Business Personal Property Appeals in Texas
Business Personal Property taxes can be a real headache for many. The tax laws are constantly changing, and there is an expectation that a company will instantly know all these codes and laws the moment they open their doors for business.
Just like a new parent does not get a ‘How to Raise a Baby’ book, there is not a tax code 101 book handed out. Instead, the company is at the whim of the local appraisal district’s valuation methodology to hopefully come to a Fair Market Value. Despite the hard work of the staff in the appraisal districts, there is simply too much property for many of them to dig down beyond the surface level of a company. They will use a mass-market approach to valuation (ex. A truck is a truck, whether a F150 standard edition or a fully loaded 4x4, they are both trucks and therefore the same) and try to get as close as possible to what they consider reasonable. In reality, there is a wide range of value difference between the two, and with proper review of the valuation adjustments can be made.
Once a company receives a preliminary value notice from the county, they will have 30 days to file an official protest with the county. This is important in that it begins the process for value discussions with the local appraiser, as well as preserving the owner’s rights. Over the coming weeks, informal discussions will take place with the local appraiser (or their contract appraisal firm) about errors and adjustments that should be considered in updating the valuation. Often, the appeal process will end here once adjustments have been satisfactorily made; however, it is not uncommon for the process to continue onto a formal Appraisal Review Board (ARB).
An ARB is made up of taxpayers residing in the county that are meant to have no direct connection with the county appraisal district. This is the owner’s (or their consultant’s) opportunity to present their information to a 3rd party, while the appraisal district presents their data, ideally allowing for an independent review and adjustment to the final valuation. Depending on the outcome, the process could be settled, or in cases where there is the opinion that the ARB has not made the appropriate adjustments, the owner will then have the option to move on to arbitration or litigation. That, however, is a subject for another post.