MERIDEN — The City Council
Under terms of the proposed contract, Tax Management will use audits to help the city assessor verify the accuracy of business taxpayers’ listing of personal property over three years. This includes manufacturing and office equipment. Tax Management will receive 40% of all taxes and penalties generated through audits for the first year, plus
Tax Management is a nationwide company and is known to the city’s current tax assessor, City Manager Brian Daniels told the council’s Finance Committee last week. He added it’s not an adversarial process, as some business owners don’t always know what to list.
“We never did a citywide audit,” Daniels said. “This is the best proposal we have.”
The City Council in October authorized Daniels to seek bids on companies that will visit and review personal property accounts greater than $50,000. City assessors will assign the audits to Tax Management and fully supervise the process.
“It’s a revaluation year,” Daniels said. “There is going to be a shift from commercial to residential. It’s a matter of going out and looking at equipment and talking to people. They understand their (business) obligation to report this stuff.”
The city’s grand list for 2025 calculates all assessed properties and is used to set the budget. It is expected to be complete on Feb. 28.
City Attorney Emily Holland said in October the firm will identify companies with equipment or other personal property they are not paying taxes on, which could include computers, printers, office furniture, manufacturing machinery and more. Assessments are based on 70% of the equipment’s depreciated value. Auditors will inspect the premises, and turn over the business’ asset list to the city assessor, who sends the owner a revised tax bill with the new amount.
All owners of business personal property must complete and return a personal property declaration to the assessor no later than Nov. 1 annually, according to state and local laws. If the declaration is not filed, the assessor is required by state statute to complete a declaration for the owner based on the best information available, and add a 25% penalty. A penalty is also assessed if the declaration is submitted after the Nov. 1 deadline or it is found that assets have been omitted from the personal property declaration.
The city agrees to provide Tax Management with prior years the audits are to be performed.The audits are not considered an appraisal except the assessor may use the audit to form an opinion of an estimated value, according to the contract.
The agreement also states all legal costs stemming from an appeal will be paid by city. Tax Management will be responsible for defending its audit findings through the appeals process without additional cost to the city.
Finance Committee and City Council members had few comments about the proposal one member who sought clarification over which businesses would be audited. Commercial and home-based businesses with less than $50,000 in personal property would not be impacted, officials said. One member asked and how the added revenue would be reflected in the budget.
“It’s additional tax revenue,” Daniels said. “The more tax revenue you collect, the lower the mill rate.”