The McTexLaw Email Alert for June, 2003
| NOTE: this Email Alert is being distributed in early July, beyond the Governor’s legislative deadline for signing or vetoing legislation. If you only read one Email Alert this year, this is the one to read. The recently completed legislative session took us on a wilder ride than normal, even by Texas standards. Amidst the normal activity, the Democrats scampered across the Red River and the Comptroller initially refused to certify the budget. Plus, the Legislature has already been called into the first of what may be several special sessions. But now that the dust has settled from the regular session, I have compiled my two “Top Ten” lists of new laws, one for business owners, one for real estate. Check them out to quickly see how some of the most important bills passed into law will impact you and your business. Also visit our 2003 Legislative Tracking Center, which has been completely revised. We removed all the dead bills and added more of the new laws on these topics:
In all, there are 58 new laws on our tracking center, for your quick reference. But wait, there’s more! For those of you who want an even stronger dose of new laws, we have posted on our website for download the hot-off-the-presses “Legislative Update–Significant Bills of the 78th Legislature Affecting Real Estate, Lending, and Other Commercial Matters”, report of the Legislative Committee, Real Estate Division of the Real Estate, Probate and Trust Law Section of the State Bar of Texas. If you look closely enough you’ll find I’m a member of this committee and wrote part of that paper, along with several other very dedicated attorneys across the state. New on The McTexLaw Business Owner’s Resource Center:
New on The McTexLaw Commercial Real Estate Resource Center:
THE TOP 10 BILLS INTERESTING FOR ALL THE WRONG REASONS This is what’s known as a “teaser”–this Top 10 List is coming in the next Email Alert, and it’s better than anything you’ll see on David Letterman. Yes, truth is stranger than fiction. When you read about these bills, you have to wonder what inspired them, and we’ll try to supply the answers. So watch for the McTexLaw Email Alert for July, and anticipate a jolly good laugh or two, or ten if we did our job right. VOLUNTARY TAXES Are you volunteering to pay more in taxes than the law requires? The State of Texas imposes at least two taxes which, with proper attention and diligence on the part of the taxpayer, can be reduced, if not eliminated altogether. First is the franchise tax. The Texas Franchise Tax is basically an income tax on certain businesses. Corporations and limited liability companies pay it. Limited partnerships do not. Professional corporations and professional limited liability companies pay it. Professional associations do not. All of these business entities offer limited liability protection, and there are very few businesses that cannot be operated as a limited partnership (or PA for professional entities). Converting your business from a limited liability company or corporation to a limited partnership eliminates the franchise tax. So if your business pays franchise taxes, the question to ask your CPA or lawyer is, why are you volunteering to pay this tax? There may be a good reason, but chances are with proper planning and structuring, elimination of those franchise taxes is possible. The second “voluntary” tax is the ad valorem property tax. Now, I’m not talking about real property taxes, because real property values tend to appreciate. But businesses are also assessed ad valorem taxes for their “business personal property.” And most business personal property, from desks and computers to vehicles, and everything in between, depreciates in value every year, especially their “fair market value” which is technically the value that’s supposed to be assessed. So it comes to pass that, in many instances, the appraisal district keeps gradually increasing the assessed value of these sorts of assets for taxing purposes, while their fair market value actually declines, until you protest that value. Remember–it’s not the appraisal district’s job to reduce your taxes, it’s your job. By simply neglecting to keep an eye on this, businesses volunteer to pay more tax than the law requires. Also in particular, note that if you’ve recently purchased a business or a tract of real estate where another business used to operate, the appraisal district’s numbers may have no relationship to your reality. The quickest way to check the accuracy of the appraisal district’s valuation is to compare your business’s value of its personal property, which is probably listed on the business’s financial statements, to the appraised value assessed by the appraisal district. If your number is lower, a protest should be considered. Watch the assessment notice for your deadline to file a protest, though, and make sure you get any needed protest filed timely. But even if you miss that deadline, you can file that protest any time until the appraisal district’s records are “certified”, which is usually mid-July, if your business personal property is more than one-third overvalued. On behalf of some of our clients we are working in conjunction with a law firm whose expertise is property tax valuation protests (Brusniak McCool & Blackwell, PC), and we are looking at the probability of realizing some substantial property tax savings for those clients. And that’s money those clients can keep in their own pockets, which really comes in handy in this economy. So again I ask you–are you volunteering to pay more taxes than the law requires you to pay? If so, now’s the time to do something about it. WE MOVED! Looking at it from this side of the moving truck, things don’t seem quite so bad. As of June 1, 2003, and with a stunningly few number of problems, our offices were “relocated.” Our new contact information is: McPherson
& Associates, PC It was done not a minute too soon, for a few weeks later the kids hit here for the summer. And any of you with young ’uns knows exactly what I mean because right about now you have this very distinct grin on your face. REFERRAL NETWORKS Your new client referrals are a big part of our continued success, and the same is true about this newsletter. Please take a moment to think about friends and colleagues you know who might enjoy receiving our Email Alerts and forward this to them. Individual subscription information is below. ARCHIVES This Email Alert and all prior McTexLaw Email Alerts, are archived at www.mctexlaw.com/ for your convenience. Feel free to browse through any newsletters you may have missed. SUBSCRIPTION MANAGEMENT
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