Article
State and local tax areas that can offer cash flow opportunities
June 2, 2020 · Updated July 24, 2023 · Authored by Marty Tschida
Cash flow, especially during turbulent times, is essential to business, and can be severely affected by delayed payments from purchasers or customers, unexpected expenses, closings, and other operational restrictions.
One way to improve cash flow is to revisit state and local tax (SALT) obligations and opportunities. While each jurisdiction can vary on approach to taxation, programs, and timing, here are some significant SALT areas for your company to consider.
Property tax
Real estate, inventories, equipment, facilities, offices, storefronts, or other property will generally be assessed on a specified taxable value.
Because of conditions since 2020 including the COVID-19 pandemic, supply chain limitations, rising interest rates, and global economic slowdown, business owners should consider if taxable values, which are largely based on productivity, use, and market comparisons, are the same as they were before the economic downturn. If not, will such values bounce back?
Opportunities
In most jurisdictions, the taxable value can be reviewed and adjusted to reflect updated values. A tailored review of asset classification, valuation, use, applicable exemptions, and other data used to determine taxable value may help lower current and future property taxes as well as potentially provide for a tax refund.
Next steps
If you think you can reduce your property tax obligations, here’s a list of considerations:
- Review real property tax assessment values.
The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.