Contrary to what others might believe, our Multistate Tax Practice is alive and thriving. As you may know, one of the areas within the Multstate Tax Practice is real estate tax appeals. This has been a very active area for us and is one of our strengths. In particular, over the past several months, David Kall, Jason Smith and Ann Hunt have achieved significant property tax reductions for several McDonald Hopkins’ clients. As 2013 comes to a close, it is imperative that you keep this topic in mind when meeting with clients. With that said, we thought it would be helpful to arm you with some information that you can use to sell a project. In addition, please feel free to contact Dave, Ann or Jason for additional help and guidance.
What does the tax appeal process entail?
The process starts when the client receives a tax bill for tax year 2013 (this will come in January of 2014). If the client feels that the assessment associated with their property is too high, McDonald Hopkins can file a Complaint with the Board of Revision within the County where the property at issue is located. The Complaint is a simple, one page document that states the basis for why the client believes the property to be overvalued. Next, McDonald Hopkins will work with the client to hire an appraiser to conduct an appraisal of the property to determine if, in fact, the property has been overvalued by the county. If the appraiser determines that the property has been overvalued, the appraiser will generate a report that describes the value of the property as of January 1, 2013. Within several months of McDonald Hopkins filing the Complaint, the Board of Revision will set a hearing, where the respective attorney will appear with the appraiser and provide testimony as to why the property is overvalued. The Board will then render a decision.
What are the potential benefits to the client?
As can be seen above, the process to file a Complaint and conduct a hearing at the Board of Revision is simple and straight forward. The outlay of funds that a client will spend on attorneys’ fees could be significantly less than the potential benefit and cost savings. We can provide a quick analysis of the potential tax savings if you and/or your client provides to us some general information.
Recent success demonstrates this fact:
- Cuyahoga County – McDonald Hopkins filed a Complaint regarding four parcels. The total assessed value of the four parcels, two of which including commercial buildings was, $7,065,000. After filing the Complaint and attending the Board of Revision hearing, we were successful in our argument and the Board of Revision reduced the total assessment to $5,045,00; a reduction in value of over $2,000,000 and a tax savings of over $700,000.
- Tuscarawas County - The Auditor assessed the property at $2,079,000. After meeting with the appraiser, discussing with our client and preparing the appraisal, the appraiser found the value to be $1,300,000. After presenting this evidence at the hearing, the Board of Revision reduced the assessed value of the property to $1,247,760; a reduction in value of over $800,000 and a tax savings of $290,000. Note that the Board of Revision actually reduced the value below the amount reported by the appraiser as the value of the property at issue.
- Huron County – The Board of Revision reduced the value of the property from $1,765,000 to $1,572,600; a reduction in value of $192,900 and a tax savings of $64,000.
An Important Date to Remember
March 31, 2014 is the last day Complaints related to 2013 may be filed with the respective county Board of Revision. Be sure to talk to your client’s well before this time to allow adequate time to prepare the Complaint.
If you have any questions regarding the process or would like a member of the McDonald Hopkins’ team to meet with your client, please reach out to David, Jason or Ann.
Businesses must be vigilant and careful in managing their state and local tax liabilities and exposures. We understand this can be a daunting task. McDonald Hopkins Multistate Tax Services provides a broad range of state and local tax services including tax controversy, tax evaluation, tax planning, and tax policy. With professionals who have worked both inside and outside government agencies, our multistate tax team leverages its knowledge and experience to help clients control their complex multistate taxes.
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