Tax/Penalty & Interest Calculations

In September of each year, the governing bodies of the local taxing units decide what services they will provide and how much money they will need.  They adopt the unit budget and set the tax rate for the year that will provide the needed revenue.

Taxing units also have the authority to allow partial exemptions.  These exemptions reduce the taxable value of qualifying properties.  The General Residential Homestead, Over-65, and Disability Exemptions are partial exemptions which can be granted on your principal place of residence. They can only be claimed on one (1) piece of property in the state of Texas.

Calculation

Taxes are calculated by subtracting the value of any exemptions and, if applicable, the cap value from the homestead value of the property, and then adding any productivity or non-qualifying value.  This result, the taxable value, is then multiplied by the tax rate per $100.  The answer is then divided by 100 to arrive at the tax amount for the taxing unit.  This process is repeated for each taxing unit.

Limitation

If a unit has a limitation of taxes for the elderly or disabled, the calculated amount is compared to the limitation amount and the tax is the lower of the two (2) figures.

Delinquent Tax Collection Rates

The following schedule provides penalty and interest rates for use in calculating the total amount of penalty and interest due on delinquent tax bills.  The rates in this schedule do not apply to taxes paid under the split or quarter payment option, or to delinquent taxes in years where a successful rollback election was held.  Value or exemption changes by the appraisal district may postpone the delinquency date.

Accounts not under the split or quarter pay option will effectively become delinquent on February 1 of the following year the taxes were imposed and will increase as follows:

Calculation

If tax is paid in (month), add penalty + interest = total percentage:

February  6% + 1% =  7%
March     7% + 2% =  9%
April     8% + 3% = 11%
May       9% + 4% = 13%
June     10% + 5% = 15%
July     12% + 6% = 18%
August   12% + 7% = 19%
Sept     12% + 8% = 20%
October  12% + 9% = 21%
November 12% + 10% = 22%
December 12% + 11% = 23%

Business Property Tax

Due to a change in the statute, participating jurisdictions may elect to turn over their delinquent business property taxes to their delinquent tax attorneys for collection on April 1 of the year the taxes became delinquent, and are subject to an additional penalty of 15% or 20% of the taxes, penalty, and interest due.  All other past due taxes are surrendered for collection on July 1 of the year the taxes became delinquent and are also subject to the additional 15% or 20% collection fee.

Quarter Payment Plan Late Payment

It is important to note that a late payment under the quarter payment plan incurs a penalty of 6% and interest at the rate of 1% per month until paid.