Personal or Business Property
Personal property is distinguished from real property in that it is usually movable and not permanently affixed as are land, buildings, and vines. There is also a distinction between tangible personal property such as boats, welders, and computers and intangible personal property such as stocks, bonds, and bank accounts. While the California Constitution establishes that all property is taxable, the legislature over the years has decided that intangible personal property is not subject to property tax. One of the largest categories of tangible, taxable personal property in California is the automobile and truck fleet. The property tax on these vehicles is collected and distributed to local governments by the state as a part of the vehicle registration process. Since property taxes are always based on value, the property tax portion of the fee declines over time because of depreciation.
The local assessor is responsible for the valuation of four main categories of personal property; boats, aircraft, equipment used in a trade or business and manufactured homes not on a permanent foundation. Of the four categories, only manufactured homes receive base year values under Proposition 13. The other three categories do not receive base year values and are reappraised annually both because they are movable and because, in most cases, their values change rapidly through depreciation. Boats and business equipment with an aggregate value of less than $2,000 are not enrolled since the cost of assessing and collecting the taxes is greater than the revenue generated.
One of the main functions of the assessor is to locate a property so that it can be assessed to the correct owner. Locating land and structures is relatively easy and changes in ownership are tracked through the recording of deeds and other documents. To locate boats, the assessor relies on reports from the Department of Motor Vehicles and local marinas; for aircraft, the source is Federal registration and local airports. Once enrolled, boats are valued by using industry sales guides; aircraft values are derived from an aircraft value guide designated by the State Board of Equalization. Each year we give each owner the opportunity to tell us of any special conditions which might affect the value of the boat or aircraft.
Business equipment is valued by applying a factor table to the original cost of the equipment. Original cost includes freight, sales tax, installation, and other related costs. Business equipment factor tables are different from Federal depreciation schedules.
To locate equipment used in a trade or business we send Business Property Statements each year to business owners and farmers throughout Napa County. We get the names of owners from city business licenses, State Board of Equalization resale licenses and other sources. Personal property is valued as of the lien date which is January 1. Business owners and ranchers need to be aware that when they file the business property statement they need to report equipment on hand as of January 1 of the current year and acquisitions and disposals from January 1 through December 31 of the prior year. Unfortunately, more than 15% of our business owners fail to return their completed statement to our office by the due date of May 7 resulting in estimated assessments and penalties for failure to file.