What should I know about Personal Property Tax?

Personal property tax is a tax imposed by the county on capital machinery, furniture, equipment and other tangible assets. 39 states have personal property taxes. The states that don’t are: Delaware, Hawaii, Illinois, Iowa, Minnesota, New Hampshire, New Jersey, New York, North Dakota, Pennsylvania and South Dakota. Many companies incorrectly think of personal property tax as a fixed expense. Because it is not fixed, the burden of this tax can be significantly reduced – resulting in increased profitability.

When was the Tax Saver Program implemented?

August 2001

How much have participating companies saved?

To date, participating SPI companies have saved an average of 20% on their personal property tax.

How often are savings found?

PTAG has successfully found savings in more than 90 percent of the cases examined and these savings are effective not only in year one, but over the assessable life of the asset.

To date PTAG has found savings for all SPI members enrolled in the Tax Saver Program with an average savings of 20%.

How much does it cost?

Property Tax Advisory Group’s compensation is based solely on a flat contingency fee (50% of first year’s tax savings for SPI members; As much as 70% for non-SPI members). This means absolutely no risk to you. If you do not benefit, there is no charge for an analysis.

Payments to PTAG can be made in two installments:

• First payment is due when the property tax filing has been approved by the taxing authorities and the assessor has accepted the return;
• Second payment is due at the same time that your tax bills are due.

What happens if the filing is audited or appealed?

In the unlikely event of an appeal, PTAG is responsible for any costs associated with the defense of its filing. PTAG also provides, at no charge, representation of and consultation with the client. If PTAG is unsuccessful in its defense then they will refund your company the entire amount paid to PTAG for its for its services.

What if I have already filed my personal property tax can I still achieve savings?

Yes, typically you have up to 30 days from the time you submit your personal property tax form to make an appeal. Additionally, if the date for an appeal in your state has expired you can ask for an additional 60-90 day extension to make any adjustments to your original return.

Please note: These figures vary by state.

How long does the Personal Property Tax Assessment take?

The time period is generally the same as if you were to do your own filing.

What is a company’s obligation after the first year of PTAG’s assessment?

None, contracts between PTAG and clients are for one-year terms. Companies interested in PTAG performing this service again receive the same discount if they are SPI members and payment to PTAG is based on savings found on any "new" assets (assets different from those in the original agreement). After the first year, all PTAG needs from you are the current year’s additions and deletions.

Usually not, your accountant is the expert when it comes to preparation of your financial statements and/or corporation tax returns. The personal property tax return, however, is an entirely different matter.

The laws and guidelines that govern this highly specialized tax vary from state to state and even county to county. A misconception persists that the basis of reporting fixed assets for the personal property tax return must be the same as the basis for the accounting and/or corporate tax returns. In reality, there is a “third” basis of reporting, dictated by the state and county guidelines, which applies only to the tax on personal property.

At Property Tax Advisory Group, the focus is helping companies decrease their personal property tax bill and transfer the savings directly to their bottom line. The technical analysis used by Property Tax Advisory Group converts the accounting and fixed-asset records to the personal property tax basis in accordance with state property tax guidelines. The result may be a lower basis for tax assessment and, consequently, lower personal property tax. The long-term effect is total cost management of personal property tax expense.

What if my Accountant is currently preparing my personal property tax return?

You have nothing to lose by allowing us to do an analysis. At minimum, your current procedures will be validated. Alternatively, tax savings will be achieved and realized over future assessments.

How does the service work?

PTAG’s service is simple to use. To perform a complete analysis, PTAG requires:

• Prior year’s personal property tax return ;
• Asset listing ;
• Most recent tax bill

PTAG will complete the following:

1. Review of assets that are reported as personal property. Frequent changes in property tax codes may validate exemptions or deletions from your personal property filings.
2. Reclassification of assets to a shorter economic life, creating faster depreciation for property tax purposes. Opportunities to obtain more rapid asset depreciation are greater than ever, due to the escalating use of computer-driven equipment in the workplace.
3. Analysis of the market value of major assets PTAG’s experience has shown that the depreciation factors used in many taxing jurisdictions may not be reflective of true market value, resulting in over-assessment.