During our recent webinar on CFO.com, Paying More than You Should in Commercial Property Taxes – A Guide to Better Risk Management, the question was asked, “What are the key characteristics of companies that are most likely to benefit from developing property tax management plans?”
Here are the key takeaways:
- Any company that owns its own real estate, machinery, equipment, and inventory can benefit from a property tax management strategy.
- Companies with multi-state portfolios and significant high-cost business personal property assets are best positioned for significant benefits from a property tax management plan to drive cost savings.
- Companies affected by significant economic and industry changes, such as manufacturing moving off shore or increased automation, can benefit from a property tax management plan that challenges assessments based on outdated assumptions about business processes and equipment valuations.
For more detailed insights read the complete transcript below or watch the video.
What are the first steps a finance leader should take when preparing a property tax management plan?
Edited transcript: Webinar presentation and discussion with Anne Sheehan, CEO of Real Property Tax Advisors, Stu Hueber, VP of Tax for Dean Foods, and Joe Fleisher, Editorial Director of CFO.com and moderator.
Anne Sheehan, CEO, Real Property Tax Advisors:
My position is that every company is subject to property taxes, so any company could benefit. As far as real estate goes, if you own the building or if you’re the single tenant in the building, you have the right to challenge your assessment.
When it comes to business property, every business files its own returns for machinery, equipment, and inventory. There are some very basic exemptions for business property that are often overlooked. We’ve taken on new clients and found that they have never filed for a Freeport inventory exemption. That’s a nice little exemption that is available in many states throughout the U.S. for goods in the process of being manufactured. It’s very specific and you often have to provide a fair amount of data, but if you manufacture a product and send it out of state that provision could save you a small fortune in property taxes.
The potential for saving will always vary with asset value. Companies that have multi-state portfolios with high-cost business personal property assets, they’re going to have a potential for larger savings. But even a company that’s smaller and not multi-state can benefit from a property tax management strategy. They might be a manufacturer with just two or three buildings, or a for-profit hospital, but they can still save on property taxes. And then just to back up what Stu said earlier, changes in manufacturing, automation, and disruptions like 3-D printing are coming in and changing everything. All of those are characteristics that could be leveraged into a property tax savings strategy.
Joe Fleisher, Editorial Director of CFO.com:
Thank you, Anne.