Personal property depreciation guide HCAD Guide to Personal Property Renditions – Harris County Appraisal District

Personal property depreciation guide

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Guide to Personal Property Renditions

If you own a business, you are required by 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 Harris County Appraisal District has prepared this document to assist you in complying with this very important law.

What is a rendition?

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.

Who has to render?

There are three categories of taxpayers who must render:

• Owners of tangible personal property that is used for the production of income (see below)
• Owners of property on which an exemption has been cancelled or denied
• Owners who have been formally notified by the chief appraiser that they must render.

1. exposed for sale in the open market with a reasonable time for the seller to find a purchaser;
2. both the seller and the purchaser know of all the uses and purposes to which the property is
   adapted and for which it is capable of being used and of the enforceable restrictions on its use; and
3. both the seller and purchaser seek to maximize their gains and neither is in a position to take advantage of the exigencies of the other. (Sec. 1.04, Texas Tax Code).

What are the penalties for failure to comply?

There are two levels of penalties for failure to comply. If you fail to file your rendition or explanatory statement before the deadline or you do not file it at all, the penalty is equal to 10% of the amount of taxes ultimately imposed on the property. If a court determines that you have committed fraud or done other acts with the intent of evading taxes on the property, a penalty equal to 50% of the taxes ultimately imposed on the property will be levied. The penalty will be a separate line item on your tax bill.

If I can’t file on time, what should I do?

If you need more time to complete your rendition, you have the right to an automatic extension to May 1, and a further 15-day extension if you show good cause. The iFile system is available to request extensions for all types of personal property accounts, and the unique iFile number is printed on the extension request form in your rendition packet. If you prefer, you can complete and mail the extension form. The May 1 extension form must be mailed or delivered no later than April 1. If you need the additional extension for good cause, that form must be mailed or delivered no later than May 1.

How do I find out whether the appraisal district received my rendition on time?

Call our Information Center at (713) 957-7800. If the center is provided with your account number or the name of your business, they can enter it into our system and inform you of the date your rendition was received.

What are my rights if a penalty is assessed against me?

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:

1. your compliance history with respect to paying taxes and filing statements or reports;
2. the type, nature, and taxability of the specific property involved;
3. the type, nature, size, and sophistication of the person’s business or other entity for which property is rendered;
4. the completeness of your records;
5. your reliance on advice provided by the appraisal district that may have contributed to your failure to comply and the imposition of the penalty;
6. any change in appraisal district policy during the current or preceding tax year that may affect how property is rendered; and
7. any other factors that may have caused you to fail to timely file a statement or report.

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 board may waive the penalty if it finds that you substantially complied with the rendition law or made a good faith effort to do so.

When can the chief appraiser request an explanatory statement from me?

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 21 days of the date you receive the chief appraiser’s request.

What must I include in an explanatory statement?

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.

What happens if I don’t file my statement on time?

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. What if the appraisal district values my property at a higher amount than what I render? You may file a protest with the appraisal review board.

Can I report all my properties on one rendition?

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.

Can I request an extension to file the rendition?

Yes. See what to do if you can’t file on time, above.

Can I fax my rendition?

No. In order to be considered timely filed, your rendition must either be physically delivered to the district prior to the deadline or mailed to the district and postmarked on or before the deadline.

Can I e-mail my rendition?

See the discussion of electronic filing above.

If I can’t file by the extension deadline, what should I do?

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