When you get that envelope from the county or city for your business property taxes, you already know it's going to be higher than what you'd like to pay. But what about when you open that envelope and the figures quoted are much higher than expected, to the point of being far above the actual value of your equipment values? Property tax appeals is one part of the process to get your taxes lowered, but how do you start the process? By getting a quality machine appraisal from an accredited equipment appraiser certified by the American Society of Appraisers (ASA). Here's why:
The tax assessor isn't perfect.
Your local county assessor handles a wide range of assessments, from livestock to residential property to construction equipment and back again. That is the main reason why the property tax appeals process is in place for virtually every government assessment process in existence. What's even worse, most property tax assessors will overestimate an assessment than underestimate it. The National Taxpayers Union estimates between 30-60% of property is assessed too highly, but only 2% of assessments are appealed. The tax man may cometh, but that doesn't mean he knows what he's doing when he gets there.
A machine appraiser knows equipment appraisals in your industry.
Because such a diverse array of property is covered by just a few people in the tax assessor's office, it's pretty easy to determine the wrong equipment value for your property taxes. Whether he marked your construction truck as a diesel with 500,000 miles instead of a gas engine with virtually no life left in it, getting a professional equipment appraisal helps ensure you're only being taxed on what that truck is actually worth. This is especially important if you've made significant modifications to your equipment that drastically changes its value.
Professional equipment appraisers can often provide expert witness testimony.
In addition, appraisers are able to provide not only documentation of their valuation process, they can also provide expert testimony for machinery and equipment if it's needed during the appeals process. Expert testimony can include how the assessed value was determined, provide evidence of why that value was chosen and may even be able to provide details about what was done incorrectly by the local tax assessor's process and methodology that created the inaccurately high value in the first place.
How do I start the property tax appeal process?
To start the process, you're going to need to do some investigation into the taxes. Things to keep in mind are cutoff dates for appeals, what the process involves on your part and when you can expect particular documents from the assessor's office. Once you have a basic understanding of how the system works, start gathering your paperwork and make an appointment to have your overvalued property assessed by an ASA-credentialed machinery appraiser using the Uniform Standards of Professional Appraisal Practice (USPAP). When the appraisal has been completed, compare it against your property tax documentation to determine whether the assessment is too high. Appealing your property tax assessment may be as simple as calling or walking into the tax assessor's office with your documented assessment and having a conversation about the problems with the assessment. If it's more involved, you have options available through the appeals process.
Now that you know what to expect from the process, is it time to appeal? Get a quality appraisal completed and start the process.