taxesProperty Tax Assistance

Tax Rate Calculation

Truth-in-taxation requires most taxing units to calculate two rates after receiving a certified appraisal roll from the chief appraiser - the effective tax rate and the rollback tax rate. 1 The type of taxing unit determines which truth-in-taxation steps apply.

Cities, counties and hospital districts may levy a sales tax specifically to reduce property taxes. 2 In which case, the taxing unit reduces its effective and rollback tax rates to offset the expected sales tax revenue.

Any taxing unit may increase its rollback tax rate for maintenance and operations (M&O) funds used to pay for a facility, device or method for the control of air, water or land pollution. 3 The taxing unit must provide its tax assessor with a copy of a determination letter from the Texas Commission on Environmental Quality stating the portion of the cost of the installation for pollution control. 4

Water districts generally do not come under provisions of the Tax Code, but instead are governed by the Water Code. Water Code Sections 49.107(g) and 49.108(f) provide that Tax Code Sections 26.04, 26.05 and 26.07 do not apply to taxing units created under Water Code Section 49.001 that levy and collect taxes under Water Code Section 49.107 or 49.108. Information regarding water district calculations can be found in the Water District Rollback Tax Rate section below.

By providing the information below, the Comptroller's office provides technical assistance and not legal advice. Taxing unit should consult legal counsel for interpretations of law regarding tax rate calculations.