App.-Dallas 2002, pet. denied).

Tax Code Section 31.08(a) neither requires nor permits the appraisal district's chief appraiser to retain tax certificate fees. An appraisal district is not a taxing unit because it is not authorized to impose and is not imposing property taxes. An appraisal district authorized to collect taxes for taxing units by contract does not transform the district into a taxing unit - it does not have the authority to impose taxes but rather merely to collect them. Because Section 31.08 refers to the treasury of the taxing unit, the chief appraiser deposits the tax certificate fees to the treasury of the taxing unit or units for which the appraisal district collects. A taxing unit that contracts to have the appraisal district collect property taxes may compensate the district in part with tax certificate fees. The contract must clearly express that intent. Tex. Att'y Gen. LO-97-041 (1997).

In an instance in which a tax certificate showing no taxes due on a property was issued in error, there is no lien against the property purchased by a new property owner. The amount of taxes, penalty, and interest due remains a personal liability of the original owner. The statute which imposed a liability on the tax assessor's bond for issuing an erroneous tax certificate was repealed. Op. Tex. Att'y Gen. No. JM-679 (1987).

Sec. 31.081. Property Tax Withholding on Purchase of Business or Inventory.

(a) This section applies only to a person who purchases a business, an interest in a business, or the inventory of a business from a person who is liable under this title for the payment of taxes imposed on personal property used in the operation of that business.

(b) The purchaser shall withhold from the purchase price an amount sufficient to pay all of the taxes imposed on the personal property of the business, plus any penalties and interest incurred, until the seller provides the purchaser with:

(1) a receipt issued by each appropriate collector showing that the taxes due the applicable taxing unit, plus any penalties and interest, have been paid; or

(2) a tax certificate issued under Section 31.08 stating that no taxes, penalties, or interest is due the applicable taxing unit.

(c) A purchaser who fails to withhold the amount required by this section is liable for that amount to the applicable taxing units to the extent of the value of the purchase price, including the value of a promissory note given in consideration of the sale to the extent of the note's market value on the effective date of the purchase, regardless of whether the purchaser has been required to make any payments on that note.

(d) The purchaser may request each appropriate collector to issue a tax certificate under Section 31.08 or a statement of the amount of the taxes, penalties, and interest that are due to each taxing unit for which the collector collects taxes. The collector shall issue the certificate or statement before the 10th day after the date the request is made. If a collector does not timely provide or mail the certificate or statement to the purchaser, the purchaser is released from the duties and liabilities imposed by Subsections (b) and (c) in connection with taxes, penalties, and interest due the applicable taxing unit.

(e) An action to enforce a duty or liability imposed on a purchaser by Subsection (b) or (c) must be brought before the fourth anniversary of the effective date of the purchase. An action to enforce the purchaser's duty or liability is subject to a limitation plea by the purchaser as to any taxes that have been delinquent at least four years as of the date the collector issues the statement under Subsection (d).

(f) This section does not release a person who sells a business or the inventory of a business from any personal liability imposed on the person for the payment of taxes imposed on the personal property of the business or for penalties or interest on those taxes.

(g) For purposes of this section:

(1) a person is considered to have purchased a business if the person purchases the name of the business or the goodwill associated with the business; and

(2) a person is considered to have purchased the inventory of a business if the person purchases inventory of a business, the value of which is at least 50 percent of the value of the total inventory of the business on the date of the purchase.

Added by 1999 Tex. Laws, p. 5099, ch. 1481, Sec. 10.

Cross References:
Partial payments, see Sec. 31.07(c).
Tax certificate, see Sec. 31.08.
Tax lien, see Sec. 32.01.
Bona fide purchaser exception to personal property tax lien, see Sec. 32.03.
Personal liability for property tax, see Sec. 32.07.
Current and cumulative delinquent tax rolls, see Sec. 33.03.

Sec. 31.09. Repealed in 1983.

Sec. 31.10. Reports and Remittances of Other Taxes.

(a) Each month the collector of taxes for a taxing unit shall prepare and submit to the governing body of the unit a written report made under oath accounting for all taxes collected for the unit during the preceding month. Reports of collections made in the months of October through January are due on the 25th day of the month following the month that is the subject of the report. Reports of collections made in all other months are due on the 15th day of the month following the month that is the subject of the report. A collector for more than one taxing unit may prepare one report accounting for taxes collected for all units, and he may submit a certified copy of the report as his monthly report to the governing body of each unit.

