Can a Texas property owner force the appraisal district to list land and the buildings on it as separate parcels, or does the chief appraiser decide?

TX AG Opinion GA-0790: Who decides whether land and buildings share one appraisal parcel?

Plain-English summary

State Representative Byron Cook asked a narrow but practical property-tax question: when a person owns both a tract of land and the improvements on it, who decides whether the land and the improvements are combined under one parcel identification number or taxpayer account in the appraisal district's records, or split into separate accounts. The premise behind the question was that a property owner might want to render (report) the land and the buildings separately and have the district treat them as two parcels with two account numbers.

The Attorney General concluded that this is an administrative determination made by the chief appraiser, not something the property owner controls. The opinion acknowledged that no Tax Code provision directly answers who decides. But it read the Tax Code's structure to point clearly to the chief appraiser. The chief appraiser is the chief administrator of the appraisal office, is charged with preparing the appraisal records, and must exercise administrative discretion in doing so. The records must list property with enough certainty to identify it and must show the value of land and the value of improvements. Organizing land and improvements into accounts or parcels is one of the mechanisms the chief appraiser uses to carry out those duties.

The opinion then rejected the idea that a taxpayer can dictate the answer by rendering land and improvements separately. A rendition is just the owner's report of taxable property to the appraiser. Nothing in the Tax Code makes a rendition binding on the chief appraiser, and the Code expressly provides that the appraiser is not bound by the taxpayer's own valuation. Texas courts have said that property ordinarily should be appraised as rendered, but the opinion noted that no case had applied that rule to a taxpayer who rendered jointly owned land and improvements separately, and in any event the right to be appraised as rendered is not absolute. The opinion pointed to several exceptions: a taxpayer who rendered parcels as one unit in the past can be estopped from objecting to single-unit valuation; and where separate tracts are occupied and used together for one purpose, such as a homestead or a cotton mill, their separate identities merge and they may be valued together. Because a taxpayer is not entitled as a matter of law to have property appraised exactly as rendered, the chief appraiser must analyze the rendition against the facts and decide, in the first instance, how to organize the property into accounts or parcels.

Currency note

This opinion was issued in 2010. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The Tax Code provisions on appraisal records, renditions, and the chief appraiser's duties, and the Comptroller's appraisal rules, may have been amended since 2010. Confirm the current statutes and rules before relying on anything below.

Who this opinion affected (as of 2010)

Chief appraisers and appraisal districts: The opinion confirmed that deciding whether commonly owned land and improvements go on one account or several is the chief appraiser's administrative call, made by analyzing the rendition against the facts.

Property owners: The opinion told them that rendering land and improvements separately does not entitle them, as a matter of law, to separate parcel accounts. A rendition is a report, not a binding instruction to the appraiser.

Taxing units: The opinion left the organization of property into accounts in the hands of the appraisal office that serves them, rather than letting individual taxpayers structure the records.

Common questions

Can I split my land and my building into two appraisal accounts just by rendering them separately?
Not as a matter of right. The opinion concluded the chief appraiser decides how to organize commonly owned land and improvements into accounts or parcels, and a separate rendition does not bind the appraiser.

Doesn't the law say property is appraised as rendered?
Courts say property ordinarily should be appraised as rendered, but the opinion stressed that is not an absolute right and there are recognized exceptions, including where tracts used together for one purpose have merged identities.

Is a rendition binding on the appraiser at all?
No. The opinion noted nothing in the Tax Code makes a rendition binding on the chief appraiser, who is not even bound by the taxpayer's valuation of the property.

When can separate tracts be valued as one?
When they are occupied and used together by the owner for a single purpose, so their separate identities and values merge, as with a homestead or an industrial site.

