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State Property Taxes and Incentives: Lowering Assessments, PILOT Agreements, California Prop 13

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Thursday, February 17, 2022

Recorded event now available

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This webinar will discuss property tax assessments, exemptions, and incentives for SALT professionals working with taxpayers in multiple states. Our panel of state tax experts will discuss the types of property subject to tax, PILOT agreements offered in many states, California's Proposition 13, and strategies to reduce the amount of tax assessed by states and localities.

Description

There are no states without property taxes. Unless a specific exemption applies, real and personal property taxes are two taxes that must be paid by every business, regardless of profit or income.

Some exemptions are based on the status of the institution and may be controversial. Universities and schools, religious institutions, hospitals, foreign governments and federal tax exempt institutions often own extremely large and valuable land and buildings, and that property is commonly exempt from property taxes. Some have complained that with many large buildings qualifying for exemption it means that ordinary property owners must pay more tax. Other exemptions may be available by agreement only and may depend on economic development. For example, New York, like most states, offers PILOT (Payment in Lieu of Tax) agreements with government entities that may necessitate capital investment and the creation of new jobs.

California's Proposition 13 caps the annual assessment on residential property at one percent of a property's assessed value and limits any increase in the assessment to two percent annually. Although this appears to be taxpayer-favorable, Proposition 13 creates sizable tax bills and problems when transferring or selling a property.

In every state, some incentives and exemptions can eliminate or significantly reduce property tax payments. For taxed property, there are steps the return preparer should consider to reduce the amount of tax assessed on real and tangible property, including the appeal of the assessed amount.

Listen as our authoritative panel explains methods businesses and tax professionals use to lower tax assessments on real and tangible property.

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Outline

  1. Types of property subject to tax
    1. Real property and improvements
    2. Personal
    3. Inventory
  2. State incentives
    1. PILOTs (payments in lieu of taxes)
    2. Other
  3. Exemptions
    1. Freeport
    2. Nonprofit
    3. Other
  4. Market value
    1. California's Proposition 13
    2. State determinations
  5. Reducing the tax assessment
    1. Strategies
    2. Appeals

Benefits

The panel will cover these and other key issues:

  • Types of property subject to property tax
  • State-specific property tax exemptions and incentives
  • When and how to appeal a real property tax assessment
  • Caveats of California's Proposition 13

Faculty

Cunningham, James L.
James L. Cunningham, Jr.
Founder, CEO, and Lead Attorney
CunninghamLegal

As a second-generation California attorney now in his third decade of practice, Mr. Cunningham and the firm he founded...  |  Read More

Reed, Jeffrey
Jeffrey S. Reed
Partner
Kilpatrick Townsend & Stockton

Mr. Reed chairs the firm's State and Local Tax Practice. He helps tax directors, business owners, and individuals...  |  Read More

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