AD VALOREM TAXES: EXEMPTIONS AND PAYMENTS

Tax Exemptions

Homestead Exemptions

An individual who is disabled or is 65 or older is entitled to an exemption from taxation by a taxing unit of a portion, the amount of

which is fixed as provided by Tax Code 11.13(e), of the appraised value of the individual’s residence homestead if the exemption is

adopted either:

1. By the governing body of the taxing unit; or

2. By a favorable vote of a majority of the qualified voters of the taxing unit at an election called by the governing body of a taxing unit, and the governing body shall call the election on the petition of at least 20 percent of the number of qualified voters who voted in the preceding election of the taxing unit.

The amount of an exemption adopted is $3,000 of the appraised value of the residence homestead unless a larger amount is specified by the governing body authorizing the exemption as described at item 1 or the petition for the election if the exemption is authorized as described at item 2.

Once authorized, an exemption adopted as provided in this section may be repealed or decreased or increased in amount by the governing body of the taxing unit or by the procedure authorized by item 2 above. In the case of a decrease, the amount of the exemption may not be reduced to less than $3,000 of the market value.

Tax Code 11.13(d)–(f)

Application for Exemption

To receive the residence homestead exemption, a person claiming the exemption must apply for the exemption. Tax Code 11.43(a)

Exceptions

If a person who receives an exemption under Tax Code 11.13, other than an exemption under Section 11.13(c) or (d) for an individual 65 years of age or older, in a tax year becomes 65 years of age in the next tax year, the person is entitled to receive and the chief appraiser shall allow an exemption under Section 11.13(c) or (d) for an individual 65 years of age or older in that next tax year on the same property without requiring the person to apply for or otherwise request the exemption, in accordance with Tax Code 11.43(m)-(m-1).

If a person who receives an exemption under Section 11.13(d) for an individual 65 years of age or older dies in a tax year, that per-

son's surviving spouse is entitled to receive an exemption under Section 11.13(q) in the next tax year on the same property without

applying for the exemption, in accordance with Tax Code 11.43(m-2) and (m-3).

Tax Code 11.43(m)-(m-3)

Surviving Spouse of Person 65 or Older

The surviving spouse of an individual who qualifies for an exemption under Tax Code 11.13(d) for the residence homestead of a

person 65 or older is entitled to an exemption for the same property from the same taxing unit in an amount equal to that of the ex-

emption for which the deceased spouse qualified if:

1. The deceased spouse died in a year in which the deceased spouse qualified for the exemption;

2. The surviving spouse was 55 or older when the deceased spouse died; and

3. The property was the residence homestead of the surviving spouse when the deceased spouse died and remains the residence homestead of the surviving spouse.

An individual who receives an exemption under Section 11.13(d) is not entitled to an exemption under this provision.

Tax Code 11.13(q)-(r)

Homesteads Rendered Uninhabitable or Unusable

If a qualified residential structure for which the owner receives a homestead exemption under Tax Code 11.13 is rendered uninhabitable or unusable by a casualty or by wind or water damage, the owner may continue to receive the exemption for the structure and the land and improvements used in the residential occupancy of the structure while the owner constructs a replacement qualified residential structure on the land in accordance with Tax Code 11.135 and 11.26(n)–(o) and 34 Administrative Code 9.416. Tax

Code 11.135, .26(n)–(o); 34 TAC 9.416

Disabled Veterans and Their Families

Portion of Assessed Value

Owned Residence

Pursuant to Tax Code 11.22, a disabled veteran and, if that person dies, the person’s unmarried surviving spouse or unmarried children, is entitled to an exemption from taxation of a portion of the assessed value of a property the veteran owns and designates in accordance with Tax Code 11.22(f). Tax Code 11.22

Donated Residence

A disabled veteran who has a disability rating of less than 100 percent is entitled to an exemption from taxation of a percentage of the appraised value of the disabled veteran's residence homestead equal to the disabled veteran's disability rating if the residence homestead was donated to the disabled veteran by a charitable organization:

1. At no cost to the disabled veteran; or

2. At some cost to the disabled veteran in the form of a cash payment, a mortgage, or both in an aggregate amount that is

not more than 50 percent of the good faith estimate of the market value of the residence homestead made by the charitable organization as of the date the donation is made.

