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SJCPA Information Spring 2014 Presentation

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In compliance with Florida statutes, all tangible personal property (TPP) located in this county and used in the operation of a business or other income-producing venture as of January 1st of each year must be reported at 100% of the unadjusted original cost.

Property is to be reported on form DR405 which is mailed to taxpayers of record by the office of the Property Appraiser in early January. Unlike most real property documents which are considered to be public record, all personal property returns and documentation required by F.S.193.052 and submitted by taxpayers pursuant to law are deemed confidential in the hands of the Property Appraiser (F.S.193.074).

To be eligible for the $25,000 Tangible Personal Property Exemption, you must file a TPP return.

FREQUENTLY ASKED QUESTIONS

What is tangible personal property (TPP)?

Tangible personal property (TPP) is everything that is not real estate (land, buildings and improvements).  It includes furniture, fixtures, tools, computer equipment, machinery, office equipment, supplies, leasehold improvements, leased equipment, signage, and any other equipment used in a business.  Furniture and fixtures used in a rental unit (condo, apt, house) are also taxable.

Who must file a return?

Businesses: Any business owner or self-employed contractor owning TPP on January 1st must file a return as required by Florida Statutes 193.052 and 193.062. Property owners that loan, lease or rent tangible property to others must also report such property.

Mobile Home Owners: Owners of mobile homes located on leased land must report attachments such as garages, porches, patios, storage sheds, etc. in the first year of ownership.  For following years, the property will remain on the assessment roll as originally reported but no additional return form is required unless those items previously reported change. Changes found by Property Appraiser personnel field inspections will also be reflected in subsequent returns.

Rental Unit Owners: Furniture and fixtures in rental condominiums and apartments must be reported.

If your business has an asset value of $25,000 or less, you MUST FILE an initial return in order to be eligible for the $25,000 TPP exemption.  However, so long as your value remains under $25,000 in subsequent years, you are not required to file again.  If you obtain additional assets that exceed the $25,000 threshold, it is your duty to report them to the Property Appraiser.  Accounts will be audited randomly.

Why must a return be filed?

Florida statutes require that all TPP be reported to the Property Appraiser’s Office annually. It is the duty of the Property Appraiser to assess all TPP in St. Johns County. To facilitate this process, return forms are mailed to all taxpayers determined by this office to have property to report. If you receive a return form and feel that the form does not apply to you, return it with an explanation so that we can properly review your situation and, if necessary, remove you from the TPP roll.  All forms should be returned.

How can I obtain the TPP return form?

Return forms are mailed in early January to all property owners of record. If you do not receive a return form at that time, please contact our office. Failure to receive a return form does not relieve you of the obligation to file. You can download the DR-405 Tangible Personal Property Tax Return from the Department of Revenue's site by clicking here.

What about old equipment that is fully depreciated and no longer on my books?

All property in your possession on January 1 st must be reported even if fully depreciated on the books for accounting purposes. As prescribed by state law governing the ad valorem appraisal process, tangible personal property is allowed depreciation over time but as long as it is being used in an income-producing venture, it never depreciates to a zero value. Additionally, property that has been expensed under IRS Section 179 must be reported.

Am I required to report SUPPLIES used in my business?

Yes. All supplies used in the business, but not for sale to the public, should be reported. Examples are office supplies, tools and dyes, restaurant supplies, brochures and other consumables.

Do I have to report assets that I lease, rent, or borrow from someone else?

Yes. There is a section on the page two of return form specifically for such items. These assets are normally assessed to their owner, unless capitalized by the lessee, however, you should list the name, address and other required information of the person or firm from whom you lease the equipment.

If I rent my furnished home or condo for a period during the year, do I have to file a Tangible Property Return?

Yes. You should report household furnishings such as furniture, window treatments, fans, art work, bedding, and appliances (excluding refrigerator, dishwasher, water heater and range/oven).

*If I own my mobile home but do not own the land on which it sits, what am I required to report?

If your mobile home has a garage, screened or glassed patio, storage shed, deck or similar improvement, you must report the measurement of the item and the original cost (if known). (Ex: garage 20x20, cost $10,000)

What happens if I do not file my TPP Return?

The Property Appraiser’s Office is required to place an assessed value on all tangible personal property regardless of whether or not a tax return is filed (F.S.193.073). In the absence of owner input, we will be forced to estimate a value based on the best available information. Additionally, per statute, a penalty of 25% will be applied for failure to file and you will be unable to file a Value Adjustment Board petition. Additionally, under F.S.196.193, if you do not file a return, you are not entitled to the $25,000 TPP exemption.

If I am no longer in business, but I receive a return form, what should I do?

All return forms should be filed with the Property Appraiser’s Office. If you were not in business on January 1st of the assessment roll year, please indicate on the form the date you went out of business, the manner in which the assets were disposed of, sign and date the return form, and send it to this office. If the business was sold, provide the name of the new owner, date sold, and how the assets were disposed of.

Is my assessment pro-rated if I sell or close my business during the year?

No. Property is assessed to the owner as of January 1 st of each year.

What if I do not agree with the assessed value stated in the notice of proposed taxes (TRIM) that I receive in August?

Pursuant to F.S.194.011, you are encouraged to call or visit the Property Appraiser’s Office to discuss your assessment, providing any information you have to support your position BY THE DEADLINE PERIOD STATED ON THE TRIM NOTICE. If you and the Property Appraiser continue to disagree with the assessed value after discussion, you may file a petition BY THE DEADLINE PERIOD STATED ON THE TRIM NOTICE to be heard by the Value Adjustment Board. If you do not file a petition by the deadline, you waive your right to such an appeal. Additionally, in order for the Value Adjustment Board to consider your appeal, you must have filed a return (F.S. 194.034).

Can I get an extension beyond the April 1st filing deadline?

Yes. F.S.193.063 provides that an extension of up to 30 days may be granted by the Property Appraiser. The extension request must be made in writing prior to the normal filing deadline. The name and tax parcel number must be stated in the request. At the discretion of the Property Appraiser, an additional 15-day extension beyond that 30 days may be granted upon written request explaining why the additional time is needed.

ADDITIONAL TANGIBLE PERSONAL PROPERTY FILING TIPS

-The original DR405 form contains your parcel number and a bar code. Please use this form to file your return, or attach it to your computer prepared form.

-Please provide the physical address where the property is located, and indicate if address has changed.

-Attach a list of assets or your depreciation schedule.
-Indicate any assets physically removed or added prior to January 1 st.

-Please sign and date form, and provide a telephone number.

-Economic lives differ for various assets, so the more detail provided with the return, the more accurate we can be in the application of depreciation factors.

If you have any further questions, please contact the Personal Property Department at our main office location.