2019 Tax Bills Will Be Arriving in Your Mailbox Soon
By Chris Becker, CC Becker Property Tax Consulting
It will soon be that wonderful time of year when property owners in Texas and most other states receive their property tax bill from the tax collector. If you are a seasoned property owner, you are probably familiar with this process, but for various reasons, many people are not. This paper will discuss some general information about tax bills, what information should be on the tax bill, and what actions you should take when you receive yours.
When should I receive my tax bill?
Texas Property Tax Code Section 31.01 (a) states: (a) Except as provided by Subsections (f), (i-1), and (k), the assessor for each taxing unit shall prepare and mail a tax bill to each person in whose name the property is listed on the tax roll and to the person’s authorized agent. The assessor shall mail tax bills by October 1 or as soon thereafter as practicable.
This section is very important and there are things you need to be aware of. The tax office gets an “Appraisal Roll” from the assessor’s office in the spring or early summer. In Texas, the assessor is the Chief Appraiser and the office is the Central Appraisal District. In some states, the assessor and the collector could be the same person. Once the collector receives the appraisal roll, and after the governing bodies (county, school district, city, etc.) have set their budgets and tax rates for the year, the collector will pull all that information together and create a “Tax Roll”.
If you are a new property owner, and you have not received any correspondence from the assessor, there is a good chance you won’t receive the tax bill for the new property from the collector. This could result in your taxes going delinquent and accrual of penalties and interest.
The bottom line here is that it is the property owner’s responsibility to know that he or she owes taxes and to make sure they are paid on time. You need to make sure the assessor knows you own the property and has your correct mailing address. Business owners should be aware that they may also owe taxes on business personal property (inventory, furniture, fixtures, vehicles, machinery and equipment) that is used in the production of income.
What information is on a tax bill?
Texas Property Tax Code Section 31.01 further states in part:
(b) The county assessor-collector shall mail the tax bill for Permanent University Fund land to the comptroller. The comptroller shall pay all county tax bills on Permanent University Fund land with warrants drawn on the General Revenue Fund and mailed to the county assessors-collectors before February 1.
(c) The tax bill or a separate statement accompanying the tax bill shall: (1) identify the property subject to the tax; (2) state the appraised value, assessed value, and taxable value of the property; (3) if the property is land appraised as provided by Subchapter C, D, E, or H, Chapter 23, state the market value and the taxable value for purposes of deferred or additional taxation as provided by Section 23.46, 23.55, 23.76, or 23.9807, as applicable; (4) state the assessment ratio for the unit; (5) state the type and amount of any partial exemption applicable to the property, indicating whether it applies to appraised or assessed value; (6) state the total tax rate for the unit; (7) state the amount of tax due, the due date, and the delinquency date; (8) explain the payment option and discounts provided by Sections 31.03 and 31.05, if available to the unit’s taxpayers, and state the date on which each of the discount periods provided by Section 31.05 concludes, if the discounts are available; (9) state the rates of penalty and interest imposed for delinquent payment of the tax; (10) include the name and telephone number of the assessor for the unit and, if different, of the collector for the unit; (11) for real property, state for the current tax year and each of the preceding five tax years: (A) the appraised value and taxable value of the property; (B) the total tax rate for the unit; (C) the amount of taxes imposed on the property by the unit; and (D) the difference, expressed as a percent increase or decrease, as applicable, in the amount of taxes imposed on the property by the unit compared to the amount imposed for the preceding tax year; and (12) for real property, state the differences, expressed as a percent increase or decrease, as applicable, in the following for the current tax year as compared to the fifth tax year before that tax year: (A) the appraised value and taxable value of the property; (B) the total tax rate for the unit; and (C) the amount of taxes imposed on the property by the unit.
Note: there are other important and relevant sections of the tax code that are not included here. You can access the complete tax code https://www.comptroller.texas.gov/ Property owners are encouraged to contact a professional with any questions or problems regarding property tax.
As you can see, there is a lot of information on the tax bill and if you are not a seasoned property owner it can be a bit overwhelming. Here are some important things to look for:
• Make sure your name and address are correct. The assessor will get your name and address from your deed so if anything has changed, you need to notify the assessor. In most states, the assessor will transmit the change to the collector, but it never hurts to follow up with both offices to make sure the changes have been made. It is not uncommon for the address on the deed to be different than the buyers actual mailing address so it is very important to check on this.
• Make sure the property is described correctly. The bill should give a brief legal description such as what lot and block a house is located on, or how many acres are in the parcel, and what survey it is in.
