Tax Tip: Business Personal Property Tax

This year I wanted the first tax tip of the season to be about everyone’s favorite topic, the business personal property rendition. I know it’s no fun, but a little bit of effort early in the year can save you a lot of headache (and money) later.

The basic idea is that each year the county tax collector wants to assess tax on a percentage of all the “personal property” owned by the business, which includes inventory and supplies, furniture, computers, equipment, and even vehicles.

Note that these instructions are specific to Travis County. I believe that other Texas counties have similar procedures, but check with your county’s appraisal district if you’re not sure. And bear in mind that this is just meant as a general overview; obviously for any discrepancy between these instructions and the instructions on the county forms, trust the forms.

Around the same time every year, usually February/March, you get a form in the mail labeled Business Personal Property Rendition of Taxable Property. The response is due by April 15, although you can request a one month extension if necessary. The purpose of this form is for the business owner to disclose all of the personal property that was owned by the business as of January 1. There are a couple of tables where you report the total amount of personal property by category. You have the option of reporting the total original cost in each category by year, or a good faith estimate of the total current market value by category. Or if the total amount of property is less than $20k, you have the option of skipping the tables and going straight to the end to report to provide just a brief description of the property.

Then in June, you get a Notice of Appraised Value. Basically the county does whatever calculations it needs to come up with a proposed taxable value, and an estimate of what the tax will be. If you didn’t return the rendition form back in April, they will estimate the amounts for your business, which may or may not be right (how they do this estimation, I don’t know). This is your chance to appeal if you don’t agree with their numbers. You have until the end of June to appeal, which means sending back the form with an explanation of why you disagree.

Then in October, you get the actual bill, with the tax due the following January 31. Then the cycle starts all over again.

The best piece of advice I can give is to not ignore the rendition form at the beginning of the year. A lot of businesses wait until they get the bill to protest/disagree, but I think it’s much easier to follow the approved protest channels back in June. If you do want to protest the bill, I would recommend seeking the advice of an attorney.

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One Response to “Tax Tip: Business Personal Property Tax”

  1. Priority Tax Group June 2, 2014 at 5:17 am #

    These are really very useful tips about personal property tax . If a tax liability does arise, perhaps as a result of an error in the return or a denial of certain deductions, you may suddenly be in a position where penalties and interest apply.

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