Fast Food restaurants are one of the most important industries in our country. On any given day you can see long lines forming in drive-thru lanes at multiple fast food locations throughout a single town. Models of efficiency, the fast-food industry employs millions of Americans, often instilling a strong work ethic and principles of customer service and responsibility for first-time workers. Many find opportunities to start at the bottom and work their way into management and corporate positions.
Restaurant and fast-food franchises have been significantly impacted by the worldwide economic impacts of the COVID-19 pandemic. At the same time, these companies have been some of the most innovative, finding ways to safely serve customers despite the challenges they face. Even still, restaurants throughout the country are far from their financial goals and need every dime going forward.
Unfortunately, without even realizing it, fast food companies are often paying significantly more in property taxes than they should.
We want to help owners and accountants reduce their tax burdens by properly evaluating their assets and property. In this article, we are discussing five ways to better calculate what fast food companies owe in property taxes.
1) Fast Food Companies Should Be Aware of Municipal Ordinances
Whether your business has been around for decades, or you have recently started expanding into new areas, municipal tax ordinances may be significantly different in your various locations. Knowing each municipality’s regulations is key to making sure you are not shelling out more of your restaurant’s hard-earned finances than you actually owe.
2) Fast Food Companies Should Be Aware of Real Estate Appraisals and Regulations
For calculating property taxes, buildings, land, and The amount of tax your fast food location owes for real estate is determined by the county’s appraisal of your property’s worth. Counties implement mass appraisal techniques to determine your real estate property values. However, these techniques are far from perfect and often result in buildings being appraised too high.
If you believe your property has been appraised unfairly, you have the right to appeal. Appeals can typically be pursued within 15 to 30 days of the appraisal, or in January.. Lyall CPA can help you determine whether you have a case for appeals and walk with you through the process.
Additionally, some items may be considered real estate in one area but categorized differently in another. Knowing the ins and outs of your municipality’s real estate tax regulations can save your company a lot of money every year.
3) Fast Food Companies Should Hunt Down Ghost Assets
Fast food companies are especially susceptible to collecting ghost assets, those items on your ledgers for which you are paying property taxes that are no longer around. Having multiple locations makes it even more difficult to keep up with assets. The ghost assets that haunt fast food restaurants include:
- Outdated machinery used for preparing food
- Drink machines that have been replaced
- Furniture such as tables, chairs, stools, couches, etc.
- Office furniture like desks, chairs, copiers, fax machines, etc.
- Cash registers, computers, drive-thru, and front of house POS systems, etc.
- Decorative items, menu boards, projectors
- Outdated software
In an effort to avoid an audit, when there is a question about whether these items exist, fast food companies often elect to include them on their books to be safe. Fast food owners and managers may not have time to track down every asset. They need help to exercise ghost assets from their ledgers.
4) Fast Food Companies Should Trust Property Tax Professionals
Many CPAs and accountants have significant expertise in helping fast-food owners and managers reduce their federal income tax burdens. However, few specialize in property taxes. Sharon Lyall, CPA, and staff have the know-how and resources to help fast-food companies identify areas where they could reduce their property tax bills.
5) Fast Food Companies Should Utilize Free Tax Review Services
Sharon Lyall, CPA provides free asset reviews for fast food companies that help identify how they can save money. We have the resources to utilize tax provisions for the municipalities in which fast-food companies operate, determine whether their real estate has been appraised unfairly, and hunt down ghost assets that wreak havoc on your bottom line. If you are ready to take full advantage of our free review, contact Lyall, CPA today.