First of all, a taxpayer should understand the nature of property taxes in Texas. Property taxes are the primary financial resource for the operation of governmental entities in Texas. This is largely based on the fact that Texas has no state income tax. Annual valuations are determined by local appraisal districts and taxes are generally levied and collected by counties, cities and school districts.
The Texas Constitution sets out five basic rules in regards to property taxes:
- Taxation must be fair and equitable.
- All tangible property must be taxed based on its current market value. The exceptions to this rule are properties receiving exemptions and agricultural valuations.
- All property is taxable unless exempted by state and federal law.
- Taxpayers have a right to reasonable notice of increases in the appraised value.
- Each property in a county must have a single appraised value
Generally speaking filing a property tax appeal involves the taxpayer’s disagreement with an action taken by the appraisal district. The taxpayer may be challenging the appraisal district for the following reasons:
- Disagreement over the appraisal district’s opinion of market value.
- The appraisal district’s denial of an exemption or special valuation.
- The property owner feels that their property is not assessed fairly and equitably by the appraisal district.
- Appraisal district did not send the notice of appraised value to the correct property owner, (failure to give notice).
- The appraisal district’s records contain an error, i.e.: a clerical error, multiple appraisals of a property, and the inclusion of property that does not exist in the form or at the location described in the appraisal roll.
When filing a protest a taxpayer should be aware of the four phases in the property tax process. The Texas Property Calendar is divided into four sections:
January-May (1/1-5/15): The Appraisal Phase.
- The appraisal district collects information to appraise properties for the current tax year.
- Administer exemptions and special appraisals.
- Update property records.
- Taxpayers file personal property renditions and appraisal districts set valuations based on those filings.
- Notices of appraised values are mailed to taxpayers.
May-July (5/15-7/25): The Equalization Phase (The Administrative Remedy).
- The tax roll is submitted to the Appraisal Review Board (ARB).
- Taxpayers file protests.
- The informal and formal appeal process begins.
- After the appeal hearings the ARB approves and certifies the tax roll on or about July 25.
July-September (7/25-10/1): The Assessment Phase.
- Taxing entities receive the certified tax rolls.
- Local jurisdictions adopt budgets.
- Tax rates are adopted.
- Taxes statements are mailed to taxpayers.
- Some taxpayers dispute their ARB rulings and appeal their appraised values to district court for Judicial Review.
October-January (10/1-1/31): Current Collection Phase.
- Taxes are collected by local jurisdictions.
- Taxes become delinquent 2/1
Generally speaking, filing a protest in Texas should be done on or before May 31 of the current tax year or after receipt of a Notice of Appraised Value from the appraisal district. All protests should be executed with protest forms provided by the appraisal district or those forms provided by the Texas Comptroller’s Property Tax Division. The forms distributed by appraisal districts and the Comptroller’s office allow the taxpayer to denote the reason for their appeal.
In most Texas Counties the taxpayer and / or the representative are allowed the opportunity to have an informal hearing with the appraisal district staff. If the taxpayer does not come to a resolution of their appeal they are entitled to a hearing before the Appraisal Review Board (ARB). Additionally, the taxpayer has the right to seek relief from Judicial Review if the ruling of the ARB is not acceptable to the taxpayer.