Reducing Business Property Tax Obligations

In this episode of The Faces of Business, Josh Malancuk, CPA, CMI, Founder, JM Tax Advocates, shares some of the opportunities he sees when helping clients minimize business property tax burdens.

In this episode of The Faces of Business, Josh Malancuk, CPA, CMI, Founder, JM Tax Advocates, shares some of the opportunities he sees when helping clients minimize business property tax burdens.

With a laser-focused passion for real and private property tax appeal advocacy and an impressive record of accomplishment in economic incentive procurement and audits, Josh is the go-to expert for businesses seeking significant property tax cost reduction opportunities.

Josh’s specialties include real estate appraisal, property tax compliance planning, and property tax compliance control evaluation. His deep expertise has been instrumental in guiding businesses through the complexities of property tax accrual reviews, planned value estimates, and fixed asset planning to reduce the overall property tax burden.

Download our free business valuation guide here to understand more about business valuations and view our business valuation FAQs to answer the most common valuation questions.

Damon pleasantly welcomes Josh to his show. He engages the guest by discussing his background in property taxes and what led him to his current role.

Josh talks about his journey into becoming a property tax expert despite lacking formal education in the field. He stumbled into it while seeking an alternative to financial audits, finding an opportunity in a consulting group acquired by his firm. Although the work is unpredictable and challenging, Josh found it suited his personality. Over 28 years, he honed his expertise through hands-on experience, learning from colleagues, and exposure to diverse clients. His path involved trial by fire, but he embraced it.

Moreover, the property tax wizard expresses his passion for saving businesses money, adding value, and sharing knowledge tailored to their needs. Drawing an analogy to medical specialties, he pinpoints the necessity of seasoned specialists for optimal outcomes in this field.

Do you want to know if your business is ready for your exit or what you should do to prepare? Learn this and more with our business exit assessment here.

Damon comments on the common misconception among businesses regarding property taxes: they are often viewed simply as bills to be paid without question. He poses a question to Josh about the potential for reducing these obligations through understanding and strategic actions.

Josh explains that many businesses pay their property tax bills without much scrutiny or understanding of the potential savings. There is a need for transformation in property tax management, moving from passive bill payment to an active process involving review, accountability, protests, and negotiation with government officials. It is essential to question everything, including assets reported for taxation, to ensure businesses aren’t overpaying or exposing themselves to penalties. Through thorough review and investigation, experts like Josh aim to rectify overpayments, often finding businesses are overpaying by significant margins.

Damon seeks further clarification on the process of reviewing and protesting property taxes.

Get the most value for your business by understanding the process and preparing for the sale with information here on our Selling a Business page.

Josh clarifies that understanding and adhering to appeal deadlines, which vary by state and sometimes by county, is crucial. The short windows for filing appeals, as brief as two weeks, cause a mess. Missing these deadlines results in being locked into excessive property tax payments for a year. It can be managed by efficient tax management.

Damon wants to learn the appeal process for filing property taxes.

Regarding the formula for challenging assessments, Josh explains that for real estate, it often involves disputing the assessor’s determination of fair market value. He mentions various appraisal techniques used for estimating market value. Additionally, for business personal property, the process may vary depending on state regulations, including economic life multipliers, depreciation, and what assets are taxable.

Similarly, the guest discusses the common misconception among businesses that their CPAs handle property tax matters adequately, often resulting in overpayments due to a lack of expertise and credentialing. He contrasts the generalist approach of many CPAs with his specialized background, including becoming a certified real estate appraiser, which equipped him to assess property values effectively and navigate the appeal process.

Damon raises the critical question of who should be paying attention to property taxes, suggesting that many businesses may be overlooking potential savings.

In response, Josh identifies the types of businesses that typically face substantial property tax bills, including manufacturers, real estate investment trusts with large industrial holdings, senior care operators, large offices and apartment complexes, hotels (especially resorts), and utility companies.

Praising the enlightening nature of his conversation with Josh, Damon seeks clarification on whether the review process involves validating the assessed property values and appealing the government entity’s valuation.

