Helping Courses
Fight the Tax Man

Success Story

A Denver-area property tax consulting firm is examining its clients' tax valuations carefully--and is saving them big money.            -by Anna Lazowski

   When property taxes are due, most golf course owners just pay up and hope they aren't paying too much.  But sometimes they are paying too much without even knowing it.
   After looking at the books of some of its golf clients, the staff at Tax Profile Services (TPS), a property tax consulting firm based in Denver, noticed that the courses were paying very high tax rates and decided to do a little investigating.
   That effort has saved TPS's client courses as much as $200,000.
   Robert Hayward, general manager at Pinehurst Golf and Country Club in Denver, says he became interested in TPS when he heard how much colleagues at other courses were saving on their taxes.
   Hayward believed the initial investment of $1,500 to get his course and books assessed by TPS was a minimal risk, so he called them up.
    "If [TPS] were to save me any money, then [the course] would get all of the savings and [TPS] would be paid a commission based on that [amount]," Hayward said.
   So TPS sent a tax appraiser out to tour the club. The next step was to pull county records and identify potential problem spots. Next, TPS filed a challenge so the county assessor's office would review the collected data.
   If that challenge had been denied TPS would have appealed the decision and the case could ultimately have reached the state level of appellate tax court or district court. But that was not necessary in Hayward's case. TPS was successful in getting the assessor to lower the original numbers to an adjusted value for the course, and Pinehurst's assessed value for tax purposes dropped to $8.8 million from $12.5 million. That saved the course $211,000 in taxes.
   Jeffrey Monroe, president of TPS, warns this is not a speedy process, and it may take 18 to 20 months in some states to resolve a challenge. He estimates that 80

percent of cases are denied at the local level and wind up being adjudicated by the courts. But while the process may be slow, Monroe believes it's worth the wait.
    "The amount of average reduction in value and ultimately in taxes is about 35 to 40 percent returned to the taxpayer." he said. "In the year 2000, we had 22 country clubs or daily fees go through the appeal process. Of that, we were able to cut the value by $87 million on 22 golf courses."
    Monroe says assessments are often high because courses are not being assessed strictly on the value of their real estate. Often, equipment and labor are included. "For property tax purposes, only the real estate value should show up on the tax roll, " Monroe said. "Uniformly across the United States the entire value of the golf course is showing up as real estate, We have to identify those other components and deduct them."
    Monroe says courses also are assessed incorrectly because of their locations.
    "Most of the time the land value is about five times higher than it should be because of the feeling that you can sell lots adjacent to a golf course for more than you can an open space that is restricted only to golf," he said. "There's a value transfer that the county assessors are taxing on the residential component."
    Steve Battisti, general manager at Ptarmigan Country Club in Fort Collins, Colo., credits TPS with finding out his course's taxable rate was assessed at about a million dollars more than it should have been. It was a lengthy process that ended with a state hearing, but the privately owned club is now expecting a return of about $48,000.
    "They're bulldogs," Battisti said. "Their purpose as far as I can understand is really trying to change the laws, the way things are being done in individual properties but hopefully in the future in the way things are done."
    Hayward says he plans to have TPS represent the course for their next assessment as well. And he was so impressed with the process, he asked Monroe to speak to the local Mile High Chapter of club managers.   "I invited them to speak to the group because there are some clubs that have not gone through this process and there's no down side to it," he said. "It's a total win situation."