We've all either had it happen or heard horror stories from friends or business acquaintances. They receive their property tax assessment and nearly have a heart attack over the high figure listed. How on earth would the tax assessor come up with a number that is so obviously incorrect? Though almost any tax agency includes a process for property tax appeals, the process can seem fairly complex. Fortunately, getting a machinery valuation for the equipment in question can help clear up any difficulties.
How Equipment Appraisals Help With Property Tax Appeals
How does an equipment appraisal help when you've had an inaccurate property tax assessment? Let's start by looking at how an inaccurate assessment is created. Typically, when a tax assessment is created, it's by a central office with one or several assessors, depending on the amount of property that is assessed every tax period. These assessors are fairly good at determining value, but the more common a piece of equipment is, the easier it is to assess. For example, it's much easier to determine the value of a late model Toyota Camry than a relatively rare piece of specialty equipment.
To keep operations rolling, the assessor will try to determine the equipment's value, but it's relatively easy to mistake one piece of equipment for another. Is your equipment a 12 or 24 horsepower model? Does it have particular features? Were some of the features original or added after the fact? What kind of conditions was the equipment kept in? Is it being used gently or excessively? All these aspects factor in to the final value, but it's difficult for an assessor, who specializes in general asset values, to determine the exact value.
When a mistake happens in an assessment, it's a good idea to have an experienced certified equipment appraisal specialist create a valuation report. This process will take a good look at exactly what the equipment's value should be based on research and analysis. It will take into consideration not only the machine's age and features, but also its condition, the location it's been stored in, how well it's been maintained, any abuse that has happened over the years and the estimated remaining usable life span the machine is expected to have. All these different aspects can change the final appraised value of the equipment, as can current market value or the impact that industry conditions can have on resale value.
But why do you need to work with a certified appraiser? Though you could ask a local dealership to provide you with a general price, it isn't necessarily an accurate one to your situation. Did you need to have extensive work performed to install or remove the equipment? That needs to be taken into account. A dealership is interested in selling you new equipment, not providing accurate values of the equipment you already own.
When you have to deal with a tax agency about an inaccurate property tax assessment, a quality equipment appraisal provides excellent documentation for property tax appeals. Equipment values determined by a certified equipment appraiser are concluded using standardized methodologies that have been designed to hold up to scrutiny in legal, financial and insurance circles. This means the equipment valuation you've had done provides documentation all the way up the appeal process.