Survey Indicates Inflated Property Value May Offer Opportunity to Reduce Taxes

OAK BROOK, Ill., July 20, 2011 /PRNewswire/ -- Even though property values have fallen in recent years across most of the U.S., a new survey of municipal and county tax assessors shows that a majority of business property owners aren't appealing their assessments. The survey found that 57 percent of the respondents saw either a decline or no change in the number of property tax appeals in 2010.

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Even in the West region of the U.S., where property values have fallen dramatically in recent years, 72 percent of the assessors saw either a decline or no change in the number of appeals. The survey, conducted by Crowe Horwath LLP, one of the largest public accounting and consulting firms in the U.S., had more than 100 respondents from the 1,000 largest population centers nationwide.

"The decline in appeals suggests that businesses are either unaware of the opportunity to reduce their taxes through appeal or mistakenly believe the savings aren't worth pursuing," said Joe Calvanico, director of the State and Local Property Tax Services group in Crowe's Tax practice. "It also indicates that the assessors may not have reappraised assessed values in these areas, so the values could easily be too high."

According to Calvanico, one reason for the lack of reassessments may be the shrinking budgets of assessors' offices. Only 19 percent of the respondents had an annual department budget of more than $1 million this year, compared to about 30 percent that boasted budgets of that size in 2008 and 2009.

"With budgets shrinking, assessors have fewer employees to perform the same amount of work. By appealing these assessments now, businesses might be able to significantly cut their property tax expenses," added Calvanico.

Additional survey findings include:

• Fifty-one percent of survey respondents reported that they reappraise the properties in their jurisdiction every one to three years. Forty-nine percent conduct reappraisals less frequently, with 12 percent letting 10 or more years lapse between reappraisals. "It's clear that many of these assessors are working from dated assessed values that could reflect a much stronger real estate market than what actually exists today," said Calvanico.
• About half of malls and strip centers in the respondents' jurisdictions failed to appeal their assessments, despite the weak economic health of the retail industry and the prevalence of vacant retail space that likely has driven down the value of such property.
• Only 37 percent of banks in the respondent's jurisdictions appealed their assessments.
• About 30 percent reported that car dealerships in their jurisdiction had closed. Again, these vacancies mean the value of existing dealerships probably has fallen.

"A manufacturing company we recently worked with in Illinois filed a property tax appeal that resulted in more than $120,000 in savings, or one-third, based on the reassessed value," Calvanico added.

For more information on Crowe's property tax services, please visit http://www.crowehorwath.com/services/tax/salt/real-and-personal-property-tax.aspx.

About Crowe Horwath

Crowe Horwath LLP (www.crowehorwath.com) is one of the largest public accounting and consulting firms in the United States. Under its core purpose of "Building Value with Values®," Crowe assists public and private company clients in reaching their goals through audit, tax, advisory, risk and performance services. With 26 offices and 2,400 personnel, Crowe is recognized by many organizations as one of the country's best places to work. Crowe serves clients worldwide as an independent member of Crowe Horwath International, one of the largest networks in the world, consisting of more than 140 independent accounting and management consulting firms with offices in more than 400 cities around the world.

Twitter: @Crowe_USNews

SOURCE Crowe Horwath LLP