A Queston About Filing Annual Returns Related to Property Tax Exemptions

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“A taxpayer asks: Why must taxpayers file annual returns for some exemptions but not others?”

This is a legal question, and the taxpayer should consult with an experience property tax attorney in his or her State, to make sure there is full compliance with the governing laws. In the meantime, based upon our experience, part of the answer is that status may change.

One example that comes to  mind relates to agricultural exemptions.  A bona fide business related to agriculture may change from one year to the next – either through a business decision or perhaps the sale of the applicable land. The local property tax assessor has no meaningful way to know if the agricultural activity continues and in what way without receipt of the Return.

While many assessors try to inspect every property in their county each year, particularly those parcels with previously filed agricultural exemptions, inspections may not coincide with growing seasons for some crops or some agricultural uses, or even the actual operation of a business, thereby making the Returns a useful tool in the compliance process. For example, it’s not always readily obvious from a visual inspection of tree farms and other lumber-related properties to know how they are being used agriculturally.

In addition, if a Return is filed and denied in whole or in part, the taxpayer may appeal that decision to the Value Adjustment Board in his/her county or in circuit court. In those events, it is critical to make sure appeals are filed not later than the governing deadlines.

Other Returns required in Florida relate to Tangible Personal Property in a going concern. If the total of asset values are less than the applicable exemption amount, the taxpayer need not file an annual Return providing any remaining value does not exceed the exemption. Typically the local property tax assessor will send a letter or a postcard to all known Tangible taxpayers as a reminder to file a Return IF the value does exceed the exemption amount. As with any other taxes, if the taxpayer disagrees with the valuation applied to these assets, the valuations may be appealed either through the Value Adjustment Board in the county or in circuit court. Again – it is critical to make sure appeals are filed not later than the governing deadlines.

There is more, much more about this subject in the legal literature. So consulting with a qualified attorney always is a good idea. In addition, taxpayers can read through the Statutes and administrative rules for more insight.

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