I. General Information
The Personal Property Tax is assessed separately from real estate. This tax is assessed upon non-real estate, tangible assets. These assets are composed of goods, material objects and other things capable of material ownership that are not part of real estate.
Personal property is assessed by the town where the property is “situated “ on the January 1st, assessment date. In limited circumstances personal property may be assessed by the community in which the owner is an inhabitant on January 1st, even if the property is located in another community on that day. This primarily applies to items that may not be permanently situated in a town, such as construction equipment.
A Form of List (State Tax Form 2) must be filed each year by all individuals, partnerships, associations, trusts and corporations that own or hold personal property on January 1st unless expressly exempt. A Form of List must be filed by March 1st with the Board of Assessors unless an extension is granted. Request for an extension must be made in writing to the assessors.
The assessment date for the Fiscal Year is the January 1st preceding the start of the Fiscal Year. Each business is assessed based on its existence on the assessment date. Thus any business that existed on January 1st would be billed for the entire fiscal year. This applies to businesses that have closed or relocated during the year so that any business that closed or relocated after January 1st will be billed for the entire Fiscal Year. Payments are due August 1st, November 1st, February 1st and May 1st. It should be noted that the reverse of this situation is also true in that any business that opens after January 1st will not be billed for Fiscal Year.
Individuals owning or holding household furnishings and effects not located at their primary residence on January 1st must file State Tax Form 2HF. Form 2HF is generally used by individuals who own a vacation home
The information in the Form of List is used by the Board of Assessors to determine the taxable or exempt status of personal property and, if taxable, its fair market value. The Assessors may request further information about the personal property in writing and seek cooperation to inspect if necessary. Forms of List are confidential and therefore not available to the public for inspection under public records law. They are available only to the Board of Assessors and Massachusetts Department of Revenue for the purpose of administering the tax laws.
II. Taxable Personal Property
The following summarizes the personal property that is taxable and must be listed on a Form of List. This summary is formatted by the type of business ownership, since the type of ownership affects which items will be taxed locally. Most corporations pay a corporate excise to the Commonwealth of Massachusetts on their furniture, fixtures and inventory so they are exempt from paying a personal property tax locally on these items. Machinery however is still taxed by the local municipality.
Individuals, Partnerships, Associations or Trusts
Individuals, partnerships, associations or trusts are taxable on all tangible personal property except: motor vehicles and trailers subject to an excise, boats subject to an excise and non-commercial registered airplanes. Individuals are not taxed on the following additional items: household furniture and effects at the place of domicile, farm utensils and tools of a mechanic’s trade. Some examples of taxable items would be:
- Poles, underground conduits, wires and pipes - Includes such items as the parking lot lights with their corresponding poles, wires etc. located in a parking lot owned by the business.
- Machinery - Includes manufacturing machinery, copying and reproduction equipment, typewriters, computers and word processing equipment, appliances, and any other machines and mechanical devices.
- Tools and Equipment - Includes business, or professional tools and equipment, including restaurant, laboratory and medical equipment. Taxable tools are implements of a professional (doctor, dentist, lawyer or accountant) such as dentist drills, x-ray machines, typewriters, and calculators. Examples of non-taxable “tools of a mechanics trade” are the instruments of a plumber, carpenter, auto mechanic or other tradesman such as: wrenches, hammers and saws.
- Business Furniture and Fixtures - Includes business, professional, commercial or service fittings and furnishings (desks, tables, cabinets, displays cases), rugs, floor coverings and draperies, lamps, specialized leasehold improvements (restaurant fittings, module walls, etc), works of art and decorations, books and professional libraries and other fittings and effects.
- Merchandise - Includes goods, wares, or any stock in trade in any store or other place of sale, in any warehouse or other place of storage, out on lease or consignment, etc. This could be represented by a retailers inventory (the shoes of a shoe store) or any finished goods or products that may be for sale or lease. These items may also include any work in progress such as partially completed product (furniture being built, jewelry being made) and any other materials or supplies used to produce a finished product (paint for a house painter).
- Unregistered Motor Vehicles and Trailers
- Other - Includes animals, forest products and all other tangible personal property not specifically exempt from taxation.