Chat
Chat with Sales Hours: Monday-Friday 8:30 a.m. - 4:30 p.m. (CST)
Contact Sales
Call Sales Toll-Free 1-(866) 774-3282 Hours: Monday-Friday 7 a.m. - 5 p.m. (CST)
Product Login
Product Log-in
Product Support
Product Support
Email Sales
Contact Sales
After Hours
  • Support
  • Sign In Sign In
  • AUS NZ UK
CoreLogic - Home
  • Solutions
    view solutions by:

    Data Solutions

    • Lead Generation
    • Property Data
    • Location Intelligence

    Real Estate

    • Multiple Listing Enterprise
    • Agent & Broker

    Mortgage

    • Origination
    • Servicing
    • Appraisal
    • Commercial Property Tax

    Insurance

    • Hazard Risk
    • Catastrophe Risk Management
    • Risk Evaluation
    • Underwriting Automation
    • Weather
    • Claims Automation
    • Restoration
    • INTRCONNECT

    Mortgage Lenders

    • Origination

    Mortgage Servicers

    • Residential Property Tax
    • Default & Loss Mitigation
    • Portfolio Insight & Monitoring

    Mortgage Appraisers

    • Appraisal

    Real Estate Agents & Brokers

    • Agents & Brokers

    Real Estate MLS

    • Multiple Listing Enterprises

    Commercial Real Estate Owners

    • Commercial Property Tax

    Marketing Departments

    • Property Data

    Insurance Underwriters

    • Risk Evaluation
    • Underwriting Automation
    • Hazard Risk
    • Catastrophe Risk Management

    Insurance Risk Managers

    • Risk Evaluation
    • Hazard Risk
    • Catastrophe Risk Management

    Insurance Claims

    • Claims Automation
    • Restoration Contractors
    • Weather Verification

    Construction Contractors

    • Restoration Contractors

    General

    • Location Intelligence
    • Lead Generation
    • Data Solutions
  • Resources

    Reports

    • Climate Change
    • Construction Cost Update
    • Construction Insights
    • Home Price Insights
    • Homeowner Equity Insights
    • Loan Performance Insight
    • Mortgage Fraud
    • Property Tax Delinquency
    • Single-Family Rent Index

    Insight Blogs

    • Hazard HQ
    • Office of Chief Economist
    • Affordable Housing
    • Homebuying
    • Insurance
    • Other Articles

    More Resources

    • Events
    • Case Studies
    • White Papers
    • Podcasts
    • Quick Takes
  • Company
    • About
    • Leadership
    • Newsroom
    • Contact
    • Careers
  • Search
CoreLogic - Home
  • Solutions
  • Resources
  • Company

    • About
    • Leadership
    • Newsroom
    • Contact
    • Careers
  • Accounts

    • Products Sign-in
  • Contact

    • Sales Contact
    • Product Support
  • Regions

    • Australia
    • New Zealand
    • United Kingdom
  • Social

    • Facebook
    • Instagram
    • Linkedin
    • Twitter
    • Youtube
Solutions
VIEW BY:
  • Data Solutions

    • Lead Generation
    • Property Data
    • Location Intelligence
  • Real Estate

    • Multiple Listing Enterprise
    • Agent & Broker
  • Mortgage

    • Origination
    • Servicing
    • Appraisal
    • Commercial Property Tax
  • Insurance

    • Hazard Risk
    • Catastrophe Risk Management
    • Risk Evaluation
    • Underwriting Automation
    • Weather
    • Claims Automation
    • Restoration
    • INTRCONNECT
  • Mortgage Lenders

    • Origination
  • Mortgage Servicers

    • Residential Property Tax
    • Default & Loss Mitigation
    • Portfolio Insight & Monitoring
  • Mortgage Appraisers

