Opinion issued March 27, 2014




                                     In The

                             Court of Appeals
                                    For The

                         First District of Texas
                           ————————————
                             NO. 01-13-00272-CV
                           ———————————
                JR WELLNESS SERVICES, LLC, Appellant
                                       V.
           HARRIS COUNTY APPRAISAL DISTRICT, Appellee



                   On Appeal from the 269th District Court
                            Harris County, Texas
                      Trial Court Case No. 2012-45984



                         MEMORANDUM OPINION

      In this ad valorem tax case, appellant JR Wellness Services, LLC (“JR

Wellness”) sued the Harris County Appraisal District (“HCAD”) to challenge the

appraised value of business personal property for the 2010 tax year. HCAD filed a
plea to the jurisdiction, contending that JR Wellness did not substantially comply

with the statutory prepayment requirement. The trial court granted the plea to the

jurisdiction and dismissed the suit. In its sole issue, JR Wellness contends that the

trial court erroneously granted HCAD’s plea to the jurisdiction.

      We affirm.

                                     Background

      In 2010, JR Wellness operated a chiropractic clinic in southwest Houston.

HCAD appraised the value of JR Wellness’s business personal property at

$223,525 for the 2010 tax year and assessed $5,642.29 in taxes. JR Wellness

never paid any portion of the assessed taxes for this tax year. JR Wellness also did

not file a protest of the appraised value with the Harris County Appraisal Review

Board (“the Board”), as allowed by Texas Tax Code Chapter 41.

      On March 7, 2012, JR Wellness filed a “Personal Property Correction

Request/Motion” pursuant to Tax Code section 25.25 to correct the appraised value

for the 2010 tax year. 1 In explaining why it sought a correction, JR Wellness

stated that it did not receive a rendition form or the form got lost in the mail, that

the business ceased operating on December 31, 2010, and that the value of the


1
      JR Wellness also indicated in its correction motion that the appraised value for the
      2011 and the 2012 tax years should also be corrected. Because JR Wellness
      sought judicial review only as to the Board’s ultimate determination regarding the
      2010 tax year, however, we will not further address the appraised values for the
      2011 and 2012 tax years.
                                           2
personal property should not be more than $16,000. JR Wellness attached a

“Statement of Use, Sale, Nonexistence of Property, or Discontinuance of Business”

affidavit, completed by Kazi Hossain, the president of JR Wellness, which echoed

the correction motion and stated, “We are out of business as of 12/31/2010. The

asset value for 2010 was extremely high and should not be more than $16,000.00.”

      The Board denied JR Wellness’s correction motion on July 2, 2012. JR

Wellness timely filed a petition for review in the district court, challenging the

Board’s denial of its correction motion. JR Wellness alleged that the Board “did

not provide any formula used in reaching the outrageous appraised amount,” that

the appraisal “is excessive for a business that lasted for about six months before

folding,” and that “[t]here is absolutely no way the business was even worth

$20,000, not to speak of $223,000.” JR Wellness then stated, “Plaintiff will pay

the full amount of the tax assessment as soon as the appropriate amount of tax is

determined in accordance with Tex. Const. Art. VII, §§1.20.”

      On February 19, 2013, HCAD filed a plea to the jurisdiction. HCAD argued

that because JR Wellness did not pay taxes on the portion of the property value not

in dispute prior to the delinquency date for the 2010 tax year, as required by the

prepayment provision of Tax Code section 42.08, the trial court lacked jurisdiction

over JR Wellness’s petition for judicial review. As supporting evidence, HCAD

attached a “Delinquent Tax Statement Summary,” which reflected the amount of

                                        3
taxes, penalties, and interest that JR Wellness owed for the 2010 tax year. This

document and an attached “Payment History Report” reflected that JR Wellness

had not paid any portion of the assessed taxes.

