Hall changing way business personal property is assessed

by Sherry Hamilton - Posted on Mar 13, 2013 - 01:07 PM

Mathews County Commissioner of the Revenue Les Hall said he’s changing the way business personal property is assessed for tax purposes in the county. He has also requested that business owners fill out new business property tax returns.

Hall said that in the past, business personal property assessments were based on depreciation schedules in the tax code—a method that allows people to recover the money they invested in equipment over time. But this isn’t an adequate economic value of property for county tax purposes, he said, because as long as a business is using a piece of equipment, it has some value to the business and thus some taxable value to the county.

Therefore, Hall is having businesses give the purchase price and the date of purchase for any equipment they have, and he will assess its value from there. The property will be assessed at 30 percent of its original cost for 10 years, he said, and then 10 percent of its original cost until it is disposed of.

Hall emphasized that he doesn’t mean that the tax will be 30 percent of the cost, but that the value of the item will be set at 30 percent of its original cost, and the tax will only be charged on that 30 percent. For instance, an item that cost the taxpayer $100 will be valued at $30 for tax purposes, and the taxpayer will pay whatever percentage tax rate is applicable on that $30, not on the $100 purchase price. At the 2012 business property tax rate of $2.14 per $100, the tax on that item would be 64 cents, said Hall.