INFO PAGE
Business personal property frequently asked questions
This page outlines the answers to frequently asked questions about business personal property.
Frequently asked questions
What is the tax rate and when I will receive my bill?
The tax rate for lien year 2024 is 1.1777%. The Office of Treasurer & Tax Collector will mail tax bills for unsecured property to taxpayers in July 2024, and payments will be due by August 31, 2024. (CA law, § 2922 Rev. & Tax. Code)
When you file your business property statement on time, you should receive your bill by the end of July. Payment is due on or before August 31st and becomes delinquent after that date and will be subject to late fees.
- If the business owner also owns the building in which the business resides, the business property tax will be included with the secured tax bill. The secured tax bill is sent by the end of October with the 1st payment due by November 1st.
- The assessment of a property is the responsibility of the Assessor's office. Our office can address questions about how your tax assessment was determined.
- Tax bills are the responsibility of the Treasurer & Tax Collector’s office. Direct your questions about billing and payment to the Tax Collector’s Office. The Tax Collector’s website is www.sftreasurer.org.
I received my unsecured tax bill and I don't understand why the tax bill would increase from prior year?
Common reasons why an unsecured tax bill may have increased from the prior year include:
- leasehold improvements acquired after 2012 appreciate in value per Proposition 13 (unlike most other unsecured property assets which depreciate in value)
- a penalty of 10% per R&T code, section 463, was added to the unsecured property assessment because the taxpayer was required to file but did not or filed late
- an estimated value was the basis of the unsecured property assessment because the taxpayer was required to file but did not. Appraisal judgment was used to assess the estimated value
- additional business assets were acquired
- the tax rate may have increased
Are my business assets taxable and under what authority, or does my personal property qualify for low-value exemption ordinance?
The State Constitution says all property is subject to property tax unless otherwise exempt. Most people are familiar with the property taxes on their home. The assets of a business are also subject to assessment and taxation. Section 201 of the Revenue and Taxation Code of California states that “All property in this State, not exempt under the laws of the United States or of this State, is subject to taxation under this code”. R&T Code, Sec. 441(a)
Each person owning taxable personal property, other than a manufactured home subject to Part 13 (commencing with Section 5800), having an aggregate cost of one hundred thousand dollars ($100,000) or more for any assessment year shall file a signed property statement with the assessor.
Every person owning personal property that does not require the filing of a property statement or real property shall, upon request of the assessor, file a signed property statement. Failure of the assessor to request or secure the property statement does not render any assessment invalid.
You may have not filed the Form 571-L in past years because your business personal property value has not exceeded $4,000 (exempt per San Francisco City Ordinance 308-97)
You may be required to file the Form 571-L this year if the business information has changed.
What is the lien date and by when is business personal property appraised?
January 1 at 12:01 AM is the current lien date in California.
The owners on the lien date are shown as the roll assessee on tax bills issued after that lien date until tax bills are issued after the next lien date. Placing a lien against someone or their property is a way of “binding” that property to show an obligation owed by that owner to the person who holds the lien. In this case, the obligation is to pay the taxes and the “person” who holds the lien is the taxing entity. Unsecured property taxes on boats, aircraft, unsecured business property, and possessory interests are usually not prorated when there is a transfer. Thus, someone who sells a boat in February that they owned on January 1 is still responsible for the property taxes for the fiscal year beginning July 1 after that February and running through June 30 of the next calendar year. Persons who sell their boat or aircraft between January 1 and when the bill is issued, should collect the expected amount of taxes from the buyer. The reverse happens if someone buys a boat or aircraft after January 1. They will not receive a regular bill until July following the next January after their purchase. Secured property taxes on real property such as land, homes, commercial/industrial structures, and ranches/vineyards are usually prorated in escrow as of the date of the transfer. The lien date does not make a significant impact on these transactions. The lien date is important, however, because decline in value reviews are made as of the lien date which sets the value for the coming tax year.
In short, unlike real property, business personal property is appraised annually. Owners of all businesses must file a business property statement each year with the Assessor’s Office detailing the cost of all their supplies, equipment, and fixtures at each location. This is required unless the Assessor’s Office has already established the value of the business property and sent out a notification of “direct billing” or “low-value exemption.” Business inventory is exempt from taxation.
