Let's talk about self storage.

Hello all, 

I ran into an issue with portable storage units being taxed as Real Property.  I appealed and in the process we all came to the same conclusion that they should in fact be taxed as business personal property tax.   I filed the rendition form reporting $60k of personal property during the appeal with the receipts in hand as evidence.  About a month later I came home to find an valuation in the mail from the taxing authority for $240K?????   

I have called and left numerous messages and sent emails as well to no avail, so I went by and happened to catch an appraiser there.  During my conversations with him he commented that he only taxes inventory and wasn't sure if they could even tax these.   He went on to say that they had to send the paperwork over to their attorney because this was a new thing for them.  

I know that I am not the only one using these in Texas.  

My question is how are you seeing these taxed?  As business personal property or as real property?  Can anyone suggest as to how I should handle this moving forward?

Thank you all,

Jason

------------------------------
Jason Smith
StoreMore, LLC
Weatherford TX
(940) 328-5196
------------------------------

Good morning Jason,

As a property tax consultant for over 30 years,I have ran across this issue numerous times.  Most owners of portable storage units want them taxed as business personal property, based on the assumption that they would be assessed on a cost basis and then placed on a depreciation schedule with a reduced value/assessment each year.  Though this is what commonly occurs with BPP, utilizing a depreciation schedule to assess is not a requirement of the tax code.  The property must be assessed at fair market value, and similar to real estate, the assessor has the right to utilize whichever appraisal methodology they so choose. 

Numerous more aggressive appraisal districts have begun putting these portable units (as well as tiny homes/park models) on income approaches.  This will obviously yield the highest value each year, and will likely increase each year, as opposed to decreasing as a depreciation schedule would reflect.  I've frequently ran across the CADs putting these units on the real estate account, and even if you successfully get them to put on a BPP account instead, they wouldn't have to change the value based on their appraisal methodology.  These protests frequently result in arbitration proceedings, as ARB panels frequently see the CAD determinations of property classifications as the gospel.

Let me know if I can be of further assistance.

Mike Eckhoff

------------------------------
Mike Eckhoff
President
Assessment Advisors
Spring TX
(281) 466-1599
------------------------------