Property Tax Right Protest 41.41

Section 41.41 – Right of Protest

Property tax appeals offer property owners a meaningful opportunity to reduce property taxes, correct errors in the description of their property and address a variety of other issues. This section of the Texas Property Tax Code delineates the basis for appeal before the appraisal review board. Most property tax protests (appeals) are based upon market value or unequal appraisal. An appeal on market value is based on the premise the assessed value exceeds market value (the amount for which the property could be sold). Appeals on unequal appraisal are based on the premise a property is assessed at a higher level than similar properties.

Property owners are well served by annually filing a property tax protest for both market value and unequal appraisal. Determination of protests for both market value and unequal appraisal are a contentious issue. Some appraisal review boards independently determine a separate value for the market value and unequal appraisal protests. However, most appraisal review boards determine only one value after hearing evidence regarding both market value and unequal appraisal. Unfortunately, appraisal review board members are much more comfortable considering evidence regarding market value than unequal appraisal.

Some appraisal review boards are unwilling to consider evidence on unequal appraisal using assessment, comparable or other evidence submitted by the property tax owner (or property tax consultant) as of September 2006. These appraisal review boards focus on either the ration study or assessment comparable prepared by the appraisal district.

The right to annually protest property tax assessments and other actions of the appraisal district balance the appraisal district’s right to determine a property value. Annual property tax appeals for each property are essential to minimizing property taxes.

Sec. 41.41. Right of Protest.

(a) A property owner is entitled to protest before the appraisal review board the following actions:

(1) determination of the appraised value of the owner’s property or, in the case of land appraised as provided by Subchapter C, D, E, or H, Chapter 23, determination of its appraised or market value;

(2) unequal appraisal of the owner’s property;

(3) inclusion of the owner’s property on the appraisal records;

(4) denial to the property owner in whole or in part of a partial exemption;

(5) determination that the owner’s land does not qualify for appraisal as provided by Subchapter C, D, E, or H, Chapter 23;

(6) identification of the taxing units in which the owner’s property is taxable in the case of the appraisal district’s appraisal roll;

(7) determination that the property owner is the owner of property;

(8) a determination that a change in use of land appraised under Subchapter C, D, E, or H, Chapter 23, has occurred; or

(9) any other action of the chief appraiser, appraisal district, or appraisal review board that applies to and adversely affects the property owner.

(b) Each year the chief appraiser for each appraisal district shall publicize in a manner reasonably designed to notify all residents of the district:

(1) the provisions of this section; and

(2) the method by which a property owner may protest an action before the appraisal review board.

(c) Notwithstanding Subsection (a), a property owner is entitled to protest before the appraisal review board only the following actions of the chief appraiser in relation to an exemption under Section 11.35:

(1) the modification or denial of an application for an exemption under that section; or

(2) the determination of the appropriate damage assessment rating for an item of qualified property under that section.

(d) An appraisal district or the appraisal review board for an appraisal district may not require a property owner to pay a fee in connection with a protest filed by the owner with the board.

Acts 1979, 66th Leg., p. 2305, ch. 841, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1981, 67th Leg., 1st C.S., p. 170, ch. 13, Sec. 137, eff. Jan. 1, 1982; Acts 1985, 69th Leg., ch. 823, Sec. 3, eff. Jan. 1, 1986; Acts 1989, 71st Leg., ch. 796, Sec. 34, eff. Sept. 1, 1989; Acts 1997, 75th Leg., ch. 113, Sec. 1, eff. Jan. 1, 1998; Acts 1999, 76th Leg., ch. 631, Sec. 11, eff. Sept. 1, 1999.

Amended by:

Acts 2019, 86th Leg., R.S., Ch. 1034 (H.B. 492), Sec. 7, eff. January 1, 2020.

Acts 2019, 86th Leg., R.S., Ch. 1284 (H.B. 1313), Sec. 3, eff. January 1, 2020.

Acts 2021, 87th Leg., R.S., Ch. 915 (H.B. 3607), Sec. 21.001(65), eff. September 1, 2021.

Cross References:
Determination of appraised value, see Sec. 23.01.
Median level of appraisal, see Sec. 1.12.
Inclusion on appraisal records, see Secs. 11.01 & 21.01.
Listing of ownership, see ch. 25.
Taxing unit situs, see Secs. 21.01 & 21.02.
Remedy for situs protest, see Sec. 41.42.
Remedy for protest of appraisal inequality, see Sec. 41.43.
Partial exemptions, see Secs. 11.13, 11.22, 11.24, 11.27 & 11.28.
Productivity appraisal, see ch. 23, subchs. C, D & E.
Notice and deadline for protest, see Sec. 41.44.
Right of appeal by property owner, see Sec. 42.01.
Exclusivity of remedies, see Sec. 42.09.
Notice of appeal, see Sec. 42.06.

