Get details on what items are considered business personal property and should be listed.
To determine if your property should be classified as real property or listed as personal property, please refer to the Wake County property classification schedule.
Business Property Descriptions
Supplies & Materials
Includes supplies and materials (Office, Cleaning, Shop, Promotional Items, etc.) that are not consumed in manufacturing or processing or that become a part of the sale of the property being sold. Include spare parts held for equipment maintenance and repair, even though they may be carried in an inventory account. Hotels and hospitals should list the supplies that are provided in their room charge. Doctors and medical offices should include all drugs and medical supplies on hand. Expensed equipment should be reported in its corresponding asset group even if expensed for IRS purposes. If asset detail is not available for expensed equipment, the total cost for the expensed items should be identified and reported in the correct acquisition year in either Group 4 on schedule A84 or Group 5 on schedule A85.
Inventories (goods held for sale in the regular course of business by manufacturers, retail merchants, and contractors) are exempt from property tax. This includes raw materials, goods in process of manufacturing, and finished goods.
Construction in Progress
Report 100% cost of all personal property carried in a CIP account as of January 1. Provide information as to the categories of property carried in this account and a detail of the expenditures for each during the preceding calendar year.
All tangible property must be listed as of January 1. Taxpayers with a business year-end other than December 31 must update their records to the January 1 reporting date. Tangible personal property includes but is not limited to machinery, furniture, fixtures, signs, purchased software treated as a capital asset, reference libraries, etc. Property must be reported at the retail level of trade if actual cost is at the manufacturer or wholesale level of trade. All items must be listed in the year acquired at 100% historical installed cost at retail level of trade (includes installation, sales tax, freight and any associated costs).
Lessors should include a detailed schedule of leased equipment and rental vehicles. Personal property that is rented or leased to others is not exempt from property taxes. If you owned such property, attach a schedule showing lessee’s name and address, a description of the property, year acquired and cost. If you manufactured this equipment, you must furnish selling price new, not manufactured cost.
Do not list licensed vehicles or attached special truck-mounted equipment such as cranes, wreckers, drilling tanks and hoses in Section C. Effective January 1, 2014: If your company owns IRP (International Registration Plan) or apportioned plated vehicles, these vehicles are required to be listed for property tax purposes. Attach a schedule showing year acquired, cost and description of equipment along with the license tag number of the vehicle.
Machinery, Equipment & Unlicensed Vehicles
Report the cost of all machinery and equipment. This includes all warehouse and packaging equipment, as well as manufacturing equipment, production lines, high-tech or low-tech. List the total cost by year of acquisition, including fully depreciated assets that are still connected with the business.
Please include unlicensed vehicles and any attached special equipment in this group. Unlisted vehicles should be listed for the year acquired and cost.
Office Furniture & Fixtures
Report the costs of all furniture and fixtures and small office machines used in the operation. This includes but is not limited to file cabinets, desks, chairs, adding machines, curtains, blinds, ceiling fans, window air conditioners, telephones, intercom systems and burglar alarm systems.
Report the costs of non-production computers and peripherals. This includes but is not limited to personal computers, midrange or mainframes, as well as the monitors, printers, scanners, magnetic storage devices, cables and other peripherals associated with those computers. This category also includes software that is capitalized and purchased from an unrelated business entity. Note: The development cost of software or any modification cost to software, whether done internally by the taxpayer or externally by a third party to meet the customer's specific needs is excluded and should not be reported regardless of the year of acquisition. This specialized software cost should be deleted if reported previously. This does not include high tech equipment such as proprietary computerized point-of-sale equipment which is listed in Group 4, or high-tech medical equipment, computer-controlled equipment or the high-tech computer components that control the equipment. This type of equipment would be included in Group 1.
Other Personal Property
Include a description of “Other” items so proper valuation scheduling can be assigned. Examples include but are not limited to farm equipment, testing equipment, printing equipment, photographic equipment, tubular steel frame greenhouses, rental equipment, electronic equipment and transmitting towers, etc.
Property in your possession but Owned by Others
If, on January 1, you have in your possession any business machines, machinery, furniture, vending equipment, game machines, postage meters or any other equipment that is loaned, leased or otherwise held and not owned by you, a complete description and ownership of the property should be reported. This information is for office use only. Assessments will be made to the owner/lessor.
Improvements to Leased Property
Report total investment during the preceding calendar year. Certain improvements are not assessed as real estate but are considered to be personal property. Examples are security systems, telephone systems, alarm systems, kitchen equipment, mill work, shelving, furnishings attached to real estate, heating or air conditioning systems for special purpose areas, coolers, piping (other than normal plumbing) and any other similar items. The real estate valuation includes such items as floor covering, wall covering, ceilings, normal lighting, heating, air conditioning, sprinkler systems, paving, outdoor fencing and area lighting.
Refer to the property classification schedule to to determine if items are considered real property or personal property. This list is not all inclusive. If you have questions, please call us at 919-856-5400.