      In response, JR Wellness reiterated that it had not existed as an entity since

December 31, 2010. It further argued that, in the order denying the correction

request, the Board did not notify JR Wellness “of the necessity to pay the

outstanding tax for the year 2010” prior to seeking judicial review. It argued that

HCAD could not seek dismissal for lack of jurisdiction when JR Wellness had

timely filed its petition for judicial review with the trial court. JR Wellness also

attached the affidavit of Kazi Hossain, who averred that he appeared at the hearing

before the Board on behalf of JR Wellness “ready to pay for appraisal of the actual

value of the property at $16,000.” He averred that he “wrote a check in the amount

of the estimated amount of $403.88, the Board refused.” He also stated that he was

financially unable to pay the assessed taxes of $5,642.29. He further averred:

      The most important aspect of this case was that I personally tendered
      the sum of $403.88 to the Board during the appeal, the Board refused
      to accept the payment. I know that part of the requirement for me to
      file the case in district court is that I must first pay the amount that is
      not in dispute. That amount is $403.88. The reason why I did not pay
      that amount is because the Board refused to accept the payment after
      the hearing. I was told that I would hear from them at a later date—at
      which time I will pay the amount that the Board decides. When I
      received the Board’s order, it was for the same ridiculous rejected
      amount of $5,642.



                                          4
Hossain concluded his affidavit by stating, “I am still ready to pay the amount

owed for the year 2010 at the rate of $403.88.”

      The trial court granted HCAD’s plea to the jurisdiction and dismissed JR

Wellness’s suit. This appeal followed.

                               Standard of Review

      Compliance with Tax Code section 42.08’s prepayment requirement is “a

jurisdictional prerequisite to [the] district court’s subject matter jurisdiction to

determine property owner’s rights.” U. Lawrence Boze’ & Assocs., P.C. v. Harris

Cnty. Appraisal Dist., 368 S.W.3d 17, 23 (Tex. App.—Houston [1st Dist.] 2011,

no pet.) (quoting Lawler v. Tarrant Appraisal Dist., 855 S.W.2d 269, 271 (Tex.

App.—Fort Worth 1993, no writ)).         Whether a trial court has subject matter

jurisdiction is a question of law that we review de novo. See Mayhew v. Town of

Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998); U. Lawrence Boze’ & Assocs., 368

S.W.3d at 23; see also Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217,

226, 228 (Tex. 2004) (holding that we review trial court’s ruling on jurisdictional

plea de novo).

      If a plea to the jurisdiction challenges the existence of jurisdictional facts,

we consider relevant evidence submitted by the parties when necessary to resolve

the jurisdictional issues presented. Carter v. Harris Cnty. Appraisal Dist., 409

S.W.3d 26, 30 (Tex. App.—Houston [1st Dist.] 2013, no pet.). “When a challenge

                                         5
to the existence of jurisdictional facts does not implicate the merits of the case and

the facts are disputed, the [trial] court must make the necessary fact findings to

resolve the jurisdictional issue.” Id.

            Substantial Compliance with Prepayment Requirement

      A taxpayer owes a continuing obligation to pay taxes on its property.

Atascosa Cnty. v. Atascosa Cnty. Appraisal Dist., 990 S.W.2d 255, 258 (Tex.

1999); U. Lawrence Boze’ & Assocs., 368 S.W.3d at 24. The State of Texas has

jurisdiction to tax tangible personal property if the property is located in Texas for

longer than a temporary period. U. Lawrence Boze’ & Assocs., 368 S.W.3d at 24;

see TEX. TAX CODE ANN. § 11.01(c)(1) (Vernon 2008); id. § 21.02(a)(1) (Vernon

Supp. 2013) (“[T]angible personal property is taxable by a taxing unit if it is

located in the unit on January 1 for more than a temporary period.”); see also id.

§ 11.14(a) (Vernon 2008) (“A person is entitled to an exemption from taxation of

all tangible personal property . . . that the person owns and that is not held or used

for production of income.”).

