TX SIT Processing

SIT Processing in PACS

You can use special inventory tax (SIT) features in PACS Appraisal and PACS Collections to post sales and payments for SIT properties. You can also remove sales and payments and process sales increases from end-of-year declarations.

Further, you can apply escrow to a single property record, or you can apply escrow to multiple properties at the same time.

Lastly, use special inventory reports to review SIT escrow and payment data.

About the Special Inventory Tax

Texas law requires that dealers’ inventory of heavy equipment & vehicles be appraised based on their prior year’s total sales. Each January, dealers must file with the county appraisal district an inventory declaration listing the total value of inventory sold during the prior year. Also, the dealer must file with the county tax office a monthly form listing the inventory sold, and prepay their property taxes for each vehicle and/or piece of equipment. (Sales between dealers, sales that qualify as fleet transactions, and dealer financed subsequent sales are not subject to SIT.)

The current year’s tax bills are received in October.

The Special Inventory Tax and the Appraisal District

Appraisal Districts must report the dealer data as follows:

• Motor vehicle dealers are reported to Texas Department of Transportation.
• Vessel dealers are reported to Texas Parks and Wildlife Department.
• Manufactured housing retailers are reported to Texas Department of Housing and Community Affairs.

Special Inventory Tax Calculations

The inventory’s market value is an average of the regular monthly sales from the preceding year: Current Year’s Market Value = inventory sales amount / 12

The current year’s tax bills are based on this market value and the current year’s tax rates.

The taxes are assessed as follows:

• Aggregate tax rate = sum of the prior year’s tax rate for each taxing unit

  Example of 20XX tax rates

  County tax rate	= $.40
  School tax rate	= $1.40
  City tax rate	= $.60
  Special district tax rate	= $.05
  Aggregate rate	= $2.45 (per $100 of value)

• Aggregate monthly tax rate = Aggregate tax rate / 12
  • Example: $2.45/12 = $0.20417 per $100 of value.
• Tax rate per $1.00 of sales price = Aggregate monthly tax rate / $100.
  • Example: $0.20417/$100 = $0.0020417 rate per $1.00 (unit property tax factor).
• Value of the equipment or vehicle sale X Unit property tax factor
  • Example: $20,000 x $0.0020417 = $40.83 in tax prepayment.

    (The dealer should subtract any value of equipment or vehicle manufacturer’s rebate and/or trade-in value from the value of the sales price.)

The monthly tax prepayment to the tax office is calculated by applying the unit property tax factor to the value of each piece of equipment or vehicle sold in a month. A copy of the monthly tax statement is sent to the county appraisal district. The dealer pays all other tax bills to the taxing units.

The county tax assessor-collector pays the inventory tax bill to the taxing units from the escrow account after receiving the dealer’s December payment. The county tax collector pays the annual inventory taxes from the dealer’s escrow account and bills the dealer for any additional amount due.

Penalties

Not filing an inventory declaration with the appraisal district by January 31 is a misdemeanor subject to fines up to $500/day past the deadline, and $1,000 per month past the deadline, and additional penalties of $1,000 per month (or portion of a month not paid).

Purpose

Use this procedure to:

• Set the year that defaults for property searches in PACS Appraisal.
• Set the year that defaults in the Select Year field of a SIT property record under either the SIT Escrow tab (PACS Collections) or SIT Salestab (PACS Appraisal).

Note:  By completing this procedure, you will not have to choose a year other than the default year from the Select Year drop-down list every time you enter a SIT payment.

Procedure

1. In PACS Appraisal or PACS Collections, choose Tools > User Settings > Set Property Search Settings.

   The Property Search Settings – System dialog box is displayed.

   

2. Complete the following options as required and then click OK:
   • Default Property Search Year – The default year for property searches in PACS Appraisal.
   • Default SIT Year – The year that defaults in the Select Year field of a SIT property record under the SIT Escrow tab (PACS Collections) or SIT Sales tab (PACS Appraisal).
   • Included Deleted and Reference Properties – Includes deleted and reference properties in property search results.
     

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     Note:  We recommend that PACS Collections users select this check box in order to view any taxes due on property records that have been deleted.

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   • Include Current Year when searching in future year– When selected, the system returns properties for both the current year and the future year.

