Tangible Personal Property Tax in Florida

Today is the deadline for 2006 tangible personal property taxes. Most small business owners aren’t even aware this tax exists until they receive the form in the mail from their local property tax assessor. The forms are very simple and most of our clients with a limited amount of tangible assets choose to complete the returns on their own. So here’s the short version on what you need to know about tangible tax.

Many people assume the property appraiser’s activities are limited to valuing real estate for property tax purposes. However, Florida statutes direct the appraiser to value all property in the county including tangible personal property used by businesses. This means that desks, chairs, filing cabinets, computers, manufacturing equipment, and virtually anything else used by your business in its activities is subject to property tax. One important exception, however, is inventory. Inventory held for resale to customers is not taxed.

The Florida Department of Revenue produces form DR-405 that can be used to report the tangible personal property held by a business, but each county seems to have its own variation of the form. Manatee County for instance has taxpayers list all the assets on one master list regardless of their asset type. Sarasota County on the other hand uses the generic state form where assets of like type must be grouped together and summarized on page 1.

If you receive a pre-printed form from the county you must return it even if you are out of business or have sold all of your assets. If you do not file a form the county is likely to assess you a minimum amount of tax that in many cases is higher than the tax you would pay if you reported all of your assets at their fair market values.

Returns are due to the county April 1st or the first business day thereafter if the 1st falls on a weekend or holiday. The assessor updates the tangible tax rolls and submits them to the tax collector who issues a property tax bill later in the year. Tax rates are the same as for real property in the same jurisdiction. There is nothing equivalent to the homestead exemption for businesses, however, in Manatee County if the tax turns out to be less than $15 the tax collector won’t bother sending you a bill.

Here are a few other points you should be aware of.

• Tangible property you lease (copy machines, equipment, etc) must be reported and taxed.
  



• Property located in a rental unit (washers, dryers, appliances, furnishings) is taxable.
  



• Vehicles or trailers subject to registration in the county are not taxable.
  



• Some counties grant extensions to file the tangible return but you must often apply for an extension before the filing deadline. Extensions tend to be for only 30 days.
  



• The assessment is made at January 1 and you must report property you removed from the business during the previous year.
  



• If you sell your business you need to provide a copy of the bill of sale to your local property appraiser so they can remove you from the rolls and follow up with the new owner.
  



• Penalties for failure to file start at 5% per month and go as high as 25%.

Like I said initially, the tangible tax return is definitely something business owners can prepare themselves and many of our clients choose to go through the exercise as a practical way of updating their asset list each year. However, if you need help don't be afraid to give us a call.

Axiom Professional Group is a public accounting and consulting firm started by Joey Brannon in Bradenton, Florida. For more information you can view the Axiom Professional Group, P.A. home page   or visit the Axiom web site articles page (both links will exit the blog site).