What Is Taxable Personal Property?

All property is taxable (or assessable) unless it is exempt by the Constitution or statutes. This taxable property may be defined as Real Property and Personal Property.

Real property is specifically defined by the law.  Real property, or real estate, is:

(a)          The possession of, claim to, ownership of, or right to the possession of land.
(b)          All mines, minerals, and quarries in the land, all standing timber whether or not belonging to the owner of the land, and all rights and privileges appertaining thereto.
(c)           Improvements.

Personal property, on the other hand, is defined by exception; personal property is all property except real estate.

Tangible personal property is defined as all “property that may be seen, weighed, measured, felt, or touched, or which is in any manner perceptible to the senses” except real property as defined above.

Not all property defined as personal property is taxable.  Unlike real property, personal property may, in whole or in part, be exempted by the Legislature.

Examples of current exemptions provided by legislative statute include business inventories, personal household furnishings, personal effects, and pets. But, in general, personal property remains taxable.

Assessment of taxable personal property relies on the same basic value concepts applicable to real property, and both are taxed at the same maximum percentage (1 percent) of full cash value (or market value). However, personal property is treated differently in many other respects:

  • Special assessments are levied on real property only.
  • The Legislature has wide authority pursuant to article XIII, section 2, of the Constitution concerning the taxation and/or exemption of personal property.
  • Personal property cannot be assessed to insurance companies or banks; fixtures are assessable, however.
  • Real property is governed by article XIII A (and assigned a base year value), while personal property is appraised at market value annually.
  • There is no taxable possessory interest in personal property, except as provided for in section 201.5.
  • Before declines in value can be recognized, machinery and equipment classified as improvements must be separated from other improvements.

571-L Property Statement form filing dates:

April 1st of each year                       Last day to timely file property statement
May 7th of each year                       Last day to timely file statement without a penalty
May 31st of each year                     Last day to amend statement omissions & errors