Florida Property Tax News: Tangible Personal Property

Tangible Personal Property Taxes

The following blog article answers FAQs concerning the arcane area of tangible personal property tax assessment in Florida.

The following list of frequently asked questions is answered below.

What is tangible personal property (TPP)?

What is intangible personal property? Is it subject to taxation?

Is residential personal property subject to taxation?

What if my residential personal property in a non-homestead condominium unit I own is in a hotel/condominium rental pool and is sometimes used by me and sometimes
used by renters?

Who is required to file a tangible personal property return?

Why was I sent a tangible personal property return?

How can I obtain a tangible personal property return (Florida Department of Revenue Form DR-405)?

What if I was sent more than one tax return?

What if I have no tangible personal property to report?

Should I file if I'm no longer in business?

Must I report tangible personal property that belongs to someone else, or which I furnish to another business?

Is there a minimum value that I do not have to report?

What are the filing deadlines? What are the non-filing penalties?

What if I buy or sell an existing business during the year?

What if I do not file a return?

What if I don't agree with the assessed value that appears on my TRIM Notice of proposed property taxes?

Can I file an appeal of my tangible personal property taxes even if I filed no tangible personal property tax return?

Do we need to file a return if we are a church, school or non-profit group?

Is my return confidential or will my competitors be able to view and obtain copies of it under Florida's Public Records Act?

ANSWERS TO THE FAQS

WHAT IS TANGIBLE PERSONAL PROPERTY (TPP)?

According to section 192.001, Florida Statutes, "tangible personal property" means all goods, chattels, and other articles of value capable of manual possession and the chief value of which is intrinsic to the article itself.

"FF&E"--furniture, fixtures and equipment--is colloquially thought of as the equivalent of tangible personal property. This is a misnomer--or at least a temiological inexactitude--since some fixtures become part of the real estate to which they are attached and are assessable as real estate, and not as tangible personal property.

While the same tax rates apply to both real property and tangible presonal property in any given jusrisdiction in Florida, misclassiciation as between real property and tangible personal property can be a basis for striking the offending portion of the assessment from the tax roll for the year in question.

Inventory held for resale and household goods for the owner's personal use are exempt from taxation.

While real property is not subject to taxation as tangible personal property, many items used along with real property, such as cleaning and mowing equipment and machinery, computers, office supplies, furniture, signage, exterior lighting, alarm systems and leasehold improvements are taxed as personal property.

The comprehensive guidelines for the assessment of tangible personal property are determined by the Florida Legislature and are enforced by the Florida Department of Revenue (DOR). The DOR is the state agency responsible for the overall supervision of assessment and collection of taxes for all 67 counties in Florida, under section 195.027, Florida Statutes. Click here to view the DOR Tangible Personal Property Appraisal Guidelines.

WHAT IS INTANGIBLE PERSONAL PROPERTY? IS IT SUBJECT TO TAXATION?

According to section 192.001, Florida Statutes, "intangible personal property" means money, all evidences of debt owed to the taxpayer, all evidences of ownership in a corporation or other business organization having multiple owners, and all other forms of property where value is based upon that which the property represents rather than its own intrinsic value.

Effective January 1, 2007, intangible personal property tax in Florida is repealed.

Intangible personal property and tangible personal property are sometimes confused by lay people--even by people you think should know better.


WHAT IS RESIDENTIAL PERSONAL PROPERTY?

If you own residential rental property, what would normally be household goods if you were living there such as stoves, refrigerators and furniture becomes taxable tangible personal property which must be reported each year. All tangible personal property must be reported, even if it has been fully depreciated or has been "expensed" on the books of the taxpayer.

WHAT IF MY RESIDENTIAL PERSONAL PROPERTY IN A NON-HOMESTEAD CONDOMINIUM UNIT I OWN IS IN A HOTEL/CONDOMINIUM RENTAL POOL AND IS SOMETIMES USED BY ME AND SOMETIMES USED BY RENTERS OF THE UNIT?

At least one Legal Special Magistrate of the Miami-Dade County Value Adjustment Board has ruled that such tangible personal property is not subject to taxation. The Property Appraiser did not sue to overturn this ruling. If you have any questions about this or other property tax assessment issues, contact a Florida property tax consultant.

WHO MUST FILE A TANGIBLE PERSONAL PROPERTY RETURN?

Any person or entity that owns or possesses tangible personal property located in Florida as of the January 1 tax assessment date must file a DR-405 tangible property return with the Property Appraiser in the county where the property is (or was) physically located on the assessment date, January 1 annually.


WHY WAS I SENT A TANGIBLE PERSONAL PROPERTY RETURN?

You either filed a return last year or our office believes you have property that should be reported.

HOW CAN I OBTAIN A TANGIBLE PERSONAL PROPERTY RETURN?

If you did not receive a return in the mail, click here to download a copy of the DR-405 form. Be sure your Federal Employer Identification Number (FEIN) or Social Security Number, and the Property Appraiser's account or folio number appear on the return you file. Contact your County Property Appraiser if you do not know your account or folio number. If you operate under a DBA (Doing Business As) name, indicate the legal name of the entity and the DBA.


