Equipment Appraisal Blog | Understanding Machinery Appraisals

What Do You Need to Know for a Personal Property Tax Appeal?

Posted by Equipment Appraisal Services on Tue, Mar 13, 2018 @ 09:52 AM

Most people have come to expect the arrival of their personal property tax bill every year. But every year, there's always a few who get an unpleasant surprise. Sticker shock is rough enough, but when it's on your property tax assessment, it can be even more alarming. Fortunately, you do have alternatives to paying a too-high assessment. Here's a quick overview of what you should expect when you go through a personal property tax appeal.


What Do You Need to Know for a Personal Property Tax Appeal?

  1. Start the process. In most situations, directions for starting the appeal process is included with the tax bill. If it isn't, it can be as simple as calling the tax agency's number to learn how the process is handled. In either situation, start the process as quickly as possible to ensure you'll be able to clear the problem up sooner.
  2. Find what documentation you already have available. If the property is new this year, it's fairly easy for it to be mistaken for another model, trim level or other easily verified error, which can lead to an incorrect assessment. In that situation, you may be able to prove the equipment's value from the invoice. However, if it's had any use at all, you may want to consider that the value may have already dropped, much like when a truck leaves the dealer's lot with the new owner.
  3. Consider whether that documentation represents an accurate value. If it's new equipment that had any use at all, you may want to consider that the value may have already dropped, much like when a truck leaves the dealer's lot with the new owner. In addition, if the equipment has been used hard, it may have already depreciated in value enough that even a reasonable tax assessment may be much higher than the equipment's actual value.
  4. Get a certified appraisal report. If you can't come up with any documentation of the value, or if you feel that the value may have changed since that documentation was produced, your next option is to get an appraisal performed. However, you'll want to make sure the individual performing the appraisal has experience working with that type of equipment - after all, the tax assessor who first determined the value used by the tax office deals with a wide range of property, but usually doesn't have the specialized knowledge to deal with the variances in particular equipment types.
  5. Send or bring your documentation to the tax agency for the appeal. Once you have your documentation in hand, present it to the tax agency in the manner recommended in their appeal process. If you're providing an appraisal report, make sure that it's from a certified appraiser who knows what methodologies to apply in your case.

By taking the time to fight a bad personal property tax appeal, you're protecting your bottom line. If you do need to have an appraisal performed on your equipment, please remember to have it performed by a certified appraiser. The certification process provides the appraiser with the knowledge and expertise to use the right methodologies for your case, methodologies that have been proven in a wide range of situations, including personal property taxes. When you follow these simple steps, your bad appraisal can soon be a thing of the past.

Tags: personal property tax, tangible personal property, property tax appeals

Fight a bad tax appraisal with a certified equipment valuation

Posted by Equipment Appraisal Services on Tue, Mar 06, 2018 @ 01:35 PM

When it comes to life, there are two things that are certain: death and taxes. However, just because you need to pay taxes doesn't mean you should just pay a bad tax appraisal that reflects too high a value for your machinery without a fight. But when it comes time to appeal your bad tax assessment, how will you verify the value of your machinery? With a certified equipment appraisal. Here's why it's important to use one to build your case.

Fight a bad tax appraisal with a certified equipment valuation

You know it's coming, at the same time as it does every year - property taxes. If you own significant machinery, it can seem almost inevitable that you'll be paying a high amount for your taxes again this year. But when you look at the appraised value of your equipment, is that value in line with what the equipment is actually worth?

Tax appraisers and assessors spend a lot of time trying to figure out the value of a wide range of items, from real estate to industrial machinery to the car you drive every day. Unfortunately, this means that they're not always very accurate when assessing something that's different from what they see on a daily basis. It's probably pretty common for a property tax assessor to determine the value of a compact sedan or a three bedroom, two bath house. But the equipment that is your company's livelihood is usually much more rare. This can cause serious problems when it's time for the tax assessment.

The appraiser may make a mistake by assuming that your equipment is in better or worse shape than the reality of the situation. You may have a beaten backhoe that was appraised on book value even though it's been through two floods and had significant damage from a tumble down a steep embankment last year. You could also run into issues when an assessor thinks that you have a 48 HP tractor instead of the much lighter-weight 18 HP tractor that is only worth half as much. Issues like these should not be allowed to stand and should be challenged through an appeal.

But how do you provide verification of what your equipment is actually worth? One of the best methods is to have a certified equipment appraiser prepare an appraisal report on that machinery. An equipment appraiser deals with machinery all day long, providing them with a strong level of knowledge and experience on the equipment in question. This also means they can easily tell the amount of wear your equipment has received over the years, allowing them to best appraise how that wear has impacted its value. Because a certified appraiser goes through a certain amount of education and experience, they use standardized methodologies that have been tested in tax agency circles for years.

By taking the time to get a certified equipment valuation, you can fight a bad tax appraisal and win. But beyond a simple property tax appeal, you can gain additional benefits from your valuation, including verifying value for insurance claims, providing proof of value for a sale, documenting machinery condition and similar areas of concern. Make sure you work with a certified equipment appraiser to ensure you'll get an accurate appraisal that will provide you with significant benefits.

Tags: property tax, property tax appeals, tax appraisal

I Owe What?! How Equipment Appraisals Help With Property Tax Appeals

Posted by Equipment Appraisal Services on Tue, Feb 14, 2017 @ 10:22 AM

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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.

Tags: personal property tax, property tax appeals