Are there any Ohio State University fans out there?  Most that I have come into contact with are quite excited about the fact that they are fans.  Well, maybe not lately.  OSU has had a tough time winning in November.  After winning the first weekend in the month, its football team lost three in a row.

OSU also lost a property tax appeal before the Ohio Supreme Court.  The issue was over a property tax exemption granted on a building owned by the university but rented to third parties for non-university use.  The State Board of Tax Appeals granted the tax-exempt status and the city and school district appealed to the Supreme Court.  The Supreme Court ruled that the property must be used for university purposes to be exempt from property taxes.  And with a 7-0 ruling, OSU lost again in November.

A colleague of mine recently received his property tax assessment for real estate in the state of Washington.  Surprisingly, it showed an increase in value of 113% even though no additions or expansions were made at the plant in the past year. Additionally, the facility has exhibited significant obsolescence and nothing has improved that situation in the past year  If anything, the value should have declined.   

When he inquired about the rational for the increase he was told in no uncertain terms that they decided to remove all obsolescence and excess depreciation adjustments on larger industrial properties for 2011 because the Assessor wants to generate more revenue for the County.  If a Taxpayer appeals this arbitrary decision they will consider a reduction, if not the higher value stands.  Are they hoping taxpayers won’t notice the increase?  I suppose there will be some who don’t. 

Interesting revenue generating technique!  What are you seeing out there?

How many travelers are excited about the new airline fees?    In order to boost profits airlines have started charging for everything - changing flights, better seats, earlier boarding, food, entertainment…. even pillows and blankets.  According to the Bureau of Transportation, the top 26 airlines combined made $3.84 billion in 2010 profits with $2.1 billion of it coming from fees.  Over half of their profits in 2010 came from fees!  Almost $1 billion came from baggage fees alone!  Do you miss the old days when bags flew free on all airlines?

It appears that the Court of Tax Appeals (COTA) in Kansas is taking a page out of the airlines fee manual.  In the interest of covering about $1 million of their budget, COTA recently proposed significant increases in filing fees, some of the increases being as high as 1000%.  Fortunately the fees were cut so that they are now ONLY doubled.  Are taxpayers supposed to feel good about only having the fees doubled?

Is it even appropriate to be charged to appeal your property value?  Should a taxpayer really have to pay to correct an erroneous assessment?  All the property tax appeal fees gets you is back to where you should have been to begin with.  At least with airline baggage fees your bag gets to travel to the same destination as you….  well, most of the time anyway.

Tell us about your experiences with fee increases for filing property tax appeals at taxtogrind.com.

Ever had a toothache?  It’s painful and annoying!  I am currently having one… probably a filling from my childhood that needs to be replaced.  Going to the dentist to get it fixed is a low priority, not my favorite way to spend time (sorry Dr. Bill).  However, it always feels better after I go.

Conducting an analysis of your fixed assets can feel like a toothache – somewhere between mildly annoying and downright painful!  But it usually results in significant property tax savings.  Much of this comes from older assets that have been physically disposed of but not written off the books.  Let’s say you have an asset fitting this description with an original cost of $100k.  Depending on the tax rate, you are probably paying $400 to $800 in property taxes for that asset.  There’s a reason to clean up your fixed assets.

Now there’s another reason to clean up your fixed assets, at least in Harris County, Texas.  Harris County is giving taxpayers an incentive of sorts (although they aren’t calling it that).  They have adopted NAM (“new asset mix”), which is “an obsolescence factor that is applied when most of the assets in a category are newer”.  They are allowing between 5-18% more in the depreciation of your newer assets if those assets make up more than 50% of your total asset base.

By removing older assets that are still on your books (but not physically present), not only do you save property taxes on those assets, you may also save property taxes on your newer assets by shifting your total asset mix.  Much like going to the dentist, you might dread the thought of conducting a fixed asset study…. but you’ll be glad you did it.

 You may not have received your personal property assessment for Harris County yet.  Once received you usually have 30 days to appeal.  Feel free to contact us if you would like more information on NAM.