Despite a great deal of protest from local government officials from across the state, the Indiana House and Senate approved bills to reduce the business personal property tax. Representatives from Indiana counties, police, fire chiefs, schools and local government officials voiced their disapproval of the legislation because there was no direct plan in place to provide additional revenue to supplement the funds that would be lost due to the partial elimination of the personal property tax. In fact, some believe it will eventually be the "most significant piece of revenue loss ever" for Indiana governments. Republican Gov. Mike Pence's initial proposal was to phase out the tax on business equipment and supplies, which generates about $1 billion annually for local governments. However, Pence also endorsed the House and Senate bills that passed, which will reduce, but won't completely eliminate the tax (although it is likely to lead to a complete phase-out in the future.)
By Sharif Mitchell, Senior Managing Consultant / Area Leader, New York City
& Cameron Moore, Senior Managing Consultant / Area Leader, Atlanta
For the first time in nearly two decades, Oklahoma is trying to get all county assessment offices to figure property taxes the same way and follow the same method of assessment, with hopes to increase state revenues in the process. The Oklahoma Tax Commission recently conducted a state performance audit, in which 35 counties across the state failed. More than 20 years ago, every county in Oklahoma was given a state-supplied computer software program, CAMA (Computer Assisted Mass Appraisal), however, the counties that failed the audit were not utilizing the system. Oklahoma Auditor and Inspector Gary Jones and other state officials are trying to gradually bring these counties into compliance over the next couple of years.
The Alabama House of Representatives overwhelmingly approved a slate of tax bills last week, and now the four bills are headed to the Senate, where another easy approval is expected. Representative Greg Wren (R – Montgomery) and House Speaker Mike Hubbard (R – Auburn) co-sponsored House Bill 108, and it was part of the House Republican Caucus’ “Commonsense Conservative Agenda” for 2014. One main aspect of the new legislation is an independent agency would become responsible for overseeing taxpayer disputes, rather than the Department of Revenue's administrative judges settling disagreements. Lawmakers believe the current system gives too much power to the agency, and Republicans have dubbed HB 108 the "Taxpayers' Bill of Rights."
In an effort to save and revive at-risk historical buildings, effectively generate living-wage jobs and stimulate local economies, Restore Oregon has called for a historic preservation tax program. In a special report released last week, Restore Oregon said a State Rehabilitation Tax Credit would help fill the gap between private and federal funding available for redevelopment. According to the report, similar tax credit programs have proven their effectiveness in 34 other states, creating a ripple effect in local economies. In Ohio, every dollar of state tax credit leverages $6.25 in investment. In Minnesota, every tax credit dollar creates $8.32 in economic activity. And in North Carolina, every tax credit dollar generates $12.51 in economic benefit. Restore Oregon reports that approximately 2,600 commercial buildings are listed on the National Register in Oregon and could benefit from a State Rehabilitation Tax Credit, which would to help cover the cost to refurbish older buildings, bring them up to code and to support seismic updates.
Due to more reductions in state aid to Maine cities and towns, municipal officials warn that it will result in skyrocketing property taxes and cuts to essential services. According to Bloomberg Businessweek, Republican Gov. Paul LePage's administration and business owners say the plan to pay for revenue sharing by cutting some tax incentive programs or dipping into the state's savings fund will hurt companies that are still struggling from the recession. Mayors, city council members and town managers are urging lawmakers to approve a measure that would prevent the reduction of $40 million in municipal aid next year — which is supposed to happen if lawmakers fail to agree on which tax breaks or cuts should be eliminated to find savings in the tax code.
Forecasters are predicting another surge in Silicon Valley's commercial real estate market in 2014. As the technology industry soars, the commercial real estate market will continue to reap the benefits. The annual Newmark Cornish & Carey real estate review and forecast event, which was held Wednesday, had an optimistic outlook for the valley's office, industrial and R&D realty sectors. In fact, the market might even outperform last year.
