OSG - The Tax Advantage [HOME]client login client login



 


 
 
 

E-mail This Page E-mail This Page

Home  >  Tax Resources  Articles & White Papers

County Firms Lose Appeal on Personal Property Tax
by Steve Brewer


An appeals court has ruled that the Harris County Appraisal District can collect lists of taxable personal property from companies doing business in the county. The decision Thursday by a panel of the 1st Court of Appeals was a huge legal victory for the county, which said it will help guarantee that homeowners won’t pay more than their fair share of the property tax burden.

“It’s gigantic,” said Harris County Attorney Mike Fleming. “Every dollar that’s saved through this decision is a dollar that homeowners won’t have to pay and that certainly will be millions and millions of dollars.”

Jim Robinson, the chief appraiser for the Harris County Appraisal District, called the ruling the most important property tax litigation in this century.

Fleming said the ruling could set precedents statewide. Joe Harrison, a San Antonio lawyer who represents the businesses, said Friday he has not seen the opinion but thinks it will probably be appealed. Taxing entities have been watching the dispute closely and some have even filed “friends of the court” briefs in support of Harris County.

The court action stemmed from a 1998 lawsuit by the county against three local businesses: Budget Rent-A-Car, Fred Haas Motors, and Splashtown. They were among a larger number of Harris County businesses that have refused to provide the appraisal district with a list of property used to generate income, such as computers and automobiles.

Those lists, called renditions, are used to help determine the amount of property tax the businesses must pay. At issue is whether the businesses are required by state law to give the appraisal district the lists.

Lawyers for the businesses essentially argued there was no requirement to file the lists because state legislators chose not to provide for a penalty if the lists were not submitted. The county, acknowledging the lack of a penalty, argued instead that the law was clear: Businesses have to supply such lists. Fleming said without such lists it becomes hard for appraisers to determine the amount of tax a business owes. “If that can’t be determined accurately,” Fleming said, “the businesses might pay less tax than they could owe and homeowners end up picking up the difference.”

Robinson said it’s also an issue of fairness between businesses. The business community pays more than 50 percent of the property taxes in the county, he pointed out. But if one business is not listing its property, then they could have a lower tax bill than a competitor who is providing the lists. “If all businesses rendered like they should,” Robinson said, “it could clearly mean millions of additional dollars in taxable income.” That’s what made the stakes so high in this case.

In October 1998, lawyers for the businesses won when state District Judge Dwight Jefferson granted a motion for summary judgment in their favor. But the appellate court panel, which consisted of Chief Justice Michael H. Schneider, Justice Eric Andell, and visiting Justice Lee Duggan Jr., voted 2–1 to overturn Jefferson’s ruling. In the majority opinion, Schneider wrote that the fact a penalty was not put in the law does not suggest any legislative intent to allow a business not to render. Andell dissented. He echoed the arguments of the businesses and wrote that because lawmakers attached no penalty, the court should refrain from legislating in the matter. The majority also ruled the county can seek relief from businesses who do not render by getting a court order to compel them to supply the list.

Robinson said such power is vital because since Jefferson’s decision in 1998, more businesses, following the advice of their lawyers and tax consultants, have opted not to render.

Harrison and the other lawyers for the businesses can either ask for a review by the full panel of the 1st Court or they can appeal directly to the Texas Supreme Court.
Personalized tax administration without the overhead.

Do you want personalized tax administration without the overhead?

find out how

Request a FREE
Tax Consultation
The OSG Tax Advantage click here

Client
Testimonials
OSG - The Tax Advantage  click here

 

CALL TODAY FOR A FREE TAX CONSULTATION OR SIGN UP ONLINE!   logos Click here

 

Newsletter    |    Terms of Use    |    Privacy Policy    |    Contact Us     |    Sitemap  1-877-4-OSGTAX