Fighting For The Underdogs In Commercial Property Tax Appeals

Minnesota business owners may decrease their tax burden through engineering-based cost segregation

On Behalf of | Aug 15, 2013 | Firm News, Posted in Commercial Property Taxes, Industrial Property Taxes and tagged Cost Segregation, MACARS, tax law.

Minnesota businesses, just like people, have an obligation to pay taxes. Taxes are the price we pay to live in a civilized society and pay for the great quality of live we enjoy in our state.

Here at Robert Hill Law, we believe that although businesses owners have an obligation to pay taxes, Minnesota companies are not obliged to pay more taxes than are legally due. Funds unnecessary spent on taxes can be used to reinvest in business and employ more people across the state.

One of the primary tax burdens that Minnesota businesses face are property taxes. An accurate property tax assessment is a key part making sure that your company’s profit margins aren’t being unnecessary shrunk.

Engineering-based cost segregation is a powerful method that can significantly decrease the property tax burden of a business. This type of segregation is the IRS-approved way of identifying the appropriate classification of a business’s property for the purposes of depreciation recovery.

Property Depreciation Under the MACRS

Minnesota businesses can recover the costs of income producing property through annual property tax deductions. This is done gradually through a method called depreciation.

The IRS generally classifies building costs into three types categories. Each one of these categories has a different rate of depreciation. Under the “Modified Accelerated Cost Recovery System,” real property is generally appreciated over 39 years, land improvements are depreciated over 15 years, and tangible personal property is depreciated over 5 or 7 years.

Many businesses across the state can benefit from a cost segregation study to determine whether all company property is properly classified. By identifying which items are improperly classified as real property, a business may drastically increase the rate of depreciation they take and reap significant tax savings.

An engineering-based cost segregation study is the most methodical method that the IRS approves for supporting such deductions. Here at Robert Hill Law, we can help Minnesota businesspeople determine whether an engineering-based cost study is right for their company and its assets.

Our team of experts will provide your company with a cost and benefit analysis that will indicate the expected benefits and the flat fee required to complete the full engineering-based study. This will allow your company to make the most educated decision possible as to whether the study makes business sense based upon the projected return on investment. To learn more about cost-based engineering and our services, contact us at 612-355-8180.