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Two Signs You May Be Overpaying Your Commercial Property Taxes

By MarksNelson on November 15, 2017 in Articles, State & Local Tax

Commercial property taxes are an unavoidable part of doing business. As an owner, you obviously don’t want to pay more than your fair share. But most you are overpaying and it is impacting your bottom line. Here’s a look at the two reasons why.

  1. Your Payment Process is on Autopilot – Regardless of size, most companies are treating tax bills no different from everyday business. The bill arrives, it heads to accounts payable, and if the increase seems reasonable it’s paid no questions asked. This same process repeats itself year after year after year. Often small business owners or CFOs of larger companies lack the expertise to evaluate and manage property tax assessments. They don’t fully understand the approaches to market value or have time to devote to diving into the intricacies of property tax.
  2. Mass Appraisals – Overassessment of properties is more common than you may think. Assessors use mandated mass appraisal techniques and market averages to estimate your property’s market value. They often make simple factual, clerical, and methodology errors. Bottom line, they don’t know the specifics of your property and they don’t have the time to really take a look. Instead, it’s lumped in with tens of thousands of properties in the same area. Your property may have deferred maintenance such as roof, HVAC, plumbing, etc., that may lower the taxable market value but those things are not factored in since the assessor can’t look at every asset individually.

So how can you break the cycle? To find out if your assessment is fair and equitable you need to contact a tax professional with expertise in real estate valuation who can maneuver through the regulatory obstacle course. They will examine the numbers along with the records on file with the county and come up with an opinion of the fair market value. If your property is not assessed correctly, your tax professional can help you file a property tax appeal or in some cases, you can file a “payment under protest” form with your tax bill. Both scenarios are equally complicated processes and require accuracy and adhering to strict deadlines.

Do you think you are paying too much in commercial property taxes? Contact Tim Anderson in our State and Local Tax Department at 816-743-7700 to schedule your consultation.

About the Author

MarksNelsonView all posts by MarksNelson
MarksNelson LLC works with clients to help safeguard and grow their businesses. Our ultimate goal is to help our clients to Move Forward. The firm provides Assurance, Accounting Services and Business Advisory, Business Valuation, Consulting, Cost Segregation, Employee Benefit Plan Audits, Litigation Support, Forensic Accounting, International Tax, State and Local Tax and Tax planning, advisory and compliance services. MarksNelson is a member of The Leading Edge Alliance, the second-largest international professional association of independently owned accounting and consulting firms, serving clients who need additional resources on a national or international level. MarksNelson has significant accounting and business advisory experience in the auto dealership, construction, insurance, manufacturing, distribution and real estate sectors. The firm was named among the 2014 Best Accounting Firms for Leadership Equity by the 2014 Accounting MOVE Project for its dedication to gender equity.