Comptroller Mandates Use of Approved Rendition Form

As if the new requirement requiring the mandatory filing of a business personal property rendition is not enough, the Comptroller of Public Accounts has also decided to mandate the use of rendition forms specifically approved by the Comptroller's Office.

This means that many special forms previously utilized by taxpayers and their representatives or accountants may no longer be valid. It also means that various appraisal districts are seeking the Comptroller's approval of forms that request far more information than the Comptroller's general rendition form or than required by statutes.

The new requirement of using a form approved by the Comptroller was officially enacted on December 24, 2003, with the revision of Section 9.3031 of Chapter 34 of the Texas Administrative Code. The Comptroller is the state officer given authority to administer provisions of the Texas Property Tax Code, including the creation of model forms for use in property tax related filings, such as renditions.

Because of changes made to the rendition statutes by the Texas Legislature during the 2003 legislative session, the Comptroller was required to revise the various rendition forms to include some language changes. For example, rendition forms are required to include a statement that a person could be guilty of a misdemeanor or state jail felony for making a false statement in a rendition form.

In addition to making revisions to the forms to conform to new statutory requirements, the Comptroller also decided to make the use of a rendition form approved by the Comptroller's office a requirement.

In the Comptroller's explanation of the Administrative Code change, the Comptroller's office claimed that the new rendition statute "requires the person rendering property shall use the form adopted by the comptroller or a form that has been approved by the comptroller to be in substantial compliance."

However, this explanation is an overstatement of the requirements of the rendition statute. The statutory language regarding the comptroller's creation of rendition forms is essentially unchanged by the new law. Section 22.24(c), both before and after the revisions, provides: "The comptroller may prescribe or approve different forms for different kinds of property but shall ensure that each form requires a property owner to furnish the information necessary to identify the property and to determine its ownership, taxability, and situs." Language is added requiring the notice of penalty for a false statement, but there is no new requirement in the statute mandating use of a particular form.

But Section 22.24 (both as contained in prior law and the revised law) does allows the Comptroller to "prescribe" a form. Previously, the rendition forms created and distributed by the Comptroller's office were "approved" model forms, but use of the particular forms was not required.

The revised Section 9.3031(b) of the Texas Administrative Code provides: "A person rendering property shall use the model form adopted by the Comptroller of Public Accounts or a form containing information which is in substantial compliance with the model form if approved by the comptroller."

Previously, Section 9.3031(b) provided that "the person rendering property shall use the model form adopted by the Comptroller of Public Accounts which is appropriate to the property type and category, use a form containing information which is in substantial compliance with the model form adopted by the comptroller, or use any other form appropriate to the property type and category which has been approved by the comptroller."

Thus, the old code allowed a property owner to use the model form, another form approved by the Comptroller, or a form containing substantially the same information as the model form. The new code allows only the use of the model form or another form approved by the Comptroller.

The Comptroller's office indicated that several appraisal districts, as well as some property owners, have already requested approval of forms other than the model form. In the case of appraisal districts, the additional form approval is sought in order to request additional information beyond that required by the model form. For example, the Comptroller's office indicated that the Jefferson County Appraisal District requested that the model form include specific vehicle information such as make, model and mileage "to avoid taxpayers from asking for high mileage adjustments during protest time." The Comptroller refused to add this requirement to the model form since mileage is not a required reportable item under the revised statute. However, the Comptroller indicated that the appraisal district could include the information in its own version of a rendition form and seek Comptroller approval of that form.

It can be expected that several appraisal districts will be seeking approval of rendition forms that request far more information than required by the statute or the model form. The Comptroller's office has indicated that these forms will probably be approved, though the additional information will be considered an optional reporting matter and may be required to be included on a separate page of the form.

In some cases, property owners or tax consultants or others who file rendition forms may want to request approval of a form that is different from the model form. Some forms are set up within computer programs for ease and conformity of use. However, to the extent these forms do not conform to the Comptroller's form, they are no longer valid. Additionally, the new notice language must be included on any such forms.

The Comptroller's office has indicated that property owners and others can request approval of a form for use in rendering property. Because of the new requirement of mandatory rendition, the Comptroller has indicated that any such requests will be expedited to the extent possible.

The mandatory use of the Comptroller's form, as well as the expected attempt of appraisal districts to force property owners to utilize their approved forms, gives rise to three key questions. First, what are the potential consequences if the property owner does not use an approved form? Second, is a property owner required to use an appraisal district's specific approved form? And, third, is a property owner required to provide all the information requested by the form?

If the property owner does not use an approved form, his rendition could be considered invalid and, if not timely corrected, he could be subject to the penalty imposed for a late filing. Because the Comptroller is requiring use of an approved form, any rendition filed on a non-approved form could be rejected by an appraisal district. Thus, even though the property owner timely provides all of the information required to be a valid rendition, the rendition could still be considered late. In such a case, the appraisal district might choose to impose the 10 percent late penalty.

Though appraisal districts might have their own approved form and seek to force property owners to use those forms, there is no requirement that the property owner use any form specific to an appraisal district. The administrative code change requires use of the "model form" or another form approved by the Comptroller. Theoretically, a property owner could file a Dallas-approved form in Harris County, or a Travis-approved from in Bexar County, as long as the form used has been approved by the Comptroller.

However, the property owner should always be safe by just using the Comptroller's model form, which should be accepted as a valid rendition form in every appraisal district statewide.

As indicated above, some approved forms will request additional information beyond that required by the model form. Also, property owners may question whether they are required to include all of the information included in the model form itself.

The new rendition law states that only the following information need to be provided by a property owner in rendering his property:

1. the name and address of the property owner;
2. a description of the property by type or category;
3. if the property is inventory, a description of each type of inventory and a general estimate of the quantity of each type of inventory;
4. the physical location or taxable situs of the property; and
5. the property owners good faith estimate of the market value of the property or, at the option of the property owner, the historical cost when new and the year of acquisition of the property.

Any other information requested by a rendition form is optional. Section 22.24(c) of the Texas Property Tax Code specifically provides: "A form may not require but may permit a property owner to furnish information not specifically required by this chapter to be reported." Thus, any additional information requested in the model form or an appraisal district specific form need not be included unless the property owner chooses to do so.

A further change in the new rendition law also supports this position. Previously, Section 22.24(b) provided: "A person filing a rendition or report shall include all information required by the form." Thus, if the form used by a property owner requested some information, then the property owner was in theory required to provide that information. This, of course, resulted in the use of a multitude of different forms, eliminating some of the information requested in the model or appraisal district form.

The revised statute provides: "A person filing a rendition or report shall include all information required by Section 22.01." Thus, regardless of what is requested by the form, the property owner need only provide the five specific pieces of information required by the statute to be included in a rendition.

In order to comply with the new form and rendition requirements, property owners are urged to either use the Comptroller's model form or seek specific approval for any alternative form that they anticipate utilizing to file renditions. Because of the potential for delay in approval of forms, any request for approval of an alternative form should be filed with the Comptroller's office as soon as possible.

The various revised model forms created by the Comptroller's office are currently available on the Comptroller's website.

If you have any questions about the contents of this article, please contact Dan Donovan, David Kaplan, or Ron Gray or contact the GPD Property Tax Section at propertytax@gpd.com.