Can a Texas county waive property taxes on a building used by a nonprofit but owned by an individual?

Texas AG Opinion JC-0134: Waiving Taxes on Individually Owned Property a Nonprofit Uses

Plain-English summary

A property owner in Cameron County had let a nonprofit organization use a building he owned since 1987 and had not paid county property taxes on it since 1988. The county wanted to know whether it could waive the back taxes, plus the penalties and interest that had piled up. The Cameron County District Attorney's office briefed the question, concluded the county could not do so, and asked the Attorney General to confirm. He agreed.

The opinion explained that the Tax Code lets a taxing unit waive penalties and interest on delinquent taxes only in a narrow situation: when an act or omission of the taxing unit, the appraisal district, or their agents caused the taxpayer's failure to pay on time, and only if the tax is then paid within 21 days of when the taxpayer knew or should have known of the delinquency (section 33.011). Neither condition was met. By the county's own account, the owner had received regular notice and knew the tax was owed, and the taxes had gone unpaid from 1988 forward. So no penalty-and-interest waiver was available.

The opinion then addressed the charitable exemption. Section 11.18 of the Tax Code exempts buildings and personal property of a qualifying charitable organization, but the statute requires the property to be owned by the charity, not merely leased, rented, or used by it. Because tax records showed the building was owned by an individual, section 11.18 did not apply. The bottom line: the county could not waive the taxes, penalties, or interest on individually owned property simply because a nonprofit occupied it.

Currency note

This opinion was issued in 1999. 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.

Common questions

Could the county waive the back taxes because a nonprofit used the building?
No. The opinion agreed with the county that it could not waive taxes, penalties, or interest on real property owned by an individual that houses a nonprofit organization.

When can a Texas taxing unit waive penalties and interest on late taxes?
The opinion explained that under section 33.011, a waiver is available only if an act or omission of the taxing unit or the appraisal district caused the taxpayer's failure to pay before delinquency, and only if the tax is paid within 21 days after the taxpayer knows or should know of the delinquency.

Why didn't the waiver apply here?
The opinion noted that the owner had received regular notice and knew the tax was owed, so the delinquency was not caused by the taxing unit, and the taxes had been unpaid since 1988 rather than paid within the 21-day window.

Doesn't the charitable exemption cover property a nonprofit uses?
No. The opinion explained that the section 11.18 exemption applies to property owned by the charitable organization, not property that is leased, rented, or otherwise used by it, so an individually owned building did not qualify.

Background and statutory framework

The opinion treated the matter as a straightforward reading of two Tax Code provisions, accepting the facts as described in the District Attorney's brief because the opinion process does not find facts. Section 33.011, as amended in 1999 (ch. 817), requires a taxing unit to waive penalties and authorizes it to waive interest on a delinquent tax only when an officer, employee, or agent of the taxing unit or the appraisal district caused or resulted in the failure to pay before delinquency, and the tax is paid within 21 days of the taxpayer learning of the delinquency; section 33.011(d) sets a six-month deadline for requesting a penalty waiver. Section 11.18, as amended in 1999 (ch. 138), exempts the buildings and tangible personal property that are owned by the charitable organization and (with a limited exception in subsection (b)) used exclusively by qualified charitable organizations. Because the delinquency was not attributable to the taxing unit and the property was owned by an individual rather than the charity, neither provision allowed the county to forgive the obligation.

Citations

Statutes and session laws:

• Tex. Tax Code Ann. § 33.011, § 33.011(a), § 33.011(d) (Vernon Supp. 1999)
• Tex. Tax Code Ann. § 11.18, § 11.18(a), § 11.18(b)
• Act of May 26, 1999, 76th Leg., R.S., ch. 817, § 1, 1999 Tex. Sess. Law Serv. 3449, 3450
• Act of May 6, 1999, 76th Leg., R.S., ch. 138, § 1, 1999 Tex. Sess. Law Serv. 596, 597

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/john-cornyn/jc-0134
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1999/jc0134.pdf

Original opinion text

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

OFFICE OF THE ATTORNEY GENERAL, STATE OF TEXAS
JOHN CORNYN

October 28, 1999

The Honorable Yolanda de Leon
Cameron County District Attorney
974 East Harrison Street
Brownsville, Texas 78520

