Category Archives: Accounting

What you need to know about personal property assessment and taxation

Personal Property Assessment and Taxation

From the Oregon Department of Revenue

All personal property is, by law, valued at 100 percent of its real market value unless exempt by statutes. Personal property is taxable in the county where it is located as of the assessment date, January 1 at 1 a.m.

Taxable personal property
Taxable personal property includes machinery, equipment, furniture, etc., used previously or presently in a business (including any property not currently being used, placed in storage, or held for sale). Examples of taxable personal property:

Amusement devices/equipment
Non-inventory supplies
Barber and beauty furniture/equipment
Garage and service station tools/equipment
Leased equipment
Medical equipment
Movable machinery, tools, and equipment (such as logging and construction equipment, lift trucks, and equipment used in service industries)
Office furniture/equipment
Store furniture/equipment
Libraries such as repair manuals, electronic media, compact discs, videos, tapes, sample books, law books
Fixed load/mobile equipment
Floating property

Tax–exempt personal property
These items are exempt from property tax:

Intangible personal property. Money at interest, bonds, notes, shares of stock, business records, computer software, surveys and designs, and the materials on which the data are recorded (paper, tape, film, etc.) (ORS 307.020).
All items held exclusively for personal use. Household goods, furniture, clothing, tools, and equipment used exclusively for personal use in and around your home (ORS 307.190).
Farm animals. Livestock, poultry, fur-bearing animals, and bees (ORS 307.394).
Inventories. Items of tangible personal property which are or will be sold in the ordinary course of business (materials, containers, goods in process, and finished goods) (ORS 307.400).
Farm machinery and equipment (ORS 307.394).
Licensed vehicles other than fixed load/mobile equipment (ORS 801.285).

Filing your personal property tax return

Each individual, partnership, firm, or corporation that has taxable personal property must file a return by March 1.
Major industrial properties appraised by the Department of Revenue will report on an industrial property return furnished by the department.
For all other accounts appraised by the county assessor, a return form may be mailed to you by the county assessor prior to January 1 if you were assessed the previous year. You must report property you own or had in your possession as of January 1 at 1 a.m. If you do not receive a form from the assessor, you are still obligated to obtain and file a personal property tax return. There is a penalty for late filing. If you need help completing the form, contact your county assessor’s office.
If you sell your business, notify the county assessor to avoid future liability on the personal property.

The Bookkeeping Company will build a file and track your assets as your bookkeeping is being done. Then all you will need to do is review the asset list annually and give us the updates of items no longer in your control. We can then handle everything else for you.

Have you taken your business entity temperature lately?

Is your current business entity still the right one for you? Businesses grow – hopefully. Businesses change – always; which is why it’s good practice to review your business entity periodically.

If you’ve made some big changes this year in the size or scope of your business (like: accumulated more assets and/or increased liabilities); it’s definitely time to re-take your business entity temperature.

To get the most out of your business it’s important to have the right business structure. The proper entity type can help maximize your financial and operational success; and is important in determining your limitations and liabilities.

Your accountant or attorney can help you decide what type of business structure best fits the needs of your company today. But here’s a handy comparison chart to get you started:

Business Comparison Chart:

	C Corporation	Subchapter S Corporation	Limited Liability Company	General Partnership	Sole Proprietor
Owners have limited liability for business debts and obligations	X	X	X
Created by a state-level registration that usually protects the company name	X	X	X
Business duration can be perpetual	X	X	X
May have an unlimited number of owners	X		X	X
Owners need not be U.S. citizens or residents	X		X	X	X
May be owned by another business, rather than individuals	X		X
May issue shares of stock to attract investors	X	X
Owners can report business profit and loss on their personal tax returns		X	X	X	X
Owners can split profit and loss with the business for a lower overall tax rate	X
Permitted to distribute special allocations, under certain guidelines			X	X
Not required to hold annual meetings or record meeting minutes			X	X	X

Contact The Bookkeeping Company for assistance in identifying the best entity for your business. Chart source: The Company Corporation.

Are you ready for the year to end?

It’s getting to be that time again. Time to review your financial and tax related issues. Time to contact your tax preparer to discuss tax law changes that could impact your business positively or negatively.

Before you turn out the lights on 2010 and ring in 2011, have you done everything you need to do to reduce your tax liability? Are you ready to start the New Year with a clean slate? Certain steps and tactics will save you money and affect your finances, not only in the current tax year but also for years to come.

Here is a handy “To Do Before Year-End” list:

Be sure your accounting is current.
Count your inventory.
Update your corporate minutes.
Control expenses and income to speed up or slow down deductions and/or income.
Decide whether to distribute or retain earnings this year.
Consider making last-minute equipment purchases to exercise expensing/depreciation bonuses.
Set up your retirement plan — or make contributions to your existing plan.
Reassess your health insurance coverage to deal with probable increased premiums next year.
Decide whether to pay bonuses.
Evaluate whether to change your business entity next year.
Make charitable contributions.

Click here to see the entire article on Year-End Planning from Wells Fargo.
Or contact us at The Bookkeeping Company for more information and assistance on how to end the year to your best advantage.