WHAT IF I WAS SENT MORE THAN ONE TAX RETURN?

You must file a return for each physical location in each county where you have tangible personal property. You will notice that the account numbers are different on each return. Even if you have sold the business or no longer have tangible personal property at a particular location, you must return the form with an explanation. This will assist the County Property Appraiser in ensuring that you are not assessed for property you have sold, surplused or removed from the county in the preceding year.

WHAT IF I HAVE NO TANGIBLE PERSONAL PROPERTY TO REPORT?

Almost every business owner has some personal property to report, even if it is only supplies, rented/leased equipment or fully depreciated/expensed property. Filing a return with all the particulars will help keep you from being assessed penalty charges or receiving an overestimate by the County Property Appraiser for property or valuations not assessable to you.


SHOULD I FILE IF I'M NO LONGER IN BUSINESS?

If you possessed tangible personal property on January 1 of the tax year, you must still file the return for that year. In Block 9A and the address correction box, explain the date you disposed of the assets and the name and address of the current owner of those assets. Sign and date the return and file it with the Property Appraiser's Office by April 1.

MUST I REPORT TANGIBLE PERSONAL PROPERTY THAT BELONGS TO SOMEONE ELSE, OR WHICH I FURNISH TO ANOTHER BUSINESS?

Yes. Page 2 of the return requires you to list property used in your business which is owned by others. Typical examples are postage meters, telephone systems, copiers, etc. If you own tangible personal property that you lease to others and is typically located in a specific county, you must report this property on Page 1, line 22 of your return.


IS THERE A MINIMUM VALUE THAT I DO NOT HAVE TO REPORT?

No. You must report all tangible personal property. If your resulting tax amount is less than $5, however, you will not receive a tax bill.

WHAT ARE THE TPP FILING DEADLINES? WHAT ARE THE NON-FILING PENALTIES?

Your return must be filed with the office of your local County Property Appraiser on or before April 1 annually (pursuant to section 193.062, Florida Statutes). If you are unable to file your return before April 1, you may file a request for a 30-day extension. Pursuant to section 193.063, Florida Statutes, this request must be filed in a reasonable amount of time BEFORE the April 1 deadline so that the County Property Appraiser may act upon it in a timely manner before the due date.

After April 1, if you did not make a timely request for extension, the County Property Appraiser is required by state law (section 193.072, Florida Statutes) to apply a penalty of 5% per month (up to a maximum of 25%) for late-filed TPP returns, a 15% penalty for unreported property, and a 25% penalty when no return is filed.


WHAT IF I BUY OR SELL AN EXISTING BUSINESS DURING THE YEAR?

Tangible personal property taxes constitute a lien against the property, and are not a personal obligation of the owner. If you buy tangible personal property during the year, you should obtain a copy of paid tax bills for prior years and the seller's return and make an agreeable proration of the current year's taxes. Most title companies do not search the public records for unpaid tangible personal property taxes. You must report the property at your cost rather than your seller's cost. Furnish the County Property Appraiser with any allocation of purchase price documents, including I.R.S. Form 8594 (Allocation of Purchase Price), if the personal property was acquired with other assets. This will make the Property Appraiser's work much easier and will help to produce an accurate and fair market value assessment of your property from year to year after purchase.

WHAT IF I DO NOT FILE A RETURN?

Even if a tax return is not timely filed by April 1, the County Propertyy Appraiser is still required to assess all tangible personal property. He or she will prepare a a best estimate based on similar equipment and assets owned by other similar businesses. The assessment will also include a 25% penalty for non-filing. Thus, it is in the taxpayer's best interest to file a timely return every year, unless you prefer to gamble on the Appraiser's ability to assess property he may never have seen or had reported or returned.


WHAT IF I DON'T AGREE WITH THE ASSESSED VALUE THAT APPEARS ON MY TRIM NOTICE OF PROPOSED PROPERTY TAXES?

Each year, the County Property Appraiser mails during the third or fourth week of August a TRIM Notice of proposed property taxes listing your assessment for that year. If you have any questions about the value, contact your County Property Appraiser to discuss your assessment. If you have information that the appraised value is higher than the market value of your property, the Appraiser will welcome the opportunity to speak with you and review all of the pertinent facts. If, after speaking with the Appraiser, you are still not satisfied, you have 25 days from the August mailing date of the TRIM Notice to file a petition with the County Value Adjustment Board (VAB). This deadline is in September of each year.

Click here for Tips and Information to Florida Property Owners About Impending Upcoming Property Tax Appeal Filing Deadlines for September 2007.

DO WE NEED TO FILE A RETURN IF WE ARE A CHURCH, SCHOOL OR NON-PROFIT GROUP?

If the taxpayer is a church, synagogue, mosque, ashram, temple, school, or other non-profit entity which may be eligible for a total exemption from TPP and/or real property taxes, contact your local Property Appraiser or Florida property tax consultant to learn more about these special exemptions.

To learn more about how to select a property tax attorney, read my article by the same title on wikihow.

IS MY RETURN CONFIDENTIAL OR WILL MY COMPETITORS AND THE GENERAL PUBLIC BE ABLE TO VIEW AND COPY IT?

