Will the slump in the real estate market give companies a bit of a break on their property tax bills this year? Most tax execs don’t think so, according to a May survey from The Tax and Accounting business of Thomson Reuters. Fifty-eight percent of the execs polled think that their property tax will either stay the same or increase over 2009’s.

Jeff Moore, director of complex property tax at Thomson Reuters Tax and Accounting, tells me he was “somewhat surprised” by that result, but he thinks that timing probably played a part. By now, “people’s perception may be that property values have stabilized or are increasing concurrent with the economic recovery,” he notes, whereas property tax assessments in most states are based on the market value as of January 1.

When I asked Moore to describe some opportunities to reduce the liability, he emphasized the need for companies to do their homework on the comparables. “Many assessors might not have access to a full array of recent, verified, arms-length, sales comparables,” he notes. It’s worth putting in the time to work up “an exhaustive list of the most relevant sales comparables to ensure a fair assessment is made. This is particularly important during times of economic change and fewer market transactions.”

Take a good look at the specific characteristics of your property. If you have vacant building space that’s not being used or earning income, or if you reduced rents on property that you lease out, an assessor should take that into account. “If your company deferred maintenance on property in an effort to preserve cash flow and weather the recession, this can affect values as well,” Moore adds. “For example, a company may have delayed replacing a roof or upgrading the lighting, which could lessen the value of the property compared to other buildings in the area.”

What about the personal property side? Moore points to three tax relief opportunities that companies often overlook:

1. Lower asset utilization. Manufacturing equipment that’s underutilized compared with capacity or historical operation may qualify for a lower assessment.

2. Slow-moving inventory. If you have excess inventory on hand, and you have reflected adjustments on your balance sheet, many states will allow adjustments to taxable value.

3. Exemptions. Maximizing these calls for a little research. For example, 33 states offer some type of property tax exemption or beneficial treatment for qualifying pollution control assets. ###