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Corporate taxpayers often express concerns about Tangible Personal Property "compliance". In fact, businesses should comply - by proper and timely "reporting" assets in annual Returns.

Reporting is first of two parts involving "compliance". The second part of "compliance" BY THE PROPERTY APPRAISER is appropriate application of "jurisdictional exceptions" (USPAP) and "proper consideration" (F.S. 194.301) of conditional facts (F.S. 193.011).

The appeal process is intended to insure "government compliance". Opportunities to challenge assessments mandate review and recourse for taxpayers. Otherwise, there is no assurance of "just value".

Real property owners may worry about the impact an appeal might have on price, if their property went on the market at a future date. In fact, appeals are based upon retroactive conditions, always months out-of-date by the time of a petition or a Hearing.

Actually, real estate buyers typically ask "What are the taxes?" The lower this amount, the more attractive. However, taxable values normally reflect a "gross" market price. Taxable value should be "net," after adjustments are "considered properly". So, current market or taxable amounts are likely to change after sales.

RIGHT MAKES MIGHT - One multinational corporation's original costs for Tangible Personal Property were $40 million US. But, taxable values remained too high.

Facing proven experience with the process in combination with conclusions of a national expert, the property appraiser offered to settle, in the hall, just moments before the Value Adjustment Board Hearing.

Successful appeals typically are the result of good evidence, well presented, in the context of nuances inherent in each venue.

OUTNUMBERED, BUT NOT OUT DONE - A folding table filled most of the small room, leaving space for eight people to be seated. Yet, after the Master and the clerk, it was deputies and their lawyer 10 to agent 1. Surrounded! By government people. With more outside the door, waiting their turn.

The final outcome . . . property owners prevailed, with settlements at the table. Reducing taxable values on 40% of Tangible Property, adjustments made on $50 million US of rental apartment projects, and 90% savings on wetlands.

Some jurisdictions use the same master to hear every type of property. Other venues schedule different cases before masters who have demonstrated experience in specific types of property valuations. Successful petitions often result from on-the-spot adaptations of presentations, depending on the circumstances.

PASSING THE TESTS - A national corporation assigned just three "most difficult" Tangible Personal Property appeals to their newly hired agent. Success was obtained in all three venues, varying between settlements offered by respective property appraisers and also before special masters.

The next CPS assignment was 23 locations throughout the state, with success even in venues known for denials. After that, the number grew again.

It's not uncommon for taxpayers to test agents, initially. Then, if satisfied to increase assignments. Many often begin with difficult cases. Yet, often the most impossible-seeming cases may be won with good strategy.

TRANSLATING TECHNICAL LANGUAGE - A textbook case of "functional obsolescence" was not understood by the Property Appraiser's Deputy. Worse, the Special Master confused "value in use" with "fair market value". An impartial explanation of the professional distinctions was furnished to the VAB, which in turn submitted it to the Special Master. Another Hearing ended up before the same Master, involving the same functional problems, albeit uniquely used by the same taxpayer. This time, "physical condition" was noted, and Findings reflected the effect.

Like appraisals, assessments are "opinions of value". If assumptions change, inevitably conclusions change. Knowing conditions of property is the first essential to giving appropriate priority to data. Taxpayers should not assume all facts are known or applied or are properly considered without full review.

THE ETHICAL PROCESS IS A TWO-WAY STREET - The Value Adjustment Board "Findings" arrived. There was a substantial reduction in taxable value, for the second year in a row, meaning many thousands of dollars saved by the taxpayer. Land reduced by 50%. And, ZERO VALUE for improvements. It was obvious the Recommendation could not be correct, since evidence and arguments supported only the adjustment on land. The taxpayer agreed to report the obvious error. Both VAB and Property Appraiser were notified. The Special Master amended his Recommendations, added back the value of improvements, and the resulting change was considered fair by all parties.

Under-taxation results in higher millage rates paid by all. Taxpayers ultimately end up with less return on investment, on a compounding basis, if improper windfalls are quietly accepted. Honesty must be the policy if the process is to work in the most efficient manner. Credibility pays back, when the benefit of doubt comes up, inevitably, in other circumstances.

NEVER SAYING NEVER - The president of a prominent lending institution was told a problem of double taxation could not be resolved. It was discovered after the Value Adjustment Board deadline expired. It was later than the "just cause" filing period. It was beyond the 60-day limit for court challenges. Everyone else said the improper taxes must be paid. 100% of the double taxation was removed.

Property appraisers have broad discretion to correct "errors in fact". In fact, there is an obligation to uphold the law and maintain accurate tax rolls. Therefore, when a factual error is noted, and can be properly documented, it is appropriate for taxpayers and property appraisers alike to fix the problem.

COMING OUT AHEAD IN AN OBSTACLE COURSE - County appraisers suddenly assessed property of two airport authorities, within municipalities. These authorities passed taxes through to more than one hundred on-site concessionaires. Real property VAB appeals, on taxable values, became complex as litigation ensued regarding exemptions.

Out of about 100 affected businesses, one multinational tenant opted to appeal valuations, in addition to being a party in the legal case. Initial investigation revealed the taxpayer was taxed for property they never occupied. Those obligations were removed, and refunds were granted for prior years. For those properties the company did occupy, petitions prevailed for multiple parcels, adding up to 50% tax savings. The next year, the outcome on value was repeated.

It is critical to look at property. On site conditions will reveal details about value. Sometimes even more telling will be the circumstances in the surrounding area. In this case, "a ride around the block" in a car revealed certain addresses could not be found. From that discovery, documents could be gathered to provide evidence of errors.

DIGGING OUT BURIED DETAILS - One land developer saved thousands of percent in taxes. It took careful review of essential data related to thousands of parcels in a PUD. Many sections of the vast acreage were unplatted and unregistered with the state.

Still others were divided into lots and small subdivisions. There were scattered sales. Problems related to physical and environmental conditions were evident in a number of parcels.

There are 67 counties in Florida. Within those 67 counties, there are 66 elected and one appointed property appraiser. Under constitutional, statutory, case law mandates, uniformity of process is the principle and ideal standard.

Yet, no two counties operate their Value Adjustment Boards identically, any more than any two properties perform in identical fashion. To insure accurate taxation, each property owner should know how appraisal works, what are the "jurisdictional exceptions" to USPAP (Uniform Standards of Professional Appraisal Practice), and then be aware of the variations in process which apply in each jurisdiction, including attitudes of pattern of appellate courts.

In addition, Florida does not have a definition of "market" although having such has been recommended by the Auditor General. And, there is more than one way to define "market" - in physical as well as economic terms.

It becomes very critical in some circumstances to define perimeter boundaries of a location or trade area, then look at legal environment as well as physical conditions. From those perspectives, select comparable sales or operating data applicable to real and tangible property.