Unsecured and Personal Property Taxes

 General Information

 Annual Personal Property Tax Bills

 Personal Property Tax Bill Penalties

General Information
Property taxes are collected by the County, but governed by California
state law. Personal property taxes are an ad-valorem (value based)
property tax that is the liability of the person or entity assessed
for the tax. Property that is not real property (such as land) is
considered personal property and therefore is issued as an unsecured
tax bill.
There are several types of unsecured assessments including: personal
property (business fixtures, business personal property, boats,
aircrafts), certain improvements (to real property), supplemental,
escaped assessment and pro-rated escaped assessment taxes on real
property that has changed ownership prior to issuance of the tax bill,
possessory interest, and delinquent taxes for manufactured housing
(mobile homes).
Annual Personal Property Tax Bills
Annually during July, personal property tax bills are mailed, and are
due and payable upon receipt. The last day to pay an annual personal
property tax bill is August 31. If August 31, falls on a Saturday,
Sunday, or a holiday, you have until the next business day to remit
your payment. Tax bills unpaid by the due date are subject to a
delinquent penalty of 10% and collection costs.
A personal property tax bill is mailed to a person (or business) that
owned, possessed or controlled taxable property as of the lien date of
January 1. The responsibility for payment of a tax bill is determined
by the lien date. The personal property owner on January 1, must
ensure that the taxes are paid by the due date specified. If you sold
the personal property after lien date, you are still responsible for
payment of the tax bill issued the following July.
The sale or purchase of a vessel (boat), aircraft or business should
be reported to the Assessor to ensure that the next year's tax bill
will be issued to the buyer. Failure to receive a tax bill is not
justification to cancel any of the delinquent penalties, costs, or
interest penalties that may accrue. If a property owner does not
receive a tax bill, they should request a duplicate tax bill.
Sellers of vessels should also report ownership transfers to the
Department of Motor Vehicles to insure removal of liability for
registration.
Personal Property Tax Bill Penalties
If you do not pay the tax bill, a penalty of 10 percent and collection
cost will be charge on the date of the delinquency. Additionally,
interest will be charged if the tax remains unpaid two months or more
after the penalty is added. Upon delinquency, the following collection
methods may be used to collect the tax:

 Filing of Liens

 Filing of Summary Judgments

 Seizure and Sale of Personal Property

 Seizure of California State Tax Refunds and/or Lottery winnings.

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Unsecured Property Taxes
CONTACT US
Tax Office Location
1st Floor 555 County Center
Redwood City, CA 94063
(866) 220-0308
taxmaster@smcgov.org

Hours of operation
Monday - Friday
9am-5pm
Excluding all Holidays
Make Tax Checks Payable to:
Sandie Arnott, San Mateo County Tax Collector
Mail Tax Payments to:
San Mateo County Tax Collector
PO Box 45878
San Francisco, CA 94145-0878
o Tax Collector Popular Links
 Pay My Taxes
 Apply for a Business License
 Transient Occupancy Tax
 Chat with a Live Agent
The following are questions we often receive from San Mateo County
unsecured property owners. For specific information, please call us at
(866) 220-0308 or visit our office.

 What are "unsecured" property taxes?

 When is the unsecured tax assessed?

 How are the unsecured tax amounts determined?

 What period of time does an unsecured tax bill cover?

 If I sell my unsecured property before the fiscal year, am I

still responsible for the unsecured tax?

 When should I expect my unsecured tax bill?

 If I don't pay on time, will I be charged a penalty?

 When should I mail my payment to avoid penalties?

 Is a private postage meter date the same as the United States

Postal Service postmark?

 If I don't pay my unsecured tax bill, can the Tax Collector take
my property?

 Who should I call if I have questions?

 Unsecured Property Tax Cycle

What are "unsecured" property taxes?
The term "Unsecured" simply refers to property that can be relocated
and is not real estate. The tax is assessed against such things as
business equipment, fixtures, boats and airplanes. If the unsecured
tax is not paid, a personal lien is filed against the owner, not the
property.
When is the unsecured tax assessed?
The Assessor establishes the value of the unsecured property on
January 1. This date is often referred to as the Tax Lien date.
How are the unsecured tax amounts determined?
The January 1 value is multiplied by the tax rate (usually 1% plus
voter approved indebtedness). The unsecured tax rate is the prior year
secured rate.
What period of time does an unsecured tax bill cover?
An unsecured tax bill covers a fiscal year. The fiscal year begins
July 1 and ends on June 30 of the following calendar year.
If I sell my unsecured property before the fiscal year, am I still
responsible for the unsecured tax?
Yes. Disposal of the property after the January 1 lien date does not
eliminate your tax liability. If you sell the property before the
unsecured tax bill is issued, make sure you collect an estimated
amount for the unsecured tax from the buyer.
When should I expect my unsecured tax bill?
Most unsecured bills are mailed before July 31. These bills must be
paid on or before 5:00 p.m., on August 31. If the bill is mailed after
July 31, the delinquent date is extended to the end of the month
following the bill's issuance. In other words, if your bill is mailed
in September, the delinquent date would be October 31.
If I don't pay on time, will I be charged a penalty?
Yes. If your payment is not received or postmarked by the delinquent
date, a 10% penalty and a $35.00 collection fee are added to your
bill. If your bill remains unpaid for two additional months, a monthly
penalty of 1 and 1/2% begins to accrue. In addition, if a Certificate
of Tax Lien is recorded, an additional fee of $13.00 will be required
to release the lien.
When should I mail my payment to avoid penalties?
You can mail your payment, but in order to avoid the delinquent
penalties, your payment envelope must possess an United States Postal
Service postmark on or before the tax delinquent date.
Is a private postage meter date the same as the United States Postal
Service postmark?
No. California law requires the Tax Collector to accept the US
postmark, not a private meter date, as the date of payment.
If I don't pay my unsecured tax bill, can the Tax Collector take my
property?
Yes. California law allows the Tax Collector to seize and sell the
unsecured property or any other personal property owned by the
assessee including bank accounts.
Who should I call if I have questions?  
To speak to a live agent, call 866-220-0308 and follow the prompt. 
Secure tax annual cycle

