Georgia Business Personal Property Tax Planning Tips for 2013

June 14th, 2022 by dayat No comments »

Georgia Tax Assessors’ Offices usually mail the PT-50P or Georgia Business Personal Property Return during the first few weeks of the year. Many tax minimizing strategies for federal return purposes may actually increase business personal property tax exposure. Remember, there is no Section 179, bonus depreciation, or threshold for personal property assets. The following tips are not an exhaustive list, but rather a starting point for your business tax planning:

Tip #1: Know the business personal property valuation date and tax return due date for your Georgia county!

Property Valuation Date for ALL Georgia counties: January 1

Property Tax Due Date for ALL Georgia counties: April 1

Personal property taxes are assessed on January 1 of the current tax year for all applicable assets. The law provides that property tax returns must be filed with the county tax assessor or the county tax commissioner between January 1 and April 1 (O.C.G.A. 48-5-18).

Tip #2: File the Business Personal Property return by April 1 to avoid penalties on unreported assets!

A 10% penalty applies to the value of unreported property assets on late returns. For example, if a return is postmarked and received by the Assessors’ Office after April 1st, the penalty would apply to all assets that had not been previously reported-including current year assets. However, if a company has been in existence for years, but never filed a personal property return until April 1, 2013, all prior year assets (2011 and before) are subject to the 10% penalty despite the timely filing date. Only the 2012, or current year assets, would not be penalized in this example.

Tip #3: When mailing your return close to the April 1st deadline, do not use metered mail!

Avoid the 10% penalty on unreported assets by mailing your return at least one week before the due date through the U.S. Post Office, FedEx, or UPS. Ask for your envelope to be counter stamped by the U.S. Post Office as proof of a timely filed return. Most counties do not accept metered mail dates as official filing dates because it is relatively simple to back date the meter. There is also the option to hand-deliver the return to the Assessors’ Office. Make sure to receive a copy of the stamp dated return.

Tip #4: Again, timing is everything!

All property subject to taxation should be returned as provided by law (O.C.G.A. 48-5-10). File personal property returns for property held and owned as of January 1 (valuation date for all Georgia counties). If you are the property owner as of January 1, it does not matter if you sold the property on January 2. You are deemed the property owner for the entire year! There is no proration for business personal property taxes.

Tip #5: Time your fixed asset and inventory purchases wisely!

The property valuation date is January 1 for all Georgia counties. Consider purchasing assets on or after January 2 to defer reporting the property for one year. This may be contrary to standard federal tax advice about timing asset purchases before December 31.

Freebie: Perform due diligence before you purchase a business!

Taxes are assessed against the property owner if known OR against the property if the owner is unknown. The Assessors’ Office can treat as the owner any person that has possession of the assets when they are unable to attach ownership to anyone else. Possession is considered a mark of ownership.

While some of these tips may seem elementary, many businesses are penalized each year due to non-compliance. Take a proactive approach with business personal property tax planning and minimize your tax liability for 2013.

Angelica Moss, CPA is the principal of Equity Tax Consultants, a full-service business personal property tax consulting firm based in metro Atlanta, Georgia. Equity Tax Consultants specializes in Freeport Exemption Reviews, Tax Appeals, Compliance, Reverse Audits, and Property Tax Planning. Angelica was a former personal property appraiser and auditor for a large metro-Atlanta county for several years before founding her consulting practice.

Commercial Insurance Business Personal Property

May 14th, 2022 by dayat No comments »

This commercial insurance business personal property coverage along with the building property coverage, business income coverage, and extra expense coverage is usually written on the commercial property policy. This can be written on a stand-alone commercial property policy or it can be folded into a commercial package policy. Usually a package policy has two or more different lines of business coverages. The most common lines of business coverage are the general liability and property insurance combine together to make a package policy.

Business personal property is almost always covered within your insured building or outside the building on the premises but usually within 1,000 feet of the primary insured location. You do not necessarily have to own your business personal property. There’re many different categories of this type of property. Your property could be 100% financed by a bank and while they are the legal owner you still can provide business property insurance coverage. Many times businesses lease their business contents. Most common types of leased business personal property are the copy machine, the phone system or many different types of office equipment. In this era of the virtual office you could conceivably lease everything within your space. When you have a loan on your contents or the property you lease you will have to name the lessor and/or the bank as a loss payee on your property and provide the appropriate evidence of property insurance coverage.

Most businesses from time to time have personal property of others in their care custody or control. These items could be stored at their desk or work area or in a specific locker room storage location within the premises. You may or may not have any responsibility to provide reimbursement if employees personal property becomes damaged or stolen. Providing coverage for property of others will help alleviate that risk exposure. Property of others could also extend to your clients and customers if you are in a particular business that provides services for other people’s contents. Maybe you are providing repair or maintenance on their contents. While the client should have their own insurance protection for their personal property a business owner can sometimes be legally liable for the property that is within your care custody or control. This coverage can be afforded under the business personal property portion of the commercial property policy.

Usually in manufacturing businesses or distribution businesses the business personal property can transform into many different forms and shapes and locales. Business personal property which is of the inventory nature can increase in value from raw materials all the way through to the finished product. Having built-in protection for inventory fluxes as they increase from a work in progress standpoint can help prevent gaps in coverage and losses. In further articles we will explore the final two coverages of business income and extra expense.