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Texas Railcar Tax Requirements

Texas is a unique state for many reasons, including the taxation of railcars.  Unlike other taxing bodies, Texas does not have a state filing requirement; HOWEVER, Texas counties are allowed to value and tax railcars.  For this reason, it raises many questions for the railcar owner.  Questions such as:

• How do I know if I have to file?
• Where do I file?
• Is my railcar value allocated?
• How am I valued?


We’ve provided guidance below to answer these questions:How do I know if I have to file?
A railcar owner is required to report railcars that are located within any Texas county on January 1 at 12:01 AM.  These railcars may be at plant locations, repair facilities, stored in railyards, etc.  As part of the railroad filing requirements, the railroads are required to provide car marks and numbers for stored cars.Where do I file?
It is important for a railcar owner to determine where the equipment was located in Texas.  If the railcar was sitting idle at a location on January 1 at 12:01 AM, this car may necessitate a filing.  If the railcar was traveling at 12:01 AM, it does not meet the requirement for filing. Therefore, additional analysis should be completed for the railcars that may meet the filing requirement.Is my railcar value allocated?
The only railcars that would not be allocated are cars which are used within a plant.  For example, you might have equipment that is not suitable for interstate travel but can be used for storage of material.  If the railcars could be used for interstate travel, an allocation adjustment should be included with the rendition.  This also includes stored railcars.  Due to business operations within Texas, the allocation formula would most likely be Texas miles divided by Total System Miles.How am I valued?
Many of the county appraisal districts outsource the railcar valuations to companies that specialize in transportation and utility properties.  Their railcar valuation model is computed using a cost approach.  After the value of the reported cars is determined, the allocation percentage is applied.

Everything’s bigger in Texas – not always!  In the processing of Texas renditions, AllTranstek strives to make sure a railcar owner pays only its fair share of taxes.  We apply leading industry practices and conduct extensive analysis resulting in the best possible outcomes for our customers when filing their Ad Valorem Taxes.

If you’d like to learn more about how AllTranstek can assist you with the proper filing of Ad Valorem Taxes in Texas and in any other taxing body, contact us today!