ATTORNEY GENERAL OF TEXAS
GREG ABBOTT
August 15,2011
The Honorable Scott Brumley Opinion No. GA-0881
Potter County Attorney
500 South Fillmore Street, Room 303 Re: Proper method of calculating interest and penalties
Amarillo, Texas 79101 on the residence homestead of an elderly or disabled
person whose property taxes have been deferred under
section 33.06 of the Tax Code (RQ-0960-GA)
Dear Mr. Brumley:
You ask about the proper method of calculating interest and penalties on the residence
homestead of an elderly or disabled person whose property taxes have been deferred under section
33.06 of the Tax Code. l See TEX. TAX CODE ANN. § 33.06 (West 2008). Your request relates to the
collection of an existing debt.
Section 33.01 of the Tax Code provides for the general assessment of penalties and interest
on property taxes that remain unpaid after their due date. Id. § 33.01(a).2 A "delinquenttax incurs
a penalty of six percent of the amount of the tax for the first calendar month it is delinquent plus one
percent for each additional month or portion of a month the tax remains unpaid prior to July l." Id.
If the tax is still delinquent on July I, it incurs a "total penalty of twelve percent," the maximum
penalty provided by statute. Id. Moreover, a delinquent tax accrues interest at the rate of one percent
per month or portion of a month for as long as the tax remains unpaid, for a maximum of twelve
percent per annum. Id. § 33.01(c).3
Section 33.06 of the Tax Code permits an elderly or disabled person to defer the collection
of taxes on his or her residence homestead. Id. § 33.06(a). This deferral continues in effect so long
as the taxpayer qualifies for the deferral by maintaining his or her residence as the homestead. Id.
If the individual dies, the deferral "continues in effect until the 181 st day after the date the surviving
ILeller from Honorable Scott Brumley, Potter County Attorney, to Honorable Greg Abbott, Attorney General
of Texas (Apr. 11,2011), https:!!www.oag.state.tx.us!opinlindex_rq.shtml ("Request Letter").
2The tax is delinquent unless paid prior to February 1. TEx. TAX CODE ANN. § 31.02(a) (West 2008).
3Additional penalties may be assessed by the appraisal district pursuant to sections 33.07(a) and 33.08(b). !d.
§§ 33.07(a), .08(b).
The Honorable Scott Brumley - Page 2 (GA-OSSl)
spouse of the individual no longer owns and occupies the property as a residence homestead,"
provided (I) the property was the residence homestead of the deceased spouse when he or she died;
(2) the surviving spouse was 55 years or more when the deceased spouse died; and (3) the property
was the residence homestead ofthe surviving spouse when the deceased spouse died. [d. § 33.06(f).
A number of benefits accrue to a person who qualifies for a deferral under section 33.06. The
interest rate on uncollected taxes is capped at eight percent per annum rather than the twelve percent
prescribed by section 33.01. [d. § 33.06(d). Furthermore, the penalty provided by section 33.01 "is
not incurred" during the deferral period. [d. 4 You indicate that one interpretation suggests that after
the deferral period expires, interest and penalties for the entire period of the delinquency are
calculated under section 33.01, "as if the deferral was never in place." Request Letter at 2. Another
view is that normal penalty and interest under section 33.01 are calculated until the deferral becomes
effective as well as subsequent to its termination, but that the calculation of interest-eight percent
per annum-and penalties-none-is preserved for the entire period of the deferral. [d.
In construing a statute, the objective of a court, and hence this office, is "to determine and
give effect to the Legislature'S intent." Leland v. Brandal, 257 S.W.3d 204,206 (Tex. 200S). A
court looks "first to the statute's language to determine that intent." !d. "If the statute's language
is unambiguous, its plain meaning will prevail." [d. Section 33.06 specifically provides that
"[iJnterest and penalties that accrued or that were incurred or imposed under Section 33.01 or 33.07
before the date the individual files the deferral affidavit under Subsection (b) ... are preserved."
TEX. TAX CODE ANN. § 33.06(d) (West 200S) (emphasis added). However, "[aJ penalty under
Section 33.01 is not incurred during a deferral or abatement period." ld. The clear implication is
that the lower interest rate imposed during the deferral period, and the absence of penalty during that
time, remains effective after the deferral period ends for the period of the deferral. It follows that
the final calculation of taxes owed must be based upon the higher rate and penalty for any period
before the deferral begins and after it ends. But for the period of deferral, section 33.06 prevails
when the final calculation is made.
We conclude that the calculation of interest and penalties on the homestead of an elderly or
disabled person whose taxes have been deferred is governed by section 33.06 of the Tax Code for
the entire period during which the deferral is effective.
4The additional penalty permitted by section 33.07 may be imposed "only if the taxes for which collection is
deferred or abated remain delinquent on or after the 181st day after the date the deferral or abatement period expires:'
Id. § 33.06(d).
The Honorable Scott Brumley - Page 3 (GA-OSS!)
SUMMARY
Calculation of interest and penalties on the homestead of an
elderly or disabled person whose taxes have been deferred is
governed by section 33.06 of the Tax Code for the entire period
during which the deferral is effective.
Very truly yours,
~
Attorney General of Texas
DANIEL T. HODGE
First Assistant Attorney General
DAVID J. SCHENCK
Deputy Attorney General for Legal Counsel
JASON BOATRIGHT
Chair, Opinion Committee
Rick Gilpin
Assistant Attorney General, Opinion Committee