Thursday, August 16, 2018

Apple Disputing Real Estate Assessments

Catherine Ho (via Ryan Mac):

In the Bay Area, Genentech and Apple are particularly aggressive in opposing tax assessors — elected officials who determine the value of property for tax purposes. Both companies are leading years-long efforts to recoup tens of millions of dollars they say they’ve overpaid in taxes on buildings, land, lab equipment, computers and other items.


There is nothing illegal or unethical about appealing assessments. Companies are entitled to contest property assessments they believe are done improperly or inaccurately. But the tactics taken by Genentech, Apple and other large corporations, county assessors say, border on abusing the system.


Some claims reflect extreme differences in estimated values. In one appeal filed in 2015, Apple said that a cluster of properties in and around Apple Park in Cupertino that the assessor valued at $1 billion was worth just $200. In another, property that the assessor valued at $384 million was, in Apple’s view, worth $200, according to an appeal application.

Hopefully the story is more complicated than that, because that sounds absurd even if the buildings are empty.

Previously: The Paradise Papers, Apple, Ireland, and the EU.

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Douglas Johnson

"because that sounds absurd even if the buildings are empty." It is absolutely absurd. I have worked for a county assessor in Ohio (though we call them county auditors) and I now work in the Real Estate department for the City of Toledo, Ohio. In Toledo, a vacant residential lot is worth $200. A building that is potentially leasable, even if vacant, would be worth considerably more.

When challenging values, a credible case has to be made and the decisions are public, including the paperwork of the hearing officers. If true, a journalist or even an interested citizen could dig into the appeal cases.

Maybe it's not related, but I find it interesting that an article about property tax in California didn't mention Prop 13 at all:

"Section 1. (a) The maximum amount of any ad valorem tax on real property shall not exceed one percent (1%) of the full cash value of such property. The one percent (1%) tax to be collected by the counties and apportioned according to law to the districts within the counties".

Prop 13 was always brought up as the reason that California often has trouble funding things that property tax generally pays for, like schools, police, fire, city general fund, etc. Maybe Cupertino is trying to collect an amount of property tax that is debatable under Prop 13?

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