      Tax Code Chapter 41 entitles a property owner to file an administrative

protest of certain actions with the appraisal review board, including the

determination of the appraised value of the taxpayer’s property. See TEX. TAX

CODE ANN. § 41.41(a) (Vernon 2008); U. Lawrence Boze’ & Assocs., 368 S.W.3d

at 24. Generally, a property owner must file a written notice of protest within

                                          6
thirty days after the owner receives notice of the appraised value of the property.

See TEX. TAX CODE ANN. § 41.44(a) (Vernon Supp. 2013). It is undisputed that JR

Wellness did not administratively protest the appraised value of its business

personal property for the 2010 tax year pursuant to Chapter 41.

      If the time limits for initiating a Chapter 41 administrative protest have

expired, a property owner may still move to correct certain limited errors in the

appraisal records by filing a correction motion pursuant to Tax Code section 25.25.

See id. § 25.25 (Vernon Supp. 2013); U. Lawrence Boze’ & Assocs., 368 S.W.3d at

25 (“[Section 25.25] also allows a property owner to move to correct errors in the

appraisal records after the time limits for a Chapter 41 administrative protest have

expired; however, ‘[a] property owner’s ability to change approved tax appraisal

rolls is clearly limited.’”) (quoting Anderton v. Rockwall Cent. Appraisal Dist., 26

S.W.3d 539, 542 (Tex. App.—Dallas 2000, pet. denied)). A property owner may

move the appraisal review board to correct, for any of the five preceding tax years,

(1) clerical errors that affect a property owner’s liability for a tax imposed in that

tax year; (2) multiple appraisals of a property in that tax year; (3) the inclusion of

property that does not exist in the form or at the location described in the appraisal

roll; or (4) an error in which property is shown as owned by a person who did not

own the property on January 1 of that tax year.         See TEX. TAX CODE ANN.

§ 25.25(c). A property owner may also, at any time prior to the date the taxes

                                          7
become delinquent, move the appraisal review board to correct an error that

resulted in an incorrect appraised value “that exceeds by more than one-third the

correct appraised value.” Id. § 25.25(d). If the chief appraiser and the property

owner do not agree to the correction within fifteen days after the date the motion is

filed, the property owner is “entitled on request to a hearing on and a determination

of the motion by the appraisal review board.” Id. § 25.25(e).

      Tax Code Chapter 42 governs suits for judicial review of appraisal review

board orders. See id. §§ 42.01–.43 (Vernon 2008 & Supp. 2013). A property

owner is entitled to seek judicial review of an appraisal review board order

determining, among other things, a correction motion filed under section 25.25.

See id. § 42.01(a)(1)(B) (Vernon Supp. 2013). Section 42.08(b) requires:

      Except as provided in Subsection (d), a property owner who appeals
      as provided by this chapter must pay taxes on the property subject to
      the appeal in the amount required by this subsection before the
      delinquency date or the property owner forfeits the right to proceed to
      a final determination of the appeal. The amount of taxes the property
      owner must pay on the property before the delinquency date to
      comply with this subsection is the lesser of
         (1) the amount of taxes due on the portion of the taxable
             value of the property that is not in dispute; or
         (2) the amount of taxes due on the property under the order
             from which the appeal is taken. 2


2
      The current version of the statute, which applies to proceedings pending on or
      filed on or after June 14, 2013, allows a property owner to comply with section
      42.08(b) by paying “the amount of taxes imposed on the property in the preceding
      tax year.” TEX. TAX CODE ANN. § 42.08(b) (Vernon Supp. 2013).
                                          8
Act of May 12, 1997, 75th Leg., R.S., ch. 203, 1997 Tex. Gen. Laws 1070

(amended 2013) (current version at TEX. TAX CODE ANN. § 42.08(b) (Vernon

Supp. 2013)).

