Payment Options

Tax Code Section 31.06 states the collection of tax payment may be paid with United States currency, check, money order, credit card or electronic funds transfer. With the exception of delinquent taxes, a tax collector may adopt that delinquent taxes be by United States currency, credit card or electronic funds transfer.

Tax Code Section 31.06 requires a collector to accept payment by credit card, but allows the collector to collect a fee for processing the payment not to exceed five percent of the amount of taxes and any penalty and interest being paid. The fee is in addition to the amount of taxes, penalties or interest.

Tax Code Section 33.06 allows the following persons to defer payment of taxes on their residence homestead:

• persons age 65 or older or disabled; and
• persons who qualify for a disabled veterans exemption under Tax Code Section 11.22.

The surviving spouse of an individual who deferred payment of taxes may continue to receive the deferral under specific circumstances described in Tax Code Section 33.06(f).

Additionally, heir property owners who qualify their heir property as a residence homestead are considered the sole owner of the property for purposes of deferred payment of taxes on the residence homestead of an elderly person, a disabled person or a disabled veteran.

Deferring the payment of taxes has an interest of 5% annually. Penalty and interest does not accrue until the property is no longer under the deferral agreement.

Tax Code Section 31.05 allows the governing body of a taxing unit to adopt discounts for persons who pay their taxes early. It allows for two types of discounts: October-November-December or 3-2-1.

A taxing unit may adopt the October-November-December discount option regardless of the date on which it mails its tax bills. This option allows for a three percent discount if the tax is paid October or earlier; a two percent discount if the tax is paid in November; and a one percent discount if the tax is paid in December.

A taxing unit may adopt the 3-2-1 discount option when it mails its tax bills after Sept. 30. This option allows for a three percent discount if the taxes are paid before or during the next full calendar month following the date the tax bills were mailed. A two percent discount is allowed if the tax is paid during the second full calendar month following the date on which the tax bills were mailed. A one percent discount is allowed if that tax is paid during the third full calendar month following the date on which the tax bills were mailed.

Tax Code Section 31.072 allows a collector for a taxing unit to enter into a contract with a property owner under which the property owner deposits money in an escrow account maintained by the collector to provide for the payment of property taxes collected by the collector on any property the person owns.

Tax Code Section 31.031 allows certain persons to pay homestead taxes in four equal installments without incurring penalty and interest. These persons include individuals who are disabled or age 65 or older; disabled veterans or their unmarried surviving spouses who qualify for an exemption under Tax Code Section 11.22; or partially disabled veterans with homes donated by charitable organizations and their unmarried surviving spouses. These taxpayers may make the first installment payment and request the installment agreement before the delinquency date.

Tax Code Section 31.032 allows homeowners, other certain residential property owners and certain small businesses whose property is located in a disaster area or emergency area and has been damaged as a direct result of the disaster or emergency to pay their taxes in four installments.

Tax Code Section 31.033 allows the governing body of a taxing unit to provide an installment payment option for certain businesses that own or lease real property and personal property that has not been damaged as a result of a disaster or emergency. More information on installment payments following a disaster or emergency can be found on the Property Taxes in Disaster Areas and During Droughts page.

If the delinquency date is Feb. 1, the first installment must be paid before the delinquency date and accompanied by notice to the taxing unit that the person intends to pay the remaining taxes in three equal installments. The second installment is due before April 1. The third installment is due before June 1. The fourth and final installment is due before Aug. 1.

If the delinquency date is a date other than Feb. 1, the second installment must be paid before the first day of the second month after the delinquency date. The third installment must be paid before the fourth month after the delinquency date. The fourth and final installment must be made before the sixth month after the delinquency date.

If the taxpayer fails to make an installment payment, including the first payment, before the applicable due date, the unpaid installment is delinquent and incurs a six percent penalty and interest in the amount of one percent per month until the delinquency is paid.

Written notice of intent to pay taxes in installments must be given with the first payment. Installment payments apply to all taxing units on the bill. Entering into an installment agreement is not an option after the first day of the first month after the delinquency date.

Tax Code 31.033 allows for certain businesses that own or lease real property and tangible personal property to make installment payments. This installment payment option must be adopted by the governing body of the taxing unit in order for the installment payment option to be used.

If the governing body of the taxing unit adopts the installment payment for disaster or emergency areas on real or tangible personal property, the installment agreement follows Tax Code 31.032.

Tax Code Section 31.03 allows the governing body of a taxing unit that collects its own taxes to allow a person to pay one-half of the taxes by Nov. 30 and pay the remaining one-half of the taxes by June 30 without incurring penalty and interest.

Tax Code Section 31.07 allows a collector to adopt a policy of accepting partial payments of property taxes. Acceptance of a partial payment does not affect the date that the tax becomes delinquent. Penalties and interest are incurred on the portion of the tax that remains unpaid on the date the tax becomes delinquent.

While the Tax Code provides for these options, they are rarely used.

Tax Code Section 31.035 allows the governing body of a taxing unit to permit persons 65 or older to perform service for the taxing unit in lieu of paying taxes due on the person's residence homestead.

Tax Code Section 31.036 allows the governing body of a school district to permit qualified individuals to perform teaching services for the school district at a junior high school or high school of the district in lieu of paying taxes due on the person's residence homestead.

Tax Code Section 31.037 allows the governing body of a school district to authorize a corporation or other business entity to permit a qualified individual employed by the business entity to perform teaching services in a high school or a junior high school for the school district in lieu of paying taxes due on property owned by the business entity.

While the Tax Code provides for these options, they are rarely used.