Tax Code And Basics Flashcards
The Texas Property Tax Code, Section 41, provides for Local Review which
lists the reasons for taxpayer appeals
Property value may be estimated
by using
sales comparison, income capitalization, and cost approach
The Texas Property Tax Code, Section 42,
provides for Judicial Review including:
the right to appeal the Order Determining Protest from the
ARB
Appraisal review board (ARB)
members are compensated by:
the appraisal district
Once a person is appointed to
the ARB:
may be removed only by a majority vote of the appraisal district’s
board of directors
The ARB has the authority to:
subpoena witnesses, records and financial documents of a business
Uniform Standard of Professional
Appraisal Practices (USPAP):
are required to be used by appraisal districts when estimating market value
After the ARB has heard evidence
from the protesting party and appraisal
district, they shall determine the protest
and:
notify the taxpayer of their decision by written order
Equal and uniform taxation is
mandated by
the Texas Constitution and the Texas Property Tax Code
According to the Texas Property Tax
Code, a tax bill mailed after January 10,
has a delinquency date of:
the first day of the next month, providing at least 21 days to pay
Business Personal Property:
may be tangible or intangible
A Taxpayer may:
designate an agent to receive only communications from the chief appraiser,
the ARB and represent them in property tax matters
An acre of land contains:
43,560 square feet
Representation of a property owner
is governed by what section of the
Texas Property Tax Code
Section 1.111
An easement is an interest in real
property that:
transfers use, but not ownership, of the property
An analysis of real property
includes:
highest and best use of the property
An important component of the
income approach is:
the capitalization rate
A step in the cost approach
would include:
a separate valuation of the land, as if vacant
The sales comparison approach
is best supported by:
several sales of similar properties in the same neighborhood or market area
A method of land surveying that
describes a parcel of land is:
metes and bounds
When estimating the value of
land, it is necessary to consider:
the size and shape of the land
An improvement which works
and is useful is said to have:
functional utility
Market value less total
development costs equal:
profit (or loss)
Income less operating expenses
equals:
net operating income
A flaw in construction, materials,
or design is known as:
functional obsolescence
If the net operating income is
$35,100 and the sales price is $368,500,
the rounded capitalization rate would be:
.0953
If the net operating income is
$85,000 and the capitalization rate is
.0825, the indicated value would be
$1,030,300
Ex parte communication between
ARB members and the appraisal district:
is prohibited
All real and tangible personal
property is:
taxable unless exempted by law
Income producing tangible personal
property and mineral interests:
having a value of less than $500 is exempt (updated to $2,500).
Property is taxable by a taxing
unit:
if located within their jurisdiction on January 1
By application, the owner of
inventory may request an alternate
assessment date of
September 1 instead of January 1
All property is taxable unless
exempted by:
Federal law, the Texas Constitution, or the Texas Property Tax Code
Inventory temporarily located in
Texas may qualify for Freeport
Exemption
if it is temporarily located in Texas for less than 175 days (in a disaster declaration, the number increases to 200 days).
The total hard construction cost for a development
was $1,394,581.
The total soft construction costs for the development
were equal to 15% of hard construction costs.
What was the total dollar amount of the soft construction
costs?
