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Property Tax Apprehension10/18
Built a modest (1800 sq. ft.) shop on my rural residential property in south central TX about a year ago, and now the local property appraisal folks want to measure it and "see how it's being used." Since they can measure the footprint from satellite images or their own aerial photos, I suspect something else is going on here.
If anyone has a similar setup, is your shop taxed as residential or commercial property? I think in order to be considered commercial under TX law, a facility has to be "open to the public," but my shop sits in a horse pasture, behind a tree line and locked gate, and is almost invisible from the road. There is no signage, I don't advertise office hours, and I virtually never have customers ask to actually visit the shop.
How close to your neighbors? Think someone complained about finish odor? With satellite imagining, it's tough to hide from the long arm of the law. A friend had the county inspector show up and tell him to clean up the pile of pallets and other debris. You can just barely see his lane from the road, let alone the homestead!
I am certainly not a property tax expert (and don't live in Texas), but I would believe that the definition of commercial property isn't whether you let people in the front door, but rather that your product is available for sale to the public. Don't confuse "retail" with "commercial", retail is definitely commercial, but commercial is not necessarily retail.
I have worked for commercial enterprises my entire life, and never had one that allowed the general public in the front door. That didn't make them not commercial, it made them not retail.
When you got the building permit did you tell them what you were going to do with the space? Did you let them believe it was a garage or personal space? Pretty hard to keep a business a secret from your neighbors. And one or more of them might be saying "Hey, that land isn't zoned for a business!" And the law is probably on their side. If you thought you were going to "get away with it" (knew better) than you can't complain when the law catches up to you.
Personally, I would let them in the door, take my lumps and move on. The alternative could be far worse.
Thanks for the insight, guys. Actually we are in an unincorporated area WAY beyond the suburbs, so there are no HOA or zoning issues (not even a noise ordinance) and, because the homes are on a minimum of 3 acres, my closest neighbor is a couple of hundred yards away, and he's a plumbing contractor with his own shop that is taxed as residential -- so he has some skin in this game too.
Also, we are among and surrounded by a good deal of ag activity, so noise and "aromas" come with the territory. A contract hay baler less than 1/4 mile from me has a shop on his homestead that's at least 3 times the size of mine, and he makes more noise than anybody.
I guess the bottom line is I'm more than willing to pay my fair share, but I balk at the idea of being classified under a tax rate and structure that was intended for heavy industry, shopping centers, hotels, etc.
If there are no zoning laws for your property, then I would have to believe you are in the clear. No law, no restrictions I would think (not a tax expert here though). I understand your apprehension, but I would still think it better to invite the inspector in, than hold him off. That's really the only way you will find out what the real reason for the visit is. And you will be able to talk to him face to face and present your thoughts to him. I think face to face is always better than letting them wonder, and/or looking like you are hiding something.
Remember the inspector is only doing his job, and one way or another, the job will get done. I think making it easier for him can only help your cause. Choose your battles wisely, is what my father always told me. There are some you just can't win.
I am sure local law allows him access, so go along with him, follow him around, talk about the weather, football, etc. Be open and cooperative. Do not deny if you are asked if you are in business.
Rural lawyers and accountants often conduct business from their homes, or an outbuilding built for that purpose. The county wants to encourage that somewhat, because they can get money from it forever.
Talk to your neighbors about what tax impact they have. I doubt you will see much since you are in rural and agricultural. I once one a rural property and we added a small cabin. Property taxes tripled - from $1.80 a year to $5.50 a year.
Update: Met with the appraiser. Turns out they just wanted to confirm sq. footage and the type of structure. Never asked what was inside or how the bldg is used. They didn't care if it was a hay barn or a meth lab. More proof of the old adage "90% of the stuff we worry about never happens."