Update: 2024 Commercial Property Tax
Appraisal Lawsuits Appealed through June
By Lee D. Winston | July 3, 2024
Since the beginning of 2024, there have been a few notable commercial property tax appraisal lawsuits appealed from district court. Below are those in which to keep an eye on as they make their way through the appellate courts.
Hunt County Appraisal District v. Lake Tawakoni Wind Point Park Corporation, No. 06-24-00016-CV (Tex. App.—Texarkana)
Primary Tax Code Section at Issue: Tex. Tax Code §§ 11.11, 25.07.
Appellee Trial Argument: The improvements are owned by the Sabine River Authority of Texas, an official agency of the State of Texas, and held and used exclusively for public use. Because of this, the improvements are exempt from taxation under both Article XI, section 9 of the Texas Constitution and section 11.11(a) of the Texas Tax Code. Plaintiff does not own or lease the improvements. Plaintiff only operates an RV park pursuant to a license granted by a Limited Commercial Use Permit issued by the Sabine River Authority of Texas. And from the terms of the permit, Plaintiff is contractually obligated to operate and maintain the RV park for public use, which it has done so. Plaintiff has no taxable interest, and the improvements are exempt under both Article XI, section 9 of the Texas Constitution and section 11.11(a) of the Texas Tax Code.
Appellant Trial Argument: Plaintiff owns a leasehold or possessory interest in Wind Point Park and is not exempt because Section 25.07 of the Tax Code makes Plaintiff’s interest taxable. When property is exempt for the government owner, Section 25.07 becomes operative if the property is leased for longer than one year. The possessory interest is placed on the roll in the name of the holder of the interest and is taxable. Plaintiff largely ignores this and instead argues that the Limited Commercial Use Permit issued by the Sabine River Authority of Texas is a license, and a license is not an interest in real property. This is an incorrect analysis. Section 25.07 does not use the term license or “interest in real property.” It specifically says a “possessory interest,” which is defined as “possession” or “right of possession.” Here, plaintiff has a possessory interest in Wind Point Park for longer than a year and as a result is non-exempt and taxable.
Disposition: Motion for Summary Judgment.
Appellate Case Number: 06-24-00016-CV.
Appeal Date: February 29, 2024.
Appeals Court: 6th Court of Appeals, Texarkana, Texas.
District Court: 196th Judicial District Court, of Hunt County, Texas.
Attorneys Involved: Hunt County Appraisal District: Sandra M. Griffin, Eric C. Farrar, and Christopher S. Jackson of Perdue Brandon Fielder Collins & Mott, L.L.P.; Lake Tawakoni Wind Point Park Corp: Shannon Wright, Janet Douvas Chafin, and Jennifer Caughey of Jackson Walker LLP
To follow this appeal: click the following link (or copy and paste): https://search.txcourts.gov/Case.aspx?cn=06-24-00016-CV&coa=coa06.
In Re Bexar Appraisal District, No. 04-24-00158-CV (Tex. App.—San Antonio)
Primary Tax Code Section at Issue: Tex. Tax Code §§ 42.06, 42.21, 42.23.
Appellee Trial Argument: The sole ground for recovery asserted by Plaintiff is the relief set forth in Section 42.26(a)(3) of the Texas Property Tax Code, namely that Defendant’s appraisal of the subject property is not equal and uniform. Defendant Bexar Appraisal District filed a counterclaim pursuant to Section 42.25 of the Tax Code appealing the Order Determining Protest of the Bexar Appraisal Review Board asserting that the market value of the Subject Property is too low. Defendant cannot do this. Defendant failed to comply with the statutory requirements of Sections 42.06 and 42.21 before filing its counterclaim. Specifically, Defendant failed: to obtain written approval of the filing of its Counterclaim from the board of directors of the Bexar Appraisal District, § 42.06(a); to file written notice of appeal within fifteen days of its receipt of the ARB’s order determining the property owner’s protest, § 42.06(b); to deliver a copy of written notice of appeal to the owner of the Subject Property, § 42.06(c); and to file its counterclaim within sixty days of its receipt of the order of the ARB determining the property owner’s protest, 42.21(a).
