{"id":1004211747,"date":"2010-12-28T00:00:00","date_gmt":"2010-12-28T08:00:00","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/cpe-uncategorized\/assessors-seek-new-ways-to-tax-business-income\/1004211747.html"},"modified":"2022-12-06T12:12:22","modified_gmt":"2022-12-06T20:12:22","slug":"assessors-seek-new-ways-to-tax-business-income","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/assessors-seek-new-ways-to-tax-business-income\/","title":{"rendered":"Robert Gordon: Assessors Seek New Ways to Tax Business Income"},"content":{"rendered":"

\"Robert<\/a>A recurring challenge to prevent over-assessment of commercial property is to separate true real estate value from business value. True real estate value is assessable for property taxation, while business value is not.\u00a0<\/p>\n

\u00a0Commercial property owners who conduct businesses on their property must be vigilant to ensure that the assessor is not capturing the value of their business operations in the guise of assessing their real estate. This can occur if the assessor assesses the property under an income approach and includes the owner\u2019s business income in his or her computations, claiming that this income is attributable to the real estate rather than to the owner\u2019s independent business operation.<\/p>\n

\u00a0The objective for property owners is to ensure that income solely attributable to the owner\u2019s business is excluded from real estate income. In general, courts are more likely to allow assessors to treat business income as real estate income where it can be demonstrated that the land itself, rather than the business skill of the owner, is primarily generating the income.<\/p>\n

\u00a0Property owners can take steps to protect themselves from assessments that include business income by carefully reviewing the form of the income information they provide to the assessor. Owners should structure their operating statements so that all income sources not directly pertaining to the real estate are reported and categorized separately.<\/p>\n

\u00a0Taking this step makes it easier to argue to the assessor that the separately reported income should not be included in the real estate assessment.\u00a0 By failing to categorize income properly, owners allow their real estate income and other income to be blurred together in a single entry in their operating statement. This needlessly gives the assessor an opportunity to point to the operating statement as proof that the other income is intertwined with the real estate income and is thus assessable.<\/p>\n

\u00a0Robert L. Gordon is a partner with Michael Best & Friedrich LLP in Milwaukee, where he specializes in federal, state and local tax litigation. Michael Best & Friedrich is the Wisconsin member of American Property Tax Counsel, the national affiliation of property tax attorneys. He can be reached at rlgordon@michaelbest.com.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

A recurring challenge to prevent over-assessment of commercial property is to separate true real estate value from business value. True real estate value is assessable for property taxation, while business value is not.\u00a0 \u00a0Commercial property owners who conduct businesses on their property must be vigilant to ensure that the assessor is not capturing the value…<\/p>\n","protected":false},"author":59,"featured_media":1004506700,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[39372],"tags":[],"class_list":["post-1004211747","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cpe-blog"],"acf":[],"yoast_head":"\nRobert Gordon: Assessors Seek New Ways to Tax Business Income - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/assessors-seek-new-ways-to-tax-business-income\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Robert Gordon: Assessors Seek New Ways to Tax Business Income\" \/>\n<meta property=\"og:description\" content=\"A recurring challenge to prevent over-assessment of commercial property is to separate true real estate value from business value. 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