The issue usually surfaces when a property owner and the taxing/assessment jurisdiction disagree on the value of an income-producing property. If you don't agree on the value of a property, then you cannot agree on the property tax burden, because in an ad valorem system, the taxes are "according to the value". But, we cannot agree on the value. So we remove the tax burden from the operating expenses, and later add back the effective tax rate, which is agreed upon, to get the loaded tax rate. Otherwise, there is circular logic involved. Both sides, no matter how bitterly opposed in their estimates of market value, nearly always agree on this methodology. I am sure those wanting to learn more, and/or who disagree with my position, can research the issue further in Lum Library of A.I., the IAAO, or plain old Google. Hope this helps.
Kevin
