Property Tax Compliance and Consulting
It is important for businesses to stay compliant with the state and local tax laws with regards to their real and business personal property. Property tax assessors calculate an assessed value based on what a company reports. Any reporting error can result in incorrect assessments.
How is Personal Property Tax Accessed?
The County Assessor calculates an assessed value based on the depreciable reported costs. The assessed value is then multiplied by the current tax rate to determine the tax. The tax is then billed for the fiscal year and becomes delinquent if not paid by August 31st. If no return is filed, the county estimates additional acquisition at 10% and applies a 10% penalty.
How to Report Value of Personal Property
In California, any owner of personal property with a cost that exceed the threshold of $100,000 has to file Form 571-L. The due date for filing is on April 1st but you have until May 7th to file the form with the County Assessor without being delinquent.
What to Watch Out for When Filing Form 571-L
There are many potential pitfalls in to avoid when filing Form 571-L. Here are some questions to keep in mind when filling out the form:
- Is the tangible personal property properly reported at cost? Is property owned by others being reported (i.e. leased equipment)?
- What are the asset lives of the properties? Are the assets still useful or obsolete?
- Is there taxpayer being taxed on property that has been sold or disposed of already?
- Are the fixed assets properly classified? Misclassified assests on the Form 571‐L, could result in a higher tax.
Our professional group can assist with compliance issues and concerns with the County Tax Assessor and deliver tailored services.