A Texas appellate court recently affirmed the dismissal of the city of Austin’s lawsuit claiming commercial and vacant property are being undervalued during property tax appraisals. Austin sued the Travis Central Appraisal District after an appraisal review board in Travis County denied the city’s formal challenge to what it said was the systematic undervaluation of two classes of vacant and commercial properties. The city alleged the state’s property tax appraisal system is unconstitutional and creates two different standards of assessment, resulting in arbitrary and unequal taxation.
In Austin v. Travis Central Appraisal District et al., case number 03-16-00038-CV, the Third Court of Appeals said, though the city does have statutory standing to challenge the level of appraisals of any category of property in the district, Austin had effectively foregone the administrative determination of its challenge, depriving the district court of jurisdiction. The court said the city could bring its concerns over tax policy to the attention of the Legislature, but that Austin “has no standing to pursue such a debate in this court.” “The city’s constitutional challenge is a transparent attempt by a taxing unit to debate an issue of tax policy that is within the prerogative of the Legislature, rather than the judiciary,” the court said.
Austin filed the suit in August 2015, two months after the appraisal review board’s ruling, also naming as defendants several individual property owners it claimed held undervalued properties. It argued commercial and vacant properties weren’t being appraised at market value because property owners aren’t required to disclose real estate sales data, which the city said created an imbalance in information available for different properties.