Purpose

Use this procedure to post monthly sales data for properties on which special inventory tax (SIT) is assessed.

Notes:

• The average of sales from the previous year’s 12-month reporting period determines the appraised value for the following year, plus any segment value in that following year. (For example the total sales report in 2007 divided by the number of months reported equals 2008 appraised value if there is no additional personal property segment value for 2008.)
• Profits from equipment rentals or leases should be recorded as they are included in property’s total taxable sales.

Zero Monthly Sales and Missing Sales Data

The appraised value of a SIT property is the result of total sales for the year divided by the number of months for which data was submitted, provided that there is no personal property segment with value on the property.

Therefore, when a dealer reports a month without sales, it is important for you to post sales in the amount of zero (0). Otherwise, the dealer’s appraised value will be higher than it should be.

In contrast, if the dealer does not submit any data for a month, do not post any sales for that month.

Prerequisites

• The user right Edit SIT Sales Data is assigned to your user ID. For information about setting user rights, see the User Rights User Guide.
• For PACS Appraisal, the Special Inv. Acct checkbox is selected on the Summary tab of the property record. When this check box is selected, the SIT Sales tab is enabled.

  

Procedure

1. If you are in PACS Collections, double-click the SIT Escrow tab. Or, if you are in PACS Appraisal, double-click the SIT Sales tab. Then review the following fields:
   • SIT Declaration Filed Date – The date that the annual dealer declaration was filed with the appraisal district.
   • Aggregate Tax Rate – The total of all the tax rates for all the entities attached to the property.
   • UPTVF – The unit property tax value factor (UPTVF), which is calculated by dividing the aggregate tax rate by 12 and by 100.
   • Total Sales – The total sales that have been posted for the year.
   • Total Due – The total escrow amount due based on the sales amounts entered. If any sales are entered after the 10th of the month following the report month, the total due includes penalties.
   • Total UPTV Paid – The total SIT escrow paid for this year.
   • Total Tax Due – The total of the tax bills for the property in the given Select Year.
   • Total Pen/Fines – The total of all penalties and/or fines that have been paid on the property.

     

2. Select the month you want to post a sale for. Then click Post Sale.

   The SIT Sales for Property dialog box is displayed.

3. Enter sales data by completing the following fields as required.
   • Post Date – Cannot be changed; the system uses the current date.
     

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     Note:  The filing date controls penalties on SIT sales.

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   • Filing Date – The date the dealer filed the sales statement. (Note:  This date can be changed. If the filing date is changed to a date after the 10th of the next month, with the net inventory value greater than zero, it will generate a 5% penalty. If it’s changed to a date after the 20th of the next month, it will generate a 10% penalty.)
   • Units Sold – The total number of equipment/vehicles sold.

     To enter detailed information about the units sold, do the following (this is not required a required step):

     a. Click Units Breakdown to display the Units Breakdown dialog box.

     b. Enter the net inventory units, fleet units, dealer units, and/or subsequent units sold during the month.

     c. If you need to carry over the total units rather than just the net inventory units, select Carry Total Units number over to the sale. Otherwise, only the net inventory will be used in the UPTV calculation.

   • Net Inventory – The dollar value of equipment/vehicles sold during the month.

     To enter details of the equipment/vehicles sold, do the following (this is not a required step):

     a. Click Sales Breakdown to display the Sales Breakdown dialog box.

     b. Carry out Steps (b) and (c) explained under Units Sold above.

4. Continue to enter sales data by reviewing and/or completing the following fields as required:
   • UPTVF – The unit property tax value factor.
   • UPTV – The unit property tax value, which is calculated by multiplying the net inventory and the UPTVF.
   • Late Filing Penalty – Automatically calculated when the filing date is after the 10th of the month.
     

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     Note:  If you need to change the late filing penalty, either select Override and enter the amount, or change the file date.

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   • Additional Fines – Additional fines that need to be assessed to the dealer.
   • Amount Due – Automatically calculated by adding the UPTV, late filing penalty, and additional fines.
5. If required, enter comments in the Comments pane.

Next Steps

If you work in a shared PACS appraisal and collections system and you have a payment for the tax due, you can continue by posting the payment. For more information, see Posting a SIT Payment for a Single Property.

