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.