Josh reveals his approach to property assessment, which involves assuming the assessment is incorrect until proven otherwise. He illustrates the challenges assessors face in valuing certain types of properties, such as large industrial complexes in small towns or hotels that include intangible business assets. To overcome these challenges, they expand their search beyond local transactions and utilize national databases.

Furthermore, Josh cites an example of a senior care client they’ve worked with for a decade, noting that they’ve saved them $3 million annually in property taxes, with this figure continuing to grow each year.
The host expresses interest in understanding the monitoring process and the typical outcomes following successful appeals.

Toward the show’s conclusion, Josh discusses the complexity of managing property taxes across states and stresses the need for specialized expertise. He stresses understanding state-specific reassessment procedures and potential triggers, like business expansions or remodeling. Offering examples of reassessment cycles in various states, from annual in Texas to triennial in Ohio, Josh advocates for accountability and expert guidance.

The show ends with Damon thanking Josh for his time.

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Damon Pistulka 00:03
All right, everyone, welcome once again to the faces of business. I’m your host, Damon Pistulka. And I am excited today because today we’ve got Josh Mellon, Chuck from jam tax advocates here today we’re going to be talking about reducing business property tax obligations, something that that many people don’t think about, but can be very beneficial if they do, Josh, thanks for being here today. Very hear me Josh. I’m hearing you just fine. Damon. Okay. I kind of faded in. Okay. No worries. No worries, no worries. So I’m gonna kill my Outlook here. A that’ll help us get going. Well, Josh, you got me now? There we go. Can you hear me they’re working? Okay. It’s I can. Alright, got it. We’re sitting there talking for this is how it works. You know, it always works this way. We’re gonna we’re gonna talk for a long time beforehand, and then we’re gonna go live and it’s going to, it’s going to screw up for us. But anyway, we’ll get we’ll get past it. So. So Josh, we always like to start out with talking about how you got into property taxes. I mean, what what really led you to where you are today and in and tell us a little bit about that?

Josh Malancuk 01:42
Well, anyone that says, you know, I went to school thinking someday I’m going to become a property tax expert is probably lying. Because there’s no coursework in college, there’s really nothing out there about property tax, other than through some trade associations that you know, I belong to, and so, you know, it’s always kind of by accident, right? Someone, you know, in my case, I was a board, staff auditor and regional accounting, you know, out of school. And, you know, I was going to pursue anything other than, you know, being involved with financial audits, where you’re in heavy work hours, lots overtime, lots of travel, and, you know, low percentage wage, wage raises. And so I was looking for something else to do after a few years and in that world, and the firm that I was working with, at the time, bought out a consulting, state local consulting group that needed someone to come in and intern and learn the trade. And so I thought, well, what the heck, I’ll, I’ll try this out. Because it’s just a matter of time where I’m doing it anything other than, you know, financial audits. So I gave it a try, I really liked the area was involved with reviewing property taxes, with presentations in front of city and county government, for some of the incentive requests. And, you know, it was just kind of this constant learning trial by fire environment, very unpredictable. But it suited my personality. And so, you know, ever since then, and 28 years later, you know, I’ve kind of stuck with the area stuck with the practice, become a property tax expert. And a lot of that’s kind of learning on the job, a lot of that’s school of hard knocks, you know, learning through trial by fire, and, and just learning the trade through being around a lot of great people in Big Four accounting and regional accounting in these specialty practices that exposed me to some of the largest industrial and commercial taxpayers in the United States and kind of helping with delivering solutions to each one of them.

Damon Pistulka 04:35
Cool. So I mean, no, like you said, no one probably goes to school to be a property tax expert. But what are some of the things that really interest you about it? Me because obviously, you spend a lot of time getting to understand it.

Josh Malancuk 04:57
Yeah, well, I enjoy saving people money. And I enjoy adding value. And I enjoy sharing knowledge that really fits in need. With a company. It’s very rare that I’ll run into a business that has an in house property tax expert or an expert that can take care of an incentive negotiation independent from the company. And so I really enjoy kind of training our clients adding value becoming a member of their team to share what I know, and and help navigate them through what could be an extremely challenging experience, because of the traps and pitfalls that are involved with everything that we do. Right? Yeah. And it’s just like, you wouldn’t ask your your general physician to do open heart surgery. You know, why would you want your generalist legal counsel or generalist CPA, to take care of an area that really requires a true specialist approach and a CV season navigator for the process to go well, and the best possible outcome?