The surviving spouse of a disabled veteran who qualified for the exemption of a percentage of the appraised value of the disabled veteran’s residence homestead when the disabled veteran died is entitled to an exemption in accordance with Tax Code 11.132.

Tax Code 11.132(b)–(c)

Total Appraised Value

A disabled veteran who has been awarded by the U.S. Department of Veterans Affairs or its successor 100 percent disability compensation due to a service-connected disability and a rating of 100 percent disabled or of individual unemployability is entitled to an exemption from taxation of the total appraised value of the veteran’s residence homestead.

The surviving spouse of a disabled veteran who qualified for an exemption under Tax Code 11.131(b) when the disabled veteran

died, or of a disabled veteran who would have qualified for an exemption under Section 11.131(b) if Section 11.131(b) had been in effect on the date the disabled veteran died, is entitled to an exemption from taxation of the total appraised value of the same

property to which the disabled veteran's exemption applied, or to which the disabled veteran's exemption would have applied if the exemption had been authorized on the date the disabled veteran died, if the surviving spouse has not remarried since the death of the disabled veteran; and the property:

1. Was the residence homestead of the surviving spouse when the disabled veteran died; and

2. Remains the residence homestead of the surviving spouse.

If a surviving spouse who qualifies for an exemption under Tax Code 11.131(c) subsequently qualifies a different property as the

surviving spouse's residence homestead, the surviving spouse is entitled to an exemption from taxation of the subsequently qualified homestead in accordance with Tax Code 11.131(d).

Tax Code 11.131(b)–(d)

Surviving Spouse of Armed Services Member

The surviving spouse of a member of the armed services of the United States who is killed or fatally injured in the line of duty is entitled to an exemption from taxation of the total appraised value of the surviving spouse's residence homestead in accordance with Tax Code 11.133. Tax Code 11.133(b)

Surviving Spouse of First Responder

The surviving spouse of a first responder listed in Government Code 615.003 who is killed or fatally injured in the line of duty is

entitled to an exemption from taxation of the total appraised value of the surviving spouse's residence homestead in accordance with Tax Code 11.134. Tax Code 11.134(b)

Exemption for

Property Damaged

by a Disaster

A person is entitled to an exemption from taxation by a taxing unit of a portion of the appraised value of qualified property that the person owns in an amount determined under Tax Code 11.35(h).

Tax Code 11.35(b)

Application for Exemption

A person who qualifies for an exemption under this section must apply for the exemption in accordance with Tax Code 11.43(s). Tax Code 11.43(s)

Expiration of Exemption

The exemption authorized by this section expires as to an item of qualified property on January 1 of the first tax year in which the property is reappraised under Tax Code 25.18. Tax Code 11.35(k)

Qualified Property

"Qualified property" means property that:

1. Consists of tangible personal property used for the production of income; an improvement to real property; or a manufactured home as that term is defined by Occupations Code 1201.003 that is used as a dwelling, regardless of whether the

owner of the manufactured home elects to treat the manufactured home as real property under Occupations Code

1201.2055;

2. Is located in an area declared by the governor to be a disaster area following a disaster;

3. Is at least 15 percent damaged by the disaster, as determined by the chief appraiser under Tax Code 11.35; and

4. For property described by item 1, is the subject of a rendition statement or property report filed by the property owner under

Tax Code 22.01 that demonstrates that the property had taxable situs in the disaster area for the tax year in which the disaster occurred.

Tax Code 11.35(a)

Goods-in-Transit

A person is entitled to an exemption from taxation of the appraised value of that portion of the person's property that consists of

goods-in-transit. Tax Code 11.253(b)

In accordance with Tax Code 11.253, the governing body of a taxing unit, in a manner required for official action by the governing body, may provide for the taxation of goods-in-transit exempt as set out above and not exempt under other law. The official action to tax the goods-in-transit must be taken before January 1 of the first tax year in which the governing body proposes to tax goods-in-transit. Before acting to tax the exempt property, the governing body must conduct a public hearing as required by Texas Constitution Article VIII, Section 1-n(d). The goods-in-transit remain subject to taxation by the taxing unit until the governing body of the taxing unit, in the manner required for official action, rescinds or repeals its previous action to tax goods-in-transit, or otherwise determines that the exemption prescribed above will apply to that taxing unit.

