Texas Needs a ‘State Assessed Property Division’

Inland Waterways

Texas Needs a ‘State Assessed Property Division’

Posted on March 19, 2019

As the leading industrial property tax consultant to the Inland Marine Transportation Industry, our clients are assessed in multiple states throughout the Inland Waterway System based on their percentage of miles traveled within that state.

In all states, except Texas, the responsibility for determining fair market value and allocation of boats and barges (along with other interstate transportation companies, including railroads, airlines, trucking companies, pipelines, and power transmission lines) is vested in the State Tax Commission, Public Utility Commission, or State Comptroller’s Office.

As a result, there is no consistency in the valuation process in Texas from county to county or with other states. Given the confusing and ambiguous Texas allocation rules for boats and barges, there is no oversight or audit process to ensure all marine transportation companies are reporting their taxable vessels and being assessed at fair market value consistent with the provisions of the Texas Property Tax Code.

The property tax valuation of a barge line requires a thorough knowledge of the industry, the unique issues affecting fair market value, and the complex industrial asset valuation processes.

Unfortunately,Texas county central appraisal districts cannot afford to retain a barge industry expert. As such, disputes regarding the property tax valuation and allocation – in many cases involving millions in property tax liability – often end up before the appraisal review board whose members who are not familiar with the barge industry, the complexities of allocation rules, have no complex asset valuation experience, and have limited time frames (often only 15 minutes) to make a decision, resulting in the CAD’s valuation being sustained and forcing the barge company into an expensive and unnecessary lawsuit.

If Texas, like every other state that assesses barge companies, had a ‘State Assessed Property Division,’ it would ensure compliance with the TPTC Reporting and Allocation Rules, provide a more accurate determination of fair market value, and result in a more equitable distribution of allocated taxable value across multiple taxing jurisdictions.

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.