Texas Comptroller of Public Accounts    STAR System



Accession No.(s): 9203R1163D13

Document superseded on: 08/15/2013 


Rule 3.570. Liens.

(a) Franchise tax liens are filed and recorded in accordance with the Tax Code, 
Chapter 113. If the filing and recording of the lien resulted from a 
corporation's failure to file franchise tax reports and make franchise tax 
payments when due, payment solely of the amount reflected in the lien, as 
recorded, is insufficient to release the lien. Before the lien will be 
released, all delinquent reports must be filed and all taxes, penalties, and 
interest shown to be due must be paid.

(b) A lien is routinely filed in each county in which it is known that the 
delinquent corporation owns property. A lien filed as the result of forfeiture 
of a corporation's corporate privileges in Texas will be routinely and 
automatically released upon revival of the corporation's corporate privileges. 
Revival is accomplished when the corporation files all delinquent franchise tax 
reports and pays all delinquent taxes, penalties and interest. However, a 
corporation must request release of a lien filed against its property under any 
other circumstances.

(c) Where a lien secures more than one lot or tract of land, a release of the 
lien against any one of the lots or tracts owned by a corporation may be given 
by the comptroller in accordance with the provisions of the Tax Code, Section 

(d) If a franchise tax lien is filed and recorded against the property of the 
registered agent of a corporation or other individual, a release will be 
furnished to the individual, discharging him from all responsibility as regards 
the state's lien. The release, however, will expressly maintain and continue in 
full force and effect the state's lien against the property of the corporation.

(e) Where a lien is based on a court judgment in which a specific amount of 
taxes, penalties, and interest is awarded to the state, the judgment and 
franchise tax lien will be released upon payment by the corporation of the 
specific amount awarded by the judgment, plus payment of any court costs 
awarded to the state and of interest from the date of the judgment until the 
date of payment by the corporation.

(f) A franchise tax lien filed after January 1, 1970, is subject to the rule of 
"first in time, first in right," but is cumulative and covers franchise tax 
accruing after filing of the lien. Federal court decisions may vary this rule 
with regard to federal liens.

(1) The comptroller may issue a release as to a particular piece of property 
upon payment of the value of the lien, where the property is sold at a private 
sale (rather than at a foreclosure sale) and the state's lien is inferior to 
one or more prior liens. The "value of the lien" is determined in these 
circumstances by subtracting the amount of all prior liens from the sales 
price. If the total amount of the prior liens is greater than the sales price, 
a release may be given upon payment of a nominal consideration.

(2) A state tax lien is invalidated by a formal foreclosure sale under a deed 
of trust, but not under a judicial foreclosure unless the state was joined as a 
party to the proceedings. Releases are not issued for a state lien which has 
been invalidated by either of these proceedings.

Effective Date: March 16, 1992
Filed with Secretary of State: February 24, 1992

Comptroller of Public Accounts

DATE: 03/16/1992