By Jodi A. Bain, Senior Managing Consultant, Tucson
Over the past two years, the New York City Finance Department has overruled its own property assessments on Google's headquarters, which takes up an entire block in Chelsea’s prominent real estate market, reducing the company's real estate tax by $21 million. According to the New York Daily News, Google, one of the country’s richest companies, shelled out a staggering $1.8 billion in December 2010 for its New York City location. But three veteran Finance Department assessors have claimed “highly unusual” interventions in the Google assessment process by their supervisors. Those interventions, they say, slowed the rise in the building’s official market value and reduced the company’s tax bite.
By Manuel A. Ramos, Senior Managing Consultant / Principal, Fort Lauderdale
By Nick Ruiz, Managing Consultant, Tucson
Representative Ben Unger, D-Hillsboro, proposed a bill to the Oregon House that would eliminate certain property tax abatements local governments grant to boost economic development. Unger's goal is to put the $378 million lost due to the abatements back into the school districts, providing the needed funding to hire more teachers and reduce class sizes across the state. According to The Oregonian, the two most visible programs that would be affected by Unger’s bill are urban renewal agencies such as the Portland Development Commission and the Strategic Investment Program, which places a cap on property tax assessment for a qualifying business for up to 15 years. Urban renewal agencies borrow against future property tax revenue, issuing bonds that make large capital investments possible in the short term. Over time, increased property tax revenue triggered by those investments is used to pay off that debt.
Arlington County, Virginia's office market has been suffering since the Pentagon's 2005 Base Realignment and Closure (BRAC) plan. While many counties in the D.C. area are reeling from loss from BRAC-related vacancies, Arlington was one of the hardest hit. In fact, Arlington's office vacancy rate is around 20 percent, the highest it's been in nearly a decade. According to ARLnow.com, the high office vacancy rate is exacerbated by new office buildings coming on the market and certain large employers (including military offices impacted by BRAC) leaving. To combat that, Arlington is considering options providing certain tax incentives to attract new businesses and encourage growth for existing employers. Alex Iams, a commercial development specialist with Arlington Economic Development, ensures that the county is aggressively planning for the future. By the end of the season, a policy should be structured to offset office vacancy.
In the fall of 2013, The Riverside Company, a global private equity firm, acquired Paradigm Tax Group. Accelerating organic growth opportunities and supporting Paradigm's acquisition strategy is one of Riverside's main goals of the partnership. Paradigm has recently announced two acquisitions, AVS Tax, Inc. and Hart Property Tax Consultants, LLC., and Riverside had this to say about it in their press release:
Categories: Paradigm Info
Back in 2007, South Carolina's Act 338 became law, changing the method of taxation for all non-primary residential properties in the state. The law requires counties in South Carolina to reassess when there is an "assessable transfer of interest," which is usually a change in ownership due to a sale. This is known as a point-of-sale reassessment, and it can cause large increases in property tax bills. Properties that were sold after the legislation was enacted suffered from dramatically higher property tax bills over identical properties which had not sold. To counteract this problem, the General Assembly passed Point of Sale legislation in 2011, creating an exemption for non-residential properties. The new law is applicable to all non-primary residential properties which are assessed at a six percent (6%) rate and include commercial properties, investment properties and second homes but excludes manufacturing properties assessed at 10.5%. Eligible properties will still be reassessed if there's a transfer of interest, however, the new value (with some limitations) will receive a 25% exemption from the sales value for taxation purposes. Property owners must apply to receive the exemption, and the deadline is January 31, 2014 for properties purchased in 2013.
Paradigm Tax Group is pleased to announce the acquisition of Hart Property Consultants, LLC. Based in St. Cloud, Minnesota, Hart Property Consultants has been working with commercial and industrial property owners for more than 25 years. Paradigm Tax Group is the fastest-growing tax consulting firm in the nation, and joining forces with Hart Property Consultants will help bolster their Upper Midwestern presence.
