THE PROTEST PROCESS

This is an extract and summarization from the Property Tax Division publication "Taxpayers' Rights, Remedies and Responsibilities"

The right to protest to the Appraisal Review Board is the most important right you have as a taxpayer. You may protest if you disagree with any of the actions the appraisal district has taken on your property. But who or what is the appraisal review board and what are their duties? What actions can I protest? How do I protest? What happens when I file a protest? Hopefully, this will answer all your questions about the protest process. To answer these questions, this site is divided into nine topics:

What is the Appraisal Review Board (ARB)?

What are the ARB’s duties?

What can I protest?

How do I protest?

Information the Taxpayer needs to bring to the hearing (Standards of Documentation)

Do I have to Appear in Person?

Informal Review with Appraisal District staff

Formal Hearing before Appraisal Review Board (ARB)

District Court

An ARB is a group of private citizens authorized to resolve disputes between taxpayers and the appraisal district. ARB members are appointed by the appraisal district's board of directors for two year terms. Although the Appraisal Review Board is funded by the appraisal district and appointed by its board of directors, it is a separate authoritative body. No employees or officers of the appraisal district or the taxing unit it serves may sit on the ARB. To qualify for service on the ARB an individual must be a resident of the appraisal district for at least two years prior to taking office. Any person who is a former member of the governing body or officer or employee of a taxing unit, or is a former director, officer, or employee of the appraisal district is ineligible to serve. Also the persons’ close relatives cannot work as professional tax agents or tax appraisers within the appraisal district. ARB members also must comply with special conflict of interest laws.

The ARB determines taxpayer protests and taxing unit challenges. The ARB also determines if the chief appraiser has granted or denied exemptions and agricultural appraisals properly. The ARB's decisions are binding only for the year in question. The ARB begins protest hearings around May 15 and finishes by July 20. The ARB meets throughout the year on a monthly basis to carry out supplemental duties. ARB meetings are open to the public. The ARB establishes its own Procedures and Rules which govern its operations. For cost savings, the ARB typically meets at the appraisal district office.

Under the law, the ARB has these duties:

1. Determine protests initiated by property owners;
2. Determine challenges initiated by taxing units;
3. Correct clerical errors in the appraisal records and the appraisal rolls;
4. Act on motions to correct appraisal rolls under section 25.25;
5. Determine whether an exemption or a partial exemption is improperly granted and whether land is improperly granted appraisal as provided by Subchapter C, D, or E, Chapter 23;
6. After it has completed substantially all protests, the ARB approves the appraisal records.

After receiving a notice of appraised value on your property, you can file a protest if you disagree with any action taken by the appraisal district that affects your property. You may file a protest if any of the following is true about your property:

The proposed value of your property is too high. This could be based on incorrect information on the appraisal district records, such as lot size, building size, etc. It could also be due to situations that the appraisal district does not know, such as hidden defects, cracked foundations, inadequate plumbing, flooding problems, etc. If similar properties are selling for less than your property, you may have a reason to protest.

Your property is valued unequally compared with other property in the appraisal district. The Texas Constitution gives property owners the right to equal and uniform taxation. For instance, if your property is appraised at 100% of market value and similar properties are appraised at 90% of market value, then you have a right to protest your value based on the appraisal district's failure to appraise equally and uniformly. This type of protest will require more evidence than other types of protests.

The chief appraiser denied you an exemption. Certain requirements exist for receiving an exemption, including deadlines for filing. If you have met the requirements and are denied an exemption, you may file a protest and have a hearing before the ARB.

The chief appraiser denied agricultural appraisal for your farm or ranch. Like exemptions, you must apply to receive an agricultural appraisal. Agricultural appraisal laws have specific requirements involving ownership and land use. If your property meets these requirements and you have been denied, you should file a protest.

The chief appraiser wrongly determined that you took your land out of agricultural use. An appraisal may have been done while your land was laying fallow, or for rotation of crops. You will be required to provide documentation to prove that you did not change the use of your land to a non-agricultural use.

The appraisal records show an incorrect owner. Even if you purchased your property after January 1, you may protest the property's value until the ARB approves the appraisal roll. The law recognizes the new owner's interest in the taxes on the property.

Your property is being taxed by the wrong taxing units. This generally applies to business personal property that has moved from one location to another. You can protest the inclusion of your property on the appraisal records if it should be taxed at another location in Texas.

The chief appraiser or ARB failed to send you a notice that the law requires them to send. You have the right to protest if the chief appraiser or ARB failed to give you a required notice. You cannot, however, protest failure to give notice if the taxes on your property become delinquent.

The appraisal district or ARB took other action that affects your property. You have the right to protest any appraisal district action that affects you and your property. For example, the chief appraiser may claim your property was not taxed in a previous year, and you disagree. You may protest only actions that affect your property.

The ARB and the appraisal district have both adopted a set of Standards of Documentation that a property owner and/or agent must bring to an ARB protest hearing or to an informal review with an appraisal district appraiser. The following outlines the required documentation for residential real estate, commercial real estate, and business personal property.

