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Who Says You Can't Fight City Hall?

According to a recent study by the National Federation of Independent Business (NFIB), small-business owners ranked property taxes as the sixth biggest problem they face today, while 23% considered the issue to be critical. Despite the concerns, however, most business owners simply accept the inevitable and hand over the taxes without a word.

On the other hand, you may be able to reduce your property tax bill if you put up a fight. If you simply say or do nothing, nothing will change.

Starting point: Be aware that property tax includes more than just the tax assessed on your business premises. You may also be taxed on business assets such as equipment, inventory and even the chairs and furniture in your office. The NFIB has suggested the following ways for relieving the tax burden.

*Avoid keeping surplus inventory on hand. While you will need enough stock to fill customer requests, excess inventory will only cost you more tax.

*Buy property next year instead of this year. Because most states tax tangible personal property on the last day of the year, try to put off purchases until next year.

*Notify state and local taxing authorities about dispositions of assets. You do not want to be taxed on property you no longer own.

*Obtain an itemized bill when you buy new property. Many localities do not tax "intangible" costs (e.g., patents and copyrights) that are included in the price of equipment. In most cases, you only have to pay tax on tangible property.

*Use discretion before you make major renovations. Upgrading the property could result in a huge increase in your property taxes. Consider all the angles, including any tax breaks that you might qualify for, such as the rehabilitation tax credit.

Practical advice: Let your feelings be known at city hall. In addition, you might reach out to your government representatives about rising property taxes in your area. Finally, consult with your business advisers for ways to counteract rising taxes.

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	[ return to list ] Who Says You Can't Fight City Hall? According to a recent study by the National Federation of Independent Business (NFIB), small-business owners ranked property taxes as the sixth biggest problem they face today, while 23% considered the issue to be critical. Despite the concerns, however, most business owners simply accept the inevitable and hand over the taxes without a word. On the other hand, you may be able to reduce your property tax bill if you put up a fight. If you simply say or do nothing, nothing will change. Starting point: Be aware that property tax includes more than just the tax assessed on your business premises. You may also be taxed on business assets such as equipment, inventory and even the chairs and furniture in your office. The NFIB has suggested the following ways for relieving the tax burden. Avoid keeping surplus inventory on hand. While you will need enough stock to fill customer requests, excess inventory will only cost you more tax. Buy property next year instead of this year. Because most states tax tangible personal property on the last day of the year, try to put off purchases until next year. Notify state and local taxing authorities about dispositions of assets. You do not want to be taxed on property you no longer own. Obtain an itemized bill when you buy new property. Many localities do not tax "intangible" costs (e.g., patents and copyrights) that are included in the price of equipment. In most cases, you only have to pay tax on tangible property. *Use discretion before you make major renovations. Upgrading the property could result in a huge increase in your property taxes. Consider all the angles, including any tax breaks that you might qualify for, such as the rehabilitation tax credit. Practical advice: Let your feelings be known at city hall. In addition, you might reach out to your government representatives about rising property taxes in your area. Finally, consult with your business advisers for ways to counteract rising taxes. [ return to list ]
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