Recovery for a Leading Chemical Manufacturing Industry

An international manufacturer and supplier of chemicals faced significant tax compliance issues due to incorrect material group mappings in its Vertex tax automation system, leading to unnecessary tax payments, especially in West Virginia. Atlantis Asset Recovery conducted a thorough overpayment review, correcting tax applications for various material groups across multiple jurisdictions, including Texas and Mississippi.

Our Client

A Leading Digital Payments Technology Company Our client, one of the largest financial transaction companies in the world, encountered significant challenges with the property tax assessment of its newly constructed, state-of-the-art data center. Given the unique nature of data centers, a precise valuation was critical to avoid inflated tax liabilities.

Case Snapshot

Challenge: Overcoming the AssesSor’s ‘Cost Equals Value’ Assumption

The initial assessment aligned the construction costs of the data center with its market value. While this approach is fairly common, it did not fully account for factors such as rapid technological obsolescence, the specialized nature of certain components, and excess capacity, resulting in a valuation that did not reflect current market conditions.

Solution

Strategic Analysis and Appeal to Correct Overvaluation
    Atlantis Asset Recovery was tasked with rectifying this over-assessment. Our strategy included:
  • Identifying and Adjusting for Super-Adequate Features: We demonstrated that certain features, while valuable to the client, were excessive for the general market and thus overvalued
  • Applying Accelerated Depreciation Schedules:By analyzing the high costs associated with HVAC, mechanical, and electrical components, we successfully argued for accelerated depreciation, recognizing the rapid technological changes that affect these assets’ economic life
  • Incorporating Market Evolution Insights: Atlantis Asset Recovery conducted a forward-looking analysis of data center trends, showing how market perceptions of economic life and depreciation should adjust the assessment downward
  • Correcting Excess Capacity Valuation: The facility’s excess capacity was used to argue for obsolescence or inutility penalties, further reducing the assessed value
  • Personal Property Assessment Adjustments: We also tackled the larger personal property assessment, eliminating double taxation and correcting classification errors

      • Result

      Significant Tax Savings and Accurate Market Valuation , Our efforts led to substantial reductions in the client’s tax
      liabilities:
      1. $200,000 in 1-year real property tax savings
      2. $500,000 in 1-year personal property tax savings
      These results ensured that the data center’s assessment accurately reflected its market value, providing the client with significant financial relief while supporting the critical infrastructure of a global financial leader. Since the data center’s initial development, Atlantis Asset Recovery has been a trusted partner, saving the client over $2 million in property taxes through strategic management and fair valuations.

      Why Atlantis Asset Recovery?

      PROPERTY TAX Expertise for COMPLEX ASSETS
      Atlantis Asset Recovery ’s success in this case highlights our ability to manage complex industrial property tax assessments for highly specialized industrial facilities like data centers. Our approach combines strategic analysis with deep industry knowledge, ensuring that our clients receive the most accurate and favorable valuations possible. By partnering with Atlantis Asset Recovery , clients benefit from:
      • Proven Track Record: Decades of experience in reducing state and local tax liabilities for data centers through meticulous assessment reviews and appeals Specialized Knowledge: Expertise in the nuances of data centers that are often over-assessed due to traditional valuation methods
      • Client-Centric Approach We work closely with our clients to tailor solutions that meet their specific needs, resulting in significant tax savings and fair assessments


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