Property tax appeals: When, how, and why to submit

When your property tax bill shows up, it can feel like there’s no room for negotiation — but that’s not always the case. Property valuations aren’t set in stone, and if your assessment seems off, you have the right to push back. In fact, filing a property tax appeal could save your business a significant amount of money.

Whether it’s a case of outdated records, clerical errors, or assets you no longer own, there are several valid reasons to challenge a property tax assessment. We’ll walk you through how to appeal property tax assessments you don’t agree with.

• You may have valid grounds to appeal your property tax assessment. Property tax valuations aren’t always accurate. Errors like outdated records, double assessments, incorrect property details, or assets you no longer own can all inflate your valuation — and your tax bill. Identifying these issues could give you a strong reason to file a property tax appeal.
• Timing matters when filing a property tax appeal. In most jurisdictions, property owners have only 30 to 45 days from receiving their valuation notice to file an appeal. That narrow window means it’s important to review your assessment quickly and notify the assessor if something looks wrong. Acting early can help preserve your right to challenge an inaccurate valuation.
• Automation can make the property tax appeal process easier to manage. Appealing a property tax assessment often requires tracking deadlines, reviewing valuation records, and gathering supporting documentation. Property tax software can help streamline the process by organizing records and keeping critical deadlines front and center.

A property tax appeal is a formal request to challenge the assessed value of a property. It’s made by the property owner to the property assessor and often starts with a written letter to the assessor (usually the city, county, or township).

There are many reasons to appeal a tax assessment. It all starts when you open a valuation notice from the assessor and see a property valuation amount that you believe is too high. You’ll have two options: 1. You can pay the too-high tax bill because you think you don’t have time to stage an appeal, or 2. You can appeal the valuation and possibly lower your tax bill.

To help you pick the right option for your business, you can request an itemized list of property — called work papers — the assessor used to determine your valuation. You may find that the assessor’s valuation is fair and no appeal is necessary. However, you may find mistakes or disagree with some of the criteria the assessor used to determine your valuation. In the latter case, the following are a few scenarios you may identify during your review of the list.

Within the last year, you may have:

• Sold personal property assets
• Discarded personal property assets
• Moved personal property assets to a different location

You still own any personal property assets you moved but they should not be included in the valuation for their original locale. Instead, the moved assets should be assessed as part of the other location’s valuation.

How do the actions above impact your valuation? Consider this example: A few months prior to your valuation, 10 employees broke their laptops. So you bought 10 new laptops to replace the old ones. In your valuation, the assessor noted your purchase of the new laptops but also included the discarded laptops. Therefore, your valuation would be higher as you’re being assessed for property you no longer own.

You shouldn’t be on the line for personal property you possess but don’t own. Leasing is a prime example. Assume you have a large copy machine you’ve leased for the office — the copier is in your possession, but it’s owned by the company you leased it from. That leasing company is likely responsible for paying taxes on the copier, not you.

Similarly, for real property, the assessor’s records may not be updated to reflect a change in ownership of a location. It may show you’re still the owner of record and, therefore, still responsible for the taxes. A property tax assessment appeal letter can help bring this issue to the assessor’s attention.

Called a double assessment, the assessor may have valued the same real or personal property twice — meaning you could be on the line for twice the correct amount. This costly issue sometimes occurs due to a clerical error in the taxpayer name or address. For example, you may be sent a valuation notice under the names John W. Smith and Johnny Smith, or for 1523 W. Main and 1523 West Main. If this happens, a property tax appeal should help clear up the error.

The more depreciated an item is, the less value it has — and the less you owe at tax time. However, there’s room for interpretation, which can lead to some of your personal property being less depreciated than you’d want. This may be due to the assessor not having a clear understanding of your assets.

For example, on your tax return, you may have used an ambiguous term to describe your property — e.g., “cash register.” The assessor didn’t know whether the item was a classic register you might find in a small diner or a high-tech, point-of-sale system modern bars use. The former version would retain its value from year to year because of its age, while the latter version would likely depreciate heavily from year to year. Assuming the assessor valued it as general machinery or equipment — when you actually had a modern register — you’d owe more taxes on that asset.

