LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION March 19, 2011 TO: Honorable Steve Ogden, Chair, Senate Committee on Finance FROM: John S O'Brien, Director, Legislative Budget Board IN RE:SB551 by Williams (Relating to liability for interest on ad valorem taxes on improvements that escaped taxation in a previous year.), As Introduced No fiscal implication to the State is anticipated. The bill would amend Chapters 26 and 31 of the Tax Code (assessments for and collections of property taxes) regarding the liability for interest on taxes on improvements that escaped taxation in a previous year.Under the bill, the issuance of a building permit would be considered constructive notice to the appraisal district of the presence of an improvement and, in this situation, back taxes would not incur interest if for the year in question the land on which the improvement is located was taxed and the property owner pays all back taxes on the improvement not later than the 120th day after the bill for back taxes is sent. The bill would cause a loss of revenue to taxing units to the extent that appraisal districts fail to include on the tax roll improvements for which building permits have been issued. The amount of such revenue losses are unknown but the great majority of appraisal districts currently use building permits as a routine part of their discovery process. Consequently, the revenue losses would not be significant for local governments. Interest charges on back taxes are not a part of the state's school funding formula so there would be no state fiscal impact.The bill would take effect September 1, 2011. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies:304 Comptroller of Public Accounts LBB Staff: JOB, KK, SD, SJS
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION
March 19, 2011
TO: Honorable Steve Ogden, Chair, Senate Committee on Finance FROM: John S O'Brien, Director, Legislative Budget Board IN RE:SB551 by Williams (Relating to liability for interest on ad valorem taxes on improvements that escaped taxation in a previous year.), As Introduced
TO: Honorable Steve Ogden, Chair, Senate Committee on Finance
FROM: John S O'Brien, Director, Legislative Budget Board
IN RE: SB551 by Williams (Relating to liability for interest on ad valorem taxes on improvements that escaped taxation in a previous year.), As Introduced
Honorable Steve Ogden, Chair, Senate Committee on Finance
Honorable Steve Ogden, Chair, Senate Committee on Finance
John S O'Brien, Director, Legislative Budget Board
John S O'Brien, Director, Legislative Budget Board
SB551 by Williams (Relating to liability for interest on ad valorem taxes on improvements that escaped taxation in a previous year.), As Introduced
SB551 by Williams (Relating to liability for interest on ad valorem taxes on improvements that escaped taxation in a previous year.), As Introduced
No fiscal implication to the State is anticipated.
No fiscal implication to the State is anticipated.
The bill would amend Chapters 26 and 31 of the Tax Code (assessments for and collections of property taxes) regarding the liability for interest on taxes on improvements that escaped taxation in a previous year.Under the bill, the issuance of a building permit would be considered constructive notice to the appraisal district of the presence of an improvement and, in this situation, back taxes would not incur interest if for the year in question the land on which the improvement is located was taxed and the property owner pays all back taxes on the improvement not later than the 120th day after the bill for back taxes is sent. The bill would cause a loss of revenue to taxing units to the extent that appraisal districts fail to include on the tax roll improvements for which building permits have been issued. The amount of such revenue losses are unknown but the great majority of appraisal districts currently use building permits as a routine part of their discovery process. Consequently, the revenue losses would not be significant for local governments. Interest charges on back taxes are not a part of the state's school funding formula so there would be no state fiscal impact.The bill would take effect September 1, 2011.
The bill would amend Chapters 26 and 31 of the Tax Code (assessments for and collections of property taxes) regarding the liability for interest on taxes on improvements that escaped taxation in a previous year.Under the bill, the issuance of a building permit would be considered constructive notice to the appraisal district of the presence of an improvement and, in this situation, back taxes would not incur interest if for the year in question the land on which the improvement is located was taxed and the property owner pays all back taxes on the improvement not later than the 120th day after the bill for back taxes is sent.
The bill would cause a loss of revenue to taxing units to the extent that appraisal districts fail to include on the tax roll improvements for which building permits have been issued. The amount of such revenue losses are unknown but the great majority of appraisal districts currently use building permits as a routine part of their discovery process. Consequently, the revenue losses would not be significant for local governments. Interest charges on back taxes are not a part of the state's school funding formula so there would be no state fiscal impact.The bill would take effect September 1, 2011.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: JOB, KK, SD, SJS
JOB, KK, SD, SJS