Equipment Appraisal Blog | Understanding Machinery Appraisals

Personal Property Taxes: How an Equipment Appraisal Helps You Fight an Inaccurate Assessment

Posted by Equipment Appraisal Services on Tue, May 17, 2016 @ 11:00 AM


In both our business and personal lives, we expect to have to deal with unpleasant things on occasion. Paying taxes is a task nobody wants to undertake. But when you receive personal property taxes based on an assessment that is much too high, you may wonder if there's any point in fighting the system. Fortunately, many business owners find that having a machinery valuation helps when appealing your personal property tax assessment. Here are a few reasons why you may have received a high assessment and how getting equipment appraisals can help.

Personal Property Taxes: How an Equipment Appraisal Helps You Fight an Inaccurate Assessment

How your property taxes are determined

Your local tax assessor knows a lot about property values in your area, but typically on a very broad basis. The same assessor that's responsible for assessing your personal property tax on your equipment also estimates value on your neighbor's classic '65 Mustang, the local farmer's replacement cows for their operation and your uncle's latest RV purchase. Though they use some tools, such as value estimating software, there's no replacement for experience in a specific area when it comes to determining the value of your equipment, and an assessor who is overseeing a wide range of property can make mistakes.

Where mistakes can be made on your assessment

So where exactly can these mistakes be made on your assessment? One common mistake is basing the value only on the machine's original purchase price depreciated over a set number of years. We all have equipment in our operations that is still being actively used, even when it's been fully depreciated. We've also had equipment that wears out much more quickly than the standard depreciation table, so your relatively new cabinet saw is assessed at a much higher value than what it would actually bring on the free market. Another area where mistakes are made happens when the assessor uses the wrong model or year to determine the value. If you have a base model that was from an overseas market when the manufacturer was trying to broaden their market share, the assessor could be valuing it based on the domestically-produced version with all the bells and whistles.

How having an equipment appraisal can help

If you've had an inaccurate assessment made on your equipment, having a machinery appraisal is a great way to set the record straight. When you work with a certified equipment appraiser, their appraisal report bears weight. A certified appraiser has had training in the appraisal process and methodology, using standardized approaches and techniques to determine the proper value for the machine in question. If you end up having to fight the assessment in court, a certified machine appraiser's report provides a legal basis for the revised value. Many local assessors, when faced with a professionally prepared appraisal report from a certified machinery appraiser, will consider revising their assessment to match the report.

Receiving a high assessment on your personal property taxes can be a pain, but having a certified machinery valuation helps you fight an inaccurate assessment in an appeal. If you don't know what your equipment values are and need help determining an accurate value, please feel free to contact us today to be put in contact with an experienced certified equipment appraiser.

Tags: property tax, personal property tax