Florida’s tangible personal property is everything used in non-real estate businesses and other income-generating occupations. It is often known as a business personal property. Includes machinery, equipment, furniture, equipment, tractors, signs, supplies, rent, rent, borrowed, or rented equipment.
Passing Amendment 1 in 2008 created a $25,000 tangible personal property exemption. Tangible property is different from real estate tax (or valorem tax) because it is a tax on what is owned and used by a company. Tangible taxes apply based on the original value of equipment or items used in the business. Items are depreciated in a manner specified by the Department of Revenue. There appears to be no clear understanding or uniformity about how depreciation is determined. Regardless of how depreciation is determined, taxes and valuations never go away. If your business uses equipment regardless of age, a 20% value will be valued and taxes apply to that value.
The tax rate is currently at 7%, and some business groups want to cut it. The First Coast Manufacturers Association (FCMA) is one such group.
The FMCA Lakeray president says the tax prevented investment in new equipment and, in some cases, increased taxes based on new investments led to businesses leaving the state.
A former Florida lawmaker, Ray A., says many manufacturers his association represents want state legislators to pursue laws that cut or eliminate state property taxes.
I’ve tried it before. Tangible taxes were posted on the ballot in 2012 and removed from the Constitution. But it failed. Although taxes are required, Lake Ray says some things will help reduce the impact.
First, consider using a similar depreciation measure to the federal government to reduce residual usage to 5%. Second, if the company has been operating in the state for more than five years, it allows for immediate value reductions for new and advanced equipment. Ray says this will protect your current business.
Third, consider ways to provide specific tax amendments. Fourth, the law requires that taxation be defined for valuation, not for the Department of Revenue.
Ray says that the state’s revenue surplus should be considered to reduce taxes on tangible property. These funds could, as mentioned above, extend the tax impact on businesses and manufacturing for a long time, allowing government businesses to adjust changes in tax collection and use. The challenge is that this tax will primarily be brought to local city and county governments and county boards of education.