(b) The collector for a taxing unit shall prepare and submit to the governing body of the unit an annual report made under oath accounting for all taxes of the unit collected or delinquent on property taxed by the unit during the preceding 12-month period. Annual reports are due on the 60th day following the last day of the fiscal year.

(c) Except as otherwise provided by Subsection (d) of this section, at least monthly the collector for a taxing unit shall deposit in the unit's depository all taxes collected for the unit. The governing body of a unit may require deposits to be made more frequently.

(d) If the taxes of a taxing unit are collected by the collector or other officer or employee of another taxing unit or by an appraisal district as provided by the law creating or authorizing creation of the unit or as the result of an election held under Section 6.26 of this code, the entity that collects the taxes shall deposit the taxes in the unit's depository daily, unless the governing body of that unit by official action provides that those deposits may be made less often than daily.

Amended by 1983 Tex. Laws, p. 5462, ch. 1027, Sec. 1; amended by 1987 Tex. Laws, ch. 488, Sec. 1.

Cross References:
County collector, see Sec. 6.21.
Assessor and collector for other units, see Sec. 6.22.
Consolidation of collection by election, see Sec. 6.26.

Note:
County tax funds may be electronically transferred from the county tax assessor's account in the county depository to the county treasury, but only the county tax assessor-collector is authorized to initiate electronic transfer of the funds. Op. Tex. Att'y Gen. No. JC-231 (2000).

Sec. 31.11. Refunds of Overpayments or Erroneous Payments.

(a) If a taxpayer applies to the tax collector of a taxing unit for a refund of an overpayment or erroneous payment of taxes and the auditor for the unit determines that the payment was erroneous or excessive, the tax collector shall refund the amount of the excessive or erroneous payment from available current tax collections or from funds appropriated by the unit for making refunds. However, the collector may not make the refund unless:

(1) in the case of a collector who collects taxes for one taxing unit, the governing body of the taxing unit also determines that the payment was erroneous or excessive and approves the refund if the amount of the refund exceeds:

(A) $2,500 for a refund to be paid by a county with a population of 1.5 million or more; or

(B) $500 for a refund to be paid by any other taxing unit; or

(2) in the case of a collector who collects taxes for more than one taxing unit, the governing body of the taxing unit that employs the collector also determines that the payment was erroneous or excessive and approves the refund if the amount of the refund exceeds $2,500.

(b) A taxing unit that determines a taxpayer is delinquent in ad valorem tax payments on property other than the property for which liability for a refund arises may apply the amount of an overpayment or erroneous payment to the payment of the delinquent taxes if the taxpayer was the sole owner of the property:

(1) for which the refund is sought on January 1 of the tax year in which those taxes were assessed; and

(2) on which the taxes are delinquent on January 1 of the tax year for which those taxes were assessed.

(c) An application for a refund must be made within three years after the date of the payment or the taxpayer waives the right to the refund. A taxpayer may apply for a refund by filing:

(1) an application on a form prescribed by the comptroller by rule; or

(2) a written request that includes information sufficient to enable the auditor for the taxing unit and, if applicable, the governing body of the taxing unit to determine whether the taxpayer is entitled to the refund.

(d) The collector for a taxing unit shall provide a copy of the refund application form without charge on request of a taxpayer or a taxpayer's representative.

(e) An application for a refund must:

(1) include an affirmation by the taxpayer that the information in the application is true and correct; and

(2) be signed by the taxpayer.

(f) This subsection applies only to a refund that is required to be approved by the governing body of a taxing unit. The presiding officer of the governing body of the taxing unit is not required to sign the application for the refund or any document accompanying the application to indicate the governing body's approval or disapproval of the refund. The collector for the taxing unit shall indicate on the application whether the governing body approved or disapproved the refund and the date of the approval or disapproval.

(g) If a taxpayer submits a payment of taxes that exceeds by $5 or more the amount of taxes owed for a tax year to a taxing unit, the collector for the taxing unit, without charge, shall mail to the taxpayer or the taxpayer's representative a written notice of the amount of the overpayment accompanied by a refund application form.

Added by Acts 1981, 67th Leg., 1st C.S., p. 167, ch. 13, 126, eff. Jan. 1, 1982. Amended by Acts 1993, 73rd Leg., ch. 198, 1, eff. Sept. 1, 1993; Acts 1999, 76th Leg., ch. 565, 1, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 915, 1, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 673, 1, eff. Jan. 1, 2002; Acts 2001, 77th Leg., ch. 843, 1, eff. Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1430, 8, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 756, 1, eff. Sept. 1, 2003.

