Can a small Texas Type C city charge a property tax?

Plain-English summary

Jefferson County Criminal District Attorney Bob Wortham asked the AG, on behalf of the mayor of the small City of Taylor Landing, a basic but consequential question: can a Type C general-law municipality levy an ad valorem property tax? The mayor reported that the city had a population of around 272 and provided various municipal services, and he was unsure whether the city had taxing authority, given an earlier opinion (JC-0291) holding that a political subdivision can tax only when the constitution or the Legislature has clearly granted it that power.

The AG started from that same principle: the power to tax belongs to the state, and a city has it only when the constitution or a statute "plainly and unmistakably" confers it, either expressly or by necessary implication. The Texas Constitution clears the way by letting the Legislature authorize municipalities of 5,000 or fewer people to levy an ad valorem tax. The puzzle was that the Tax Code provision granting municipal taxing authority, section 302.001, names home-rule cities and Type A and Type B general-law cities, but says nothing about Type C cities.

The answer came from a "borrowing" provision in the Local Government Code. Section 51.051 gives a Type C municipality the same authority as a Type A or Type B municipality, depending on its population. For a Type C city with 201 to 500 inhabitants (Taylor Landing's range), section 51.051(b) gives it the same authority as a Type B municipality, unless that authority conflicts with a Local Government Code provision specific to Type C cities. The AG found no such conflict, and noted a revisor's note explaining that the Tax Code did not need to list Type C taxing power precisely because of this borrowing provision. Reading the two statutes together, the AG concluded that section 302.001 of the Tax Code and section 51.051 of the Local Government Code expressly authorize a Type C general-law municipality to levy an ad valorem tax on property within its city limits.

Currency note

This opinion was issued in 2015. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis, and tax authority in particular is sensitive to statutory change. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What the opinion meant for those who asked

The City of Taylor Landing and other small Type C cities (as the opinion described it): The opinion described a Type C general-law municipality as expressly authorized to levy an ad valorem tax on property within its limits, through the combination of Tax Code section 302.001 and the borrowing provision in Local Government Code section 51.051. For a city in the 201-to-500 inhabitant range, the opinion described the city as having the same taxing authority as a Type B municipality, absent a conflicting Type C provision.

Property owners in a Type C city (as the opinion described it): The opinion described the legal basis on which such a city could impose a property tax. It did not address rates, exemptions, or the procedures for adopting a tax; it resolved only the threshold question of whether the authority to tax exists.

Common questions

Can a small Texas Type C city impose a property tax?
Yes, according to this opinion. The AG concluded that a Type C general-law municipality may levy an ad valorem tax on property within its city limits.

The Tax Code doesn't list Type C cities. How can they tax?
Through a borrowing provision. The AG explained that Local Government Code section 51.051 gives a Type C city the same authority as a Type A or Type B city depending on population, so it picks up the taxing authority that the Tax Code grants those city types. A revisor's note to the Tax Code confirms that is why the Tax Code did not need to mention Type C cities separately.

Does the size of the city matter?
Yes. The borrowing depends on population. For a Type C city with 201 to 500 inhabitants, section 51.051(b) gives it the same authority as a Type B municipality. The Texas Constitution separately allows the Legislature to authorize ad valorem taxes for municipalities of 5,000 or fewer people.

Where does a city's power to tax come from in the first place?
From the state. The AG reiterated that the power to tax belongs to the state and can be exercised by a city only when the constitution or the Legislature has clearly granted it, either expressly or by necessary implication.

Background and statutory framework

The question was whether a Type C general-law municipality may levy an ad valorem property tax. The governing principle, drawn from a prior opinion and Texas case law, is that the taxing power belongs to the state and a municipality may exercise it only where the constitution or a statute "plainly and unmistakably" confers it, expressly or by necessary implication (Tex. Att'y Gen. Op. No. JC-0291 (2000); Tex. City v. J.L. Martin Inv. Co., 222 S.W.2d 139, 141 (Tex. Civ. App.-Galveston 1949, writ ref'd); Vance v. Town of Pleasanton, 261 S.W. 457, 458 (Tex. Civ. App.-San Antonio 1924), aff'd, 277 S.W. 89 (Tex. Comm. App. 1925)).

The Texas Constitution permits the Legislature to authorize municipalities of 5,000 or fewer people to levy an ad valorem tax (Tex. Const. art. XI, § 4). Tax Code section 302.001 grants ad valorem taxing authority to home-rule municipalities and Type A and Type B general-law municipalities but does not address Type C municipalities (Tex. Tax Code Ann. § 302.001). Local Government Code section 51.051 supplies the missing piece by giving a Type C municipality the same authority as a Type A or Type B municipality depending on population; subsection 51.051(b) provides that a Type C municipality with 201 to 500 inhabitants has the same authority as a Type B general-law municipality unless that authority conflicts with a Local Government Code provision specific to Type C municipalities (Tex. Loc. Gov't Code Ann. § 51.051; § 51.051(b)). The AG found no such conflicting provision and pointed to the revisor's note to Tax Code section 302.001, which explains that the section did not need to specify Type C taxing powers because of the borrowing provision in section 51.051. The AG accordingly concluded that the two sections together expressly authorize a Type C general-law municipality to levy an ad valorem tax on property within its city limits (see also Tex. Loc. Gov't Code Ann. § 51.052 (authorizing certain Type C municipalities to adopt the power of a Type A municipality based in part on assessed valuation)).

