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A Complete Guide To Property Tax Research

Posted by Giselle Kretzschmer on Jan 23, 2020 3:34:04 PM

A Complete Guide To Property Tax Research

Tax research is a very important part of a property tax professional’s agenda. Knowing which tools to use will improve your process, and staying up to date with the industry’s new tools is beneficial. However, some resources are better than others. The more research you do, the better you’ll get at determining which ones work for you and your specific cases—this is key to streamlining your practice and enhancing your work product.

So if you’re looking for some property tax help in this area, you’re in the right place. This article covers a variety of aspects regarding how to do tax research, including property tax research sources and tax research software; it also notes the areas of property tax where research is most essential. (Tweet this!)

Property Tax Research For Each Stage Of The Cycle

All stages of the property tax cycle include some level of research. Below are the stages of the cycle with the most pertinent needs for research highlighted. We then match each need with some direction on how to do tax research in that area, and, in some cases, note specific resources tax professionals use for information gathering.

Preparing & Filing Stage

Whether you’re preparing information requests for real property or business personal property returns, you’ll need to do some level of research to ensure they are completed accurately. There are two primary areas of research in this stage: asset-specific information (information about your own properties and assets), and tax-jurisdiction information (logistical information related to your state or county’s assessments (address, deadline dates, exemptions, etc.) and details regarding tax collection.

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Property Tax Research In The Filing Stage

To research assessment and payment information: The most authoritative source for property tax information will always be the physical documents sent to you from the assessor or the collector. These documents are considered a legal document from the assessor’s or collector’s office and if you follow the instructions as stated you will retain your rights and avoid penalties.

To research tax jurisdiction information: Your assessor’s or collector’s website is the second-best information source. It’s essentially a warehouse of property tax information in the context of one specific county, township, or state subdivision. If available, you can visit the assessor’s website for assessment information and the collector’s website for tax bill information. (They are different entities!) A phone call to the jurisdiction’s office works just as well, if you’d rather ask questions directly. Be cautious with these two methods and get written confirmation of the information requested, because if the information you learned is challenged (i.e. due date or amounts) it's now your word versus theirs.

Assessment Stage

When a jurisdiction sends you an assessment notice you have to verify various pieces of data, which may require some research. Potential areas of research may include:

  • Property Valuation—How much has the value increased or decreased on a yearly basis? How does it compare to last year’s or the previous year’s values? If it is higher or lower than what you assumed it would be, you will want to do some more extensive research to uncover whether something changed in the surrounding area that’s causing property values to go up or down.
  • Property Attributes—If there is a drastic change from the previous year, in terms of square footage, gross building area, net leasable area, or land acreage, you may need to do some research to find out why. For example, say last year’s original assessment notice listed your property’s square footage at 30,400, and this year it was decreased to 20,400. The decrease could be due to a parcel split—for that, you’d want to do light research.
  • (For Consultants) Changes In Representation: Consulting firms should check the Agent section. If this changes to a name other than your own, it’s very probable that another firm or entity is now authorized to represent the subject property. This is common for consulting firms whose clientele is composed of companies with many portfolios, hundreds of properties, and thousands of parcels. If the agent name has changed, additional research is needed to figure out why you no longer have appeal rights to the subject property. This is important because additional authorization paperwork is required for appeal filing that you would not have to worry about if there hadn’t been a change.
  • Owner Changes—A change in Owner information most often indicates a sale. If there is a sale, then documentation to support the sale price can be used to support an appeal; research may be required to obtain it. (Be aware, however, that searching for sale documents can also sometimes hurt your case.)
  • Exemptions—Always verify relevant exemptions associated with the property. If the subject property had an exemption previously and was expected to have an exemption for the current year that is not included in the assessment notice, additional research is needed. This can affect how much the owner will be paying in taxes.
  • Liens—Confirm there are no liens on the subject property.

Property Tax Research In The Assessment Stage

To research changes in representation: Check your property’s record on the county’s site, or contact the county assessor’s office. This could affect how you value this property currently and in the future.

To research sale information: Be aware that some of this information is public and in some states it is not (e.g. Texas is a non-disclosure state). If it is public information, there will be a link to the document in the assessment notice.

