Advantax proactively resolves valuation issues for a high-tech manufacturer, saving the company over $500,000
THE CHALLENGE
The facility in Arkansas produced and assembled connectors used in high-tech industries. The taxpayer suspected that the facility was over-assessed, but was concerned about the consulting process due to a negative experience with a previous property tax appeal that led to a strained relationship with the jurisdiction.
THE SOLUTION
Advantax worked with the local facility to proactively review the jurisdiction’s assessment methodology in conjunction with the assets at the facility. During the comprehensive review process, Advantax identified numerous assets included in the assessment, but were not physically located at the facility, as well as assets that were permanently idle. Advantax also determined that a significant portion of the assets at the facility were misclassified and qualified to be valued under shorter lives according to state guidelines. Advantax quantified all the proposed adjustments in a detailed report, providing substantive documentation to support the findings. Advantax helped the taxpayer prepare the tax return and then explained the proposed asset and classification adjustments to the jurisdiction.
THE RESULTS
The jurisdiction accepted the return as filed, except for the proposed shorter life for tooling assets. The taxpayer filed an appeal with the local board to pursue the issue further and was able to resolve it before the board; based on the statutory analysis and state guidelines submitted by Advantax. As a result, the overall value of the facility was reduced from $112 million to $70 million. In addition to saving over $500,000 annually, Advantax was able to proactively achieve these results while enhancing the taxpayer’s relationship with the jurisdiction.
