This document discusses guidelines for property tax rendition in Texas. It addresses what types of property are taxable, how they should be valued at market rate on January 1st, and options for rendition including providing cost and year of acquisition or only an opinion of value. It notes penalties for failure to render or filing false rendition, and offers advice on establishing reasonable valuations, pursuing appeals, and potential valuation discounts.

1. April 13, 2017

2.  What is taxable?
 How is it valued?
 How should it be valued?
 Rendition options
 Valuation options
 Appeals / getting results

3.  Real estate
 Tangible business personal
property
 Mineral interests

4.  Intangible personal property
 Contracts
 Leasehold improvements
 Data
 Computer programs
 Business enterprise value

5.  Goodwill
 Accounts receivable
 Cash
 Bonds
 Stocks
 Trademarks

6.  Market value on January 1
 Typical willing buyer and
willing seller, neither under
duress, and both well informed
 Sales of the items as a group

7.  Based on depreciation schedule
if you render with cost and year
of acquisition.

8.  If your business has 50
employees or less, subsection
22.07(c) allows you to base your
good faith estimate of market
value on depreciation schedules
used for federal income tax
purposes.

14.  Regulatory compliance by
providing cost new and year
purchased (including furniture
purchased prior to 2002).
 Tax reduction approach by only
providing the opinion of value,
which also provides regulatory
compliance.

15. Render?
10%penalty if do not render.
Class A misdemeanor violation of
penal code to file false rendition.
50% penalty for bad faith, false
rendition.
Only 10% penalty if do not render.

16.  Based on market value, and not
on IRS depreciation schedules.

17.  Market value of an airplane
without the maintenance log?
 The maintenance log is
essentially data that could be
kept in hard copy or electronic
copy.
 50% discount?

18.  Cost new in 2014 - $800 million
 Market value January 1, 2017?

19.  Assume an office set up in 2016
and the equipment, phone
system and furniture cost $3
million.
 Market value on January 1, 2017?
 How much would someone pay
for 6 month old FFE?

20.  $40,000 car came with software.
Software is not taxable. Value
without software?

21.  Companies are leaving behind
furniture, equipment, phone
systems and computers in the
Energy Corridor.

22.  90%
 50%
 35%
 15%
 1%

23.  In-house
 Independent fee appraiser

24.  Value of FFE as % of cost new?
Low
 Cost of more valuable
equipment – visit with industry
experts
 Your estimate will be more
reasonable than the appraisal
district depreciation schedule.

25.  Goal is to resolve value through
the rendition; that typically
works.
 If not, need support for value.

26.  Worst case scenario is to obtain a
third-party appraisal and pursue
a judical appeal. Provided the
value is reasonable, the appraisal
district will settle.

27.  Patrick O’Connor – 713 822 8613
 John Fisher – 713 375 4297
 Doug Ford – 713 375 4233
 Frank Ledesma – 713 375 4250
 www.poconnor.com
 www.cutmytaxes.com