You wouldn’t pay taxes you don’t owe. Why should Lowe’s?
That’s a shocking idea to many of my liberal brethren who think that Lowe’s, the home improvement giant, shouldn’t be able to avail itself of the company’s legal right to argue for more accurate property taxes.
While I’m not aware of any of my friends on the left being willing to pay extra taxes in the name of civil responsibility and moral fiber, that’s exactly what they’re expecting from Lowe’s. They’re not protecting the little guy from the corporate giant; they’re simply trying to shame a corporation away from lawfully using the courts to determine a tax obligation.
Real estate property taxes are basic in principle. Property is appraised at “fair and reasonable market value” between a willing buyer and seller in an arm’s length transaction. That amount generates an assessment that’s multiplied by a millage rate to develop a property tax bill. Most businesses are assessed at twice the rate of residential property in Alabama.
We’re talking about real property here, such as land and improvements. Don’t confuse it with business personal property that consists of the furniture and equipment used to run the operation. That’s a separate unrelated tax.
Lowe’s is simply arguing that its property taxes should be based off the value of selling the empty structure of a given store. It’s only as valuable as what the company could get for it in an arm’s length sale.
Revenue hounds have responded with allegations of corporate greed and horror stories about reduced revenues. In their eyes, a business arguing to pay an accurate tax bill is the height of corporate evil, threatening to undermine education for Alabama’s children.
That’s a tremendously skewed perspective. Some countries and regimes don’t allow people to argue their government tax assessments. We don’t want to be any of them.
Lowe’s detractors aren’t defenders of the little guy; they’re the worst kind of statists. They’re crying foul about the same tools that give the average taxpayer the ability to push back against the government. The ability to push back on incorrect taxation shouldn’t be eroded simply because of a liberal bias against corporations.
This isn’t tax evasion. This isn’t a scam. And it certainly isn’t illegal. Lowe’s may not succeed with their argument, but they’d be silly not to try. That’s simply prudent financial management.
If Lowe’s is successful, revenues for state and local governments will take a hit. That’s a problem for politicians, not Lowe’s. If a homeowner successfully challenged her residential property appraisal, we wouldn’t expect her to find a replacement for the lost revenue as a matter of civic duty. Lowe’s isn’t any different other than the scale.
The company’s property tax arguments do beg for us to simplify the tax code. We tax all manner of property and economic activity in the most complicated ways imaginable. That complexity is unfair for those who don’t have the financial, legal or accounting resources to ensure they don’t pay more taxes than they owe. Lowe’s might be able to fight improper tax assessments, but smaller businesses or individuals might not.
With respect to Lowe’s, the left is arguing that the company should pay taxes they may not owe. That’s ridiculous. If anything, they should demand that our tax code be made simple enough that everyone knows what they owe in the first place.
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