Property Tax Services
Property, plant, and equipment is one of the largest items on corporate balance sheets for many companies. Effective management of these assets often does not mirror its importance within the capital structure. By extension, property tax can be a significant operating expense for taxpayers. Our Property Tax Services identify tax savings opportunities for current or prior years while minimizing future property tax expenses.
Real Estate Tax
State and local tax authorities assess real estate taxes based upon “value” as defined by statute or caselaw. A number of factors can result in property being assessed at more than its taxable “value.”
At FandlGagnon, we take pride in being able to identify these factors that result in clients being over-assessed and determine strategies for correcting them. We will review your real property assessments and where appropriate, we will visit significant locations. We take the time to understand not only the building specific issues which may affect value but also industry-specific issues as well as any company-specific issues which may affect the value of your assets.
Assessment reductions, through either informal negotiation with property tax authorities or formal tax appeals, can result in savings for multiple tax years.
Personal Property Tax
There are more than 7,000 taxing jurisdictions in the United States with a myriad of state and local tax laws, rules, and regulations. Some states tax inventory, but don’t tax raw materials. There are some states with pollution control exemptions, states that don’t assess leasehold improvements as personal property, and 13 states that don’t assess personal property at all. Some states do not audit, and some states have mandatory audits. The divergence of personal property tax treatments is vast and complex.
Companies which report all assets based on their general ledger book cost with original cost and year of acquisition may be over-assessed as these classifications do not take into consideration ad valorem issues.
Tax savings can be achieved through appropriate asset classification (between class lives and between real and personal property assets), analysis of obsolescence (functional and external), identification of ghost assets or costs that do not increase value, and analysis of exempt property.
As part of our overall property tax services, FandlGagnon can handle all aspects of property tax outsourcing including data review, filing of returns, payment of tax (to include an imprest account option), audits & appeals, and management reporting.