War is hell!  This often repeated statement is thought to have originated in a speech given by General Sherman during the Civil War.  War IS hell, but is it also a time to ponder enacting a Federal property tax?  Well it was in at least two instances.

In 1798 we had an “Undeclared War with France” after they captured hundreds of US merchant vessels.  In an effort to fund the “war” Congress passed a national property tax.  Property was divided into three categories:  houses over $100, land and houses under $100, and slaves.  Assessors in each of the 16 states were authorized to carry out the property tax.  Values were established, taxes were collected and the war ended in 1800 (yes, contrary to what you might think we are no longer at war with France).

In 1943, three economists, commissioned by the Treasury Committee on Intergovernmental Fiscal Relations, wrote a proposal to modernize property taxation.  They recommended dozens of reforms to centralize and standardize property assessment at a Federal level.

World War II had changed people’s opinions on taxation.  People, in general, were motivated to contribute to the war effort at all levels.  The Revenue Act of 1942 forced most workers to pay income tax for the first time and still opinion polls consistently showed 85-90% of people thought the new taxes were fair.  Property taxes weren’t quite as popular, though, because they didn’t go directly to the war effort.  This, coupled with overwhelming disagreements in Congress, killed the idea of a Federal property tax.  War is not the best solution.  A Federal property tax probably isn’t either.

Are breast pumps taxable for personal property taxes?  Now I understand that this may be a question that you never contemplated…..You may be wondering, “what’s the relevance between property taxes and breast pumps?”  Or even “how can an item that might only cost $200-$500 be taxable for property taxes?”  Those are great questions.

Let’s say your company distributes breast pumps to hospitals for use in the maternity ward……  For instance, a commercial style, double pump, electric, adjustable speed breast pump complete with battery pack and a nice travel bag….not that I would know.  Even though this pump sounds really fancy, and I’m sure it is, the resulting property tax on that pump will only be around $10.  Yet, many jurisdictions (and remember 39 states tax personal property) will still require you to report it and pay tax on it.

Don’t we all file enough personal property tax returns already (Los Angeles County alone has 1.7 million personal property tax returns filed annually)….. why the need to pump out more?  Why give taxpayers an additional cost for processing a personal property return that will only result in a $10 tax (not to mention their costs for processing a $10 check to pay that tax)?  It sure would be nice to wean taxing jurisdictions off these nuisance returns.

It is human nature for us to make comparisons.  Remember when you were dating (or maybe you still are) and how you compared one date to another to find out which was more “your type”.  The fact is that we do this in many areas of our lives…. Chevy or Ford, Miller or Bud, Batman or Spiderman, PC or Mac, satellite or cable….  Comparisons of similar items help us evaluate them better.  In property taxes, comparisons are extremely important (so important that one of the three approaches to value is the “Sales Comparison Approach”).

Who has heard of the Los Angeles Dodgers?  How about the Reno Aces?  The Reno Aces is a Triple-A baseball team based out of Reno, Nevada.  They recently completed construction on a new ballpark (officially opened in April, 2009) and are disputing the value with the Washoe County Assessor.  According to the Reno Gazette Journal, the Assessor has compared the new Reno Aces stadium to the Los Angeles Dodger’s stadium, saying that the quality of the ballpark is similar to Dodger Stadium.  The attorney for Nevada Lands (owner of the stadium) argues the stadium is a minor league stadium and should be valued accordingly.

I’m just wondering if the Washoe County Assessor has ever been to Dodger Stadium to analyze its comparability to the Aces Stadium.  Let’s see where they compare and where they don’t.  Starting with where they compare… they both play the Cubs.  The Aces play the Iowa Cubs and the Dodgers play the Chicago Cubs.

Okay, let’s see where they don’t compare so much.  Aces Stadium has a capacity of 9100; Dodgers Stadium has a capacity of 56,000 (it now holds the record for being the largest major league ballpark).  The average ticket price for the Aces is $7 (very affordable for families).  The average price of a beer at Dodgers Stadium is probably at least that.  Dodgers Stadium is in Los Angeles with a population of nearly 10 million to draw from.  Aces Stadium is in Reno with about 200,000 to draw from.