Background and statutory framework

The Tax Code establishes an appraisal district in each county to appraise property for the taxing units in the district (Tex. Tax Code Ann. § 6.01(a)-(b) (Vernon 2008)). The chief appraiser is the chief administrator of the appraisal office and prepares the appraisal records listing all taxable property (id. §§ 6.05(c), 25.01). Those records must be in the form the comptroller prescribes and must include the value of land and the value of improvements (id. § 25.02(a)(5)-(6)), and property must be described "with sufficient certainty to identify it" (id. § 25.03); the Comptroller's rules require an appraisal card with an account number for each parcel (34 Tex. Admin. Code § 9.3001(b)(2) (2010)). Section 25.08 directs the chief appraiser to examine submitted information and notify owners whether they qualify for separate taxation of land and improvements. The opinion read these provisions together to make the organization of land and improvements into accounts an administrative function of the chief appraiser.

On renditions, a rendition is the owner's reporting of taxable property to the appraiser (SLW Aviation, Inc. v. Harris County Appraisal Dist., 105 S.W.3d 99, 101 n.1 (Tex. App.—Houston [1st Dist.] 2003, no pet.); Hill v. Stone, 421 U.S. 289, 292 n.1 (1975)). A person may render property he owns, on the Comptroller's model form (Tex. Tax Code Ann. § 22.01(a), (c) (Vernon Supp. 2009); 34 Tex. Admin. Code § 9.3031(b), (d)(1) (2010)). Nothing in the Tax Code makes a rendition binding on the chief appraiser, who is not bound by the taxpayer's valuation (Tex. Tax Code Ann. § 25.19(a)(2) (Vernon 2008); Harris County Appraisal Dist. v. Reynolds, 884 S.W.2d 526, 529 (Tex. App.—El Paso 1994, no writ)). Although property ordinarily should be appraised as rendered (Cherokee Water Co. v. Gregg County Appraisal Dist., 801 S.W.2d 872, 876 (Tex. 1990), citing Electra Indep. Sch. Dist. v. Waggoner Estate, 168 S.W.2d 645, 650 (Tex. 1943)), that right is not immutable. Exceptions include estoppel where the taxpayer previously rendered parcels as one unit (French Indep. Sch. Dist. v. Howth, 134 S.W.2d 1036, 1037-38 (Tex. 1940)) and the merger of separate tracts used together for one purpose (Moody-Seagraves Co. v. City of Galveston, 43 S.W.2d 967, 969-70 (Tex. Civ. App.—Galveston 1931, writ ref'd); City of Edinburg v. Magee, 97 S.W.2d 983, 984 (Tex. Civ. App.—San Antonio 1936, no writ)). Because a taxpayer is not entitled as a matter of law to appraisal exactly as rendered, the chief appraiser must analyze the rendition in light of the facts and determine how to organize the property into accounts or parcels.

Citations

Statutes:

• Tex. Tax Code Ann. §§ 6.01(a)-(b), 6.05(c), 22.01(a), (c), 25.01, 25.02(a)(5)-(6), 25.03, 25.08(a), 25.19(a)(2)
• 34 Tex. Admin. Code §§ 9.3001(b)(2), 9.3031(b), (d)(1) (2010)

Cases:

• SLW Aviation, Inc. v. Harris County Appraisal Dist., 105 S.W.3d 99 (Tex. App.—Houston [1st Dist.] 2003, no pet.)
• Hill v. Stone, 421 U.S. 289 (1975)
• Cherokee Water Co. v. Gregg County Appraisal Dist., 801 S.W.2d 872 (Tex. 1990)
• Electra Indep. Sch. Dist. v. Waggoner Estate, 168 S.W.2d 645 (Tex. 1943)
• Harris County Appraisal Dist. v. Reynolds, 884 S.W.2d 526 (Tex. App.—El Paso 1994, no writ)
• French Indep. Sch. Dist. v. Howth, 134 S.W.2d 1036 (Tex. 1940)
• Moody-Seagraves Co. v. City of Galveston, 43 S.W.2d 967 (Tex. Civ. App.—Galveston 1931, writ ref'd)
• City of Edinburg v. Magee, 97 S.W.2d 983 (Tex. Civ. App.—San Antonio 1936, no writ)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0790
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2010/ga0790.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

ATTORNEY GENERAL OF TEXAS

GREG ABBOTT

August 23, 2010

The Honorable Byron Cook
Chair, Committee on Environmental Regulation
Texas House of Representatives
Post Office Box 2910
Austin, Texas 78768-2910

Opinion No. GA-0790

Re: Combining real property and improvements on one parcel identification number or taxpayer account for appraisal district record purposes (RQ-0827-GA)

Dear Representative Cook:

You ask who determines whether land and improvements are combined on one single parcel identification number or taxpayer account for appraisal district record purposes when the land and improvements are under common ownership.

