The Texas franchise tax is a tax imposed on each taxable entity chartered/organized in Texas or doing business in Texas. The annual franchise tax report is due May 15, for entities that became subject to franchise tax in the previous year. Texas franchise tax applies to partnerships (except general partnerships directly and solely owned by natural persons), corporations, LLCs, business trusts, professional associations, business associations, joint ventures and other legal entities.
Is Your Company in Good Standing?
A Certificate of Account Status will indicate if a taxable entity doing business in Texas is in good standing with its franchise tax reports and payments. Most lenders will require a Certificate of Good Standing as a condition for any real estate or financing transaction. You can easily check the status of your entity at the Texas State Comptroller’s website.
3 Steps to Reinstate for Non-Filing of Texas Franchise Taxes.
When an entity fails to file a franchise tax report and/or pay franchise taxes, the secretary of state forfeits it under the Texas Tax Code. If you discover your entity has been forfeited for failure to file franchise taxes, the situation can be remedied in 3 easy steps.
STEP 1 - File your delinquent franchise tax form(s) with the Texas Comptroller. For more information on franchise filing instructions and forms select the following link Texas State Comptroller Franchise Tax Information.
STEP 2 - Request a Tax Clearance Letter from the Comptroller’s office (see form). The Tax Clearance letter will be issued, upon request, by the Comptroller's office after all franchise tax reports and information reports due through the date of reinstatements are filed, and all franchise tax, penalty and interest due on those reports are paid.
STEP 3 - File an application for reinstatement with the Texas Secretary of State, Form 801. The fee is $75.00 and you must include the clearance letter from the Texas Comptroller of Public Accounts stating that the entity has satisfied all of its franchise tax obligations and is eligible for reinstatement.
Upon completion of these three steps, the Secretary of State will issue Certificate of Reinstatement. With this certificate the entity will be in position to legally engage in real estate and financing transactions, including a commercial property tax loan.
For those in the property tax lending business, this is our busy season. Tax delinquencies peak the first day they are past due, normally Feb 1st, then gradually reduce during the year as property owners pay or make arrangements to pay their taxes. It’s during the first six months of the calendar year that tax lenders incur the majority of their marketing expenses as we attempt to identify and market to property owners who need help with their past due property taxes.
How Do Property Tax Lenders Generate Their Mailing Lists?
While tax lenders have many means of marketing to prospective clients, the most pervasive method is direct mail. Tax Assessors are required to make their delinquent tax rolls available through public information requests. Through these requests, property tax lenders receive the information used to derive their mailings lists. For the most populous counties, these initial lists are typically very large, some with millions of records. The lenders then slice and dice the delinquent tax rolls to develop their direct mail lists. While an effective marketing method, direct mail is expensive. Tax lenders take great effort to narrow their target lists to remove properties that would not qualify for a tax loan. However, when dealing with millions of records mistakes can happen and some properties owners are inadvertently mailed property tax loan offers. We apologize if you were mailed a property tax loan offer that you did not wish to receive.
How Do I Remove My Name From Property Tax Lenders’ Mailing Lists?
During our busy season we occasionally get phone calls or letters requesting removal from our mailing lists. We attempt to respond to each request accordingly; however, my best advice would be to save your time and just toss out the letter or better yet recycle it. If you are receiving multiple offers from lenders, you might want to check with your tax assessor(s) since this is the ultimate source of the data. If you’ve recently paid your taxes, your name will automatically fall of our mailing list when we refresh our tax assessor data.
If you are really serious about getting rid of promotional mail, you can register with the Mail Preference Service of the Direct Marketing Association (DMA). It won’t guarantee you a life free of junk mail, but it can help. DMA will list you in its database in the “Do Not Mail” category. Direct marketers are not required to check the database, but most companies that send large volumes of bulk mail do use the DMA service.
Protesting Dallas County Property Values – Dallas, Texas
I’m sure everyone is aware that the assessed value from the Dallas County Appraisal District (DCAD) will directly affect the amount property owners will pay in property taxes for 2011 (which will be due January 31, 2012). What you may not know is that as a Dallas County property owner you will only have a short window of time to try and lower the assessed value if you feel the amount being assessed is too high. Appraised value notices will be mailed out beginning May 1st and property owners will have until May 31st (or 30 days after the delivery of their notice) to protest the appraised value. See the DCAD website to learn more.
How to Protest Dallas County Property Taxes
Beginning May 1st, protests can be filed in writing or through the Dallas County Appraisal District website at www.dallascad.org using their Online Protest Program called uFile. The uFile Online Protest Program will be available for protesting residential and commercial property from May 1st through May 31st and will be available beginning May 17th for Business Personal Property.
What Are Valid Reasons to Protesting Appraised Values
The majority of the reasons for protesting the appraised value of your property are covered by the following three reasons.
1. Market Value Reasons – The proposed appraised value of your property is simply too high. This typically happens when the appraisal district has incorrect information regarding your property such as property size. Also, if comparable properties in your immediate area are selling for less than your proposed appraised value, then you may have a legitimate reason to protest.
2. Unequal Valuation – The Texas Constitution gives Texas property owners the right to equal and uniform taxation. This means that even if your proposed appraised value is in line with the market value, but comparable homes in your area are being appraised below market value, then you have a right to also have your home appraised below market value equally.
3. Denial of an Exemption – You may want to protest when the Chief Appraiser denies you a requested exemption. If you have met all requirements for filing for an exemption, including meeting the deadline, and are denied, then you can file a protest and have a hearing before the ARB.
There are other reasons you may consider protesting and the DCAD website has more to say on this subject, but in short, if you feel your proposed appraised value or any other information at the Central Appraisal District is costing you too much in Dallas County property taxes, then I encourage you to begin looking at your rights and begin the process as soon as possible to avoid missing the deadline. Once you miss the deadline for protesting, there is very little you can do for this year’s appraised value or the property taxes due.
If you would like to get a more comprehensive guide written by our attorney for lowering your property taxes in Texas, then please visit this link and fill out the required information and follow the instructions that will be emailed to you.
If you would like to learn more about property tax loans, then please visit this link and fill out the required information and one of our loan counselors will contact you for a low-pressure consultation.