Why You Should Challenge Your Commercial Property Tax Assessments

Posted by Anne Sheehan on Mar 17, 2015

Why You Should Challenge Your Commercial Property Tax Assessments Do you believe that commercial property taxes are just another cost of doing business?

If so, you’re likely overpaying your commercial property taxes. There are several strong reasons why you should consider challenging your commercial property tax assessments. 

These taxes are a variable cost, not a fixed one. The reality is commercial properties are widely over-assessed, so if you want to save money, it’s worthwhile to evaluate your current property tax situation.

Even if an organization has been in business for a century, it doesn’t mean that it’s doing everything right and there’s no room to improve the bottom line.

Take the example of a 100-year-old American steel product producer with manufacturing and warehousing facilities nationwide. This organization still had much to learn about paying taxes on its real and personal property.

The organization’s executives didn’t know how to challenge commercial property tax assessments. In fact, they didn’t even know that challenging was a possibility!

Lowering commercial property tax payments (the largest cost of corporate occupancy) is a largely uncovered stone.

Even the few businesses that do proactively manage their commercial property taxes (often by outsourcing the laborious task to professional tax consultants) usually have room for improvement. 

Stop Overpaying Commercial Property Taxes! (Yes, This Means You)

Here’s the cold, hard fact about commercial property taxes: 85 to 90 percent of U.S. companies are paying their bills with no questions asked.

This means nearly every business is paying its corporate property taxes at whatever assessed value the local assessor chooses, without contest. 

On average, companies overpay their commercial property taxes by 31 percent. Depending on the value of the property portfolio, this overpayment could amount to hundreds of thousands of dollars — if not more. The bigger the property portfolio, the more likely properties are over-assessed.

Overpaying commercial property taxes doesn’t necessarily mean that every asset in a portfolio is over-assessed. However, about 75 percent of a typical commercial property portfolio is over-assessed. 

If there’s so much money being needlessly spent on commercial property taxes, why aren’t more people doing something about it?

You now know that challenging your commercial property tax assessments is an option. If you don’t have the time or expertise to challenge your assessments alone, look for a property tax consultant equipped to do the hard work, manage the critical dates and get results on your behalf

Learn more about successfully challenging your commercial property tax assessments in our updated e-book, The Corporate Taxyer's Guide To Minimizing Commercial Property Taxes.

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