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Most business owners are aware that land and buildings are subject to a real estate tax. Business owners may not be aware they are also subject to a local business/personal property tax.
Business/personal property consists of any tangible assets owned by an individual, a business, or an organization which are not real estate, are not permanently affixed to a particular building and are not the personal furniture and fixtures of the domiciliary owner of the property. Personal property is composed of goods, merchandise, equipment, tools, machinery, furniture, furnishings and effects and other movable property. The municipality where the property is located on January 1 has the authority to assess the tax. Property is located in a particular municipality if it is physically located in the community on January 1 and is intended to remain there. Property intended to be moved from location to location is deemed located where the owner lives or has a principal place of business.
Example: The equipment of a construction company that is moved from site to site is located in the municipality where the company is headquartered.
The tax is an assessment on the ownership of property and the owner's tax liability is measured by the value of that property. In the case of a partnership, all of the partners are liable for the whole tax.
For businesses owned by individuals and partnerships, all equipment, machinery, stock in trade, furniture and fixtures is taxable at the local level.
For businesses owned by a corporation, machinery (not stock in trade), poles, wires and underground conduits are taxable at the local level. Corporations are partially exempt from local taxation on much of their personal property, but the exempted property is taxed at the state level as part of the corporate excise. The coordination of the complementary provisions avoids double taxation of these assets.
A Form of List (State Tax Form 2) must be filed each year by all individuals, partnerships, associations, trusts, corporations, limited liability companies and other legal entities that own or hold taxable personal property on January 1. Individuals who own or hold household furnishings and effects not situated at their domicile on January 1 must file State Tax Form 2HF. This return must be filed by March 1 in the Assessors office. The Form of List is confidential and not public information.
Literary, temperance, benevolent, charitable or scientific organizations that may be entitled to an exemption under G.L. c. 59, § 5 Clause 3 must file State Tax Form 1-B3 the initially and form 3ABC the first year and every year thereafter; listing all property they own or hold for those
purposes on January 1.
An abatement is a reduction of property valuation that may result in a tax reduction. Abatement applications may only be filed in the time between the mailing of the actual tax bills (on or about December 31) thru the due date of those bills (generally April 1st).
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