While we find no state law that directly addresses who determines whether land and improvements are combined in a single taxpayer account or parcel, we conclude on the basis of express provisions of the Tax Code that it is an administrative determination made by the chief appraiser. Section 25.02 of the Tax Code provides that "[t]he appraisal records shall be in the form prescribed by the comptroller" and must include, among other things, the appraised or market value of land and the appraised value of improvements to land. TEX. TAX CODE ANN. § 25.02(a)(5)-(6) (Vernon 2008). Section 25.03 provides that "[p]roperty shall be described in the appraisal records with sufficient certainty to identify it." Id. § 25.03. The chief appraiser, who is the chief administrator of the appraisal office, is charged with preparing the appraisal records and must exercise his administrative discretion in carrying out these and other functions set out in the Tax Code. See id. §§ 6.05(c) (providing that the chief appraiser is the chief administrator of the appraisal office), 25.01 ("the chief appraiser shall prepare appraisal records listing all property that is taxable in the district"); see also id. § 25.08 (requiring chief appraiser to examine information submitted and notify owners of property whether they qualify for separate taxation of land and improvements). Organizing land and improvements into taxpayer accounts or parcels is one mechanism the chief appraiser uses in carrying out these functions. Cf. 34 TEX. ADMIN. CODE § 9.3001(b)(2) (2010) (Tex. Comptroller of Pub. Accounts, Appraisal Cards) (requiring appraisal districts to prepare an appraisal card that includes for each parcel of residential or commercial real estate the account number of the property). [Footnote 1: The Tax Code establishes an appraisal district in each county and requires each district to appraise property for each taxing unit that imposes ad valorem taxes on property in the district. TEX. TAX CODE ANN. § 6.01(a)-(b) (Vernon 2008).] [Footnote 2: Request Letter at 1 (available at http://www.texasattorneygeneral.gov).] [Footnote 3: You note that subsection 25.08(a) provides that, with certain exceptions, "an improvement may be listed in the name of the owner of the land on which the improvement is located." TEX. TAX CODE ANN. § 25.08(a) (Vernon 2008) (emphasis added); Request Letter at 2 (asking "'who' may add the improvements to the account of the real property" under section 25.08(a)). Because we do not understand a reference to the listing of separate real property components to equate to a directive about how to organize the various components of real property into taxpayer accounts or parcels, we do not believe subsection 25.08(a) addresses your question.]

You suggest that a real property owner may, at his discretion, render the land and improvements separately such that they "would be classified [by the appraisal district] as separate parcels of property with separate account identification numbers for the appraisal district records." Request Letter at 2. You do not provide any legal analysis to support the proposition that the chief appraiser would be bound by a taxpayer's division of land and improvements as presented in a rendition or describe the authority under which a taxpayer would be authorized to make such a division. [Footnote 4: We find nothing in the Tax Code that provides that a rendition is binding on a chief appraiser. On the contrary, the Tax Code provides that a chief appraiser is not bound by the taxpayer's valuation of property in the rendition. See TEX. TAX CODE ANN. § 25.19(a)(2) (Vernon 2008) (providing that "the chief appraiser shall deliver a clear and understandable written notice to a property owner of the appraised value of the property owner's property if . . . the appraised value of the property is greater than the value rendered by the property owner") (emphasis added); cf. also Harris County Appraisal Dist. v. Reynolds, 884 S.W.2d 526, 529 (Tex. App.—El Paso 1994, no writ) ("[T]he statute now in force does not include any prohibition against correcting the appraisal rolls to include property omitted although previously rendered by the taxpayer.").]

