I have two questions regarding property tax. We are a California based
business, but I hope the answer will not be significantly different across
First, when a fixed asset is purchased that has sales tax added to the
invoice, is the sales tax considered part of the "value" of the asset that
depreciates over time, and should the full sales tax amount be added into
the asset value for property tax purposes?
Second, when a fixed asset has no sales tax added, but you decide that it
should have been taxed, and you pay the state sales tax authority for "use
tax", should that separate payment for use tax be counted as part of the
asset value, and added to it for depreciation and for property tax purposes?
You're already had your two..........
For depreciation, yes, for property tax value, yes.
That's four questions. I get to bill if there's a fifth.
Generally the business personal property tax report is primarily based on
depreciation schedules. It may also be inclusive of inventory, office and
shop supplies, etc. It is generally exclusive of land and buildings,
vehicles, etc where the tax is computed and paid elsewhere.
LOL--Good one Paul!
Michelle L. Long, CPA, MBA
Author of: Successful QuickBooks Consulting: The Complete Guide to
Starting and Growing a QuickBooks Consulting Business
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