Do you own a restaurant? What about a Brewery or Pub? There’s plenty of these establishments popping up here in Colorado which is very exciting!
Did you know that most commercial buildings and the property they sit on have two major tax entitlements or tax incentives available to them? I’m here to tell you that most owners aren’t taking advantage of these tax lowering solutions and are actually losing money in their businesses. And why is that you ask? Probably because the specialized work that’s to be done to take advantage of these tax entitlements are not well known nor easy to implement. These two main programs that most in these types if industries are missing out on are:
Engineering-based Property Cost Allocation
There are available opportunities for federal, and in some cases, state tax advantages to owners of commercial and/or industrial real estate. The engineered-based cost allocation will pinpoint property depreciation that can be accelerated. Key word here… “engineered-based”. This is where the difference typically comes in to make the BIG difference …
The owners of these properties are typically correct in depreciating personal property such as equipment and furniture over five or seven years. However, what’s neglected is available federal and state tax benefits by inaccurately depreciating their entire investment in constructing or acquiring a building over 39 years. To do this correctly, one must hire an experienced engineer with a thorough understanding of construction finance. This engineer will meticulously review blueprints, architectural drawings, and electrical plans to identify and separate structural and mechanical components from the ones that are regarded as personal property. Also, this work will most likely include also identifying architectural and engineering fees that can be isolated or “segregated.” The resulting cost distribution report will allow a taxpayer to:
- Adjust the timing of deductions thereby maximizing tax savings
- Create a comprehensive audit trail to resolve any IRS reviews
- Gather and take advantage of immediate past and prospective future savings on these qualifying properties
- Significantly reduce real estate tax liabilities
Property Tax Reduction
Like all of us, that deadline of Uncle Sam’s has just come and gone, but for many, the pain is still new. What I mean is last year perhaps was a pretty good year for you – revenue-wise. However, I’ve found that a lot of commercial property owners have just been experiencing what’s probably considered the most frustrating bill in the mail. That dreaded property tax bill. Studies indicate the average Restaurant in the United States is being overcharged by 15% or more on their property taxes. There are many reasons Restaurants and other similar establishments are overcharged. Typically, this is mostly due to the wrong assessments by the governing municipality.
If you have not had a thorough review on your facility, especially as it relates to the areas of Property Cost Allocation, and Property Tax Reduction, you are probably losing money that you’re entitled to. If you own a Restaurant or Brewery or the like and are paying property taxes over $40,000 per year, you should have a review completed on your facility. Reductions in this area can directly boost your bottom line! Why not put back in your pocket what’s rightfully yours?
Understanding your company’s basic business profile is my very first step to presenting you with a no-cost / no-obligation value proposition. This is where we’ll discover:
1. How much money we can save you;
2. The cost of our services to capture these savings; and the
3. Benefit-to-Cost ratio.
The opportunity to meet with you to learn more about your business, answer any questions you may have and present you with a transparent value proposition to improve your bottom line is easy completed. Give me a shout, drop me a line. It takes about 15 minutes for me to ascertain whether or not these performance-based studies would be beneficial to you and your business.
Diane C. Brown