Texas Senate Bill SB46

Texas 2017 - 85th 1st C.S.

Caption

Relating to the effect of a sale of property on the tax lien on the property to secure the payment of taxes, penalties, and interest imposed on the property as a result of the addition to the appraisal roll of property or appraised value that was erroneously exempted in a prior year.

Impact

The impact of SB46 is primarily on property tax law in Texas, particularly concerning the management and enforcement of tax liens in cases where property has been misclassified. By preventing the enforcement of tax liabilities on properties that have been sold, the bill offers a safeguard for buyers who might inadvertently inherit tax penalties associated with prior errors made by the appraisal district. This change is expected to enhance the fairness of property tax assessments and promote transparency in the taxing process.

Summary

Senate Bill 46 addresses the implications of a property sale on tax liens related to properties that have been misclassified or erroneously exempted from previous taxes. The bill aims to amend Section 11.43 of the Texas Tax Code by introducing a new subsection that stipulates a tax lien cannot be enforced if the property in question is sold in an arm’s length transaction to a non-related person after January 1 of the year in which the erroneous exemption was identified. This provision seeks to protect property owners who may have been affected by errors in prior appraisal assessments.

Contention

While the bill may have advantages for property buyers, there could be concerns from local government entities reliant on property taxes for their funding. By limiting their ability to enforce tax liens and collect revenue for erroneous assessments, there might be arguments surrounding the fiscal impacts on local budgets, which could lead to contention during discussions over amendments or votes. Additionally, there may be challenges in defining what constitutes an arm's length transaction, which could complicate the bill’s application in practice.