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Business Personal Property Taxes; One More Reason the IRS Sucks!

By November 9, 2021Business, Taxes
We got this question from one of our gym owners the other day.

 

“Wait. I have to file property taxes on my equipment?”

 

And unfortunately, the short answer is… Probably. I’ll get to that later.

 

We’ve all heard the familiar quote, “Nothing is certain, except death and taxes.”

 

Even The Game of Life makes you pay taxes. Except the board game ends with retirement, so really taxes are even more certain than death.

 

Let’s face it, the IRS wants your money. Literally their job is to collect revenue i.e., taxes.

 

If you own your house or any land you are probably familiar with Property Taxes. The same goes for your business, if you own the land or building for your business, you’re familiar with Business Property Taxes.

 

And as if that’s not enough, your state may also assess the less familiar Business Personal Property Tax.

 

These taxes are generally levied by state and local municipalities and used for local purposes such as schools and libraries. You know that Monopoly card, “You are assessed for street repairs”? Property Tax.

 

If you own a business, you probably have to pay taxes on what is called, “Tangible Personal Property.” Essentially, items that a company uses to conduct business. This could mean anything from furniture to printers, and yes, gym equipment.

 

Whether or not you need to file, how much to file, and how to file can vary widely from state to state, and city to city.

 

They all have their own rules, their own exemptions, and their own list of what they consider to be “Tangible Personal Property.”

 

So, how do you know if you need to file a Business Personal Property return?

 

That’s a good question.

 

Currently, these are the only 12 states that do not tax Business Personal Property (ref crowdreason.com)

  1. Delaware
  2. Hawaii
  3. Illinois
  4. Iowa
  5. Minnesota
  6. New Hampshire
  7. New Jersey
  8. New York
  9. North Dakota
  10. Ohio
  11. Pennsylvania
  12. South Dakota

 

So, if your business is located in one of these 12 states you’re safe, for now.

 

However, just like each new edition of The Game of Life, the rules can change. It is your responsibility as a business owner to know if your state and/or city requires a Business Personal Property return.

 

To find more information specific to your location you can check your city’s website under Assessor’s Office, or your state’s website under Department of Revenue.

 

But here’s the good news.

 

Some of that Tangible Personal Property could be deductible as a business expense on your Federal Return.

 

That’s where we come in.

 

Most accounting firms wait for you to hand them your papers in April then plug the numbers into their software. This results in YOU over-paying in taxes. That’s money going to the IRS when it could be going back into your business, or your pocket.

 

Incite Tax & Accounting takes a more proactive approach with strategic tax planning. We want you to keep as much of your money as legally possible so your business can thrive.

 

Do not get stuck paying more than you need to.

 

Stick it to the IRS and schedule with one of our Tax Geniuses today.

 

 

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