Pit & Quarry, November 2015
Battling city hall Take advantage of laws that can offer tax breaks BY MARK E BATTERSBY onsider it the perfect Catch 22 Businesses are making less money and paying less in taxes at the same time costs are going up for governments at the state and local levels Many states are raising taxes across the board property sales income and excise with more increases projected C While thats happening technology also enables BUSINESS both state and local governments to better audit and more efficiently compare notes In other words enforcement is becoming more aggressive and more issue focused Attempting to prevent local state or even federal lawmakers from increasing the amount of rules regulations fees and taxes that every aggregates operation must contend with is often fruitless and always expensive Battling the city hall county or statehouse over zoning issues unfairly levied fines property tax assessments and tax bills can be even more expensive Tilting at windmills Fortunately our tax laws contain a number of unique tax breaks and more routine deductions to help every business reduce the cost of those battles While most quarries and sand and gravel pits are grandfathered or exempt from changes in zoning laws zoning restrictions can effectively slow plans for expansion seriously erode the operations customer base and otherwise create an impact on the business bottom line Unfortunately the U S Tax Court has denied a tax deduction for a decrease in property value resulting from government restrictions or zoning laws Adding insult to injury the cost of challenging zoning laws must be capitalized rather than deducted as an immediate expense Potentially even more painful are the eminent domain laws that are increasingly being used to take property away from owners While any gain that results is taxable an aggregates business does not recognize the gain after involuntary conversions such as theft destruction or condemnation so long as the converted property is replaced with property that is similar to the property that was lost or taken Fighting improvement taxes Any tax that is in reality an assessment for local benefits such as streets sidewalks and similar improvements is not deductible by the property owner except where it is levied for the purpose of maintenance and repair or of meeting interest charges on local benefits According to the tax rules it is up to the taxpayer to show an allocation of amounts assessed for different purposes 58 PIT QUARRY November 2015 www pitandquarry com ISTOCK COM LVCANDY Tax laws contain a number of unique tax breaks and routine deductions to help every business reduce costs
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