Personal Property Renditions Must be Made by April 15

Significant changes have been made to the Texas Property Tax Code regarding the rendition of tangible personal property used in a business. The new rules require action by April 15, unless an extension is obtained, and provide substantial monetary penalties for failure to comply. Previously, there was no penalty for failure to render. The new rules also specify the information that must be included on a rendition.

Property owners must render for taxation all tangible personal property used for the production of income owned on January 1 of each year. Rendition is thus required for equipment, furniture, as well as inventory. Renditions must be filed with the Chief Appraiser by April 15 of each year. A taxpayer can obtain an extension of the rendition deadline to May 15 by written request to the Chief Appraiser, which should be made by April 15. The Chief Appraiser may extend the deadline for an additional 15 days if the property owner shows good cause in writing.

Unless the property, in the owner's opinion, has an aggregate value under $20,000, the property owner must render: (1) his name and address, (2) a description of the property by type or category, (3) for inventory, a description of each type of inventory and general estimate of the quantity of each type, (4) the physical location or taxable situs of the property and (5) the property owner's good faith estimate of the market value of the property or, at the property owner's option, the historical cost when new and year of acquisition. If the aggregate value of the property, in the owner's opinion, is under $20,000, items (3) and (5) are not required.

Under Texas tax law, the market value of inventory is generally the price for which it would sell on January 1 as a unit to a purchaser who would continue the business. There are special valuation rules for dealers in motor vehicles, boats and outboard motors, heavy equipment, and mobile homes.

The Comptroller's Office has issued forms for business personal property rendition, which may be used to render the property. Forms must be signed by the property owner and sworn before a notary that the information is true and correct to the best of his knowledge and belief.

Under the new rules, failure to timely file a rendition statement is subject to a penalty equal to 10% of the total amount of taxes imposed on the property for that year by all taxing units. The penalty may be waived if the Chief Appraiser determines that the property owner exercised reasonable diligence to comply or has substantially complied with the rendition requirements. To obtain a waiver, a written request, with supporting documentation, must be sent to the Chief Appraiser within 30 days of receipt of notice of the penalty. The Chief Appraiser's refusal to waive a penalty may be protested to the Appraisal Review Board, and appealed to court. Fraudulent renditions are subject to substantial civil and criminal penalties.

Strasburger would be glad to assist its clients in complying with the new rendition requirements.

     
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