What are the Top Three Things to Look for in a Property Tax Attorney?

By Robert A. Hill, property tax attorney and president, Robert Hill Law, Ltd.

From my perspective, the answer is simple: Integrity, Perseverance and Knowledge. 

Integrity is key. Find a team that is “lean and mean” by design – but highly networked to be scalable to your specific needs. Here’s a classic example: Since property tax issues vary by state, your tax issues might need expertise beyond your home state. You need not vet and hire 50 attorneys, nor must you hire an expensive “Big-law” firm with one property tax expert per state. A firm with integrity would not have you paying for more than what your specific needs require. Simple as that.

Perseverance is critical; however, it should always be directly tied to integrity. Litigation is expensive and the tax attorney you choose should be first focused on a perseverance rooted in compromise – keeping your case out of the courts.

Knowledge is rooted in the efficient collection of the evidence to your situation, but also the reputation – and relationships – with those parties that can establish a compromise sooner than later. Be asking, “What percentage of your cases is solved in compromise as compared to full litigation?” And, “In those cases that are solved by compromise, what is the average number of months it takes to reach an acceptable compromise?”

Integrity is key. The team you choose should feel like a true ally, and a team of relentless advocates working for you.

Property Tax Reduction Case Studies:

  • Big Box Home Hardware Retailer – $9 million in savings over three years
  • Big Box Pharmacy Retailer – $2 million in savings over four years
  • Minnesota-based Food Retailer – $3.7 million in savings over three years
  • Well-known Food Brand – $250,000 in annual savings

Author Bio:

Robert “Bob” Hill has, for over three decades, successfully represented major companies in property tax appeals through both negotiations with tax assessors and litigation. His dedication to his clients has helped businesses throughout the United States save tens of millions in property taxes. Mr. Hill has earned Martindale-Hubbell’s highest peer review rating of AV-Preeminent for his legal knowledge, communication skills, high ethical standards, and his representation of clients in significant property tax cases.

The Institute for Professionals in Taxation

The Institute, founded in 1976, is a non-profit educational association serving over 4400 members representing approximately 1450 corporations, firms, or taxpayers throughout the United States and Canada. It is the only professional organization that educates, certifies and establishes strict codes of conduct for state and local income, property and sales & use tax professionals who represent taxpayers (government officials or organizations do not qualify for membership). The Institute also provides excellent educational programs in Value Added Tax (VAT) and Credits & Incentives.

Sign up to become a member, and you’ll have access to news and information, articles, and details on events.

Visit them at ipt.org.

New Orleans, Ft. Lauderdale Are Top Hotel Project Targets

New Orleans, Ft. Lauderdale Are Top Hotel Project Targets

By Natalie Rodriguez

Law360, New York (August 22, 2014, 5:19 PM ET) — New Orleans and Fort Lauderdale are the two top hotel markets with the most appetite for new development, with current supply projections through 2015 well below what the cities could handle, a PKF Hospitality Research economist told Law360 on Friday.

The two cities crown a list of 25 undersupplied hotel markets that could handle more development — and therefore present an opportunity for investors and developers, according to a recently released PKF report.

“New Orleans has been beat up hard lately with Katrina and the oil spill and then they had another hurricane. Natural and manmade disasters have really hurt performance in that market,” said Jamie Lane, a senior economist with PKF Hospitality Research who was one of the co-researchers on the report.

But the market is perking up, with its 2013 occupancy levels having hit 67 percent — its highest level since 2000 — and with recent revenue growth signaling that it’s time for more development, according to the PKF report.

Currently, there are 37,239 rooms in the market, and current projects will lift that number to 38,895 by next year, but PKF projects that New Orleans could handle 40,850 rooms. Fort Lauderdale, Florida, could also see another 1,000 or so hotel rooms being built beyond what is already in the works for next year before new supply meets the market demands, the report shows.

Nashville, Tennessee; Jacksonville, Florida; and Long Island, New York, round out the top five undersupplied markets, with Salt Lake City and Portland nipping at their heels.

Another market hungry for hotel rooms is San Francisco, but with the little land available for construction being earmarked for residential development as the city endures a housing crisis, it is unlikely that the hub will see new projects anytime soon, according to Lane.

“We haven’t seen any hotels go into that market recently and we don’t expect to,” he said.

Austin, Texas, is also undersupplied at the moment, though PKF sees the market possibly righting that imbalance with what’s already in the pipeline for 2016, Lane said.

“In general, we’ve seen much less supply growth than we would otherwise expect at this point of the cycle,” Lane said.

There are a few markets, however, that are risking getting overbuilt over the next year. These include Cincinnati, Pittsburgh and New York, among a few others, according to the report. New York, for one, has more than 10,000 rooms under construction — which could lead to an oversupply of 3,468 rooms, according to PKF projections.

Across hotel sectors, however, there also seems to be room for new development — particularly in the midscale and economy markets

“They have been slow to recover and they’re lower profit-margin hotels … [but] now in 2014, they have been seen as some of the strongest performers, so we expect the pipeline to start to pick up,” Lane said.

The upscale sector also has some room for new development, while luxury seems to be at equilibrium in terms of its supply-demand balance.

The one noticeable exception, however, is the upper midscale market, which looks to be getting overbuilt, according to the PKF report.

