In the review of complex industrial properties, a site visit is essential. During the site visit, key personnel will be interviewed such as the controller, engineers, maintenance supervisors and others that have knowledge of the operations and the specific assets. The capitalized costs are analyzed to ensure only taxable costs are reported. Often, nontaxable costs or intangible costs are capitalized and need to be identified and excluded.
Other aspects of the operation such as idled equipment, software, tooling, rebuilding costs, pollution control assets and other costs have to be considered relative to local tax laws and regulations.
As noted earlier, one of the major aspects of our services is the analysis of value of the equipment. Even when the costs are adjusted to reflect the local and state tax laws and regulations, the resulting value may not equate to the true cash value of the equipment. This is due to the inability of the local depreciation schedules to measure all form of depreciation, particularly obsolescence.
Determining the correct cost to report and the true cash value is only part of our services. The next step, and sometimes the most difficult, is convincing the local taxing jurisdiction that our opinion of true cash value is correct. Our relations in many jurisdictions ensure that our client receive favorable values.
Once the values have been accepted, we provide reports and methodologies to our clients to ensure that any savings are captured in future years. Future capital costs can then be processed thereby ensuring future savings are realized.