Senate Bill 340, passed in the 2003 regular legislative session, took effect January 1, 2004. You can get a copy of the bill from the Texas Legislature's website at www.capitol.state.tx.us . SB 340 made sweeping changes to the laws concerning rendition or reporting of business assets for property tax purposes. If you own a business, you are required by this law to report personal property that is used in that business to your county appraisal district. There are substantial penalties for failure to report or for falsification and tax evasion. The Smith County Appraisal District has prepared this document to assist you in complying with this new rendition law.
A rendition is a form that provides information about property that you own. The appraisal district uses the information you provide to appraise your property for taxation.
There are three categories of taxpayers who must render:
For taxation purposes, your property is classified as either real property (land, buildings, and other items attached to land) or personal property (items that can be owned but are not attached to land). Personal property that you use to produce income or for business purposes must be rendered. This includes furniture and fixtures, equipment, machinery, computers, inventory held for sale or rental, raw materials, finished goods, and work in process. You are not required to render intangible personal property (items that can be owned but do not have a physical form) such as cash, accounts receivable, goodwill, custom computer software, and other similar items. If your organization qualifies for an exemption that applies to personal property, for example, a religious or charitable organization exemption, you are not required to render the exempt property.
The last day to file your rendition is April 15. If you mail it, it must be postmarked on or before April 15. If you hand deliver it or use a private delivery service such as Federal Express, it must be physically received in our office before close of business on April 15. If your property must be rendered because the chief appraiser has denied or cancelled an exemption, you must render it within 30 days of the date the chief appraiser denies or cancels the exemption.
Renditions for property located in Smith County must be filed with SCAD. The mailing address for the general rendition form is Smith County Appraisal District, 245 S SE Loop 323, Tyler TX 75702. If your property is appraised by two or more appraisal districts, you must file renditions before the deadline with both districts .
Your rendition will be analyzed and used, along with other information we collect on similar businesses, to develop an estimate of value for your property.
Yes. Information contained in a rendition cannot be disclosed to third parties except in very limited circumstances. In addition, the code specifically provides that any estimate of value you provide is not admissible in proceedings other than a protest to the ARB and/or court proceedings specifically related to "penalties for failure to render". The final value we place on your property is public information, but your rendition is not.
You will only be required to fill out a short table generally describing your assets and giving their location. However, should you file a protest a complete asset listing may be required.
Depending on the type of property you own and its value, you can expect to provide the following information:
You will need to give the address where the property was located on January 1. If the property was in transit on January 1 or is regularly used in more than one location, you should provide additional information about the property's normal location and circumstances on January 1.
A general description should give enough information to identify the property and distinguish it from other items that you own. At minimum, you should identify the major categories of personal property assets that you own, using the same terminology you would use in reporting to the Internal Revenue Service. You have the option of providing an itemized listing of the various assets in any category. For vehicles, you will need to provide the plate and VIN number, as well as the year, make, and model.
If you own an inventory of items that you hold for sale or rental, you will need to provide an estimate of the quantity of each type of item that you hold in inventory. Again, you can provide an itemized list if you prefer for any category.
The appraisal district will estimate the market value of your inventory on the basis of your rendition and other information in its possession. Under the new rendition law, you must provide for either a good faith estimate of the market value of your items or the historical cost and acquisition date (discussed below) of the items. If you choose to give a market value estimate, you should be aware that there are several different definitions of market value that may apply. For items other than inventory, market value is defined as follows:
"Market value" means the price at which a property would transfer for cash or its equivalent under prevailing market conditions if:
For inventory, market value is defined by the tax code as "the price for which it would sell as a unit to a purchaser who would continue the business." Sec. 23.12, Texas Tax Code.
If your business has 50 or fewer employees, you may base your estimate of value on federal income tax depreciation schedules. You will need to be prepared to defend your estimate and explain how it was developed.
Instead of providing a good faith estimate of market value, you may provide the original cost and date you acquired the property. Original cost (the code uses the term "historical cost when new") refers to the amount you paid to acquire the property. Your cost would include transportation and any other necessary expenses incurred in acquiring the property. If you purchased a used item, you should note on the form that you purchased it used and give the amount you paid.
