The study alleges that TCAD is not assessing enough property tax against commercial businesses in Austin. The study indicates that due to a number of factors, primarily Texas being a nondisclosure state and also the threat of paying attorney’s fees if they assess a commercial property above the median value, TCAD is systematically undervaluing commercial properties throughout the city at 27% below market value, and underdeveloped commercial land by 76%. While this may seem great for commercial real estate owners, it shifts the tax burden to private homeowners and renters by lowering the overall tax pool and thus increasing the percentage homeowners and renters are responsible for.
Austin has requested that, among other things, TCAD should be ordered to follow “generally accepted appraisal methods and standards” when assessing property values. In response, TCAD released its own report on May 26, 2015. This report sharply questions the Austin study’s purpose and design, methods, and even arithmetic. It alleges that Austin’s study is vague, potentially misrepresented, and paints an inaccurate picture.
The district court has its hands full attempting to logistically juggle all of the defendants Austin’s suit names (all individual property owners who own C1 vacant land or F1 commercial real property within Travis County). In the nearly 40 years since the creation of the CAD system, no taxing unit has attempted to launch mass litigation against its own taxpayers. Austin’s lawsuit is poised to set legal precedent for not only Travis County, but the entire state of Texas.
About Five Stone
Five Stone is a full-service tax firm serving U.S. taxpayers worldwide. We deliver a comprehensive approach to tax planning, preparation, compliance, and consulting through a suite of integrated services.