Procedure

1. Post a special inventory tax (SIT) payment with the following steps.
   1. In PACS Collections, open the property and click the SIT Escrow tab.
   2. Select the month line item for which you need to post a payment and then click Post Sale.

      The SIT Sale for Property dialog box is displayed.

   3. Click Post.

      The

      Post SIT Escrow Payment for Property

      dialog box is displayed.

      

   4. Click Change Batch to select a batch in which to post the payment.
   5. Select the payment method and the date paid.
   6. Review and/or complete the following fields as required:
      • UPTV Amount Due – The amount calculated when you entered the sales data for the month.
      • Late Filing Penalty – The penalty calculated and/or entered when the sales data was entered.
        

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        Note:  If you need to change or remove the late filing penalty (for example, if a dealer sends a payment that does not include the penalty amount), select Override and enter the amount.

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      • Additional Fines – The fine entered when the sales data was entered.
      • Amount Paid – The amount received from the dealer.
        

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        Note:  The amount due defaults in the Amount Paid field. If the payment is not for the exact amount due, select Override and enter the amount of the payment.

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   7. If you need to change the name of the payor for which the payment will be posted, either click Change Paid By and make your selections or click [X] to remove the owner name and type the name.
   8. If you selected check or money or order, complete the relevant fields such as Check Number and Drivers License Number.
   9. If you need to print a receipt, verify that the Print Receipt check box is selected. Then in the Copies field, enter the number of copies to print.
   10. Verify that the fields contain the correct data, and then click Post.
2. Review the posted payment in Payments section of the SIT Sale for Property dialog box.
   

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   Note:  The column labeled Escrow Paid contains the total amount paid.

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Purpose

Use this procedure to post special inventory tax (SIT) payments for one property after another in the same window.

You can use this feature when:

• Sales are already entered and all that needs to be entered is money collected.
• Posting to multiple properties with different checks paid by different parties.

This feature is ideal:

• To set the month and tax year and post multiple payments for multiple dealers at one time.
• For a shared office for which the appraisal staff enters the sales and the collections staff enters the payments only.

Display for Quick Post SIT

After completing the fields in the Search and Additional Options sections for a property and clicking Submit, the system clears the sections so you can make entries for the next property.

The system displays lines in the bottom pane for each property record that you submit a payment for.

Prerequisites

Sales have been entered.

Procedure

1. In PACS Collections, choose ActiSITies > Quick Post SIT.

   The Quick Post SIT Sale / Payment dialog box is displayed.

2. In the Search section, enter the following property and payment information:
   • ID Type – Select whether to retrieve the property record you will post a payment to by property ID or by geo ID.
   • ID – The ID of the property you need to post.
   • Month – The month to apply the payment to.
   • Date Paid – The date of the payment. (Defaults to the current date.)
   • UPTV Paid – The UPTV portion of the payment to be applied.
   • Penalty Paid – The penalty portion of the payment to be applied.
   • Total Paid – This total is calculated automatically when the UPTV and Penpad fields are entered.
   • Payment Method – Select the correct payment method (check, cash, or money order).
     

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     Note:  If you select Check, enter a check number.

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   Caution   Before you carry out the next step, make sure you know the tax year applicable for the payment.

3. In the Additional Options section, enter the tax year the payment should be credited to. Then, if you need to print a receipt, select Print Receipt and specify the number of copies to be printed.
4. Click Change Batch to select a batch in which to post the payment.
5. After you have verified that the files in the Search and Additional Options section contain the correct data, click Submit.

   

6. Repeat Steps 2 through 5 for each property record that you need to submit a SIT payment for.
   

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   Note:  Any information that remains the same from payment to payment (for example, the tax year or the batch) does not have to be changed.

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7. If you need to review or correct payment details, select the payment and click Details.
8. If you need to remove a payment, click Remove.
9. After you have verified that the data entered is correct, click Post.

Troubleshooting

If processing of the payment stalls after you click Post, your partner appraisal district may not have entered the sales declaration for the month that you’re posting the payment for.

Note:  This applies to PACS Appraisal.

