property tax law changes include a new penalty
Texas Property Tax Code for many years required owners of business
personal property to annually render (or summarize) to the central
appraisal district the ownership and value of assets used in a
business. Historically, however, over half of all owners of business
personal property have not rendered.
Rendition was mandatory, but there was no penalty for not rendering.
Many property owners felt it was not a material issue since the
associated property taxes are modest. Others didn't render because it
was not convenient, or it would dramatically increase their tax
Chief appraisers at central appraisal districts and tax entities were
concerned that a material amount of business personal property was not
Impetus for change
There was concern that if business personal property owners are not
being taxed equitably with real property owners, the burden of
taxation would be shifted from owners of personal property to owners
of real property.
In addition, fiscal shortfalls at many city, county and school
entities, as well as at the state level, raised the government's need
to ensure it was receiving all due revenue based on current tax laws.
In Robinson vs. Budget Rent-a-Car Systems, a 2001 appeals court
decision, the court clarified that the chief appraiser may sue to
force a business personal property owner to render business personal
property. This was a largely unsatisfactory remedy, however, due to
the financial costs and political stigma of chief appraisers suing
large numbers of taxpayers.
The other possible solution was for chief appraisers to "guess high"
on assessed values, effectively forcing business personal property
owners to provide information. Fortunately, few chief appraisers chose
The new law
During the summer of 2003, the Texas Legislature put some teeth into
the rendition law by passing Texas Senate Bill 340.
Starting in 2004, a company that does not render will automatically
pay a 10 percent penalty on its business personal property tax bill.
This penalty, which can be appealed, will be collected by the chief
There is also a 50 percent penalty for filing a fraudulent rendition.
In addition, filing a fraudulent rendition is a criminal offense.
Owners of business personal property with an aggregate value of less
than $20,000 can file a simplified rendition statement containing only
the property owner's name and address, a general description of the
property by type or category and the location of the property.
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