      Generally, with some exceptions not applicable here, “taxes are due on

receipt of the tax bill and are delinquent if not paid before February 1 of the year

following the year in which imposed.” See TEX. TAX CODE ANN. § 31.02(a)

(Vernon 2008); see also id. § 31.04 (Vernon 2008) (providing that delinquency

date may be postponed in certain circumstances). “Courts have repeatedly held

that if the property owner does not pay any portion of the assessed taxes by the

delinquency date, even if it later pays some or all of the taxes after the due date, the

property owner has not substantially complied with section 42.08(b).” Carter, 409

S.W.3d at 30–31 (quoting U. Lawrence Boze’ & Assocs., 368 S.W.3d at 27); J.C.

Evans Constr. Co. v. Travis Cent. Appraisal Dist., 4 S.W.3d 447, 451 (Tex.

App.—Austin 1999, no pet.).

      Subsection 42.08(d) provides an exception to the prepayment requirement

contained in subsection (b):

      After filing an oath of inability to pay the taxes at issue, a party may
      be excused from the requirement of prepayment of tax as a
      prerequisite to appeal if the court, after notice and hearing, finds that
      such prepayment would constitute an unreasonable restraint on the
      party’s right of access to the courts. On the motion of a party and
      after the movant’s compliance with Subsection (e), the court shall
      hold a hearing to review and determine compliance with this section,
      and the reviewing court may set such terms and conditions on any
                                           9
      grant of relief as may be reasonably required by the circumstances. If
      the court determines that the property owner has not substantially
      complied with this section, the court shall dismiss the pending action.
      If the court determines that the property owner has substantially but
      not fully complied with this section, the court shall dismiss the
      pending action unless the property owner fully complies with the
      court’s determination within 30 days of the determination.

TEX. TAX CODE ANN. § 42.08(d); see id. § 42.08(e) (requiring movant, at least

forty-five days before hearing to determine substantial compliance, to mail notice

of hearing by certified mail to collector for each taxing unit that imposes taxes on

property). A property owner may avoid forfeiting its right to a final determination

of its suit for judicial review if it substantially complies with either subsection

42.08(b), subsection 42.08(d), or some combination of both. See U. Lawrence

Boze’ & Assocs., 368 S.W.3d at 26 (quoting J.C. Evans Constr., 4 S.W.3d at 450).

      Because HCAD sought dismissal of the suit for lack of subject matter

jurisdiction, it had the burden to establish that JR Wellness did not substantially

comply with section 42.08. See id.; Lee v. El Paso Cnty., 965 S.W.2d 668, 671

(Tex. App.—El Paso 1998, pet. denied) (“The party seeking dismissal for lack of

jurisdiction maintains the burden of proof.”).       Whether a property owner has

substantially complied with section 42.08 is a factual matter to be determined by

the trial court on a case-by-case basis. See U. Lawrence Boze’ & Assocs., 368

S.W.3d at 26; J.C. Evans Constr., 4 S.W.3d at 449. We construe tax statutes

strictly against the taxing authority and liberally in favor of the taxpayer, and, if the

                                           10
statute is designed to relieve a property owner from the harshness of forfeiture, we

liberally construe the statute to accomplish that purpose. See U. Lawrence Boze’ &

Assocs., 368 S.W.3d at 26.

      The Tax Code provides the “exclusive” procedures for adjudication of a

property-tax protest. See TEX. TAX CODE ANN. § 42.09(a) (Vernon 2008); U.

Lawrence Boze’ & Assocs., 368 S.W.3d at 27. “Compliance with the tax code is a

jurisdictional prerequisite to pursuing judicial review, and failure to strictly comply

with the time lines set forth in the code is a jurisdictional defect precluding

review.” Tarrant Appraisal Dist. v. Gateway Ctr. Assocs., Ltd., 34 S.W.3d 712,

714 (Tex. App.—Fort Worth 2000, no pet.).