Damon Pistulka 06:23
Yeah. Because, I mean, when you think about property taxes, and you think about, you know, large property holders, multiple states, all these other things. Oftentimes, you still just think that’s, that’s, that’s just a bill you pay. I mean, if it says $5, you pay $5? I mean, there’s, I think many businesses treat it that way. But are you saying that if, if we know what we’re doing, or we understand all the things that we can do, we can actually make that Bill different? Because a lot a lot, a lot of people think it’s just it’s says $10, that’s all we got pay? Check. Most

Josh Malancuk 07:04
of the time, Damon, before we get involved with a business, you know, that company controller is just paying the bill, just like you said, and hopefully they’re paying it on time to avoid the 10% penalty or so. But that doesn’t always happen. Either. They may miss that deadline, and then they’re kind of sunk, right. And so it’s really always our goal, to transform that pay the bill management, style for property tax management, to be one of transformation, through process changes. That almost always involves a review process, accountability, through filing protests and working them through the process with government officials at the county and state level. And really, a lot of advocacy and a lot of negotiation aspects that go into effectively moving that needle south with the bill level that you’re paying. You know, in some cases, the states will also tax business personal property, in other words, their their furniture, fixtures, manufacturing equipment, maybe even the inventory, right? Yep. So a lot of times those returns that report, the property will be filed by a company CPA with very little questioning, right? Yeah. So in essence, what we do is well, question everything will question all the assets, we’ll look for ways to improve some of the categories. And, you know, we’re looking at sometimes 10s of 1000s of line items, and with a boots on the ground investigation approach, to make sure that that company is not paying a penny more than they have to. And then also looking out for exposure, in other words, omitted property that may get them into trouble with under underpayment penalties. So, you know, we were looking for the right answer with everything that we do. And sometimes the answer is, hey, you’re under paying, you better get this fixed before you have an audit. In most cases, though, I’d say about 80% of the time, we find that businesses are overpaying their property taxes on average by 20%. And so what what we do is come in and fix that through a very thorough review and investigation. That questions everything that holds the government accountable for doing the right thing that puts the business in it. position where they’re paying fair, accurate, and equitable property tax amounts as part of their annual filing, and annual reporting and payment. And that’s probably one of the aspects of property tax and property tax management, that can be so troublesome for a capital intensive business, because, you know, every year that they have an overpayment, and they’re not fixing that overpayment, what that’s not going to get fixed by itself, right. Unless someone coming in that knows what they’re doing. That season navigator who knows how to fix the issue properly, that business will continue to overpay every single year. And so that $50,000 mistake, you know, and 10 years later, that’s some real money. I mean, it’s half a million dollars, you could have put back in your workforce, put business automation initiatives in place and funded part of your capital budget for a year, you know, so it’s important, and it’s an area that’s a heavy burden for businesses, but so often overlooked, because not many people know what to do about it, and know how to fix the issues.

Damon Pistulka 11:22
Yeah, that I mean, you brought up a ton of stuff here. So I want to go back through some of my notes, because I didn’t actually understand a lot of this can happen. But I now that I think about it, I’m sure there it is. You said one thing about, okay, we get the tax bill every year. But you talked about a review and protest. Let’s talk about that with our property taxes. So reviewing and then doing some sort of protest. What do you mean by that? How does it work? You know, what, what are we doing in that step? Because it’s interesting to me,