In December of 2012, Governor Snyder signed into law eleven bills affecting the taxation of
personal property in the state of Michigan. While most of the Acts don't go into effect until next year, The Michigan Department of Treasury recently issued a bulletin highlighting the amendment to the existing industrial and commercial personal property tax laws that apply to the 2014 tax filing season. Beginning December 31, 2013, the value of property that is exempt from personal property taxes increased from $40,000 to $80,000. Therefore, property owned by, leased by or in the possession of the owner or a related entity in each tax collecting unit with a combined true cash value of less than $80,000 will qualify to be exempt from property taxation. In order to claim the exemption, the owner of the eligible personal property must annually file an affidavit, (Form 5076), with the local tax collecting unit where the property is located. The deadline is February 10. Once this affidavit is filed the owner is not required to file a personal property tax statement in that tax year.
Phoenix, AZ - The property tax practices of Paradigm Tax Group and AVS Tax, Inc., also known as AVS Valuation Services, have joined forces to expand Arizona’s leading property tax consulting practice. “AVS represents another outstanding addition to Paradigm’s standing as the leading property tax consulting firm in the Southwest,” said Bob Dunlap, Co-Founder of Paradigm Tax Group. Based in Phoenix, Arizona, AVS has provided property tax management services to a diversified portfolio of property owners for more than 25 years.
Denver, Colorado's industrial market is the healthiest it's been since before the recession. With more than 2.6 million square feet of industrial construction underway and a vacancy rate of 4.6 percent, things couldn't be going much better in Denver. Investors and developers alike are taking notice of the thriving industry and they have been scouting the market heavier than at any time before the economic downturn. Although lease rates rose modestly at the end of the year to $6.10 per square foot overall, Denver has experienced a lot of growth in Class A rates. After five years of hardship, the area has finally transitioned from market recovery to market expansion.
For the first time since the economic downturn, Utah's commercial real estate market is hitting new highs. Investments in Utah's commercial real estate markets exceeded $1.3 billion in 2013, but industry leaders are still proceeding with caution due to the blow from the recession. However, the investment figures would have been even higher had more office, retail, industrial and rental properties been available for sale, part of a larger recovery for the industry across the state, according to The Salt Lake Tribune. Forecasters expect 2014 to be at least as healthy for all commercial sectors.
The U.S. Census Bureau released new data on construction starts and spending in 2013, which provided evidence of an urban office development recovery. According to CoStar, a leading commercial real estate information company, some planners are describing 2013 as "the year of the return of the downtown high-rise" as major skyline-altering projects broke ground in Seattle, New York, San Francisco, Houston, Dallas, Chicago and even in markets hit hard in the housing downturn such as Phoenix and South Florida. The total value of office construction put in place was up 2.6% in November from the previous month and is 5.6% higher than the same time last year -- with private projects logging larger increases of 4.6% and 11.5%, respectively.
The commercial real estate market in Phoenix, Arizona is rebounding and sparking a great deal of interest with big investors once again. The industry's most influential survey , "Emerging Trends in Real Estate (published byPwC and the Urban Land Institute)," ranked the city as No. 25 in a list of the best places in the county for investors to put their money, which is eight spots higher than last year. According to Arizona Central, the Valley’s employment and population growth, as well as a relatively low cost of doing business, helped the area improve its position with small and large investment funds. The report projects Phoenix's population to grow 2.6 percent in 2014, and it also predicts the number of the coveted millennial-generation residents, ages 20 to 34, in the region will increase by 11 percent over the next five years. In addition, the report projects a 2.4 percent increase in the number of jobs in 2014, while predicting that employers needing office space will account for the biggest growth in jobs.
As hoteliers reflect on 2013, many are asking if they've left money on the table they'll never get back. According to Hotel News Now, the rapid and record rise of demand during the recent upturn has overshadowed a more sluggish surge in average daily rate. And as the metric continues to decelerate as 2013 comes to a close, many hoteliers fear it's too little too late. Post 9/11 the U.S. hotel industry saw occupancy and ADR decrease 6.7% and 4.5%, respectively, on a 12-month-moving average basis. Occupancy eventually recovered to a peak of 3.6% growth in February 2005, but ADR bounced back at a much faster clipping, hitting 7.5% growth for five consecutive months beginning in October 2006. In this most recent cycle, however, occupancy recovered much more quickly and significantly, topping out with growth of 6.1% during February 2011. ADR petered out at only 4.3% growth in January 2013.