Business personal property includes tangible and intangible personal property. Real estate, minerals and tangible personal property are taxed in most states. In this article, you’ll get to know about the elements that make up business personal property, how this property impacts the value of your real estate and how to leverage it to maximize property tax savings.
What Is Business Personal Property?
When you think of your commercial real estate, you’re likely to picture buildings, land and other structures. But, have you ever considered the impact of what’s inside your buildings when you review your property taxes?
Every business has furniture, fixtures, equipment, inventory or other components owned by the company that lend themselves to the production of income. This is considered business personal property, and it is taxable in many jurisdictions.
Why Is Business Personal Property Valued?
There are a fairly consistent set of reasons people require valuation of business personal property including:
Accounting / depreciation
Impairment of value
Casualty loss
Business valuation
Business dissolution
Divorce
Estate taxes
Property taxes
How Does Business Personal Property Affect Your Property Taxes?
The only consideration that companies give to business personal property is the simple form they fill out every year for each jurisdiction. If you fail to meet the compliance requirements of personal property or file incorrectly, your company is at risk. The assessor will explain to you about the value of your business personal property tax, including penalties and interest for improper or non-filing and possibly reject a favorable Freeport Inventory Exemption. At this point, you have lost control over your tax liability.
Tips To Leverage The Value Of Your Business Personal Property
Develop a strategy
Keep comprehensive records
Follow industry standards
Factor in the economy
Consider outsourcing
If you’re not already investing adequate time, resources and effort into your personal property management, it’s time to start. Leverage your business personal property tax to your advantage today.
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