Date of acquisition is simply the date you bought or acquired ownership of the property.
Publications that provide value information on assets are helpful tools in estimating market value. For example, there are numerous publications on vehicles and computer equipment that provides a range of value information for these assets. If you chose to use published value information, you must use a value that would reflect the assets worth near January 1st. Developing an estimated useful life and replacement cost of an asset is another method of estimating market value. Divide the actual age of the asset by the estimated useful life in order to calculate the depreciation for the asset. Multiply the depreciation percentage by the replacement cost to estimate an amount of depreciation. Subtract the amount of depreciation from the replacement cost to arrive at an estimate of market value.
To determine original cost, you need to refer to your accounting records such as, original journal entries and account ledgers. Use original purchase documents, such as invoices or purchase orders to determine the original cost of the asset. You need to add all cost that is attributed to getting the asset functioning, such as freight and set-up cost.
There are two levels of penalties for failure to comply. If you fail to file your rendition before the deadline or you do not file it at all, the penalty is equal to 10% of the amount of taxes imposed on the property. If a court determines that you have committed fraud or engaged in other acts with the intent of evading taxes on the property, a penalty equal to 50% of the taxes imposed on the property will be levied. The appraisal district imposes this penalty. It will appear on your tax bill from the Smith County Tax Office.
The law provides for two extensions of time. If you make the request in writing before the deadline, the chief appraiser must automatically extend your deadline to May 15. If you provide good cause and need a little extra time, the chief appraiser has the discretion to further extend the deadline to May 30.
Call our office at (903) 510-8600 and ask to speak with a Business Personal Property Representative. Provide your account number or the name of your business, and the representative can access that information.
If a penalty is assessed against you, you can file a request for a waiver of the penalty. You must file the request in writing with the chief appraiser within 30 days after you receive the notice that the penalty has been imposed. Your request must include documentation showing that either you substantially complied with the rendition law or that you made a good faith effort to do so. The documentation should also address:
The chief appraiser is required by law to consider these factors and notify you in writing. If the chief appraiser declines to waive a penalty and you have made a timely request for waiver, you may protest the imposition of the penalty to the Appraisal Review Board. The ARB may waive the penalty if it finds that you substantially complied with the rendition law or made a good faith effort to do so.
If you provide a good faith estimate of market value instead of original cost and acquisition date for any items, the chief appraiser may request an explanatory statement from you. The chief appraiser must make the request in writing, and you must provide the statement within 20 days of the date you receive the chief appraiser's request.
The explanatory statement must set out a detailed explanation of the basis for the estimate(s) of market value given in your rendition. The statement must include adequate information to identify the property. It must describe the physical and economic characteristics of the property that are relevant to its market value. It must give the source(s) of information used in valuing the property and explain the basis for the value estimate.
If you don't file your statement on time, a penalty equal to 10% of the amount of taxes on the property will be imposed. There is also a 50% penalty if a court finds you engaged in fraud or other actions with intent to evade taxes. You have the same waiver and appeal rights discussed above.
You may file a protest with the Appraisal Review Board.
If the appraisal district has already set up accounts covering your property, you should file a rendition corresponding to each account. If the district does not have accounts set up for your property, it is generally best to file a rendition applicable to each location where your property is kept. For example, if you own three separate convenience stores, file three renditions, one for each store.
Yes. See "What to do if you can't file on time", above.
You may fax renditions to (903) 510-8645. To ensure your rendition is received you may need to call our office to verify.
You should file your rendition as soon as possible, and include with it a request for waiver of penalty and explanation of your reasons for missing the deadline as described above. If you receive a notice from the chief appraiser regarding the imposition of a penalty, be sure to file the request for waiver within 30 days of the date you receive it.
Click to view and download the Rendition Form
For more information, contact the Smith County Appraisal
District at (903) 510-8600. The district's website is www.smithcountymapsite.org.