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23 Overlooked Property Tax Savings Opportunities
Get One Step Closer to Lowering Your Tax Obligations. Ask yourself any of the following questions, then ask us what we recommend, and you’re one step closer to successfully lowering your current tax obligation.
1. Are your reported costs actual original costs or from a purchase price allocation?
2. What are your capitalization policies for fixed assets and inventory?
3. Have there been changes in technology or operating efficiencies in the property subject to assessment?
4. Are there units or areas of your plant that are underutilized or idled?
5. Are there raw materials or other conversion cost increases that cannot or have not been passed on to your customers?
6. If you were building your existing facility today, would you replicate it or change the construction in any way?
7. Have fully depreciated or obsolete and unused fixed assets been written off, or have reserves been set up for replacement?
8. Has increased industry competition and/or opening of competing facilities reduced profitability?
9. Have interest rates or inflation negatively impacted your property’s operations or required investment?
10. Are any aspects of your facility less than “state-of-the-art” regarding efficiency and/or production capabilities? Assessors trended costs assume current technology is in place and do not consider or make adjustments for high-cost producers.
11. Is your property fully utilized as designed, operating at its optimal production level, and achieving the margins that justify the original investment or purchase price?
12. Is there an optimal balance between production units, or do they need recalibration?
13. Do your reported or capitalized costs include any attributable to property tax-exempt intangible assets?
14. Have you compared your actual plant and equipment lives to a local appraiser or assessor-published useful lives?
15. Have all available tax exemptions and incentives, such as freeport for out-of-state sales, tax abatements, etc., been identified and pursued?
16. Has all pollution control-related property qualifying for permanent property tax exemption been identified and certified by the approval authority?
17. When did you last review currently useable and used assets against fixed asset lists to identify “ghost assets” – either no longer present or present but no longer useable or in service?
18. Do you periodically adjust your inventory values to reflect decreased values of slow-moving, damaged, or obsolete items?
19. Do you frequently compare your property assessments with similar or nearby properties, consistent with Texas constitutional requirements (“equal and uniform” taxation of similar, a.k.a. “comparable” properties)? Changes in their values may justify a reduction in your value.
20. Do you regularly protest and/or appeal your assessed values? (If you do not, you are most likely paying more than your fair share annually.)
21. Do the appraiser’s forecasted production volumes and decline rate appear wildly optimistic for mineral properties?
22. For mineral properties, does the appraiser consider your increased cost of goods and services due to inflation and labor shortages?
23. For mineral properties, does the appraiser incorporate periodic workover expenditures into the discounted cash flow for mineral properties?
