If you’ve been reading our blog, you already know that the business personal property tax cycle is filled with complexities, whether you’re a business with one location or several. If you have 500 or more locations, keeping up with paperwork, information tracking, and due dates can be downright labyrinthine—never mind having enough time to put a case together for appeals (unless you’re taking advantage of all the tools at your disposal, which we’ll get into later).
Below we’ve clarified the what, who, and when of business personal property tax as it applies to large companies, with some tips on managing the how: How can businesses with 500+ property tax assessments per year manage it all?
Property Tax Assessments: What’s Involved
Property tax assessments revolve around the assessment notice. It serves as the official communication between the assessing jurisdiction and the owner, and reflects the assessing jurisdiction’s valuation of the account. They also include important protest instructions in which the property owner can argue the assessment if they believe it to be unfair/too high, with the overall goal of reducing the taxable value (less tax!).
Every assessment notice you receive usually contains three pieces of important information:
- That specific property’s market value, known as the fair market value or appraised value of the property.
- That property’s assessed value, calculated by multiplying the market value and the assessor’s assessment ratio.
- That property’s taxable value, which is the actual property value that will be taxed (the assessed value less any abatements/exemptions).
Some assessing jurisdictions send one notice, others may send multiple in the event of value adjustments that arise from protests. Or, they may send none at all, in which case the final tax bill serves as the assessment.
Tip for managing 500+ assessment notices
If your business is being assessed on more than 500 properties, your property tax team needs an efficient way to track the values and protest deadlines attached to each notice. Why? A crucial step in deciding whether or not to protest is to compare the values against those on your returns, or the prior year assessments. Real Estate Assessments may also contain value breakdowns across land, building, and miscellaneous improvements so it is important to review these individual pieces. You also need to track protest deadlines so you know when you need to take action if necessary.
Not tracking this information means you’ll miss valuable opportunities to address what may be unfair, high property values, and therefore high tax bills—which will only continue to increase over time.
Integrated property tax software is the best tool for companies that need to track high volumes of data.
Looking for a time-saving, accurate way to do high-volume data entry? See how MetaTaskerPT’s full-service data extraction service can simplify your workflow.
As the owner of 500+ properties, your business will receive assessment notices for each. The assessor—the entity that creates the assessments—usually relies on one of three common strategies for the assessment. Since your properties are likely in many different tax jurisdictions, those strategies may vary by location. (You can find this information on each assessor’s individual website.) The three strategies are:
- Cost Approach: This is the most common valuation strategy for business personal property. It’s calculated by taking the original cost of an asset minus depreciation.
- Market Approach: Primarily used for real estate, this strategy estimates value by comparing the property with similar properties for which sales prices are known.
- Income Approach: Rarely used and fairly complicated, this approach uses capitalization to convert anticipated benefits of the ownership of property into an estimate of present value.
It is important to understand these valuation methodologies, as when it is time to protest the value you will need supporting evidence using any combination of these strategies to argue your case.
Who can help manage 500+ property tax appeals
Third-party appraisal firms, or property tax consultants, can be a huge help in the appeal process. Most consultants proactively manage your location information and even search for assessed values online before the assessment notice itself arrives in the mail. They’ll conduct independent valuations for as many properties as you need, and back them up with evidence you can pass on to the assessors that may ultimately lower your property value. Consultants usually bill on contingency rates, and, especially if you have hundreds of properties, often end up paying for themselves many times over in your tax reductions.
When should you take action?
Every jurisdiction across the country may have a different deadline for protesting. And the deadlines, for the most part, are tight. In fact, most jurisdictions don’t have set appeal deadlines, but instead give property owners 30, 60, or sometimes 90 days to appeal after an assessment notice is sent. That not only makes it nearly impossible for tax teams to build a calendar for protest dates, but it also gives them little time to review and prepare appeals if necessary.
Keep in mind, too, that you should also be tracking any protest activity—like revised notices—and key dates—like hearings, as well as the outcomes.
Tip for managing 500+ property tax deadlines
Small companies can afford to be reactive when it comes to the appeals process—they have a few people on staff, wait until the assessments come in, and can handle the load with their existing time and resources. But if you have 500 or more appeal deadlines to manage, you can’t afford to wait. Instead, try to forecast your “busy season,” or the time when you expect assessment notices to start rolling in—maybe it’s summer or fall. Then, budget your resource needs based on that time frame. That way, if you receive 300 notices in June, you’ll have the staff and the time to track information and, hopefully, start preparing appeals.
Some companies build a forecast calendar using Word, Excel, or other calendar-type software, based on last year’s appeal deadlines or jurisdiction deadline data—tough to do with 500+ properties. A better way is to use a software system built specifically for property tax. Not only will it manage an assessment calendar and tax-related activities for every property you own, it also gives you a way to log the values associated with each one. You can also:
- See all missing notices by protest deadline.
- Update notices when received with values and updated deadlines.
- Track all protest activity dates and values.
- Run reports, as all your data is centralized, on all your notices by county, deadline, etc.
Software can help you properly plan for resource utilization, so you’re better able to handle high-volume periods without incurring too much wasted time/cost during low-volume periods.
Interested in finding out more about how software can help you manage your 500+ property tax assessments?
Companies with 500+ property tax assessments simply can’t manage it all manually, using spreadsheets and calendar apps. Software is the most efficient, and responsible, way to comply with tax requirements and give your team back the time it needs to handle more high-value tasks, like lowering your tax bills through protests and generating accurate forecasts.
CrowdReason property tax software makes compliance easier. MetaTaskerPT allows companies with a high volume of property tax documents to automate the data entry process. Simply scan and upload your assessment notices and other tax documents into the software, and it quickly and accurately extracts all the relevant data—due dates, assessment values, addresses, and more. You can then import it all into your own management system, or have it imported into TotalPropertyTax (TPT) software.
Even without the use of MetaTaskerPT, TPT on its own is a valuable software tool to have. No more passing around spreadsheets and files—you can store all your property tax data, from assets to values to bills, in a single application. It automatically verifies key data associated with every tax jurisdiction in the U.S., so there’s no need for you to manually track deadlines.
Plus, you can quickly import or update data, like assessment values, with just the click of a button, reducing the time you spend on data management. And because all your property value data is closely integrated, you’ll gain valuable insight into your property’s tax activity—along with the time you need to evaluate and appeal.