Discover the overlooked charges that may be inflating your tax bill
Many manufacturers unknowingly overpay millions in personal property taxes every year.
The problem? Missed savings opportunities related to asset classifications, missed exemptions, and a lack of creative tax reduction strategies that impact your bottom line.
At
Baden Tax, we specialize in helping manufacturers identify tax savings and optimize compliance. This blog outlines the top reasons businesses overpay and how to ensure you are only paying what is necessary.
1. Misclassified Assets Are Costing You Thousands
One of the most common tax mistakes is incorrectly classifying assets, which can significantly impact values and tax liabilities.
- Is it real or personal property? The answer is not always as simple as it seems. Misclassification can result in double assessment OR exposure.
- Depending on the state, various types of assets qualify for exemption, deductions, or special treatment that can significantly reduce your tax.
- Upgrades, rebuilds, and repairs present a special opportunity for tax savings that many taxpayers overlook.
- Large asset capitalizations often contain embedded components such as software, tooling, or intangible costs that are either exempt or subject to lower assessment.
- Highly specialized equipment often qualifies for special assessment treatment that can substantially reduce your tax liability.
What to do next: Conduct a thorough asset classification review to ensure everything is categorized correctly.
2. Missing Key Tax Exemptions and Incentives
Many manufacturers qualify for state and local tax exemptions, but most do not take full advantage of them.
- Specific machinery and equipment may qualify for exemptions.
- Many companies can benefit from economic development incentives, but never apply for them.
What to do next: Work with a tax expert who understands your industry and location to uncover potential exemptions.
3. Inaccurate Property Tax Assessments
Are you confident your property tax assessment accurately reflects your assets' fair market value? If your assessed values are too high, you may be paying more than necessary.
Signs your property tax assessment might be inaccurate:
- You have never appealed your property tax assessment.
- Your tax bill has increased significantly without explanation.
- You have never considered functional or economic obsolescence with your property tax filings.
What to do next: Request a tax savings assessment to analyze whether your assets are overvalued
4. Failing to Conduct a Tax Savings Assessment
Many manufacturers assume that they cannot recover overpayments once they have paid taxes. A tax exposure assessment can uncover prior tax overpayments, often leading to significant refunds.
- Reviewing historical tax filings can reveal classification errors that resulted in overpayment.
- Identifying missed deductions can help reduce future liabilities.
- Reassessing past property tax bills may uncover opportunities for refunds.
What to do next: An assessment can help identify refund opportunities and reduce future liabilities.
5. Sticking with the Wrong Property Tax Provider
If your tax provider is not proactively helping you reduce property tax liability, you could leave money on the table. Many companies stay with the same provider for years without questioning whether they get the best service.
Questions to ask yourself:
- Is my tax provider helping me find savings or just filing paperwork?
- Have I compared my tax costs to industry benchmarks?
- When was the last time I reviewed my provider’s performance?
What to do next: Compare providers and consider an expert consultation to see if you could be saving more.
How Much Are You Overpaying? Find Out Today
If you are unsure whether you are paying too much in personal property tax, now is the time to act. A
simple review
could
uncover hidden savings opportunities that significantly impact your bottom line.
Request a Free Tax Savings Assessment
