Beware of Protest Filing Deadlines

The deadline for filing a protest of the appraised value of property in the State of Texas is May 31 - MAYBE. Then again, maybe it's not.

While the normal deadline for a value protest is "before June 1", Section 41.44 of the Tax Code actually provides for the possibility of a later deadline. The Code provides that the deadline is before June 1 or 30 days after the date that a value notice under Section 25.19 is delivered, whichever is later. Therefore, if the appraisal district mails a Section 25.19 value notice on May 2 or later, the protest deadline will be extended to the 30th day after such mailing.

One potential trap for property owners and tax consultants concerns the date of delivery of a value notice. Pursuant to Section 1.07 of the Tax Code, delivery of the notice is accomplished when the appraisal district mails the notice, not when the owner receives the notice. This is different from the manner of determining the deadline to file a lawsuit appealing a review board order. In that case, the filing deadline runs from actual receipt of the board order.

Because it is not uncommon for a document from an appraisal district to be dated earlier than when it is actually mailed, it is important to retain not only the value notice but also the envelope in which the notice was received. That envelope, if it has a legible postmark, might show that the appraisal district did not mail the notice on the date indicated on the notice itself. If so, then it might be used as evidence to show the timeliness of a protest.

Another potential problem occurs when the property owner or tax consultant delays the filing of a protest in anticipation of receiving a value notice. Such a delay could result in a waiver of protest rights.

Section 25.19 of the Tax Code indicates that an appraisal district is required to send a notice of appraised value in three situations: (1) the appraised value increases from the previous year; (2) the appraised value is greater than the value rendered by the property owner; or (3) the property was not on the appraisal roll in the prior year. A notice must also be delivered if (1) the property was reappraised for the current year, (2) there has been a change in ownership, or (3) the owner requests notice in writing.

Technically, an appraisal district is not required to send an appraisal notice if the value remains the same as the previous year. Though some appraisal districts might take the view that no notice is required if the appraised value drops, such a decrease could constitute a reappraisal of the property and thus necessitate the mailing of a value notice. However, if the appraisal district's board of directors give approval, then the appraisal district is not required to send a notice if the value increases no more than $1,000 from the previous year.

Though many appraisal districts will send out notices of appraised value each year, they are not required to do so unless one of the specific situations requiring notice exists. Therefore, it is possible in any particular year that no notice of appraised value will be required or received from the appraisal district. In fact, there are situations where chief appraisers of certain appraisal districts consciously do not send value notices where no change in value occurs.

The failure to receive a value appraisal notice (when no notice is required to be sent by the appraisal district) might not be an excuse for the failure to timely protest the appraised value of the property. Section 41.44 of the Texas Tax Code provides that a value protest must be filed "before June 1 or not later than the 30th day after the date that [the notice of appraised value] was delivered," whichever is later. In the event that no notice of appraised value is required, then the "before June 1" date would apply.

The protest filing deadline under Section 41.44 does not apply only to value protests. It also applies to other protests, such as denial of an application for special valuation or denial of an exemption application. If a notice of denial has been received in such cases, then the same protest deadlines will apply.

However, often a determination to deny an application will not be made until after the deadline for such a denial. Technically, the chief appraiser is required to deliver any notices of denial before submitting the appraisal records to the review board on May 15. Very seldom do chief appraisers follow this rule, instead ruling on the application at some later date.

Of course, if a value notice is required and is not sent such that the protest deadline is missed, then the property owner should consider seeking relief under Section 41.411 for failure of the chief appraiser to send a required notice.

Failure to timely file a protest could severely impair the right of the property owner to obtain an appraisal roll correction, potentially prohibiting any correction at all or resulting in the imposition of penalties for a late correction.

Additionally, property owners and tax consultants should take note of Section 1.08 of the Tax Code which deals with the timeliness of actions taken by mail. In Section 1.08, the Code provides that, when a property owner is required to file some paper (such as a value protest), his filing by mail is considered timely if it is sent by regular first-class mail, properly addressed and postage prepaid and is sent "before the specified date."

A technical reading of this statute would provide that the deadline for a mailed protest would thus not be May 31, but the last day before May 31 that the post office is opened. Many appraisal districts do not follow this hypertechnical reading to this section, and the statute has yet to be interpreted by the courts. In fact, there is a pending legislative proposal to clarify the mailing date provisions. However, property owners and tax consultants need to be aware of this issue for the current year.

It would be good business practice to be sure that all protests are filed in advance of any deadline that might exist, in order to avoid any issues regarding timeliness of the filing whether in person or by mail.

Recommendations

If a property owner has not received a value notice as the deadline approaches, then he should contact the appraisal district and inquire as to the anticipated appraised value. If the owner believes that such anticipated value is excessive, then he might wish to file a value protest prior to June 1, even if no notice of appraised value has been received by that date.

If no value notice has been received and the appraisal district indicates that a notice will be sent in the future, it would still be advisable to file a protest prior to June 1. If no notice has been sent and the appraisal district subsequently decides to roll over the value (though the property owner believes the correct value to be lower), then no notice will be required and the taxpayer might forego correction remedies while waiting for a future value notice that never arrives.

Property owners and tax consultants might also want to consider filing defensive protests -- essentially filing a protest of all property accounts before the June 1 deadline. After such filings, the owner can decide whether or not to pursue each protest.

If you have any questions about the contents of this article, please contact the GPD Property Tax Section at propertytax@gpd.com.