Business Personal Property Tax: Requirements, exemptions, and filing tips

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Page written by Ashlyn Brooks. Last reviewed on November 5, 2024. Next review due October 1, 2026.

It’s always good to build a habit of understanding the inner workings of taxes on both the business and personal side of things, but what about when the two meet? Business personal property tax is an important consideration for small business owners, as it directly affects operational costs and tax obligations. Knowing what qualifies as business personal property, when to file, and where exemptions may apply can help businesses manage this tax effectively and avoid potential penalties.

Here at Swoop, we’re all about helping you achieve funding and mitigate any pitfalls (like tax penalties). Below is a guide to help you understand how business personal property tax works and the steps required to file.

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What is Business Personal Property Tax?

Business personal property tax is a tax on physical, moveable assets owned by a business and used for commercial purposes. These are items such as furniture, machinery, computers, tools, and other equipment you may need for operations.

Unlike real property tax, which is applied to land and buildings, business personal property tax focuses on assets that are not fixed to a specific location. This tax is assessed by local or state governments and is generally calculated based on the fair market value of the assets each year.

Do I need to file Business Personal Property Taxes?

Yes, most businesses that own tangible personal property for commercial use are required to file business personal property taxes annually. If your business owns equipment, furniture, or other assets that are used in day-to-day operations, you’ll likely need to report these to your local tax office.

The specific filing requirements can vary depending on the state or even by county, so it’s a good practice to check in your area for the most up-to-date information. Also, keep in mind you could be subject to fees or penalties if you fail to file so it’s best to seek advice from a professional early on.

How to file Business Personal Property Tax

Unlike filing income tax or FICA taxes, there’s a bit more legwork involved. Here are the general steps:

You need to list all applicable assets owned by the business, including their purchase cost and purchase date. This is where proper record keeping is invaluable rather than retracing your steps.
Determine the fair market value or assessed value of each asset. Some counties use depreciation schedules to help determine this.
Submit the tax declaration to the appropriate local or state tax authority by April 15th of each year.

Are there any states that do not tax business personal property?

Yes, 12 states either do not tax business personal property or have minimal requirements for it. These states have eliminated or significantly reduced business personal property taxes, while others may apply the tax only in certain jurisdictions within the state.

Here are the 12 states that don’t tax business personal property:

North Dakota
South Dakota
Ohio
Pennsylvania
New Jersey
New York
New Hampshire
Hawaii
Delaware
Illinois
Minnesota
Iowa

Are there any exemptions for Business Personal Property Tax?

Yes, there are 10 states and localities that offer exemptions or reductions for certain types of business personal property including:

Small Business Exemptions for businesses with assets below a certain value.
Inventory Exemptions on inventory taxes used for resale.
Industry-Specific Exemptions within industries such as agriculture or manufacturing, may qualify for exemptions on specific equipment.

State name	Exemption
Arizona	$225,572
Colorado	$50,000
Delaware	No TPP Tax
District of Columbia	$225,000
Florida	$25,000
Georgia	$7,500
Hawaii	No TPP Tax
Idaho	$250,000
Illinois	No TPP Tax
Indiana	$80,000
Iowa	No TPP Tax
Kentucky	$1,000
Michigan	$180,000
Minnesota	No General TPP Tax
Montana	$1,000,000
New Hampshire	No TPP Tax
New Jersey	No General TPP Tax
New Mexico	No General TPP Tax
New York	No General TPP Tax
North Dakota	No General TPP Tax
Ohio	No TPP Tax
Pennsylvania	No TPP Tax
Rhode Island	$50,000
South Dakota	No General TPP Tax
Utah	$25,000
Wisconsin	No TPP Tax

Do I have to file Business Personal Property Tax for leased equipment?

Not, in most cases, if your business leases equipment, the responsibility for filing personal property tax falls to the leasing company rather than your business. However, your lease agreement may state otherwise. In some contracts, they place the responsibility on the lessee (your business).

How Swoop can help

At Swoop, we help businesses access financial resources and services to start or grow their business. Whether you’re looking for guidance or financial support to cover business expenses, Swoop’s platform can connect you with suitable funding options. Explore available business loans today and see how Swoop can support your business’s growth.

Written by

Ashlyn Brooks

Ashlyn is a personal finance writer with experience in business and consumer taxes, retirement, and financial services to name a few. She has been published in USA Today, Kiplinger and Investopedia.

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