Texas Property Tax Attorneys
With Offices in Dallas and Houston, We Represent Businesses Throughout Texas in Property Tax Matters
Navigating the local property tax rules in Texas can be extremely difficult, and mistakes can be extremely costly. Too often, businesses pay far more than they owe. From excessive appraisals to misinterpretations of local property tax ordinances, there are various issues that can lead to excess tax liability—and businesses that fail to uncover these issues can end up paying more than they owe for years.
Since Texas does not have state or local income tax, the state government and local government entities rely heavily on property tax revenue. This fact leads to aggressive enforcement, and businesses that fail to pay their property taxes on time can expect to face swift and significant penalties. Whether your business is facing an excessive tax appraisal or needs help resolving any other type of property tax controversy, the Texas property tax attorneys at Oberheiden P.C. can help.
Texas Property Tax Attorneys for All Appraisal Protests, Appeals, and Other Tax Matters
Property taxes are a cost of doing business in Texas, and businesses of all sizes across all industries must be careful to ensure that they timely pay their property tax liability. However, they must also be careful to ensure that they do not overpay their property tax liability.
Excessive and unequal appraisals are common; and, while local property tax authorities will raise businesses’ property taxes automatically when the appraised value of their property increases, they won’t necessarily reduce businesses’ property taxes when appraised values go down. As a result, businesses must manage their property tax liability proactively, and they must rely on experienced counsel to help them make informed decisions about how and when to challenge taxing authorities’ decisions.
At Oberheiden P.C., we assist all types of businesses with property tax matters in Texas. With offices in Dallas and Houston, we serve companies statewide. Our Texas property tax services include:
Property Tax Appraisal Protests
Texas law gives businesses the right to protest their property tax appraisals on an annual basis. Property tax bills reflect two main factors: (i) the local taxing entity’s tax rate for the current year, and (ii) the appraisal of the business’s property.
In many cases, business property tax appraisals will grossly overstate the value of the property in question. This can happen for a number of different reasons. In some cases, appraisals reflect unwarranted comparisons to dissimilar business properties. In others, they reflect flawed assumptions and appraisal practices. In others still, appraisals reflect outdated property and market conditions that are no longer indicative of the subject property. Applicable exemptions, changes in land use, and various other factors can influence a property’s appraisal as well.
Regardless of the reason why an appraisal overstates the value of a business’s property, challenging the appraisal is necessary to avoid excess tax liability. This begins with filing a protest with the appropriate County Appraisal District (CAD) by the annual deadline. If a business misses this deadline, it may be possible to submit a late protest to the Appraisal Review Board (ARB); however, the ARB only accepts late filings upon a showing of “good cause,” and this is a determination that is subject to the ARB’s discretion.
We file protests with the CAD and ARB on behalf of our clients, and we deal with these entities for our clients throughout the appraisal challenge process. This includes gathering evidence to challenge our clients’ appraisals. There are two main grounds for challenging a property appraisal in Texas:
- The Appraisal is Excessive – An appraisal of business property must reflect the property’s market value as of January 1 for the relevant tax year. If an appraisal exceeds a property’s market value, then it is excessive and subject to reduction.
- The Appraisal is Unequal – Texas law requires municipalities and other government entities to impose property taxes in a manner that is “equal and uniform.” If an appraisal of one business’s property results in unequal taxation, then the appraisal is subject to challenge even if the appraisal is at or below market value.
In order to demonstrate that a business’s appraisal is excessive or unequal, one of the primary forms of evidence we obtain is an independent appraisal of the subject property’s market value. In some circumstances, however, it may be sufficient to challenge the CAD’s method of appraisal. Texas allows for three primary approaches to valuation for purposes of a property tax appraisal, and we work with independent appraisers who are highly-experienced in all three methods of valuation:
- Cost Approach – The cost approach focuses on the replacement cost of the property, taking into account land value, improvements, and depreciation. While the cost approach often (though not always) makes sense for new construction and unique properties, it will lead to an inflated valuation in some cases.
- Sales Approach – The sales approach focuses on the sale price of comparable properties in order to arrive at an estimate of the subject property’s current market value. Failure to appropriately consider differences in lot size, location, property age and condition, improvements, and other factors can lead to inaccurate appraisals using this approach as well.
- Income Approach – The income approach focuses on determining what an independent third party would be willing to pay to purchase the anticipated revenue of an income-producing property. While not relevant for all types of business properties, the income approach can produce a favorable appraisal in some cases.
In all cases, our goal is simple: To minimize our client’s property tax liability to the greatest extent possible. It will often be possible to significantly reduce companies’ property tax liability through the protest process, and we can help you make an informed decision about whether to protest an appraisal of your business’s property.
Property Tax Appeals
If a property tax appraisal protest is unsuccessful, then the next step is generally to file an appeal. Appeals must be filed in Texas District Court within 60 days of receiving a final ARB decision. Although these proceedings are styled as “appeals,” they are much more akin to trial litigation. The parties engage in discovery, they will often engage in settlement negotiations, and then a trial judge hears the issues de novo without considering the ARB’s decision.
In some cases, pursuing an alternative to an appeal may be a more cost-effective option. Potential alternatives include binding arbitration (if the subject property’s value is less than $5 million) and filing with the State Office of Administrative Hearings (if the subject property’s value is over $1 million). While we are skilled trial attorneys, we also have significant experience in these types of alternative dispute resolution (ADR) and administrative proceedings, and we can help you choose a path forward with your company’s financial interests in mind.
Exemptions, Abatements, and Incentives
Businesses will often qualify for exemptions, abatements, and other incentives that they can use to reduce their property tax liability. As explained by the Texas Comptroller, “Texas offers a variety of partial or total (absolute) exemptions from appraised property values used to determine local property taxes. A partial exemption removes a percentage or a fixed dollar amount of a property’s value from taxation. A total (absolute) exemption excludes the entire property from taxation.” We can determine if your company qualifies for any property tax incentives; and, if it does, our lawyers will manage the application process from start to finish.
FAQs: Texas Property Tax Issues for Businesses
What Types of Business Assets are Subject to Property Tax in Texas?
All types of business assets are subject to property tax in Texas. This includes commercial buildings and facilities, commercial land, agricultural land, rental properties, and business personal property. Valuing different types of business property requires an understanding of the unique nature of the asset in question, and this is another common factor that leads to inaccurate property tax appraisals.
How Can I Determine if My Company is Overpaying Property Taxes in Texas?
Determining whether your company is overpaying its property tax liability requires an understanding of the accuracy of the CAD’s appraisal of the value of your company’s property. At Oberheiden P.C., we work with independent appraisers who specialize in all types of commercial properties and who can determine if your company is being overtaxed.
What if My Company is Behind on Its Texas Property Taxes?
If your company is behind on its property taxes, this is an issue that you will want to address proactively. Our lawyers can evaluate your company’s tax liability and provide recommendations for moving forward. Depending on the circumstances involved, it may be possible to negotiate your company’s property tax liability. If necessary, our lawyers can also provide defense representation for property tax enforcement proceedings.
Talk to a Texas Property Tax Attorney at Oberheiden P.C.
If you have questions about your company’s property tax liability or filing an appraisal protest in Texas, we invite you to schedule a complimentary consultation at Oberheiden P.C. To speak with an experienced Texas property tax attorney in confidence, call 888-680-1745 or tell us how we can contact you online today.