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Tulare County

Office of the Assessor/Clerk-Recorder

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About Business Property Assessments

Unlike real property, business personal property is appraised annually.

The Business Personal Property Division (BPP) of the Office of the Assessor / Clerk-Recorder is responsible for assessing all unsecured property owned by businesses located in the County of Tulare and conducts business audits mandated by the State. Business Personal Property includes items like machinery, equipment, fixtures, and leasehold improvement held or used in connection with a trade or business. Unlike Real Property, Business Personal Property taxes are based on information provided to the Office of the Assessor/ Clerk-Recorder on an annual basis. Business Personal Property is reassessed annually because businesses may have acquired new or disposed of existing personal property during the course of the year.

Business property owners must file a property statement each year detailing the acquisition cost of all supplies, equipment, fixtures, and improvements owned at each location within the County of Tulare.
The State Constitution indicates that all property is subject to property tax unless otherwise exempt. Failure to file the Business Property Statement (i.e., Form 571-L, 571-R, 571-STR) will subject business owners to an arbitrary assessment plus a 10% penalty.
Assessment begins with the cost of the asset, including sales tax, freight and installation per filed Business Property Statement (Form 571-L). The Assessor applies valuation factors (for reference, please see the Business Factor Table) to the cost of the asset to arrive at the assessed value.

What is business personal property?

Business personal property is all property owned or leased by a business except real property. Tangible personal property owned, claimed, possessed, or controlled in the conduct of a profession, trade, or business may be subject to property taxes. Business personal property and fixtures are valued annually as of the January 1 lien date. Business inventory is personal property but is 100 percent exempt from taxation.

Why do I have to pay taxes on my business property?

The California Constitution states in part that, 'Unless otherwise provided by this Constitution or the laws of the United States, (a) All property is taxable....' That is, unless otherwise exempted, all forms of tangible property are taxable in California and the Assessor must assess business personal property because the law requires him or her to do so. Some forms of personal property are exempt from taxation under the Constitution. For example, household furnishings, personal effects and business inventory are exempt under the law. However, Business Personal Property is not exempt under the law and neither are privately or business-owned boats or aircraft.

How is the assessed value of my business property determined?

The Assessor is required to annually assess most taxable personal property at 100% of its lien date, fair market value. In order to determine fair market value, the assessor employs a number of methodologies. For example:

The Assessor often relies on various trade publications and 'Blue Books' that provide current, open market sales price and/or cost data for various types of both new and used equipment, vehicles, aircraft and boats.
The Assessor trends actual owner-reported costs to a present replacement cost estimate using trending tables provided by the State Board of Equalization. We then reduce the trended costs to reflect normal or actual depreciation and derive a market value estimate.

Unlike real property, which is assessed under Proposition 13, most personal property does not fall under Prop 13's umbrella (although it does enjoy the same, maximum 1% tax rate). The only exception is personal property 'fixtures,' which are defined as real property for property tax purposes and are subject to Proposition 13 restrictions. Unlike other real property, fixtures are not subject to supplemental assessment.

Can the county assessor prorate assessments or taxes between the buyer and seller of taxable personal property?

No. The county assessor must annually assess all property in the county to the person owning, possessing, or controlling it on the lien date. There is no provision in the law that allows the county assessor to prorate assessments between the buyer and seller of taxable personal property that is sold in the ensuing fiscal year.

I sold my personal property (boat, aircraft, machinery, or equipment) after January 1. Shouldn't the new owner be required to pay the property tax?

Even though you may no longer own the property, you are still liable for the taxes because you owned it on the January 1 lien date. When taxable personal property is sold subsequent to the lien date, it is the duty of the seller to pay the taxes on the property for the ensuing fiscal year.

What is the 'lien date'?

The lien date is January 1 every year, and is also the date property taxes for any fiscal year become a lien against a business property owner. Where personal property is concerned, the lien is placed on the owner of the property (not the property), and owners who allow their personal property taxes to become delinquent may have a summary judgment recorded against them personally.