Property tax for energy
Energy businesses hold property that tax offices find hard to value: generating plants, pipelines, wells, substations, storage tanks and heavy equipment spread over many jurisdictions.
A partner firm can review whether the assessments you receive are reasonable. Fairview Audit connects energy businesses with partner firms. Fairview does not perform the review itself.
Why property tax matters for energy
Energy assets are capital heavy and often large, so the assessed value drives a large tax bill. They are also unusual. There may be few comparable sales for a power plant or a gathering system, so the assessor relies on cost or income methods. Each depends on assumptions that can be questioned.
Some energy property is assessed by the state and some by the county or local office. Pipelines and utilities often cross boundaries and may be valued as a unit, then divided among the places they pass through. The rules differ widely from place to place. [VERIFY: which assessment bodies and methods apply in each jurisdiction where you hold property]
Condition and use change quickly. A plant may be idled or retired. A field may decline. A pipeline segment may be abandoned. The assessment may still reflect the old asset.
What a review typically examines
A partner firm looks at the value placed on your property and the data behind it. For an energy business it may examine:
- Whether the assessor's method fits the property type, such as cost, income or unit valuation.
- Whether idle, retired, abandoned or removed assets are still on the roll.
- Whether depreciation and obsolescence were applied for aging or underused equipment.
- How property is classified, for instance as real property or as equipment, and whether the class is right.
- Whether the reports you filed match your fixed asset records.
- Whether exemptions, abatements or incentive agreements tied to a project are being applied.
- Whether construction in progress is valued appropriately before the project is in service.
- Whether the value allocated to each jurisdiction fits the property located there.
- Whether appeal deadlines are tracked in each place.
Warning: Appeal windows can be short and differ by jurisdiction. Ask a partner firm about deadlines as early as you can. [CONFIRM: a partner firm supplies and approves any statement about deadlines]
What to have ready
- Assessment notices and tax bills for each parcel or asset group.
- Your most recent filings with each assessing body.
- Fixed asset registers with in-service dates, retirements and costs.
- A list of idled, retired or abandoned assets, with dates.
- Any incentive, abatement or tax agreements tied to projects.
- Appraisals, engineering reports or purchase allocations, where they exist.
- Prior appeals and their results.
- Contacts in your tax, finance and operations teams.
How matching works
Choose the request path that suits your business: larger business, smaller business or not sure or another need. There is no fixed size cut-off between the two types of firm. A request goes to the matched partner firm, or to Fairview for manual matching. You then talk with the firm directly. Fees are between you and the firm.
The firm gathers data, presents findings with you involved and agrees how to proceed with the assessing bodies. The general steps are in how it works. You can also read the article on what to gather for a property tax review.
An independent partner firm that specializes in property tax handles this work. Fairview Audit makes the match. We do not perform the review ourselves.Who does the work
FAQ
Do energy companies need a different kind of review?
Often yes. The valuation methods and filings for energy property differ from those for ordinary commercial buildings, so ask the partner firm about its experience.
Can a review cover property in several states?
It can, depending on the firm. Say where your assets are in your request.
Does the review include sales and use tax?
That is a separate category. Mention it in your request if it matters to you.
Related pages
See the parent page on property tax and the energy industry page. For common problems in this area, read common property tax errors.
Tell us what you need reviewed. We match you by hand with an independent partner firm. You keep your existing vendors.Find out what you are overpaying.