Personal Property Tax by MakailaFaith


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									                                                       WASHINGTON STATE DEPARTMENT OF REVENUE

            Personal Property Tax                                                                                                      OCTOBER 2010

Personal Property Tax                               Administration
Most people know that property tax                  By state law, the county assessor is                 As a property owner, you are
applies to real property, however,                  responsible for the assessment of real               responsible for filing a personal
some may not know that property                     and personal property, including the                 property listing each year that you
tax also applies to personal property.              calculation of taxes. The treasurer is               have taxable property even if you do
Most personal property owned by                     responsible for the billing and                      not receive the form by mail. If you
individuals is exempt. For example,                 collection of the taxes based on the                 have multiple business locations, you
household goods and personal                        “tax roll” received from the assessor.               must complete a separate listing for
effects are not subject to property                 The Department of Revenue is also                    each location. The assessed value is
tax. However, if these items are used               involved in the administration of                    allocated to the taxing district based
in a business, property tax applies.                property taxes and advises assessors                 on where the property is located.
Personal property tax does not apply                and treasurers on how to assess
                                                                                                         When completing the form you must:
to business inventories, or intangible              property to assure uniformity of
                                                                                                         ƒ List all assets you own or control
property such as copyrights and                     assessment and taxation throughout
                                                                                                           as of January 1, including those
trademarks.                                         the state.
                                                                                                           assets fully depreciated in your
Personal property is subject to the                 Personal Property Tax Forms:                           accounting records, and assets
same levy rate as real property. The                If you use personal property that                      in storage.
characteristic that distinguishes real              is not exempt, you must complete                     ƒ Identify each personal property
and personal property is mobility.                  a Personal Property Tax Listing Form                   category. For example, office
Real property includes land,                        by April 30 each year. Listing forms                   equipment should be broken into
structures, improvements to land,                   are available from your local county                   separate categories of personal
and certain equipment affixed to                   assessor’s office. The listing must                   computers, network servers,
land or structures. Personal property               identify all taxable property located in               printers, phones, etc.
includes machinery, equipment,                      the county as of noon on January 1.                  ƒ Include the total purchase cost of
furniture, and supplies of businesses               The assessor uses this information to                  each item. This excludes sales or
and farmers. It also includes any                   value property for taxes due the                       use tax, but includes costs to make
improvements made to land leased                    following year.                                        the item usable such as installation
from the government (leasehold                                                                             and freight.
                                                                                                         ƒ Include the date each item was
                                                                                                         Once property is listed on the tax
                                                                                                         rolls, the assessor mails a new listing
                                                                                                         form each year. You then have an
                                                                                                         opportunity to add or delete
                                                                                                         property, as appropriate, and return
                                                                                                         the form to the county assessor by
                                                                                                         April 30.

This fact sheet provides general information regarding Personal Property Tax. The information is current at the date of publication.
Please note subsequent law changes may supersede or invalidate some of this information.
                                          WASHINGTON STATE DEPARTMENT OF REVENUE

