Yes most certainly. The idea is to look at tax comps and understand if the subject pays a fair tax reconcile and use that number in your pro forma. Taxes could be higher than what current taxes are and most likely are since most taxing bodies still want more money. Therefore, even though assessed values decrease, after the math is done your rate increases.
Taxes should be about 20% of EFGI. Yet for some reason these assessors think more is okay and okay to them is from 40-50% that really squeezes income! I have seen some properties paying upwards of 80 to 90% and sometimes over 100% of the efgi. How taking from the rich works to further more hiring and the building of equity for more development just is inconceivable. Yet those taxing bodies seem to think income producing property just makes so much money and they are entitled to more more more. Since the taxing bodies must grow and after all as Obama says it is the government that builds business!
If I am off base then please someone speak up and correct my perceptions of how the facts affect our economy! Since I see this over and over and over.
So yes include the taxes in the expenses. It is one of the basic ones, such as Insurance, CAM, Repairs, Utilities and should include reserves. Do not forget to estimate your market vacancy factor, not the subject the market for your EFGI.