Leasehold Jeopardy The Trials

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Leasehold JeopardyThe Trials Tribulationsof
Defending Leasehold Improvements

• Presented by
• Maryanne P. Deasy, PPS, CFE
• Mdeasy_at_PBCGOV.org
• August 31, 2009

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Definitions of Personal Property

• Property Assessment Valuation, 2nd Ed. IAAO
• Any property that is not real property
• Standard on Valuation of Personal Property
• USPAP 2008-2009 Ed Appraisal Foundation
• Property that is not real is personal
• State of Florida Statutes 192.001, 192.011
• All goods, chattels and other articles of
  value capable of manual possession and whose
• chief value is intrinsic to the article
  itself

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Florida Department of Revenue Personal Property
Classification Guidelines

• Décor Packages in Shopping Malls
• Movable Walls and Partitions
• Trade Fixtures
• Wiring and Cabling

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BRAND

• Form of Identification
• Causes immediate identity of
• something
• Designates grade, class, quality
  

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Life Expectancy forRetail Trade Fixtures

• Palm Beach County 7 to 9 Years
• State of Florida 9 Years
• Marshall Swift 7 to 11 Years
• National Retail Federation 7 to 9 Years

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Helpful Web Addresses

• National Retail Federation
• nrf_at_smartbrief.com
• Marcus Millichap
• www.marcusmillichap.com
• Construction Estimates
• www.get-a-quote.net
• Shipping Cost Estimates
• www.freightcenter.com
• Shopping Center Information
• www.theshoppingcentergroup.com

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• Re Account ____3C_________
• Dear Taxpayer
• We are rejecting your 2009 Tangible Personal
  Property Tax Return as incomplete and
  unacceptable (Section 195.027(4)(a), Florida
  Statutes). Please complete the enclosed return as
  soon as possible and be sure to include the
  information listed below. Your failure to file a
  complete return will result in a non-filing
  penalty of 25 (Section 193.072) and constitutes
  a failure to apply for the 25,000 exemption.
• Lines 1 through 9a on tax return.
•  Business/DBA name.
•   Physical location of assets. Provide a street
  address, not a P.O. Box or Mail Stop.
•   Your signature and date.
• Description of all assets (specify owned or
  leased), age, years of acquisition, original
  installed cost , taxpayers estimate of
  fair market value and taxpayers estimate of
  condition, corresponding to lines
  10through 24 on page 1 of the return. Note If
  leased, provide the name an address
  of the lessor(s), a description of the property,
  year acquired, and installed cost.
•   Description of assets, corresponding to
  lines 10 through 24 on page 1 of the return.
•   Age of assets and years of acquisition,
  corresponding to lines 10 through 24 on page 1 of
  the return.
• Age of assets and years of acquisition,
  corresponding to lines 10 through 24 on page 1 of
  the return. Original installed cost of assets,
  corresponding to lines 10 through 24 on page 1 of
  the return.
•   Taxpayers estimate of fair market value,
  corresponding to lines 10 through 24 on page 1 of
  the return.
•   Taxpayers estimate of condition,
  corresponding to lines 10 through 24 on page 1 of
  the return.
•   In order to claim the 25,000 exemption, in
  the first year you must file form DR-405, not
  DR-405EZ.
•   If you own no Tangible assets, you do not
  need to file a Tangible Return.  
• If you have any questions regarding the reporting
  of personal property or the tangible personal
  property exemption, please contact us at (561)
  355-2896. Thank you for your cooperation.
•  
• Very truly yours,
•  GARY R. NIKOLITS, CFA

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• Re Account ____3D________
•  Dear Taxpayer
•  We have received your 2009 Tangible Personal
  Property Tax Return. However, additional
  information needed for the processing of your
  return. Please provide the following information
  no later than ( 2 weeks from letter date).
•   Itemized listing of all tangible assets
  owned by you on January 1, 2009. Be sure to
  include all trade fixtures,
  leasehold improvements, and expensed items.
  Include a description of the asset, year of
  acquisition, original installed cost,
  taxpayers estimate of fair market value, and
  condition.
• Itemized listing of all assets reported on
  line 20 of your return. Provide a description of
  the asset, year of acquisition, original
  installed cost, taxpayers estimate of fair
  market value, and condition.
•   Itemized listing of all appliances and
  furnishings provided to your tenants. Provide a
  description of the asset, year of
  acquisition, original installed cost, taxpayers
  estimate of fair market value, and condition.
• Itemized listing of all tanks, pumps and
  dispensers. Provide a description of the asset,
  year of acquisition, original installed cost,
  taxpayers estimate of fair market value, and
  condition.
•   Detailed description of assets.
• If you believe that any portion of the
  original installed cost of an asset is
  non-taxable, please state the original cost
  figure and the reason for the adjustment.
• Listing of all leased, loaned or rented
  equipment. Include the name and address of the
  lessor(s), a description of the property, year
  acquired, and retail installed cost new. Copy of
  a monthly invoice from the leasing company(ies).
• If you went out of business or sold your
  business last year, please file a final return
  which indicates the disposition of the assets,
  the date assets were sold and the name and
  mailing address of the buyer.
• Copy of any appraisals, valuation
  studies, reports and/or computations, along with
  supporting documents, that provide an opinion of
  fair market value of all personal property sited
  at this facility on January 1, 2009.
• If you have made any calculations to
  demonstrate physical, functional, or economic
  obsolescence, please state the method used and
  the amount of the adjustment. 
• Other
•  If you have any questions regarding the
  reporting or assessment of personal property,
  please contact us at [phone]. You may
  mail your response to the above listed address,
  fax your response to [phone] or e-mail to
  patangible_at_pbcgov.org. If the requested data is
  not provided by the above date, it will not be
  considered for the current tax year and will be
  objected to if submitted in a subsequent
  administrative or judicial assessment challenge.
  Thank you for responding in a timely fashion.
•  Very truly yours,
•  GARY R. NIKOLITS, CFA
• Palm Beach County Property Appraiser

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Consideration of Eight CriteriaFlorida Statute
193.011

• Present cash value of the Property
• Highest and best use for the property
• Location of said property
• Quantity or size of said property
• Cost of said property
• Condition of said property
• Income from said property
• Net proceeds of the sale of said property

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Sample of Standard Appraisal Executive Summary
Page

• Location Situs Palm Beach Co.
• Company Name Great Fashions Store
• Corporate Name GFS LLC
• Business Type Department Store
• Years At Location N/A
• Type of FFE Office Furniture and
  Equipment, retail sales fixtures and display
  cases
• Overall Condition Average to Fair
• Subjects Market Value 15,000,000
• Date of Value January 1, 2008

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Example of Lot Category

• Comp ___
• WAS LOTTED OUT AND VALUED AT _______ (no value
  provided on comparable pages)
• Corresponding asset inventory line
• Miscellaneous
• SPECIAL LIGHTING (TRACK ETC.) 12,500

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Example Lighting Category

• Photo Qty Size Desc. Cond. Ea. Market
• Value
• N/A 122 12 LIGHT TRKS A
  10 1220
• N/A 67 HANGING LTS A
  115 7705
• N/A 18 FLOOR LAMPS A
  18 3330
• Not Included Top Hats, Spots, Featured
  Chandeliers

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