Inaccurate property details can lead to an inflated valuation. Here are a few property details that tend to be wrong:

• Building square footage
• Land acreage
• Construction year
• Building features (such as a walk-in freezer or covered patio)

If any of the details aren’t right, you may have good reason to protest property taxes.

Sometimes it’s not that an asset has a particularly high absolute value, but that the valuation is high compared to similar properties near you. For example, if you own an Italian restaurant that’s valued 50% higher than another, similarly sized Italian restaurant located a mile away, there could be cause for a property tax appeal.

If your real property increased, say, 10% over last year, you may find this unreasonable (or unlawful), depending on the state where your property is located. In that case, you may decide to file a property tax appeal.

If any of these situations apply to you, keep reading to learn how to appeal property tax assessments.

Follow these steps if you decide to file a business property tax appeal.

The first step to appealing your property tax assessment is to look up recent sales of similar properties in your neighborhood, taking note of lot size, features, and condition.

If you decide to appeal a valuation, notify the assessing jurisdiction of your intentions. In most states, a property tax appeal notification consists of a letter stating your intentions (see a sample outline of a property tax appeal letter below). Keep it simple:

• Include phrasing that indicates the letter is a “formal notice of protest.”
• List the account number or numbers you plan to protest.
• State the reason(s) for protesting. Common reasons to dispute property taxes are that a property has been assessed more than once (called a double assessment), an assessed location has been recently closed, or the stated property value is too high.
• Sign the letter and send it.

Not all states accept property tax appeal letters; some require completion of an official notification form.

You’ll receive a letter or official document from the appeals board telling you whether your property tax appeal was approved, partially approved, or denied. If the property value has changed, the letter will include the new assessed value and the updated property tax amount you owe.

Typically, property owners have 30 to 45 days from the time they receive their valuation notice to send a property tax appeal letter. That’s a relatively small window — which means you likely won’t have time to confirm your belief that the assessed value is too high before notifying the jurisdiction you intend to appeal. So, if you do feel you’ve been assessed unfairly, send the letter to buy the time you need to research the matter properly. If it so happens that you discover the stated value is correct, you can always withdraw your appeal.

After you send the letter to appeal your property tax assessment, you’ll usually get a response back to confirm it was received. Sometimes the communication you get will assign you a case number or appeal number; other times it may even include a scheduled date and time for a hearing. The amount of time you’ll get to put your case together varies by state. Some states, like California, have so many hearings that your date could be as far out as a year. For other states, it could be as little as 30 to 45 days.

In the meantime, you may need to pay the higher amount while you appeal to avoid late fees and penalties. If that’s the case, you’ll be reimbursed if the appeal is approved.

The property tax appeal letter is just one piece of the process, as you’ll also need to meet important deadlines and do thorough research to support your case, which takes time. Avalara Property Tax software can help.

Avalara Property Tax allows you to review property assessments, identify discrepancies, and prepare and file your property tax appeals from a centralized hub. The solution is designed to streamline the process by keeping track of appeals deadlines for you.

Our property tax compliance specialists have extensive experience with property taxes and can provide additional support.

Ready to learn more? Contact Avalara to speak to one of our property tax compliance specialists today.

There are several reasons you might want to protest your property tax value. An important reason to appeal is that your company’s property has been overvalued, and the assessed value is higher than the actual market value. This could result in a higher tax bill.

The full timeline is different in every state. You typically have 30 to 45 days from when you receive your assessment notice to file your appeal, then the initial response may take a few weeks. In some cases, an assessor will want to schedule a hearing. After the hearing, you might be informed of the results immediately in person, or within a few months via mail. Avalara Property Tax can help you streamline the appeal process by enabling your team to track deadlines in a shared calendar.

There are a number of reasons you might hire someone to appeal your property tax. For example, if your case is complex, your business’s property is high-value, or you need to hire a lawyer for a formal hearing. But if your case is simple, you’re comfortable conducting the research and paperwork, or your potential tax savings is small, you may be just fine taking a DIY approach. If you’re not sure where to start, an automated property tax solution like Avalara Property Tax can help.