Pursuant to section 193.074, Florida Statutes, your return is strictly confidential when filed with our office. Interested persons may not obtain a copy of it through Florida's Public Records Act, as it is exempt from public disclosure.

WHAT IF I READ EVERYTHING ABOVE AND STILL HAVE TPP QUESTIONS?

Contact your County Property Appraiser or Florida property tax consultant.

_______________________________________________________________________
Mr. Weiss has represented taxpayers in thousands of administrative tangible personal property and real estate tax appeal hearings and has more than 70 published opinions to his credit, including 55 property tax opinions, is co-author of Chapter 64 of the Florida Tax Service 2d, "Agriculture and Other Classified Properties" with Matthew Bender, and a lecturer on property taxation for the National Business Institute. To view Mr. Weiss's most recent Youtube video on property tax appeals in Florida, click here.

Tips and Information on Filing Property Tax Appeals Before September 2007 Deadline

Florida property taxpayers face annual property tax appeal filing deadlines. After a tumultuous legislative special session Florida property taxpayers are turning their attention to appealing their annual property tax evaluations. Confusion reigns because while tax bills may be lower, valuations have risen an average of 15 percent. Tax appeal filing deadlines vary from county to county, but all appeals must be filed within 25 days of mailing of notices of proposed taxes.

PRWeb.com published on Auguest 31, 2007, dateline Miami, Florida, the following press release.


Miami, Florida (PRWEB) August 31, 2007 -- Florida property tax attorney Daniel Weiss offers the following tips and information to residents and business owners about the upcoming deadline for filing property tax appeals in Florida.

25 day filing period -- Weiss cautions taxpayers that all 2007 property tax appeals must be filed with 25 days of the mailing of notices of proposed taxes.

Since this is one of the shortest statutes of limitations imaginable, Florida property taxpayers are advised to exercise their right of appeal swiftly. The 25 days starts to run on the date of mailing of the notice of proposed taxes. No extensions are authorized by statute.

Each of Florida's 67 counties decides when in August to mail taxpayers their notices of proposed property taxes (TRIM -- "Truth In Millage" -- notices). By state law, however, the deadline for filing valuation appeals expires 25 days from the mailing of the TRIM notice.



Filing deadlines may be as early as the first week of September or as late as the last week of September. By state law, each taxpayer's notice of proposed taxes shows the filing deadline at the bottom.

Only valuations -- and not tax bills -- are subject to appeal. Typically, taxpayers look at the "bottom line" and react based on the projected dollar amount of taxes. After a legislative rollback of local government revenues adopted in 2007, many property tax bills in Florida will be lower than 2006. Valuations, however, are an average of 15 percent higher.

This means that even lower-than-usual taxes may be based on higher-than-ever valuations. So remember to determine whether to appeal based on the valuation -- not the dollar amount of taxes to be paid. Be like the commercial taxpayers who are savvy enough to understand that even if their tax bills are lower for 2007, there is still an opportunity to seek to have them reduced even more.

January 1 is the date of assessment in Florida, as it is in many other states. This means that it is the county's responsibility to ascertain the valuation of all properties as of the first of the year. So if you still had Wilma or Katrina hurricane damage unrepaired as of January 1, 2007, and the Property Appraiser (formerly called the tax assessor) did not take it into account, this failure can be the basis of a successful appeal.

Annual appeal as business strategy -- Many commercial property owners make it part of their annual business plan to appeal all property taxes. It's an easy decision, because most property tax consultants offer their services on a contingency basis. Then, if there's no tax reduction, no fee is due.

Many property tax professionals will review assessments at an initial consultation without charge. Take advantage of this opportunity. Interview more than one before you sign a retainer.

Some property owners prefer to retain a property tax consultant who is also an attorney to represent their interests in property tax appeals. This preference assumes that attorneys are better at spotting legal issues and formulating legal arguments. These include the impact of zoning and comprehensive planning regulations on property tax assessments, as well as superior understanding of procedures and exemption and special classification statutes which confer benefits for agricultural use or historic properties.

Other property owners prefer to work with real estate brokers or agents familiar with comparable sales and income and expense ratios in local markets.

If you're not sure whom to retain, do some research online.

The Florida Department of Revenue provides a list of all 67 county Property Appraisers: http://dor.myflorida.com/dor/property/appraisers.html Contact the local County Property Appraiser to ascertain the date of mailing of the notice of proposed taxes or to request a duplicate of any notice not received.

But don't delay. The tax appeal time clock is ticking.

Daniel A. Weiss has over 26 years experience as a Florida property tax attorney. Weiss was named by the 2007 South Florida Legal Guide as one of the top lawyers in the practice areas of both Real Estate - Land Use, Zoning & Environmental and Real Estate - Commercial.
Property Tax Appeals

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Mr. Weiss has represented taxpayers in thousands of administrative tax appeal hearings and has more than 70 published opinions to his credit, including 55 property tax opinions, is co-author of Chapter 64 of the Florida Tax Service 2d, "Agriculture and Other Classified Properties" with Matthew Bender, and a lecturer on property taxation for the National Business Institute.