Obsolescence Audits

Obsolescence Audits

A key component of our industrial complex property tax analysis is our comprehensive abnormal (functional and economic) obsolescence audit. Unlike some of the large tax consulting firms that apply a template approach across industries, we examine each client’s property tax valuation within the context of their unique industry.

Where to Look for Complex Property Tax Obsolescence

We begin our complex property tax obsolescence audits by evaluating a comprehensive set of abnormal obsolescence indicators, including but not limited to:

Functional Obsolescence (Internal)

  • Excess Capital Cost (Current Replacement versus Indexed Reproduction Cost)
  • Excess Operating Cost compared to current “state of the art”

Economic Obsolescence (External)

  • Plant Utilization Metrics
  • Declining Production
  • Diminishing Revenue
  • Reduced Headcount
  • Lower Return on Capital

Economic obsolescence is an important area of focus as it is often overlooked by tax assessors and presents an excellent opportunity to identify, quantify and appeal your asset valuation(s).

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Barges

Abnormal Obsolescence and its Impact to Industrial Property Tax Savings

An example of abnormal (functional) obsolescence due to excess cost of capital is the rapid decline in the replacement cost of solar modules in the energy sector. An example of abnormal (functional) obsolescence due to excess operating cost is the production costs of operating an older generation semiconductor fab.

Examples of abnormal (economic) obsolescence includes the declining freight rates on U.S. inland barge fleet due to excess capacity in the market and decline in newspaper revenue due to the migration of advertising from print to digital.

Tanks

Tax Savings

The result of our comprehensive obsolescence audit is increased potential for complex property tax savings by our clients.

Find out how we can help your company identify obsolescence opportunities to support seeking a reduction of your complex industrial property taxes.

Resulting in Millions of Dollars of Industrial Tax Savings

Success Stories

ValPak

Val Pak

$1.5M
ANNUAL
SAVINGS
TAX SAVINGS OF 77%
Industry Association
MEDIA
Industry Association
MEDIA
  • Economic and functional obsolescence quantified through excess capital and operating costs
  • Multi-year appeal of assessed value for their equipment based on a replacement versus reproduction cost model.

marine company

Marine company

$3.6M
ANNUAL
SAVINGS
TAX SAVINGS OF 33%
Industry Association
MARINE
Industry Association
MARINE
  • A combination of exemptions, quantified functional obsolescence and economic obsolescence produced a 33% property tax savings for KIM’s allocated fleet assessment.

Ft. Worth Star Telegram

Ft. Worth Star Telegram

$355K
ANNUAL
SAVINGS
TAX SAVINGS OF 77%
Industry Association
MEDIA
Industry Association
MEDIA
  • Our tax reviews yielded a 77% reduction in taxable value based on our extensive database of newspaper equipment sales, supplemented by our comprehensive fixed asset valuation analysis incorporating replacement cost, functional obsolescence, and economic obsolescence.

What Clients Say

Quotes

I have worked with John and the rest of the Industrial Property Tax Solutions team the last three years. They are highly capable tax professionals who possess a wonderful combination of tax technical skills and people skills, which are both necessary to navigate the pitfalls of state and local property taxes. With their assistance, we have lowered our annual property taxes.

- Scott Dant, Director of Tax -

American Commercial Barge Line LLC

What Clients Say

Quotes

I worked with IPTS' John Woolard, during my 17 year tenure at Odfjell Houston. John had a sound understanding of our business which enabled him to apply innovative ideas, that were later used during our HCAD mediation process. As a direct result of his field work and experience, we were able to reduce our out-of-line HCAD property tax values from $60M to $38M culminating in major tax savings. John maintained strong working relationships with HCAD tax appraisers and he continuously sought ways to reduce our tax values. He gets results.

- Albert M. Noggle, Retired CFO and Interim President -

Odfjell Holdings US Inc

What Clients Say

Quotes

I’ve had the pleasure of working with John over the past 7 years. During this time he has shown me to be reliable, responsive and reasonable in his approach. Overall, he has served as a solid partner and has been instrumental in reducing our property taxes.

- Craig Wohlfort, Controller -

Austin American-Statesman

What Clients Say

Quotes

I have been worked with IPTS for three years. They are efficient and timely in the services that they provide for HID, and a great source of reference on Texas property tax issues. They keep us apprised of emerging tax related concerns in Austin.

- Teresa Wagner - Assistant Controller -

HID North America