IPTS Supports Legislation to Amend Allocation Due Dates and Late Filing Penalties for Barge Owners
There are two proposed bills before the Texas legislature that address changes to due dates and late filing penalties for barge owners. HB 1815 proposes to move the due date for allocation applications back to April 30th, which is consistent with when other exemption applications are due. SB 1013 proposes to amend the way penalties are calculated on late filed allocation and freeport exemptions.
Industrial Property Tax Solutions specializes in the marine transportation industry, representing about 60% of the boats and barges operating on the U.S. Inland Waterway System, and as such, files numerous allocation applications on behalf of our clients. John Woolard, President of IPTS, recently testified before the legislature in support of HB 1815 and SB 1013 on behalf of the Texas Association of Property Tax Professionals.
HB 1815 seeks to change the due date for allocation applications from March 31 to April 30th.
The allocation of a marine vessel employed in interstate commerce is only one component of the assessment formula. The other components, including index factors, depreciation rates, exemption percentages, and abnormal obsolescence adjustments, are all included in the rendition which is typically extended until April 30th; and the pollution control exemption application which is not due until April 30th. Furthermore, the allocation report, which is filed on a per vessel basis, must be tied to the vessel listing and adjusted for vessels that do not meet taxable situs rules in accordance with the TPTC. HB 1815 would provide a more feasible plan that would allow all required documentation to be due at the same time.
SB 1013 would provide for a more reasonable and equitable methodology for assessing penalties on late filed freeport and allocation exemptions. Current rules provide for a penalty of 10% on the tax liability difference between the unallocated value and the allocated value. This compares to the penalty for filing a late rendition, which is 10% of the tax on the assessed value. This formula often results in a property owner paying substantially more in late filing fees than they do in taxes owed. There is a need to assess a reasonable late filing penalty. SB 1013 amends the penalty calculation rate to 10% of the new taxes owned, providing a more reasonable minimum floor for late penalties.
Industrial Property Tax Solutions has more than 35 years of experience helping inland barge operators. If you feel you may not be addressing all opportunities for property tax savings, contact us for a risk-free analysis and situational assessment.