Business owners, you’re about to get a piece of mail you shouldn’t ignore. Mixed in with credit card offers and other junk, you’ll find your property tax bill. Decoding property tax bills for businesses can be complicated, so get ready.
Understanding your rights as a taxpayer and how taxes and valuations work can ensure you don’t overpay. With the help of an expert like Sharon H. Lyall, CPA, you can even reduce your property tax bill through an appeal.
In this guide to decoding property tax bills, we’ll review:
- The basics of business property taxes
- The difference between real and personal property taxes
- How to appeal your bill
- When to get expert help
WHAT ARE BUSINESS PROPERTY TAXES?
Business property taxes are locally-assessed taxes collected by each county. Business owners in North Carolina pay these taxes annually for real estate and personal property.
Local governments like cities and counties assess these property taxes. Government entities use property tax revenues to fund schools, infrastructure, and public services like police and fire departments.
WHAT’S THE DIFFERENCE BETWEEN REAL ESTATE AND PERSONAL PROPERTY?
Business real estate is the building and land owned by your company. Business personal property is any tangible asset required to run the business.
EXAMPLES OF BUSINESS PERSONAL PROPERTY INCLUDE:
HOW DOES THE GOVERNMENT KNOW WHAT TO TAX?
When you purchase real estate, you register the property with local taxing authorities. Each year the county assessor determines the assessed value of your property and how much tax you owe. For example, if your property tax rate is 3.5% and the assessed value of your real property is $1 million, you’d owe $35,000 in taxes.
Remember that each county has different tax schedules; therefore, you may receive your valuation notice for multiple properties at different times. Also, even if all your property is in one county, the rate could differ across locations. This differentiation is because the property may be in an alternate tax jurisdiction, such as another city.
Officials handle business personal property differently than real estate. They assess business personal property annually, based on depreciation schedules determined by local authorities.
North Carolina business owners must list their property by Jan. 31 each year unless they have obtained an extension. Extension deadlines vary by county.
CAN I APPEAL MY TAX BILL?
Decoding property tax bills can be tricky. You’re likely to get confused when you receive multiple bills from different counties and are trying to understand the difference in how real and personal property are taxed. But the most important thing to know about your property tax bill is you can appeal.
When the bill comes, you have a limited number of days to appeal, the number of days depends on the taxing authority. But the ability to appeal is a requirement and your guaranteed right as a taxpayer.
WHEN SHOULD YOU APPEAL A TAX BILL?
Most people don’t file appeals for assessment because they assume their bill is correct. But that’s not always the case.
YOU SHOULD APPEAL YOUR TAX BILL FOR REASONS INCLUDING:
- Economic Conditions Changed. Changes in the real estate market can change the value of your property. Anytime there’s a downturn in the real estate market, you might want to consider an appeal to ensure your property isn’t overvalued.
- Changes in Business Assets. If you’re not diligent about tracking and reporting changes in your assets on the annual listing, you could end up paying taxes on personal property you no longer use or own.
- Miscatogrization of an Asset. How you categorize an asset determines which depreciation schedule the county applies. If your asset is in the wrong category, you could overpay your taxes. A review from a trusted CPA will help you avoid this common personal property tax pitfall.
HOW SHARON H. LYALL, CPA, CAN HELP WITH DECODING PROPERTY TAX BILLS
If you think something is off with your property tax assessment or bill, your first step is to get an expert review. Sharon H. Lyall, CPA, and her staff specialize in helping clients with decoding property tax bills and filing appeals.
Property tax assessment and reviews are available to current and new clients. We ask our clients to send us their assessment or bill right away to determine if everything aligns with their filing during tax season or if they need to appeal.
SOME REASONS OUR CLIENTS ASK US TO REVIEW THEIR PROPERTY TAX BILLS:
- We Handle the Process for You. If we determine you should appeal, we’ll handle the entire process for you.
- We Understand the Market. We review multiple assessments from different clients and have a better understanding of current market conditions.
- We Know the Inside Information. Each county is a bit different, so if you have locations in multiple counties, we can help. We also have keen insights into how officials categorize personal property. In many cases, there are more categories than what the county lists on their preprinted forms. We can help you make sure to list your property in the most tax-efficient category.
If you want help decoding a property tax bill, contact us as soon as you receive your notice. Thirty days is not long to research and appeal. There might not be an error in your bill, but there may be ways to save in the future. Let us make sure you’re not paying more than you should.