Tax Code 11.253(j)

Notwithstanding Tax Code 11.253(j) or official action that was taken before October 1, 2011, to tax goods-in-transit under the

above exemption, a taxing unit may not tax such goods-in-transit in a tax year that begins on or after January 1, 2012, unless the governing body of the taxing unit takes official action on or after October 1, 2011, in the manner required for official action by the board, to provide for the taxation of the goods-in-transit. Tax Code 11.253(j-1)

Exception

If the governing body of the taxing unit, before October 1, 2011, took action to provide for the taxation of goods-in-transit and

pledged the taxes imposed on the goods-in-transit for the payment of a debt of the taxing unit, the tax officials of the taxing unit may continue to impose the taxes against the goods-in-transit until the debt is discharged, if cessation of the imposition would impair the obligation of the contract by which the debt was created. Tax Code

11.253(j-2)

Extension for Property in Disaster Area

This provision applies only to a taxing unit any part of which is located in an area designated a disaster area by a disaster declaration issued under Government Code 418.040 or 418.108 on or after January 1, 2020. The governing body of a taxing unit, in the manner provided by law for official action, may extend the date by which goods-in-transit must be transported to another location in this state or outside this state to a date not later than the 270th day after the date the person acquired the property in or imported the property into this state. An extension adopted by official action under this provision applies only to the exemption from ad valorem taxation by the taxing unit adopting the extension and the tax year in which the extension is adopted. Tax Code 11.253(l)

Additional

Exemptions

A taxing unit is required or permitted, as applicable, to grant additional tax exemptions as provided by law. Tex. Const. Art. VIII,

Sec. 1-b; Tax Code Ch. 11, Subch. B

Notice of Optional

Exemption

If a taxing unit adopts, amends, or repeals an exemption that the unit by law has the option to adopt or not, the taxing unit shall notify the appraisal office of its action and of the terms of the exemption within 30 days after the date of its action. Tax Code 6.08

Tax Payments

Discounts

The governing body of a taxing unit may adopt one of the discounts described below, or both, in the manner required by law for

official action by the body. Tax Code 31.05(a)

Option 1

A taxing unit may adopt the following discounts to apply regardless of the date of which it mails its tax bills:

1. Three percent if the tax is paid in October or earlier;

2. Two percent if the tax is paid in November; and

3. One percent if the tax is paid in December.

This discount does not apply to taxes that are calculated too late for it to be available.

Tax Code 31.04(c), .05(b)

Option 2

A taxing unit may adopt the following discounts to apply when it mails its tax bills after September 30:

1. Three percent if the tax is paid before or during the next full calendar month following the date on which the tax bills were

mailed;

2. Two percent if the tax is paid during the second full calendar month following the date on which the tax bills were mailed;

and

3. One percent if the tax is paid during the third full calendar month following the date on which the tax bills were mailed.

Tax Code 31.05(c)

Both Options

If a taxing unit adopts both discounts, the discounts described at Option 1 apply unless the tax bills for the unit are mailed after September 30, in which case only the discounts described at Option 2 apply. Tax Code 31.05(a)

Rescission

The governing body of a taxing unit may rescind a discount adopted by the governing body in the manner required by law for official action by the body. The rescission of a discount takes effect in the tax year following the year in which the discount is rescinded. Tax Code 31.05(d)

Split Payment

The governing body of a taxing unit that collects its own taxes may provide, in a manner required by law for official action by the body, that a person who pays one-half of the unit’s taxes before December 1 may pay the remaining one-half of the taxes without penalty or interest before July 1 of the following year. The split-payment option, if adopted, applies to taxes for all units for which the adopting taxing unit collects taxes.