Josh Malancuk 11:57
well, so each state, and maybe even county within the state, it just depends on the state, right? As an appeal deadline, that pops up every single year, along with the business personal property tax filing deadline, and then possibly an amended return deadline to fix any errors in that business, personal property return. And then thirdly, there may be a business personal property valuation, notice that has to be appeal by a certain timeline. In some cases, the window to file an appeal can be as short as two weeks. And, you know, and so by the time you get your notice in the mail, it may be too late to do anything about it, and then you’re locked into your excessive property tax payment for an entire year. And so it’s extremely important. And this is something that we undertake whenever we get to know a client and they want some help, you know, with their property taxes, we’ll calendar out the anticipated deadline to file an appeal. And make sure that, you know, we’re aware of whether it’s a statutory deadline, which means it’s just one set date every year doesn’t change, right, or whether the deadline falls along. When notices are issued, which are completely different typically, then the tax bill itself, so the tax notice will come out at a certain time of the year for their building and land assessment. And then possibly also with the personal property assessment. And then it’s up to the business or their consultant that’s representing them to make sure that they’re filing a petition form to keep that assessment open for review, and change. And if they miss that deadline, there’s really some limited options, typically no options, depending on the state to ask for forgiveness on missing that deadline. In fact, it’s almost always a never don’t ask situation in about 90% of the time, so

Damon Pistulka 14:25
you had your chance you’ve missed it. So, so bad for you, but next year, you can do it. That’s

Josh Malancuk 14:32
right. So you have to know your state. You have to know the process for filing your petition. And you also have to know the rules of the road. Once you file the petition. There’s requirements that follow to keep your petition what’s perfected or alive and kicking is probably a layman’s way of putting it. There are certain requirements that if you miss those requirements You’re done. And there’s no no way to keep your petition open. It’s just denied.

Damon Pistulka 15:06
Yeah. Wow, wow, wow, this is cool. Can I write some more notes here? ask some more questions. So first of all, I didn’t know you could even appeal your property taxes from a business standpoint and do that. That’s cool that you can sounds like there’s some intricacies though, in if you decide to do it, in the timing, you’ve got to do it, and how to keep it alive. As you said, without them just you didn’t do this, and we just close it down. But I mean, what happens in this appeal process? mean, what are we doing? Or because is that? Are they just saying your property’s worth this much? And so, it’s up to you to prove it isn’t or what are we doing in that process? Well,

Josh Malancuk 15:57
Damon, let me first of all take a short step back. So the common misunderstanding that we see, you know, more often than not, is that businesses think they can appeal their property taxes. And actually, that’s not correct. You cannot typically appeal your tax bill, you can only appeal your assessed value. Okay, which is a function of your tax bill. Right. But if you miss your notice, you’re typically done. Once you get your property tax bill, which may be it maybe a year later, yeah, you discovered, man, I just got hit with a big assessment increase. And my property tax bill just doubled. Well, guess what? If you waited to the bill, it’s too late. You know, so you have to get ahead of that by calendaring when that notice of value is coming out. Now, you know, going to your question, the formula for challenging your assessment can differ depending on the state and depending on the property tax type, you know, so with the real estate, for instance, you’re almost always appealing the assessor’s determination of fair market value. In other words, if I were to sell the property, as of the valuation date, which is typically January 1 of the assessment, notice here, right, what would be the anticipated price that I could attain, you know, in a willing buyer willing seller type environment. And so, you know, there’s appraisal techniques, we don’t need to go into all of them around, you know, what would be a good way to estimate market value between the cost income and sales comparison approach, but they’re all used to kind of estimate value depending on the property type. The gyrations for for determining that can look a little different, right? So, but the business personal property really is going to be a function of what the states have typically adopted for economic life multipliers and depreciation multipliers. For certain assets. It can also be a function of what the state and Amador county would actually tax, you know, for instance, inventory is not taxable in every state. And so you have to understand that, in certain states, certain assets may be taxed as personal property, and not as real estate, or they may be taxed as real estate, because of them being permanently affixed. So there’s some real nuances with your business personal property filing, to even get the starting point with what my reportable cost basis should be before I apply market depreciation, and then come up with the value for that. And so, each state kind of has their own way of taxing property have given that the type of property and what is taxable is state driven as well. You know, another for instance, beyond the inventory is not every state taxes, business, personal property for the equipment, and in certain states only tax the real estate and everything else is exempt and not even reportable. You don’t even have to file a business personal property return. So there’s there’s a lot of variation, and you got to know your state aid. You got to know what the state is taxing you for and then you have to know how to report correctly and how to estimate value better than the assessor can.

Damon Pistulka 19:59
Yeah, well, I mean, So as I’m, as I’m thinking, thinking about it, what you said is exactly yet, you want to be a better at predicting the value than the assessors, just to make sure that you know if they’re right or not.

