HomeMy WebLinkAboutIR 7821 INFORMAL REPORT TO CITY WUNCIL MEMBERS No. 7821
�oereaEo April 12, 1994
To the Mayor and Members of the City Council
0iis
rEX Subject:
1873 The Appraisal of Billboards
Billboards are appraised by the Tarrant Appraisal District(TAD) and values are reported to the City
on the appraisal rolls every July,as required by state property tax law.
Billboards are carried on the appraisal rolls as both business personal property and real property.
The reason for the dual classification is that in the City of Fort Worth,one company owns more than
half the billboards in the City. Patrick Media owns approximately 450 billboards with a total
appraised value of $3,173,549. For the convenience of the business and TAD, the accounts are
consolidated into one personal property account.
The remaining billboards total 417,with an appraised value of$3,079,227. There are various owners
of these billboards (i.e., May Advertising, Moore, and 3M). These accounts are carried on the
appraisal rolls as separate real property accounts.
Billboards are individually appraised using the cost method. Standard construction cost guidelines
are used, and then,normal depreciation methods, features,economic obsolescence, etc., are used to
determine current market value. Billboard construction features, such as wood, I-beam, tubular
steel, two-sided, computerized, lighted, etc., are used to modify the cost schedules and to
individualize the appraisal of each billboard.
Market value is not used because there are so few sales of billboards. Occasionally, through
newspaper reports of billboard sales between companies,TAD has tried to determine value based on
the sale. The courts have ruled that part of the sales data is considered intangible because companies
are selling franchises,not just the physical billboard. Intangibles,such as franchise sales,are exempt
from ad valorem taxation.
The income method of appraisal is not used because companies are very guarded with their leasing
data, primarily because they are concerned about disclosure to their competitors. TAD has
attempted to obtain data from companies, but few have come forward with anything other than
vague information.
According to the legal counsel of the State Comptroller's Office, Tax Division, TAD's method of
appraising billboards is standard across the state.
Dallas includes another modifier in its valuation, specifically, traffic flow or the exposure of the
billboard. However,to accurately use this factor,data on how much traffic,what kind of traffic,the
models and ages of vehicles exposed, etc., would have to be determined. There are so many
variables with this modifier,TAD has not considered it cost effective.
Mr.John Marshall,the Executive Director and Chief Appraiser of TAD,will be glad to meet with the
Council to discuss billboard appraisals.
OFFtCIAI. RECORD
re-Bob Terrell CRY SECRETARY
City Manager
FT. WORTH, TMX. --
ISSUED BY THE CITY MANAGER FORT WORTH,TEXAS