As the old saying goes, ‘nothing is certain, except death and taxes”.
And with property taxes accounting for anywhere up to 50% of operating costs for some warehouses, an understanding of the basics can help facility owners pinpoint opportunities, minimise tax and increase profit.
According to Seth Krchmar (Paradigm Tax Group) in his article in MH&L…
‘For an industry that focuses on reducing cost and improving efficiency, property taxes are often an overlooked piece to reducing warehouse expenses. Property taxes may simply be seen as the cost of doing business, but they don’t have to be. Owners can often get them reduced through an appeal if they take the right steps.
He points to 4 key areas where warehouse owners can focus attention and potentially reduce taxes on their facility…
1. Be clear on local regulations
Like most laws and regulations, property taxes vary across jurisdictions, but regardless of your location, key info relating to property tax is readily available on local government websites or local accessor’s offices.
2. Research local market data
Inn addition to a basic understanding of local rules and regulations relating to property tax, get some insight into the key local trends such as real estate and labour markets, which can inform your drafting of a property tax appeal.
3. Ensure your records are detailed and well maintained
Property tax is are based on the assessed value of your warehouse facility, and often includes equipment within the building itself. The accessor may think equipment is valued higher than it really is, so work with your warehouse staff to keep detailed records on what equipment is being used, what’s outdates, and what needs repair.
4. Maintain your calendar
In the same way different councils, states and territories have different tax regulations, their timelines and deadlines also vary.