Valuation: The assessor values the       The appeal (petition) must be filed        The lien follows the property. This
property at 100 percent of its current   by July 1 of the assessment year or        means that a new owner can be held
market value. Market, or true and fair   within 30 days of the date the             liable if the previous owner does
value, is the amount that a willing      assessment was mailed, whichever           not pay the tax. Be sure to check with
and unobligated buyer will pay a         is later. Some counties have extended      your local county treasurer’s office
willing and unobligated seller. After    the filing deadline to 60 days. Please     before buying or selling personal
performing a personal property           check with the board of equalization       property.
assessment, the assessor informs         in the county where the property is
                                                                                    Penalties for Late Payment: Personal
the property owner of the assessed       located to determine the filing
                                                                                    property tax payments made after
value.                                   deadline for the appeal.
                                                                                    the due date are subject to interest
Penalty for Failing to File: To avoid    Tax Liens: The amount of tax due           and may also be subject to a penalty.
a penalty, the assessor must receive     becomes a lien on personal property.       If you do not make your first half tax
your listing form by April 30. The       The lien is in effect from the time the    payment by April 30, the full year tax
penalty is five percent of the tax due   assessor makes the assessment until        is delinquent on May 1. Interest is
per month, up to a maximum of 25         the taxes are paid. For example, an        calculated at one percent per month
percent. If the assessor does not        assessor values personal property          on the full year taxes, until paid in
receive your form, the assessor will     in June, and the lien is in effect until   full. A penalty of three percent
estimate the value of the property       the taxes are paid on April 30 of the      applies on the current year taxes
based on the best information            following year.                            if still delinquent on June 1. An
available.                                                                          additional penalty of eight percent
                                         If the tax remains unpaid, the
                                                                                    applies if taxes are delinquent on
Appeal of Assessed Value: You            treasurer may place a lien on the
                                                                                    December 1.
should contact the assessor’s office    owner’s other real and personal
if you believe an assessment is          property.                                  Distraint (Seizure) of Property/
incorrect. The assessor, or their                                                   Advance Payment Requirement:
                                         Payment of Property Taxes: Property
representative, can explain how the                                                 If property taxes are not paid on time,
                                         tax payments are due by April 30 and
value was determined and make                                                       the treasurer may take control of the
                                         October 31. If the amount of tax due
corrections if appropriate.                                                         personal property until the taxes are
                                         is $50 or less, full payment is due by
                                                                                    paid. The treasurer may also seize the
If you still believe the assessment is   April 30. If the tax due is more than
                                                                                    property or require an immediate tax
incorrect or excessive, you have the     $50, half of the amount due may
                                                                                    payment and/or advance payment if
right to appeal the assessment           be paid by April 30 and the balance
                                                                                    it is alleged that the property will
to the local county board of             by October 31. The county treasurer
                                                                                    be sold, destroyed, or removed from
equalization. Appeal forms are           mails property tax statements every
                                                                                    the state or county before the tax is
available from your local county         February.
                                                                                    paid. (RCW 84.56.070)
assessor’s office.
                                         The owner of the property on
                                         January 1 of the assessment year
                                         owes the tax due the following year.
                                         The tax is due even if the business
                                         closes, or the property is sold or
                                         transferred before the end of the
                                         year. For example, a property owner
                                         submits a list of personal property
                                         held as of January 1, 2010, and then
                                         sells the property in July 2010. The
                                         property owner (seller) owes the full
                                         amount of taxes due in 2011 for the
                                         2010 assessment year.

                                          WASHINGTON STATE DEPARTMENT OF REVENUE

Taxable Personal Property                Farm Equipment, Machinery,                a listing form, please contact the
Unless specifically exempt, all          Supplies, and Tools: Most farm            Special Programs Division of the
tangible personal property is subject    equipment, machinery and supplies         Department of Revenue at (360)
to personal property tax. The major      are subject to personal property tax.     534-1503. For more information,
categories of taxable personal           An exemption or partial exemption         please refer to RCW 84.40.065.
property include the following:          may apply to some farm machinery
                                                                                   Vehicles: Personal property tax
                                         and equipment. Contact your local
Machinery and Equipment, Fixtures                                                  applies to vehicles that are used
                                         assessor for exemption information.
and Furniture: Most machinery,                                                     off-road and not primarily designed
equipment, and fixtures are              Leasehold Improvements: Personal          for use on public streets or highways,
considered personal property unless      property tax applies when the             licensed or not.
permanently affixed to real property.   lessee/tenant retains ownership of
                                                                                   Taxable vehicles include:
Personal property is generally           the leasehold improvements, or is
                                                                                   ƒ Vehicles used entirely upon private
considered permanently affixed to       required to remove them at the end
real property if it cannot be removed    of the lease. For example, the
without causing damage to the real       improvements a lessee makes               ƒ Special highway construction
property, or if it is adapted for use    to a leased space are taxable as            equipment, such as earth moving
only in one location. The assessor’s     leasehold improvements.                     and paving equipment.
office can answer questions about                                                 ƒ Farm vehicles
                                         Supplies, Materials and Tools:            ƒ Off-road vehicles
whether a specific item is taxable as
                                         Taxable materials and supplies
real or personal property.                                                         ƒ Racing vehicles
                                         include office, shop, janitorial,
Taxable tangible personal property       brochures, promotional materials,
includes but is not limited to:          fuel held in storage, spare parts, etc.   Intangible Personal Property
ƒ Office furniture and fixtures such    Tax does not apply to items that are      Personal property tax does not apply
   as desks, chairs, etc.                held for resale or that become an         to intangible personal property such
ƒ Office equipment such as              ingredient or component of an article     as monies, notes, certificates
   computers and printers                manufactured for sale.                    of deposit, personal service contracts,
ƒ Store fixtures and equipment           Watercraft: Watercraft is subject to      franchise agreements, trademarks,
ƒ Computer software (canned and          either property tax (at the state levy    patents, brand names, copyrights,
   embedded)                             rate) or watercraft excise tax.           licenses, and customer lists.
ƒ Manufacturing machinery and            Commercial watercraft that is exempt
   equipment                             from the watercraft excise tax is         Destroyed Property
ƒ Construction equipment                 subject to personal property tax.         If your property is destroyed in whole
ƒ Office trailers                                                                 or in part during the year, the
                                         Owners of charter vessels
                                                                                   assessed value may be reduced.
ƒ Signs                                  documented with the U.S. Coast
                                                                                   To obtain a reduction, you must file
Leased Equipment: Equipment that         Guard must register with the Special
                                                                                   a claim with the local county assessor
is leased under a lease-purchase         Programs Division of the Department
                                                                                   within three years of the date of
contract is subject to personal          of Revenue and pay property tax.
                                                                                   destruction or reduction in value.
property tax. Both the lessor and the    Taxable watercraft include:               Claim forms are available from the
lessee may be requested to list the      ƒ Vessels used exclusively for            assessor’s office. This reduction is not
equipment. The assessor will               commercial fishing.                     available to a person convicted of
determine which party is liable for                                                arson with respect to the property.
                                         ƒ Documented vessels, such as tugs,
the tax.
                                           used to transport property or
                                           persons between specific points
                                         ƒ Barges, dredges, and similar
                                         ƒ Charter vessels that are required
                                           to be documented by the United
                                           States Coast Guard.
                                         For more information or to obtain