Is there any property that is exempt or that I do not have to report on my Business Property Statement?
The following are some common exempt items that should not be reported:
- Business Inventory (Revenue and Taxation Code 129)
- Application Software (Property Tax Rule 152)
- Licensed Motor Vehicles (R&T Code 10751)
- First $50,000 of employee-owned Hand Tools (R&T Code 241)
Are non-profit and religious organizations required to file annual Business Property Statements?
Yes. The filing laws apply to non-profits, including religious organizations, who may qualify for property tax exemptions.
In summary, R&T codes state:
- Section 441 where any property owner with aggregate personal property costs of $100,000 or more must file 571-L statement due by May 7th without penalty (section 463) with the Assessor.
- Section 267 where claim form can be filed by property owner to exempt the value that will be reported on the property owner's annual 571-L statement to the Assessor. Therefore, to receive the exemption of value, property owner must complete both the exemption claim form AND the 571-L statement submission for each property.
The above 2 R&T code rules relate to 801/802 annual reporting requirement, which applies to the Assessors, where they must report annually to California Board of Equalization regarding all business personal property values and exemption values, as assessed in their county.
For more information, please contact our office and ask for the Exemptions Division of the Assessor's Office.
All the equipment I use in my business was gifted to me and I don't know what to report on my property statement.
Equipment gifted to you for use in your business is taxable and must be reported on the property statement. If you don’t know the equipment cost and/or year of acquisition, provide a good description including make and model and the general condition of each piece of equipment.
I do not own anything and lease all my equipment; do I still have to file the statement.
Yes. You are required to report this information in Part III of the statement so that the Assessor can properly locate and assess the actual owner of the equipment. However, if you own any small equipment, such as printer, copier, supplies, etc., which you are using in the business you need to report these costs under Part II of the statement.
If the statement is not filed, how is my assessed value determined?
The Assessor-Recorder’s Office, directed by state law, will determine an assessable value. In addition, a 10% penalty for failure to file will be added to your assessment (R&T Code, Sections 441, 463 and 501).
Who can sign the statement?
The owner or an authorized agent can sign the statement. When signed by an agent or employee other than a member of the bar, a certified public accountant, enrolled agent or a duly appointed fiduciary, the assessee’s written authorization of the agent or employee to sign must be filed with the Assessor.
The signature on the authorization must be an original, not a fax copy. In the case of a corporate assessee, the statement must be signed by an officer or by an employee or agent whom the board of directors has designated in writing.
A property statement that is not duly signed in accordance with the foregoing instructions does not constitute a valid filing and may be subject to the 10% failure to file penalty.
Is the business personal property statement subject to audit?
Yes, the statement is subject to audit by the Assessor-Recorder’s Office. The Assessor-Recorder has the discretion to audit businesses to encourage the accurate and proper reporting of personal property. State law mandates BPP audits as well.
I have already competed and sent my business property statement and now realized that I have to amend the statement. What should I do?
You will have to resubmit or file a new statement with all the preprinted identification that was on the initial statement. Please indicate this is an “AMENDED COPY” to the statement that was submitted previously.
You may call the office and ask for another statement, if necessary. Statements that were initially filed on time may be amended without penalty until May 31st (R&T Code, Sec. 441 (i)).
I closed or sold my business after the lien date; do I still have to file the statement?
You are required to file if your annual BPP filing notice states that filing is required. You should contact our Office to update records and discuss filing requirements.
My business has moved to a new location after the lien date; do I still have to file the statement?
If you moved out to another county before January 1st, make a notation on the statement that you have moved outside of the county. Mail the statement to the address indicated on the form and contact the new county to request a Business Property Statement.
I was not open for business on January 1; do I still have to complete the statement?
No, you do not need to file the Form, but you do need to notify the Assessor's office that the business has closed and the closing date. If this is not done, the Assessor may not be aware of that fact, and may continue to assess the property despite its true circumstance.
I went out of business after the lien date; do I still have to complete the statement and pay personal property taxes?
Yes. The law specifies that all taxable personal property must be assessed as of a specific point in time, and that point is precisely at 12:01 a.m. January 1st (regardless of what transpires after that date). Even if closed shortly after the lien date (January 1st), a business must still file a Form 571-L Business Property Statement.