The Texas Property Tax Reform and Transparency Act of 2019 aims to make the property tax appraisal and collection systems more transparent. It also seeks to make it easier for Texas property owners to understand how tax rates are calculated. The array of amendments it introduced includes those that define “no-new-revenue” tax rates and “voter-approval” tax rates.

According to Section 26.04 of the new law, the taxing unit’s assessor must submit the appraisal roll to the governing body of the taxing unit. When the appraisal roll is ready, a designated officer or employee will calculate the taxing unit’s no-new-revenue tax rate and its voter-approval tax rate.

In the new legislation, “no-new-revenue” replaces “effective” while “voter-approval” replaces “rollback.” This is how you compute for the tax rates:

“No-new-revenue tax rate”

“No-new-revenue tax rate” is conveyed in dollars per $100 of taxable value. You can get the no-new-revenue tax rate using this formula:

No-new-revenue tax rate = (Last year’s levy – Lost property levy) / (Current total value – New property value)

“Voter-approval tax rate”

“Voter-approval tax rate” is also generated in dollars per $100 of taxable value. You can determine the voter-approval tax rate using these formulas:

For special taxing units:

Voter-approval tax rate = (No-new-revenue maintenance and operations rate x 1.08) + Current debt rate

For taxing units that are not special taxing units:

Voter-approval tax rate = (No-new-revenue maintenance and operations rate x 1.035) + (Current debt rate + Unused increment rate)

Additional sales and use tax

There are different formulas for obtaining the no-new-revenue tax rate and the voter-approval tax rate for the first year in which a taxing unit requires the collection of additional sales and use tax. These are as follows:

No-new-revenue tax rate = (Last year’s levy – Lost property levy) / (Current total value – New property value) – Sales tax gain rate

Voter-approval tax rate for special taxing units = (No-new-revenue maintenance and operations rate x 1.08) + (Current debt rate – Sales tax gain rate)

Voter-approval tax rate for taxing units that are not special taxing units = (No-new-revenue maintenance and operations rate x 1.035) + (Current debt rate + Unused increment rate – Sales tax gain rate)

You can get the “sales tax gain rate” by dividing the expected revenue from the additional sales and use tax in the coming year by the current total value. Sales tax gain rate is expressed in dollars for every $100 of taxable value.

Provisions

The no-new-revenue tax rate for a county is the total of the no-new-revenue tax rates for each type of tax that the county levies. The voter-approval tax rate for a county is the total of the voter-approval tax rates for each type of tax that the county levies.

The 2019 tax reform legislation adds the following amendments:

In computing for the no-new-revenue tax rate and the voter-approval tax rate, the officer or employee designated by the taxing unit must use the tax rate calculation forms provided by the comptroller.

Before the designated officer or employee submits the no-new-revenue tax rate and the voter-approval tax rate to the taxing unit’s governing body, he or she must first certify on the tax rate calculation forms that he or she has calculated the rates using the values in the certified appraisal roll.

The designated officer or employee must submit the tax rates to the governing body by August 7. The new law also says that he or she must publish the rates on the home page of the taxing unit’s website. Before this, the tax code required the designated individual to publish these rates in a newspaper or deliver them by mail to each property owner in the taxing unit.

 

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