Accurate Taxation For Multiple-Property Businesses And Retail Chains
As an attorney with over 40 years of experience helping business owners challenge tax assessments, I know that not all businesses are created equal – and not all businesses are taxed equally, either. This is especially true for businesses with multiple locations, such as franchises and business chains.
Because I focus my entire practice on property tax appeals and have represented clients ranging from local business chains to national brand-name franchises, I understand the unique components that affect tax assessments for these clients. I have the knowledge and experience to make sure these multiple-property enterprises are taxed fairly.
What Property Tax Assessment Factors Work Against Multiple-Property Businesses?
When multiple properties operate as separate businesses but are owned by the same company or are franchisees, there are specific factors working against each property when its location is assessed for property taxes, such as:
- Location — These businesses often overpay when they purchase a specific piece of property because they believe its location is key to their success because of targeted demographics, the number of surrounding residence rooftops, traffic patterns, etc. That inflated purchase price inflates the tax assessment.
- Construction costs — When a business is required to conform to national branding standards, the cost of construction and assemblage can be significantly higher than it would be otherwise. The additional costs may include facades, layouts and trade fixtures that are specific to that particular franchise or brand, which are taxed by assessors even though they often do not add value to real estate.
- Revenue — A national brand’s (for instance, a drugstore like CVS) sales may be much higher than what any other business could produce in the same location. Revenue is often used as evidence of a property’s value by assessors – even though revenue depends on the success of a business, not necessarily property values.
Buyers only care about market value. Buyers base their purchase offers on factors such as the rental price of the property and their own expected revenue. Business chains and owners of multiple properties calculate the amount they are willing to pay differently than do other potential buyers.
When tax assessors use high sales as a factor when calculating a property tax assessment, they inherently inflate the tax liability of multiple-location businesses such as franchise or business chains. Worse, tax assessors do not factor in the additional costs that franchisees and chains take on when they purchase property.
You should not be penalized for having a successful economic model — your business should be welcomed for its many benefits to the local economy.
If your franchise or multiple-property business is being over-taxed, I can help you challenge your tax assessment by demonstrating how your costs and revenue structure differ from businesses on similar properties. As you attorney, I am here to help you fight for what is fair.
Contact Me To Discuss Your Property Taxes
Determining the proper taxation for a business with multiple locations can be time-consuming, and you need a skilled advocate to ensure your interests are being represented. Call my office today at 734-335-1967 or send me an email. I offer a free initial consultation so I can learn a little bit more about your situation.