Business Tangible Property Tax

I have had several calls in the last few days regarding tax statements just received by businesses from the county tax offices.  Receiving one of these for the first time is a rude awakening for many small businesses.  Their thoughts are  1) they lease their business space and therefore have no property tax to pay, right? and 2) once they figure out that this is a tax on business equipment they wonder why they are being taxed on items that they already paid sales tax on.  Sorry folks, state sales tax and county property tax are two different things.  Odds are if you started a new business, you are now on the radar for paying ANNUAL property tax on your business furniture/equipment and inventory.  This tax is the reason car dealerships always have great year end deals!  

The tax bill you are receiving right now is based on values at January 1, 2008.  These values were either provided by you on a property rendition form mailed to you in early 2008, or the most likely scenario for a new business is that an agent from the county tax office paid a visit at your new location.  What I see quite often, especially in Galveston and Brazoria counties, are agents literally walking door to door, checking their databases to see if businesses have tax accounts.  Another way to be automatically signed up by the tax office in most cases is to apply for an assumed name (dba) with the county clerk.  Regardless, the RULES are that if you are operating a business within the county then you must obtain a tax account and render the January 1 value of the property used in your business.  Blank rendition forms can usually be found on the county appraisal district websites, if you do not receive a preprinted one.  The rendition forms are due by April 15 with an opportunity to file a 30 day extension.  You certainly want to complete the rendition form rather than ignore it.  Otherwise, you leave it wide open for potential penalties and for the county to estimate the values based on the industry and square footage.  I know from experience that they always estimate high!