Opinion No. JC-0134

Re: Whether a county may waive taxes on real property that houses a nonprofit organization, but is owned by an individual (RQ-0078-JC)

Dear Ms. de Leon:

You have asked this office whether Cameron County may waive taxes, penalties, and interest on real property that houses a nonprofit organization, but that is owned by an individual. A brief prepared by your office in connection with this request concludes that, absent any showing that the taxpayer's failure to pay the tax was caused by an act or omission of the taxing unit, such interest may not be waived pursuant to section 33.011 of the Tax Code. See Letter Brief from Honorable Yolanda de Leon, Cameron County District Attorney, to Office of the Attorney General, Opinion Committee (June 16, 1999) [hereinafter "de Leon Brief"]. The brief further concludes that taxes are not exempted under section 11.18 of the Tax Code on real property used by a nonprofit organization, but actually owned by an individual. See id. at 4. We agree.

As a preliminary matter, we note that this office does not find facts in the opinion process. Accordingly, we will assume for the purposes of this opinion that the facts in this situation are as described in the brief submitted to us.

As we understand it, a property owner in Cameron County has been letting a nonprofit organization use a building he owns since 1987, and has not paid county taxes on the building since 1988. It is these unpaid taxes, along with the attendant penalties and interest resulting from their delinquency, which the city is asking if it may waive.

Waiver of penalties and interest is covered by section 33.011 of the Tax Code, which provides in relevant part:

(a) The governing body of a taxing unit:

(1) shall waive penalties and may provide for the waiver of interest on a delinquent tax if an act or omission of an officer, employee, or agent of the taxing unit or the appraisal district in which the taxing unit participates caused or resulted in the taxpayer's failure to pay the tax before delinquency and if the tax is paid within 21 days after the taxpayer knows or should know of the delinquency.

Act of May 26, 1999, 76th Leg., R.S., ch. 817, § 1, sec. 33.011(a), 1999 Tex. Sess. Law Serv. 3449, 3450 (to be codified as an amendment to TEX. TAX CODE ANN. § 33.011). A request for a waiver of penalties under this section must be made within six months of the delinquency. See TEX. TAX CODE ANN. § 33.011(d) (Vernon Supp. 1999).

The plain language of the statute requires that the delinquency be somehow attributable to an act or omission of the taxing unit or its agents in order for interest and penalties to be waived. However, the brief you have submitted indicates that such is not the case here: "In this case it appears that the taxpayer has been given notice on a regular basis, and knows or should know that the tax is owed." de Leon Brief at 2. Moreover, a waiver is not available under the statute unless the tax is paid within twenty-one days of the time the taxpayer knows or ought to know of the delinquency. But in this case, you inform us, "The taxes owed to the county have not been paid from 1988 to the present." Id. Accordingly, waiver of penalties pursuant to section 33.011 is not available in this case.

Nor does section 11.18's exemption for the property of a nonprofit organization apply in this case. Section 11.18(a) provides in relevant part:

An organization that qualifies as a charitable organization as provided by this section is entitled to an exemption from taxation of

(1) the buildings and tangible personal property that:

(A) are owned by the charitable organization; and

(B) except as permitted by Subsection (b), are used exclusively by qualified charitable organizations.

Act of May 6, 1999, 76th Leg., R.S., ch. 138, § 1, sec. 11.18, 1999 Tex. Sess. Law Serv. 596, 597 (to be codified as an amendment to TEX. TAX CODE ANN. § 11.18) (emphasis added).

The statutory language plainly requires that the exemption is available for property owned by the charity, not leased or rented or held in some other form of tenure. But again, that is not the case here. Your brief informs us that "[t]ax records indicate that the owner of the property is an individual." de Leon Brief at 2. Because the owner of the property is an individual, section 11.18 of the Tax Code is inapplicable.

To summarize, we agree with your conclusion that Cameron County may not waive taxes, penalties, and interest on real property owned by an individual that houses a nonprofit organization.

SUMMARY

Cameron County may not waive taxes, penalties, and interest on real property owned by an individual that houses a nonprofit organization.

JOHN CORNYN
Attorney General of Texas

ANDY TAYLOR
First Assistant Attorney General

CLARK KENT ERVIN
Deputy Attorney General - General Counsel

ELIZABETH ROBINSON
Chair, Opinion Committee

James E. Tourtelott
Assistant Attorney General - Opinion Committee