Josh Malancuk 20:20
That’s right. In Damon, you know, one other kind of complexity that comes about is that so often I hear this comment from companies that, you know, hey, you know, I ask about property tax. The answer I get is, Well, my CPA, my accountant is taking care of this for me, right. And what’s typically happening is that CPA is filing their business personal property returned, hopefully on time. It’s likely not, there’s no review process at all, in the same way that we would review the property. And that company is left over paying their property tax because they think they’re covered. Right? Yeah. And there’s a lot of reasons for that. The first being the inexperience you know, you have a generalist, you know, taking care of a very specialty area with a lot of nuances. The second is credentialing. And it really is important to understand that in certain states, you can’t just be a CPA, you have to be something else. And it may be a certified tax representative for property tax matters. In other states, you have to be credentialed with a group called the Institute for professionals in taxation, and then that carries reciprocity. I mean, each state kind of has their own pitfalls with tax represented representation for property taxes. And if you don’t carry that credential, you literally cannot practice in front of that county board or State Board for a petition. So if that CPA firm doesn’t have those on staff, which they typically don’t, their CPA can only get them so far. You know, by comparison, you know, I actually, beyond just the accounting training, I actually undertook the road to become a certified real estate appraiser, which required a lot of supervision by a fee appraiser, about 3000 hours of appraisal experience through doing appraisal work. And just a lot of credentialing, a lot of coursework, about 180 hours of coursework with two levels of tests at the state level. And it was probably on equal footing as far as the complexity as getting my CPA license. So, so it’s a very difficult road. But guess what, that was great training for me to estimate value. negating you know, through an appeal process, right? Yeah. And to be able to put together some market analysis to determine even whether we should file an appeal or not. And so most accounting firms and law firms don’t have someone with that valuation background to be able to undertake that type of study. And so, you know, having that background is really been helpful to be able to practice in this area. But again, it’s it’s something that takes way too much time to way too much effort. And most accounting firms and law firms don’t don’t have an in house appraiser.

Damon Pistulka 23:58
Yeah. Well, I think I think there’s still what it cut that comes back to the beginning. And when we very first started the conversation is it’s a bill that most people just think that it should just pay without, without asking. And, you know, you come into with someone like yourself, understanding what you do about, like you do the things you do about property taxes about business tax, and evaluate and valuation, property valuation. So, you know, who really we’re sitting here talking about property taxes, and most people are going on? Well, that doesn’t mean you know, I just pay my property taxes, right? I pay my property taxes, but who really should be looking at this? I mean, who is this gonna make a difference to that? You’re gonna say, Listen, you might be leaving serious money on the table.

Josh Malancuk 24:49
Yeah, if I’m a company, CFO or controller, and my bonus is tied to the p&l, you know, property tax is a big burden. It’s a big line. I I’m on their p&l. And if I’m going to improve my bonus by lowering the property tax bill, I care about that one. Yeah. And, you know, most people don’t realize is that property tax can be the number one or number two tax burden to capital intensive business. So again, if I, if I’m the CFO, I care about that line item, and I want to bring someone in, that knows what they’re doing that can help drive that line item downward.

Damon Pistulka 25:34
Yeah, so when you talk capital intensive, we’re talking about processing, manufacturing, other kinds of what are so what are the typical kinds of businesses where you guys get called into?

Josh Malancuk 25:46
Yeah, so the businesses that generally pay the most amount of property taxes would include manufacturers, it would include real estate investment trusts with large holdings in industrial property, the senior care operators that are Oh, yeah, would have a large property tax bill, big offices, apartments are gonna pay a good a good amount, hotels, especially resorts, they’re going to have a humongous property tax bill, usually in the millions for each one of those properties, wow, utility companies be in the hundreds of millions of dollars, because of all of their power generation equipment to manufacture the energy and then drive the energy through their power lines, or underground telephone lines in the case of the telephone companies. And so those are the those are the ones that typically feel the property tax bill every year.