$209,187
To be eligible for 1-d-1 (Open
Space) use valuation, land must be:
devoted primarily to agricultural use
To qualify for an exemption on a
single-family residence:
the property must be owner occupied
Market values for tax purposes
are determined by:
the county appraisal district in which the property is located
The Texas Property Tax Code states
that an application for agricultural use
designation is due:
before May 1
Business personal property
reports (renditions) are due:
on or before April 15
The ARB is comprised of:
a panel of citizens appointed to resolve disputes between the appraisal district
and taxpayers
Tangible personal property is
generally taxable if:
it is located in the taxing unit on January 1 for more than a temporary period
If the chief appraiser or the ARB fails
to provide a property owner with a
legally required written notice, the
property owner should:
file an appeal in accordance with section 41.411 of the Texas Property Tax Code
An Appointment of Agent form
provides for an appraisal office, an
assessor or collector to:
direct mailings of notices and tax bills to a third-party representative
Section 25.25, Texas Property Tax
Code provides remedies for
correcting an error in the appraisal records
Section 25.25(h), Texas Property Tax
Code, allows for a correction of the
appraisal records if:
a joint motion is filed by the chief appraiser and the property owner prior to the tax payment delinquency date
If a motion filed pursuant to Section
25.25(d), Texas Property Tax Code,
results in a value correction:
the taxpayer will be assessed a late correction penalty equal to 10% of the corrected tax amount
Section 11 of the Texas Property Tax
Code governs the administration of:
Exemptions
The definition of market value
includes:
exposure on the market for a reasonable length of time with buyer and seller under no duress
The market value of a property
as recorded by the chief appraiser:
is known as the appraised or assessed value
Three types of property interest
are:
leased fee, leasehold, and fee simple
Two types of legal descriptions used
to describe a parcel of land are:
metes and bounds and lot and block
The loss in value due to negative
external influences over which the
property owner has no control is known
as:
economic or external obsolescence
Depreciation is defined as a loss
in value from:
physical, functional, and economic obsolescence
Generally, property taxes become
delinquent if not paid on or before:
January 31
A delinquent tax incurs a penalty
of:
6% for the first calendar month it is delinquent plus 1% for each additional month or portion of a month it remains unpaid
To apply for an exemption, a person
must file an exemption application form with the chief appraiser for each
appraisal district in which the property subject to the claimed exemption has situs
The chief appraiser is entitled to
appeal an ARB order determining
protest except:
if approved by each taxing unit with jurisdiction to tax the specific property
*Note - the reason it’s the taxing unit and not the board is because the board already made their decision. The taxing unit now has to decide whether or not to approve it
The Texas Property Tax Code
defines real property as:
land, improvements, a mine or quarry, minerals in place and standing timber
The Texas Property Tax Code section
that addresses renditions and other
reports is:
Section 22
The loss of property value from
any source is known as:
depreciation
A property owner must file a written
notice of protest with the ARB:
before May 15 or no later than 30 days after the date the notice was
delivered, whichever is later.
The appraisal district is required to
make available all evidence it intends to present at the ARB hearing:
upon written request of the property owner made at least 14 days prior to the hearing
A motion filed pursuant to Texas
Property Tax Code, section 25.25(d)
requires the taxes be paid before the delinquency date in the amount
of the tax in full or the undisputed amount of the tax
A motion filed to correct an
excessive appraisal pursuant to Section 25.25(d):
must be filed prior to the tax delinquency date
Property Tax Consultants Administrative
Rules state that a registrant shall not solicit or advertise property tax consulting services by claiming a specific result or stating a conclusion regarding such services:
without prior analysis of the facts and circumstances pertaining thereto
The annual calculation of the tax
rate is the responsibility of:
the tax assessor for the taxing jurisdiction
The agency that governs the
registration of property tax consultants
is:
the Texas Department of Licensing and Regulation
A registered property tax consultant is required to be employed by or associated with a senior property tax consultant or acting on behalf of an
attorney who is licensed to practice law in this
state and who:
has successfully completed the senior property tax consultant registration
examination
TDLR Rules and Regulations limit the
number of consultants supervised by a senior consultant to:
10
The property tax consultant
examination is intended to test the
applicant’s knowledge of:
the property tax system, principles of appraisal, accounting and law as they
relate to property tax consulting services
The designation of an agent
must be made by:
written authorization using a form mandated by the Texas State Comptroller and signed by the property owner or his authorized representative
Section 41.411, Texas Property
Tax Code, addresses the issue of:
denial of due process, failure to provide a notice required by law
The median level of appraisal as
defined in the Texas Property Tax Code, Section 1.12 is:
the median appraisal ratio of a reasonable and representative sample of properties in an appraisal district
A rendition of tangible business personal property that
contains only the name and address of the property
