Reducing Business Property Tax Obligations – The Faces of Business Interview

Feb 14, 2024

Reducing Business Property Tax Obligations – Interview with Josh Malancuk

 

 

 


 

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.

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.

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.

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.

Our Guest

Josh Malancuk, CPA, CMI

Josh is the Founder of JM Tax Advocates, which helps 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.

The guest studied Accounting at Indiana University Bloomington.

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

 

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