Is your company paying property taxes for items that are no longer in use?

Is your company paying property taxes for items that are no longer in use?

Thursday, 26 September 2019 10:33

Business owners and managers work hard to make sure their products and services are consistently representative of their high standards. They spend countless hours caring for the needs of employees, supporting customers, and ensuring the wheels of the organization do not fly off. 

As far as you are concerned, state and local business property taxes are probably just a headache you want to go away as quickly as possible. Unfortunately, many companies are paying entirely too much for property taxes due to improper identification of assets and the existence of ghost assets.

In this article, we will discuss business property taxes, asset identification and tagging, and why ghost assets should send a cold shiver down your spine. 

Business Property Taxes

When it comes to taxes, Federal Income Tax arrests the most attention. It is often the case that companies, as well as most accounting firms, take the IRS regulations more seriously than state and local tax regulations. Each state and local governing body (county, municipality, etc.) has unique requirements by which companies must abide. This is especially irritating for companies that have property in multiple locations. 

It is unfortunately easy for companies to pay too much for their business property taxes. One of the property tax pitfalls into which businesses fall is allowing ghost assets on their ledgers. 

Scary Ghost Assets 

Ghost assets often haunt businesses with their taxing presence. While not literal ghouls, the amount of money they could be costing your company might make you jump out of your seat. 

Ghost Assets are fixed assets on your ledger, even those that may be considered fully depreciated, on which you are paying property taxes, but they are either no longer functional or simply do not exist within your company. Common ghost assets include:

  • Photocopiers and Fax Machines Computers, computer equipment, and software 
  • Office phones 
  • Company cell phones that were replaced or taken by former employees
  • Furniture that has been sold or given away
  • Old machinery, equipment, and tools
  • Cash registers and point of sale systems 
  • Vehicles and heavy equipment 

There is a good chance that these ghost assets are present on your books and they may be wreaking havoc on your bottom line, especially as they are multiplied across all your company’s locations. The only way to eradicate them is by performing a substantial, thorough, personal audit of all your company’s fixed assets. This may seem like a daunting task however, we can help.

How We Help Eradicate Ghost Assets through Identification and Tagging

Sharon H. Lyall, CPA has been helping businesses reduce their property tax burdens for over twenty years. We take your ledger and perform a thorough step-by-step investigation of your physical assets, identifying and tagging them, and determining whether ghost assets exist. The removal of non-existent or unused items can reduce your company’s property tax burden significantly for this tax year and many years to come. Furthermore, we can help you change the way you record assets to avoid future issues. 

If you would like to know more about saving your company money through effective asset identification and tagging, or you know you need to exorcise the ghosts, contact Sharon H. Lyall, CPA. We will do a free review of your company’s assets to help you determine how much more your company is paying in business property taxes than it should.  We are here to help reduce your company’s tax burden.