owner, a general description of the property and the property’s physical location is adequate for reporting
purposes if the owner’s opinion of value is:
less than $20,000
According to the Texas Property Tax Code, the value of inventory is the price for which it would sell as a unit to a purchaser who would continue the business except for inventories:
of motor vehicle dealers, vessels, outboard motors, heavy equipment, and manufactured housing
When a change of use occurs on
land granted special use valuation for agricultural purposes:
an additional tax is imposed based on the difference between the taxes
imposed and the taxes that would have been imposed at the market value for each of the preceding five years, plus interest (updated is 3 years no interest)
A person who acquires property
after January 1 who qualifies for an over 65 exemption:
may receive the exemption for the applicable portion of the tax year
immediately upon approval of the filed exemption application
With the approval of the appraisal district board of directors, the chief appraiser isn’t required to send a notice of appraised value:
if the value increase is less than $1,000
Although the Texas Property Tax Code directs the chief appraiser to submit the appraisal records to the ARB by May 15, or as soon thereafter as practicable, he may not do so until:
all required notices are delivered to property owners within the district
The steps used in the cost approach consist of:
applying valuation principles to the existing structure to arrive at the
improvement value then adding the land
Two types of physical depreciation are:
curable and incurable
The definition of useful life is:
the period of time over which a structure may reasonably be expected to perform the function for which it was designed
When applying the sales comparison approach to estimate
market value:
the appraiser should adjust sales to the subject base on size, age, and other physical characteristics
A property subject to a triple net
lease requires:
the tenant pays utilities, property taxes, insurance and property maintenance
Effective gross income less all
operating expenses is known as:
net operating income
Fixed expenses:
include taxes and insurance
To estimate the market value of
property, the appraisal district shall:
apply generally accepted appraisal methods and techniques
Assessed value less applicable
exemptions is known as:
taxable value
The chief appraiser is appointed
by:
the appraisal district board of directors
Most absolute exemptions from
taxation require property to be:
used exclusively by the qualified exempt organization
Find the value of the property
given the following:
• Annual rent - $612
• vacancy and collection loss – 5%
• operating expenses – 35% of the
effective gross income
• capitalization rate – 9%.
$4,200
Given the following, what is the total value of the
property using the cost approach?
• Total direct and indirect
construction costs are $33.99 per
square foot
• entrepreneurial profit is 10% of total direct and indirect construction costs
• total building square footage is
59,400,
• land value is $650,000.
2,870,000 (rounded)
Given the following, what is the net operating
income (NOI) for the property?
• Rental income - $367,200/year
• other income - $1,380/year
• vacancy and collection loss – 4% of PGI
• fixed operating expenses - $21,350
• variable operating expenses - $81,337
• replacement allowance - $17,850
$233,300 (rounded)
Given the following, what is the cash flow before debt
service?
• Potential rent income - $499,475
• vacancy and collection loss - 5% of
potential rent income
• total expense reimbursements - $62,781
• total operating expenses - $188,379
• leasing commissions - $11,949
• tenant improvements - $28,800
$308,154
When a property owner is required by Section 1.08, Texas Property Tax Code, to make a payment or to file or deliver a report, application, statement, or other
document by a specified due date, his action is timely if:
it is sent by regular first-class mail, properly addressed with postage prepaid and bears a post
office cancellation mark of a date earlier than or on the specified due date and within the
specified period or the property owner provides satisfactory proof that it was deposited in the
mail on or before the specified due date and within the specified period.
The acronym NOI is used to
represent:
Net Operating Income
Texas Property Tax Code, Section 11.251,
states that a person is entitled to an exemption from taxation on that portion of the inventory consisting of:
Freeport goods
The total cost to construct an improvement
was equal to $668,175.
The amount of building
depreciation is equal to $240,543.
If the indicated value of the property by the cost approach is $607,632, what is the value attributed to the land?
$180,000
Replacement cost new is
defined as:
the current cost of constructing an improvement of equivalent utility to the one being appraised
What is the best way to value land?
Recent comparable sales
What is going concern?
The incremental value associated with intangibles of a business concern.
The most accurate way to appraise
a property’s fee simple market value is to use:
Current market rental rates
Positive equity income is called:
Dividends
What is not a quantitative
adjustment that an appraiser would use in the sales comparison approach?
Leasehold interest
An arm’s length transaction could also be defined as a:
Market value transaction
If an appraisal district agrees to keep taxpayer information confidential what section of the Texas Property Tax Code deals with confidential information not open for public inspection?
Section 22.27
A taxing unity may elect to allow
for split payments, with equal payments due before:
December 1 and July 1
A notice must be sent certified
mail on:
Denial or modification of an exemption