Damon Pistulka 27:00
Yeah, and you didn’t, you know, you don’t even think about that, really about the utilities or resorts or hotels, in the fact that, you know, like a resort, they cover a lot of land, it’s usually desirable land, so therefore valuable. And that could be a significant part of their operating budget every year. And absolutely, yeah, yeah. And then of course, wow. So it’s always interesting

Josh Malancuk 27:30
retailers, the retailers can also feel a big hit, too, especially the large malls, then have to heat these these enclosed malls. These behemoth malls that have a huge energy bill, along with property taxes, need to be looking at every way that they can drive that than material cost downward? Wow,

Damon Pistulka 27:56
that is so interesting, because I tell you, Josh, every time I learned something, talking to one of the guests here, I just it opens so many new horizons, because you’re like, you don’t really think about that. In these instances, you talked about where tax bills are really concerning. First of all, it’s a big number on your on your overall p&l Or where you’re spending your money. But then that there are specialists like yourself that can say, Okay, you’re you do have to pay $5 million in taxes a year now, on your your property taxes. But maybe we can do something about it. Because, like we said before, most people just go, Oh, you got to pay 5 million. I’ve been paying, you know, I’ve been paying my taxes, like they told me every year on my property. And they think there’s not anything you can do. So when you come into this situation, and you go okay, we’re in a we’re in a mall, we’re in one of these resort, whatever it is, you’re gonna go through this review process with them. Are you trying to then just validate that they’ve got the values? Right? Is that what really what this is? And then it’s a appeal of the valuation that the the government entity is trying to put on the property?

Josh Malancuk 29:21
Yeah, so Damon, what we do is, assume the assessment is wrong until we can prove it right. And prove it. Otherwise. There you go. So, yeah, so we’ll come in, eyes wide open, you know, review the calculations from from the assessor. Do your own analysis to figure out, hey, is this correct or not based upon our analysis and modeling? And chances are it’s not correct. And really, depending on the property type. There are there’s there’s a There’s more complexity, certain property types and others, you know, and I’ll give you a instance right? You get a, a million square foot manufacturer complex manufacturer in a small town, which is where your GM is Ford’s you know, Honda’s Toyota is a little older, and they’re putting plants all over the place in the small markets, because they’ve got some labor force to work with. And they’re not having to fight everyone else for those employees. Right. And so they come into this small town. You know, how many times do you see a million square foot property, like an industrial manufacturer is selling in a Timbuktu, small town in United States, it almost never happens. So how in the world is the assessor even supposed to estimate the value for a property like that? If they have no transactional sales, to base their Market Value estimate on there, they’re kind of stuck with this insurable value model, which is replacement cost, less a linear depreciation that almost always is different than the true market value. And so they really have no hope for estimating the correct value. Scenario. Yeah. Because what they should be doing in this is what we do with a property that is more of a limited market property or limited transaction type property like that, is will expand our search beyond just that county, to maybe a statewide, possibly a regional search, or maybe even national, depending on how large the property is. Because we’re trying to replicate what the typical buyer would look like and what their behavior would be. If someone were to be looking at such a property to acquire, right, well, how many assessors have national cop databases to even estimate that about you? They just don’t. Right? And we do. And we pay a hefty premium every year to thrive all these transactional databases that help us as a starting point with that evaluation. So you can kind of see the bigger they are Yeah, are is, well, the same is true with certain property types in that, you know, with a senior care, or a hotel, when you see one of those properties sell. It’s almost always a business sale. In other words, the real estate, Zach’s but everything in it, including the business personal property, including the name rights of that flag, Hilton, or whatever it is. And that represents a franchise in an intangible value that goes above and beyond the real estate and should never be taxed by by that county assessor? Well. It’s extremely hard to extract all of those elements of value from the business value. It’s a very complex model. And most assessors don’t know how to do that they haven’t been trained to do it. They’re not appraisers, they don’t have that experience. Same was senior care if it sells, it’s almost always the business sell. Yeah, and there’s a lot of intangible value with running, for instance, a licensed nursing home that involves, you know, on site therapists on site nurses, a team that knows how to maintain the license that require certain service levels for all the patients that stay in those skilled nursing sites. And so there’s a hefty, intangible amount that is really challenging to quantify, along with the real estate and the business, personal property. So those property types are what are called total asset value property types that need some complex modeling to unbundle all of the non real estate components to just get to the real estate value. So whenever there’s a lot of added complexity, the check the chances of the assessor at the county and or the state missing the mark on the fair market value of the real estate is extremely high. It’s almost always a situation and the value differential can be as high as 50 to 70%. And so what’s important Yeah,

