Billboard Taxation?


#1

Frank or anyone with info,

New to the forum here, and it’s great! My question is; how can the governemnt, whether it’d be a mucipilaity, county, etc., levy a tax on a billboard? A billboard is personal property? Is the tax computed by increasing the assessed value of the land, and you have an obligation to pay the owner the increase in tax? Or do they actually tax you, the billboard company/operator? And how do they value the billboards, based on structural costs, or economic value?

Thanks,

Mark


#2

Mark,

Great questions, as you have found one the most grey areas of the billboard business. There is no right or wrong answers to these questions, as every city approaches them differently, so here are my answers based on the "average"of all the markets I have been in:

  1. Yes, a city can levy a tax on a billboard as personal property.
  2. No, you cannot tax a billboard twice. A city can choose either personal property tax or real property tax, but they can’t tax it as both. Since a billboard is not permanently affixed and can be removed it is, by definition, personal property.
  3. Billboards are normally assessed based on depreciated value – just like a car. I have never been taxed on them based on a value higher than the cost of construction.

But the terrible truth is that my past experience has no bearing on the facts in your market. You can ask the tax assessor these same questions in your area and he’ll give you a much more accurate picture of the reality of your city.


#3

Good Morning! I am new to the forum, the billboard business and to communicating on-line in this venue. I’m a real estate appraiser in Houston, Texas and am interested in learning more about billboard valuation. I have read some appraisals on billboards and my conclusion so far is there appears to be a void of a standard approach or available data. From what I have read, it appears the local ordinances and permitting would have great influence on value. If anyone has any insite or further information on this I would appreciate the help. Also, is there any place I can go for historical data on sales of billboards?


#4

Mike,

Valuing billboards is extremely difficult. The normal way is based on the income approach, but even that is very tricky if you are not used to deriving the income of a billboard. We have a service here on the site where we give our own opinions (not to be construed as an appraisal) on sign values for $199. We do some basic market research on ad rates, and couple that with our experience in sign operations and budgets.