Property tax appeals: When, how, and why to submit

When your property tax bill shows up, it can feel like there’s no room for negotiation — but that’s not always the case. Property valuations aren’t set in stone, and if your assessment seems off, you have the right to push back. In fact, filing a property tax appeal could save you a significant amount of money.

Whether it’s a case of outdated records, clerical errors, or assets you no longer own, there are several valid reasons to challenge a property tax assessment. We’ll walk you through: 

• Common reasons to appeal
• How and when to submit a property tax appeal letter 
• How to simplify the process with automation

A property tax appeal is a formal request to challenge the assessed value of a property. It’s made by the property owner to the property assessor and often starts with a written letter to the assessor (usually the city, county, or township).

It all starts when you open a valuation notice from the assessor and see a property valuation amount that you believe is too high. You’ll have two options: 1. You can pay the too-high tax bill because you think you don’t have time to stage an appeal, or 2. You can appeal the valuation and possibly lower your tax bill. 

To help you pick the right option for your business, you can request an itemized list of property — called work papers — the assessor used to determine your valuation. You may find that the assessor’s valuation is fair and no appeal is necessary. However, you may find mistakes or disagree with some of the criteria the assessor used to determine your valuation. In the latter case, the following are a few scenarios you may identify during your review of the list.

Within the last year, you may have:

• Sold assets
• Discarded assets
• Moved assets to a different location

Notably, you still own the assets you moved, but they should not be included in the valuation for their original locale; instead, the moved assets should be assessed as part of the other location’s valuation.

How do the actions above impact your valuation? Consider this example: A few months prior to your valuation, 10 employees broke their laptops. So you bought 10 new laptops to replace the old ones. In your valuation, the assessor noted your purchase of the new laptops, but also included the discarded laptops. Thus, your valuation would be higher as you’re being assessed for property you no longer own.

You shouldn’t be on the line for personal property you possess but don’t own. Leasing is a prime example. Assume you have a large copy machine you’ve leased for the office — the copier is in your possession, but it’s owned by the company you leased it from. That leasing company is likely responsible for paying taxes on the copier, not you.

Similarly, for real property, the assessor’s records may not be updated to reflect a change in ownership of a location. It may show you’re still the owner of record and, therefore, still responsible for the taxes. A property tax assessment appeal letter can help bring this issue to the assessor’s attention.

Called a double assessment, the assessor may have valued the same real or personal property twice — meaning you could be on the line for twice the correct amount. This costly issue sometimes occurs due to a clerical error in the taxpayer name or address. For example, you may be sent a valuation notice under the names John W. Smith and Johnny Smith, or for 1523 W. Main and 1523 West Main.

The more depreciated an item is, the less value it has — and the less you owe at tax time. However, there’s room for interpretation, which can lead to some of your personal property being less depreciated than you’d want. This may be due to the assessor not having a clear understanding of your assets.

For example, on your tax return, you may have used an ambiguous term to describe your property — e.g., “cash register.” The assessor didn’t know whether the item was a classic register you might find in a small diner or a high-tech point-of-sale system modern bars use. The former version would retain its value from year to year because of its age, while the latter version would likely depreciate heavily from year to year. Assuming the assessor valued it as a classic register — when you actually had a modern register — you’d owe more taxes on that asset. 

Inaccurate property details can lead to an inflated valuation. Here are a few property details that tend to be wrong:

• Building square footage
• Land acreage
• Construction year
• Building features (such as a walk-in freezer or covered patio)

Sometimes it’s not that an asset has a particularly high absolute value, but that the valuation is high compared to similar properties near you. For example, if you own an Italian restaurant that’s valued 50% higher than another, similarly sized Italian restaurant located a mile away, there could be cause for a property tax appeal.

If your real property increased, say, 4% over last year, you may find this unreasonable (or unlawful), depending on the state where your property is located.

Look up recent sales of similar properties in your neighborhood, taking note of lot size, features, and condition. 

If you decide to appeal a valuation, notify the assessing jurisdiction of your intentions. In most states, an appeal notification consists of a letter stating your intentions (see a sample outline of a property tax appeal letter below). Keep it simple:

• Include phrasing that indicates the letter is a “formal notice of protest.” 
• List the account number or numbers you plan to protest. 
• State the reason(s) for protesting. Common reasons for protests are that a property has been assessed more than once (called a double assessment), an assessed location has been recently closed, or the stated value is too high. 
• Sign it and send it. 

Not all states accept letters — some require completion of an official notification form.

You’ll receive a letter or official document from the appeals board telling you whether your appeal was approved, partially approved, or denied. If the value has changed, the letter will include the new assessed value and the updated property tax amount you owe.

Typically, property owners have 30–45 days from the time they receive their valuation notice to send a property tax appeal letter. That’s a relatively small window — which means you likely won’t have time to confirm your belief that the assessed value is too high before notifying the jurisdiction you intend to appeal. So if you do feel you’ve been assessed unfairly, send the letter to buy the time you need to research the matter properly. If it so happens that you discover the stated value is correct, you can always withdraw your appeal.

After you send the letter, you’ll usually get a response back to confirm it was received. Sometimes the communication you get will assign you a case number or appeal number; other times it may even include a scheduled date and time for a hearing. The amount of time you’ll get to put your case together varies by state. Some states, like California, have so many hearings that your date could be as far out as a year. For other states it could be as little as 30–45 days. 

In the meantime, you may need to pay the higher amount while you appeal to avoid late fees and penalties. If that’s the case, you’ll be reimbursed if the appeal is approved.

There are several reasons you might want to appeal your property tax value. An important reason to appeal is that your property has been overvalued, and the assessed value is higher than the actual market value. This could result in a higher tax bill.  

The full timeline is different in every state. You typically have 30-45 days from when you receive your assessment notice to file your appeal, then the initial response may take a few weeks. In some cases, an assessor will want to schedule a hearing. After the hearing, you might be informed of the results immediately in person, or within a few months via mail.  

There are a number of reasons you might hire someone to appeal your property tax; if your case is complex, your property is high-value, or you need to hire a lawyer for a formal hearing, for example. But if your case is simple, you’re comfortable conducting the research and paperwork, or your potential tax savings is small, you may be just fine taking a DIY approach. If you’re not sure where to start, an automated property tax solution can help. 

The property tax appeal letter is just one piece of the process, as you’ll also need to meet important deadlines and do thorough research to support your case, which takes time. Avalara Property Tax software can help, as it’s designed to streamline the process by keeping track of deadlines for you.

Avalara Property Tax provides the solutions — and the support — you need to conquer the property tax appeal process. Our team members have extensive experience with property taxes. As a result, we understand what you’re trying to accomplish, and have designed our software to handle nearly any challenge you can throw at it. 

Ready to learn more? Contact Avalara to speak to one of our tax specialists today. 

This blog post has been updated. It was originally published in February 2023.