Cross References:
Consolidation collections, see Secs. 6.22, 6.24 and 6.26.
Refunds made automatically by unit, see Sec. 26.l5(f).
Refunds resulting from a tax rate rollback election, see Sec. 26.07(g).
Representation of property owner, see Sec. 1.111.
Interest on refunds, see Sec. 31.12.
Tax refund form, see Rule Sec. 9.3039.
Application of refund to delinquent account, see Sec. 26.15(g).

Notes:
The voluntary payment rule does not apply where a taxpayer is not aware of all the relevant facts. Therefore, when the court concluded that where one taxpayer did not realize that another taxpayer had paid taxes for the same piece of property for the same years, the voluntary payment rule does not apply because the taxpayer had no knowledge of the payment of the taxes. Brooks County Central Appraisal District v. Tipperary Energy Corporation, 847 S.W.2d 592 (Tex. App.-San Antonio 1992, no writ).

Where taxpayers double paid their taxes and sought a refund from the taxing units, the units contended that chapters 25 and 26, Tax Code, require a procedure corresponding to the procedure set forth in chapters 41 and 42. The court disagreed, noting that chapters 25 and 26 only reference a "motion" either by the property owner, chief appraiser or tax assessors of the taxing units. Moreover, the court found that Sec. 31.11, Tax Code, expressly negates the requirements for any type of detailed procedure for seeking a refund. Under Sec. 31.11, the taxpayer only need apply to the tax collector of a taxing unit for a refund of an overpayment or erroneous payment of taxes. Id.

In a case involving taxpayers double payment of taxes, the taxing units contended that the taxpayers could not obtain a refund under Sec. 31.11 because the section applies only in situations "where the payment that is made does not match the correct tax statement or bill." The court disagreed, reasoning that the spirit of the statute does not require that Sec. 31.11 must be interpreted to deny a taxpayer a refund when the taxing units would be able to retain a windfall merely because the taxes paid "identically matched the tax bill" generated by the taxing unit. Id.

Appeal from denial of a refund is not made under Sec. 42.01, et. seq. Cockrell v. Taylor County and Jim Ned C.I.S.D., 814 S.W.2d 892 (Tex. App.-Eastland 1991, writ denied).

A lawsuit protesting denial of refund must be brought under the requirements of Chapter 42, Tax Code. First Bank of Deer Park v. Harris County, 804 S.W.2d 588 (Tex. App.-Houston [1st Dist.] 1991, no writ).

A person who voluntarily pays an illegal tax has no claim for repayment. The public policy reason for the voluntary payment rule is to prevent a taxing entity from using funds paid by taxpayers in a given budget year and subsequently being required to refund that amount. In this case, however, the court found taxpayer's payment was not made voluntarily. City of Laredo v. South Texas National Bank, et al. 775 S.W.2d 729 (Tex. App.-San Antonio 1989, writ denied).

A tax paid because both taxpayer and taxing unit mistakenly concluded the tax was legal was a voluntary payment and not subject to a refund under Sec. 31.11. Bank of Baytown v. Harris County, 765 S.W.2d 823 (Tex. App.-Houston 1988, writ denied).

"Voluntary payment rule" prevents taxpayers from recovering repayment of Sec. 33.07 penalties, even if the penalties are illegally imposed. Salvaggio v. Houston ISD, 752 S.W.2d 189 (Tex. App.-Houston 1988, writ denied).

A tax assessor-collector lacks statutory authority to accept or deposit money paid by a heavy equipment dealer to the dealer's inventory tax escrow account when the dealer would not owe taxes. Section 23.1232(c) does not authorize the collector to maintain an escrow account for a dealer who is not an "owner" or to accept funds from a person who is not an owner. A heavy equipment dealer who mistakenly prepays such taxes is not entitled to a refund of the monies unless he is entitled to a refund under Section 31.11 of the Tax Code or can show that he paid them as the result of fraud, because of a mutual mistake of fact, or under duress. Op .Tex. Att'y Gen. No. JC-286 (2000).

Absent contrary authority, unclaimed overpayments of property taxes become county property once the three-year reclamation period lapses under Sec. 31.11. The county then may transfer the funds into its general fund account under article VIII, Sec. 9, Tex. Const. Op. Tex. Att'y Gen. No. DM-258 (1993).

A county tax assessor-collector may not establish a "tax clearance" account in which excess property tax payments may be deposited and then withdrawn to offset those property tax payments which are less than the amount imposed. Op. Tex. Att'y Gen. No. JM-536 (1986).