    • Appraisal
  • Real Estate Agents & Brokers

    • Agents & Brokers
  • Real Estate MLS

    • Multiple Listing Enterprises
  • Commercial Real Estate Owners

    • Commercial Property Tax
  • Marketing Departments

    • Property Data
  • Insurance Underwriters

    • Risk Evaluation
    • Underwriting Automation
    • Hazard Risk
    • Catastrophe Risk Management
  • Insurance Risk Managers

    • Risk Evaluation
    • Hazard Risk
    • Catastrophe Risk Management
  • Insurance Claims

    • Claims Automation
    • Restoration Contractors
    • Weather Verification
  • Construction Contractors

    • Restoration Contractors
  • General

    • Location Intelligence
    • Lead Generation
    • Data Solutions
Resources
  • Reports

    • Climate Change
    • Construction Cost Update
    • Construction Insights
    • Home Price Insights
    • Homeowner Equity Insights
    • Loan Performance Insight
    • Mortgage Fraud
    • Property Tax Delinquency
    • Single-Family Rent Index
  • Insight Blogs

    • Hazard HQ
    • Office of Chief Economist
    • Affordable Housing
    • Homebuying
    • Insurance
    • Other Articles
  • More Resources

    • Events
    • Case Studies
    • White Papers
    • Podcasts
    • Quick Takes

Home / Intelligence / Blogs / Other Articles / Comparing the Cost of Owning and Operating Commercial Real Estate across the United States

ABOUT THE AUTHOR
Dominique Lalisse
Dominique Lalisse
Principal, Product Management
View Profile
  • October 22, 2021

Comparing the Cost of Owning and Operating Commercial Real Estate across the United States

Rajiv Koya, Senior Professional, Product Management, also contributed to this story

Overview of commercial property taxation

The accurate estimation of the total amount of real property tax in any given area is a challenging task considering the complexity and heterogeneity of property taxation in the United States.  Real property taxation includes the land and everything permanently attached to it, inclusive of all interests, benefits and rights inherent in the ownership of real estate. In addition, for all but 12 states commercial properties are subject to tangible personal property tax for any “moveable” property used to generate income such as machinery and equipment, building features, inventory or vehicles. 

For tangible personal property taxation, states can be grouped into 3 categories:

© 2021 CoreLogic,Inc., All rights reserved.

According to an August 2019 Tax Foundation publication, tangible personal property tax represents less than 10% of the total property tax collected at the state level. Its effect on property tax is highly dependent on the type of real property, thus tangible personal property is not included in the state comparative calculation in Figure 1. This means site selection and investment decisions can be influenced by commercial property tax rates, which investors should consider when selecting the best economic options for their operating sites. 

Figure 1: States Ranked by Median Effective Commercial Property Tax Rate (Percent of Property Market Value). Highlighted states have little or no tangible personal property taxation.

© 2021 CoreLogic,Inc., All rights reserved.

Notes:

  1. Tax rate includes RE taxes paid at all levels of government (or just to the state, excluding taxes paid to local jurisdictions)
  2. Multifamily residential rental properties of 10+ units are included in this study
  3. Tax rate calculation excludes tangible personal property tax

The total property tax amount can include property taxes paid to multiple agencies with varying formulas, including both fixed and variable components. To provide a meaningful comparison of property tax rates among states, all existing levels of collection need to be considered. In Texas, for example, one might pay taxes to a county, a school district and a Municipal Utility District (MUD); in California, one might only pay county taxes.

CoreLogic’s state-by-state calculations

Using the CoreLogic comprehensive property values and tax rates data at the local level, we have calculated the median overall commercial property tax rates nationally and by state. Our analysis takes into consideration all taxing and collection entities and provides a complete state-level picture of the cost of owning commercial real estate property. The rates reflect the annual cost of owning a set dollar amount of commercial real estate property and providing an accurate comparison of critical components of the operating cost of a business. However, it does not reflect the actual differences in market value for identical assets, so it is not a full comparison of the cost of operation. 

