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DC Annual Property Taxes: What Commercial Real-Estate Companies Essentially Pay

Posted on Aug 21, 2015

If you are a resident, business owner or are interested in staying informed on the ins and outs of local commercial taxes like Frank Haney, then this comprehensive editorial that will aid you with current DC tax facts. Knowing when to pay your commercial taxes and staying in touch with how much you truly have to pay is vital. The process isn’t extremely complicated and simple computation can help demystify common question with concrete answers.

Inside Commercial Property Taxes

There are several significant things that should be understood before computing your annual commercial real-estate taxes. This includes knowing what happens before you receive your bill. The process that your local government utilizes is basically a straight forward method. Generally, your DC commercial real-estate taxes began with an income to expense formula. This important information is sent to the proper location in your area on a detailed form.

All of the information that you provide on this form will be used to calculate property assessments. Dependent on the value of the commercial property, you may owe the same that you have paid the previous year. Additionally, according to the accurate and current information that you have provided on your income to expenses form, you may owe significantly less or more than you have paid previous years in DC.

Noteworthy Info

It is important to note, however, that tax laws do change and staying abreast with all current changes can help you to save more time and money for the long term. If you believe that a mistake has been made during the annual tax process in DC, there is a process you can follow to correct it. It’s important to make sure that all the information you provided is fully detailed and accurate. Sometimes, mistakes do happen and usually the appeals process can rectify this situation.

Computing What’s Owed

Commercial entities that owe real-estate taxes in the DC area follow a concise method to calculate what is owed correctly. Property that is categorized as commercial have two separate tiers.

When annual taxes are owed, it is placed in the Class-29(A) or Class-2(B) category. Class-29(A) pays $1.65 for every $100.00 of the 1st three million dollars ($3,000,000) of the property assessed value for the current year.

For example, if company XYZ has a property that has been assessed this year for less than $3,000,00 but not more than that amount ($1,000,000 is the assessment for company XYZ). This means that XYZ will have to pay $1.65 for every $100 of the assessed commercial property value.

The formula is: 1st step ($) 100 divided by ($) 1,000,000 = ($) 10,000. 2nd step ($) 10,000 multiplied by 1.65 = ($) 16,500 or (1,000,000 ÷100) x 1.65= $16,500.

The algebraic formula is 1st step 1,000,000(100) =X. 2nd step (X) * 1.65 = (X) $16,500.00 (x = the amount of taxes owed and x meaning unidentified answer or value).

But let’s suppose that company XYZ has a property assessment of 3 million and five dollars ($3,000,005). That will put this company in the Class-2(B) bracket. The formula for this would be as follows: basic computation method 1st step ($) 3,000,000.00 divided by ($)100 = $30,000.00. 2nd step $30,000.00 + ($1.85 x $5.00) =?
Therefore, 1.85 x 5.00 = $9.25 plus $30,000.00 = $30,009.25 amount owed.

Formula Chart

Commercial Real-Estate Companies DC $3,000,00.00 or Less
$1.65 for every $100.00 of Principal $3,000,000.00 value assessed commercial property
= Class-2(A)

In Addition, add to Commercial Real-Estate Companies in DC Over that are $3,000,00.00
$1.85 for every $100 of value assessed commercial property
= Class-2(B)