18.32 State Tax Liens - Other Than Liens Directly On

18.32 State Tax Liens - Other Than Liens Directly On Real Property


In General

In addition to liens created by property taxes which are based on the value of real property, the land may be subject to other tax liens which may eventually attach to real property.

Examples of these liens are: franchise taxes, gift taxes, income taxes, employment security taxes, sales taxes, motor fuel taxes, motor vehicle sales tax, cigarette tax, manufactured housing sales and use tax and inheritance tax.

Generally, any unpaid tax of this nature becomes a lien on any property owned by the person or entity liable for its payment upon the recording in the County Clerk’s office of a notice of tax lien.

·  Notice Requirements

The notice shall include the following:

¨  The name and address of the taxpayer;

¨  The type of tax that is owing;

¨  Each period for which the tax is claimed to be delinquent;

¨  The amount of tax due for each period excluding the amount of any penalty, interest, or other charge; and

¨  Other information the comptroller deems proper. (Tax Code Sec. 113.002)

·  Effect of Notice

One tax lien notice is sufficient to cover all taxes of the same nature that may accrue after the filing of the notice. (Tax Code Sec. 113.006)

·  Applicability of Lien Before Filing

No lien of this type is effective against third parties before the filing, recording, and indexing of the lien in the county where the property is located. (Tax Code 113.101)

·  Suit Limitations/Tax Lien; Period of Validity

¨  At any time when three years after (a) the last recording of a lien, or (b) a deficiency or jeopardy determination, the comptroller may bring an action to collect any delinquent amount together with penalties and interest. (Tax Code Sec. 111.202 & Sec. 151.607)

¨  However, the state tax lien on personal property and real estate continues until the taxes secured by the lien are paid. (Tax Code Sec. 113.105)

·  Extension of Limitations Period

The comptroller and taxpayer may agree in writing to collection of taxes after the limitation period. Such agreement must be made prior to the expiration of the limitations period. (Tax Code Sec. 111.203)

NOTE: There is no provision for filing and recording an agreement to extend.

·  Seizure and Sale of Property

The comptroller may seize and sell at public auction non-exempt real and personal property within three years after a taxpayer becomes delinquent. (Tax Code Sec. 111.017)

When real property is sold, a deed will be given. The deed vests in the purchaser the interest or title held by the person liable for the amount of the tax. (Tax Code Sec. 111.019)

Company Policy: Tax liens of this type (Title II) which are filed for record must be paid and a release obtained before title insurance may be provided without exceptions to such liens.

A policy issuing agent or office may rely on the three year statute of limitation for enforcement of the tax lien, provided that a determination is made that an unrecorded agreement to extend the time period for payment has not been executed.