Protesting a Business Property Tax Assessment
One of the most difficult parts of being a small business owner in Texas is dealing with property taxes. It is essential for all forms and submissions to be accurate and timely. Even when this is done, there is no guarantee that the municipality will accurately appraise and assess taxes. When the business owner suspects that an error has been made, then it becomes necessary to launch a business property tax appeal. This can be a time-consuming and confusing process. Nonetheless, it is crucial for the business owner to ensure that he is not being unfairly assessed. Understanding more about small business property tax requirements and the process for protesting a property tax assessment is essential to the ongoing profitability of any business venture.
Small Business Appraisals
Each year, business owners are required to submit a rendition of all income-producing personal property. This rendition, or inventory, must include equipment, machinery, fixtures, vehicles and materials. It is important that this rendition be accurate as a delinquent or fraudulent rendition can result in harsh consequences. Renditions are particularly important because they become a part of the official file that demonstrates the business owner’s assessment of the value of all of their income-producing property. The chief appraiser of the district is required to send a notice of appraised value if they assess the property at a higher value than the owner reported.
Notice of Appraised Value
State law requires that appraisal districts send out the Notice of Appraised Value by May 1 of each year. However, they may be able to send out notices a bit later under some circumstances. They are required to send such a notice when property values rise, when they appraise a higher value on property than was reported on the rendition or if the property is newly included in the appraisal district. The notice informs the recipient of the property’s appraised value and the process for protesting the appraisal among other data.
Early Protest Process
Many appraisal districts mail a protest form with the Notice of Appraised Value. Often, the first step in the protest is to complete and submit this form by a certain deadline. Some appraisal districts offer an informal hearing during which many of these disputes can be resolved with a minimum of time and effort. Even when this is an option, it is essential for protestors to stick to the deadlines so that they reserve their right to present their case to the Appraisal Review Board, or ARB.
Appearing Before the Appraisal Review Board
When the informal process is unavailable or when it does not resolve the issue, then it may be necessary to appear before the ARB. An impartial group composed of other residents of the county, the ARB listens to arguments presented by the property owner and the representative of the appraisal district.
Items to Protest Before the ARB
The ARB is empowered to hear disputes regarding a number of small business property tax topics. These include:
- Excessive value: when the property owner believes the appraised value is too high;
- Unequal appraisal: when one property is unfairly assessed when compared with similar properties;
- Failure to provide notice: when the appraisal district did not send the required Notice of Appraisal; and
- Failure to grant exemptions: when an exemption application is denied.
- Protest Considerations
A protest must be filed before the deadline that is disclosed on the Notice of Appraisal. If there is no deadline, then the protest must be filed by May 31 or no more than 30 days after the date on the notice. It is permissible for the taxpayer to request an evening or weekend hearing.
Before the Hearing
Protestors receive a mailing from the appraisal district two weeks prior to the hearing. The letter includes a copy of ARB procedures, a statement about the taxpayer’s right to inspect copies of any paperwork the appraisal district plans to use and a brochure from the state Comptroller that explains the taxpayer’s rights and the ARB’s responsibilities. It makes a great deal of sense for the business owner to request copies of all documentation from the appraisal district before the hearing so they can be prepared to counter these arguments. This may mean taking a trip to the appraisal district’s office to obtain the copies. It is also essential to study the ARB procedures so that taxpayers know what to bring and how to prepare.
Appearing before the ARB is a bit like attending a trial. Both sides present testimony and evidence, and they are under oath while doing so. It’s essential to not let emotions take control as logic is far more likely to win the day. This process can be quite stressful, but with adequate preparation, it can also be rewarding as it may result in a reduced property tax bill.
You can also find similar suggestions in a video tutorial from the Texas comptrollers office.