Purpose

You can use this optional, recommended procedure described below for one of the following situations:

• Your office has received an end of year declaration from a dealer with sales that are higher than what has been entered in the system throughout the year, and all monthly sales for that year have been entered in escrow and applied.
• You have received sales declarations from a new dealership that opened after the first of the year. Because the dealership was not in business at the beginning of the year, there are no sales from the previous year that can be used to formulate a bill.

This procedure involves adding a segment to capture the difference in value or the tax due amount for a new dealership (or other facility).

Prerequisites

The SIT Type field is selected for the type code to be assigned to the segment. To set the SIT Type field for the type code you will use, go to Tools > Code File Maintenance > Personal Property > Type Codes.

Procedure

Note:  If the unreported end of year declaration is a significant amount and you need to supplement the property for additional value, contact Harris Govern’s Client Services department for assistance. Otherwise, use the following method.

1. In PACS Appraisal, open the property record for the end of year declaration. Then select the Rendition tab.
2. In the Renditions section, click New and then enter the declared value in the Rendition Value field. Click OK.

Purpose

Use this procedure to remove or void a special inventory tax (SIT) payment.

Caution   PACS will not allow you to remove a payment after escrow has been applied.

Procedure

1. In PACS Collections, open a property and choose the SIT Escrow tab.
2. Double-click the month line item for which you need to remove a payment.

   The SIT Sale for Property dialog box is displayed.

3. In the Payments section, highlight the payment and click Remove.

   The Reverse Escrow Transaction dialog box is displayed.

4. Click Reverse.

   The SIT Sale for Property dialog box is displayed with a status of Removed for the payment you reversed.

   

5. If required, post the correct amount. For more information, see Posting a SIT Payment for a Single Property.

Purpose

Use this procedure to remove sales data from a special inventory tax (SIT) property record.

Prerequisites

Caution   SIT payments have not been received or posted to that month’s sale that you wish to remove.

Procedure

1. In PACS Collections, open the SIT property record. Then click SIT Escrow.
2. Select the month for which you want to remove sales data. Then click Remove Sales.
3. You are prompted to confirm that you want to remove the sale. Click OK.

Purpose

Use this procedure when your office receives payment for escrow to apply toward the payment of the property’s bills.

You can either apply escrow to a single property or mass-apply escrow to multiple properties at one time as described below.

Prerequisites

If you will mass-apply escrow to multiple properties at one time, the posting date should be less than or equal to 1/31/tax year due plus 1 year so that penalty, interest, and attorney fees do not accrue on taxes due prior to mass application.

Note:  This is especially important if the application of escrow for multiple properties needs to take place after January 31.

Example:  For 2007 taxes due, the posting date needs to be 1/31/2008 or prior.

Procedure

1. Do one of the following:
   • To mass-apply escrow to multiple properties at one time:
     • In PACS Collections, choose Activities > SIT Processing.
   • To apply escrow to a single property:
     1. In PACS Collections, open the property and click the SIT Escrow tab.
     2. Select the line for the month in which the escrow was paid.
     3. Click Apply Escrow.
2. When the Special Inventory Payment Wizard is displayed, click Next.

   The Special Inventory Payment Wizard – Step 1 of 3 window is displayed.

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   Note:  The system removes any properties displayed in this window that do not have any bills or for which no amount has been paid.

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3. You are prompted to create a new batch.
   

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   Important   We recommend creating a new batch so that you can reverse the application of escrow if needed.

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4. Click Next to proceed to Special Inventory Payment Wizard – Step 2 of 3. Then complete the options as required.
   

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   Note:  If you choose Print Statement of Accounts, you are prompted to confirm that you want to print the statements, and your default printer then immediately begins to generate the statements.

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5. Click Next to proceed to Special Inventory Payment Wizard – Step 3 of 3.
6. Review the data to be processed. Then choose Finish to process the accounts.

Result

The escrow is applied. Depending on the number of accounts you selected, the application process could be lengthy.

Next Steps

Check that your Special Inventory Escrow Report for the year selected equals your Daily Balance Details Report for the separately generated batch, less any penalties.

The escrow application process in PACS takes monies received and deducts a penalty first, leaving an escrow. The process then applies the balance to ad valorem taxes, and so the Special Inventory Escrow Report shows any penalties left.

Note:  The penalty amount remains in escrow; it is not applied to the amount due.