Now I’m not a baseball stadium value expert and really am not sure what the going rate for baseball stadiums is, but I do know that an argument for valuing a minor-league baseball stadium against Dodger Stadium is not a fair comparison. This whole comparison thing works best when we compare things that are actually comparable.

You may recall our New Years Resolutions, Property Taxes and Free iPods blog last month when I asked for your ideas on what you’d like to read about.  In that post I asked: “What property tax articles have you read lately that disturb you?  What property tax practices make you laugh?  Or Cry?  What crazy assessment techniques make you mad?........” 

Well, let me tell you I received some very enlightening and entertaining comments and stories!  Thanks for all the submissions, it was great to read them.  You may also recall there was a little incentive for the top 4 ideas (click here to find out more).  After much deliberation, here are our four winners:

·         Our fourth place winner is Robert with Tyson Foods, Inc.  He was intrigued when an assessor in Missouri stated that the state suggested they should be careful about lowering values as this was only a short downturn so they could have trouble taking the values back up once the recession was over.  Interesting valuation concept!

·         Our third place winner is Hugh with Sourcecorp.  Property tax bills are collected quarterly in MA.  The first two quarters are due before the total tax is determined (based on estimates) and the third and fourth quarters are then trued up.  Isn’t there an easier way to do this?

·         Our second place winner is Daniel with Ahold USA.  Daniel commented on a Minnesota Tax Court judge who ruled that an assessor was not qualified as an expert because he did not have the legally mandated appraisal license!  I wonder if there are any others out there……

·         Our first place winner is Lesli with Rotech Healthcare Inc!  Lesli questions why auditors in California can freely adjust values on equipment 200%, 300%, 400% using trade level adjustments.  With little or no guidance (or analysis for that matter), trade level adjustments have added a new level of frustration with CA audits…..  as if we didn’t have enough frustration already.  

Congratulations to Leslie, Daniel, Hugh and Robert!  Leslie will be receiving her new iPod soon.  Daniel, Hugh and Robert can also expect their iTunes gift cards to arrive shortly.  Thanks again for all the submissions!  Keep reading the 'A Tax to Grind' articles to see if your submission is transformed into a blog.

On Wednesday, February 10, 2010, an earthquake measuring 3.8 shook northern Illinois.  It was actually felt from Wisconsin to Tennessee.  How do you like that?  Ten inches of snow and then an earthquake!  Back to back surprises.  Needless to say, it’s been an eventful week!

The epicenter for the earthquake was a farm field in Elgin, which is less than10 miles from where I work in St. Charles.  As fate would have it I missed the earthquake (traveling) but I did not miss the drama surrounding it.  Friends and family were emailing and texting feverishly by 4:30 am.  Some thought a snow plow had hit their home.  Others wondered if a train had derailed.  Some slept through it.  But all were surprised by the event.

It’s the 2010 property tax compliance season and most of us don’t want to be surprised, at least with unpleasant surprises like missing an important deadline or incurring the penalties that follow a missed deadline.  So many dates – assessment dates, return due dates, extension dates, appeal dates.  Even the best tax departments can feel overwhelmed (and addicted to post-it-notes).

In the spirit of ‘entertaining and enlightening those afflicted with property tax’ (particularly the enlightening part), I want to offer you our 2010 PropTax Calendar.  The 2010 PropTax Calendar is a handy tool that includes all of these important property tax dates.  The information is categorized by state and between personal property and real property.  I regularly receive feedback on how the calendar is a useful resource for tracking and planning.  In fact, if you already have a 2010 PropTax Calendar, post a comment and share your thoughts on it.

You can get your free 2010 PropTax Calendar several ways; go to www.advantax.com, email me at dlevan@advantax.com,or leave a comment on this blog post.  Either way, we’ll get you a calendar and help you avoid the surprises… maybe even save some post-it-notes.