Taxes on equipment

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Willemjm

Willem
Corporate Member
If you see a guy prowling around on your property, don’t be kind.

Moore county had a guy visit my property, they decided on their own to value the internal equipment of my shop at $30,000 and I now get a separate property tax bill for my equipment once a year.
 

junquecol

Bruce
User
Back in 1980, built house. In Jan, 81, built shop. Feb, 81 tax guy comes and starts appraising both. Had show them receipt for concrete in footings, which was bought in Jan 81 to keep taxes off shop for another year. One of the reasons I closed my business was collecting sales tax on my labor. This meant NC and Wake County combined were collecting a 7.25% income tax beyond what I was already paying. Plus labor income was used to pay for items already taxed (electricity, propane truck expenses, tools and supplies.) This is double taxation. But don't worry, American Airlines no longer had to pay sales tax on fuel at Charlotte Douglas Airport, nor did millionaires have to pay sales tax on boats, or Leer Jets. Nice thing is when I retired, all the stuff in shop became personal property, which is tax exempt.
 

tvrgeek

Scott
User
Nope.
The moment you run a business on personal property, all your equipment is taxed.
Depends on the business. They can only tax the equipment that is related to the business.
If you are a CPA working from home with a woodshop, they can't tax your hobby of woodworking. But if you are a woodworker by business, and probably they would argue if a GC, well then pay your fair share. If the wrong equipment is taxed, you may have to file for a re-assessment.

Many do not have the correct insurance for their business. A big area is use of a personal car for business. Read your policy and you will see any business use is excluded from your coverage. If you are in an accident and are taking material home to be used in the shop for business, they can deny your claim. We had a big fight with our third party maintenance company about insurance as the required you to use personal cars and would not pay for the extended coverage. ( which is not cheap) If your shop burns down and no business insurance, they may deny it under homeowners. Same with liability insurance.
 

tvrgeek

Scott
User
Of course, if running a business, then you have business taxes, State and Federal. You recover some of the equipment asset cost by depreciation which will then reduce the property tax. If your Jet or boat is used for business, it gets depreciated and is not personal property.

Tax is assessed when money changes hands. So, in the life of any product or service, it gets taxed several times. It is not really double taxation. It is structured where it does not matter if you work for a company you own, or some one else. Yes, it sure adds up. But unless you are a billionaire ( lots of political comments I will keep to myself) we all should pay under the same rules.

Yes, jurisdictions grant State and Local tax exemptions on some businesses under the justification that having the business locally will generate greater revenue by higher employment or sales tax. Amazon, and many car factories are examples. Let us just say, it is the "golden rule" : He with the gold makes the rules.
 

Willemjm

Willem
Corporate Member
My Building is for "storage"......
Hard to explain, when it is full of machines, electrically connected, with dust collection connected and work in progress. My shop was done while the house was still going up. Plus the AC. The can charge back taxes, plus penalties.
 

gfernandez

Gonzalo
Corporate Member
Nope.
The moment you run a business on personal property, all your equipment is taxed.
No, just the equipment related to your business. You'll be lucky if there aren't additional penalties levied. May be time to have a talk with your accountant to get squared up and legal.
 

Willemjm

Willem
Corporate Member
Of course, if running a business, then you have business taxes, State and Federal. You recover some of the equipment asset cost by depreciation which will then reduce the property tax. If your Jet or boat is used for business, it gets depreciated and is not personal property.

Tax is assessed when money changes hands. So, in the life of any product or service, it gets taxed several times. It is not really double taxation. It is structured where it does not matter if you work for a company you own, or some one else. Yes, it sure adds up. But unless you are a billionaire ( lots of political comments I will keep to myself) we all should pay under the same rules.

Yes, jurisdictions grant State and Local tax exemptions on some businesses under the justification that having the business locally will generate greater revenue by higher employment or sales tax. Amazon, and many car factories are examples. Let us just say, it is the "golden rule" : He with the gold makes the rules.

All my equipment has been written of, so they have zero value on my balance sheet. Only the shop building is being depreciated over 30 years. Even the AC for the shop has been written off. The tax accessor wanted original purchase price of each piece of equipment, year of purchase and they have a formula for calculating personal property used for business value.

So I get three sets of tax bills, one for the real estate value, one set for all my vehicles and one for my equipment.
 

Willemjm

Willem
Corporate Member
No, just the equipment related to your business. You'll be lucky if there aren't additional penalties levied. May be time to have a talk with your accountant to get squared up and legal.
I have good accounting practices in place, submitted and checked by a reputable CPA firm each tax year. I have a state tax audit in progress, which is a total joke. Incompetence like I have never seen before. I am tempted to make a YouTube video of that, so the public can see what small businesses have to deal with. But probably better to utilize my time better.
 

woodworker2000

Christopher
Corporate Member
All my equipment has been written of, so they have zero value on my balance sheet. Only the shop building is being depreciated over 30 years. Even the AC for the shop has been written off.

So you want the benefit of reducing your taxes by depreciating equipment you use in your business but don't want to pay personal property tax on equipment you use in your business. I don't understand your issue. The taxing authorities are treating you no differently than any other business.
 

Willemjm

Willem
Corporate Member
So you want the benefit of reducing your taxes by depreciating equipment you use in your business but don't want to pay personal property tax on equipment you use in your business. I don't understand your issue. The taxing authorities are treating you no differently than any other business.
I don’t have an issue with paying tax on personal property used for business purposes. My objective with the initial post was just to alert members here that they should be careful when making items in a home shop which are being sold. Then they are liable for paying personal property tax on the equipment used for that purpose. And, I guess it depends on the rules of the county one lives in.

Neither I or my CPA knew about this until I was approached by Moore county, so it was a learning experience for me, which I wish to share for the benefits of members here.

Also worthy to note is that county rules and state rules are not consistent.

What I did complain about, is a NC State tax audit, something totally different, which is being handled far beyond my moral compass, with regards to their conduct.

From your tone, perhaps you are affiliated with the state? If that is the case I will be pleased to share my last writing and telecom voice recording with you.
 
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gfernandez

Gonzalo
Corporate Member
I have good accounting practices in place, submitted and checked by a reputable CPA firm each tax year. I have a state tax audit in progress, which is a total joke. Incompetence like I have never seen before. I am tempted to make a YouTube video of that, so the public can see what small businesses have to deal with. But probably better to utilize my time better.

As a small business owner who works in multiple states across the country, I feel your pain.
 

Rwe2156

DrBob
Senior User
"Tangible property" tax is just another way to extract money from businesses. Its a double tax. You're taxed on the income generated by the equipment. You paid tax on the equipment when you bought it and it is depreciating in value every year. If you sell the equipment, its a capital gain.

It's not just equipment, its any fixture in a business, right down to window blinds.
 

woodworker2000

Christopher
Corporate Member
@Willemjm, I am not affiliated with any federal, state, or local government but if your CPA wasn't aware that personal property tax is assessed on business assets, you may want to find a new CPA or, at a minimum, make him or her aware of this site which provides useful information about starting a business in NC: State of NC - Starting a Business. Clicking on the Taxes link brings you to another page which includes this tidbit of information "As a business owner, you are responsible for listing your business personal property with the County Tax Assessor."
 
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