Business Personal Property FAQ
- Who does Business Personal Property affect?
In Washington State, the listing of business personal property is a self-reporting system. Per WAC 458-12-060, all businesses in the state are responsible for filing a listing of their personal property each year with their county Assessor, even if a listing form has not been provided to use. If you own any business-related personal property in Skagit County, you are required to file a personal property listing.
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- How is this different than other taxes I pay?
Property tax is a locally assessed based on the assessed value of your real and/or personal property. Taxes reported to the federal or state governments directly are most commonly based on transactions like income or sales, not on property values. Real property is subject to excise tax at the time of purchase, and then to property tax annually afterward. Personal property is similarly subject to sales/use tax at the time of purchase, and then to property tax annually afterward also. Personal property tax is listed, assessed, and paid at the county level to fund the same local services as real property taxes. Examples include public schools, county services & operations, cities & towns, libraries, parks & recreation, emergency medical, hospitals, fire departments, and ports. [Top]
- How do I file a business personal property listing?
Paper listings are mailed out in January each year to existing business personal property accounts. If you have not received either a listing form by the end of February, please contact our office so we can verify your account information. [Top]
- How do I complete a paper listing?
Instructions for completing the paper listing form are on the form itself and can also be accessed on the Skagit County Assessor website. In most cases, if you provided an asset list in a prior year, that list will be included on the following year's listing form. This allows you to simply cross-out assets you have removed from your business, and write-in assets you acquired during the previous year. The desired result is a current list of all assets used by the business as of the yearly January 1 lien date. [Top]
- Do I need to submit a listing even if there were no changes to my business assets last year?
Yes. The law requires each business to file a listing yearly even if there are no changes from the previous year. Additionally, if you are claiming any exemptions on your business personal property assessment, those are required to be sent with the form. [Top]
- What exemptions are available to my business?
Head of family Exemption
The Head of Family Exemption reduces the taxes owed by making the first $15,000 of the total assessed value non-taxable. Any assessed value remaining after the exempted portion is still taxable, and other exemptions may be claimed in addition to this one.
To qualify for the Head of Family Exemption, the business must be a sole proprietorship, and the owner of the business must meet at least one definition of "head of family" as described in WAC 458-16-115. That definition includes the following residents of the state of Washington:
- Any person receiving an old age pension under the laws of this state.
- Any citizen of the United States, over the age of sixty-five years, who has resided in the state of Washington continuously for ten years.
- The husband, wife, or domestic partner, when the claimant is a married person or has entered a domestic partnership, or a surviving spouse or surviving domestic partner, who has neither remarried nor entered a subsequent domestic partnership; and
- Any person who resides with, and has under his or her care and maintenance, any of the following:
- His or her minor child or grandchild, or the minor child or grandchild of his or her deceased spouse or deceased domestic partner.
- His or her minor brother or sister or the minor child of a deceased brother or sister.
- His or her father, mother, grandmother, or grandfather, or the father, mother, grandmother, or grandfather of a deceased spouse or deceased domestic partner; or
- Any of the other relatives mentioned in this subsection who have attained the age of majority and are unable to take care of or support themselves.
PLEASE NOTE: This exemption is not available to any partnerships or corporations, including those with only one governing member, because those types of businesses are not sole proprietorships.
To claim this exemption, mark the appropriate box(es) shown on the asset listing form to which it pertains. This exemption is shown on every asset listing form (both online and on paper) available from our office, but it cannot be claimed retroactively.
Farm Machinery & Equipment Exemption
Farm Machinery & Equipment Exemption reduces the taxes owed by removing the state-portion of the levies from the resulting tax statement. Local levies are not affected by this exemption, so claiming this exemption will not normally remove all of the taxes owed. Other exemptions may be claimed in addition to this one. To qualify for this exemption, the business must conduct farming as its primary operations, and only the equipment used for farming is eligible. The definition of "farming" is provided in RCW 82.04.213, and it specifically excludes the growing of marijuana and related products. To claim this exemption, the exemption's application form must be completed, signed, and submitted annually with the asset listing form to which it pertains. A copy of that exemption form is provided by our office attached to every asset listing form (both online and on paper) for eligible businesses with existing accounts.
Exemption for Non-Profit Entities
Determination of the exempt status from personal property assessment and taxation for non-profit entities is a function of the Washington State Department of Revenue. Application must be made annually to the State Department of Revenue. RCW 84.36.020 allows exemption of church-owned property used for church purposes. Property must be used for such things as a church, parking, parsonage, convent, and caretaker’s residence. The land for which an exemption is granted may not exceed five acres. After initial application, a renewal application must be submitted annually. RCW’s 84.36.030 through 84.36.350 allow tax exemptions for property used in character building, benevolent, protective or rehabilitative social services, camp facilities, veterans and relief organizations, libraries, orphanages, day care centers, nursing homes and hospitals, schools and colleges, art, scientific and historical collections, fire companies, humane societies, musical and artistic associations, public assembly halls, certain public authorities, and sheltered workshops for the disabled. Exemption must be claimed annually and ceases upon cessation of the exemption-qualifying use of the property. Applications must be made to the State Department of Revenue.