 
 
Texas Business Personal Property Rendition and Taxation
The Texas Property Tax Code for many years had required owners of
business personal property (BPP) to annually render those assets used
in a business. Rendering is summarizing to the central appraisal
district the ownership and value of the assets. Historically, however,
over half of all owners of business personal property have not
rendered.
The Texas law was unusual in that while rendition was mandatory, there
was no penalty for not rendering. Therefore, many property owners did
not render because it was not material, was not convenient or would
dramatically increase their tax liability. For many small business
owners, the value of the personal property and the associated property
taxes are modest and not a material issue for the business.
Chief appraisers at central appraisal districts and tax entities have
long been concerned that a material amount of business personal
property is not being taxed. There is a reasonable concern that if
business personal property owners are not being taxed equitably with
real property owners, the burden of taxation is shifted from owners of
personal property to owners of real property.

Impetus for Change

Several factors combined to make business personal property rendition
a hot topic. In Robinson vs. Budget Rent-a-Car Systems, a prior years
appeals court decision, the court clarified that the chief appraiser
may sue to force a business personal property owner to render BPP. In
addition to the objective of chief appraisers to equitably spread the
burden of property taxation, fiscal shortfalls at many city, county
and school entities as well as at the state level have raised the
government’s need to ensure it is receiving all due revenue based on
current tax laws.
Although Robinson vs. Budget allowed chief appraisers to sue property
owners who did not render, this was a largely unsatisfactory remedy
due to the financial costs and political stigma of chief appraisers
suing large numbers of taxpayers. The other possible solution was for
chief appraisers to “guess high” on assessed values in order to
effectively force business personal property owners to provide
information. Fortunately, few chief appraisers have chosen this
option.
Summary of the New Law
During the summer of 2003, the Texas legislature put some teeth into
the rendition law by passing Texas Senate Bill 340. Starting in future
years, a company that does not render will automatically pay a 10%
penalty on its business personal property tax bill. This penalty will
be collected by the chief appraiser, although there are options to
appeal the penalty. There is also a 50% penalty for filing a
fraudulent rendition. In addition, filing a fraudulent rendition is a
criminal offense.
Rendition Requirements
Owners of business personal property with an aggregate value of less
than $20,000 can file a simplified rendition statement containing
only: 1) the property owner’s name and address; 2) a general
description of the property by type or category; and 3) the location
of the property. Owners of business personal property worth more than
$20,000 must file a rendition with: 1) the owner’s name and address;
2) a description of the property for inventory; 3) a description of
each type of inventory; 4) a general estimate of the quantity of each
type; 5) the property’s physical location; and 6) either the owner’s
good faith estimate of the property’s market value or the property’s
historical cost new and its year of acquisition.
If you would like a free evaluation of your estimated business
personal property tax savings click here to request your free
evaluation now.
If the owner simply provides a good faith estimate of the property’s
market value the appraisal district may request a statement of
supporting information indicating how the property owner determined
the value rendered. This detailed statement must be delivered within
21 days after the date the property owner receives the request.
Read more about rendering business personal property here.
Rendition Deadlines
The rendition addresses business personal property as of January 1st
of the tax year and may be filed annually between January 2nd and
April 1st. There is an automatic extension of the filing deadline
until April 1st upon written request. The chief appraiser may extend
the filing deadline for an additional 15 days (until April 15th), if
the property owner files a written request showing good cause.
Amnesty Provision
With the new legislation, the Texas Property Tax Code also offers
property owners a special rendering provision for the prior tax year.
If owners render BPP before December 1st of the prior year, the
appraisal district may revalue the property for the previous tax year.
Revaluation is likely to occur if there was no previous account for
the property or if the rendered value greatly exceeds the current
assessed value.
However, exercising the special rendering, or amnesty, the provision
in the prior year allows the property owner to avoid omitted property
taxes for the two prior years. When business personal property not
already on the tax rolls is discovered, the Texas Property Tax Code
requires it be assessed at the market value for the two prior years.
For example, if business personal property were discovered in 2017,
the appraisal district would also typically assess the property for
2015 and 2016.
What is Business Personal Property?
The Texas Property Tax Code 1.04 (5) defines tangible personal
property as property that can be seen, weighed, measured, felt, or
otherwise perceived by the senses, but does not include a document or
other perceptible object that constitutes evidence of a valuable
interest, claim, or right and has no negligible or intrinsic value.
Examples of tangible personal property, or business personal property,