A signed and dated closing statement is required. The closing statement will include a description of the property being transferred. A copy of the sales contract and the volume and page number of the deed filing will be required in some cases.

Sales of comparable properties will include the following information, if available:

This type of information can be documented in a variety of ways. The best type of documents are usually estimates for repairs from contractors and photographs of physical problems. All documentation will be signed and attested to.

Closing statement - Signed and dated, includes a description of the property being transferred and volume and page, if sold during last 3 years. Sales contract - (Same as above)

Basis of sale - Sale was based on actual income and expense data, or pro forma income and expense data, etc. Appraisal -if an appraisal was made for any purpose submit a complete copy of appraisal report. Survey of the property may be required.

Previous year rent roll, rent summary and income statement (typically 3 years of data should be provided). Additional years data (May be required)

Documentation of lease offering rates, lease concessions, effective lease rates and current and historical occupancy, as of January 1st of the current year.

Documented explanation of any line items (May be required)

Construction Contracts (s) - Signed and dated, includes a detailed description of the work to be performed. Financial records (May be required)

Certified A.I.A. Document G702 or equivalent, with detail. Subcontracts (May be required)

Documentation must reflect all hard and soft costs. I.R.S. records (May be required)

TYPE OF DATA/MINIMUM DATA (REQUIRED)

Independent Fee Appraisals - Complete copy of the appraisal report.

Confirmed sales and photographs of comparable properties the detail would include:

The documents below must be furnished to the ARB in all business personal property cases appearing before them or to an appraiser in an informal review.

1. CPA Statements
2. Balance Sheets
3. IRS Returns
4. Bookkeeping accounts, records, journals, ledgers and inventories showing acquisition by year of purchase.
5. Receipts, invoices or leases pertaining to the property in question.
6. A statement of general accounting policy and procedures, especially concerning the capitalization policy and the basis of depreciation. The statement will also address inventory methods and if physical inventory equals book inventory.

You have three choices: you can appear in person; you can appoint someone else to appear for you; or you can file an affidavit stating your facts and presentation by mail.

The affidavit and supporting documents must be received by the ARB before the scheduled hearing date. Delivering them to our office in person is best. If you mail them, it is a good idea to send them return receipt requested. Be sure to mail them in plenty of time and be sure the address is correct. The affidavit must state that you swear or affirm that the information it contains is true. Be sure to clearly put in the affidavit or a cover letter the property owner's name, address, account number, property description, and the date and time of the hearing.

Having Someone Else Appear For You:

You can authorize someone else to appear on your behalf. If the person is your spouse or a co-owner of the property, you do not need to do anything to authorize the person. To authorize a friend or a family member other than your spouse, you must obtain a copy of Appointment of Agent For Single Family Residential Property Tax Matters form from the appraisal district and file it with our office. To authorize somebody who is paid for representing you, you must use a special Appointment of Agent form. This form is available from the appraisal district. The person you select should be able to discuss the property from personal knowledge and should file the form as soon as possible. At the very latest, the person must bring the appropriate form to the protest hearing before the ARB.

Many times your protest can be resolved with a staff member of the appraisal district in an informal manner without going to the ARB for a formal hearing. You should be prepared to present whatever evidence you have to convince the appraiser of your point of view. The appraisal district has adopted a set of Standards of Documentation that details the type of data and information that you should present. You may talk to an appraiser up until the day before your hearing, if you have filed a protest. If you have not filed a protest, you may discuss the value until May 31 or thirty days after you received your notice of appraised value. If you are still not satisfied with the decision, you may proceed to a formal protest hearing before the ARB.

If you are not able to resolve the protest informally with an appraiser, your protest will be heard by the Appraisal Review Board (ARB). The ARB is a group of citizens who are authorized to resolve disputes between appraisal districts and taxpayers.

A hearing before the ARB is conducted very much like a court case. Each ARB sets their own procedures with guidelines from the State Comptroller’s Office. Generally, ARB panels are three-member panels, but may be more. Typically, after formal introduction of the parties and the property involved, the ARB will hear evidence from the property owner and the appraisal district then make a judgement based on that evidence presented. After a decision is made by the ARB panel, and approved by a quorum of the entire Board, a written notice is sent by certified mail to you or your agent. This decision is binding for the current tax year unless you appeal to district court.

After the ARB rules on your protest, it must send you or your agent a written order by certified mail. If you are dissatisfied with the ARB's decision, you have the right to appeal its decision to the district court in your county. You must file a petition with the district court within 45 days of receiving the written order from the ARB.

You will also be required to make a partial payment of taxes -- usually the amount of taxes that are not in dispute -- before the delinquency date. You may ask the court to excuse you from prepaying your taxes. You must file an oath of "inability to pay" the taxes in question and argue that prepaying the taxes restrains your right to go to court on your protest. The court will hold a hearing and decide the terms or conditions of your payment.

At the district court, you may ask to have your appeal resolved through arbitration.