Property taxes are one of the most stable revenue streams available to local governments in Texas. Assessment and collection of these taxes is governed by the Texas Property Tax Code. Taxes are assessed annually based on property values as of January 1st and are due by January 31st of the following year. Sugar Land has a very high collection rate for property taxes, and budgets revenues at 99.5% of the tax levy each year. With that, there are a small number of accounts that remain unpaid, and a lien or lawsuit may be filed to ensure collection of taxes owed.

The City has contracted with Fort Bend County for billing and collection of City property taxes since 2007. This arrangement has worked well; the Fort Bend County Tax Assessor/Collector maintains the individual property tax accounts, collects taxes on behalf of the City and deposits payments made into the City's accounts. By contracting this service, the City minimizes collection expenses and facilitates payment of all property taxes through one agency.

The City recently received a request from the Fort Bend County Tax Assessor/Collector to approve write-offs of property taxes that are more than 10 or more than 20 years delinquent under Section 33.05 of the Property Tax Code. The Texas Property Tax Code places limits on collection of taxes for both real and personal property, including time constraints for filing of lawsuits to collect delinquent taxes.

If a lawsuit has not been filed and taxes are delinquent as shown below, the delinquent taxes must be written off by the tax collector:

• Personal Property: more than 10 years
• Real Property: more than 20 years

This is the first year the City has received a request to approve such a write-off of delinquent tax accounts from the County. This write off covers tax years 2004-2007 for the City of Sugar Land, Fort Bend MUD #1 and Fort Bend MUD #69, totaling $29,171.11 as shown below:

 
The City budgets for property tax revenues at 99.5% of the total levy. The amounts listed above are well below the amounts estimated as uncollectible by staff. Staff reviewed this request with the Council Finance/Audit Committee at their July 19, 2018 meeting and recommends City Council approve the County's request to write off delinquent property tax accounts totaling $29,171.11 for tax years 2004-2007.