Is outsourcing property taxes the best way to go?  While the predictable answer from a consultant might be “absolutely”.  I am going with “it depends”.  The real question is not “should we outsource?” but rather “what is the most effective way to manage property tax compliance and pursue savings opportunities?”  When considering whether to outsource or manage property taxes internally consider the following factors:

·        Complexity – There are an estimated 12,000 taxing jurisdictions.  Is your corporate tax department equipped to manage the numerous tax laws and rulings, renditions, factor tables, exemptions, abatements, tax bills, deadlines and valuation methodologies?  Are the outsource providers you might be considering equipped to do the same?

·        Staffing – Most property tax returns are due between January and May.  Are you appropriately staffed to accomplish the filings?  Can your tax department staff be more effectively deployed to strategic, value-adding initiatives?

·        Expertise – Does significant property tax knowledge reside within your tax department?  Do you want to build property tax knowledge into it?

·        Costs – Have you considered all of the costs to manage the property tax function internally?  How about all of the costs to outsource?

Considering these factors within the context of the goals/focus of your company (and your tax department) will help you determine if outsourcing is right for you.  And here’s another thought… Outsourcing doesn’t have to be an all or nothing decision.  You might just find a partial outsource to be the right decision.