News & Insights

Possible Texas Property Tax Exemption for COVID-19 Damage

Tax Development Apr 17, 2020

COVID-19 Property Tax Relief for Texas TaxpayersRyan is exploring potential property tax relief as a result of harm caused by COVID-19 to real and business personal property in Texas. Under newly enacted Texas Tax Code § 11.35, taxpayers suffering damage to their property caused by a governor-declared disaster may receive a temporary exemption from a portion of their property tax liability. This exemption is allowed for property that has suffered at least 15% damage caused by a disaster and applies proportionately to property tax liabilities.

Relief is not certain. The Texas Attorney General recently issued an Opinion stating diminution of market value does not qualify a property for relief under Texas Tax Code § 11.35. The Opinion interpreted the word “damage” in the statute to mean physical property damage. Staff of the Texas House of Representatives Ways & Means Committee previously issued a similar statement.

However, the Attorney General’s Opinion and the House Ways & Means Committee staff’s statement are not binding on courts. There is a plausible argument the text of Texas Tax Code § 11.35 does not require physical damage to property to trigger the exemption. It is likely appraisal districts will deny the exemption, and such denials will be upheld by appraisal review boards. Yet Texas Tax Code § 11.35 is new. How courts, subsequent to such denials, will interpret it is uncertain.

Ryan’s Property Tax and Advocacy teams will closely monitor developments throughout this process and continually report on any activities or changes. We will be consulting with our clients on the best strategy, considering each client’s unique circumstances, maximizing relief under all Texas administrative, litigation, and appeal remedies.

TECHNICAL INFORMATION CONTACT:

Shane Moncrief
Principal
Ryan
404.942.6377
shane.moncrief@ryan.com

The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at info@ryan.com.