Appeals Stage

Once you’ve confirmed and verified all the data on the assessment notice, you can proceed to the next stage: determining whether or not to appeal. (Here’s some guidance on how to make that decision.) If you feel you’ve been overassessed and want to appeal, you’ll need to conduct some tax research regarding the value of your property to solidify your case. You’ll also want to make sure you have all the correct information regarding appeal submission, so that you submit everything the assessor requires (originals vs. copies; blue ink vs. black ink; multiple copies of the same document; additional assessor forms; electronic signatures vs. wet signature, etc.). Once the appeal case is submitted, all information that is relevant and pertinent is acceptable for the evidence packet. This includes trends in the industry, news in the industry, news about the current ownership team, news clippings from the subject property’s surrounding area, maps, historical information, etc.

Some states provide you with information about how the assessors have come up with their current valuations. If that’s the case for you, it’s advisable to review that documentation thoroughly to see if there’s anything valuable you could use for your own evidence packet.

Property Tax Research In The Appeals Stage

The valuation approach you’ll use to appeal will determine the tools you’ll need to do your research:

  • Market Approach—The market approach involves comparing your asset to other, similar properties to ensure it is priced accordingly. To do that you can use:
    • CoStar—Tax research software that gives you access to reliable real estate and lease data
    • LoopNet—An online marketplace that provides commercial property listings for sale and lease in the U.S.
    • City and county business license listings—To find new businesses
    • Tenant lists—Information from shopping malls or commercial building managers about tenants, business operating dates, what the lease covers, and who owns the fixtures in a building
    • NETROnline—An online resource that shows tax rates, cap rates, tax ratios, reassessment dates, tax rate rollback elections, and agricultural and timberland exemptions for counties and jurisdictions
    • GoogleMaps or Geographic Information System (GIS)—These online tools show you the square footage of your property and the surrounding parcels. GIS is available on most assessor websites, and, in many cases (though not all), is free to use.
    • Building permits—For construction and remodeling
    • Building board—For repair, maintenance, and personal services
  • Income Approach—The income approach involves determining value based on the income it is likely to generate in the future.
    • Rent rolls and operating expense information are key to making an accurate estimate of future income. These resources are normally given to consultants to use for appeals by their clients.
  • Cost Approach—This approach works on the principle of substitution: What would it cost to replace this asset?
    • Marshall & Swift—An appraisal guide for developing replacement costs, depreciated values, and insurable values of buildings and other improvements

Tax Research Software

Tax research software is especially handy during the appeal process, both for analyzing your appeal opportunities and supporting your appeal. (We recommend these three valuation tools.)

Software can also be helpful in other parts of the cycle. For example, TotalPropertyTax has detailed information on over 20,000 assessing and collecting jurisdictions—addresses, phone numbers and deadline dates—embedded in it, so you can skip the step of looking this data up yourself. It also includes the most up-to-date return forms from most jurisdictions around the country, along with depreciation tables, which saves you time.

Two popular sites for tax research software reviews and comparisons are G2 Crowd and Capterra; Google is also a useful research tool.

Tracking & Paying Bills Stage

In this stage, data verification is key. If the information on your bills doesn’t match the information you have recorded elsewhere, additional research will be required. Areas to verify include:

  • Tax bill amounts
  • Exemptions
  • Liens
  • Tax ratios in some jurisdictions
  • Non Ad-Valorem items
  • Tax rates
  • Mil rates
  • Installment dates and amounts
  • Discount amounts and due dates
  • Payee information
  • Payment requirements (i.e., electronic vs. mailed check, required original tax bill, etc.)

Another Place To Turn For Property Tax Help: People

Tax research software and other tools are crucial for doing thorough research, but sometimes tax practitioners overlook another helpful source: people. Your fellow professionals can be a great source of knowledge about all areas of property tax, whether they’re speaking at a conference or publishing what they know online. Becoming an active member of industry associations will help you establish relationships with people who know the industry, and discover blogs, books, and articles about industry trends. Not only will these activities come in handy for tax research, but they’ll also help you stay on top of new processes and software solutions that can help your business get ahead.

Not enough time to conduct thorough tax research?

Make sure you’re leveraging all the tools at your disposal to save time wherever possible. Sign up for a free demo of CrowdReason’s property tax softwareTotalPropertyTax (TPT) and MetaTaskerPT—to find out how much time you could be getting back by taking advantage of these automation and machine learning applications. It could be exactly what your team needs to work smarter—and deliver more.

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Topics: Business property tax, Property tax, Tax research