“When you look at the upper midscale chain, it’s a lot of what is popular right now,” Lane said.

–Editing by Jeremy Barker.

Original Post: http://www.law360.com/realestate/articles/569979?nl_pk=25180bf1-556c-4866-bf0e-5f384091a66c&utm_source=newsletter&utm_medium=email&utm_campaign=realestate

‘Earnings Stripping’ Fix Could Blunt Foreign Investment

‘Earnings Stripping’ Fix Could Blunt Foreign Investment

By Ama Sarfo

Law360, New York (August 22, 2014, 5:19 PM ET) — New York Sen. Charles Schumer recently escalated the corporate inversion debate by pitching a proposal to blunt “earnings stripping” — where U.S. subsidiaries deduct interest payments on debt owed to their foreign parent — and experts worry the scheme could hurt non-inverting companies if it isn’t narrowly crafted.

Schumer, a Democrat, says his legislation will complement anti-inversion activity championed by Senate Finance Chair Ron Wyden, D-Ore., and Sen. Carl Levin, D-Mich., and as such will exclusively apply to inverted companies. But the law surrounding earnings stripping is already restrictive, experts say, and they fear further belt-tightening may unintentionally ensnare non-inverting companies and reduce America’s appeal as a country for investment.

“There needs to be an analysis on whether tightening the earnings stripping rules will have other detrimental effects aside from making inversions unattractive,” said Will McBride, chief economist at the Tax Foundation. “It could cause businesses considering inversions to consider other tactics like selling off their subsidiaries or moving to the individual tax code.”

Generally, earnings stripping occurs when a company pays sizable interest payments on its debts to a related company in order to reduce its taxable income. In the inversion context, this means foreign-owned U.S. companies often give their U.S. subsidiary a substantial amount of debt so the subsidiary can deduct its interest payments on the debt and shrink its U.S. tax obligations.

The Internal Revenue Code already polices earnings stripping and limits interest deductions if a subsidiary’s debt-to-equity ratio exceeds 1.5-1 and its net interest expense is more than 50 percent of its adjusted taxable income.

Schumer wants to repeal the debt-to-equity safe harbor so that the limitation will apply to all inverters. He also wants to reduce the net interest expense threshold from 50 percent to 25 percent and eliminate a carryforward that allows companies to use the deduction in subsequent years.

The plan is intended to enhance legislation introduced by Levin, who wants enact a two-year moratorium on inversion deals, and Schumer says he will work with Levin and Wyden to create a comprehensive package of anti-inversion legislation.

“Assuming that is the case, I think the proposal makes sense because it reduces the incentive to invert,” said Philip Cohen, who teaches in the legal studies and taxation department of Pace University’s Lubin School of Business. “These proposed changes to [the Internal Revenue Code] should however, I believe, be targeted to inverted companies.”

But Nancy McLernon, president of the Organization for International Investment, warns that any tweaks to the Internal Revenue Code’s earnings stripping provisions will likely inflict collateral damage upon foreign-based companies that are operating in the U.S. because that part of the code already discriminates against foreign-based entities, she says.

Although Schumer has stated that his legislation will only apply to inverted companies, McLernon’s organization — which is a business association that represents the U.S. operations of foreign-based multinationals — fears it will be difficult to achieve that task.

“The difficulty is in carving those clean lines in terms of the companies you want to hit and the companies you will hit,” McLernon said. “We think it’s really difficult to write rules that don’t have collateral damage, so any tightening in this area is of concern.”

Although the U.S. is still a top destination for cross-border investment, it has to work harder to attract that activity since its economy is already established, which means lawmakers need to seriously consider their tax policy determinations, McLernon said.

“We’re a developed economy. We won’t have double-digit growth, and we have to pull the levers we can pull,” she added. “Making a part of the tax code that’s already discriminatory even more so could force companies to review their operations in the U.S. and could have a negative impact.”

McBride also believes that Schumer’s well-intentioned fix could have serious consequences.

“We can’t lose sight that inversions are one of many ways for companies to get out from under U.S. tax. Another tactic is to move to the individuals U.S. tax, through adopting a master limited partnership form or other form of organization — that’s entirely legal and has been happening since 1986 when the incentives changed,” he said.

“It’s dangerous territory here, and I’d hope the senator and his staff could do some due diligence,” McBride added.

–Additional reporting by Igor Kossov. Editing by Jeremy Barker and Mark Lebetkin.

Original post: http://www.law360.com/tax/articles/569682?nl_pk=18b2e25b-a661-4507-8795-aecdcbe331ad&utm_source=newsletter&utm_medium=email&utm_campaign=tax

Minnesota Tax Court

In the news: Improving the Minnesota tax court

I recently authored a commentary in the Star Tribune on the recent removal of George W. Perez from the Minnesota Tax Court. This removal shows that it is time to examine the status of the court and make it more accountable.

Unlike other Minnesota courts, the tax court is not under the jurisdiction of the Minnesota Supreme Court. It is rather under the jurisdiction of the state’s finance department, creating a lack of oversight that allows abuses and misconduct to occur without any consequences.

My piece contains three suggestions on how to improve the court. It is available at the Star Tribune’s website.

Full documentation regarding Judge Perez’s misconduct is available in PDF format here.