The total property tax expense for U.S. hotels exceeds a potential $8.1 billion, according to a new study by STR utilizing 2016 HOST (Hotel Operating Statistics) data. The study found that roughly 36% of all hotel property tax expense resides in 15 counties. While 611 counties comprised STR’s HOST data, the report studied only those with a sufficient reporting sample. Overall, the median property tax expense for U.S. hotels was 3.7% of total revenue with a much higher expense percentage for limited-service properties (4.2%) than full-service hotels (3.3%).
By Carlos Villatoro, Senior Managing Consultant, Dallas
It is no secret that significant commercial real estate investments continue to pour into the great state of Texas. However, if an owner isn’t lucky enough to receive major tax breaks from local jurisdictions as an incentive to invest here, they will have to accept some of the highest effective property tax rates in the country. The tradeoff is that Texans enjoy a relatively low sales tax rate and zero state income tax rate. Fortunately, the Texas Property Tax Code offers multiple appeal recourse avenues, which allow owners and tenants alike to review the property tax liability from a fair and competitive standpoint.
In 2017, the Texas Legislature made changes to the Texas Property Tax Code, most of which became effective on January 1, 2018. Among the changes are new, earlier deadlines for filing Notices of Protest and Personal Property Renditions.
Three important property tax deadline changes are:
- May 15: The new deadline for filing a Notice of Protest. The previous deadline was May 31. If a Notice of Appraised Value is sent under Code Section 25.19 the deadline is extended until the 30th day after the notice is delivered.
- April 1: The new deadline for filing a personal property rendition "for property located in an appraisal district in which one or more taxing units exempt property under Section 11.251 (Freeport Exemption)." The previous deadline was April 15.
- March 31: The new deadline for an application for Interstate Allocation for moveable personal property, including vehicles, vessels and watercraft, commercial aircraft and business aircraft. The previous deadline was April 30.
A summary of the remaining deadline changes are as follows:
By Seth Krchmar, Managing Consultant | MFRTECH
Keeping costs at a minimum is often a top priority for owner/operators of manufacturing facilities; however, they often overlook one key area that can positively impact their bottom line. In fact, property taxes are often one of the biggest line item expenses manufacturing facilities face and can represent 30 to 50 percent of operating costs. The good news is that owners don’t have to take them at face value.
For the past 25 years, Republican lawmakers have tried over and over again to cut the much-maligned business personal property tax in Colorado. State Senate members passed a bill Monday to increase the exemption for the business personal property tax by a hefty 27-6 margin — the kind of bipartisan agreement that one might think would lead to success for the bill in the House of Representatives. But when asked just hours before the vote about the chances for the long-sought GOP goal of making substantial cuts to business equipment tax, Senate President Kevin Grantham jokingly deflected the question by asking, “Hey, how about that nice weather we’ve been having?”
A Florida Senate committee has unanimously approved Senate Bill 90, which would implement Amendment 4 and eliminate property taxes on solar and other renewable energy devices installed at commercial and industrial facilities for 20 years. The same tax break already exists for residential property owners. Florida voters passed the Amendment 4 ballot initiative last summer with almost 75% of the vote. The legislation would go into effect in 2018, and would also exempt renewable energy devices from Florida’s tangible personal property tax, including storage tanks, rock beds, thermostats and control devices, and heat exchangers.
Ohio’s oil and gas industry may get a retroactive windfall tax break estimated at $264 million under a bill passed by the legislature during the lame-duck session The heavily amended Senate Bill 235 would expand the sales-tax exemption for tangible personal property for the oil and gas industry. And in an unusual move, the General Assembly made the tax breaks retroactive to June 30, 2010, requiring refunds from the state totaling $215 million and local governments totaling $49 million.
Florida voters will be asked on the primary-election ballot on Aug. 30 to extend the residential solar energy tax break to commercial and industrial property owners, and thus significantly expand renewable-energy production in the state. Crafted by the Legislature, the broadly supported Amendment 4 proposal would exempt for 20 years the assessed value of solar and renewable-energy devices installed on businesses and industrial properties.
More than 30 trade associations and businesses are banding together in an effort to increase their push to get Wisconsin's personal property tax law repealed. The Coalition to Repeal Wisconsin's Personal Property Tax, which includes major business interests in the state like AT&T, American Family Insurance, Wisconsin Manufacturers and Commerce, and the Wisconsin Restaurant Association, says the lack of structure in determining what property is and is not exempt from the tax is unfair and disproportionately affects small businesses.
Major changes in Michigan Business Personal Property law provide an opportunity for manufacturers to significantly reduce their property taxes. The Michigan Department of Treasury indicates that many manufacturers failed to qualify for the new Eligible Manufacturing Personal Property (EMPP) Exemption due to the complexity of filing.
If you have Industrial Facility Exemption (IFT) returns that have been rejected, the IFT will be revoked if not corrected by the May 31, 2016 deadline. There is still time to file the required forms, but you must act quickly. If you are a manufacturer and are unsure of your exemption status, please contact us today to see how we can assist.