Client: Travel Industry Information Transaction Processor
Challenge: Review Property Tax Assessment and Reevaluate Asset Listings
A leading travel industry company, specializing in data processing and travel reservation storage, believed it was overpaying personal property taxes at its major data processing location. The company maintained that the market value of its older generation equipment was lower than the annual value assigned by the assessor. It also realized its asset listing was inaccurate because it contained significant ghost assets – assets that either no longer existed or whose useful life had expired.
AccuVal reviewed the assets previously reported and interviewed IT managers to discuss obsolescence and identify assets that had been sold, redeployed or discarded. Before completing the evaluation, an accurate, carefully detailed fixed-asset database needed to be created. After analyzing the amended database, AccuVal determined the company had been overpaying its personal property taxes for at least three years. Had overpayment continued, the company would have missed another year of tax savings, estimated at approximately $250,000. Although welcoming the savings, the company knew that correcting the overpayment meant a substantial reduction in the local school district's potential tax base. This could have created a protracted and costly formal appeal. Instead, AccuVal held informal negotiations with the assessor early in the assessment process stressing the taxpayer's desire to be a good corporate citizen. As a result, the amended asset list and lower valuation were accepted, and tax savings were achieved without adversarial court hearings.
Thanks to the accuracy of the new fixed asset database and AccuVal's negotiation skills, the assessor accepted the valuation analysis, and the company achieved immediate savings of $250,000 on its property taxes. The accepted valuation analysis set the precedent for annual informal negotiations with the assessor and subsequent related tax savings.
Broad knowledge of applicable tax law, including a bottom-up approach to asset verification and valuation. Decades of personal property consulting and appraisal experience. Negotiation skills. Sensitivity to local issues. That's The AccuVal AdVantage™ at work.