Georgia Tax Assessors’ Offices usually mail the PT-50P or Georgia Business Personal Property Return during the first few weeks of the year. Many tax minimizing strategies for federal return purposes may actually increase business personal property tax exposure. Remember, there is no Section 179, bonus depreciation, or threshold for personal property assets. The following tips are not an exhaustive list, but rather a starting point for your business tax planning:
Tip #1: Know the business personal property valuation date and tax return due date for your Georgia county!
Property Valuation Date for ALL Georgia counties: January 1
Property Tax Due Date for ALL Georgia counties: April 1
Personal property taxes are assessed on January 1 of the current tax year for all applicable assets. The law provides that property tax returns must be filed with the county tax assessor or the county tax commissioner between January 1 and April 1 (O.C.G.A. 48-5-18).
Tip #2: File the Business Personal Property return by April 1 to avoid penalties on unreported assets!
A 10% penalty applies to the value of unreported property assets on late returns. For example, if a return is postmarked and received by the Assessors’ Office after April 1st, the penalty would apply to all assets that had not been previously reported-including current year assets. However, if a company has been in existence for years, but never filed a personal property return until April 1, 2013, all prior year assets (2011 and before) are subject to the 10% penalty despite the timely filing date. Only the 2012, or current year assets, would not be penalized in this example.
Tip #3: When mailing your return close to the April 1st deadline, do not use metered mail!
Avoid the 10% penalty on unreported assets by mailing your return at least one week before the due date through the U.S. Post Office, FedEx, or UPS. Ask for your envelope to be counter stamped by the U.S. Post Office as proof of a timely filed return. Most counties do not accept metered mail dates as official filing dates because it is relatively simple to back date the meter. There is also the option to hand-deliver the return to the Assessors’ Office. Make sure to receive a copy of the stamp dated return.
Tip #4: Again, timing is everything!
All property subject to taxation should be returned as provided by law (O.C.G.A. 48-5-10). File personal property returns for property held and owned as of January 1 (valuation date for all Georgia counties). If you are the property owner as of January 1, it does not matter if you sold the property on January 2. You are deemed the property owner for the entire year! There is no proration for business personal property taxes.
Tip #5: Time your fixed asset and inventory purchases wisely!
The property valuation date is January 1 for all Georgia counties. Consider purchasing assets on or after January 2 to defer reporting the property for one year. This may be contrary to standard federal tax advice about timing asset purchases before December 31.
Freebie: Perform due diligence before you purchase a business!
Taxes are assessed against the property owner if known OR against the property if the owner is unknown. The Assessors’ Office can treat as the owner any person that has possession of the assets when they are unable to attach ownership to anyone else. Possession is considered a mark of ownership.
While some of these tips may seem elementary, many businesses are penalized each year due to non-compliance. Take a proactive approach with business personal property tax planning and minimize your tax liability for 2013.
Angelica Moss, CPA is the principal of Equity Tax Consultants, a full-service business personal property tax consulting firm based in metro Atlanta, Georgia. Equity Tax Consultants specializes in Freeport Exemption Reviews, Tax Appeals, Compliance, Reverse Audits, and Property Tax Planning. Angelica was a former personal property appraiser and auditor for a large metro-Atlanta county for several years before founding her consulting practice.