Damon Pistulka 35:00
That’s I mean, that’s a that’s a lot of money, man when you’re talking about because Oh, wow. Yeah, sorry. Just like that’s a lot. Because you know, but it makes sense. Because what you’re saying and a skilled nursing and the resorts or hotels, or anything that you’re selling the business along with it, they’re likely looking at the business transactional value and using that for the value of the property.

Josh Malancuk 35:28
Or with some That’s exactly right.

Damon Pistulka 35:31
Minor adjustments, but you know, you look at it, and you it could be vastly different, depending upon the the the income generating characteristics of the property, you know, what they’ve all got for facilities and equipment, everything else in there. Wow.

Josh Malancuk 35:51
This is, well, when you look at the fact that this is an ongoing issue, right, this is ongoing, I’ve got in my closet, those sins are gonna keep going without a true fix. Right. And that’s what we provide that fix. You know, and so, you know, I’ll just point out a, a senior care, you know, client that we’ve had now for about 10 years. You know, they have about a dozen sites, and our scorecard to date, we’ve saved them $3 million in annual in their property tax levels. That’s a cumulative number, and it’s growing every year.

Damon Pistulka 36:35
12 sites, you save the $3 million in property taxes. My goodness,

Josh Malancuk 36:42
we’ve averaged $300,000 a year on probably a $1.2 million property tax bill and total 25 years.

Damon Pistulka 36:55
Oh, my goodness. So now, and this is not a one and done kind of thing, because you have to go back every do they reassess every year on property. So say we get it right this year, we go appeal, we get it right this year? Do they bounce it right back up again? Or it’s dependent? Or what? We’re always monitoring to see what they do. How does that work? Usually?

Josh Malancuk 37:23
Well, it depends on the state. And it depends on if the business is expanding, right? Because new construction is going to trigger a reassessment. Even remodeling may trigger a reassessment. And that’s, that’s the thing with with a hotel or a senior care is they constantly have to look to remodel to keep their business intact. Right. And so if they do enough remodeling, they’re going to be reassessed, and they’re going to be having to fight the value again. The other thing to keep in mind, Damon is that each state kind of has, has their own process for reassessment and their own cycle. You know, in some states, it’s every year. You know, Texas is a good example of that. In my home state in Indiana, you know, we reassess with trending every year. In Iowa, it’s an every odd year. So every two years, you’re gonna see a complete rebound. In Ohio, it’s a triennial. So every three years in Kentucky, it depends. Yeah, in Tennessee, it’s four. So you got to know your state, you’ve got to know Yeah, it’d be revamped the property, you’ve got to know the points for that, you know, whether your new construction project is going to trigger an increase as well. So it’s not an easy answer. And whenever there’s not an easy answer, it breeds chaos, and you need someone to come in and build that transparency to keep everything in check. And the accountability, that’s so important.

Damon Pistulka 39:00
So you’re, you’re actually with with your clients you’re looking at every year because Okay, did something trigger it? Did we, you know, did you know, did it change or not? And some some years, you’re gonna say, No, everything’s fine. And the next year you go, Okay, we’re on a reassessment or cycle and we’re going to have to go back in and review everything again.

Josh Malancuk 39:20
That’s, that’s right. Yeah.

Damon Pistulka 39:21
No rhyme or reason. Really? Yeah. And

Josh Malancuk 39:24
that’s the thing when you’re, you know, when you’re a property manager, controller, or CFO, and you have properties across state lines, you know, each state kind of does their own thing, as I mentioned, right? So you really need someone who can manage that portfolio. And, you know, really put a work plan in place that covers your bases with timing deadlines, appeal procedural rules, the credentialing that you have to have from one state to the next. Knowing you know what state does something some way attack certain property for business personal property and, and other states that don’t I mean, there’s, there’s a lot of moving parts and variables. And it’s an extremely challenging and complex process to do a portfolio review to properly manage the property taxes, and it’s right for pitfalls, it’s right for errors, and it’s right over payments. And essentially, that becomes our job to make sure that we’re advocating for that business, for their best interests, that we’re helping them steer clear of those pitfalls, you know, aware of the timing, the deadlines, the way properties valuable, and then we’re navigating, you know, the appeals, or the amendments through to the end. And then ultimately helping them validate that they achieved savings, you know, as a result of settlement activity or an agreed upon value, you know, by that that county or state official?