The study was enabled by CoreLogic’s ability to identify Commercial Real Estate parcels and properties using the county provided land use codes. Agricultural parcels were not included in the median calculation to avoid a bias in the results. A total of more than 8.8 million parcels nationwide were used to calculate the median tax rates using actual annual tax amounts and County provided market value estimates of the parcels.

While higher median tax rates are seen primarily in the northeastern states and states which do not charge tangible personal property tax, notable exceptions are Kansas (which has a median commercial property tax rate of 3.1 percent) and Indiana (with a median commercial property tax rate of 2.8 percent). Typically, the states with the highest property tax rates, except for Illinois, have multiple levels of tax collection. Conversely, most states with low commercial median tax rates have a single level of tax collection at the county level and most tax tangible personal property. Other than Hawaii, the lowest median property tax rates are primarily in the southern states.

Figure 2: Heat Map of Median Commercial Property Tax Rates

© 2021 CoreLogic,Inc., All rights reserved.

Figure 2 shows the distribution of states by median commercial real property tax rates categories, indicating that:

  • 23 states, or 45 percent of the U.S., have a median property tax rate of less than 1.5 percent.
  • 8 states, or 16 percent of the U.S., have a median property tax rate of between 1.5 and 2 percent.
  • 14 states, or 27 percent of the U.S., have a median property tax rate of more than 2 and 2.5 percent.
  • 6 states, or 12 percent of the U.S., have a median property tax rate above 2.5 percent.

Given the many differences and complex rules on exemptions by industry, we recommend consulting with a property tax servicing or consulting firm to review the specifics of a property. We are confident these high-level statistics provide enough of an overview to make a comparison between operating locations. As part of site selection, investors need to select the best economic options for their operating sites. Part of that equation is the commercial property tax rate which is combined with the actual cost of purchasing land and buildings. Land and building will drive investment cost while property tax is part of the ongoing operating cost. CoreLogic provides tax reporting and payment services for residential and commercial properties nationwide.  For more information about commercial tax solutions please email sales@corelogic.com.

Reference: “States should continue to reform taxes on Tangible Personal Property” by Garrett Watson – Tax Foundation Fiscal Act Number 668 – August 2019

  • Category: Blogs, Intelligence, Other Articles
  • Tags: Commercial Property, Real Estate, Tax Services
ABOUT THE AUTHOR
Dominique Lalisse
Dominique Lalisse
Principal, Product Management
View Profile

Related Posts

CSI_Promo_Mar2023
Blogs

US CoreLogic S&P Case-Shiller Index Gain Slows to Pre-Pandemic Low, Up by 3.8% Year Over Year in January

The index continued to decline year over year in January, again posting a single-digit gain.

March 28, 2023
Tornado footprints in Southern California captured by CoreLogic's weather verification technology as viewed in CoreLogic Reactor™.
Blogs

A Rare Los Angeles Tornado and Near Hurricane-Force Winds in San Francisco

CoreLogic Weather Verification Services captured wind and tornado footprints from the severe weather system in California.

March 24, 2023
atmospheric rivers california
Core Conversations

What Was it Really Like to Live Through the California Floods? Our Team Spills

A Conversation With Kent David and Tom Larsen Since the beginning of the year, California has been drenched by atmospheric rivers. The flooding in California

March 22, 2023

About Corelogic

  • Newsroom
  • Leadership
  • Careers
  • Ethics & Compliance

Accounts

  • Products Sign-in

Contact

  • Sales Contact
  • Product Support

Regions

  • CoreLogic Australia
  • CoreLogic New Zealand
  • CoreLogic UK

Follow & Connect

  • Facebook
  • Instagram
  • Linkedin
  • Twitter
  • YouTube
© 2023 CoreLogic. All rights reserved.
  • Legal
  • Privacy Policy
  • CCPA
  • Cookie Preferences
  • Security
  • Sitemap
  • Accessibility
  • Legal
  • Privacy Policy
  • CCPA
  • Cookie Preferences
  • Security
  • Sitemap
  • Accessibility