In San Diego County, every business that has an office has a Property Tax Statement filing requirement. They were due on April 1st with a 10% penalty accruing after May 7th if not filed. If either date falls on a weekend the due date is extended to the next business day (so April 2nd this year). There seems to be quite a bit of confusion on the filing requirements and how to fill out the form. The filing requirement applies to your client if they rent or own office space, or technically, work out of their home (if it’s considered a home office). They must “declare all assessable business property situated in this county which you owned, claimed, possessed, controlled, or managed on the tax lien date…”. Failure to file the business property statement allows the Assessor to “estimate the value of your property from other information in the Assessor’s possession and add a penalty of 10% of the assessed value…”.
In addition, there is a requirement to file in other counties where the aggregate cost is $100,000 or more for any year. A business “must file a business property statement with the Assessor of that county whether or not you are requested to do so…”.
This property includes furniture and fixtures, computer equipment, tenant improvements, and other fixed assets. The business property statements are sent out months in advance of the due date. Many clients receive the form and don’t know what to do with it or who to give it to. It is very common for it move from desk to desk until someone who knows what it is sends it to accounting. It is also very common for many accounting departments to be confused by what to do with it. Some people throw it away, but it is more likely that it sits on someone’s desk, buried in a pile of paperwork well past the filing date.
Every year the form is printed on a different color paper (purple, this year) so it is usually pretty easy to see the form if it is in a pile of paperwork. The easiest way to fill out this form is electronically; the form will automatically prefill with the last years return figures. This will save a considerable amount of time when filling it out for the current year. In order to login and file electronically, an account number and pin number are necessary, which can be located in the top left hand corner of the Business Property Statement.
All assets need to be listed by category with acquisition date. If you are paper filing, it will be necessary to relist all the assets on the prior years return and update for any assets acquired or disposed of. This schedule should tie to your fixed asset schedule. The form is self explanatory as it describes what is listed in each category. There is a section to list all additions and disposals from the prior years return.
It is important to our clients that we are able to keep them in compliance and are on top of the filings before the due date. Even though there is a grace period before any penalty occurs, it gives our clients confidence that we are knowledgeable and efficient when we comply with the due dates.
For help with Property Tax Statement Filings, contact your TGG Accounting expert. We will help you file this form on time and correctly.Written by: Nancy Brzezniak TGG Accounting