BUSINESS PERSONAL PROPERTY
Contact: Laura Bryant (928) 474-7187 or email to firstname.lastname@example.org
To obtain forms for reporting Business Personal Property, please contact the Assessor’s Office.
For additional information, please go to the Arizona Department of Revenue’s Personal Property Manual at http://www.azdor.gov/PropertyTax.aspx
What is Business Personal Property? For property tax purposes in Arizona, business personal property is defined as all types of property except real estate. Taxable personal property includes property used for commercial, industrial, and agricultural purposes. Personal property is considered to be movable and not permanently attached to real estate. Although there are exceptions, personal property usually can be removed without causing damage to either the real estate from which it is removed or to the item of property itself. Property taxes in Arizona are imposed on both real and business personal property.
How is Personal Property Valued? Based on original cost and age of all personal property in your possession as of December 31st of the prior year, the County Assessor will calculate the current replacement cost new less depreciation (Full Cash Value) of each item. The Assessed Value is based on the Full Cash Value after application of any qualifying exemption amount and the assessment ratio for the legal class of the property. The tax rates for the county and local governmental jurisdictions in which the business operates are applied to the Assessed Value. The original cost of a personal property item includes the purchase price plus all freight and installation costs as well as any paid sales taxes for the item.
How do I report Taxable Personal Property? File a Business Property Statement, Form DOR 82520, or an Agricultural Business Property Statement, Form DOR 82520A, with the County Assessor each year. It should list property acquired or disposed of during the year and confirm property items still on the roll. It is the owner’s responsibility to report his or her personal property to the Assessor.
I’ve received an Arizona Business Property Statement, where do I send the payment? The Business Property Statement is not a Tax Bill, it is the annual reporting form for your business to submit changes on your account such as additions/deletions to equipment and name and address changes.
I just started my business, how do I report my Personal Property? If you were not sent a form, please contact the Assessor and a form will be mailed to you for completion.
This is the first time we received a Business Property Statement. What do I need to do? Business Personal Property deals with the physical assets used in the operation of the business. If you have an Asset Listing, you can attach a copy to the property statement and return it to the Assessor’s Office. Or, if an asset listing is not available, make a listing of all the business equipment including a description of the equipment, year it was purchased and the original acquisition cost (to include any freight, installation, special support, special wiring, special plumbing and sales tax paid). Send your list to the Assessor’s Office.
Last year, we filed an Asset Listing and now our equipment costs are listed on the front of the Business Property Statement. How do we make changes? To add or delete equipment from your return, use the back side of the form (section 4). When adding equipment, list the total acquisition cost under the appropriate schedule column, and the year acquired at the far left of that row in the “Additions” section. When deleting equipment, it is the same as adding, but listed in the “Deletions” section. You must delete equipment out of the same year that it was previously added.
We have added equipment, but do not know if it is Qualified or Non-Qualified? Equipment is qualified if this is the first time it is being assessed in Arizona. Typically, brand new equipment is always Qualified. Used equipment that was acquired for the first time, (historically) more than four years ago, does not qualify and should be listed as Non-Qualified.
The name and address on the Business Property Statement is wrong. How do we correct this? Complete Section 1 on the front of the form to identify any changes to the Business Name, Mailing Address or Location Address.
Is my inventory taxable? No, with minor exception, inventory for sale is not taxable in Arizona.
We did not receive our Business Property Statement. How do I obtain a duplication form to file? Please contact the Assessor’s Office and a duplicate form will be mailed to you.
In regard to the deadline of April 1st, does the Business Property Statement need to physically be in your office, or can it be postmarked April 1st? Your return must be postmarked on or before April 1st by the United States Postal Service.
Our business closed, how do I close my Business Personal Property Account? You may write on any open space on the front of the Business Property Statement, or attach a separate letter, identifying the Account Number, stating that the business closed, date of closing and what happened to the equipment.
How and when will I know if my account has been processed? The Assessor’s Office mails out Valuation Notices on or before August 30th of each year. The Valuation Notice will identify your Full Cash Value, Assessed Value and appeal deadlines.
What if I don’t agree with the Valuation Notice? By statute, you have 20 days from the Notice’s mailing date to file a Personal Property Petition for Review of Valuation (DOR form 82530) with the Assessor’s Office. The Assessor’s Office then has 20 days to respond to your petition. If the disputed value has not been settled by that time, you may file an appeal with the County Board of Equalization within 20 days of the mailing date of the Assessor’s Decision. (You can download the form from the Personal Property Appeal page).
My Business Property Statement makes reference to “Important Exemption Information.” Is my business exempt? No, this “exemption” refers to the Full Cash Value exemption amount that is annually determined by the Arizona Department of Revenue. Any remaining Full Cash Value will be assessed.
I operate several locations throughout the State. Does the “Exemption” apply to each location? The “Exemption” applies only once throughout the State for each legal Business entity. If multiple locations have a combined Full Cash Value of less than the exemption amount, then it would cover all of those locations.
I am leasing equipment and the leasing company is billing me for Personal Property Taxes. If this legal? By statute, the tax on Business Personal Property is a debt against the owner. Typically, the leasing company will pay the taxes directly to the County Treasurer and then issue their own billing to the lessee for reimbursement. Please review your lease agreement for details.
I understand why the leasing company is billing me for Personal Property Taxes, but they are also charging an additional Sales Tax. Isn’t that double taxation? No, the Counties are solely responsible to value and to collect the Personal Property Taxes for the equipment. Separately, the Arizona Department of Revenue charges “Sales Tax”, (technically labeled “Transaction Privilege Tax”). The Arizona Department of Revenue charges these taxes on every invoice your leasing company bills to customers in Arizona.
I have finished my lease, and now own the equipment. Shouldn’t I report my “buyout” cost as my acquisition cost? The best way to report any equipment that has been previously assessed by another business entity is to maintain the Historical Acquisition Costs and Dates. By reporting, the historical information, you will maintain the depreciation already applied to the assets. Once you report used equipment at a reduced purchase cost, it is now Non-Qualified, and the depreciation starts over from your purchase date. Also, if Market Value (which is the pre-depreciated value) is reported, then no additional depreciation will be applied.