Personal property tax which is also collected on high-priced possessions, such as yachts and air planes, is most often collected from California businesses. Each year, business owners must detail the cost of all their supplies, equipment, and fixtures in a 571-L. Depending on the county in which the property is located, a business must pay for items that they own such as machinery, fixtures, office furniture and equipment; however business inventory is exempt. While computers are understandably taxable, operating systems also are included on the taxable-items list; however, most application software is exempt.
Capital Assets and Personal Property Tax
Almost everything you own and use for personal or investment purposes is a capital asset. Examples include a home, personal-use items such as household furnishings, and stocks or bonds held as investments. When a capital asset is sold, the difference between the basis in the asset and the amount it is sold for is a capital gain or a capital loss.
Capital gains are either short-term (owned for less than a year) or long-term (owned longer than a year). If your long-term capital gains are more than your short-term capital gains that gain may be taxed at a lower tax rate than your ordinary income tax rates – rates are higher for taxpayers making higher incomes but in general the rate for long-term gains is lower than that for income tax. Short-term gains are taxable at the normal income rates.
Unusual taxes include:
- The highest tax for a gain from selling section 1202 qualified small business stock is 28%.
- Net capital gains from selling collectibles (such as coins or art) are taxed as high as 28%. In general, a collectible is something that that is being held with the intent of making money instead of simply owning it for pleasure. While you might be able to use a collectible investment — like wearing a Rolex Daytona when you’re out to dinner — investment collectibles are typically safeguarded to avoid damage that would reduce their value.
Property Tax Appeals Process
Property owners may inspect and copy documents related to their property’s assessment. If they disagree with the assessment, they can ask for an interview to discuss the basis of the assessment and to inform the assessor of any facts affecting the valuation of the property. Most disagreements are settled this way, however, if an agreement cannot be reached an appeal should be considered.
Paramount Property Tax Appeal specializes in real estate and personal property tax filings. When needed, we know how to file and effectively win an appeal in any county. We represent our clients throughout the filing and appeals processes.