Guide to Property Tax Appraisal in Texas

If you recently purchased property in Texas, you need to understand property taxes and how the appraisal of your property might increase or decrease the taxes you pay to your local government.  Additionally, you may need to understand the appraisal of business personal property, which includes tangible personal property like furniture, equipment, and motor vehicles.

Taxes collected from property and business personal property fund various government programs like schools, emergency services like police and fire, and local government operations. If you disagree with an appraisal, you have the right to a property tax appeal, which your property tax attorney can help you file.

What You Should Know About Business Personal Property

Before filing an appeal, it’s helpful to understand the concept of business personal property and your rights as a taxpayer in Texas. The Harris County Appraisal District has published a guide to help business owners understand what is expected of them when submitting a document called a “rendition,” which gives the government details on a property’s assets.

Information required in the rendition includes:

  • A general description of assets
  • Quantity of items (such as an inventory)
  • Estimate of approximate market value
  • Original cost of the property
  • Date the property was acquired

Did You Know? There are exemptions for “ad valorem taxation” that may include one passenger car or light truck that’s owned by an individual and used for personal and business activities. Property tax consultants are a valuable ally in helping you determine whether you qualify for an exemption.

Here are a few of the types of business personal property that must be reported:

  • Computers
  • Equipment
  • Finished goods
  • Furniture
  • Inventory
  • Fixtures
  • Machinery
  • Raw materials

Items considered intangible personal property aren’t required for the reporting. Such intangible items include things like cash, computer software, and accounts receivable. Essentially, items without a physical form don’t need to be reported.

Are there Penalties for Failure to File a Rendition?

There is a rather hefty fee imposed on property owners for failure to comply with business property tax rules in Texas. If you don’t file on time or you don’t file at all, you could face a 10% penalty on the amount of taxes owed on the property. If the court determines that a property owner has willfully committed fraud, a penalty of up to 50% could be imposed.

If you’re having difficulty understanding tax laws, it’s important to seek out property tax help early so that you’re not dealing with expired deadlines and penalties. A property tax consulting firm can help you with filing an extension, as well as filing a waiver for a penalty that’s already been imposed.

How are Appeals Handled?

If you receive your appraisal and disagree with the value or taxability, you have the right to file a formal protest. According to the Harris County Appraisal District:

“If you disagree with HCAD’s determinations of the appraised value or taxability of your business personal property, you have the right to protest before the Harris County Appraisal Review Board (ARB).”

It’s important to consider legal assistance when seeking property tax relief since an appeal does require completing an official protest form and arranging a hearing with the ARB. Your property tax consultant may be able to resolve the issue you have with your appraisal without requiring you to go through the complete process with the official hearing before the ARB.