Personal Property questions? See below.
If you own a business with tangible personal property in the Metropolitan Nashville or Davidson County areas, we have the answers you need.
Closed or Sold Business
State law requires you to notify the Assessor in writing and pay personal property taxes within 15 days of sale or closure.
GoTangible Personal Property
Tangible personal property is defined as assets owned by the taxpayer and used or held for use in such business or profession, including, but not limited to, furniture, fixtures, machinery and equipment, all raw materials, supplies.
In Tennessee, personal property is assessed at 30% of its value for commercial and industrial property and 55% of its value for public utility property.
One of the most common components used to differentiate “personal property” from “real property” is whether it is moveable (personal) or affixed (real).
Excluded: all finished goods in the hands of the manufacturer and the inventories of merchandise held for sale or exchange.
Reporting
No later than February 1 each year, the Assessor is required to furnish each applicable business in the county with a Schedule B for listing all their tangible personal property. Those business owners or agents must then complete and return the Schedule B, and asset/disposal lists to the Assessor’s Office.
For many existing businesses, this simply involves listing the equipment acquired or disposed of during the previous year, so that it may be added or removed from the schedule already on file. It is basically a “self-declaring” system, which is subject to audit for verification.
Deadline: March 1st is the deadline for filing Personal Property Reporting Schedules each year. Failure to return the schedule by that date will result in a forced assessment of the business’s personal property using information about the quantity and value of personal property held for use by businesses of similar size and function. Mail addressed to the Assessor’s Office that is postmarked March 1st is acceptable.
Amend a Filing
To amend your filing, call our Personal Property Department at 615-862-6073.
How is personal property assessed?
Unlike real property, where the appraisal is based on fair market value and equalized across the entire jurisdiction, the appraisal of personal property is based on the actual cost of the property less depreciation. Personal property is categorized into 10 groups for reporting. Each group has its own depreciation schedule that is outlined in state statutes.
Leased Property: In Tennessee, leased personal property used by a business is assessed to the lessee (user) and must be reported on the company’s reporting schedule every year.
Small account certification: For smaller accounts, the system allows an alternate method for reporting personal property. If the depreciated value of the business’s personal property is $1,000 or less, the owner can declare such in the reporting schedule and he/she does not have to itemize or report detailed costs. With this certification, subject to audit, the assessment will be set at $300.
Prorate Roll – Business Tangible Personal Property: Proration may be required when commercial or industrial tangible personal property is “destroyed, demolished or substantially damaged by fire, flood, wind or any disaster certified by the federal emergency management agency (FEMA), and is not restored and no commercial and industrial tangible personal property is operated in its place before September 1 of that year.” (TCA § 67-5-606)
Intangible Personal Property
Intangible personal property is defined by statute to include “money, any evidence of debt owed to a taxpayer, any evidence of ownership in a corporation or other business organization having multiple owners, and all other forms of property whose value is expressed in terms of what the property represents rather than its own intrinsic worth.” Included is all personal property not classified as tangible personal property. The assessment level is 40% for this classification.
The state constitution gives the legislature power to establish subclasses and assessed value percentages for intangible personal property, but currently, the statutes impose the assessment only on intangible personal property of certain insurance companies. Provisions for assessing bank-owned intangible property were struck down by the U.S. Supreme Court in 1983 and an excise tax is now imposed in lieu of the property tax on intangible personal property of banks.
Reporting
The Davidson County Assessor’s office provides a schedule for reporting intangible personalty. Certain Insurance companies are provided a Tax Schedule “D” to be completed and returned in the same manner. If you feel you need to file this schedule, call our Personal Property Department at 615-862-6073.