Don’t like what you see in your value notices? Aren’t sure if it’s fair? We can help.
Texas property assessments are out or on the way from the more than 250 county-level appraisal districts across the state, and time is running short to contest your taxable values.
These value notices are based on each assessors’ opinion of market value for your real and business personal property, fixed assets and inventory.
While it is the tax rate that ultimately determines the property tax bill for everyone, it is your individual value assessment that you (or we) can most impact to minimize your tax bill.
Fixed Assets: Mass Appraisal
In Texas, appraisal districts determine taxable values according to depreciation schedules (usually mass appraisal).
Upon receiving your property renditions, the appraisal districts apply depreciation schedules of their own devising, which is made up of a combination of straight-line depreciation for age, based on their assumption of “useful” lives, and ratcheted up by index factors for a high-level reproduction cost new.
They generally residual the values at 10% to 30% of indexed cost, until you physically get rid of the asset. So, they never go to zero, unlike book value as GAAP allows.
Inventory: Cost ≠ Value and One-Buyer-Take-All
The Texas Property Tax Code basically states that you should be taxed at 100% of market value.
For inventory, it defines market value as what a willing buyer would pay for your inventory as a unit to carry on the business. This is a one-buyer-take-all concept.
Real Estate: Market Value and Equity Matter
In Texas we not only look at fair market value, we also consider equal and uniform assessment (equity).
So, even if your property is assessed at 100% of market value, if comparable properties in the area are assessed below market value then yours should be also.
We look at market value from every applicable approach (cost-depreciation, sales and income) as well as equity.
To Appeal or Not to Appeal
In Texas, you have the right to appeal your value notice from the tax assessor’s office. But that does not mean the system makes it easy for businesses to win.
Appraisal review boards, appointed by tax assessors, review protests with the assessors’ mass appraisal protocol guiding their decisions. And this year, with the closure of many county assessors’ offices due to COVID-19, it may be even tougher to effectively protest values without a clear and convincing case.
Appealing an assessment and winning an appeal requires experience and a deep understanding of the intricacies of the Texas appraisal and appeals process. Navigating all of this is difficult enough, but with the current situation caused by the recent pandemic it has become even more challenging.
TAG Can Help
At TAG, we take the Texas Property Tax Code at its word and harness it for our clients to realize material savings – with an average reduction of 30% in assessed value of business personal property.
We commission independent third-party appraisal studies and purchase appraisal data for every class of assets and inventories. This enables us to value our clients’ assets and inventories according to the tax code’s definition of market value uniquely for assets and inventory, on a location by location basis. Additionally, we utilize a variety of resources to evaluate real property values from a property tax perspective.
Our team of highly qualified consultants have already appealed and won many cases this tax season and with recent deadline extensions in 50 major counties across Texas, we are prepared for many more successful appeals to come.
It is not too late to reduce your property tax, an above-the-bottom-line operating expense, this year… but time is running out fast! Appeals must be filed within 30 days of the assessment notice. To learn more about our approach, call us today at (972) 503-7506 or email us at email@example.com.