"'Rendition' is the reporting of taxable property by the owner to the appraiser." SLW Aviation, Inc. v. Harris County Appraisal Dist., 105 S.W.3d 99, 101 n.1 (Tex. App.—Houston [1st Dist.] 2003, no pet.); see also Hill v. Stone, 421 U.S. 289, 292 n.1 (1975) ("To 'render' property for taxation means to list it with the tax assessor-collector of the taxing district in question."). The Tax Code provides that "[a] person may render for taxation any property that he owns" and prescribes the information that must be included in a rendition statement. TEX. TAX CODE ANN. § 22.01(a), (c) (Vernon Supp. 2009); see also 34 TEX. ADMIN. CODE § 9.3031(b), (d)(1) (2010) (Tex. Comptroller of Pub. Accounts, Rendition Forms) (providing that "[a] person rendering property shall use the model form adopted by the Comptroller of Public Accounts or a form containing information which is in substantial compliance with the model form" and adopting, among others, Form 50-141, entitled "General Real Estate Rendition of Taxable Property").

The Texas Supreme Court has broadly stated that "[o]rdinarily property should be appraised as rendered." Cherokee Water Co. v. Gregg County Appraisal Dist., 801 S.W.2d 872, 876 (Tex. 1990) (citing Electra Indep. Sch. Dist. v. Waggoner Estate, 168 S.W.2d 645, 650 (Tex. 1943)). However, you do not identify and we did not find any instance in which this rule has been applied to a taxpayer's rendering separately land, and improvements on that land, that are under common ownership.

Even if the general rule does apply to a taxpayer who renders land and improvements separately, the Texas Supreme Court has made it clear that the right to have property appraised as rendered is not an immutable right. Cherokee Water Co., 801 S.W.2d at 876. We find several exceptions to the general rule. A taxpayer is, for example, estopped from complaining about parcels being valued as a single unit when he himself had rendered the parcels as one unit in past years. See French Indep. Sch. Dist. v. Howth, 134 S.W.2d 1036, 1037-38 (Tex. 1940). Similarly, a taxpayer who renders parcels as a single unit will not be heard to complain that parcels are valued separately when he fails to appeal the valuation of all the relevant parcels. Cherokee Water Co., 801 S.W.2d at 876-77.

Additionally, a property will not be assessed and valued "in accordance with the description of the property owner's rendition [if] the property [is] being used in such a manner as to make it impossible to do so." Id. (citing Electra Indep. Sch. Dist., 168 S.W.2d at 650). For instance, Moody-Seagraves Co. v. City of Galveston involved two contiguous tracts of land that contained a cotton mill building and various related improvements. Moody-Seagraves Co. v. City of Galveston, 43 S.W.2d 967, 969-70 (Tex. Civ. App.—Galveston 1931, writ ref'd). The improvements were valued as a whole. Id. at 969. The court explained that "[w]hile the general rule requiring the separate valuation and assessment of separate pieces of property is well settled, . . . it is equally well settled that where separate pieces of property are occupied and used by the owner for one and the same purpose, and their separate identities and values become merged and consolidated by such use, no separate valuation and assessment is required." Id. at 970. Likewise, in City of Edinburg v. Magee the court explained that "where two or more tracts or parcels are occupied and used together by the property owner for a single purpose, such as a homestead, their separate identities become merged into one by such use, and they may be valued and assessed in solido." City of Edinburg v. Magee, 97 S.W.2d 983, 984 (Tex. Civ. App.—San Antonio 1936, no writ).

A rendering taxpayer is not entitled, as a matter of law, to have property appraised in accordance with a rendition. We conclude that it is the chief appraiser who must, in the first instance, analyze the rendition in light of the facts and determine how to organize the property into taxpayer accounts or parcels.

SUMMARY

The chief appraiser of an appraisal district determines whether land and improvements are combined into a single taxpayer account or parcel. A taxpayer's separate rendition of land and improvements does not change this conclusion.

Very truly yours,

GREG ABBOTT
Attorney General of Texas

DANIEL T. HODGE
First Assistant Attorney General

NANCY S. FULLER
Chair, Opinion Committee

Christy Drake-Adams
Assistant Attorney General, Opinion Committee