If one or more taxing units contract with the appraisal district for collection of taxes, the split-payment option does not apply to taxes

collected by the district unless approved by resolution adopted by a majority of the governing bodies of the taxing units whose taxes

the district collects and filed with the secretary of the appraisal district board of directors. After an appraisal district provides for the

split-payment option, the option applies to all taxes collected by the district until revoked. It may be revoked in the same manner as

provided for adoption.

This payment option does not apply to taxes that are calculated too late for it to be available.

Tax Code 31.03, .04(c)

In Certain Counties

The governing body of a taxing unit located in a county having a population of not less than 315,000 and not more than 351,000

that borders a county having a population of 3.3 million or more and the Gulf of Mexico that has its taxes collected by another taxing unit that has adopted the split-payment option may provide that the split-payment option does not apply to the taxing unit's taxes collected by the other taxing unit. Tax Code 31.03(d)

Installment Payments

Certain Homesteads

Tax Code 31.031 applies only to an individual who is disabled or at least 65 years of age and qualified for an exemption under Tax

Code 11.13(c) or an individual who is a disabled veteran or the unmarried surviving spouse of a disabled veteran and qualified for an

exemption under Tax Code 11.132 or 11.22. Subject to Section 31.031, an individual to whom this section applies may pay a tax-

ing unit's taxes imposed on property that the person owns and occupies as a residence homestead in four equal installments without

penalty or interest if the first installment is before the delinquency date and is accompanied by notice that the individual will pay the

remaining taxes in three equal installments. If the delinquency date is February 1, the second installment must be paid before April 1,

the third installment must be paid before June 1, and the fourth installment must be paid before August 1. If the delinquency date is

a date other than February 1, the second installment must be paid before the first day of the second month after the delinquency date, the third installment must be paid before the first day of the fourth month after the delinquency date, and the fourth installment must be paid before the first day of the sixth month after the delinquency date.

Notwithstanding the deadline prescribed above for payment of the first installment, an individual to whom this section applies may pay the taxes in four equal installments as provided above if the first installment is paid and the required notice is provided before the first day of the first month after the delinquency date.

Tax Code 31.031(a)–(a-2)

Damaged Property in a Disaster or Emergency Area

This section applies to:

1. Real property that:

a. Is the residence homestead of the owner or consists of property that is used for residential purposes and that

has fewer than five living units or is owned or leased by a business entity that had not more than the amount calculated as provided by Tax Code 31.032(h) in gross receipts in the entity’s most recent federal tax year or state franchise tax annual period, according to the applicable federal income tax return or state franchise tax report of the entity;

b. Is located in a disaster area or emergency area; and

c. Has been damaged as a direct result of the disaster or emergency;

2. Tangible personal property that is owned or leased by a business entity described above at item 1a; and

3. Taxes that are imposed on the property by a taxing unit before the first anniversary of the disaster or emergency.

A person may pay a taxing unit's taxes imposed on property that the person owns in four equal installments without penalty or interest if the first installment is paid before the delinquency date and is accompanied by notice to the taxing unit that the person will pay the remaining taxes in three equal installments in accordance with Tax Code 31.032. Any notice under this provision shall be in writing.

Notwithstanding the deadline prescribed above for payment of the first installment, a person to whom this section applies may pay the taxes in four equal installments as provided above if the first installment is paid and the required notice is provided before the first day of the first month after the delinquency date.

Tax Code 31.032(a)–(b-1); 34 TAC 9.3060(a)

Undamaged Property in a Disaster or Emergency Area

This section only applies to:

1. Real property that is owned or leased by a business entity, is located in a disaster or emergency area, has not been dam-

aged as a direct result of the disaster or emergency, and that had gross receipts in the entity’s most recent federal income

tax year or state franchise tax annual period that were not more than the amount calculated as provided by Tax Code 31.032(h);

2. Tangible personal property that is owned or leased by a business entity described above at item 1; and

3. Taxes imposed by the taxing unit before the first anniversary of the disaster or emergency.

For a taxing unit that has adopted an installment payment plan under Tax Code 31.033, Tax Code 31.032(b), (b-1), (c), and (d) apply

to the payment by a person of that taxing unit's taxes imposed on property that the person owns.

