A business woman reads bad news

Two Signs You May Be Overpaying Your Commercial Property Taxes

November 8, 2022

Commercial property taxes are an unavoidable part of doing business. As an owner, you obviously don’t want to pay more than your fair share. But many of you are overpaying and it is impacting your bottom line. Here’s a look at the two reasons why. 

Your Payment Process is on Autopilot

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. This same process repeats itself year after year after year. Often small business owners or CFOs of larger companies lack 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.

Mass Appraisals

Overassessment of properties is more common than you may think. Assessors in most states use mandated mass appraisal techniques and market averages to estimate your property’s market value. They often make simple factual, clerical, and valuation methodology errors. Bottom line, they don’t know the specifics of your property and they don’t have the time. Instead, it’s lumped in with tens of thousands of properties in the same area. Your property may have deferred maintenance such as roof, HVAC, plumbing, etc., that may lower the taxable market value, but those things are not factored in since the assessor can’t look at every asset individually.

Break the Cycle

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. If your property is not assessed correctly, your tax professional can help you file a property tax appeal or in some cases, you can file a “payment under protest” form with your tax bill. Both scenarios are equally complicated processes and require accuracy and adhering to strict deadlines.

The team at MarksNelson can help you ensure you’re paying your fair share of commercial property taxes. We’ve helped a multitude of clients reduce their real estate property tax payment. Contact us today.


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

Woman rejoices at cliff


Subscribe to receive email updates intended to support your business operations, mitigate risk, and help you grow.