Boosting Tax Revenue in Southwick
The town of Southwick is exploring strategies to increase tax revenue in a bid to balance increasing operating costs and the annual regional school district allocation. This comes as a response to the approval of a contract by the Select Board for an external consultant to perform a personal property valuation.
Selecting a Property Valuation Consultant
The town director of assessment, Randy Austin, is confident that the $26,300 contract with Real Estate Research Consultants will pay for itself. The contract involves conducting a comprehensive valuation of personal property in the town.
Understanding Personal Property Tax
In Southwick and throughout the commonwealth, personal property is identified as movable items not permanently attached to land or a building. This includes business equipment such as office chairs and computers, as well as furnishings in second homes or vacation cottages. These items are subject to tax, a detail often overlooked, according to Austin.
Identifying Tax Shortfalls
Upon assuming the role of assessment director, Austin identified several valuations that required adjustment due to incomplete information on property cards. He also discovered businesses that claimed exemption from personal property taxes despite not meeting the criteria.
Addressing Unpaid Taxes
One of these businesses owed a few hundred dollars. While not a significant amount, Austin insists on fairness for those who are diligently paying their taxes. He also found that some equipment at WGI Inc. had not been classified as personal property. After reassessing, WGI Inc. was billed $33,000, which they promptly paid.
Bringing Experience from Greenfield
Before his tenure in Southwick, Austin worked as an assessor in Greenfield. There, he conducted an inventory of businesses and discovered 90 that weren’t being billed for personal property. This resulted in an additional revenue of $240,000 for the city.
Identifying Businesses not Paying Taxes
Real Estate Research Consultants has been contracted to analyze current tax data in Southwick and identify businesses that may have been evading taxes on personal property or falsely declaring exemptions. Certain items such as household furnishings and farming tools are exempt, according to the Division of Local Services.
Conducting Comprehensive Street Canvassing
As part of their contract, Real Estate Research Consultants will conduct extensive street canvassing, review lists of new business certificates, and evaluate 300 business accounts throughout the town. They will also review and value wireless and cable systems and conduct an appraisal of public utility equipment.
The Role of Depreciation in Tax Assessment
Austin stated that depreciation schedules exist to reduce taxes on equipment over time. However, even though equipment depreciation might end at a zero value, it never drops below 30% for personal property purposes.
RRC’s Revaluation Completion Date
The entire revaluation process by the Real Estate Research Consultants is expected to be completed during fiscal 2027. You can read the original article on MassLive.
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