• Make sure the taxable value is correct. In Texas you could have different types of values listed. You will have a “Market Value” which is the value the assessor says the property is worth on the open market. This is the starting point in determining how much tax you will pay. If you protested your appraised value earlier in the year and were granted a reduction, the new reduced market value should be listed on the tax bill. If you have any exemptions such as homestead, disability, veterans, etc., the amount of the exemptions should also be listed, and this amount should be deducted from the market value to determine the “Taxable Value”. You should check and make sure you have all the exemptions you are entitled to. Exemption amounts vary by taxing jurisdiction and you should be aware of what the exemption amounts are. If you have land, you may also have a “Productivity Value” also known as the agriculture special value and commonly referred to as the ag exemption (its not really an exemption, it’s a special valuation based on the agricultural use) Insert link to previous blog about Ag Value here. If you have the ag value, it should be listed and the tax bill plus the value of any improvements such as barns, will be the taxable value, which is typically much less than market value. Note: improvements are taxed at market value and are not subject to the ag valuation.
• Make sure you know when the taxes are due. In Texas, taxes are generally due on or before January 31st and become delinquent on February 1st. So, if you get your 2019 tax bill on October 15th of 2019, you need to pay it before February 1st of 2020 to avoid penalty and interest. If the tax bills are mailed after the delinquency date, the collector must give you 21 days to pay without penalty and interest. If you mail your payment, it must be postmarked before the delinquency date, and many collectors will not accept metered mail as the postmark. I always recommend paying the taxes as soon as possible and well before the due date. If possible, it is a good idea to go to the tax office in person to pay the taxes and obtain a receipt. However, don’t wait until the last minute as you will likely encounter long lines. If you mail in your payment, you can enclose a self-addressed stamped envelope and request that the collector send you a receipt. I highly recommend doing this.
• Some jurisdictions offer discounts for early payment. These discounts will be clearly printed on the tax bill and usually start with a 3% discount and then go down by 1% each month. With today’s interest rates for CD’s, you might come out ahead by taking advantage of the discount.
What should I do if I have a problem or question about my tax bill?
• If there is a problem with the name, address, legal description, values, or exemptions, you should contact the assessor’s office. Be sure to have any needed documents in hand so that you can clearly communicate the problem. Most assessors staff are professional and want to help you with any problems you may have. If something needs to be corrected, they will make the change and update the collector. Be aware that you still owe the taxes and the due date has not changed. It is not uncommon for the collector to get the changes after the due date so if you have not paid the taxes you will be charged penalty and interest. If the change involves the taxable value, you should pay the tax bill and request a refund once the change has been made (most collectors automatically send a refund when due but that is not always the case).
• If there is a problem with the tax calculations, you have not been given credit for an exemption and the assessor shows it on their records, or if the collector made some error that caused you to miss the due date, you need to contact the collector.
• Most tax bills will have a portion that can be detached and sent in with your payment. It will usually have a barcode on it that will pull up the account on the collectors computer so it is easier for them and helps minimize errors.
What happens if I miss the due date and my taxes become delinquent?
Texas Property Tax Code Section 33.01 (a) states: (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.
Late payment will result in penalties and interest (P&I) applied to the taxes. Unless you can prove that the collector made some error that caused you to be late, the collector is prohibited by law from waiving P&I. If your dog ate your tax bill, or you forgot, you didn’t receive a tax bill, or had a family emergency, that is not an excuse. If you did not receive a tax bill, the courts have found that you should know that you owe taxes and should have contacted the collector to find out why you didn’t get your bill. It is very difficult to get P&I waived and the avenues for appeal are very few. Your tax bill should list at least 3 months after the due date with amounts that would be due for each delinquent month.
In Texas, P&I is added on February 1st with a 6% penalty plus 1% interest. The interest rate goes up 1% per month for every month the taxes go unpaid up to 12%. Additionally, if the tax remains delinquent and the collector has contracted with an attorney for delinquent tax collections, the collector can add attorney’s fees of up to 20% to the tax bill. Finally, if the tax remains unpaid, the collector’s attorney can file a lawsuit for collection and sell the property at auction on the courthouse steps to collect the unpaid taxes. As you can see, it is never a good idea to let your property taxes go delinquent.
What can CC Becker Property Tax Consulting do for me?
The information provided here gives a very basic overview of what information to look for on your tax bill and some of the potential issues to look for. If you have any problems with or questions about your tax bill you should get professional assistance immediately. Tax office personnel are usually very professional and helpful. Unfortunately, a lot of the time people don’t notice potential problems with their taxes until they get the tax bill, and by then it is often too late to get it corrected for that tax year. There are sometimes remedies that can be employed to help you and a property tax consultant is a good resource for navigating through this often frustrating and complicated process.
At CC Becker Property Tax Consulting, we offer full-service consulting. This means that we are on top of your property taxes throughout the tax process for the entire year. We will obtain a copy of your property tax notice of appraised value, make sure you are getting your exemptions, and if necessary file any exemption applications for you, meet with the assessor to negotiate a lower taxable value, attend hearings, and make sure your tax bill is correct. We have software and systems in place so that we can manage your property taxes for you, so you don’t have to worry.
Please visit our website at C.C. Becker Property Tax or contact me directly at (214)803-2564 should you have any questions or if I can help you in any way.
Here is a copy of a Texas tax bill for informational purposes only. This bill has been paid so the amounts that would be due if paid after the due date are zeroed out.