Business Personal Property Tax

Complex business personal property taxes can significantly impact the bottom lines of our clients. Market factors and valuation errors in machinery and equipment often lead to overpaid taxes, with taxpayers across the nation not receiving adequate relief.

At Baker Tilly, we offer a unique level of personal interaction and responsiveness to address complex business personal property tax matters proactively. Our continual open line of communication ensures that no stone is left unturned in the review, valuation and appeal of our clients’ complex assets, minimizing their tax burden.

Complex personal property tax consulting

Valuing complex properties is a specialized process that often involves multiple data sources with varying formats detailing numerous assets per location. Patient and clear guidance is essential when partnering with a complex property tax provider.

Changes in personnel, audit notifications, unexplained increases in property taxes and unexpected fees from current consultants can threaten the bottom line of business personal property taxpayers. To avoid these costly circumstances, our property tax consultants recommend a proactive approach to tax savings.

High volume business personal property tax compliance

Baker Tilly’s personal property tax consultants have extensive experience in all states that impose personal property tax. We have the resources to efficiently file and maintain tax returns and exemption forms for each taxing jurisdiction across the country. Our high-volume business personal property tax services are tailored to meet your needs, from providing labor to fulfilling compliance and rendition requirements, to advising on the most advantageous valuation methodologies and implementing the best technology options.

Our team utilizes best-in-class technologies and processes to timely and efficiently file mass renditions and exemption forms. The personal property tax compliance process demands a profound understanding of local taxing authorities' procedures and laws, as well as a system that guarantees timeliness to meet all deadlines. Managing a high volume of assets nationwide requires a level of attention to detail that only an experienced team of analysts can provide, making outsourcing this function an optimal choice for operations of all sizes.

Our approach to nationwide compliance

Complying with personal property tax rendition filings can be both time-consuming and costly. Missing deadlines or failing to file properly can significantly impact your bottom line. At Baker Tilly, we have developed a cost-efficient approach with seamless service transitions.

After transitioning your account, we begin by addressing common errors in high-volume compliance, such as identifying missed closed accounts, duplicate accounts, over-valued assets, and unclaimed personal property tax renditions. Through our intensive initial asset inventory and valuation process, we establish a solid baseline. This allows us to implement a streamlined approach that maximizes efficiencies year after year, ensuring your compliance needs are met effectively and economically.

Business personal property tax compliance solutions

Personal property tax compliance can become exceptionally complex when dealing with state and local taxing authorities across multiple states and jurisdictions. Complying with property tax rendition filings and exemption forms is both time-consuming and expensive. Proper execution of each element in the personal property tax compliance process is crucial to achieving accurate valuations annually and avoiding continuous overpayments as tax rates rise nationally. Missing deadlines or failing to file completely can be extremely costly to your bottom line. 

At Baker Tilly, we have developed a cost-efficient approach that ensures complete and accurate outsourcing with seamless transitions among services. Our profound understanding of local taxing authorities' procedures and laws, combined with a practiced system, ensures deadlines are met. 

We have the resources to efficiently file and maintain tax renditions and exemption forms for each taxing jurisdiction across the country. Our services are tailored to meet your needs, from providing premier talent to fulfilling exemption and rendition requirements, and advising on the most advantageous valuation methodologies. Additionally, our use of industry-leading technology platforms streamlines the overall compliance process, eliminates manual data entry, manages documents and provides analytical tools to save valuable resources. 

Personal property tax compliance rendition filings 

When managing high-volume personal property tax compliance and rendition filings, it is crucial to maintain accurate records, understand state and local tax laws and successfully manage varying deadlines. At Baker Tilly, our team of seasoned consultants possesses nationwide expertise in high-volume personal property tax compliance. We consistently update our filing methods and proactively improve our methodologies to address the nuances of each state taxing authority. This proactive approach ensures we are well-prepared for a business personal property audit in all 50 states. 

Our typical rendition preparation and review process follows the below general guidelines: 

1. Authorizations 
2. Detailed asset and inventory review 

• Site visits, tax codes, year-over-year consistency, accelerated depreciation tables, classification of assets, entity verification, state filing rules and regulations, exemption and abatement identification 

1. Management approval 
2. Jurisdiction filings 
3. Assessment notices 

The right tools for success

Baker Tilly’s preferred personal property tax compliance software programs offer full visibility and dashboard access to our clients, providing a managerial view of the system. These cloud-based, real-time updated programs allow for automated notifications of completed tasks and pending deadlines, and the ability to monitor progress with key performance indicators. Utilizing this software streamlines the overall compliance and rendition process, eliminates manual data entry, manages documents and provides analytical tools to save you time and money. 

Additionally, Baker Tilly has developed a system of edits and reports that integrate seamlessly with our technology alliances. These automated controls ensure staff adherence to internal policies and procedures, confirm that all steps are completed and provide tailored reporting for each client engagement, ensuring unparalleled transparency. The collaboration between our operations, client relationship and technology teams at this level represents a best-in-class service combination. 

Fixed asset inventory

From our extensive experience analyzing business personal property tax operations across various industries, we’ve found that many businesses pay property taxes on assets they no longer own. While the goal is to only pay taxes on assets still in use and located on-site, day-to-day operational demands often take priority, leading to tax payments based on outdated information.

During the onboarding process, we have discovered that over 90% of clients are paying taxes on “idle” or “scrap” assets that have been replaced or disposed of by the lien date, qualifying them as “ghost assets” and exempt from property taxes.

Having an accurate and up-to-date fixed asset inventory, conducted by an experienced team of business personal property tax consultants, can result in significant tax benefits. Baker Tilly’s holistic approach to fixed asset inventory involves key members of your operations and a complete site inspection to identify ghost assets. This process uncovers valuation issues that often lead to additional tax benefits, including intangibles, functional/economic obsolescence, reclassification issues, pollution control exemptions, abatements and fair market value opportunities.

Reconciling data after site inspections

After performing a site inspection, we reconcile the newly recorded fixed asset inventory data with updated listings for accounting purposes. Often, assets listed in the fixed asset inventory are not located during the inspection because they were replaced or disposed of. These assets need to be removed from the books to prevent overpayment on property taxes.

Removing non-existent ghost assets from the books will lower future business personal property tax bills and result in significant, ongoing tax benefits, impacting both the current and future tax years.

The benefits of a fixed asset inventory

Completing a fixed asset inventory meets Sarbanes-Oxley (SOX) audit requirements by ensuring that balance sheets accurately reflect existing assets at each facility. Conducted by a third-party with a proven, fully documented process, the results are credible for potential audits. Given the possibility of audits at any time, we recommend maintaining a regular fixed asset inventory schedule.

The inventory process also helps identify communication gaps between employees and the accounting department. Reconciling assets enhances interdepartmental relationships and communication within the organization. Accounting staff may not always be aware of significant equipment replacements, disposals or upgrades. Identifying these changes allows for adjustments to the original purchase price during returns, preventing duplicate taxation. Closing this knowledge gap results in significant tax benefits and increased profitability.

Maintaining a fixed asset inventory is cost-effective, potentially reducing income taxes, property taxes and insurance premiums. Clients often experience substantial tax obligation decreases in the initial year, leading to ongoing benefits throughout the lifespan of their assets. A fixed asset inventory is valuable for industries with heavy business personal property tax liabilities, including manufacturing, office, automotive, data centers, healthcare facilities and distribution warehouses. We also find substantial asset inaccuracies in companies acquired through bankruptcy.