Notes:
Where taxpayer claimed not to be the owner of property upon which delinquent taxes were due and he had not presented this fact before the appraisal review board, he has waived non-ownership as a defense to a delinquent tax suit. A taxpayer must protest the non-ownership issue before the appraisal review board. Anderson v. Robstown Independent School District, 706 S.W.2d 952 (Tex. 1986). (Note: 1987 amendment adds Sec. 42.09(b) that provides defenses to delinquent tax lawsuit where property owner did not own personal property on January 1 or where real property was outside taxing unit’s boundaries on January 1.)

The exempt status of a church could not be raised in a suit for delinquent taxes. The church failed to include the appraisal district as a party to the lawsuit, so that no action could be taken on its counterclaim concerning denial of its late application and qualification for exemption as a religious organization. The Tax Code remedies are exclusive. St. Joseph Orthodox Christian Church v. Spring Branch Independent School District, 110 S.W.3d 477 (Tex. App.-Houston [14th Dist.] 2003, no pet.).

Section 25.25(c)(3) was not a proper remedy for the allocation of aircraft value because the property owner stipulated that the aircraft existed at the location and in the form described on the appraisal roll. It could not use the allocation provision of Section 21.03 to prove that the aircraft was not located in the appraisal district to correct a prior year roll. By failing to file timely a protest, the taxpayer waived its right to allocation for prior years. Kellair Aviation Co. v. Travis Central Appraisal District, 99 S.W.3d 704 (Tex. App.-Austin 2003, pet. denied).

The taxpayer exhausted its administrative remedies by protesting to the appraisal review board the inclusion of certain vehicles in the appraised value of a property account. The taxpayer therefore could raise the defense of non-ownership in a suit to collect delinquent taxes, even though the appraisal protest was not continued in subsequent years. City of Pharr v. Boarder to Boarder Trucking Svc., Inc. 76 S.W.3d 803 (Tex. App.-Corpus Christi 2002, pet. denied).

The ad valorem tax did not violate the subsidiary’s substantive due process rights because taxing property with no direct benefits to the property does not amount to a palpable and arbitrary abuse of power unless its initial inclusion in the district was itself a palpable and arbitrary abuse of power. The constitutional requirement of equality and uniformity is met when taxation is uniformly assessed on an ad valorem basis on all taxable property without regard to benefits received. Southwest Property Trust, Inc. v. Dallas County Flood Control District No. 1, No. 05-97-00399-CV (Tex. App. – Dallas [5th Dist.] 2002, rehearing overruled).

A leasehold’s valuation was not the annual contract rental price on each leased lot, but instead had to be based on the leasehold’s current market value which might be higher than the contract price given the demand for leasehold estates. All comparables of fee-simple interests should be eliminated from data used in establishing the fair market value of leaseholds, but the appraisals should not be limited to the amount of annual rent being paid on the leaseholds. Panola County Fresh Water Supply District Number One v. Panola County Appraisal District and Panola County Appraisal Review Board, 69 S.W.3d 278 (Tex. App. – Texarkana 2002, no pet.).

Section 25.25(d) does not provide for the appeal of the denial of an exemption. Bexar Appraisal District v. Wackenhut Corrections Corporation, 52 S.W.3d 795 (Tex. App. – San Antonio 2001, no pet.).

The statutory language in Tax Code Section 25.25(d) provides that the tax roll could not be changed if the property was subject of a prior protest brought under Tax Code Chapter 41 and resolved by an earlier negotiated resolution. Royal Production Company, Inc. v. San Jacinto County Central Appraisal District and San Jacinto County Appraisal Review Board, 42 S.W.3d 373 (Tex. App. – Beaumont 2001).

Taxpayer sought relief under Section 25.25 regarding the value of an airplane for 1991 through 1995. 1991 and 1992 were not properly before the court since protests were filed, but dismissed when taxpayer did not appear for the hearing. 1994 and 1995 were not properly before the court either since protests were filed and written settlements executed. No protest was pursued for 1993. However, since the parties stipulated to the form and location of the airplane as described in the appraisal, Section 25.25(c) provided no relief for 1993. Allocation of value cannot be corrected using Section 25.25(c). Aramco Associated Company v. Harris County Appraisal District and Harris County Appraisal Review Board, 33 S.W.3d 361 (Tex. App. – Texarkana 2000, pet. denied).

Sanctions against a taxing unit are inappropriate because the taxpayer may not raise excessive appraisal or nonownership in district court without first exhausting the administrative remedies in the Tax Code. Taxpayer did not protest the property’s appraisal or ownership to the appraisal review board, and thus could not raise those issues in a delinquent tax lawsuit. Aldine Independent School District v. Baty, 999 S.W.2d 113 (Tex. App. — Houston [14th District] 1999).

