What is Personal Property?
In Washington State, both real and personal property are assessed for property tax purposes. The chief characteristic distinguishing personal property from real property is mobility, meaning it can be moved from one place to another. Everyone who owns personal property used in a business must complete a personal property listing to the Assessor by April 30 each year.
Unless specifically exempt, all tangible personal property is taxable, including items such as:
-office equipment, communication equipment, supplies and materials not held for sale or not components of a product-tools, furniture, rugs and fixtures used in a business-leased or rented equipment, leasehold and tenant improvements, and lessee-owned improvements on public land-machinery and equipment used in agriculture, construction, manufacturing and logging-signs, billboards, poster panels, display samples not held for sale-commercial vessels not subject to excise tax, off road vehicles, drag racers and similar competition vehicles not licensed-rental video tapes, discs and game cartridges-boathouses, portable buildings and office trailers
-office equipment, communication equipment, supplies and materials not held for sale or not components of a product
-tools, furniture, rugs and fixtures used in a business
-leased or rented equipment, leasehold and tenant improvements, and lessee-owned improvements on public land
-machinery and equipment used in agriculture, construction, manufacturing and logging
-signs, billboards, poster panels, display samples not held for sale
-commercial vessels not subject to excise tax, off road vehicles, drag racers and similar competition vehicles not licensed
-rental video tapes, discs and game cartridges
-boathouses, portable buildings and office trailers
Exempt personal property includes household goods and personal effects, unless used in a business, custom software, livestock, inventories held solely for resale and intangible personal property such as money, franchise agreements, personal service contracts, patents, copyrights, customer lists, brand names, licenses and intellectual property.
In addition, sole proprietors are eligible for a $15,000 Head of Household exemption deducted from the business's total assessed value.
Collection of Tax
The taxes are collected in arrears: meaning, collection occurs the following year after the assessment.
FOR EXAMPLE, the assessor will list the value of personal property, based on the value as of January 1 of the assessment year. However, the tax is not normally due until the following April. (See Advanced Tax below for exceptions)
Payment of Property Tax (Methods of Payment)
The county treasurer mails the property tax statements on February 13 each year. If the amount of tax due is less than $50.00, full payment is due by April 30. If the tax due is $50.00 or more, half of the amount may be paid by April 30 and the balance by October 31 without incurring a penalty for late payment. If the first half tax is not paid on or before the 30th of April, the tax becomes delinquent, with interest and penalty on the entire year, and subject to distraint & collection charges.
The tax lien levied on personal property is a lien from the date of assessment. No sale or transfer of property shall in any way affect the tax lien. Check with the County Treasurer's Office before buying or selling personal property to protect the property against lien (RCW 84.60.020).
Delinquent Tax Subjects the Assets to Distraint
The treasurer must proceed to distraint (seize) and sell personal property if the tax is not paid. The treasurer may place a lien on the property owner's other real and personal property if the tax is not paid. (RCW 84.56.070)
If you have decided to sell or close your business, please contact us to obtain an ADVANCED TAX REQUEST FORM. This form provides us with information we need to update the business account with the new owner's information or to cancel the account if the business is closing. This will ensure that the final tax bill is sent to the appropriate person.
Washington State law requires advance payment of the taxes if the property is sold or transferred before the tax is due. It is important to note that the person, who owns the property as of January 1 of the assessment year, owes the tax due the following year. The tax is due even if the business closes or the property is sold or transferred.
FOR EXAMPLE, a property owner lists equipment on the personal property affidavit due by April 30, 2017. In August 2017, the property owner sells the equipment (or business). The property owner owes the full amount of taxes due in 2018 for the 2017 assessment year. However, the lien follows the property. This means that a new owner can have the equipment distrained (seized) if the previous owner does not pay the tax. Buyer Beware!
Questions? Call 360.337.4936