New Tax Solution Can Help Multi-Location Businesses Cut Personal Property Taxes By Up To 20 Percent

OAK BROOK, Ill., March 3 /PRNewswire/ -- Businesses with many locations, such as supermarkets, restaurants, banks and other retail chains, have personal property tax obligations that vary by state and can be difficult to accurately manage. Crowe Horwath LLP, one of the largest public accounting and consulting firms in the U.S., has designed a new solution to help simplify that process, saving the business time and money.

While multiple service and retail sites are usually built with similar layouts and standard asset lists, over time, some assets may be overvalued due to category misclassifications, equipment obsolescence or tax errors. Since states levying personal property taxes have varying requirements, filing these taxes accurately for multi-location businesses can be a time-consuming challenge. Prototyping, which standardizes the process of quantifying and reporting assets, helps overcome that challenge.

"Prototyping has been employed sporadically within the retail industry for decades," said Scott Tyler, senior manager in the State and Local Tax practice at Crowe Horwath. "Crowe has taken the methodology and standardized it, which can help cut a business' personal property taxes by up to 20 percent – typically without costly appeals. Additionally, prototyping has been shown to save up to 50 percent of a company's operational compliance time in some instances."

Without prototyping, retailers typically handle personal property taxes by manually going through a list and attempting to identify misclassifications and errors. Other approaches include appraisals or physical inventories for each location. According to Tyler, these tactics can be cost-prohibitive and time-consuming or only provide marginal results.

Prototyping, on the other hand, is a repeatable process that can often result in reducing the personal property tax burden. The method uses generally accepted tax assessment standards to create a more accurate asset allocation for each location.

Crowe's prototyping process creates a typical store cost configuration for a specific company concept. After inspecting sample locations and interviewing key personnel, Crowe creates a prototype. Modifications are then made to each location's documentation of actual fixed assets on the original tax return. "Crowe relies on many sources of data for prototyping including market based information that agrees with specific jurisdictions' definition of assessed market value," said Tyler. "Crowe's combined multi-disciplined team quality checks results with other similar taxpayers for consistency, validity and reasonableness." Consequently, this method of rendering returns may significantly reduce any need for an appeal to achieve desired tax savings.

For more information, visit www.crowehorwath.com/propertytax.

About Crowe Horwath

Crowe Horwath LLP (www.crowehorwath.com) is one of the largest public accounting and consulting firms in the United States. Under its core purpose of "Building Value with Values®," Crowe assists public and private company clients in reaching their goals through audit, tax, advisory, risk and performance services. With 25 offices and 2,400 personnel, Crowe is recognized by many organizations as one of the country's best places to work. Crowe serves clients worldwide as an independent member of Crowe Horwath International, one of the largest networks in the world, consisting of more than 140 independent accounting and management consulting firms with offices in more than 400 cities around the world.

SOURCE Crowe Horwath LLP