This time a year we get a LOT of complaints about the tangible tax. If you don't own a busines or rental properties you may have never heard of this little gem, but each March and November it is a proverbial thorn in the side of small business. The tangible tax is an ad valorem tax on tangible personal property. Most people associate ad valorem taxes with real property (houses, land, office buildings), but it can also apply to tangible personal property such as desks, computers, leasehold improvements, machinery, equipment and so on.
Each spring businesses must report their tangible personal property to the property appraiser in their county. These records are then used to assess an additional property tax in November based on the millage rates set by the county. Complying with the law in this case often costs as much or more than the tax itself. However, in some cases the tangible tax can be substantial (think Tropicana or Bealls Department Stores). At least one
group is arguing that the tax even pushes businesses out of the state.
Relief may be in sight. Governor Crist has proposed a $25,000 exemption for tangible personal property. In Manatee County where my business is located that amounts to about a $500 break. Not a huge amount of money and certainly not enough for me to consider moving to Georgia and a state income tax. I guess my biggest problem with the tangible tax is that it feels like the government is double dipping. After all, I paid sales tax on those items when I purchased them. Not only did I pay 6% to the state but my local county tacked on an additional .5%. Now I get hit with an additional 2% of the assets assessed value EVERY year. It's a tough pill to swallow but small enough that I only think about it twice per year when it is assessed and collected.
I think Governor Bush did a great thing by pushing for and accomplishing a repeal of the intangible tax. It would be nice if his successor tackled its ugly cousin and left a similar smile on the faces of business owners.
Article originally appeared on Axiom CPA, P.A. (http://www.axiomcpa.com/).
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