Destroyed Property
RCW 84.70.010 provides that, if on or before December 31st in any calendar year, any property placed upon the assessment roll in that year is destroyed in whole or in part, the true cash value of such property shall be reduced for that year in an equitable amount as determined in other provisions of the law. To apply for this tax relief, please complete the Taxpayers’ Claim for Reduction of Assessments form to obtained on the Skagit County Assessor website and/or by contacting our office. After completing the form, please submit by selecting a method of contact below:
Lisa Henderson
Personal Property Specialist
Skagit County Assessor’s office
Administration Bldg., Room 204
700 South 2nd Street
Mount Vernon, WA. 98273
Email: lisah@co.skagit.wa.us
Direct Line: (360) 416-1797
Main Line: (360) 416-1780
Heavy Equipment Rental Exemption
The 2020 Legislature passed Substitute Senate Bill (SSB) 5628 which creates the following: A property tax exemption for heavy equipment rental property owned by a heavy equipment rental dealer (effective for 2021 assessment year)
This bill creates a property tax exemption for all heavy equipment rental property owned by a heavy equipment rental dealer. To qualify for the property tax exemption the heavy equipment must meet the criteria and Dealers must submit the Application for Exemption of Heavy Equipment Rental Form, and the Personal Property tax listing form, by April 30th to the County Assessor where the property is located. To ensure that the rental property receives a full exemption, both the exemption form and the personal property tax listing form will need to include a list of the heavy equipment rental property claimed. Once the Assessor receives the exemption form, they will confirm that the dealer meets the 50% total revenue requirement to be a heavy equipment rental dealer and will also verify that the list of property qualifies as heavy equipment rental property. If the Assessor finds that either the dealer does not meet the 50% revenue requirement, or the equipment claimed is not heavy equipment rental property, then the exemption may be denied in whole or in part. A dealer has a right to appeal a denied claim for exemption to the Skagit County Board of Equalization. [Top]
- What is the penalty for not filing a listing by April 30 each year?
According to RCW 84.40.130, a penalty of 5% of the amount of the following year tax is assessed for each month the listing is late up to a maximum of 25%. This is a percentage of the taxes due, not a percentage of the value. For example, if the listing is returned in May the penalty is 5%. In June the penalty increases to 10%, and so on until it reaches the maximum of 25% on September 1. The penalty (appearing as a percentage on the Notice of Value) is converted into a dollar amount due on the following year's tax bill.
Skagit County considers a government postmark of April 30th as a timely filing. Hand-delivered listings are date-stamped by our office on the date received, and listings submitted electronically are automatically date-stamped. A postage meter stamp is not considered proof of timely filing.
We always use the oldest postmark date available. If you need to amend a filing with more information, resubmit in a different format, or otherwise submit the same form for the second time in a year for any reason, the original filing date from the first submission will be used to determine the penalty. [Top]
- How can I get a copy of the asset detail?
Requests for asset detail should be made to the Skagit County Assessor’s office. Due to proprietary information restrictions, we can only provide a copy of the asset detail to third parties, like a tax preparer, after receiving a letter of authorization from the owner. [Top]
- What are my options if I don't agree with my value?
You have the right to appeal your value to the Skagit County Board of Equalization (BOE) within 30 days of the date shown on any value notice you receive from our office. Most value disagreements on personal property accounts are the result of either an error or a misunderstanding of the process however, and these can usually be corrected without an appeal.
Whenever an error is found in your personal property assessment, regardless of cause, the Assessor's Office wants to fix it. If you believe that errors were made either in our assessment process or in your reporting, please contact our office for review. We can fix errors to the current and three prior assessments without the involvement of any other departments. Additional information about the appeal process and appeal forms, are available on the Skagit County Website. Late-filing penalties are not values, so they cannot be appealed. [Top]
- What do I need to do when I close, sell, or move my business out of Skagit County?
The current year’s assessment of your business personal property results in a tax obligation (lien) per RCW 84.56.120. If you moved or closed your business after January 1st of last year, you are liable for the full amount of this year’s tax. If you move or close your business after January 1st of this year, you are also responsible for paying the full amount of next year’s tax. All taxes must be paid before the personal property is sold to another business entity. You must request a final advance tax bill by contacting the Assessor’s office.
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