The pandemic has hit local governments hard financially, and they may look to ad valorem taxes on industrial and commercial properties to replenish their coffers. Sometimes, assessors improperly inflate ad valorem property tax bills by including the value of the taxpayer’s intangible assets, which are not subject to property taxes in some jurisdictions. The summer 2020 Insights from Willamette Management Associates has a number of articles on this, including “The Identification and Extraction of Intangible Property From Unit Principle Valuations” (Tia Hutton and John C. Ramirez). The entire issue is devoted to property tax planning, compliance, and appeals.
Practice op: Examine your local area to see whether the laws exempt certain intangible assets from commercial property taxes. You may have clients who have overpaid their property taxes if the value of intangibles was improperly included in the assessment.
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