Citations

Constitutional and statutory provisions:

• Tex. Const. art. XI, § 4 (Legislature may authorize ad valorem taxes for municipalities of 5,000 or fewer)
• Tex. Tax Code Ann. § 302.001 (municipal ad valorem taxing authority; revisor's note)
• Tex. Loc. Gov't Code Ann. § 51.051 (Type C municipality borrows Type A/B authority by population)
• Tex. Loc. Gov't Code Ann. § 51.052 (certain Type C municipalities adopting Type A power)

Cases:

• Tex. City v. J.L. Martin Inv. Co., 222 S.W.2d 139, 141 (Tex. Civ. App.-Galveston 1949, writ ref'd)
• Vance v. Town of Pleasanton, 261 S.W. 457, 458 (Tex. Civ. App.-San Antonio 1924), aff'd, 277 S.W. 89 (Tex. Comm. App. 1925)

Prior Attorney General opinions referenced:

• Tex. Att'y Gen. Op. No. JC-0291 (2000)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0028
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2015/kp0028.pdf

Original opinion text

Best-effort transcription from the official PDF. Minor extraction artifacts were corrected; the linked PDF is authoritative.

KEN PAXTON
ATTORNEY GENERAL OF TEXAS

July 13, 2015

The Honorable Bob Wortham Opinion No. KP-0028
Jefferson County Criminal District Attorney
1085 Pearl Street, 3rd floor Re: Whether a Type C municipality may
Beaumont, Texas 77701 levy an ad valorem property tax
(RQ-0006-KP)

Dear Mr. Wortham:

On behalf of the mayor of the City of Taylor Landing, Texas (the "City"), you ask whether a Type C general-law municipality may levy an ad valorem property tax. [1] In a letter attached to your request, the mayor states that the City has a population of 272 and provides various municipal services. Durkay Letter at 1. [2] The mayor asks whether the City may impose "a traditional ad valorem tax," but he is uncertain whether the City has that authority under the principles discussed in Attorney General Opinion JC-0291. Id. at 1-2. That opinion advises that the power to tax, which belongs to the state, can be exercised by a political subdivision only when the constitution or the Legislature has expressly granted taxing authority to the political subdivision. Tex. Att'y Gen. Op. No. JC-0291 (2000) at 4 (determining that a political subdivision may levy an ad valorem tax only if the constitution or the Legislature has "plainly and unmistakably conferred" such authority). While that opinion concerned a county development district, the same principles govern the taxing authority of a Type C general-law municipality. See Tex. City v. J.L. Martin Inv. Co., 222 S.W.2d 139, 141 (Tex. Civ. App.-Galveston 1949, writ ref'd) (stating that "municipalities are strictly limited in the exercising of their taxing power to the powers expressly granted them by the constitution or by statute, either expressly or by necessary implication"); Vance v. Town of Pleasanton, 261 S.W. 457, 458 (Tex. Civ. App.-San Antonio 1924) (stating that general-law municipalities "have no power to levy or collect taxes upon property within their territorial limits, except such power as may be expressly delegated to them by the Constitution or statutes"), aff'd, 277 S.W. 89 (Tex. Comm. App. 1925).

Under article XI, section 4 of the Texas Constitution, the Legislature may authorize municipalities with a population of 5,000 or less to levy an ad valorem tax. TEX. CONST. art. XI, § 4. Section 302.001 of the Tax Code grants ad valorem taxing authority to home-rule municipalities and Type A and Type B general-law municipalities without addressing the authority of Type C municipalities. TEX. TAX CODE ANN. § 302.001 (West 2015). But section 51.051 of the Local Government Code gives Type C municipalities the same authority as a Type A or Type B municipality, depending on population. TEX. LOC. GOV'T CODE ANN. § 51.051 (West 2008). [3] Subsection 51.051(b) of the Local Government Code provides: "The governing body of a Type C general-law municipality with 201 to 500 inhabitants has the same authority as a Type B general-law municipality unless the authority conflicts with a provision of [the Local Government Code] relating specifically to a Type C general-law municipality." Id. § 51.051(b). No provision of the Local Government Code that relates specifically to a Type C general-law municipality conflicts with the taxing authority that a Type C municipality may possess under section 302.001 of the Tax Code. As a revisor's note to section 302.001 of the Tax Code explains, it is not necessary for that section to specify the taxing powers of Type C municipalities because of the authority granted in the borrowing provision of Local Government Code section 51.051. See TEX. TAX CODE ANN. § 302.001 revisor's note (West 2015). Accordingly, section 302.001 of the Tax Code and section 51.051 of the Local Government Code expressly authorize a Type C general-law municipality to levy an ad valorem tax on property within its city limits.

SUMMARY

Section 302.001 of the Tax Code and section 51.051 of the Local Government Code expressly authorize a Type C general-law municipality to levy an ad valorem tax on property within its city limits.

Very truly yours,

KEN PAXTON
Attorney General of Texas

CHARLES E. ROY
First Assistant Attorney General

BRANTLEY STARR
Deputy Attorney General for Legal Counsel

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

WILLIAM A. HILL
Assistant Attorney General, Opinion Committee

[1] See Letter from Honorable Bob Wortham, Jefferson Cnty. Crim. Dist. Att'y, to Office of the Tex. Att'y Gen. at 1 (Jan. 20, 2015), https://www.texasattorneygeneral.gov/opinion/requests-for-opinion-rqs ("Request Letter"); Letter from Honorable John J. Durkay, Mayor, City of Taylor Landing, to Honorable Bob Wortham (Jan. 13, 2015) ("Durkay Letter") (attached to Request Letter).

[2] The 2010 decennial census lists the population of the City of Taylor Landing, Texas as 228. See U.S. Census Bureau, U.S. Dep't of Commerce, 2010 Census of Population, http://factfinder.census.gov.

[3] See also TEX. LOC. GOV'T CODE ANN. § 51.052 (West 2008) (authorizing certain Type C municipalities to adopt the power of a Type A municipality based in part on assessed valuation).