Attorney General Letter Ruling OR2015-16025
Revisions to Tax Code Section 23.175, per SB
Property Tax Code Section 23.175 (Oil and Gas
Interest) has been amended once again by the Texas Legislature, in their 84th
Regular Session in 2015, via
effective beginning tax year 2016.
This “new and improved” version of Sec. 23.175 is essentially unchanged from the
version we’ve had in place since 2012, the major exception being that the Price
Adjustment Factor is to be calculated with reference to a different EIA
publication (the “Short-Term Energy Outlook” (STEO), which is published monthly)
rather than the “Annual Energy Outlook” (AEO) if the current year AEO is not
published by March 1. SB 1985
specifies we use the current January STEO if or when this situation arises.
This bill also made some needed “house-keeping”
language changes. What has not
changed is that we're still starting with last year's average monthly price for
each property, to which the Price Adjustment Factor is applied to derive the
forecasted year-1 price. As always
we’ll be making all these oil and gas price calculations on behalf of the chief
appraiser in the normal course of fulfilling our contractual duties to appraise
oil and gas mineral interests in each county we’re employed.
We welcome any thoughts or suggestions you have
regarding all aspects of our appraisal work for property tax purposes. We are here to serve the taxpayers in
the most efficient, timely and fair manner possible.
Appraising Mineral Interests in
the Eagle Ford Shale
Pritchard & Abbott, Inc. was pleased to recently make a presentation to La
Salle, Frio and Zavala county taxpayers in Cotulla, Texas, regarding the
appraisal of oil and gas mineral interests for property tax purposes. Click on
<< link >>
to view the PowerPoint presentation we showed last Friday, May 15, 2015. To view this file you may need to
download free viewer software from Microsoft that works with PowerPoint "show"
Download Microsoft PowerPoint Viewer Here
Economic Obsolescence Appraisal Policy for Pipelines
P&A is committed to the uniform and accurate appraisal of all pipelines.
Beginning tax year 2015 we’ve instituted a new policy regarding pipelines we
appraise using the Cost Approach. Specifically, we’re amending the way we
provide for Economic Obsolescence (a form of depreciation) based on
“utilization” (throughput versus capacity of the pipeline). Although we’re
not amending the formula itself we’ve used for many years now (a variation of
the Chilton equation), we are striving for more clarity in the throughput and
capacity figures required in the formula. Please see this
throughput appraisal policy memo
for details. Thank you for your understanding
and cooperation. Please feel free to contact any of our utility appraisers
if you have any questions.
New Hyperbolic Production Forecast Feature in P&A Mineral Appraisals
We've improved our production forecast abilities by incorporating a hyperbolic
formula using parameters from Aries decline curve software. See this explanation
for more details.
Business Personal Property Renditions
are due by April 15!
Rendition statements and property reports must be delivered to the chief appraiser
after January 1 and not later than April 15, except as provided by Tax Code §22.02.
On written request by the property owner, the chief appraiser shall extend a deadline
for filing a rendition statement or property report to May 15. The chief appraiser
may further extend the deadline an additional 15 days upon good cause shown in writing
by the property owner.
Each year the comptroller and each chief appraiser shall publicize in a manner reasonably
designed to notify all property owners the requirements of the law relating to filing
rendition statements and property reports and of the availability of forms. A person
required to render property or to file a report as provided by this chapter shall
use a form that substantially complies with the appropriate form prescribed or approved
by the comptroller.
Appraisal districts are not obligated to mail rendition forms to property owners,
although many do only as a courtesy. Property owners can find and print approved
rendition forms directly from the Comptroller’s website:
Which form to use depends on the type of property being rendered. Each form requires
a property owner to furnish the information necessary to identify the property and
to determine its ownership, taxability, and situs. A property owner can (but is
not required to) furnish additional information on the form, including a good faith
estimate of value. A tax agent (but not the property owner) is required to swear
that the information provided in the rendition is true and accurate to the best
of their knowledge and belief.
Substantial tax penalties can accrue for failure to timely file a rendition or if
the property owner or agent is found to have committed fraudulent conduct in an
inspection, determination, or other proceeding before the appraisal district.
More information is available in the Texas Property Tax Code, Chapter 22 (Renditions
and Other Reports), such as what persons and which property is covered by this business
personal property rendition law.