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.