Arbitration is not a remedy available to a taxpayer that missed the Chapters 41 and 42 protest deadlines. If a Section 25.25 correction motion is filed, the district court must hear the appeal from the appraisal review board’s decision. Harris County Appraisal District v. World Houston, Inc., 905 S.W. 2d 594 (Tex. App.-Houston [14th Dist.] 1995).

The subsequent purchaser of property is not barred from contesting the property’s value under Section 25.25(d) when the previous owner had timely filed a protest of the property’s value and then withdrew the protest because of the pending land sale. Jim Sowell Construction Company, Inc. v. Dallas Central Appraisal District, 900 S.W.2d 82 (Tex. App.-Dallas 1995, writ denied).

For the purposes of chapters of 41 and 42, “property owner” includes the owner of property on January 1 of the year for which taxes are imposed. Thus, HUD, which owned property on January 1 but sold it in August of the same year, was a property owner and had the right to appeal the appraisal review board decision to district court. HUD v. Nueces County Appraisal Dist., 875 S.W.2d 377 (Tex. App.-Corpus Christi 1994, no writ history).

A taxpayer waived any complaint about the way in which the taxing units determined that it was the party responsible for the taxes since it had not complained of such at the ARB hearing as provided for in Sec. 41.41(7) and (9). The taxpayer could only assert the affirmative defenses of non-ownership and a taxing unit’s lack of jurisdiction over the property in a subsequent suit for delinquent taxes as provided by Sec. 42.09(b). General Electric Capital Corp. v. City of Corpus Christi, 850 S.W.2d 596 (Tex. App.-Corpus Christi 1993, writ denied).

A taxpayer seeking correction of a clerical error that affects tax liability must exhaust his administrative remedies by filing a correction motion with the appraisal review board before bringing suit in district court for a refund. Liland v. Dallas CAD, 731 S.W.2d 109 (Tex. App.-Dallas 1987, no writ).

Taxpayers who failed to comply with the Tax Code provisions for protesting property valuation were preempted from a right to judicial review because of the exclusiveness of the remedies provided by the Tax Code. Adams v. Kendall County Appraisal District, 724 S.W.2d 871 (Tex. App.-San Antonio 1986, no writ).

Injunctive relief by a taxpayer for protesting valuation of his property is no longer permissible; the legislature has provided a comprehensive plan for appeal of taxing authorities’ decisions in the Tax Code and has required property owners to follow that plan. Brazoria County Appraisal District v. Notlef, Inc., 721 S.W.2d 391 (Tex. App.-Corpus Christi 1986, writ ref’d n.r.e.).

Property owned by a hospital authority with a portion leased to private doctors for their own commercial enterprise was not used exclusively for the use and benefit of the public and was not exempt as public property. A hospital authority must exhaust its procedural administrative remedies under the Tax Code before seeking judicial review. Grand Prairie Hospital Authority v. Tarrant Appraisal District, 707 S.W.2d 281 (Tex. App.-Fort Worth 1986, writ ref’d n.r.e.).

The failure of the tax assessor to deliver a notice of appraised value denied due process to the taxpayer and deprived the appraisal review board of jurisdiction to consider any increase in taxpayer’s valuation above the amount rendered. Because the board did not acquire jurisdiction over the valuation, the taxpayer was not confined to remedies under the Property Tax Code and could challenge the assessments through a collateral attack. Garza v. Block Distributing Co., 696 S.W.2d 259 (Tex. App.-San Antonio 1985, writ ref’d n.r.e.).

Property tax statute did not arbitrarily deprive taxpayer of his right to show that taxes assessed on his property were unequal, not uniform, and excessive where the code, which meets due process requirements, affords taxpayers the right to protest a hearing on protests and a determination of a protest. Brooks v. Bachus, 661 S.W.2d 288 (Tex. App.-Eastland 1983, writ ref’d n.r.e.).
These codes affect property owners across the state, in both larger and smaller counties including:

• Williamson County
• Fort Bend County
• Harris County
• Dallas County
• Brazoria County
• Collin County
• Montgomery County
• Cameron County
• Comanche County
• Potter County
• Cherokee County
• Walker County
• Uvalde County
• Smith County
• Grayson County
• Panola County
• McLennan County

The Texas Property Tax Code applies to all property types in Texas including:

• Neighborhood shopping center
• Supermarket
• Daycare center
• Night club
• Vacant land
• Mini-warehouse
• Shopping center
• Single-tenant retail
• Auto salvage yard
• Nursing home

O’Connor & Associates offers property tax services to all property owners of all land uses across Texas.

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