There are forty-two states that levy state-wide taxes on personal property, including California, North Carolina, and Massachusetts. However, other states choose to have no state-wide personal property tax, but may permit other government entities to enact personal property taxes. For example, Pennsylvania does not tax personal property on a state-wide level, but it does allow its local governments to levy a personal property tax.
What Personal Property Is Subject to Taxes?
A variety of personal property is subject to taxes based on the state where you live. Personal property is property that is not attached to land, and generally mobile and not as long-lasting as real property. Common examples of personal property are cars, cattle, and computers. This type of property may be taxed if it helps you earn an income, such as your car if you use it to perform a shuttle or taxi service.
Personal property can be characterized as "tangible" or "intangible". Tangible personal property is transportable and used for a certain purpose, such as furniture and occupational tools. Intangible personal property is non-physical, such as stocks, trademarks, and deeds of trust. Some states tax both tangible and intangible personal property.
Are There Restrictions on Personal Property Taxes?
Personal property tax laws differ from state to state. Some states are limited in their ability to tax your personal property. Most states, like California, provide that personal property assessments can not exceed 2% annually. In Virginia, for example, personal property tax relief is given for passenger cars, motorcycles, and pickup or panel trucks. Other states have similar tax relief provisions.
In addition to restrictions imposed by the states, the federal government establishes boundaries on the taxation of the personal property of service members of the U.S. military services. The personal property of service members is to be taxed only by the state that is their residence and not the state in which the service member is living temporarily to fulfill military duties.
Do I Need an Attorney to Help Me with My Personal Property Tax Matter?
Every state has its own property tax regulations. A tax lawyer familiar with your state’s tax law can help you understand your tax obligations and rights.