include equipment, furniture, computers, and inventory. Business
personal property would not include accounts receivable, stocks,
bonds, notes, franchise agreements, licenses, permits, certificates of
deposit, insurance policies, pensions, contracts and goodwill. I
recently published a guide on business personal property valuation.
You can request your copy here and we will send you a complimentary
book.
Market Value Definition
Market value is defined in the Texas Property Tax Code 1.04 (7) as the
price at which a property would transfer for cash or its equivalent
under prevailing market conditions if:
1. Exposed for sale in the open market with a reasonable time for
the seller to find a purchaser;
2. Both the seller and the purchaser know all of the uses and
purposes to which the property is adapted and for which it is
capable of being used and the enforceable restrictions on its
use; and
3. Both the seller and purchaser seek to maximize their gains and
neither is in a position to take advantage of the exigencies of
the other.
Get your free evaluation of your potential BPP Tax Savings here!
Market Value vs. Book Value
Market value may be less than or more than book value. For example,
the value of a 3-month-old computer may be one-half of the initial
acquisition price. The book value based on IRS tax per IRS
depreciation schedule would be 95% of cost based on a 60-month
depreciation schedule. Other examples of items whose market value may
decline sharply after being placed in service include cars, linens and
bedding at motels, phone systems, copiers, and furniture.
Other Valuation Issues
Inventory shall be valued at the price for which it will sell as a
unit to a purchaser who would continue the business. Due to issues
such as pilferage, obsolescence, and damage, the market value of
inventory may be less than the book value of the inventory. The
assessed value of the furniture, computers, and equipment should be
the price for which it could be sold.
Issues for Appraisal Districts
Although appraisal districts lobbied aggressively to ensure this bill
passed, it poses many challenges and issues for appraisal districts.
The first challenge is how to process a large number of renditions.
Then, the appraisal districts will have to decide whether to
aggressively request additional information if the owner gives market
value instead of providing a fixed asset listing (property
description, year of acquisition, and acquisition cost). The appraisal
districts will also have to decide how much consideration to give the
owner’s estimate of market value, particularly if it is sharply below
the appraisal district’s assessed value.
At least one chief appraiser believes the new rendition requirements
may delay certification since appraisal districts must wait to receive
the renditions before mailing notices of assessed value. The higher
level of renditions will impose additional challenges for appraisal
district staff in up-front processing and will likely require
additional protest hearings. Appraisal districts are generally leanly
staffed and will have to be creative and effective to handle a likely
meaningful increase in business personal property renditions and
appeals.
Practical Considerations for Property Owners
One nettlesome issue for owners of small amounts of business personal
property is whether the penalty for not rendering is incentive enough
to render. Consider the following example: Bob owns a small business
and has business personal property reasonably worth $5,000. It is
assessed for $5,000. The annual personal property taxes, based on a 3%
tax rate, are $150. The penalty for not rendering is $15. Should Bob
make sending the rendition form to the appraisal district a priority
above working with his customers, seeking new customers, and working
with his staff?
Owners of business personal property who either are not on the tax
rolls or whose property is grossly under-assessed will have to decide
whether to render. It is clear that the law requires owners to render
and there is now a 10% penalty if you do not render; the amnesty
provision provides a modest incentive to render. Consider the
following example: Charlie owns a wholesale distribution business with
$995,000 in inventory and $5,000 in furniture and equipment. However,
Charlie’s current BPP assessment is $100,000 and annual taxes are
$3,000. If he does not render he will likely pay annual taxes of
$3,000 and a 10% penalty for a total of $3,300. If Charlie does
render, his business personal property taxes will increase to $30,000
per year. It is clear that owners of business personal property are
required to render and that there is now a 10% penalty for not
rendering that began in 2004. Whether owners render will depend partly
on their records, risk tolerance, and corporate culture.
Conclusion
The new business personal property rendition requirements will sharply
increase compliance with rendition laws over the next three to five
years. Many small business personal property account owners will
probably not address the issue until receiving a future year tax bill
with a 10% penalty for failing to render. It is unclear how many large
accounts are either not on the tax roll or are substantially
undervalued. It is clear there are some, but from a practical
perspective this writer has not seen or heard of many such cases.
The benefits of the law are that it will make taxation more equitable
between business personal property and real property. It will also
make business personal property taxes more equitable between those who
do and do not render. Less attractive features of the new rendition
requirements are an increase in tax revenue and an increase in
paperwork for businesses.
 
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