Leveraging Your Indiana Property Taxes for Potential Savings

Feb 5, 2024

Leveraging Your Indiana Property Taxes for Potential Savings

IMA - leveraging your Indiana property taxes

 

For 11 years, JM Tax Advocates has been a great business partner with leading Indiana manufacturers while serving as IMA’s preferred provider of property tax and economic tax incentive solutions. Property taxes represent a large burden to any capital-intensive business and the IMA and JMTA have been working in tandem to improve our members’ profitability by offering resources that can assist with attaining fair, accurate, and equitable property tax assessments while achieving maximum incentives during company growth projects.

Josh Malancuk, President and CEO of JM Tax Advocates

IMA leadership recently asked Josh Malancuk, President/CEO of JM Tax Advocates, some general questions regarding property tax assessments and incentive planning, and how IMA programs have benefitted Indiana manufacturers, improving their bottom lines. The following is a synopsis of our interview.

IMA: What would you say are the two most frequent, impactful company pitfalls when it comes to property tax-related and incentive planning issues?

JMTA: First is taking a do-it-yourself approach for handling property tax filings, audits, appeals, and incentive procurement. Leveraging a seasoned expert can make a big difference by improving a company’s savings and overall benefit with the end result, freeing up valuable time for company leadership to focus on what they do best – running their business. Second is assuming a company’s current accountant or attorney has their property tax and incentive areas covered. Not all accountants or attorneys make good property tax or incentive advocates. Becoming an effective advocate and expert in this niche area takes years of on-the-job training, credentialing, and supervision to develop essential skills for effective professional practice. Would you trust your family doctor to do open-heart surgery? It’s the same logic trusting an accounting generalist to handle this big P&L area. A seasoned navigator can impact your company’s annual tax costs by hundreds of thousands, and sometimes millions of dollars.

IMA: Can you relate any specific JMTA case study/studies that may quantify the possible savings our members might realize through a property tax assessment?

JMTA: On average, we find that capital-intensive manufacturers are annually overpaying their property taxes by 20%. We commonly negotiate incentive packages that offset 5-20% of a company’s capital expansion budget. These programs free up a company’s valuable resources helping to justify additional job and capital growth including automation and technology initiatives.

Recent IMA member success stories:

  • The business personal property taxes of a leading tooling manufacturer were lowered by $293,000 with ongoing cost savings of $50,000.
  • A medical supplies manufacturer realized $170,000 through real property tax assessment appeals and amended business personal property tax filings; indefinite cost savings achieved $75,000 through improved fixed asset reporting.
  • A leading environmental-related conglomerate achieved a whopping $1.7 million savings during our multistate property tax review, additionally achieving savings of $300,000 annually.

Read more case studies here.

IMA: Are there any areas of opportunity that manufacturers should be on the lookout for this year?

JMTA: Two major factors that may lead to substantial property tax assessment increases:

1) Rising U.S. market value changes for industrial real estate will likely be reflected in this year’s assessment notices – we anticipate double-digit percent increases; and

2) Inflationary impact on machinery and equipment acquisition and installation costs leading to noticeable increases in business personal property taxes because return values are closely tied to capitalized costs.

Later this year, you will probably sense your property taxes are too high but aren’t sure how your company is being over-assessed or where to start with incentive planning on your business expansion projects. Indiana’s real property tax appeals are due June 15, and amended personal property tax filings are due May 15. Incentive planning should start at least 6-9 months prior to construction activities.

So how will you determine your correct property tax values? We suggest leveraging an experienced navigator to evaluate and pursue property tax relief and incentive strategies on new and historical construction to:

1) Investigate if property is correctly reported, classified, and all available exemptions are being applied;

2) Quantify market depreciation through common appraisal approaches; and

3) Negotiate incentives well ahead of the construction start timeline.

Don’t be a do-it-yourselfer. Enlist a pro who understands your industry and brings plenty of experience. Your company’s pocketbook will thank you in the end!

Through your IMA membership, JMTA offers a complimentary review of your property taxes and expansion projects.

Contact Josh Malancuk at joshua@jmtaxadvocates.com or (317) 674-8390 ext. 100.

 

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