      JR Wellness challenges the business personal property taxes assessed for the

2010 tax year. The delinquency date for these taxes was February 1, 2011. See

TEX. TAX CODE ANN. § 31.02(a) (providing that, generally, taxes are delinquent if

not paid before February 1 of year following year in which taxes were imposed). It

is undisputed that JR Wellness has never paid any portion of the assessed taxes for

the 2010 tax year, let alone paid the taxes by February 1, 2011. Because JR

Wellness did not pay any portion of the assessed taxes by the delinquency date, it

has not substantially complied with subsection 42.08(b). See Carter, 409 S.W.3d

at 30–31; U. Lawrence Boze’ & Assocs., 368 S.W.3d at 27.




                                          11
      We must now determine whether JR Wellness substantially complied with

subsection 42.08(d), under which a property owner may be excused from the

prepayment requirement. In response to HCAD’s plea to the jurisdiction, which

sought dismissal of JR Wellness’s suit on the basis that it had not substantially

complied with section 42.08, JR Wellness filed the affidavit of Kazi Hossain, the

president of JR Wellness. Hossain averred that, when he appeared before the

Board in 2012 at the hearing on JR Wellness’s section 25.25 correction motion, he

argued that the “actual value” of the property was $16,000 and offered to pay

$403.88 in taxes on that value. He further averred, “I was unable to pay the actual

value of the property because the Board told me to pay the [assessed] amount of

$5,642.29. I did not have the funds to pay such an amount. The business was

losing money.” JR Wellness did not file an “oath of inability to pay” the taxes at

issue with the trial court; thus, the above statement in Hossain’s affidavit is the sole

evidence before the trial court that JR Wellness could not pay the assessed taxes.

      JR Wellness has not, at any point in these proceedings, either in response to

HCAD’s plea to the jurisdiction or in its briefing on appeal, argued that it ought to

be excused from section 42.08’s prepayment requirement due to its inability to pay

the taxes at issue. JR Wellness has neither cited section 42.08(d) nor argued that it

has substantially complied with this subsection. JR Wellness did not move the trial

court to determine whether it had substantially complied with subsection 42.08(d),

                                          12
nor did it request a hearing on this issue before the trial court. See TEX. TAX CODE

ANN. § 42.08(d) (“After filing an oath of inability to pay the taxes at issue, a party

may be excused from the requirement of prepayment of tax as a prerequisite to

appeal if the court, after notice and hearing, finds that such prepayment would

constitute an unreasonable restraint on the party’s right of access to the courts. On

the motion of a party and after the movant’s compliance with Subsection (e), the

court shall hold a hearing to review and determine compliance with this

section . . . .”).

       Although section 42.08(d) does not specify what evidence must be offered

or what items a taxpayer must prove to establish that it was financially unable to

pay the assessed taxes at issue, the taxpayer must still establish its inability to pay

by a preponderance of the evidence before it may be excused from the prepayment

requirement. See Carter, 409 S.W.3d at 35–36; see also Palaniappan v. Harris

Cnty. Appraisal Dist., --- S.W.3d ---, No. 01-11-00344-CV, 2013 WL 6857983, at

*7 (Tex. App.—Houston [1st Dist.] Dec. 31, 2013, no pet. h.) (“[W]e conclude that

Palaniappan failed to demonstrate by a preponderance of the evidence that he was

financially unable to pay the taxes on the due date.”). JR Wellness offered no

evidence, beyond Hossain’s conclusory statement in his affidavit that he “did not

have the funds to pay [the assessed] amount,” to support a contention that, as of the

delinquency date of February 1, 2011, it lacked the financial ability to pay the

                                          13
assessed taxes. Thus, even if we construe Hossain’s affidavit attached in response

to HCAD’s plea to the jurisdiction as an oath of inability to pay, we conclude that

JR Wellness has not demonstrated that it substantially complied with the

provisions of subsection 42.08(d), such that it may be excused from the

prepayment requirement.

