BTA Business Personal Property Glossary

Arbitration Hearing – Property owners may file an arbitration if they are not happy with the results obtained from the appraisal review board hearing. The arbitration is filed with the State Comptroller’s office, then an arbitrator is picked for a scheduled hearing.  That decision becomes binding on both parties.

Book Value to Market Value Conversion Tables – Book Value to Market Value Conversion Tables are used when the original cost by year of acquisition of an asset is not known. 

Business Personal Property (BPP) – BPP is any property you own as of January 1 that is not attached to land, is used for business purposes, and to produce income. It generally includes computers, equipment, fixtures, furniture, inventory, machinery, supplies, vehicles, and other items in your place of business or related to your business that are moveable without causing damage to itself or the associated real property. BPP is taxable at the same rate as real property in Texas.

Comparable Properties – Properties with similar characteristics to the subject property and adjusted for any dissimilarity/differences. This is more than just the location of the properties. Characteristics considered by the CAD can be age, style, size and more based on the type of property.

Cost Approach of BPP – This type of approach is one of the three techniques appraisers use to determine property tax market valuation.  This approach involves estimating the replacement cost as if new, less depreciation of the asset.

County/Central Appraisal District (CAD) Evidence - Information provided by the appraisal district supporting their noticed market and equity property tax values.

Customer Evidence – Documents and photographs provided by the customer that may be used as evidence in the property tax protest process to support a lower property value. i.e. pictures of the property showing any type of negative influences or damages, estimates, invoices, construction costs, appraisals, etc.

Equity Value - One of two values the appraisal district calculates to use in its determination of a property’s appraised value. It is also known as Uniform and Equal and is calculated based on adjusted values of comparable properties in the appraisal district’s system. The appraised value of the subject must be equal to or less than the median appraised value of a reasonable number of comparable properties that are appropriately adjusted. The appraisal district must value all property in an equal and uniform manner.

Free Trade Zone (FTZ) - Free Trade Zone (FTZ) is a special area within a country where companies can import, manufacture, store, and export raw materials, components, and finished products without the usual tax burden. An FTZ is generally found in the vicinity of international airports and major seaports. Typically, a company’s inventory will be exempt from property tax if designated to be within the Free Trade Zone.

Freeport Exemption - Freeport Inventory Exemptions are granted under Section 11.251, Texas Tax Code and must be applied for annually by April 30th. This exemption applies to items in your inventory that  (1) are or will be forwarded out of Texas within 175 days of the date you acquire them or bring them into Texas; (2) are in Texas for assembling, storing, manufacturing, repair, maintenance, processing, or fabricating purposes. The exemption does not apply to oil, natural gas, or liquids or gases that are immediate derivatives of refining oil or natural gas.

Highest and Best Use - Highest and Best Use for a property is that use which will produce the highest net return to land.  The reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, and financially feasible and that results in the highest value.

Interstate Foreign Commerce (IFC) - Inventory located in Texas on January 1 that is not being manufactured, modified, assembled, or processed and is pre-committed to an out of state customer, may qualify for an IFC exemption.

Manage Litigation AppealA customer may choose to file a lawsuit in state district court if they are not happy with the value determined by the appraisal review board (ARB). BTA's litigation team can assist our customers with managing their judicial appeal through a lawyer of their choice. See the Litigation and Arbitration tab for more information,

Market Value - One of two values the appraisal district calculates to use in its determination of a property’s appraised value. It is the price at which a property would transfer for cash or its equivalent under prevailing market conditions. There are three approaches that can be taken to determine Market Value based on the type of property: Income Approach, Cost Approach, Sales Approach. For BPP properties the Cost Approach supported by the Sales Approach are typically used.

Net Book Value (NBV) – A business’ Net Book Value is original cost minus accumulated depreciation.

New Age Mix – In situations where most assets in a category have newer acquisition dates an obsolescence factor is applied to compensate for the age mix of the assets being out of balance. This schedule does not apply to vehicles.

RenditionA Rendition is a form that you use to report your Business Personal Property to your county appraisal district. The Texas State Property Tax Code requires business owners to file their renditions after January 1 and no later than April 15 every year. Failure to do so results in a 10% penalty.

Sales Approach This type of approach is one of the three techniques appraisers use to determine property tax market value.  This approach involves compiling available data on sales, sales offers, and property listing values of properties that are comparable to the property being appraised.  These values are adjusted for any dissimilarity/differences.  A value for the subject is then obtained by analysis of the comparable properties. 

Standardized Depreciation Tables – Depreciation tables used by the appraisal districts to determine the annual depreciation of an asset category based on year of acquisition. These may vary by appraisal district.

Uniform and Equal – The phrase ‘Uniform and Equal’ is interchangeable with ‘Equity Value’. The appraisal district must value and tax all property in an equal and uniform manner. This helps ensure that no single property or type of property pays more than its fair share of taxes.

Year of Acquisition – Refers to the date the asset was acquired and placed in service.