What Taxpayers Should Know

It is the inalienable right of every taxpayer to challenge ad valorem assessments, and to obtain relief if overtaxed. Every state has a system for this purpose, as does Canada and England.

Each state also has its own laws, court decisions, and regulations affecting opinions of value, the types of assets taxed as "property". There are significant differences in practical applications of these taxes.

Red Flag - The Florida Auditor General has reported, for fifteen years to date, local tax rolls cannot be verified. The reports detail lack of uniformity, lack of objective, current, complete Guidelines, lack of appropriate statistical analysis, lack of documentation, and other deficiencies in the state's Department of Revenue's supervision of local assessing practices. A statewide Grand Jury Presentment, in 1989/1990, itemized similar concerns. Of twelve AG recommendations made to DOR in 2000, to which DOR reported "we concur" on all points, two specifically identify appropriate Guidelines {key to solving several problems) which are not being followed by this state agency.

In Florida, the "just value" of Real Property - land, improvements (including buildings), and Tangible Personal Property - is reassessed for taxable purposes as of each January 1. Computer assisted mass appraisal (CAMA) techniques are applied, in many counties. However, "mass appraisal" really applies statistical analysis rather than traditional appraisal methods, often includes "margins or error," and does not necessarily result in "just value".. And, venues in Florida typically do not use the same CAMA software programs, so their data varies.

At the end of December, business owners receive Tangible Personal Property Returns to file before April 1st. Most typically ask their accountants to fill out the forms, then sign and send them in. The filing of Returns is Step One. From those forms, the counties will apply appraisal techniques and methods to the hard assets.

Business taxpayers should realize there are major differences between accounting and appraisal approaches to tangible property valuation. It is critical to use appraisal methods for tangible personal property. Even the "cost approach" differs between the two professions. The "market approach" has been found, in legal decisions, to be superior. Tax rates of tangible property values are the same as real estate, once set cannot be changed. However, the taxable valuations of tangible personal property may be appealed, under VAB rules and regulations.

In Florida state law, there are "eight criteria" (F.S. 193.011) which must be "properly considered" (F.S. 194.301) to determine "just value" of real and tangible property. The foundation of successful appeals is the application of these criteria in the context of valuation methods, with degrees of weight given to the preponderance of clear and convincing evidence.