Thursday, February 09, 2012

A bit of evidence, please

IACI President Alex LaBeau is again trying to get the corporate personal property tax repealed. He cites all sorts of facts and statistics, such and the number of jobs it kills by itsodious presence, and the number of jobs that will be created by its happy demise. He also calls it “businesses’ most hated tax.” Says its onerous, and not transparent, and burdensome, and all that.

Will someone please challenge him on this stuff? Please? Of course, I’m not privy to what he’s handing out so maybe he’s supplying written justification, but I doubt it. How do you document that the tax is “hated?”

First off, if no one challenges him, tax breaks could be given just because he asked, not because of any showing of need or positive effect.

And, don’t you know, don’t you just know as surely as the sun comes up, that if the corporate personal property tax goes away, LaBeau will be back with some new “most hated,” asking for yet another tax break. That’s his job. His bare-naked claims should have zero credibility on their own. They should have credibility only insofar as he proves them up.

Now, on that point, I offer some actual evidence; my personal experience. For about 6 years, I was the GM of a small ($10 mil in annual sales) manufacturing company, and in that role was responsible for the annual property tax submission. Yes, we did have to report the number of staplers and all that, but here’s the deal.

The first year it did take some time to do a decent survey. We sent a property survey out to various department heads, and they sent it down to their mangers. As it rolled back up the line, we added it all up and prepared the report. 22 staplers @ $1.00 ea (how much do you think a used stapler is worth?), and on and on. For the big, expensive stuff (autos, machinery) there weren’t so many to count (how hard is it to count the number of cars a company owns?).

Two key points why this wasn’t such a big deal. One, after year one we had the data, and it was only a matter of adding in all the new staplers we bought, and maybe adjusting the value down a bit. Easy peasy. Two, no one ever came around and challenged our estimates of the worth of that stuff. Thus, it didn’t take lots of time to substantiate the value. Our mangers just winged it, and that was fine.

So, no, it was not onerous. A bit of a PITA, but not “oooonerous!! Oh, God!!! The humanity!!!!,” as you’d think from listening to LaBeau. And no, we didn’t particularly hate it, more than any other reporting requirement, such as the payroll break-outs our work comp insurer (a private company, BTW, so government doesn’t have monopoly on PITA requirements) demanded of us in order to figure our premium.

Although I have no experience or proof, I suspect that had the company only been able on avoid that tax on those 22 staplers, or had been able to avoid the 5-6 person-hours to do the report, it would not have affected its hiring decisions one whit.

1 comment:

Irvine Tax Attorney said...

thanks for sharing us.Its true that the first year it did take some time to do a decent survey. We sent a property survey out to various department heads, and they sent it down to their mangers.