Property tax appeals: 4 tips to improve your outcome

There are a lot of complicated aspects of running a business. Real and personal property tax compliance has to be high on the list. There are a number of variables and it’s notoriously difficult to budget for annual property tax bills.

One reason budgeting in particular is so challenging is that it’s not uncommon to receive a tax valuation for significantly more than you expect. After an assessor completes their evaluation of your property, they have to determine how much your property is worth based on certain conditions including inflation and depreciation rates.

Because this key part of the process is so reliant on an actual person, it’s subject to interpretation and open to human error. Luckily, you have the right to appeal the assessor’s valuation, which if successful, will result in a lower tax bill.

But this is not a decision to be made lightly or handled willy-nilly. A sound strategy backed up by solid evidence is necessary to reduce an inflated valuation. Here are 4 tips to help you craft your appeal:

Keep careful track of deadlines and jurisdictional requirements
Present clear, objective evidence
Bring in relevant experts to strengthen your appeal argument
Pursue an informal appeal route if available

Tip #1: Keep careful track of deadlines and jurisdictional requirements

The easiest way to lose an appeal is to miss the property tax filing deadline. If you don’t file in time, you essentially accept the valuation and owe the subsequent taxes.

You also have to make sure you meet all the filing requirements for your jurisdiction. Naturally, every jurisdiction has its own requirements, which may include filling out a specific form or mailing the assessor a property tax appeal letter.

Tip #2: Present clear, objective evidence

When presenting your case, you need to include the evidence that backs up your claim for a lower valuation. For example, you may try to prove a lower inflation rate or argue for a higher deflation rate. Regardless of why you’ve determined the assessed value is too high, you’ll have to present a specific number and support it with clear research and objective data.

You may point to the selling prices of similar properties or recently sold assets — for instance, the vacancy rate on your commercial real estate property is lower than the rate the assessor is using to value your property.

For your business personal property, such as machinery or supplies, are there listings for items similar to the ones you own? Discrepancies in the assessor’s assumptions can help you quickly whittle down the valuation.

Tip #3: Bring in relevant experts to strengthen your appeal argument

Tap into your professional network for expertise around your argument. It might be a plant manager for a manufacturing company, the community director of an apartment building, or a third-party appraiser. Your ability to condense the issues into simple and supportable statements will improve your chances for a fair adjustment.

Experts with experience in measuring and supporting the adjustment lend credibility to your claims and can help explain why adjustments are valid. Loop them into the process as early as possible.

Tip #4: Pursue an informal appeal route if available

Formal hearings typically involve a board or panel assigned by the jurisdiction. They listen to both your and the assessor’s valuation arguments, and then make a decision as to which to follow.

But it may be possible to avoid a formal hearing by submitting your appeal early and requesting a discussion about the valuation directly with the assessor either in person or via a conference call. An informal method is simpler and often results in a more favorable and timely resolution.

While some appraisers won’t discuss your case until you file the appeal, others are willing to begin the conversation beforehand. There’s a benefit to being at the front of the line. Assessing offices are often understaffed, busy, and human, so speaking to them sooner increases your chances of getting their full attention and allows sufficient time to amend your valuation. Sometimes a simple one-on-one phone call early in the year explaining your issue to the person responsible for setting the value can go a long way.

Get help with your property tax appeals

Technology can help make the appeals process faster, easier, and more efficient. Avalara Property Tax can help you quickly create appeal packages, including an appeal letter and any custom attachments you want to send.

In addition to helping you prepare the paperwork, Avalara Property Tax can help you support your claims. You can more easily capture market, assessed, and taxable values across multiple notices and compare those values across notices and prior years for analysis.

You’ll also spend less time entering information from assessment notices and tax bills, so you can spend more time strategizing on how to reduce your tax burden and save money.

To learn more about Avalara Property Tax and how it can help your business, schedule a demo today.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.