Real Property Tax
There are two factors at work in the realm of real property when it comes to minerals. Because each of these is classified as real property, the taxes are based upon fair market value appraisals.
Surface – The land that contains the minerals is taxed as real property. And you’re most likely overpaying for your property along with an estimated 90% of commercial property owners — whether you’re a big corporation, an investor, or a small business owner. The sheer volume of properties in any given jurisdiction prevents the assessor’s office from looking at every asset individually, which means that individual property characteristics are not factored into the tax value assessment. It also means that the over-assessment of commercial property is common.
Minerals – The minerals resting under the surface are considered real property and are taxed as such. It is important to know that this is not an income tax on the prior year’s revenue. When in production, the market value is based on the value of the discounted cash flow estimated from future production.
Although the approach may seem simple, mineral rights valuations can be quite complex, and there is a risk of over-assessment of property. Taxes vary depending on whether the minerals are being produced or not.
Personal Property
Machinery and equipment either used to get minerals out of the ground or to process and transport those minerals to market is taxed as personal property. Determining the fairness and accuracy of the property tax values is no easy task. It requires a thorough comprehension of issues around inspecting and appraising property as well as collecting and analyzing relevant data. Knowing the basis of your assessment and its relation to market value is imperative.
J. Joseph's experts have decades of experience handling the unique issues and complexities surrounding property tax in the energy and industrial fields. Combining appraisal, accounting, and engineering disciplines, we conduct an exhaustive analysis of your equipment.
Compliance
Reporting of business personal property valuation differs from state-to-state and oftentimes, county-to-county—a team of J. Joseph professionals dedicated to you work diligently — just as you would — to ensure that you’re not paying more than your fair share in property taxes. Our people, utilizing our proprietary AdVolution™ software — developed in-house by a team of analysts, agents, and coders — confirm that your company’s returns are filed in compliance with the appropriate jurisdictions nationwide. With additional reporting to track appeals and results, AdVolution™ is the perfect complement to the master plan of your company’s tax mitigation strategy. Our annual Trendulation™ report summarizes your savings and tax liabilities, so you have a solid understanding of your results.
Industrial Complex
Determining the fairness and accuracy of industrial property tax values is no easy task. It requires a thorough comprehension of issues around inspecting and appraising property and collecting and analyzing relevant data. Knowing the basis of your assessment and its relation to market value is imperative.
Minerals Tax Services
As we are all aware, energy can mean significant revenue. But that big revenue can mean potentially substantial tax liabilities. Whether you’re an owner of one, some, or all of the components involving minerals, there are many tax implications to consider. To help you avoid paying more than your fair share of taxes, we offer a suite of comprehensive Mineral Tax Services to make sure every possible option for savings is identified and captured.
Exemption Review
We analyze your inventory, logistics, and movements to determine which, if any, tax exemptions might apply in specific jurisdictions. Our experienced and knowledgeable team collects notices and bills for inventory accounts and reconciles values with book inventory. Exemption-based savings are pursued with the appropriate jurisdictions if and when you provide your approval and after we’ve provided you with a recommendation on the best solution for the greatest long-term savings.
Appeals & Resolution
We take care of every facet of the protest, including filing an appeal, performing analysis, negotiating over the phone, and being your boots on the ground for any interaction better served in person — like taking the appeal to a formal hearing for resolution. Because of our relationship with you, we know your business well, which means we can take a very tailored approach to build a case for every unique property.
Abatements & Incentives
J. Joseph assists in identifying and pursuing exemptions and abatements for you. This encompasses locating and communicating with the proper individuals in local jurisdictions who can help secure available incentives.
Equal & Uniform Analysis
None of us want property taxes to be assessed inequitably. Although you may not mind paying your fair share of taxes, it’s unfair to pay more than others pay for similar properties. When appealing under equity or equal and uniform, we look for a reasonable number of comparable properties appropriately adjusted, and then we contrast your assessed value with the assessed values of these similar properties. Your property should be assessed for the median level of these adjusted comparables.
Litigation Support
Court-ordered mediations, settlement meetings, negotiated agreements – and, on occasion, actual trials can be the mechanisms for litigation settlement. The result of any of these depends on the team you have working for you. At J. Joseph, although we can’t serve as your attorney, we can make recommendations or work with the litigator of your choice. We work with the attorney to build your case and participate in settlement meetings as part of the effort to reach a resolution. The key to securing a win is your property tax consulting team and attorney working together as one. No matter the method or extent of the process, we’re here to support you through it.
Strategic Planning
It’s one thing to be able to reduce your property taxes for one year. It’s another to have the foresight and plan to determine the best course of action for long-term savings. With the experience and expertise to help you strategize — whether it’s where to relocate inventory for logistics or what geographically advantageous locations to consider when opening a new facility. At times, this strategy may not be directly related to property taxes — it may be more about how we manage the process. Because we know our work is not just about our relationship with you — our client — it’s also about the relationships we maintain with our colleagues in jurisdictions across the country and how we treat them with respect while we work toward a positive result for you.
Severance Tax
Operators must report the volume of minerals removed from the ground (or severed), taxed at various rates. Texas has one of the most substantial severance taxes in the nation. There are different ways to approach reducing the tax burden, and they vary by state. Reviewing for applicable exemptions and deductions as well as identifying errors in the tax rate applications are a few methods in which J. Joseph's minerals experts help you put money back on the right side of the ledger.
