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Property Tax Done Right: Solutions For Tax Compliance & Fair Payment

Posted by Lisa English on Nov 13, 2019 9:54:06 AM

Property Tax Done Right: Solutions For Tax Compliance & Fair Payment

No matter what kind of business you are or where you’re located, property taxes cannot be ignored. Tax compliance—not only following the rules of filing but actually paying the taxes themselves—isn’t something to take lightly; the consequences of noncompliance could be devastating for any company.

But as any tax team knows, there’s more to property taxes than just compliance—it’s also about making sure you’re paying a fair and equitable amount compared to other businesses in your jurisdiction.

So how can you be compliant and confident that your taxes are correct—in other words, how do you make sure you’re doing the process right on all fronts? For most businesses, the right software goes a long way in this endeavor.

Do you have hundreds of property tax filings every year? Our software was built to handle it all—in less time than you would expect. Schedule a demo to see it in action.

Tax Compliance

Tax compliance, by definition, means following through on your responsibility to pay property tax, and doing so in a way that meets the requirements of your taxing jurisdiction.

The specific requirements of taxing jurisdictions vary.

  • For example, the state of California requires a “wet” signature—an actual, not computer-generated signature—on personal property returns. Many companies, especially those that file a lot of returns, use a signature stamp instead of signing hundreds of tax documents; if that stamp is applied to a California return, the company’s filing will be considered non-compliant.
  • Another example: Texas jurisdictions require non-employees who file a return on behalf of a company (such as an outside tax compliance service firm) to get the return notarized. Not doing so would be a form of noncompliance.

Consequences of Noncompliance

The importance of tax compliance is clear when you consider the consequences of noncompliance.

Failure to pay a property tax bill typically results in an interest charge and a monetary penalty above and beyond the amount of the bill itself. Essentially, if you don’t pay, you owe more. At some point—five years is the average in most states—non-payment leads to an even worse scenario: The government may seize your property, whether it be a piece of equipment or a plot of land—and sell it at auction.

Failure to comply with jurisdictional filing rules has consequences, too, but they are not nearly as severe as those associated with failing to pay a bill. Filing incorrectly means you’ll likely incur a penalty on top of the amount you already owe for property tax. Not filing at all (but paying the bill) means there’s a chance you’ll end up paying more in taxes than what you should owe; you’re also likely to incur a penalty (usually about 10% of the tax bill amount). Filing a property tax return is your chance to provide specific valuation data that supports your fair market value, so skipping this step means you give up your right to appeal.

Stay In Compliance With Tax Compliance Software

Most companies aren’t tax evaders; that makes the main issue with compliance one of meeting deadlines. If you’re still manually tracking deadlines with spreadsheets, there’s no guarantee mistakes won’t be made that could cause something to fall through the cracks.

Using tax compliance software like TotalPropertyTax (TPT) helps you remain in compliance throughout the property tax cycle, whether it’s for filings, appeals, or payments.

  • Our software has detailed information, validated annually, that covers the return deadlines of 10,000+ assessors, and the default tax bill deadlines of 8,000+ collectors, as well as various payment options and scenarios for bill paying, such as installments and different due dates based on property type (real vs. personal property taxes). (For new users, we’ll always check to make sure the information for all the jurisdictions you’re reporting to is included in our database.)
  • Once you’ve set up your system with your properties, your TPT calendar will automatically populate with the relevant jurisdictions’ due dates for returns, appeal filings, and tax bills. It filters the upcoming dates into a “To Do” list, showing outstanding items to prioritize. That means you no longer have to rely on simply getting bills in the mail—you’ll know exactly what needs paying, when. If you don’t get a particular bill, you’ll know it’s time to start tracking it down.

TPT tax calendar

  • TPT also gives you the option of utilizing our tax payment automation solution, which dramatically simplifies tax compliance. When a payment comes due, TPT generates a check request that includes all the appropriate data—check amount, due date, the address to send it to, and the tax bill image—and sends it to Anybill, a tax payment service. An Anybill + CrowdReason integration gets it right every time, follows up to confirm bills have been paid, and provides supporting documentation that goes directly back into your tax management platform.
  • TPT ensures you get the filing process right no matter what your jurisdiction, whether it’s a wet signature on California returns or notarizing Texas returns.

TPT was built to handle hundreds of property tax deadlines, which is why large companies with 500+ property tax assessments often choose us for tax compliance software. You can always be confident you’re meeting your deadlines—and fulfilling individual filing requirements correctly—with TPT.

Tax Compliance Services

Rather than using software, some businesses prefer to hire a third-party organization to handle tax compliance on their behalf—a tax compliance service. Tax compliance services will file your returns on time, review your property values, and appeal if necessary; some even pay your bills on your behalf. (The bills come to them, so they handle tracking and making the payments while you fund their account.) If you’re lacking sufficient in-house resources to handle property tax filings, this may be the best tax compliance solution for you.

Paying Fair & Equitable Taxes

Even if you’re compliant—paying your property tax bills and meeting all the filing requirements—it’s equally important to make sure you’re paying the right amount. (Tweet this!) Many property tax teams focus heavily on compliance because it’s all they have time to do—a situation that can be remedied with the right property tax software. But in reality, the real value of having in-house expertise about property tax should be less about compliance and more about minimizing the company’s tax burden. That means you need to ensure the accuracy of your property valuations—and have the time to do so.

CrowdReason software can help. It creates significant efficiency gains that give you and your team time to do the more important work of property valuation.

  • MetaTaskerPT is a technologically advanced tool that uses a combination of machine learning and crowdsourcing to automate data entry. You simply scan your tax bills, notices, and other tax documents, and it automatically extracts the important data in a fraction of the time it would take your team to do it manually. It then seamlessly imports that data into TPT.
  • TPT takes the data from MetaTasker PT (or imports information from whatever data system you’re using) and presents it in a way that gives you greater visibility over your property’s tax activity. It easily allows you to compare your property values against those on prior year assessments. It also performs allocation calculations for you, reducing the time it takes to determine valuation amounts and removing the risk of human error. So you can forget about doing time-consuming spreadsheets and calculations and transferring them to a legacy application—with TPT you can do more inside the system, making your team more efficient and your numbers more accurate.

Large property tax teams, like Comcast’s team, have switched to our software, reducing the time spent on manual data extraction and data entry, and increasing the time they have to work on reporting accurate information, reviewing assessments, and filing appeals. That means more time is being devoted to tasks that have real financial impact.

Used together or individually, MetaTasker and TPT give you the additional time needed to execute each stage of the property tax cycle carefully, thoroughly, and on schedule.

Interested in learning more about our tax compliance software?

Compliance and efficiency go hand-in-hand. If you’d like to learn more about how CrowdReason software can help with both compliance and property valuation, schedule a free demo. We’d love to show you how our software tools work, and talk to you about your company’s specific challenges with regard to property tax.

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Topics: Tax compliance