The value of “embedded intangible assets” is at the heart of a personal property tax dispute between Comanche County Assessor Grant Edwards and the Goodyear tire manufacturing company.
Embedded intangibles are nonphysical components - such as software, licenses, engineering/ design costs, and warranties that are bundled with a tangible asset (equipment or property) but do not contribute to its fair market value. In many jurisdictions, these are nontaxable and should be excluded from property tax assessments.
Consultant Bryan Shuck told the Comanche County Equalization Board — J.P. Richard, Dustin Glover, and Dean Penello — that a computer operating system is not an intangible asset “because the computer has to have that to be able to operate.” An intangible asset would be a program such as Word or Excel, he said.
The Equalization Board retained Shuck, personal property supervisor in the Cleveland County Assessor’s Office, to provide some guidance in the complicated matter.
For example, Lawton’s Goodyear plant has 17,000 assets, Shuck said.
Matt Shirack, director of property tax consulting with the Ryan tax agency representing Goodyear, said that the manual for just “one piece of equipment” at the tire plant is 1,500 pages long. He was accompanied by Matthew Bodie, taxpayer’s representative with Ryan LLC.
Goodyear’s tax protest focuses on 10 separate accounts. “We need to make sure all of these accounts are correct,” Richard said.
“We are about $35 million apart [from Ryan LLC] on all 10 accounts,” Shuck said. “I would not feel comfortable ‘splitting the baby’ on all of those accounts today.”
After approximately 45 minutes of debate Wednesday morning, the Equalization Board voted to table the discussion to Sept. 28.