Appellant Trial Argument: Bexar Appraisal District has two options to raise the market value of a property: 1) file an appeal of an ARB order, or 2) file a counterclaim. An appeal has a 60-day deadline, while a counterclaim has no deadline. Here, Bexar Appraisal District filed a counterclaim more than 60 days after the board order’s issuance, but counterclaims are governed by Rule 97 of the Texas Rules of Civil Procedure. Under that rule, there is no deadline to file a counterclaim. Instead, it requires that a counterclaim just be within the jurisdiction of the court among a couple of other items. Bexar Appraisal District’s counterclaim is clearly within the jurisdiction of the court. The Texas Tax Code specifically mandates that Ad Valorum tax cases are to be tried in accordance with the Texas Tax Code and Texas Rules of Civil Procedure. It also mandates that all property in Texas shall be appraised at its market value, and allows for a market claim to be brought in District Court pursuant to §42.25. Plaintiff improperly assumes that Bexar Appraisal District is appealing the Appraisal Review Board’s decision from the administrative level. This is incorrect. Bexar Appraisal District is asserting a counterclaim to raise the market value.
Disposition: Plea to the Jurisdiction.
Appellate Case Number: 04-24-00158-CV.
Appeal Date: March 6, 2024.
Appeals Court: 4th Court of Appeals, San Antonio, Texas.
District Court: 407th Judicial District Court, of Bexar County, Texas.
Attorneys Involved: Bexar Appraisal District: Laurie Ratliff of Laurie Ratliff LLC, and Karen K. Evertson and Mary Sanchez of Evertson & Sanchez, PC; TMP Stone Oak Project, LLC and TMP Rim Project, LLC: Laine Weatherford Schmelzer and Ryan Clinton of Davis, Gerald & Cremer PC, and Daniel W. McDonald of McDonald Law Firm, P.C.
To follow this appeal: click the following link (or copy and paste): https://search.txcourts.gov/Case.aspx?cn=04-24-00158-CV&coa=coa04.
Harris County Appraisal District v. 11490 Westheimer Road LLC (Royal Oaks Centre Office Building), No. 14-24-00293-CV (Tex. App.—Houston [14th Dist.])
Primary Tax Code Section at Issue: Tex. Tax Code §§ 1.08, 42.08.
Appellee Trial Argument: Plaintiff complied with the prepayment requirement of Section 42.08 of the Tax Code and the trial court has jurisdiction over plaintiff’s lawsuit because Plaintiff made a timely tax payment according to the standards for determining timeliness set forth in Section 1.08 of the Tax Code. HCAD’s argument that the trial court does not have jurisdiction and plaintiff’s lawsuit should be dismissed because the tax assessor did not physically receive payment before the February 1, 2023 delinquency date is contrary to the Tax Code. Section 1.08 of the Tax Code recognizes that a tax payment may be lost or misplaced and never reach its destination. Plaintiff complied with Section 1.08 of the Tax Code because its tax payment was sent regular first-class mail, properly addressed, postage was properly prepaid, and bears a meter mark of a date that satisfactorily proves it was deposited in the mail before the February 1, 2023, delinquency date.
Appellant Trial Argument: Plaintiff failed to comply with the prepayment requirement of Section 42.08 of the Tax Code and the trial court lacks jurisdiction over plaintiff’s lawsuit because plaintiff did not timely pay any amount of the 2022 taxes due on the subject property before the delinquency date. To maintain its suit in district court, the property owner must comply with the prepayment requirement of Section 42.08. Here, Plaintiff did not make any payment until July 28, 2023 – almost six (6) months past the delinquency date of February 1, 2023. Plaintiff’s reliance on Section 1.08 of the Tax Code is misplaced. Plaintiff failed to show it complied with Section 1.08’s requirements because it provided nothing other than statements from an employee that plaintiff’s tax payment was stamped using private postage and given to a United States Postal Service employee on January 31, 2023, for mailing. Since Plaintiff has no evidence that it timely paid its taxes before the delinquency date, Plaintiff did not substantially comply with Section 42.08.
Disposition: Plea to the Jurisdiction.
Appellate Case Number: 14-24-00293-CV.
Appeal Date: April 19, 2024.
Appeals Court: 14th Court of Appeals, Houston, Texas.
District Court: 234th Judicial District Court, of Harris County, Texas.
Attorneys Involved: Harris County Appraisal District: Tammy White-Chaffer of Olson & Olson, L.L.P.; 11490 Westheimer Road LLC (Royal Oaks Centre Office Building): Amy Reilly Sallusti and Dorothea Lee Vidal of Geary, Porter & Donovan, P.C.
To follow this appeal: click the following link (or copy and paste): https://search.txcourts.gov/Case.aspx?cn=14-24-00293-CV&coa=coa14.