Property Tax Resources

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California Property Tax Updates

UPDATED september 2023

California Appellate Court Explains Basis for Deducting Nontaxable Intangible Assets in Valuing Complex Properties

Last August, the California Court of Appeal ruled that a landmark hotel located on San Francisco’s Union Square was entitled to a property tax reduction because the county assessor had not removed the full value of the management agreement between the hotel’s owner and the company the owner had hired to manage the hotel (SHR St. Francis LLC v. City and County of San Francisco).  The key element in the Court’s ruling was the property tax treatment of nontaxable intangible assets, including the hotel’s management agreement.  This is the first published appellate court decision that explains in detail the reasons for removing the full value of the management agreement in the assessment of hotel properties, including the need to deduct a “return on” intangible assets.  The implications of the SHR St. Francis decision are potentially far-reaching as the decision could benefit owners of all types of complex commercial and industrial properties who employ non-taxable intangible assets in operating their properties. 

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Greenberg Traurig, LLP
American Property Tax Counsel (APTC)

Arizona Property Tax Updates
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American Property Tax Counsel

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