Property Tax Prep: 6 Must-Know Tips Before Filing Your Returns

When it comes to running a business, managing a multitude of taxes becomes an ongoing concern with each fiscal year. One of the year-long processes to consider is filing and paying your business personal property taxes. Business personal property tax is assessed on the assets owned and used by a company. These assets encompass machinery and equipment, furniture and fixtures, computer equipment, inventory, leasehold improvements, and more. If an item in question is not permanently affixed to the building, it would likely be considered personal property! Here are some things to consider before filing your tax returns: 

• Determine filing jurisdiction. 

The physical location of your business will determine whether you need to file a business personal property return. Some states, such as Alaska, do not have property taxes. Therefore, it is essential to conduct research on the reporting requirements based on where your business operates. This will include requirements at a state, county, and city level.  

• Verify return due dates with jurisdiction. 

Once you have confirmed where to report your assets, confirm the return/rendition filing due date, as it varies by state, on the tax assessor website or call the assessor offices. Should you need additional time to collect the necessary information to file your return, verify if the county offers a due date extension without penalty. 

• Taxability of tangible personal property. 

Check your local tax assessor’s website to determine whether your property falls within the scope of reportability. State laws differ on which assets will need to be reported and assessed. For example, in Virginia, software is required to be reported, but tax will not be assessed on those specific assets. 

• Assess the reportability and taxability of inventory. 

Along with your assets, the reportability of inventory on hand as of the assessment date must also be considered. If reporting inventory is required, it is recommended to collect data month over month as each jurisdiction has different requirements when it comes to completing the report of inventory.  

• In jurisdictions that tax inventory, check the availability of freeport storage exemptions. 

If your business has movements of inventory throughout the year, check to see if your county offers any type of freeport storage exemptions that would be applicable to your business. Freeport exemptions are exemptions or tax breaks on inventory that only stays within a state or location for a short period of time before being moved out of the state in question. This provides businesses an opportunity to reduce the amount of potential tax owed. For example, states like Oklahoma have an exemption for your inventory if the inventory is held in the state for less than nine months. 

• Verify when an assessment notice will arrive from a jurisdiction. 

Once you have filed your property return, certain counties will issue an assessment notice to indicate the value your property will be taxed on. The timeframe varies from state to state.  Some states will issue an assessment notice separate from your tax bill, while some will provide the assessment in conjunction with your tax bill. To confirm the timing of your tax assessment, reach out to your local tax assessor's office. Additionally, there may be an option to check online for updates periodically! 

 

How Can We Help? 

Allyn’s tax team is staffed with seasoned tax professionals experienced in all aspects of Federal, multi-state and local tax compliance and consulting for large US and global corporations. We use that experience to your advantage. 

Allyn files state and local property tax returns in every US taxing jurisdiction. Allyn obtains property tax data, analyzes it for proper classification, cost basis, and exemptions, and ensures timely and accurate property tax return filing and property tax bill payment processing. 

We routinely conduct opportunity reviews in all US states for companies and advise clients with proactive measures to improve their tax compliance. Allyn can review your asset listing and returns, property tax bills, provide onsite property tax reviews, prepare and file returns and manage the payment of property taxes throughout the US. We can manage your tax compliance, create a solid tax process, and provide audit defense for your company. 

For a thorough explanation of freeport tax exemptions, please see the article, Reduce Your Inventory Taxes with Freeport Exemptions.   

Contact us and we can provide a customized cost-effective solution to meet your company’s needs. For further information on Allyn Tax services, please contact: tax@allynintl.com. 

 

Contributor: Brenda Morales 

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About Allyn International

Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance. Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North America, Europe and Asia and Allyn regional headquarters are strategically located in Fort Myers FL USA, Shanghai P.R. CHINA and Prague, CZECH REPUBLIC. For more information, go to www.allynintl.com.