      JR Wellness complains that the Board, in its order denying JR Wellness’s

correction motion, did not inform it that it had to comply with the prepayment

requirement to avoid forfeiting its right to a final determination of its appeal. As

HCAD points out, however, the Board was under no obligation to include this

specific information in its order. Tax Code section 41.47 governs an appraisal

review board’s determination of a property owner’s protest. See TEX. TAX CODE

ANN. § 41.47 (Vernon Supp. 2013). Subsection (e) specifies what language must

be included in the order:

      The notice of the issuance of the order must contain a prominently
      printed statement in upper-case bold lettering informing the property
      owner in clear and concise language of the property owner’s right to
      appeal the board’s decision to district court. The statement must
      describe the deadline prescribed by Section 42.06(a) of this code for
      filing a written notice of appeal, and the deadline prescribed by
      Section 42.21(a) of this code for filing the petition for review with the
      district court.

Id. § 41.47(e). No other statutory provision mandates that an appraisal review

board include specific language in an order determining protest.          The order

determining JR Wellness’s protest contains the language required by section
                                         14
41.47(e). The Board was not required to include any further language informing

JR Wellness of the prepayment requirement.

      JR Wellness also points to a property rendition statement filed by a company

called US Feni Wellness Center, LLC, which was apparently located at the same

property as JR Wellness and which challenged the assessed business personal

property taxes for the 2011 and the 2012 tax years, two years in which HCAD also

assessed taxes against JR Wellness. JR Wellness thus argues that “HCAD assessed

business personal property taxes on two separate entities on the same property.”

We agree with HCAD, however, that even if HCAD taxed the same business

personal property twice—a contention that JR Wellness has offered no evidence to

support—that fact is not relevant to JR Wellness’s petition for judicial review,

which explicitly challenged the assessment of taxes only for the 2010 tax year.

      Because we conclude that JR Wellness did not substantially comply with

either subsection 42.08(b) or 42.08(d) of the Tax Code, we hold that the trial court

correctly granted HCAD’s plea to the jurisdiction and dismissed JR Wellness’s

petition for judicial review.3


3
      To the extent JR Wellness contends that it substantially complied with section
      42.08 because Hossain appeared at the hearing before the Board and tendered
      $403.88 as payment for taxes on the undisputed value of the property, but the
      Board refused to accept the payment, JR Wellness has not established that the
      Board was the proper entity to accept payment of a portion of the assessed taxes.
      See, e.g., TEX. TAX CODE ANN. § 31.06(a) (Vernon Supp. 2013) (“Except as
      provided by Section 31.061, taxes are payable only as provided by this section. A
                                         15
      We overrule JR Wellness’s sole issue.

                                     Conclusion

      We affirm the judgment of the trial court.




                                                Evelyn V. Keyes
                                                Justice

Panel consists of Justices Keyes, Bland, and Brown.




      collector shall accept United States currency or a check or money order in
      payment of taxes and shall accept payment by credit card or electronic funds
      transfer.”) (emphasis added); id. § 1.04(15) (Vernon 2008) (defining “collector” as
      “the officer or employee responsible for collecting property taxes for a taxing unit
      by whatever title he is designated”) (emphasis added); id. § 1.04(12) (defining
      “taxing unit” as political unit “that is authorized to impose and is imposing ad
      valorem taxes on property . . . .”). Appraisal review boards do not fall within the
      definition of “taxing units.” Cf. id. § 41.03(a) (Vernon 2008) (“A taxing unit is
      entitled to challenge before the appraisal review board . . . .”); Lamar Cnty.
      Appraisal Dist. v. Campbell Soup Co., 93 S.W.3d 642, 644 (Tex. App.—
      Texarkana 2002, no pet.) (“Appraisal review boards are vested by law with, inter
      alia, two duties: to determine protests initiated by property owners and to
      determine challenges by taxing units.”).
                                           16