Printing a Statement with the Remaining Balance Only

If you want to print a statement for a property processed in with the Special Inventory Wizard that does not include the balance for all years, but only the remaining balance, open the property and choose Property > Create New Tax Statement.

Purpose

Use this report to generate a listing of escrow collected according to date, batch, property ID, and/or taxpayer ID.

Procedure

1. In PACS Collections, choose Reports > Escrow & SIT > Special Inventory Escrow Report.

   The Special Inventory Escrow Report is displayed.

   

2. Select the year for which to print the report.
3. Use the following options as required:
   • Month
   • Batch
   • To limit the report results to a date range in which the escrow batches were posted, select Batch Balance Date Range and then select a date range in the drop-down lists.
     

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     Note:  If you select a beginning date and leave the end date blank, the end date will be set to the current system date.

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   • To limit the report results to either a specific property ID or specific taxpayers, select Other.
     • To search by property ID, select Property ID, and then select Search to display the property search wizard. Enter criteria to select the property ID to include in the report.
     • To search by taxpayer, select Taxpayer, and then select Search to display the taxpayer search wizard. Click search to enter criteria with which to select the taxpayer to include in the report.
4. Click Preview or Print.

Purpose

Use this report to generate a listing of sales posted as well as escrow collected according to date, batch, property ID, and/or taxpayer ID.

Procedure

1. In PACS Collections, choose Reports > Escrow & SIT > Special Inventory Escrow Report with Sales.

   The Special Inventory Escrow Report with Sales is displayed.

   

2. Select the year for which to print the report.
3. Use the following options as required:
   • Month
   • Batch
   • To limit the report results to a date range in which the escrow batches were posted, select Batch Balance Date Range and then select a date range in the drop-down lists.
     

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     Note:  If you select a beginning date and leave the end date blank, the end date will be set to the current system date.

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   • To limit the report results to either a specific property ID or a specific taxpayer, select Other.
     • To search by property ID, select Property ID, and then select Search to display the property search wizard. Enter criteria to select the property ID to include in the report.
     • To search by taxpayer, select Taxpayer, and then select Search to display the taxpayer search wizard. Click search to enter criteria with which to select the taxpayer to include in the report.
4. Click Preview or Print.

Purpose

Use this report to generate a listing of SIT properties for which sales were not reported according to month, batch, property ID, and/or taxpayer ID.

Procedure

1. In PACS Collections, choose Reports > Escrow & SIT > Special Inventory Late Filing Report.

   The Special Inventory Late Filing Report is displayed.

   

2. Select the year for which to print the report.
3. Use the following options as required:
   • Month
   • Batch
   • To limit the report results to a date range in which the escrow batches were posted, select Batch Balance Date Range and then select a date range in the drop-down lists.
     

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     Note:  If you select a beginning date and leave the end date blank, the end date will be set to the current system date.

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   • To limit the report results to either a specific property ID or a specific taxpayer, select Other.
     • To search by property ID, select Property ID, and then select Search to display the property search wizard. Enter criteria to select the property ID to include in the report.
     • To search by taxpayer, select Taxpayer, and then select Search to display the taxpayer search wizard. Click search to enter criteria with which to select the taxpayer to include in the report.
4. Click Preview or Print.

Purpose

Use this report to generate a taxpayer statement showing the amount paid as well as the amount due and any penalties due. You can send this statement to taxpayers to inform them of their status.

Procedure

1. In PACS Collections, choose Reports > Escrow & SIT > Special Inventory Sales Statement.

   The Special Inventory Sales Statement is displayed.

   

2. Select the year for which to print the report.
3. Use the following options as required:
   • Month
   • Batch
   • To limit the report results to a date range in which the escrow batches were posted, select Batch Balance Date Range and then select a date range in the drop-down lists.
     

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     Note:  If you select a beginning date and leave the end date blank, the end date will be set to the current system date.

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   • To limit the report results to either a specific property ID or a specific taxpayer, select Other.
     • To search by property ID, select Property ID, and then select Search to display the property search wizard. Enter criteria to select the property ID to include in the report.
     • To search by taxpayer, select Taxpayer, and then select Search to display the taxpayer search wizard. Click search to enter criteria with which to select the taxpayer to include in the report.
4. Click Preview or Print.