Commercial building

Property Tax Misconceptions Can Cost Business Owners Thousands

February 7, 2019

As a business owner, you have one eye on the bottom line and the other on the future. You’ve surrounded yourself with a team who supports your vision and helps propels the business forward. But would it surprise you to learn there is one area which most business owners aren’t focusing on? Commercial Property tax bills come in the mail every year and chances are it’s too high, and you’re getting overbilled. Paying the amount, no questions asked can cost you thousands. Here are two common misconceptions surrounding Property Tax Assessments.

  1. My in-house team has it covered - Regardless of size, most companies are treating tax bills no different from everyday business. The bill arrives, it heads to accounts payable, and if the increase seems reasonable, it’s paid no questions asked. Or if it raises a flag, it is sent to someone with a tax background. But often the team member lacks the expertise to evaluate and manage property tax assessments. They don’t fully understand the approaches to market value or have time to devote to diving into the intricacies of property tax like a professional.
  1. My property valuation didn’t go up that much, so my taxes shouldn’t either – Wrong! We’ve done the research, and in most cases, it is a 1:1 increase. If your real property tax assessment value went up by 5%, expect your property taxes to follow suit.

Overassessment of properties is more common than you may think.  Assessors in Kansas and Missouri use mandated mass appraisal techniques to estimate your property’s market value. Mass appraisal is the process of valuing a large number of properties at the same time using standardized procedures.

Bottom line, the county appraiser does not know the specifics of your property, and they don’t have the time and resources to really take a look. Instead, it’s lumped in with tens of thousands of properties in the same area and industry.  If you are a real estate owner in the manufacturing, hospitality, financial services areas just to name a few - whether it is a single property or multiple, you will feel the impact. Many properties are atypical and require varying degrees of special attention.

To find out if your assessment is fair and equitable you need to contact a tax professional with expertise in real estate valuation who can maneuver through the regulatory obstacle course. They will examine the numbers along with the records on file with the county and come up with an opinion of the fair market value. If your property is not assessed correctly, your tax professional can help you file a property tax appeal. The property tax appeal process is complicated and requires accuracy and adhering to strict deadlines.

Do you think you are paying too much in commercial property taxes?  Contact your MarksNelson professionals  at 816-743-7700  or click the box below to schedule a free consultation.


Tim Anderson is a key member of the real estate practice area at MarksNelson, leading the real estate valuation and commercial property tax appeal specialty groups. He partners with clients to secure credits and incentives, provide economic development guidance, and advise on state and local tax... >>> READ MORE

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