Business Personal Property Taxes in California Explained

California businesses with personal property have a unique tax situation.

Business personal property taxes in California are assessed on a wide range of assets, including office equipment, furniture, and vehicles, but not on land or buildings.

For tax purposes, personal property is valued based on its original cost, not its current market value.

Businesses must file a personal property statement with the county assessor's office by July 1st of each year to report their taxable assets.

For another approach, see: Taxes on Selling a Business in California

You'll need to file Business Personal Property Tax if your business owns tangible personal property like equipment, furniture, machinery, computers, or inventory. The state and local laws where your business is located will determine the filing requirements.

Some states may exempt businesses with a certain level of assets or a certain amount of annual revenue from filing Business Personal Property Tax returns. This means you might not have to file if your business meets these specific conditions.

Curious to learn more? Check out: How to File Small Business Federal Taxes

State and local taxes can significantly impact your business's exit strategy. These taxes can be a major consideration when planning for the future of your company.

Exit strategies for a company involve planning and execution on various fronts, including handling state and local taxes. These strategies can be complex and time-consuming, but they're essential for a smooth transition.

State and local taxes can vary greatly depending on the location of your business. For example, some states have a high sales tax rate, while others have a low or no sales tax rate. This can affect your business's bottom line and overall profitability.

Businesses must consider the tax implications of their exit strategy, including the sale of assets, equipment, and property. State and local taxes can be a major factor in determining the final sale price of these assets.

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Taxes are based on the location and status of property as of January 1 of each year.

You'll need to pay taxes on all personal and real property acquired before Jan. 1, 2025, by May 15 of the same year. Property acquired in 2025 is not taxed until Jan. 1, 2026.

If you miss the tax payment deadline, interest will accrue until you pay your taxes. Interest is equal to the Federal Funds Rate Target set on January 1 preceding delinquency plus six percentage points, and it's currently 10 percent for 2025.

Curious to learn more? Check out: Interest on Investment Property Tax Deductible

In Utah, county assessors collect information on business personal property using an annual signed statement to determine property value.

The statement must be completed and submitted within 60 days, or within 30 days if the assessor hasn't requested one.

A taxpayer must apply for the personal property exemption for tangible personal property with a total aggregate fair market value of $29,300 or less.

If the county assessor has not requested a Signed Statement, the taxpayer must apply within 30 days from the day they are requested to indicate whether they have $29,300 or less of taxable tangible personal property in the county.

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If a business fails to provide the requested information, the assessor will impose a penalty of $25 or 10 percent of the tax due, whichever is greater.

The signed statement must be filed after a second written notice, or the property value will be estimated by the assessor.

Estimates cannot be changed by the county board of equalization or by the State Tax Commission.

Property intentionally concealed, removed, transferred, or misrepresented to avoid taxation is subject to a penalty of 100 percent of the tax due.

Any property not assessed may be valued and taxed as far back as five years prior to the time it is discovered.

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Taxes are based on the location and status of property as of January 1 of each year. This means that a business must pay 2025 taxes on all personal and real property acquired before Jan. 1, 2025.

Property taxes are a primary source of revenue for local government entities, including counties, school districts, cities, and towns.

Taxes are due on May 15, and if they're not paid on time, interest accrues until taxes are paid. The interest rate is equal to the Federal Funds Rate Target set on January 1 preceding delinquency plus six percentage points, and it may not be less than 7 percent or more than 10 percent.

Interest is 10 percent for 2025, and in addition to the interest, the assessor must seize and sell the personal property in order to meet the tax liability or attach it to the real property owned by the business to secure the payment of the taxes.

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Filing a Business Personal Property Declaration Schedule can be done online through eGov, which is the standard for online filing with over 7,800 government agencies served. Registration is required, which will require you to create a password, and an access code is also required and can be found on your declaration form above your schedule/account number.

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If you're a first-time filer or your mailed Declaration Schedule Addendum doesn't reflect any assets, you should use the custom Excel spreadsheet to file this year. Next year, you'll be able to file using eGov, as your account will reflect your assets. Online Filing opens February 3, 2025.

You may also file by paper, using the Business Personal Property Blank Declaration Form.

If you're a business owner in California, it's essential to understand your obligations regarding property taxes on business personal property. Business owners should be aware that assessors may apply penalties to property that was not reported correctly.

You can seek help from a San Jose tax lawyer to address these issues and defend against potential penalties. Contact John D. Teter Law Offices for legal assistance with property tax matters.

Business owners can reach out to a San Jose, CA property tax attorney by calling 408-866-1810 to set up a consultation.

For another approach, see: Business Owner Taxes

You may need to file a Business Personal Property Declaration Schedule, which can be done online or by paper.

Online filing is available starting February 3rd and uses eGov, a standard for online filing with over 7,800 government agencies served. Registration is required, which will require you to create a password.

If you are a first-time filer, you should use the custom Excel spreadsheet to guide you through the listing of your business assets. Next year, you will be able to file using eGov, as your account will reflect your assets.

Businesses that have previously filed a declaration form with the county can update their assets online using eGov.

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Filing an appeal can be a straightforward process. You can file your appeal online between June 15th and June 30th.

To start, you'll need to visit the relevant website or click the button provided. For more information on the appeal process, you can visit the Appealing Business Personal Property Valuation page.

Filing online is a convenient option for many people. However, you can also visit the Appealing Business Personal Property Valuation page for more information on other filing options.

Keep in mind that the online filing period is limited to June 15th to June 30th.