Questions on Property Tax

May 01, 2008 2 Replies

I have two questions regarding property tax. We are a California based business, but I hope the answer will not be significantly different across different locations.



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?


"Will" wrote

Yes. So do shipping and installation charges.

Yes.

You're already had your two..........

Times up.

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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