If you’re wondering about the difference between secured vs. unsecured property taxes, I’d wager a guess you live in California. Why? Because it’s the only state in the union that uses this terminology in reference to this common ad valorem tax. Everywhere else, “secured property tax” is simply called real estate tax (real estate is attached to or secured by land); and “unsecured property tax” is called personal property tax (movable property not permanently affixed to a particular location).
Whether you’re a small or large business in any state, managing both types of property tax can be a challenge. That’s why an increasing number of organizations are turning to technology for help. Not only is tax software incredibly useful for tracking and organizing what often turns out to be huge quantities of information; it also speeds up the tax process and frees up valuable time for your highly skilled (and highly paid!) tax professionals.
In this article we’ll look at how technology can help manage your unsecured property taxes in particular.
The Unsecured Property Tax Cycle: Where Technology Helps
Unsecured property tax in every state revolves around an organization’s moveable assets and the depreciation of those assets. One of the main differences between secured vs. unsecured property tax is that the personal property tax cycle requires you to file a return estimating the value of your assets, while the real estate tax cycle does not. (For real estate, you simply receive a notice of your property’s assessed value, which kicks off the tax cycle.) This single difference—the valuation of assets—adds a layer of complexity to unsecured taxes that makes software a worthwhile investment.
Preparing and filing returns makes up the largest portion of the tax cycle. (For companies with thousands of accounts, it can be a nightmare to get business personal property tax returns out the door.) Your asset information is the basis of this stage. You’ll need to determine the correct depreciation for all your assets, or the overall value of your personal property will be incorrect.
If you’re tackling the filing stage without software, that means you’re doing the work of depreciating your assets elsewhere, perhaps in an Excel spreadsheet. That requires your team to contact assessors to get the appropriate depreciation schedules and then apply them to your assets manually, altering the numbers as needed to get an accurate valuation. Once those values are determined, you or another team member must enter them into return forms by hand.
Tax software reduces the time your team spends on filing. With all depreciation schedules built right into the system, values can be calculated and recalculated in a fraction of the time, making it easy for you to see what one depreciation collection looks like applied to your assets vs. another. And once your numbers are final, the software automatically transfers values onto the right tax return forms. It’s fast and accurate—more accurate than human data entry—and dramatically changes the way you calculate values and prepare and file returns.
Forget about spreadsheets—get a closer look at the advanced application that securely stores all your property data and documents, and reduces your returns filing time.
Assessments and Appeals
Tracking incoming assessments and protest deadlines is an important step in ensuring you’re being taxed fairly. If you don’t have enough time to prepare for a protest, you could miss out on significant savings.
Every assessment notice has valuable information that will be recorded in your books, including the assessor’s estimates of market, assessed, and taxable values. Without technology, you’ll have to compare your filing to the assessor’s numbers and do the recording manually. And if you want to appeal, you’ll have to assemble the supporting documents and track your appeal using spreadsheets or notes.
Again, tax software streamlines assessment tracking and protesting. The values you filed are kept in the system, making it easy to compare them to the assessor’s values and determine if you need to appeal. And if you do decide to protest, you can assemble the necessary documents quickly and efficiently, as well as track hearing notices and appeal responses.
Tracking and paying unsecured property tax bills constitutes another significant portion of the tax cycle. If your organization has multiple properties, you’re likely dealing with numerous tax bills in different jurisdictions. Tracking that the bills arrive, ensuring they’re correct, requesting checks, staying on top of installment payments, and meeting all due dates are essential activities in this stage. Without technology, it’s a major challenge (and incredibly time consuming) to keep up with it all. And a single missed deadline or incorrect payment amount also puts you at risk for incurring costly penalties.
Tax software allows you to track incoming tax bills, due dates, and receipt of payments so nothing falls through the cracks. Your tax bills can be clearly marked in the system as missing or received; you can also run reports on missing bills. And some software (like TotalPropertyTax) even links directly to an accounts payable solution, which automatically takes care of check requests and bill paying. Once your bills are paid, they can then be linked to all the relevant supporting documents stored in the system for future reference.
Want to see how advanced property tax software works?
TotalPropertyTax is sophisticated property tax software that automates much of the manual, repetitive work associated with the tax cycle. As a result, the tax teams we work with have more time for higher-value tasks, like crafting appeals that save their organizations money. Why not book a demo to see our software in action? In addition to a customized tour of our software, we’ll discuss your team’s unique needs for property tax software and see how we can help. Take the first step toward simplifying your tax management process, and book a demo today.