Property Tax Reduction
Companies use fixed assets for use in its operations – examples include equipment, furniture and fixtures, buildings and leasehold improvements. In addition to these traditional fixed assets, many companies also use technology systems like Sage, PowerPlan, Oracle JDE, BNA and SAP to track and manage their fixed assets. These systems typically contain large volumes of transactional and historical data. In the power and utility industry, the chance to help identify, quantify and claim a property tax reduction related to transmission and distribution assets can be a significant benefit for companies; in addition, utilizing a cloud-based data platform would be a perfect fit in these scenarios. By understanding the fixed asset modules and identifying key input data streams, data platforms can be built around these systems to help server advanced analytics, such as identifying ghost assets for property tax reduction.
By understanding a fixed asset system, like PowerPlan’s continuing property records (CPR) data tables and the PowerPlan property tax module, a Datawarehouse can be built that houses datasets in a specific way that would assist with analytics capabilities. Other systems like geographic information systems (GIS) can also be housed in the Datawarehouse. This is important since tax parcel transmission and distribution (T&D) assets should be compared against GIS data to identify where a power and utility company may be overpaying in property tax. Working only with CPR data may be more challenging since T&D are often mass assets and may require broad assumptions to retrieve data in a format in which there is a sufficient audit trail to show the link into the more precise GIS breakdown of, for example, poles and conductor. If a company uses the PowerPlan property tax module, the mapping process can be historically followed and used to move such assets into tax parcels. Then by using the location deification for these parcels, a direct link to the GIS information could be produced.
To approach such a project, companies may need data analytics and tax teams working together. These teams should assess if a power and utility company is using the PowerPlan property tax module and work to understand the current and historical process for putting T&D cost into tax parcels. If companies are not using PowerPlan property tax, they can still work with their property tax team to understand their process for mapping T&D assets into tax parcels. Power Plan CPR tables can then be leveraged to verify whether the current process can support an audit challenge. In addition, the data analytics and tax teams can determine if there is also a robust and current GIS system.
Another use case for these technology systems would be applying repair testing procedures on qualified assets and work orders. Many utilities currently have either a manual process to identify a repair’s eligible activity or an automated process in fixed asset systems like PowerPlan. A data platform can help either automate a manual repairs qualification process or test a process already in place within fixed assets systems. A key data point in these types of reviews would be circuit counts for units of property, such as poles and conductions, and making sure they are as accurate as possible.
This repairs review acts as a suitable add-on to the ghost assets review process as well, since certain critical steps like transmission and distribution mapping to accurate GIS information would already have been performed. Using GIS mapping, comparison can be made to the current method for measuring eligibility for repairs and quantify any lost deductions resulting from overly conservative circuit counts.
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