Topic: A Tax to Grind, Property Tax Appeals
Thursday, 28 October 2010 by David H. LeVan
I drove past Six Flags Great America in Gurnee and saw the giant spider atop the American Eagle roller coaster and it got me thinking. Early in my career I was working in the valuation group for a public accounting firm. One of my assignments at that time was to value an amusement park, specifically looking at the value of the roller coaster. So, we went out to see the park. In fact, they opened the park just for us. It was very cool to have the park to ourselves (although it would have been much cooler if the rides were actually running). The 50+ year old wooden roller coaster looked spectacular. It brought back wonderful childhood memories of state fairs and amusement parks.
The valuation was done for property tax purposes, which at the time was not too relevant in my life since I didn’t own any property and only a few of my assignments were related to property taxes. The taxpayer couldn’t understand why the value kept going up every year. We reviewed his personal property tax filings and noticed that the reported costs kept increasing every year. Upon further digging we found that each year he added all of the repair costs to what he reported. The annual maintenance/repair costs for the roller coaster were huge (I’m sure that is a relief to all of you who like to ride roller coasters). Every year portions of the wooden roller coaster were replaced, reinforced and repainted. The taxpayer kept reporting these costs and the assessor kept adding the resulting “property value”. When totaled, the costs reported for the roller coaster were three times as much as what they should have been!
The result was a lower reporting basis and a more accurate value. The taxpayer had a better understanding of how to report and explain costs and the assessor had a more accurate basis for valuing the roller coaster. As for me, I rediscovered my love of roller coasters and exposed a budding new appreciation for property taxes.
Thursday, 21 October 2010 by David H. LeVan
Several years ago my wife and I had the opportunity to attend a wedding in Greece. For those of you who have seen “My Big Fat Greek Wedding” there were some similarities…. Only this was way better because it was actually in Greece! It was an outdoor wedding in a town by the Aegean Sea. The reception was in an open air restaurant right by the water – a very romantic setting. The festivities went well into the early morning hours. I believe the bride’s grandmother was still on the dance floor when we left at 3:00 AM!
It was truly an international event. The bride had family from Albania, Greece and Italy. The groom’s family hailed from the countries of Illinois and Florida. Thus, Albanian, Greek, Italian and English were all spoken at the wedding but it seemed that only the Bride knew all four languages. I found myself trying to communicate with other wedding guests who didn’t speak English. My attempts to speak louder, annunciate slower, wave my arms and even break into Spanish (I have a limited grasp on the Spanish language so I usually stick with “Hablo Ingles?”) did not help. It seems that the best communication happened when the bride was present to interpret between the different languages. Typically this resulted in being hugged and even kissed by the other party for whom she was interpreting (in retrospect I’m not exactly sure what she was saying to them).
When I think about it, isn’t the job of a property tax representative to interpret? When it comes to property taxes, there are two languages out there – the language of our company and that of the jurisdiction. The language of our company is defined by the unique set of financial policies; policies driven by accounting guidelines. Among other things, these policies determine how assets are capitalized, recorded, categorized, transferred and disposed. The language of the jurisdictions is that of fair market value, defined by its own policies and guidelines. Each jurisdiction (and there are thousands) may even have its own dialect. Communication between those speaking the two languages can be very difficult at best. It may often sound really loud, and look like a lot of arm waving, but little is being accomplished. It all changes when an interpreter walks into the conversation to help translate and bridge those language gaps. Who knows… you may even get a few hugs and kisses.
Thursday, 14 October 2010 by David H. LeVan
When I heard about Randy Moss’ trade back to the Vikings last week, it brought up all kinds of bad thoughts. As a lifelong Green Bay Packer fan, it can be difficult to think of positive attributes for Randy Moss…. or any Viking for that matter. He was such a jerk back in his Viking days. In trouble with the law. Disrespecting other players (mostly Packers). Just another Viking to hate. In fact, I think the Vikings were even sick of having him around. Having followed him a bit with the Patriots, I’d have to admit that he seems to be a different person….. and an even more amazing receiver. Maybe going back to Minnesota is like a second chance for Randy Moss.
As a corporate property tax professional you are sometimes put in a position where the time crunch and lack of resources don’t allow you to pursue all of the savings opportunities available. During the busy season, it may become all about getting returns out the door. It may make you wonder if you left any savings on the table. The PropTax Assessment validates that this is in fact the case for the majority of companies.
Don’t give up on savings potentials for the current year! Many states allow taxpayers to amend personal property returns well after the original returns were filed. Some states have formal amended return processes while others are more informal. For example, Indiana allows for amended returns within 6 months. That means October is the month to review those Indiana returns and look for any savings opportunities you may have missed. It’s a second chance for property tax savings.
Who knows… maybe there are additional property tax savings for your company….maybe Randy Moss and that old timer they have for a quarterback will connect to make the Vikings a viable playoff contender.