Advantax, Inc., a comprehensive property tax consulting and software firm, is challenging businesses to reevaluate whether outsourcing their property taxes or managing them in-house is right for them.
“While the predictable answer from a consultant might be ‘absolutely,’ Advantax wants to spread the word that ‘it depends.’” says Advantax’s founder and CEO, David LeVan. The real question is not ‘should a business outsource?’ but rather ‘which option is the most efficient and helps businesses to focus on what they do best?’
“In this constricted economy, businesses are struggling to stay afloat. Becoming efficient and focusing on their core competencies can be that proverbial life-vest.” David added. “Evaluating partnerships for business processes is a foremost step to create needed efficiencies during a recession.”
The challenge of considering whether to outsource or manage property taxes internally can be a bit complex. Advantax has laid out some initial factors to consider:
- Complexity – There are an estimated 12,000 taxing jurisdictions. Is a 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 equipped to do the same?
- Staffing – Most property tax returns are due between January and May. What difficulties arise when trying to be appropriately and seasonally staffed to accomplish the filings? Can a corporate tax department’s staff be more effectively deployed to strategic, value-adding initiatives?
- Expertise – Does significant property tax knowledge reside within a tax department? Can property tax knowledge be built into it?
- Costs – Have all of the costs to manage the property tax function internally been considered? How about all of the costs to outsource?
Considering these factors within the context of the company and tax department’s goals/focus will help determine if outsourcing is the viable option.