GENERAL OFFICE - MEDICAL OFFICE
Offices can include substantial furniture, equipment, (particularly in the case of medical office), and supplies. These personal property items are rarely tracked in a fixed asset listing, due to the capitalization caps of the property owner. Simultaneously, the personal property is frequently disposed without record, as they are not capitalized. The real estate, which can sometimes be highly customized for specific office operations, typically can easily accommodate other office users from other industries.
CONCERNS FOR OFFICE
Property Tax Services, Done Right, Go Far Beyond Return Filing
Property taxes divert valuable staff away from more important projects and regular finance operations during the busiest accounting months of the year, January through April. The diversion of staff, not to mention the costs of missed opportunities, are too expensive not to call in a quality consultant.
ASSET REVIEW
General and medical office personal property assets usually include computers, equipment, furniture, specialized equipment, and other short-lived tangible and intangible assets. Offices may also have considerable tenant improvements. Many companies operate their fixed asset lists and record keeping around two functions - resource allocation and income tax depreciation. Neither of these focuses align with the interests of property tax assessments. Testudo reviews your assets in the manner that matters to assessors. Our method includes verifying the physical presence of assets, componentizing costs (particularly tenant improvements), reviewing asset condition, and numerous other considerations. Due to capitalization thresholds, fixed asset lists rarely list all the assets on site. Simultaneously, it is easy to over estimate the value of the assets when a maintained asset list isn't used. The goal is to identify exposures and opportunities.
EXEMPTIONS
Numerous jurisdictions offer, sometimes locally and other times statewide, partial or complete exemptions for certain assets, businesses, geographic areas, or uses. Examples relevant to general and medical office operations can include pollution control exemptions, intangible exemptions, development zone incentives, and industry specific exemptions. Such exemptions may be stated in the state constitution or be buried in local code. Many require extensive documentation and an application process to one or many governing authorities for a single exemption.
INDUSTRY REVIEW
For clients with specialized, industry specific assets, such as high tech medical equipment, satellite relay equipment, computer mainframes, high-end printers, and small labs, require a review of the market for the client's products and services, prices, competition, technology, customer base, trajectory, and the numerous other facets that are relevant to determining a just taxable value and identifying potential exemptions from taxation.
ASSET CLASSIFICATION
Testudo will review the current and best alternative classification of every asset for your property. Rather than just assuming the perfection of the tables provided by the local assessing authority, the accuracy of the description of the fixed asset listing, or ignoring the prospect of a costly audit, Testudo reviews the actual assets in place, their actual economic life, and their real use. With this information, Testudo can classify assets in a defensible and reasonable way, to result in the least amount of taxes possible, without the need for appeal.
REAL ESTATE
The real estate used for office and medical office can span a fantastic range of cost and specialization, due to location, finish quality, specialized layout, and architectural features. Most office structures do not need to be substantially modified between users, even if those users come from different industries. Consequently, market sales and an income analysis are highly relevant to determining the value of these structures. The review should consider, among other things, functional inadequacies, parking, excess land, rent potential, market vacancy rates, property rights, fact verification, analysis of sales, age of structures, and much else.
VALUE ANALYSIS
Ad Valorem Taxes are taxes "to the value" of the subject property. Whether real estate or personal property, that value is subjectively derived (if it is to in any way reflect market value). Consequently, it is in the interest of the owner to know if the value derived by the assessor's calculations are just and reasonable. Even a return, accurately provided to the assessor, may result in a grossly incorrect value. The assessor may not know if some equipment is inoperable, if a building is vacant, if the technology is obsolete, if there are damages to the structure or personal property, or any number of other influences on the value of your property. The assessor cannot be expected to know all these influences. It is up to the consultant, and expert witnesses (when necessary), to research, identify, and weigh these influences, to scrutinize the justness of the assessor's findings.
AUDIT DEFENSE
Some jurisdictions regularly audit taxpayers above a certain payment threshold. Practically all have the power to audit businesses returns, sometimes going back five or more years. These audits can be time consuming, nerve racking, and costly, if not properly managed. Testudo assists businesses by acting as recipient of the auditors inquiries, providing answers, and minimizing the impact to operations of the business. Additionally, Testudo will work to keep the resulting audit just and not unreasonable in its findings. If an audit is forthcoming, enrolling the services of a tax consultant as early as possible in the process will serve the tax payer more than the audit's conclusion.
COMPLIANCE
Most states require the filing of annual returns and records to be used by assessing authorities, be they local or state officials, to determine the value of your property for property tax purposes. Businesses may also be required to file their financial statements, previously obtained exemption certificates, fixed asset lists, and other documents. Such returns must be timely filed or penalties and the revocation of rights, such as the right to appeal the resultant value, will be enforced against the tax payer. A 10% tax penalty is common for late returns. Another great effect of a professionally produced return is that the taxpayer is much better able to predict the value and tax many months in advance of their issuance. Improperly completed returns, in addition to penalties, do not allow business owners to accurately predict what their tax bill will be that year.