Untitled Texas Attorney General Opinion
GA-0973
| Tex. Att'y Gen. | Jul 2, 2012Background
- Webb County purchased real property in three transactions; seller taxes for the year of sale were prorated and deducted in two instances.
- Taxes for the year of sale remained unpaid after Webb County acquired the properties.
- All three properties were acquired for and used for a public purpose.
- Tax obligations attach personally to the owner and also as a tax lien on the property, but ownership by a political subdivision for public use can exempt from taxation.
- The County does not dispute owing base taxes pre-acquisition but disputes penalties and interest accrued after acquisition; petitioner asked whether penalties/interest can be charged to a tax-exempt governmental entity and under what authority.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Penalties/interest on delinquent taxes can be charged to a tax-exempt entity | Webb County argues penalties/interest may be imposed as fees | Abbott et al. contend exemptions may bar penalties/interest for property used for public purposes | Penalties/interest generally not charged on exempt property acquired by a political subdivision |
| Is Webb County treated like any other taxpayer for penalties | Webb County seeks treatment as a regular taxpayer | Exemption principles apply due to public-use status | Exemption generally precludes penalties/interest when property qualifies for exemption |
| Does tax-exempt status automatically attach at closing | Tax-exempt status may arise on closing date | Exemption depends on facts and use; not automatic by closing | Tax-exempt status may begin at closing, depending on facts; not universally automatic |
| Does one tax-exempt entity charging another require constitutional/statutory authority | Penalties/interest could be charged under authority between government entities | Authority not established; question not answered in final terms | Not necessary to answer beyond stating exemptions generally preclude penalties on exempt entities |
Key Cases Cited
- City of San Antonio v. Toepperwein, 133 S.W. 416 (Tex. 1911) (tax lien and penalties implications relative to public-use property)
- City of Marlin v. State, 205 S.W.2d 809 (Tex. Civ. App.-Waco 1947) (public-use exemption from taxation; taxation cannot be levied on public property)
- State v. City of San Antonio, 209 S.W.2d 756 (Tex. 1948) (reversing judgment; public property used for public purposes not subject to state/county taxes)
- Lubbock Indep. Sch. Dist. v. Owens, 217 S.W.2d 186 (Tex. Civ. App.-Amarillo 1948) (preexisting tax lien suspended by acquisition by state when then conveyed back; penalties/interest may be affected by exemption)
- A. & M. Consolo Indep. Sch. Dist. v. City of Bryan, 184 S.W.2d 914 (Tex. 1945) (test for determining public purpose eligibility for exemption)