My name is Don Barnhart and I am a Property Tax Accountant with Southwest Airlines. I’ve worked in many different corporate environments and held a variety of positions through the years – from being an Assistant City Manager of a small Texas town (Electra, Texas: population somewhere around 2,000) to the position I have now. I have three degrees: one in History from the University of Texas in Austin, an Accounting degree from Midwestern State in Wichita Falls, TX (the waterfall is fake by the way, its run by a pump), and an MBA from Midwestern State.
Southwest Airlines can present a variety of challenges for any accountant. At the same time, Southwest’s spirited team culture makes them worthwhile endeavors. The main challenge for a property tax accountant is getting the lowest possible assessments for the corporate assets – the lower the assessment, the lower the tax bill. Always under public and government scrutiny, air carriers are obvious targets for tax jurisdictions. Since Southwest, along with its subsidiary AirTran Airways, is the largest U.S. domestic airline, the Southwest Tax Department must be under constant vigilance for any tax saving opportunity.
The property tax process begins with the tax return process. During the spring, the tax returns are filed with state and county tax jurisdictions. Needless to say, those are the busiest months of the year. Crucial data is gathered from the Accounting and Info System Departments to supply the required data for the returns. This data includes assets costs, manufacture dates, financial statements, depreciation costs, and air travel statistics. The highest asset costs are the aircraft fleets which vary depending on the model and year manufactured. Research is crucial to determine the correct asset class, its respective depreciation life, and whether the asset is taxable or not. Software and licensed vehicles are often tax exempt.
The property tax accountant’s most important tool is the tax calendar, used to keep track of due dates for tax returns, appeals, and invoices. Penalties for missed due dates can be severe and uncompromising.
Based on age, the type of asset, and the financial statements, the tax assessors determine the assessed values of the various property sites. These sites consist of real property and business personal property.
Real property is property that is permanently affixed to the site and includes buildings, fences, paved lots, towers, and fuel tanks.
Personal property is not affixed; it can be moved. These assets consist of vehicles, machinery, passenger service equipment, communication equipment, operating equipment, and computers.
The real challenge occurs when the assessments arrive. Research on previous assessments and the assessor’s work papers will determine if an assessment is fair and not excessive. A protest is filed to receive a hearing and obtain a change of the assessed value. Usually values are argued informally by conference call. If agreed, the board of assessors will change the value or issue a refund if the tax had already been paid. Protests can be resolved quickly or take months through legal proceedings.
Once the assessed values are finalized, taxable values are calculated and multiplied by the tax rate to come up with the invoice amount. The tax collectors mail out the invoices for each property site that contains Southwest owned assets. Schools and bond issues are usually the biggest recipients of property tax dollars. Because property tax invoices are usually extremely high and are paid within a few months of the fiscal year, they are charged to an accrual account. Tax payments are estimated prior to the beginning of the fiscal year to determine the monthly accrued expense.
Property Tax certainly has its hazards, but the benefits of a terrific employer clearly outweigh any detriments. If you like a challenge, have an engaging personality, and like to have fun, Southwest Airlines is the place for you.