Many Indiana counties have contracted with a third-party vendor to perform business personal property tax audits on their behalf. Since these contracts went into place, Katz, Sapper & Miller (KSM) has seen a significant spike in personal property tax audits. These spikes have been especially large for our clients located in Marion, Hamilton and Allen counties.
A typical business personal property tax audit covers three years and can result in additional tax, penalty and interest. Because these audits are performed on a contingency basis, the auditing firms are paid based on the amount in new taxes assessed and collected. According to the website of one vendor, it has audited 27,685 returns and identified over $1 billion in errors.
Again, this tax alert concerns personal property used in a trade or business only, not property held and used by individuals.
If your business receives a notice of personal property tax audit from a county or third-party auditor, KSM can assist you in managing the audit process and work to minimize a potential assessment. Please feel free to contact your KSM advisor, our property tax leader, Chad Miller, or state and local tax manager, Heather Judy, if you need assistance.