Reducing Your Business's Property Tax Payments

Posted by: Brookside Admin

One of the largest recurring costs for most businesses is property taxes. Most business owners regard property tax as a fixed cost that simply needs to be paid. Your property taxes don't have to be written off, however. Through appeals, negotiation and other tactics, you could be able to significantly reduce your property tax payments, which also significantly reduces your operating costs. 

  • Calculate annual property tax payments

This is a vital first step for any business, but is particularly important if your business operates from multiple properties. Many business owners don't know exactly how much they owe each year in property taxes, but finding that number will dictate the best course of action moving forward. If your tax payments are already fairly low, a formal appeal may not be necessary. 

  • Take advantage of discounts

Unlike an employees salary or your mortgage payment, property taxes may have some opportunities to pay less when you pay in a certain way. These incentives vary from state to state and county to county, but be sure you are aware of any possibilities to reduce payments. For example, your county may offer a small discount if you submit payments early. Others may allow a discount when the entire annual payment is submitted in one lump-sum. Alternatively, some jurisdictions add additional fees when a payment is broken up into installments. Knowing these opportunities and penalties could result in some major savings. 

  • Formal appeals

Just as different jurisdictions have different payment options, they also have different appeals options. Appealing the valuation of a property can help to reduce the annual cost of property tax, but you'll want to know what you're in for before starting the process. In some areas, you'll be automatically granted a discount on property taxes while the property is under appeal. Once the appeal is over, you'll owe that additional tax if the appeal is not granted, however. In either case, appealing in these counties doesn't hurt and can grant you at least a temporary break on the amount of taxes you owe. 

  • Do your homework

It's beneficial to have a regular meeting with your local property assessor, but when you do, you'll want to be prepared with specific information about the property in question. That includes the square footage, what the property is currently valued at and how that value compares to similar properties in the same jurisdiction, both your fixed and variable operating costs and capitalization rates for properties of similar type, location and occupancy. When you know these details about the properties being discussed, it will help your assessor give you accurate recommendations and show them that you take this process seriously. 

If you need help with the appeal process, determining the appropriate value of a property or other tax related matters, the CPAs at Brown Kinion and Company are here to help. We are experienced in various property tax services in Oklahoma.