Analysis of Montgomery County real estate tax records reveals wide inconsistencies in the way sand mines are appraised. Fifty three parcels of land in Montgomery County devoted to sand mining received seven different real estate tax classifications. Not one classification had anything to do with mining, though one parcel was classified as commercial land and two were classified as industrial.
36 West Fork Mines Received Six Different Classifications
Sampling 36 parcels of land used for sand mining on the West Fork of the San Jacinto revealed that properties were taxed as:
- A1 – Residential Single Family (1)
- D1 – Qualified Ag & Timber Land (6)
- E3 – Other Improvements over 5 acres Non-Ag (1)
- E4 – Vac Rural Land over 5 acres Non-Ag (24)
- F1 – Commercial (real) (1)
- F2 – Industrial (real) (2)
The numbers in parentheses represent the number of parcels found within each category. The sample included West Fork mines larger than 5 acres from US59 to just west of I-45 on the San Jacinto River’s West Fork that showed clearly visible mining activities on the Montgomery County Appraisal District website.
17 East Fork Parcels Classified 3 Different Ways
Yesterday, I posted about one San Jacinto East Fork/Caney Creek mine in Porter that was subdivided into 17 different parcels. The parcels were classified as:
- D1 – Qualified Ag & Timber Land (10)
- C1 – All Vac Res Lts & Vac Res Tr < 5 Ac (3)
- E4 – Vac Rural Land over 5 acres Non-Ag (4)
Real Estate Tax Roulette?
Altogether, the East and West Fork parcels represent a sample size of 53. Excluding undeveloped land reserved for expansion, several things stood out.
- Sometimes adjacent pieces of land that were being used in identical ways received different classifications.
- Areas dedicated to mining – often without any agriculture or timber – received ag/timber exemptions that dramatically lowered their taxes.
- None of the parcels appeared to be vacant, yet 27 parcels out of 53 (more than half) were classified that way.
- NOT ONE parcel of the 53 received a G3 Category classification for sand mines.
Not One Parcel Classified as “Subsurface Interests”
The G category in Texas Property tax includes “Real Property: Oil and Gas, Minerals and Other Subsurface Interests.” The Texas Property Clasification Guide states on page 10, “… real property defined as mines and quarries, should be reported as Category G3.”
The Texas State Controller’s website states: “Tax Code Section 23.01 requires … the same appraisal methods and techniques be used in appraising the same or similar kinds of property.”
Yet 53 parcels of land in Montgomery County devoted to sand mining received seven different classifications, not one of which had anything to do with mining.
Financial Impact of Inconsistencies
So how big of a deal is this? Yesterday, we saw the value of an ag/timber exemption compared to land classified as C1 and E4 on the East Fork. The actual tax due for the ag/timber land was $1.83 per acre. But the tax due on other land not receiving the exemption was $102.36 – 56 times more!
Today, I discovered similar inconsistencies on the West Fork.
- Edward Boetcher Jr’s 542-acre mine had an ag/timber exemption which meant he only had to pay $990 in tax last year, or $1.82 per acre, even less than Guniganti on the East Fork
- Hanson Aggregates paid $23,617.46 last year on a sand mine classified as industrial property. It included 396.480 acres. That made their tax $59.57 per acre – 33 times more than land with the ag/timber exemption.
- JR Development paid $37,764.34 on 568 acres classified as vacant rural land (E4). The tax equaled $66.49 per acre or 36 times more than land with the ag/timber exemption.
- For that land zoned as commercial, Scottie McDonald paid $2,180.18 on 22.1427 acres for tax/acre of $99.00. That’s 54 times more than land with the ag/timber exemption.
However, even $99/acre is still dirt cheap!
To see the list of who’s classified as what, download this Excel worksheet, West Fork MCAD Classifications.
I still need to investigate this more. Is there a policy in Montgomery County NOT to classify mines as mines? Why are subsurface interests being given away? Did the State do away with the G3 classification?
I’m sure the Montgomery County Appraiser can help us understand why none of the sand mines on the San Jacinto are classified as mines and why half of them receive ag/timber exemptions they apparently don’t qualify for.
Posted by Bob Rehak on September 27, 2018
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