Opinion ID: 6712
Heading Depth: 2
Heading Rank: 5

Heading: Resolution of the Conflict

Text: 12 The term incur is defined as [t]o have liabilities cast upon one by act or operation of law [or to] become liable or subject to. BLACK'S LAW DICTIONARY 691 (5th ed. 1979). [A] tax claim is incurred on the date it accrues rather than the date it is assessed or becomes payable. In re Northeastern Ohio General Hosp. Assn, 126 B.R. 513, 515 (Bankr.N.D.Ohio 1991). 7 A tax obligation accrues when the event that triggers liability has occurred. 8 13 Under Texas law, a property owner's liability for ad valorem taxes for any given year arises as of January 1 of that year regardless of when the tax is assessed. TEXAS TAX CODE ANN. Sec. 32.01. Therefore, under state law, even if the amount of MCAD's claim was undetermined, its right to payment from Appellee accrued on January 1, 1988. Appellee's liability for the Taxes was incurred on January 1, 1988, and therefore is a pre-petition expense. 14 The Taxes are not administrative expenses of the estate because the events which triggered the tax liability, ownership of the property and attachment of the tax lien, occurred pre-petition. MCAD is not entitled to assert both a pre-petition secured tax lien and a post-petition administrative expense for the same tax. 9 15 For the foregoing reasons, the district court's order denying MCAD's claim for the Taxes as an administrative expense is 16 AFFIRMED.