Personal property tax confuses Polk residents

Published 3:00 pm Tuesday, January 20, 2009

The county tax office issued the form this year following the guidance given by county commissioners last year.

At a May 5 county board meeting, commissioners voted unanimously to reinstate the property tax listing and business personal forms on a yearly basis.

Taxable personal property includes all unlicensed or untagged motor vehicles, singlewide manufactured homes, boats, boat motors, jet skis, airplanes and farm equipment.

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Residents who own taxable personal property are required to list it on the personal property tax form and return it to the Polk County Tax Office by January 31.

Potential penalty

Residents who own such items but do not list them face the possibility the county will discover them later and assess a penalty. The county can charge a penalty of 10 percent per year for the current fiscal year and the previous five years for a maximum penalty of 60 percent. The penalty is applied to the amount of tax that would have been owed on items not listed.

Based on people the tax office has heard from already, Bridgers says it appears many residents have not listed personal property in the past so the county has been losing that tax revenue.

Previous county boards, he says, apparently declined to pursue the tax, figuring the revenue would not be enough to cover the additional cost incurred in the tax office to keep up with the added work.

But Bridgers says he thinks the personal property tax revenue likely will be substantial and more than enough to offset costs. The tax office will be kept busy while answering questions and recording the information, but shouldn&squo;t have much work associated with the tax during the rest of the year.

&dquo;There&squo;s a major push in December and January to deal with this, but I think it&squo;s worth the cost,&dquo; says Bridgers.

Questions about Part C

Unfortunately, one part of the personal property listing form has added to the confusion. Part C on the form was supposed to be filled out by the county and show new property values from the county&squo;s 2009 property revaluation.

Bridgers says the tax office had hoped to save on mailing costs by combining the notice of new values with the personal property listing form.

But he says the revaluation has been delayed due to the slow and uncertain real estate market and the new values were not available in time. The county decided to wait as long as possible to assign property values since the real estate market has slowed with the economy, and there have been so few sales to use as a guide to current values.

The county now plans to issue notices of new property values in about six weeks.

In the meantime, Bridgers and other tax office employees have been telling residents to ignore Part C of the personal property listing form. The rest of the form is fairly clear, he says.

&ull; Part A asks for the resident&squo;s current address.

&ull; Part B asks real estate owners to outline any improvements they made to the property in 2008. Improvements made prior to last year should not be listed.

Bridgers adds that owners do not have to list routine repairs or maintenance work, such as flooring, siding or a new roof. The improvements should include only new additions, such as a new room, barn or garage.

The county may already have information about the addition on record if the owner obtained a building permit. But Bridgers notes that some property owners do not obtain a permit as required, and this part of the listing form can catch those additions.

&ull; Part D on the form is for Polk residents who own a mobile home. Singlewide mobile homes are considered property rather than real estate since there is only a bill of sale and no deed involved in the transaction. Residents are asked to identify whether the mobile home(s) is on their property. Many people have failed to list mobile homes as personal property in the past, says Bridgers.

&ull; Part E provides space for residents to list all of their personal property.&bsp; Residents do not need to list any items other than untagged motorized vehicles, singlewide mobile homes and farm equipment, such as combines, tractors, hay rakes and farm trucks with a three month or permanent tag.

Residents should not list any&bsp; boat trailer that has a tag from the state. If they do, they face getting taxed twice since they should already receive a vehicle tax bill for that vehicle.

Bridgers says the farm equipment is listed only if it is used for income-producing purposes. Someone who has a tractor for their garden does not need to list it. Likewise, he says, a landscaper would need to list a lawnmower used for the business, but a homeowner does not need to list a lawnmower used at home.

&ull; Part F asks for personal data, namely employer and date of birth. Bridgers says the tax office did not ask for social security numbers to avoid being too invasive, but it needs some personal information to ensure that it is sending tax bills to the right person. Otherwise, he says, there could be some confusion with people who share the same name.

Business personal property

On the back of the personal property listing form, the county asks whether residents have any rental property and provide any appliances to their tenants. If so, they are asked to contact the tax assessor&squo;s office at 894-8954 and obtain a business personal property listing form.

Items, such as refrigerators, stoves, washers and dryers provided to tenants, should be listed in Group (1) Machinery and Equipment on the business personal property form since they are used for income-producing purposes.

Many businesses are accustomed to filling out the business personal property form, but some may not be, and some landlords may have never filled one out, says Bridgers. The form is limited to personal property used by businesses as part of an income-producing operation.

&dquo;If you haven&squo;t filled out the form, it is very confusing. Once you&squo;ve done it, it&squo;s a matter of record keeping,&dquo; he says. &dquo;

Tax values and tax rate

Bridgers says it can be difficult to establish an exact value for some appliances that perhaps were not bought by the current landlord and may be quite old. The tax office works with the owner to come up with an estimate, he says.

Other personal property items, including motorized vehicles, mobile homes and farm equipment, are valued according to &dquo;Blue Books&dquo; the county has for each category of property. The books provide a schedule of values reflecting depreciation.

Items listed on the personal property form will be taxed at the county&squo;s property tax rate and included on the tax bills for fiscal year 2009-2010, which will be mailed out in July.

The county&squo;s property tax rate is currently 68 cents per $100 of valuation. So an item valued at $1,000 would be charged a personal property tax of $6.80.

But the property tax rate is expected to decline as a result of the revaluation. County commissioners have indicated they will adopt a revenue-neutral tax rate so the rate will be lowered to offset any increase in property values as a result of the revaluation.

Bridgers says the county does not know at this point exactly how much the tax will be lowered, but says it may be between 40 and 50 cents.

Although the personal property tax bills may increase taxes for some residents this year, the increase will be minimal in most cases, says Bridgers. He notes that the cummulative increase for the county, though, will help broaden the tax base and lower the tax burden for all property owners.

That might help the county and taxpayers at a time when the economy is slow and revenues are declining.

Anyone with questions about the personal property tax listing or business personal property tax listing forms is invited to contact the Polk tax office at 894-8954.