Damon Pistulka 41:07
Wow, wow. Josh, this is awesome, man. Thank you. I mean, I had no idea that you could, you really could make this much difference in a business, your your real estate taxes, your property taxes, your inventory, equipment, all these kinds of things. But now after talking with you understand that if you know, if you’re, if you’ve got a business, like you said, your Skilled Nursing Facility at a mall, I got manufacturing facilities that could have multiple in multiple states, and I’m in those companies where we had them in multiple states, and we owned the property and those kinds of things that where you got hundreds of 1000s of square feet all were a, you really need to be looking at your property tax bill with a different perspective, and finding experts that can actually help you make sure it’s right.

Josh Malancuk 42:08
If you’re if you’re not paying attention to your property tax levels, you’re wasting a lot of money as a business owner or property owner. And you’re it’s really incumbent on a company to not be satisfied with how they’re being taxed and even more so to bring in someone with the experience and the knowledge and the wherewithal to take care of managing their property taxes properly. Because otherwise you’re leaving money on the table. And, you know, it can over time, it’ll add up to a seven digit plus impact. And then that, then by the time they realize that it’s too late on those back years, there’s no retroactive relief, typically. You know, and, and hopefully, they’ve got to go forward strategy to fix the bleeding. put a put a tourniquet on that wound.

Damon Pistulka 43:06
Yeah, that’s for sure. Well, Josh, thanks for Wow, thank you so much for stopping by today, you know, in and just just sharing a bit of your knowledge about property taxes, how you can really look at reducing business property tax obligations and, and your expertise. So what’s the best way if someone wants to get a hold of you?

Josh Malancuk 43:34
So probably the best way is through my company website, which is www.jm, tax advocates.com. And there’s a Contact Us slide that someone can use. My personal direct dial is 317-674-8390, extension 100. And my email address is Joshua at J M, tax advocates.com. You know, all of those are pretty good ways to get a hold of me. And the thing that I would just add, is we provide our initial evaluation for at no cost to a business. So there’s, there’s no risk for someone reaching out to us and seeing if they might be overpaying. The second facet of how our clients engage us, is we only charge a fee unless we’re successful with savings. And so we offer a contingency fee option for a company and and that’s that’s a way to to offer a no risk value proposition for someone that says hey, I’m sick of overpaying my property taxes, let’s make a run at this. But if we’re not saying Successful. There’s no nothing gained nothing ventured at that point, there’s no fee. And at that point, we’re just kind of monitoring their value going forward, because chances are at some point, they’re going to need us. And we continue to monitor the property value until the end of our engagement, which may span a few years. And so we’re providing that valuable service all along the way. And we’re only charging when, when our client need needs us. It’s kind of like auto insurance that you don’t pay for until you get into a wreck. So this is one of the Brainer areas to borrow our experience and know how to take care of a very important area that each financial leader should care about with managing the property tax levels.

Damon Pistulka 45:52
Very cool. Very cool. Well, Josh, thanks so much for stopping by today. And I want to just encourage the listeners out there if you’re if you’re here on LinkedIn, or one of the other places where we’re live and wants you to go back, and and rewind this, if you want to learn more about mitigating, you’re reducing your business tax property tax obligations here, just dropped a lot of great, great tidbits and knowledge, things that you can consider and then go back again to he left his email his website address, damn tax advocates.com to go there and get some more information. But hey, thanks so much for being here today, Josh. We’re gonna shut down for now, everyone. And we’ll be back again later this week. Josh, hang out for a moment. We’ll end up we’ll finish up when we’re offline. Thanks so much for being here today, Josh. All right.

Josh Malancuk 46:45
Thanks, Damon. Appreciate the opportunity.

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