Tax Code 31.033(b)–(c); 34 TAC 9.3061(b)–(c)

Partial Payments

A tax collector may adopt a policy of accepting partial payments of property taxes. Acceptance of a partial payment does not affect the date that the tax becomes delinquent, but the penalties and interest provided by Tax Code 33.01 are incurred only by the portion of tax that remains unpaid on the date the tax becomes delinquent. A payment option provided by Tax Code 31.03 or a discount adopted under Tax Code 31.05 does not apply to any portion of a partial payment. Tax Code 31.07(c)

Performing Services

in Lieu of Paying

Taxes

In accordance with Tax Code 31.035, the governing body of a taxing unit may permit an individual who is at least 65 years of age to

perform service to the taxing unit in lieu of paying property taxes imposed by the taxing unit on property owned by the individual and

occupied as the individual's residence homestead. While performing service for the taxing unit, the property owner is not an employee of the taxing unit and is not entitled to any benefit, including workers’ compensation coverage, that the taxing unit provides to an employee of the taxing unit. Tax Code 31.035(a), (f)

Delinquency Date

Taxes are due on receipt of the tax bill and are delinquent if not paid before February 1 of the year following the year in which im-

posed, except as provided below:

1. The taxing unit has provided for split payments, as described above. Tax Code 31.03

2. The taxing unit’s tax bills are mailed after January 10. Tax Code 31.04(a)

3. The taxing unit’s tax bills are mailed after September 30 and the taxing unit has adopted discounts provided by Tax Code

31.05(c). Tax Code 31.04(d)

4. A person who owns any interest in the property is an eligible person serving on active duty in any branch of the U.S. armed

forces as provided by Tax Code 31.02(b).

Tax Code 31.02

Delinquent Tax

Collection

The governing body of a taxing unit may contract with any competent attorney to represent the unit to enforce the collection of delinquent taxes. The attorney’s compensation is set in the contract, but the total amount of compensation provided may not exceed 20 percent of the amount of delinquent tax, penalty, and interest collected. Tax Code 6.30(c)

Penalties and

Interest

Delinquent taxes incur penalties and accrue interest in accordance with Tax Code 33.01, subject to any waiver by the board pursuant

to Tax Code 33.011.

Additional Penalties

A taxing unit or appraisal district may provide, in the manner required by law for official action by the body, that taxes that become

delinquent on or after February 1 but not later than May 1 of that year and remain delinquent on July 1 of the year in which they become delinquent incur an additional penalty to defray costs of collection, if the unit or district or another unit that collects taxes for the unit has contracted with a private attorney for the collection of delinquent taxes pursuant to Tax Code 6.30. The amount of the penalty may not exceed the amount of the compensation specified in the contract with the attorney to be paid in connection with the collection of the delinquent taxes. A tax lien attaches to the property on which the tax is imposed to secure payment of the penalty.

If a taxing unit or appraisal district provides for a penalty under this section, the collector shall deliver notice of the delinquency and of the penalty to the property owner at least 30 and not more than 60 days before July 1. If the governing body of the taxing unit or appraisal district has imposed the penalty for collection costs described above and the taxing unit or appraisal district, or another taxing unit that collects taxes for the unit, has entered into a contract with an attorney under Tax Code 6.30 for collection of delinquent taxes, the governing body of the taxing unit or appraisal district, in a manner required by law for official action, may provide that taxes that become delinquent on or after June 1 under Tax Code 26.075(j), 26.15(e), 31.03, 31.031, 31.032, 31.033, 31.04, or 42.42 incur an additional penalty to defray costs of collection. The amount of the penalty may not exceed the amount of compensation specified in the contract with the attorney to be paid in connection with the collection of the delinquent taxes. A tax lien attaches to the property on which the tax is imposed to secure payment of the additional penalty. After the taxes become delinquent, the collector for a taxing unit or appraisal district that has provided for the additional penalty shall send a notice of the delinquency and the penalty to the property owner. The penalty is incurred on the first day of the first month that begins at least 21 days after the date the notice is sent.

Tax Code 33.07–.08