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We represented a property owner, which operates a family-owned business as a beverage distribution company located in the Graduate Hospital section of Philadelphia, in her attempt to reduce the real estate taxes due on account of the property. The beverage distribution company is the oldest beer distributor in the city of Philadelphia – starting right after Prohibition in 1933.

In Philadelphia, the city of Philadelphia’s Office of Property Assessment (OPA) determines what every piece of property within city limits is worth.  The assessed dollar value of the property is used to calculate the property’s real estate taxes so due.

Under the tax rate at the time, for every $100,000 in assessed value, the property owner pays approximately $1,400 in real estate taxes to the city of Philadelphia

When we were retained by the property owner, the city of Philadelphia notified the property owner that it believed that the assessed value of the property was $3.3 million at the time.

In other words, the city of Philadelphia expected that the property owner pay $46,200 in real estate taxes on an annual basis.

We initially filed a first-level review application with the OPA, requesting that it reconsider its proposed real estate assessment of the property.

When the OPA rejected the governmental application to reduce the assessed value of the property in an amount satisfactory to the property, we filed an appeal of the proposed assessed value to the city of Philadelphia’s Board of Revision of Taxes (BRT) which makes sure that real estate market values are fair and accurate.

After much negotiations with the OPA while the real estate tax assessment appeal was pending before the BRT, we convinced the OPA to reduce the assessed value of the property to $2.2 million.  In doing so, the real estate taxes due on account of this reduction in the assessed value of the property equaled $30,800, equating to a savings of $15,400 for the tax year appealed.

As part of the settlement of the pending real estate tax assessment appeal, the OPA also agreed to freeze the assessed value of the property for the following tax year as well, meaning that the property owner saved another $15,400 in real estate taxes which would have been due to the city but for our efforts in representing them.

Since the property owner also operated her family-owned business at the property, she also owed use and occupancy to the city of Philadelphia.

In Philadelphia, use and occupancy taxes are calculated by taking the assessed value of the property multiplied by 1.21% and deducting the first $2,000.00 from the amount of use and occupancy taxes which would otherwise due by the property owner on an annual basis.

Based upon the assessed value of $3.3 million, $37,930 in use and occupancy taxes were due by the property owner during that tax year.  As a result of the reduced assessed value of $2.2 million, the use and occupancy taxes for that tax year was reduced to $24,620.  Since this reduction occurred over the course of a couple tax years, we saved the property owner an additional $26,620 in monies which would otherwise be due to the city on account of the property.

In all, we saved a family-owned business almost $55,000 in taxes which were originally due to the city.