SECURING REFUNDS FOR TAX YEAR 2023
California businesses have mostly recovered from the economic effects of COVID-19. However, with California being a business personal property tax audit state on a 4-year cycle, there is still ample opportunity to achieve significant savings in the form of refunds if an audit covers tax years 2021 and 2022.
In order to appeal a business personal property assessment, an application must be submitted between July 2nd and either September 15th or November 30th (varying by county).
With multiple California-based offices, Invoke Tax Partners has the local business personal property tax knowledge and expertise to provide immense tax savings to Northern California, Central California, and Southern California entities across all industries.
To ensure savings are maximized by way of your personal property assessment appeal, contact our California team and schedule your complimentary desktop review. While value notices will begin to arrive in late July, we highly recommend partnership with an experienced, local, property tax provider proactively to solidify appeal strategies and maximize property tax refunds.
Business Peronsal Property Tax Appeals in California
Invoke Tax Partners’ California team of personal property tax consultants have decades of experience working with appraisal offices and taxing authorities statewide and are very familiar with the nuances of all California counties. Because of this, our team has developed a unique approach to uncovering refunds and additional tax savings that is not one-size-fits-all. Depending on a company’s industry, size, assets, and location, our team has two different business personal property tax appeal processes that are widely accepted by most taxing authorities.
One commonly overlooked appeal strategy capitalizes on functional and economic obsolescence. In California, taxing jurisdictions use mass appraisal depreciation tables for personal property valuation. The structural basis for many of these tables dates back up to 50 years and does not consider functional or economic obsolescence. As a result, when these elements need to be considered, the mass appraisal depreciation tables do not produce an accurate estimate of fair market value. The economic obsolescence adjustment we have been successful with uses an inutility calculation which is backed by the state board of equalization.
If upon review of the assets our team has concluded that obsolescence is not going to be a determining factor in developing a business personal property tax appeal strategy, our consultants will look into applying current market-based and sales-supported schedules that consider all forms of depreciation – an asset’s physical, functional, and economic state – to derive a fair market value. The market derived depreciation schedules result in a more realistic fair market value compared to the value derived from the jurisdiction depreciation schedules.
Key 2023 PROPERTY Tax Cycle Dates and Deadlines
California businesses in all industries will begin to receive their value notices in late July. In order to appeal a business personal property assessment an application must be submitted between July 2, 2023, and either September 15, 2023, or November 30, 2023 (varying by county). The respective county will process the appeal and set a hearing typically between 6-12 months out (this may be longer with an extended backlog of appeals due to COVID.) Before the hearing date is scheduled, it may be possible to settle the appeal informally, but often local jurisdictions will not review our appeal position until a hearing date* is set. The jurisdiction in question has two years to hear and settle an appeal, with the exception of instances where an extension of the 2-year statue is mutually agreed upon with the taxpayer. Overall, the process to get an appeal resolved can be quite lengthy.
*The process of settling a business personal property tax appeal with a local jurisdiction in California outside of an appeal hearing is highly unlikely without partnership with property tax representation.
additional invoke unique approaches
Specific to California, Invoke Tax Partners’ level of local business personal property tax expertise is second to none in the industry. We have a deep understanding off the issues facing the assessment of fixtures. Double taxation of these fixtures, which are real property by nature but assessed by the personal property division, are largely mistreated, especially in the City and County of San Francisco. A lack of communication between the real and personal property departments of many local operations is at the root of the issue where sometimes fixtures can be assessed and taxed by both departments.
Through our analysis of the county’s records and a detailed review of our clients cost components, we can provide significant property tax savings by removing intangibles, non-assessable components, and assets which have already been picked up in the real property tax assessments. This can be done proactively through the annual filling of the business personal property statement (form 571-L due every May 7th), through an appeal, or through an audit. We pride ourselves on providing this level of service and detail to all California clients, as we’ve seen it go often missed across the industry.
If you have business personal property assets in California, contact our team today. We proudly provide complimentary desktop reviews to assist in solidifying appeal strategies prior to the impending deadlines and recommend filing promptly with our partnership to increase the likelihood of earlier settlement dates and increased property tax savings.