:max_bytes(150000):strip_icc()/storage-garage-128087144-56aadb453df78cf772b49632.jpg)
Rebecca Lake is a journalist with 10+ years of experience reporting on personal finance. She also assists with content strategy for several brands.
Updated August 23, 2024 Reviewed by Reviewed by Michelle P. ScottMichelle P. Scott is a New York attorney with extensive experience in tax, corporate, financial, and nonprofit law, and public policy. As General Counsel, private practitioner, and Congressional counsel, she has advised financial institutions, businesses, charities, individuals, and public officials, and written and lectured extensively.
Fact checked by Fact checked by Vikki VelasquezVikki Velasquez is a researcher and writer who has managed, coordinated, and directed various community and nonprofit organizations. She has conducted in-depth research on social and economic issues and has also revised and edited educational materials for the Greater Richmond area.
A personal property tax is imposed by state or local governments on certain assets that can be touched and moved such as cars, livestock, or equipment. Personal property includes assets other than land or permanent structures such as buildings. These are considered to be real property.
Most states levy a business personal property tax as well as a property tax on individuals. Twelve states don't tax business personal property as of 2024: North Dakota, South Dakota, Ohio, Pennsylvania, New Jersey, New York, New Hampshire, Hawaii, Delaware, Illinois, Minnesota, and Iowa.
Each locality can apply its own personal property tax rules. Those that collect this tax typically use the proceeds to fund public works projects such as road maintenance or the construction of schools.
State and local governments with personal property taxes can apply them in terms of:
Property tax is assessed locally and collected by individual counties in North Carolina. The North Carolina Department of Revenue which collects sales and income tax plays no part in the collection or management of personal property taxes.
North Carolina residents are subject to taxes on both real property and tangible personal property, divided into three categories:
Personal property tax isn’t uniform across the United States. Some states don’t tax personal property and those that do may impose different criteria and rates.
Other states such as New York tax only tax real property like land and buildings but they and their local governments may collect sales tax on personal property at the time of purchase. States also collect revenue in the form of registration and licensing fees in the case of personal property such as automobiles and motorcycles.
State and local governments define personal property differently. What’s considered personal property in one state might not fall under that same umbrella in another and not every state taxes personal property at all. Many that do tax it provide exemptions for personal property that's worth less than a certain amount.
Personal property covers anything you own other than real property. The distinguishing factor between personal property and real property is that the former is movable and isn’t fixed permanently to one particular location. Examples of personal property include clothes, jewelry, furniture, and automobiles.
Personal property can also include assets owned by a business. Some typical examples are:
You should be able to appeal with your local tax office if you disagree with a personal property tax assessment. Look for details on their website.
Personal property tax is typically calculated based on the value of the property in question. It's generally assessed as a percentage of that value. Taxes based on the value of the property are sometimes referred to as ad valorem taxes.
Tax assessors determine the value of personal property in various ways. The Missouri city of St. Louis sets car values based on the average trade-in value for that make, model, and year as established by the National Automobile Dealers Association.
The tax rate and how it’s applied can also vary by state and locality. Some states impose a flat tax rate across all property types, including real property, personal property, and vehicles. Others have different rates for types of property. Many allow counties or other local governments to determine what rate to impose although the state may set limits.
Personal property tax rates are periodically updated and property values are reassessed. This could result in your tax bill increasing or decreasing from one year to the next.
The basic property tax rate is 1% in California. This applies to personal property owned by individuals or businesses as well as to real property. But California counties can also add fees or other charges to their personal property tax assessments.
Your local tax assessor’s office or its website should be able to supply information on the personal property tax rate you’re subject to, if any, and what types of property are included.
Personal property tax is typically due annually and assessed on Jan. 1 of each year. Bills are then mailed out to individuals or businesses owing the tax.
You may have to register certain types of personal property with your local tax office when you purchase them. This generally involves completing a form online or in person at the tax assessor’s office listing the details of the property.
Those who itemize their tax deductions can claim a deduction for personal property taxes on their federal income tax although the overall deduction for all state and local income, sales, and property taxes is limited to $10,000 combined.
Whether you must file this type of form can depend on where you live and the value of the property. Filing a business property statement form listing business personal property is only required in Orange County, California when the aggregate value of the property is $100,000 or more. It wouldn’t be necessary to file if you run a business but your equipment is valued at less than $100,000 in total.
There may be a set deadline for filing this form each year. The deadline is April 1 in Orange County. Businesses can file for an extension if they need more time, however.
Personal property is any property that’s not land and all things that are permanently attached to it such as real estate. Examples include cars, livestock, and equipment.
There are generally three types of personal property:
States and localities that collect personal property taxes typically use the money to improve public infrastructure and services.
You may be taxed on the property you own that’s not attached to land, such as vehicles and household items, depending on where you live. Personal property refers to movable assets. It's taxed in several states and localities in the United States and can be quite complicated. Each jurisdiction has its own rules on what constitutes personal property and how it’s taxed and collected.
States and localities that impose this tax typically use the money to improve public infrastructure and services. It’s possible to subtract these expenses on your federal tax return, reducing the amount of taxable income on which you owe federal tax, if you itemize your tax deductions.
Article SourcesAn ad valorem tax is a tax derived from an assessed value, such as the value real estate or personal property, with a tax rate applied.
The Uniform Gifts to Minors Act (UGMA) allows minors to own property, including securities.The mill rate is the amount of tax payable per dollar of a property's value. Learn more about how mill rate is determined and how it is used to assess property taxes.
A widow(er)'s exemption is one of several forms of state or federal tax relief available to a surviving spouse in the period following their spouse's death.
A tax lien certificate is a claim against property that has had a lien placed upon it as a result of unpaid property taxes. Certificates are typically sold at auction.
The Smith Maneuver is a Canadian tax strategy that makes interest on a residential mortgage tax-deductible. Borrowers need a readvanceable mortgage to use it.
Related Articles:max_bytes(150000):strip_icc()/advaloremtax.asp-final-029f64b4f4d648a0b20fee668599b47a.png)
:max_bytes(150000):strip_icc()/StepstoTakeBeforeYourPrepareYourTaxes-ce2597fb6e644b2788a6f20a8272fed1.jpg)
:max_bytes(150000):strip_icc()/ugma.asp-final-e587847fbf754e6384c212417653b8e5.png)
:max_bytes(150000):strip_icc()/GettyImages-1468684796-086b1a840e4c4532b231d7973a9d0f1c.jpg)
:max_bytes(150000):strip_icc()/Millrate_final-3822c10cece446acb554409e1a9df7c1.png)
:max_bytes(150000):strip_icc()/WidowsExemptionDefinitionStateandFederalTaxRulesGettyImages-104302941-8741d93e2fa7496db7793afd151cbd66.jpg)
We and our 100 partners store and/or access information on a device, such as unique IDs in cookies to process personal data. You may accept or manage your choices by clicking below, including your right to object where legitimate interest is used, or at any time in the privacy policy page. These choices will be signaled to our partners and will not affect browsing data.
Store and/or access information on a device. Use limited data to select advertising. Create profiles for personalised advertising. Use profiles to select personalised advertising. Create profiles to personalise content. Use profiles to select personalised content. Measure advertising performance. Measure content performance. Understand audiences through statistics or combinations of data from different sources. Develop and improve services. Use limited data to select content. List of Partners (vendors)
