FREQUENTLY ASKED QUESTIONS - BUSINESS PERSONAL PROPERTY
WHY ARE YOU ASSESSING MY BUSINESS PROPERTY?
The State Constitution states ALL property is subject to property tax unless specifically exempt. The State Legislature has exempted several kinds of property from the property tax, but the property of businesses are still subject to assessment.
WHAT PROPERTY IS EXEMPT?
The State Legislature has exempted the follow types of property:
- Business inventories
- Personal household furnishings, personal belongings and pets.
- Property of charitable or religious organizations (these organizations are not exempt from filing the Annual Business Property Statement and an Exemption Claim Form must be filed each year).
- Intangible property such as goodwill, trademarks, copyrights, liquor licenses and franchise fees.
Software not used for basic operations of the computer is exempt. Basic operational software is fundamental and necessary to the function of a computer, normally called the operating system or BIOS. Exempt software is generally thought of as application software not fundamental and necessary to the function of a computer.
- Licensed vehicles, although not exempt, are not assessed by the Assessor because they are taxed by the DMV.
WHAT BUSINESS PROPERTY DO YOU ASSESS?
All business property situated in El Dorado County which is owned, claimed, possessed, controlled or managed on the tax lien date of January 1st. Generally, all non-exempt property used in your business including machinery, equipment, furniture, non-licensed vehicles, equipment leased by you, any business inventory out on rent or lease on January 1, supplies on hand on the lien date, and expensed small tools on hand on the lien date. Leasehold or tenant improvements are also assessed. For more information, contact the Assessor at (530) 621-5716 or email firstname.lastname@example.org.
AM I REQUIRED TO REPORT IF MY BUSINESS PROPERTY WERE GIVEN TO ME AS A GIFT?
Yes, business property is assessed at fair market value even if you obtained them at no cost.
WHAT IF I USE MY EQUIPMENT AS PART BUSINESS AND PART PERSONAL?
If you use property in your business it is assessable. There is no provision to allocate cost between personal and business use.
HOW IS THE ASSESSED VALUE DETERMINED?
Assessment begins with the cost of the asset, including sales tax, freight and installation, but not including trade-in allowances. This cost basis is generally the same as your income tax basis. The Assessor applies a depreciation factor to the asset cost to arrive at the assessment. Assessor depreciation schedules differ from tax depreciation schedules used for income tax purposes. The Assessor's depreciation schedules are based on expected economic life.
HOW MUCH WILL MY TAXES BE?
The tax rate is applied to the assessment to determine your tax. The tax rate will vary depending upon voter-approved general obligation debt service associated with the parcel where the business is located. For example if your cost is $15,000, and the depreciated assessed value is $12,000, and your tax rate is 1.05% your property taxes on your business property will be $126. For information regarding tax rates contact the Auditor-Controller at (530) 621-5470 or email email@example.com
WHEN DO I HAVE TO PAY THE TAXES?
If you do not own the real property where the business is conducted, you will receive your tax bill in mid-to-late July. Payment is due by the end of August. If you own the real property where the business is conducted, the assessed value of your business property will be added to the value of the real property and you will pay the taxes in your secured property tax installments payable on or before December 10th and April 10th. To obtain tax amounts due or question regarding property tax liens, contact the Tax Collector at (530) 621-5800 - Placerville or (530) 573-7955 x5800 - South Lake Tahoe or (916) 358-3555 x5800 - El Dorado Hills or email firstname.lastname@example.org
WHAT OTHER PROPERTY IS ASSESSED BY THE BUSINESS PROPERTY DIVISION?
Boats, aircraft, agricultural property, apartments, water companies, possessory interest (private use of public land), leased property located in El Dorado County, mining claims, and unsecured improvements on real property are the other property assessed by the Business Division of the Assessor. Note: Historical aircraft are eligible for exemption. An annual statement and exemption claim forms must be filed.
WHAT IS A TAXABLE POSSESSORY INTEREST?
Possessory interest is the private right and use of public land, waterways or improvements for a specified period of time. Examples of private use of public land are commercial rafting operation, grazing rights, airport hangers, marinas or buoys, ski resorts on forest service land, business enterprises on Fair property, employee-occupied residence on forest lands or other government land, etc.
WHEN AM I REQUIRED TO REPORT BUSINESS PROPERTY TO THE ASSESSOR?
Property Statements are due on or before April 1st annually. Any business owning, claiming, controlling or managing business property with an aggregate cost of $100,000 or more for any assessment year, must file a property statement by the due date. Businesses not otherwise required to file the statement shall do so upon request of the Assessor regardless of the aggregate cost of property. Mailing of the Property Statement to the business is a request to file by the Assessor. Non receipt of the statement does not negate your requirement to file. If filed late a 10% penalty will be added to the assessed value.
WHAT HAPPENS IF I DO NOT FILE THE PROPERTY TAX STATEMENT?
The Assessor will estimate your value based on the best information available and add a 10% penalty.
HOW DO I GET THE REQUIRED FORMS TO REPORT TO THE ASSESSOR?
The Assessor mails property statements to the last known address of the businesses in January of each assessment year. If you did not receive a property statement, the Assessor will supply you with one upon request. Non receipt of the statement does not negate your requirement to file.
WHAT HAPPENS WHEN I GO OUT OF BUSINESS OR MOVE?
Contact the Assessor!!! If you do not contact the Assessor, tax assessments will be issued and mailed to the last known address until such time the Assessor is notified that the business is closed or moved.
HOW DO I CONTACT THE ASSESSOR?
Placerville: 360 Fair Lane Placerville, CA 95667
Lake Tahoe: 3368 Lake Tahoe Blvd. Ste. #103 South Lake Tahoe, CA 96150
Placerville: (530) 621-5719
El Dorado Hills: (916) 358-3555 x5719
South Lake Tahoe: (530) 573-3422
WHAT HAPPENS TO MY TAX BILL IF I SELL OR GO OUT OF BUSINESS BEFORE THE BILLS ARE ISSUED BUT AFTER JANUARY 1ST?
The responsibility for the tax accrues to the owner of the business on the lien date, and covers the fiscal year beginning July 1 of the same year. There is no provision for allocation of the assessment or the tax bill. Businesses sold after January 1st should consider the liability when negotiating the price of the business. Secured bills: If the business did not sell with the real estate the business property assessment will be removed from the secured bill and reissued as unsecured to the owner of the business as of the lien date, January 1st.
CAN I FILE MY PROPERTY STATEMENT ON-LINE?
Yes. A state-wide on-line filing system, known as eSDR is available starting with the 2011 filing season. Please click here for more information.