Personal Property & Real Estate taxes

When you start a business there is a long list of taxes that you could be responsible for. Knowing what these are and whether or not they apply to your business is key. In this article we will go more in depth of what Personal Property & Real Estate Taxes are and who they pertain to, as well how much they could cost your business.

What is Personal Property & Real Estate Tax? 

Tangible Personal Property Tax is levied on property that can be moved or touched, such as business equipment, machinery, inventory, and furniture.

Real Estate tax is levied on real property owned by your business, such as commercial buildings or rental properties.

Who pays it?

The direct property owner reports and pays the property taxes.

How much is it? 

The tax is calculated using a percentage based on an assessed value of the property you own. All of the states in the U.S. have property taxes but there is seven states that only have real estate tax without Tangible Personal Property.

Fun Fact: Hawaii has the lowest real estate tax at 0.3% while New Jersey has the highest at 2.21%.

How do you pay it? 

Honestly, different states have different payment dates and rules, but most of them are due once a year at the beginning of the year. The majority of the states give you the option to split the payment into two installments, if needed. Your real estate taxes can also be accrued via Escrow with your monthly mortgage payment and then paid on your behalf by your mortgage company.