Maximize Your Property Tax Investment
Topic: A Tax to Grind, Property Tax Appeals
Thursday, 23 June 2011 by David H. LeVan
Loading ...How do you maximize your investment when hiring a property tax consultant? We all know that savings are important but what about other deliverables? When you have a minute, check out…
Can You Change the rules on Property Tax appeals? Some Assessors in CA think so
Topic: A Tax to Grind, Property Tax Appeals, Property Tax Exemptions
Thursday, 16 June 2011 by David H. LeVan
Loading ...Do you remember playing games as a kid? Some of my best childhood memories were playing kickball, dodgeball or baseball with my neighborhood friends! While most of us were there to have fun, there was always that one kid who would try to change the rules when things weren’t going his way. In dodgeball it was “it only hit my shirt, not my body”. In baseball, the strike zone became non-existent. In kickball he was never out, no matter what the facts might otherwise indicate. And there was always some “new rule” used to explain the situation….. usually one we had never heard of before.
Application software is exempt from personal property taxation in California (and most other states for that matter). When it is included with the price of equipment a taxpayer must identify the nontaxable software portion and show its value in order to be exempt. Seems like a fair rule. In fact, taxpayers have played by this rule for years and the courts have backed the rule. But, like that one kid on the playground, certain assessors and legislators don’t like the rule. They introduced a “new rule”, AB 832, which would raise the standard of proof to make it almost impossible for taxpayers to win. Fortunately the bill has been “ordered to inactive” which means that it won’t be discussed for at least another year. But don’t be surprised if that kid shows up again.
For more information on AB 832, you can check out www.caltax.org.
If you want to know more about how to pursue a position on nontaxable software, feel free to contact us.
Toothaches, Texas and Property Taxes
Topic: A Tax to Grind, Property Tax Appeals, Property Tax Management
Thursday, 09 June 2011 by David H. LeVan
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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.