Have You Considered Appealing Your Business Personal Property in Texas?

Counties across the state of Texas require taxpayers to file annual business personal property returns that list all assessable personal property owned as of January 1. All business personal property (BPP) must be filed regardless of amount or cost by the return date of April 15 to the local appraisal districts. After review, the appraisal districts will generally issue an assessed value notice between May 15 and June 15. Taxpayers then have 30 days to file an appeal if they choose to challenge the assessment.

In the state of Texas, appraisal districts use a mass appraisal model based on outdated depreciation tables that only consider the age and an assumption on useful life for fixed assets. BPP assessment is determined by each county based on the asset’s historical purchase price without accurate depreciation. This methodology does not take into account either functional or economic obsolescence, which can result in significant overpayments until you physically get rid of the asset and remove it from your books.

It is important for taxpayers with BPP and inventory in multiple locations across the state to ensure the value of your fixed assets and inventories aligns with the current market value. Counties across Texas still utilize the Marshall & Swift depreciation model as a valuation basis that does not capture all forms of obsolescence resulting in overpayment of BPP.

Ryan utilizes current market-based comparable data from internal research and strategic alliances with strategic valuation firms to demonstrate that the actual taxable market value of a company’s assets is lower than the incomplete valuation of the local jurisdictions. Our experts consider the different market and accounting adjustments that are applicable to arriving at the proper value of a company’s inventory.

The experts at Ryan have a track record of 85% BPP appeals won in Texas, with a 2022 average reduction of 28% achieved for our clients. Learn how you could potentially reduce your annual personal property up to 40% in 2023.