Frequently Asked Questions
WHO IS REQUIRED TO REPORT PERSONAL PROPERTY?
Every individual, firm, or corporation owning business personal property in Alabama on October 1 of each year is required to report personal property. Any individual, firm, or corporation owning aircraft based in Alabama, regardless of use, and any individual firm or corporation that purchases a permanent trailer tag for a tractor trailer, truck trailer, or semi-trailer.
WHEN SHOULD PERSONAL PROPERTY BE REPORTED?
A complete itemized listing of all personal property owned on October 1 must be provided to the local assessing official in the taxing jurisdiction in which the property is located. This list must be submitted between October 1 and December 31 of each year to avoid penalty. The list must include a description of the property along with its acquisition date and cost.
I DID NOT RECEIVE A BUSINESS PERSONAL PROPERTY RETURN FORM BY MAIL. WHERE CAN I GET ONE?
Click here: Business Personal Property Rendition
WHAT ARE EXAMPLES OF THE ITEMS I LIST ON THE RETURN?
All furniture and fixtures as well as machinery and equipment purchased for and used by the business.
AM I REQUIRED TO FILL OUT AND RETURN THE BUSINESS PERSONAL PROPERTY RETURN FORM EVERY YEAR EVEN THOUGH MY EQUIPMENT IS THE SAMES AS LAST YEAR?
Yes, the local assessing official must receive a form every year no later than December 31 to report equipment that is owned and located in the county as of October 1.
MOST OF MY BUSINESS EQUIPMENT HAS BEEN FULLY DEPRECIATED ON MY INCOME TAX RETURN; DO I STILL LIST THESE ITEMS ON THE BUSINESS PERSONAL PROPERTY RETURN?
Yes, all assets owned as of the October 1 lien date must be reported with acquisition dates and acquisition costs. The depreciation schedule used in preparing income tax returns may be used. However, the depreciation schedule must be adjusted for additions and deletions so that it will contain property owned by the business on the October 1 lien date. Also, assets which are expensed rather than capitalized for income tax purposes and are not included on the depreciation schedule must be added to the taxpayer's listing so that all personal property is reported.
HOW DOES THE REVENUE COMMISSIONERS'S OFFICE VALUE MY BUSINESS PERSONAL PROPERTY?
The Property Tax Division of the Alabama Department of Revenue has established procedures in the Alabama Personal Property Appraisal Manual for determining market value and the assessed value of personal property. All counties in the state of Alabama use this manual to achieve uniformity. The type of business, type of equipment, acquisition year, and acquisition date are all used in figuring values. For example, computer equipment depreciates more quickly than items of office furniture. Business Personal Property falls into Class II property and is assessed at 20% of its market value.
WHAT IF I FAIL TO COMPLY WITH THE LAW?
If you fail to file a listing of your Business Personal Property, a field review will be conducted in accordance with the provisions of Title 40 of the Code of Alabama 1975. During this field review, a listing will be made of your business personal property and this property will be assessed to you.
WHEN WILL I RECEIVE A TAX BILL TO PAY THE AD VALOREM TAXES ON MY BUSINESS EQUIPMENT?
You will receive a tax bill the following October 1st, just like ad valorem taxes on real property. For instance, what you own this October 1st (2010) you will receive a tax bill for those items the next October 1st (2011).
I ALREADY PAID TAXES ON MY BUSINESS EQUIPMENT WHEN I PURCHASED THE ITEMS. WHY AM I BEING TAXED AGAIN?
When you purchased the equipment you paid sales tax and this is ad valorem tax or "ownership" tax that is solely based upon value. It is based neither upon the ability of the owner to pay nor upon the amount for which the property last sold.
CAN MY BUSINESS BE AUDITED BY THE REVENUE COMMISSIONER?
Yes, and it will be. All counties are currently following the Alabama Department of Revenue guidelines to regularly audit businesses which have personal property.