More property tax relief, more rules: Navigating enterprise compliance

• Property tax relief is expanding. At least four states broadened business personal property tax exemptions in 2026 alone. Moreover, 23 states have lowered real property taxes since 2021. But more relief means more complexity. Each new exemption brings its own eligibility rules, filing requirements, and deadlines.
• The gap between assessed value and actual market value is an opportunity to appeal. Businesses with organized property data and a reliable deadline tracking system can save on tax.
• Managing property tax across hundreds of jurisdictions has outpaced what manual processes can handle. The right technology centralizes deadlines, filing requirements, and asset data so nothing slips through the cracks.

Property tax is the dominant tool in a local government’s toolbox. According to the Tax Foundation, property taxes accounted for 70% of local tax collections in fiscal year 2023. The Institute on Taxation and Economic Policy (ITEP) puts the figure even higher at 72% of local tax revenue or $886 billion as of 2024.

Counties, cities, and special taxing districts depend on property tax revenue to fund public safety, schools, roads, and essential services. Because the stakes are so high, property tax assessments are scrutinized closely.

Property tax compliance isn’t static. Local government update valuations. Many jurisdictions are modernizing their property tax systems, introducing new filing portals. Businesses that treat property tax as a once-a-year administrative task can easily be caught off guard by new or different forms and filing requirements.

Relief activity is real and it’s arriving from multiple directions.

Arizona, Indiana, Texas, and Wyoming, for example, expanded business personal property tax exemptions effective January 1, 2026, in a wave of legislative reform. That’s meaningful relief, but it’s also four different sets of eligibility rules, documentation requirements, and filing considerations for businesses operating across those states.

South Dakota Governor Larry Rhoden signed two bills, SB 245 and SB 96, designed to reduce residential property taxes by funding relief through sales tax revenue.

SB 245 restores the statewide sales tax rate from 4.2% to 4.5% beginning July 1, 2027. The bill specifically locks the 0.3% additional revenue into a homeowner property tax reduction fund to reduce school district property taxes on owner-occupied homes.

SB 96 gives counties the option to levy up to an additional 0.5% local sales tax — also earmarked for residential property tax relief — effective July 1, 2026.

For enterprise businesses operating in South Dakota, however, the net effect is a higher sales tax burden with no corresponding reduction in their property tax obligations.

At the federal level, the One Big Beautiful Bill Act of 2025 permanently restored 100% bonus depreciation for business personal property — equipment, machinery, vehicles, and other tangible assets with a useful life of 20 years or less. To qualify, these assets must be both acquired and placed in service after January 19, 2025. For capital-intensive businesses, this is significant: assets can be fully expensed in the year they’re placed in service rather than depreciated over several years.

But here’s the catch that matters specifically for property tax: federal bonus depreciation has no bearing on local property tax assessments. Local jurisdictions still assess those same assets at fair market value and still expect an on-time return and payment regardless of how the assets are treated on a federal return.

While some businesses are gaining property tax relief, others are losing incentives they have long relied on. Alabama and Maine both rolled back property tax abatements for data centers in 2026.

Maine Governor Janet Mills signed LD 713 on April 23, 2026, fully excluding data centers from both the Business Equipment Tax Exemption — which had previously provided a 100% property tax exemption on eligible equipment — and the Dirigo Business Incentives Program. For data centers beginning operations on or after August 1, 2026, both programs are off the table.

In Alabama, Act 2026-573 reduced the maximum property tax abatement period for new large-scale data center projects from 30 years to 20 years for abatements granted on or after January 1, 2027. The law also stripped state construction tax abatements entirely for facilities consuming 100 megawatts or more of electricity. The change was driven in part by concerns that data center growth was pushing up utility costs for residents and other businesses.

For businesses that build their tax strategy around long-term abatements, these are costly surprises. What’s on the books today isn’t guaranteed to be there next year.

Qualifying for relief is only half the battle. Some jurisdictions require detailed, itemized asset lists with original acquisition costs and depreciation calculations. Others accept summary-level property values. Filing windows open and close on different dates in different states, often with little margin for error.

For enterprise businesses managing hundreds or thousands of assets across multiple locations, keeping track of jurisdiction-specific requirements and deadlines without an automated property tax compliance solution is challenging. Even worse, missing a deadline or submitting the wrong form can erase the financial benefits of any tax relief a business qualified for in the first place.

Property tax appeals are growing. Take Chicago, for example. The Cook County Board of Review received a record 273,907 property tax appeals for tax year 2024, an 11% increase over tax year 2023. According to the board, the surge was largely driven by significant increases in commercial and residential property assessed values.

Tax assessors rely on backward-looking data, which means assessed values often lag behind market reality. In many jurisdictions, assessed values still reflect the elevated valuations of recent years, while actual market values have declined. Rising interest rates, higher capitalization rates, increased vacancies (particularly in office and retail properties), and broader commercial real estate softening are contributing factors.

When your assessed value and actual market value don’t line up, it’s time to file an appeal. A successful appeal doesn’t just reduce this year’s tax bill; it resets the assessed value that carries forward into future years, compounding the savings.

A successful appeal starts with preparation. Jurisdictions have strict procedural requirements and the stakes of waiting are high. In some states, missing the appeal window means waiting two years for the next opportunity — with an inflated assessed value compounding your tax liability in the meantime.

A well-supported appeal built on accurate, organized, audit-ready asset and property data is far more likely to succeed than a reactive one filed in a hurry. An AI-powered property tax compliance solution built for centralizing property tax data and documents and tracking appeals helps ensure you stay on track.

The businesses best positioned to manage property tax and to take advantage of relief and appeals opportunities treat property tax as a year-round function, not a seasonal filing exercise.

They keep accurate, current records of all taxable assets organized by jurisdiction so that when a new assessment arrives or a filing window opens, the data is ready. They monitor legislative and assessment changes systematically, rather than discovering them when a penalty notice arrives. And they approach appeals proactively, building a case before a deadline rather than scrambling to respond after the fact.

For most enterprise organizations, this level of rigor requires purpose-built tools and processes. The volume of jurisdictions, deadlines, and asset records involved makes manual management impractical and prone to error.

Enterprise businesses budget for the bill; the challenge is everything that comes before and after.

The hard part is identifying the right exemptions and qualifying for them, tracking jurisdiction-specific deadlines across hundreds of locations, filing accurate returns in the right format for each taxing authority, maintaining the organized data needed to support a successful appeal, and then doing all of it again next year, against a backdrop of constantly shifting rules.

That’s the property tax life cycle. And managing it well — capturing available relief, staying compliant, and pursuing legitimate appeals — requires a modernized approach that brings data, deadlines, and workflows into one place. Avalara Property Tax is built to do exactly that so your team can focus on strategy.

For teams managing property tax across dozens or hundreds of jurisdictions, Avalara Property Tax Managed Services takes it a step further — handling the entire compliance life cycle, from return preparation and filing to bill payment and proactive appeal identification, so your team doesn’t have to.

Speak with an Avalara property tax compliance specialist to learn how Avalara can help your business stay in control.