From the Desk of Josh Malancuk, CPA
March 17, 2022 | Josh Malancuk, CPA
If you've seen an Iowa property tax bill recently, you might have wondered if your taxes are too high. Well, your business sense is right on point. Odds are, they probably are too high because about 80% of the time, we find that companies are paying inaccurate property tax levels by as much as 20%-30%!
As an Iowa business, your property tax bill likely represents one of your largest tax burdens and it is highly likely that you are paying far above the fair, accurate and equitable amount. So, what’s the best approach to tackle the issue head-on?
Planning to Lower Iowa Property Tax Burden
Typically, Iowa assessment notices are sent during the month of March. If a property owner disagrees with an assessor’s estimate of the market value, they have the right to appeal their property tax assessment by filing a protest with the local Board of Review between April 2 and April 30 of each year. The Board typically meets annually in May to consider protests. Property owners can further their appeal to the Iowa PAAB or District Court (in both odd and even years) if they aren’t satisfied with the local Board’s decision.
Corresponding property tax bills are paid 18 and 24 months in arrears. For instance, the January 1, 2022 assessment taxes will be due for payment in September 2023 and March 2023. By the time a property owner/manager has sticker shock from seeing their skyrocketing property tax bills, it’s going to be too late for corrective action. For this reason, it’s incumbent on company management to pay particular attention to their property tax assessment notices, which will be mailed later this year.
Best Practices for Managing Iowa Property Taxes
The real key to successfully reducing an Iowa property tax assessment is to plan diligently and uncover any overages prior to annual appeal deadlines to build solid footing with appeal support documentation. Unfortunately, many companies miss the chance to reduce their Iowa property taxes because they do not put a review process in place ahead of local protest dates. We have found that Iowa commercial and industrial property owners are typically paying inaccurate property tax levels by as much as 20-30%, so we suggest embracing the following property tax management steps ahead of future tax appeal protest periods:
- Assess preliminary real property tax reduction opportunities through initial market analysis.
- Verify findings through interviews with operational personnel.
- Identify and calendar statutory local and state appeal deadlines.
- Implement findings through appeals and established evidentiary support.
- Validate secured savings through revised property tax statement review.
Properly managing business property tax levels goes well beyond just paying and then forgetting about annual property tax bills. Meaningful reductions are only achieved by implementing a disciplined process and pursuing tax appeals to bring company assessments in line with reality. Hundreds of thousands $$$ to millions $$$ in property tax cost savings can be achieved, which can then be redirected to other areas of greater company priority.
A word to the wise: Don’t go at it alone–let an expert help you and your company navigate the property tax review and protest process. Your company’s annual profit statement will thank you in the end! To learn more about tax savings reductions in Iowa and how to go about reviewing your valuation, join us for a webinar on March 24 at 10:00 am.
Josh Malancuk, CPA, CMI is president of JM Tax Advocates, a service organization that advocates for property tax reductions and maximum level incentives for leading Iowa manufacturers and other major employers. JM Tax Advocates currently serves ABI members as an endorsed Buy ABI provider. Josh can be contacted directly at email@example.com or at 317.674.8390x100.