Tiny Dancer Hit With Giant Tax Bill

June 20, 2006

Elton John is not feeling any love tonight from the Fulton County Assessor’s Office as they have just hit him with a property tax bill that he feels is $16,000 too high. The Grammy-award-winning singer has decided to challenge in court what he claims is too high of an assessment of the property value on the penthouse he owns in the Atlanta suburb. From WSB-TV in Atlanta:

Singer Elton John has filed a lawsuit against the Fulton County tax assessors office, saying the county overvalued his penthouse condominium.

The tax assessors office placed a value of $4.6 million on John’s 12,000-square-foot condo on Peachtree Street in Atlanta’s trendy Buckhead neighborhood.

But that value is $900,000 too much, the singer’s experts say. If he prevails, John would save $16,000 a year in taxes. If he loses, he can expect to pay $77,250 a year.

But money is not the issue, said Craig Klayman, a tax consultant hired to represent John in his lawsuit.

“I just don’t see how the county can justify that number,” Klayman said. “It’s just too high looking at what everybody else is valued at.” (Full Story)

All across the country, the way assessments are performed, as well as the occasional corruption among those who perform them, is a controversial issue. This high degree of subjectivity in assessments is likely to be one reason why, in a recent Tax Foundation poll, property taxes were viewed by Americans as the “least fair” of state and local taxes. The problem of subjectivity in assessments, as well as the ability for an appeals process, can lead to high compliance costs as people spend time and money fighting back against what they perceive to be an unfair tax bill.

This appeals process can also create a circle of reassessments because, as part of an appeal, owners will often cite their neighbors’ lower tax bills. The government can remedy this inequality in two ways: it can lower your taxes or raise your neighbor’s taxes. (And if the neighbor knows of the appeal that ends up raising his taxes, it is going to be a long, long time before the two neighbors speak to one another again.)

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