Business personal property in the context of ad valorem tax is everything that isn't considered real property. In any given commercial or industrial facility all of the property found onsite is classified as real or personal property. Real property often includes land, buildings, improvements and rights conveyed with the real property. Personal property would include everything that isn't real property including but not limited to machinery and equipment, furniture and fixtures, computer equipment and leasehold improvements. However, personal property can take many forms and can include:

manufacturing inventories, retail and wholesale inventories, supplies, manufacturing machinery and equipment, manufacturing tools, dies and molds, warehouse equipment, heavy construction equipment, store equipment, professional equipment, office furniture and fixtures, computer equipment, expensed assets, idle, salvage and obsolete assets, leasehold improvements, leased assets, rented and owned assets, motor vehicles, boats, aircraft, construction in progress, exemptions, and etc.

One of the most difficult jobs for a taxing official can be the distinction between real and personal property in a complex industry. Although there are many gray areas concerning property tax, some common areas requiring personal property guidance include: real versus personal asset classification, computer equipment classifications, asset classification in general, pollution abatement equipment certifications, cost omissions, construction in progress confusion, ghost assets, expensed assets, inventories and supplies, and tax situs.

Personal property classification and related taxation issues can be a complicated and time consuming process. If you have any questions concerning the above items, or wish to learn more about personal property issues and related topics, please contact a TMA representative.