Tangible personal property taxes: Basic info to know

by Kate Hogan 05/09/2022

What is the difference between property tax and tangible personal property tax? While property taxes are commonly understood as payments on your home or land, tangible personal property is a less common term used in real estate. Referring to physical objects other than the literal land or building, personal tangible property is important in commercial and rental businesses. Here is the basic info to know about personal tangible property and associated taxes:

Tangible personal property examples

Some examples of business assets qualifying as tangible personal property include:

  • furniture
  • production machinery
  • computers
  • delivery vehicles

Individuals and households may have personal tangible property such as:

  • jewelry
  • collectibles
  • sports & hobby equipment

You can think of tangible personal property as anything of value with physical existence. Other assets, such as patents and copyrights, do not count as tangible personal property as they are not literally tangible.

How tangible personal property taxes work

Similar to regular property taxes, personal tangible property taxes are based on a percentage of either the asset's sale price or assessed value. Landlords and businesses have to report these assets on a tax return, as long as they are related to a business. Taxes are paid to the local government, and in some cases can qualify for tax deductions on federal income tax returns.

Understanding personal tangible property taxes is crucial if you're planning on investing in a commercial or rental property. Keep this basic info in mind when considering your next move in real estate investment.

About the Author
Author

Kate Hogan

Kate Hogan – Amherst MA Realtor ® and Pioneer Valley

Your number one source for Real Estate in Amherst, MA, and surrounding towns!

Kate Hogan, a 20-year resident of Amherst and Top Producer at Sawicki Real Estate, has that unique combination of qualities you need in an agent: a big picture view of the entire Five College area, towns, and neighborhoods, a high standard of professionalism, and an innate talent for understanding homes. All of that, plus this savvy agent is known for being experienced, knowledgeable, and a lot of fun to work with.  As a full-time real estate professional, Kate’s approach is focused on getting to know her clients as real people and taking care of them from beginning to end.