Overview: Personal Property Appraisal Process
Taxable personal property means all tangible equipment used to conduct business. A chief difference between personal property and real property is mobility. Land and improvements to land are considered real property. Taxable personal property includes machinery and equipment used in agriculture, construction, logging, manufacturing, and offices. It also includes supplies and materials that are not held for sale or do not become an ingredient or component of an article being produced for sale. Furniture and fixtures in commercial use, leased equipment, certain leasehold improvements, and lessee-owned improvements on public land are considered taxable personal property.
Everyone who owns personal property used in a business must complete a personal property listing by April 30 each year. The listing must include a description of the equipment, its cost, and the acquisition date. The Assessor uses the listing to value equipment for taxes payable the following year. Personal property tax rates are the same as for real property.
What Personal Property is Exempt from Taxes?
Many types of personal property are exempt from taxation. These include livestock, inventories held solely for resale, intangible personal property and personal effects and household items not used for business. Property held for lease to others is not considered part of a business’ inventory and, therefore, is taxable. Farmers can apply for a partial exemption on machinery and equipment used exclusively for growing and producing commercial agricultural products.
What is the Head of Family Exemption and Who Qualifies?
Businesses owned by sole proprietors may be eligible to receive a $15,000 exemption on the reported assessed value of personal property; this would affect taxes due in the following year. To qualify for this exemption, you must be a sole proprietor AND one of the following:
- the head of a family with family members living in the same household,
- a citizen over age 65 with 10 continuous years of state residency, OR
- a widow or widower.
This exemption must be applied for annually when submitting the Personal Property Listing.
What is the Farm Machinery and Equipment Exemption and Who Qualifies?
Most farm equipment, machinery, and supplies are subject to personal property tax. Certain machinery and equipment that is owned by a farmer and used exclusively in growing and producing agricultural or aqua cultural products, such as hay, cattle, or oysters, may be exempt from state school levies. It must be applied for annually.
How Are Personal Property Assessments Processed?
Most personal property assessments are based on information provided by the taxpayer on Personal Property Listings provided by the Assessor. The Assessor uses information provided by the taxpayer to determine value, taking into consideration the age, cost, and type of property. When the listing is processed and the equipment valued and entered on the assessment roll, a Personal Property Value Change Notice is mailed to the taxpayer.
When Are Personal Property Listings Due?
The listings are mailed to established accounts in January each year and must be returned to the Assessor by April 30.
A tax penalty of 5 percent per month (up to 25 percent) will be applied to listings received after April 30. If April 30 falls on a weekend, the deadline is extended to May 1 or May 2. A penalty of 25 percent of the tax due in the following year will be applied for failure to file an listing.
How can I get a listing for a new business?
New businesses can request a personal property listing via e-mail. Call us at (360) 867-2200 or drop by the office at 2000 Lakeridge Drive SW.
Can existing businesses file on-line?
Beginning in 2008, businesses with an existing account will be able to access their account here. Detailed instructions are found on the eFile website, and a confidential login name and password will be emailed to you when you sign up.
What if I close my business?
Report the details (including the disposition of equipment) to our office via e-mail or on the listing. If the equipment is in your possession, continue to file the listing - due every April 30th, as usual until it is sold or disposed of.
Please don’t confuse relocating, selling, walking away from, or reorganizing the business, with closing it. You still need to report the equipment. If you don’t have the equipment, we need to know what you did with it. Specifically: the date that the business closed and the location of the equipment. If sold: sale date, sale price, new owner's name, new owner's address.
The Assessor's value is way too high - what can I do?
If you feel the Assessor's value is too high, please provide a copy of your Depreciation Schedule, along with a list of your expensed and leased equipment, if any, to the Assessor's Office for review.
When can I appeal my assessment?
You have 30 days from the date on the Value Change Notice.
Who do I talk to about an appeal?
The first step should be to contact our office, if you are not satisfied with the results that you receive, then you can appeal the decision to the Board of Equalization. If you disagree with our calculation on reported assets, call us at 360-867-2200 or e-mail us.