FALL/WINTER 2017-2018 | BWD 7
Every taxpayer has rights, but unfortunately many are
unaware. You have the right to protest decisions and
assess the true value of your property … knowing and
understanding your rights will provide you with the
information you need to make informed tax decisions.
Properly classify new assets
New assets entering your organization should be evaluated to
determine their proper classification. Categorizing your assets is
essential to ensuring minimum property tax liability — regardless if
it is real or personal, or taxable or non-taxable.
Review your fixed assets on an annual basis
Like any other expense, an annual review of personal property tax
is important. Whether through a fixed asset inventory assessment
(applicable for property tax or many other control requirements) or
a discussion with knowledgeable resources, it is critical to ensure the
accuracy of what you own. Review the location of your assets and
update records that encounter full or partial disposals.
Remove disposed assets from fixed asset records
A major issue for many taxpayers is not accurately communicating
that assets have moved from the organization. One of the main
reasons is ineffective documentation processes — beginning with
the already lean resources that utilize the assets, to the accounting
department who is responsible for reporting. Implementing effective
processes to enhance communication between departments is key to
accurately reflecting disposals.
Take advantage of exemptions
Exemptions are available for both real and personal property, which
can partially or fully reduce the value or millage rates that directly
impact property tax liability. There are programs to assist taxpayers
regardless if the asset value is below certain thresholds, if there is a
particular asset functionality, or a benefit to the community.
Review assessments for accuracy
We all receive a notice of proposed property tax assessment,
or Truth in Millage (TRIM) notices in the mail that frequently
state, “This is not a tax bill.” We are often so distracted by other
responsibilities that we place the notice on the back burner
to rev iew when we have more time. Months later, we receive
a tax bill and are surprised at what we owe. At this point, we
have no choice but to pay the property tax liability. Just as
you visit the doctor for an annual checkup, get in the habit of
consistently reviewing your notice for accuracy. If you are not
sure how to interpret the value, ask your state and local tax
(SALT) professional.
Know your rights
Every taxpayer has rights, but unfortunately many are
unaware. You have the right to protest decisions and assess
the true value of your property. Engaging your rights should
not be considered contentious — knowing and understanding
your rights will provide you with the information you need
to make informed tax decisions. Keep in mind, rights have
critical deadlines to pay particular attention to. By knowing
your rights and their appropriate deadlines, effective change in
property tax liability can occur.
For more information, please visit:
https://www.rehmann.com/paul-bach
ABOUT THE AUTHORS:
Paul Bach is a senior tax manager in the SALT group at Rehmann. He primarily assists clients with real estate
and personal property matters, and analyzes current assessments to determine whether assets are valued
accurately. Contact him today at [email protected].
Sam Hodges is a principal and director of the SALT group at Rehmann. He focuses on providing customized
SALT services, advising clients both domestically and abroad on multistate tax issues including tax planning
and tax dispute resolution. Contact him today at [email protected].