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How do you become tax exempt

how do you become tax exempt

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Determine your status. The Texas Comptroller of Public Accounts is a good place to start. If you are just looking to declare a rural homestead, the process is straightforward. You may be able to declare as much as 200 acres as your rural homestead, which protects your land from creditors in most cases. Declaring the allowable homestead exemption does not disqualify you from the agricultural use or open-space appraisal declarations.

Determine your eligibility. If you are a full-time farmer and your land use produces the bulk of your income, you can apply for the Agricultural Use Appraisal. The appraiser will base the decision on your status as the landowner as well as the land. If you will use the land for agricultural purposes that do not provide your primary source of income, you will apply for an Open-Space Appraisal. The land's designation within the last three to five years can affect your appraisal outcome, so ask for guidance to determine eligibility.

Fill out and submit your application. Get the forms from the Texas Comptroller of Public Accounts or your county government office. You will need to

submit documentation proving previous land use, even if you weren't the owner, as well as income, the extent of which depends on your application type. Your county or state officials will tell you what documentation you need. Be aware of the application deadline. Some of your submitted information may be public record.

Follow up as requested or necessary. Upon receiving your application, the appraiser will approve, disapprove or deny the application. If the application is disapproved you will need to provide additional information that will allow the appraiser to either approve or deny the application. You will have a specified amount of time to submit the requested information.

Keep track of annual requirements to maintain eligibility. For agricultural use, you will need to file an application each year. The open-space designation is valid until you or a subsequent landowner changes its use or changes categories of use, such as a switch from wildlife management to offering a grazing lease for your neighbor's cattle. Failing to file the application or to report a change in the land use can result in serious tax consequences, so stay in contact with your county tax office.

Category: Taxes

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