What is the difference between property tax and tangible personal property tax? While property taxes are commonly understood as payments on your home or land, tangible personal property is a less common term used in real estate. Referring to physical objects other than the literal land or building, personal tangible property is important in commercial and rental businesses. Here is the basic info to know about personal tangible property and associated taxes:
Tangible personal property examples
Some examples of business assets qualifying as tangible personal property include:
- furniture
- production machinery
- computers
- delivery vehicles
Individuals and households may have personal tangible property such as:
- jewelry
- collectibles
- sports & hobby equipment
You can think of tangible personal property as anything of value with physical existence. Other assets, such as patents and copyrights, do not count as tangible personal property as they are not literally tangible.
How tangible personal property taxes work
Similar to regular property taxes, personal tangible property taxes are based on a percentage of either the asset's sale price or assessed value. Landlords and businesses have to report these assets on a tax return, as long as they are related to a business. Taxes are paid to the local government, and in some cases can qualify for tax deductions on federal income tax returns.
Understanding personal tangible property taxes is crucial if you're planning on investing in a commercial or rental property. Keep this basic info in mind when considering your next move in real estate investment.
About the Author
Deborah Tomczak
Hello, my name is Deborah Tomczak, One of the Top Selling Real Estate Agents on the Space Coast working with Remax/Elite.
I specialize in the business of pairing discerning buyers with homes that match their wants and needs, and maximizing profits for people with real estate to sell. My commitment to you is that I will make sure you are communicated with during the entire process to reduce stress and ensure a positive outcome.
I bring a 25 year corporate career in marketing and advertising to my 19 year real estate business, allowing me to utilize skills and experience to make the best use my clients time and minimize unforeseen challenges that may arise.
I'd be honored to put my real estate experience to work for you.