Understanding Texas
Property Taxes
{
Cheryl E. Johnson, PCC
Galveston County Tax Assessor /Collector
Property taxes
are the primary* funding
source for most local
governments
*Funding may also be secured by
voter approval of
local sales and use tax
(Section 775.0751, Health & Safety Code)
Texas Constitution, Article XIII
Defines property taxes as being assessed in
proportion to value on all real and
personal property
held or used for the production of income
Article III, Section 48-e
Provides for creation of Emergency Services
Districts and authorizes levy of a tax on real
property not to exceed $0.10/$100 of value
(unless approved by voters as provided by the
Health and Safety Code Section 775.0745)
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Codes Affecting Property Tax
Processes
Health & Safety Code
Property Tax Code
Who’s Who?
County Appraisal
District
Board of Directors
Chief Appraiser
Locate, list and appraise
all real and personal
property in county
Appointed by county, city, ISD &
community college officials
(voting power based on levy)
Certified/regulated by TDLR
Appraisal Review
Board (ARB)
Reviewed by Comptroller via
Ratio study & MAP Review
(Methods & Assistance Program)
Appointed by State District Administrative Judge
Who’s Who?
County Tax Office
County Tax Assessor Collector elected by voters
Other options for most local governments (not ESDs):
Contract for assessment & collections with CAD, other
government, private firm or hire staff tax collector (these
are required to be certified/regulated by TDLR
Governments may use County delinquent law firm or contract
with own firm (15% to 20% rate negotiated)
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Property Tax Year Phases
Appraisal
January - April
Equalization
May - July
CAD locates, lists and appraises property
in county as of January 1; administers
exemptions, delivers appraisal notices
and updates & maintains property records
(the preliminary certified roll must be
provided to the TAC by April 30)
CAD appraisers hold informal meetings
with property owners; ARB hears
valuation disputes & certifies appraisal
roll no later than July 25th
Note: Tax units must adopt optional exemptions
no later than July 1 (the earlier the better!)
Appraisal & Equalization
From the perspective of our constituents
Value for Resale
Value for Taxes
Property Tax Year Phases
Assessment
July - October
Collection
October - January
TAC receives appraisal roll, submits taxable
values, total taxable of new property and
collection rate to governing bodies by
August 1 (or when practicable), assists with
tax rate calculation, publication and
adoption and mails statements
TAC collects current year taxes
Delinquent collections begin in February with notification
of late quarter & notification of payment agreements
May – 33.07 notices
July – Delinquent roll turned over to delinquent law firms
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Property Tax Year Phases
Appraisal
January - April
Equalization
May - July
Assessment
July - October
Collection
October - January
Assessment Phase
July 25 – October 1
 Truth in taxation process
 Tax rates proposed & adopted
 Tax roll created
 Tax bills mailed
Assessment Phase
Truth in Taxation
Embodied in the Texas Constitution
and Tax Code,
local governments are required to make
property owners (taxpayers)
aware of tax rate proposals and to give them
the opportunity to be involved
and to roll back or limit tax increases
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Assessment Phase
Truth in Taxation
Different taxing units have different requirements
but if you fail to comply in good faith,
a property owner may seek an injunction
to stop bills from being sent until
a State District Court judge
is convinced the entity has complied.
(This does not apply to water districts or small taxing units.)
Truth
In
Taxation
for
Emergency
Service
Districts
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A small taxing unit has a rate less than
$0.50 and imposes $500,000 or less in tax
revenue (both conditions must be met).
A small taxing unit is required to calculate
the effective and rollback tax rates and
publish Notice of Calculated Rates but
is not required to hold a public hearing
before adopting a tax rate.
Assessment Phase
Tax Office receives certified appraisal roll and
estimated value of properties under protest from CAD
Assessment Phase
Tax Office receives certified appraisal roll and
estimated value of properties under protest from CAD
Tax Office additionally uses most
current Supplemental Totals from
prior year
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85% of Under Review
Assessment Phase
Tax Office receives Effective Tax Rate Report from
CAD
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Steps 1 through 24 develop
the effective tax rate
(the rate that will generate the
same amount of taxes if applied to
the same properties)
Steps 26 through 39 develop
the rollback tax rate
Effective M & O Rate
+ 8% (R/B M&O Rate)
+ I & S (debt service)
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Publish Notice of
Calculated Rates
By August 7th (or soon after)
mail to each property owner
or publish ¼ page ad in
newspaper of general circulation
(may be published at same time as
Notice of Public Hearing)
Includes ETR, RBR,
statement of increase/decrease,
unencumbered fund balance &
description of debt service
to be paid
Publish Notice of
Calculated Rates
By August 7th (or soon after)
mail to each property owner
or publish ¼ page ad in
newspaper of general circulation
(may be published at same time as
Notice of Public Hearing)
Includes ETR, RBR,
statement of increase/decrease,
unencumbered fund balance &
description of debt service
to be paid
If adopting ETR
or less,
no additional
publications or
hearings
necessary
(except to hold a
meeting, adopt
the budget
and then the
tax rate)
Publish Notice of Public Hearing
on Tax Increase
If exceeding rollback or
effective tax rates, must
hold two public hearings
and mail notice to each
property owner or publish
¼ page ad at least
7 days before the hearings.
Notice includes dates, times
and location
of public hearings
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Publish Notice of
Revenue Increase
After public hearings and
7 days before meeting to
adopt. Language includes
percentage by which
rate exceeds the lower of the
ETR or RBR, the dates
of the public hearings and
the date, time and location
of meeting to adopt.
All notices must also be published
7 days in advance of hearings &
meetings on unit’s website.
Final Step in
TNT
 Adopt rate (by September 30)
 Prepare Order to Levy Tax
 Certificate of Order
Final Step in
TNT
 Adopt rate (by September 30)
 Prepare Order to Levy Tax
 Certificate of Order
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Assessment Phase
 Tax Office creates tax roll
 Prepares & mails statements
Rollback Election?
If you exceed the rollback rate, voters have 90 days from
date rate is adopted to petition for an election
Petition requirements:
If $5M or more M&O
7% of voters
If less than $5M M&O 10% of voters
Petition must be validated within 20 days and election
called if petition is valid.
Election held. If passes, rate rolled back to R/B rate,
statements redone and refunds issued. Very costly!
Collection Phase
October 1 & throughout that & following year
 Receive & process payments
 Deposit & remit funds to entities
 Calculate penalty & interest
 Administer delinquent collections
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Questions?
The Last Word(s)
The only difference between
a tax man
and a taxidermist
is the taxidermist leaves the skin.
Mark Twain
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