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2013 Advanced Personal Property Seminar September 24, 2013 Sheraton Four Seasons Hotel Greensboro, NC Presented by Dave Duty Property Valuation Specialist II North Carolina Department of Revenue The Instructions Manual Why do we need to follow the instructions manual? The 2013 Billboard Structures Valuation Guide If we are not using the NCDOR Billboard Manual, we are valuing these assets using vintage methodology-- Utilizing the Billboard Manual or any manual optimizes our successful completion of any important project------- There are efficiencies built in to the manual to help county employees be better mass appraisers------- What does the manual have in it? Contents Page It gives the reader a snapshot of topics contained within the manual itself Open up to great information!!! Introduction & historical overview Diagrams of sign styles & configurations Base Cost Tables Valuation Worksheet for special/unique signs Examples of how to value signs Definitions The I-1 Form & Instructions Depreciation Schedules Dos and Don’ts-Warnings!!! What is my skill level? Be able to use simple math processes; adding, subtracting, multiplication, & division Comprehension is important Read various graphed information Transfer information from the I-1 worksheet into your office valuation system Ask questions when in doubt Ask your neighboring county to assist you What tools are needed? What does the billboard manual have in it? Tools! An overview of billboard valuation over the years-- An introduction to billboard construction techniques and types of structures--The valuation methodology used in the manual--Illustrations of billboard sign configurations--A specialized valuation worksheet for unique signs--Real world examples to follow along with--Access to the Billboard Manual online 24/7 Access to a live conversation with Dave 24/7 for a fee! Installation Instructions Billboard Manual has---- The base costs of the specific sign related to its classification Definitions of terms used in the manual A Depreciation Schedule to apply loss in value Examples to follow of all the various types of signs Customer Delivery Billboard Manual Delivers It provides a copy of the I-1 form along with instructions for filling it out-- The billboard manual delivers all the necessary data and information for the county appraiser to determine values on billboard signs-- The county appraiser is able to deliver the proper forms to the taxpayer along with instructional information--- Care and Maintenance Trouble Shooting----- Need Help? Our office valuation specialists are available to assist you concerning questions about the billboard manual The manual also provides examples on how to take data from the taxpayer and utilize the processes in the manual to assess and value billboard signs Summary Using the billboard manual properly values billboard signs-- The manual process is uniform, equitable, and it arrives at fair market value-- Achieving fair market value provides tax revenues that ultimately provide more services to county citizens, possible additional clerks in the tax office, & leads the county into a more complete compliance program-- The courts have already given their blessing to manuals that NCDOR develops to help businesses become more compliant-- The NC Outdoor Advertising Association helped the NCDOR develop the manual & the I-1 form--- Transition Challenges Sometimes, it is difficult to get information from the taxpayer-- County must be pro-active in helping the taxpayer utilize the I-1 form and understand the benefits going forward-- County staffing is minimal with increasing responsibility and fewer resources-- A general lack of knowledge is overcome by attending classes, seminars, & using internet sources--- First have a funeral, then have a party!!! Have a proper and respectful disposal of the old way of assessing and valuing billboard signs-- Have a party and celebrate a whole new way of thinking!!! Become environmentally friendly & kind to the earth! Interstate Outdoor, Inc. vs. Johnston County Thursday May 16, 2013 Taxpayer’s Evidence: Owner has not appealed in other counties where his property is also located--Claims his cost invoices confirmed the cost to build various signs within the county--Improvements have been made to the signs and taxpayer approves of the depreciation schedule in manual--Taxpayer says there are additional costs to build a sign in coastal communities due to soil conditions--Owner claims neighboring county accepted their invoices and did a reasonable assessment--- Thursday May 16, 2013 County Evidence per County Attorney: Johnston County did use the NCDOR Billboard Manual in order to be uniform & equitable--Showed that owner’s invoices were “Proposals” only and that there were inconsistencies between invoices; invoices provided did not include all costs--County relied on NCDOR Billboard Manual because it supports and reflects cost changes from year-to-year related to the actual building of a sign structure--- Thursday May 16, 2013 County Evidence per County Attorney (Continued): County was willing to adjust values for construction techniques based on costs in other regions, however, the sign owner was unable to show all costs related to the construction of these signs--- Replacement costs provided by the taxpayer’s construction vendor could not be authenticated & appeared to be from a biased source--- The PTC Members Vote Vote was 2 to 1 in favor of Johnston County The Final Decision Statement of Case Analysis & Issues Findings of Fact Conclusions of Law Findings Of Fact Johnston County used the 2012 Billboard Structures Valuation Guide to value all billboard signs in their county Interstate Outdoor testified to certain direct costs to construct said billboard signs, but claims county has overvalued the assets There was no testimony regarding the fact that all costs to construct the signs were included Findings Of Fact The construction vendor testified that invoices included a turn-key package cost & varied only if a physical site inspection was made The NCDOR Manual prescribes a proper methodology for using the cost approach to value and says that the reproduction costs new less depreciation is the best way to arrive at Fair Market Value The NCDOR Manual uses all costs and the costs vary from year-to-year based on the Producer Price Index Conclusions Of Law The County Ad Valorem tax assessment is presumptively correct & the taxpayer must rebut the presumption by presenting competent, material, and substantial evidence The NCDOR has the power to prescribe forms, books, & records to use to develop standards and rules to be followed by Assessors All costs must be included in the taxpayer’s presentation of construction invoices A Definitive Hearing Statement “Providing some costs does not generate a Fair Market Value…” Your “Take Away” for today………………… Appeal??? What can your county do to present a rock solid case??? Walk the PTC members through the cost approach used so often in valuing business personal property Use the NCDOR Billboard Structures Valuation Guide or all counties run the risk of having this guide declared invalid because all 100 counties do not use it Be familiar with how the manual works, what it strives to produce, and how its application produces a fair, equitable and uniform approach to valuing signs for all business owners Summary PLEASE USE THE NCDOR BILLBOARD STRUCTURES VALUATION GUIDE!!! Take advantage of the tools & resources, technical support & court cases to confidently appraise the property Get out there and make the tax world a bright and wonderful place to be!!!