COVID-19 and 2020 Property Taxes March 30, 2020 Update

Posted on Mar 31, 2020 by Jean Louise

The novel coronavirus (“COVID-19”) has impacted revenues for most businesses. Many counties in Texas have issued “shelter in place” orders, and many countries have limited or banned domestic and international travel. With revenues down, business owners are concerned about managing expenses, and property tax are consistently among the top expenses for Texas property owners.

This letter projects how the pandemic and government actions will affect:

  • Tax payment deadlines
  • The 2020 Appraised Values for commercial properties;
  • The 2020 protest process, and
  • Specific actions commercial property owners should take to minimize the impact to their business. It also includes a list of actions already taken by several of the larger appraisal districts in Texas.

Deferment of Payment Deadlines

At this point, Texas has not offered any deferments for any tax payments. The first tax payments due after the pandemic hit Texas were the February monthly tax payments due to the Comptroller (i.e. sales tax, occupancy tax, alcoholic beverages tax, etc. due mid-March). The Comptroller has already stated that these tax deadlines will not be postponed. This decision provides little reason to believe that there will be a postponement of the property tax payment deadline, which is still ten months away on January 31, 2021. Based on the state’s current position and on the relief expected as a result of the recent federal stimulus bill (CARES Act), we do not expect an extension of the deadline. One potential solution in most jurisdictions is to take advantage of the opportunity to split the January 31 payment into two equal payments due November 30, 2020 and June 30, 2021.

2020 Appraised Value

Most counties have not yet released values, but the release date is typically April 15. Although COVID-19 will affect the revenue of most properties, the Tax Code requires valuation based on their market value as of January 1, 2020. At that time, COVID-19 had not started to affect revenues, so we do not expect the noticed values to reflect the impact of COVID-19 until the 2021 tax year. We also find it unlikely that appraisal districts will issue new, post-disaster values for several reasons. First, the damages are largely economic and difficult for the appraisal district to objectively measure. Second, the sales market has slowed, but we do not yet see a significant negative impact on market prices. Third, most appraisal districts will argue that any claims related to COVID-19 should be reflected in the 2021 appraised value, and they will be successful unless that property owner’s attorney is familiar with and effectively argues the Tax Code provisions that affect this type of situation. It will be imperative that you protest your 2020 appraised value and consider appealing that determination by filing a lawsuit.

2020 Protest Season

Unlike the payment deadlines, we do foresee that the protest timeline will be affected by COVID-19. Certain counties have already pushed back rendition deadlines and have made recommendations to alter the protest calendar. Although the protest deadlines remain unchanged as of the date of this advisory, many Appraisal Districts are seeking additional time, recommending phone hearings, asking for relief from the duty to re-value property (effectively freezing values), or trying to extend the protest time to allow COVID-19 to pass.

Action Items for Property Owners

  •  Some appraisal districts intend to delay mailing notices of appraised value by 30-60 days and they have publicly stated that protest deadlines will be 30 days after mailing.  However, districts are only required to send notices in situations where the values increase, and the deadline is only extended in situations where notice is mailed, so you must plan to protest by May 15, 2020 unless you are willing to agree that the 2019 value is acceptable.
  • Prepare 2019 Operating Statements and any operating reports that demonstrate the decline in revenue due to COVID-19 when presenting to the appraisal districts.
  • The CARES Act (also known as the Coronavirus Stimulus) provides several forms of relief to owners of commercial property, but in general, one must actively apply and/or seek out that relief.  The number of funds budgeted under the act is large, but they are also limited, so prompt action provides the best chance of obtaining relief available.

Selected Appraisal District Responses

  • General:
    • Most appraisal districts have closed their doors complying with local “Stay at Home” orders and currently do not expect to reopen until April 6.
  • Bexar County:
    • Has postponed the mailing of Appraisal Notices to April 18 instead of April 1
    • Is seeking to freeze all property values from 2019 (by not sending out Appraisal Notices), which would wipe out an otherwise expected 7-8%increase in values and revenue for taxing jurisdictions in Bexar County.  Read more here.
  • Dallas County:
    •  Has suspended activities until at least April 3, 2020 at which time they will reevaluate.
    •  Has extended the deadline to file a business personal property rendition to May 15, 2020.
    • Has extended the deadline to file a Freeport Exemption Application to June 15, 2020.
    • Has temporarily suspended all in-person meetings.
  • Harris County:
    • Has provided a drop-off location at Harris CAD’s office to any filings or documents that need to be sent to the appraisal district.
    • Has extended the business personal property rendition deadline to May 15, 2020.
  • Tarrant County:
    • Has postponed the mailing of Appraisal Notices to after April 1, 2020.
    • Has postponed all March and April hearings to a later date.
  • Travis County:
    • Has provided a drop-off location at Travis CAD’s office to any filings or documents that need to be sent to the Appraisal District.
    • Has extended the business personal property rendition deadline to May 15, 2020.

For more information, feel free to contact Josh Estes (214.272.8027), Niral Gandhi (214.272.8029), or Spencer Banks (214.272.8026) at Estes & Gandhi, P.C.