Personal Property Taxes: Taxes on Business Equipment

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During the early part of this year’s legislative session, there was a proposal to eliminate the personal property tax on businesses. While the bill was killed, the proposal has initiated dialogue on the efficacy and efficiency of the personal property tax on business equipment. This brief will explain the business personal property tax and some of the issues and trends surrounding the tax.

The personal property tax is a component of the overall property tax structure in Utah. Personal property can generally be defined as any tangible property that is temporary or movable. According to the Salt Lake County Assessor, locally-assessed personal property is specific to business furniture and fixtures, business equipment, construction equipment, and manufactured homes. Other types of personal property, such as vehicles, boats, and trailers, are taxed by the state and are not included in this analysis. In 2003 personal property tax revenue (business personal property & mobile homes) contributed 6.3% of total property tax revenues. In contrast, real property is defined as any property that is permanently fixed, such as land and buildings. Real property taxes contribute 73.9% of the total property tax, making up the bulk of property tax revenue.

 

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