                                          WASHINGTON STATE DEPARTMENT OF REVENUE

Personal Property                        Laws and Rules                            Need More Information?
Tax Exemptions                           Revised Code of Washington (RCW)          Review the following publications:
Personal property tax does not           Chapter 84 provides for the taxation      ƒ Nonprofit Organizations
apply to:                                of personal property. The                 ƒ Personal Property Valuation
ƒ Household goods and personal           Department of Revenue publishes             Guidelines
  effects unless used in a business      administrative rules, Washington
                                         Administrative Code (WAC), to               These can be found on the
  activity.                                                                          Department of Revenue website
                                         administer the law. Chapter 458-12
ƒ Personal property owned by                                                         at
                                         and 458-16 WAC discuss the taxation
  governmental entities.
                                         and exemption of property. The            ƒ Call our Telephone Information
ƒ Business inventories including         Department of Revenue also issues
  goods for resale, ingredients or                                                   Center 1-800-647-7706
                                         Property Tax Advisories that discuss
  components of articles                 specific tax issues. You may obtain       ƒ Contact your local county
  manufactured for sale, and             a copy from the Department of               assessor’s office
  livestock. (Property held for lease/   Revenue online at or
  rental is subject to tax.)                                                       ƒ To inquire about the availability
                                         by calling 1-800-647-7706.                  of this document in an alternate
ƒ Custom software and modifications
                                                                                     format for the visually impaired,
  to canned software.
                                                                                     please call (360) 705-6715.
ƒ Cargo containers used in interstate    Questions
  commerce.                              Your local county assessor’s office      ƒ Teletype (TTY) users please call
ƒ $15,000 of assessed value for          can answer questions regarding:             1-800-451-7985.
  persons who qualify as head of         ƒ Assessed Values
  family; the assessor determines        ƒ Listing Forms
  who qualifies for this exemption.      ƒ Exemptions
ƒ Personal property accounts valued      ƒ Appeals
  at less than $500 (Those qualifying
  for the $15,000 head of family         Your local county treasurer’s office
  exemption do not qualify).             can answer questions regarding tax
ƒ Property owned by nonprofit            statements and payments.
  organizations such as churches and
                                         Telephone numbers are located in
  social service agencies; qualifying
                                         the county government section (blue
  entities must apply for the
                                         pages) of your local telephone
  exemption each year.
ƒ Property owned by schools.
ƒ Vehicles used or designed primarily
  to be used on the public streets or


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