Property taxes can be a significant financial burden for businesses. In Missouri, commercial properties are subject to higher tax rates than residential properties. Overtaxation can cost commercial property owners thousands or even millions of dollars. In such cases, appealing the assessment may be a sound business decision.
Here are the key steps to pursuing a commercial property tax appeal:
1. Meeting with the assessor
While not a mandatory step in the process, this informal meeting may be worthwhile to gain a better understanding of the assessor’s method and reasoning. If disputes are resolved at this stage, property owners can avoid the time and expense involved in a formal appeal.
2. Filing a timely appeal
In Missouri, reassessment notices are issued in odd-numbered years. If you did not appeal in 2019, you can look at appealing in 2020.
Assessment notices are issued in February or March of each year. Property owners only have until June or early July (depending on the county) to file an appeal with the county Board of Equalization. Because of this tight timeframe, don’t put it off until the last minute.
3. Attending a hearing before the county Board of Equalization (BOE)
Hearings are held in July and August of each year. Strong evidence – including an expert appraisal – is crucial at this stage of proceedings, and thorough preparation is essential for a successful outcome.
4. Appealing to the Missouri State Tax Commission
If the BOE issues an adverse decision, property owners may pursue the next level of appeal with the State Tax Commission. The deadline is tight, so swift action is necessary.
This step involves a formal evidentiary hearing in the county where the property is located. Business entities (corporations, LLCs, trusts, etc.) must be represented by an attorney. A hearing officer will weigh the evidence and issue a written decision. This is generally the last opportunity to present thorough evidence and compelling arguments, since the scope of review on further appeal (in court) is extremely limited.
5. Pursuing judicial review in state court
Following an adverse decision from the State Tax Commission, the next step involves challenging the decision in circuit court. Importantly, this isn’t a “do-over.” Rather, the court will review the record, proceedings and decision of the Tax Commission, applying a deferential standard of review.
As you can see, the appeals process is complicated, potentially spanning months or even years to reach a full resolution. Experienced legal counsel is indispensable at each stage of the process.