Sec. 31.111. Refunds of Duplicate Payments.

(a) The collector of a taxing unit who determines that a person erred in making a payment of taxes because the identical taxes were paid by another person shall refund the amount of the taxes to the person who erred in making the payment.

(b) A refund under Subsection (a) shall be made as soon as practicable after the collector discovers the erroneous payment. The refund shall be accompanied by a description of the property subject to the taxes sufficient to identify the property. If the property is assigned an account number, the collector shall include that number.

(c) Each month, the collector shall inform the auditor of each appropriate taxing unit of refunds of taxes made under Subsection (a) during the preceding month.

Added by Acts 2001, 77th Leg., ch. 673, 2, eff. Jan. 1, 2002 and by Acts 2001, 77th Leg., ch. 1430, 9, eff. Sept. 1, 2001.

Cross References:
Refunds made automatically by unit, see Sec. 26.l5(f).
Refunds resulting from a tax rate rollback election, see Sec. 26.07(g).
Representation of property owner, see Sec. 1.111.
Interest on refunds, see Sec. 31.12.
Tax refund form, see Rule Sec. 9.3039.
Application of refund to delinquent account, see Sec. 26.15(g).

Sec. 31.115. Payment of Tax Under Protest.

Payment of an ad valorem tax is involuntary if the taxpayer indicates that the tax is paid under protest:

(1) on the instrument by which the tax is paid; or

(2) in a document accompanying the payment.

Added by 1995 Tex. Laws, p. 4981, ch. 993, Sec. 1.

Cross References:
Certain payments accepted, see Sec. 31.07.
Conditional payments, see Sec. 31.071.
Medium of payment, see Sec. 31.06.
Prohibition on restricted or conditional payments, see Sec. 31.073.
Refunds of overpayments or erroneous payments, see Sec. 31.11.

Notes:
In the absence of any protest from taxpayers, taxpayers are deemed to have voluntarily paid an maintenance and operations school tax rate above the rate set by the electorate and are not entitled to a refund. A mistake in law does not excuse a taxpayer from the consequences of voluntary payment of taxes. Unless taxpayers protest under Section 31.115, that is payment of tax under protest, taxpayers are presumed to have paid the taxes voluntarily. Letter Op. Tex. Att'y Gen. No. DM-98-050 (1998).

Sec. 31.12. Payment of Tax Refunds; Interest.

(a) If a refund of a tax provided by Section 11.431(b), 26.07(g), 26.15(f), 31.11, or 31.111 is paid on or before the 60th day after the date the liability for the refund arises, no interest is due on the amount refunded. If not paid on or before that 60th day, the amount of the tax to be refunded accrues interest at a rate of one percent for each month or part of a month that the refund is unpaid, beginning with the date on which the liability for the refund arises.

(b) For purposes of this section, liability for a refund arises:

(1) if the refund is required by Section 11.431(b), on the date the chief appraiser notifies the collector for the unit of the approval of the late homestead exemption;

(2) if the refund is required by Section 26.07(g), on the date the results of the election to reduce the tax rate are certified;

(3) if the refund is required by Section 26.15(f):

(A) for a correction to the tax roll made under Section 26.15(b), on the date the change in the tax roll is certified to the assessor for the taxing unit under Section 25.25; or

(B) for a correction to the tax roll made under Section 26.15(c), on the date the change in the tax roll is ordered by the governing body of the taxing unit;

(4) if the refund is required by Section 31.11, on the date the auditor for the taxing unit determines that the payment was erroneous or excessive or, if the amount of the refund exceeds the applicable amount specified by Section 31.11(a), on the date the governing body of the unit approves the refund; or

(5) if the refund is required by Section 31.111, on the date the collector for the taxing unit determines that the payment was erroneous.

(c) This section does not apply to a refund in an amount less than $5.

Added by 1987 Tex. Laws, ch. 112, Sec. 1; amended 1989 Tex. Laws, p. 3600, ch. 796, Sec. 30; amended by 1999 Tex. Laws, p. 3637, ch. 915, Sec. 2; amended by 2001 Tex. Laws, p. 1203, ch. 673, Sec. 3 and p. 4821, ch. 1430, Sec. 10.

Cross References:
Refunds made automatically, see Sec. 26.15(f).
Refunds resulting from a tax rate rollback election, see Sec. 26.07(g).
Refunds for overpayment or erroneous payment, see Sec. 31.11.
Tax refund form, see Rule Sec. 9.3039.