Our client, Kimberly-Clark, is a global manufacturer in the consumer products industry—specifically pulp and paper. Their Jenks Mill facility located in Jenks, Oklahoma is a tissue mill that produces toilet paper, Kleenex, and paper towels. Their plant activities include pulping, papermaking, and converting operations.
The client had been overpaying property taxes attributable to the inclusion of non-taxable embedded intangibles. Even with an incentive agreement in place, and as assets rolled off this agreement, Kimberly-Clark was subject to additional and inaccurate taxation.
DMA brought an opportunity to Kimberly-Clark’s attention regarding potential non-taxable intangible assets embedded within its personal property tax rendition and reporting. Our strategic valuation professionals identified cost components within Kimberly-Clark’s asset base that were considered non-taxable in Oklahoma—which was a new route of exploration for our client.
Our team first examined Jenks Mill’s asset listing and asset capitalization history to identify major line items, assets, or projects that presented a non-taxable embedded intangible opportunity. We requested and received invoices and project cost breakdowns for several large projects that were implemented between 2009 and 2016, which allowed us to better understand the assets and adjust accordingly.
Working in conjunction with Kimberly-Clark project managers and engineering personnel, DMA reviewed seven project cost breakdowns in detail. Specifically, we searched and identified items that were considered non-taxable for property tax purposes. These non-taxable cost components were quantified and excluded from the 2022 filing and separately stated on Form 901-IP regarding exempt intangible personal property assets.
Our recommendation was accepted by the assessor’s office without question. This resulted in a Market Value reduction of roughly $11 million, equating to a one-year tax savings of about $115K.
DMA’s methodology and resulting savings were applied to future years as new assets were acquired and as assets came off the five-year exemption. Our unique approach was also applicable to other properties within the Kimberly-Clark portfolio.
Our Strategic Valuation Services team projects that this initial portion of the analysis will equate to over $1 million in savings over the life of the assets/projects reviewed at this specific location. Recently, we performed a site inspection to identify additional opportunities, and we anticipate our findings will lead to future and even more significant tax savings.
DMA’s Property Tax Strategic Valuation Services and Embedded Intangibles Review can be completed in an accelerated timeline with minimal interruption to personnel or business operations. Our experts can strategically review your company’s information, make recommendations for process improvements, and implement solutions to actualize significant tax savings.