Personal property used for the production of income must be rendered annually and is subject to property taxes in Texas. All real property and personal property is to be appraised at 100% of its market value on January 1 of the tax year. Property tax exemptions such as the homestead exemption for homes and the Freeport exemption for business personal property can reduce the burden of Texas property taxes. Real property does not have to be rendered but personal property must now be rendered annually by April 1st, although taxpayers can obtain a 30-day extension by asking for it. This document was prepared by the Texas Comptroller and is presented for your convenience.
Q: When is property taxable by a taxing unit?
A: If a property is located in a taxing unit on January 1 for more than a temporary period, the property is taxable. State law makes certain properties exempt from taxation-either automatically or by taxpayer application.
Q: What is a rendition?
A: A rendition is a form or communication a property owner may use to report the taxable property he or she owns or manages as a fiduciary on January 1 to the appraisal district. The rendition identifies, describes and gives the location of the taxable property. An owner may either give a good faith opinion or the also give an opinion of the property’s value on the rendition form, but it isn’t required. For income producing personal property, an owner may either give a good faith opinion of the market value of the property or the cost of the property when acquired and the year of acquisition.
Q: Am I required to file a rendition form?
A: You must file a rendition of business personal property used to produce income that you own or hold/manage as a fiduciary. Otherwise, you may submit a rendition of other property (personal or real) if you choose, but you are not required to do so. If your property is appraised by more than one appraisal district, you should file a rendition in each appraisal district office. This situation can occur when your property is located in a taxing unit that reaches into a neighboring county. The appraisal districts will send you a notice with their addresses if this occurs. If someone other than the property owner, owner’s employee, or the owner’s affiliated entity (i.e., a tax agent) files a rendition form, that person must swear to (notarized) the contents on the form before an officer authorized to administer an oath. Rendition forms are available online or at the appraisal district.
Q: What are the advantages of filing a rendition form?
A: Filing a rendition allows you to exercise your rights as a taxpayer. Your correct mailing address is on record, so taxing units will send the tax bills to the right address. Your opinion of the property’s value is on record with the appraisal district. Filing a rendition insures that you will receive a notice if the chief appraiser puts a higher value on the property than the value you placed on the rendition form.
Q: What is the deadline for filing a rendition form?
A: You must file a rendition with the appraisal district after January 1st and no later than April 1st. If you request to file a rendition form late, the chief appraiser must extend the deadline to May 1st. The chief appraiser may extend the deadline another 15 days if you request an extension in writing and can show good cause for needing the extension.
Q: Can I be charged a penalty for failing to file a rendition timely?
A: If you are required to file a rendition and file late, the chief appraiser must charge a penalty of 10 percent of the amount of annual taxes imposed on the property. The chief appraiser may waive this penalty if he or she determines that you exercised reasonable diligence to comply, or substantially comply, with rendition deadline requirements. You may request a penalty waiver in writing within 30 days of being notified of the penalty. If the chief appraiser denies your waiver request, you may protest that deadline before the appraisal review board.
Q: Can I be charged a penalty for filing a fraudulent rendition or for failing to file a rendition?
A: Yes, the chief appraiser must impose an additional penalty of 50 percent if a court finally determines that (1) you filed a false statement or report with the intent to fraud or to evade taxes, or (2) you altered or destroyed records or other information in the course of proceedings before the appraisal review board. The county or district attorney must initiate a lawsuit to do this. The court must consider your compliance history; the type, nature and taxability of the property involved; the type of business involved; the completeness of the records; your reliance on appraisal district advice that may have contributed to the violation; changes in district polices affecting renditions; and any other relevant factor. The chief appraiser may waive this penalty if he or she determines that you exercised reasonable diligence to comply or substantially comply with rendition deadline requirements. You may request a penalty waiver in writing within 30 days of being notified of the penalty. If the chief appraiser denies your waiver request, you may protest the denial before the appraisal review board.
Q: How does the appraisal district determine the value of a property?
A: The appraisal district determines the value of all taxable property in the county as of January 1 of the tax year. The appraisal district must repeat the appraisal process for property in the county at least once every three years. Some appraisal districts adjust values annually, others adjust every two years and some wait for three years. Check with your local appraisal district about its appraisal process.
For example, the value of a home is an estimate of the price a home would sell for on January 1. The appraisal district compares a home to similar homes that have sold recently and determines the home’s value
The appraisal district also uses other appraisal methods to appraise types of properties that don’t often sell, such as utility companies and oil leases. These methods include the cost approach (what it would take to build the property again, less depreciation) and the income approach (what an investor would pay for the property with an anticipated return). These methods are specifically described in the Tax Code Section 1.04.
Q: If my property is located in a school district that is located in two counties, how is the value of my property determined?
A: If your property is located in two or more appraisal districts, Texas law requires that the value of your property is the same in each appraisal district. If the chief appraisers do not agree to one appraised value, then your property’s value for that year is the lowest appraised value determined by the chief appraisers. If a protest, appeal or other action reduces that value, then the chief appraiser notifies the other chief appraisers who must reduce the value on their districts’ appraisal roll.
Q: How and when will I know what value the appraisal district puts on my property?
A: The chief appraiser will send you a notice of appraised value that details what the appraisal district believes is the value of your property. The notice includes a protest form and explains how you can file a protest with the appraisal review board if you disagree with the district. Notices for business personal property will not be mailed until after applicable rendition deadlines.
The chief appraiser must mail a notice by May 1st or as soon thereafter as possible. The notice of appraised value is sent if any of the following circumstances exists:
- the value of a property is higher than it was in the previous year;
- the value of a property is higher than the value the owner gave on a rendition;
- the property wasn’t on the appraisal district’s records in the previous year;
- the property was reappraised this year;
- the ownership of the property changed in the previous year; or
- the property owner or the owner’s agent requested the notice.
Q: Are the taxes on my home based on the current year’s market value?
A: Property owners’ taxes are based on the most current year’s market value minus applicable exemptions. The appraised value of a residence homestead for a tax year is limited to the lesser of either its market value or the sum of the market value of any new improvements and 110 percent of the appraised value of the preceding year. The 10 percent increase is cumulative – that is, 10 percent times the number of years since the property was last appraised. Therefore, if a homestead increases in value by 20 percent in two years, all of the increase can be added to the appraisal roll. A limitation takes effect for a residence homestead on January 1 of the tax year following the first tax year the owner qualifies the property for the residence homestead exemption. The limitation ends on the January 1 of the first tax year that neither the owner nor the owner’s spouse or surviving spouse qualifies for the homestead exemptions.