What Property is Taxable?
Tangible (that is, physical) property is subject to the personal property tax unless exempted by statute. Items defined as tangible personal property range from the chairs in a barber shop, to the furnishings of a doctor’s waiting room; from the drills used by a dentist to the poles owed by a utility company.
The following categories apply to personal property taxation:
Property owned by Individuals, Sole Proprietors, Partnerships, and Trusts.
In general, all tangible personal property located in Massachusetts is taxable unless expressly exempt.
Property Owned by Business Corporations
For business corporations, poles, underground conduits, wires, pipes (property generally owned by utility companies) and machinery used in the conduct of business are taxable. Taxable examples of machinery used in the conduct of business would include property used on behalf of that corporation’s customers (e.g., using computers and equipment to process data on behalf of clients).
Exempt examples of machinery would include property directly used in any purchasing, selling, accounting or administrative function; inventory or stock in trade; or personal property directly used in connection with laundering or dry-cleaning processes, the refrigeration of goods or the air condition of the premises.
- Manufacturing Corporations (Domestic and Foreign)
The Commissioner of Revenue for the Commonwealth determines what is a manufacturing corporation. Machinery of a manufacturing corporation (domestic or foreign) is not subject to personal property taxation; however, poles, underground conduits, wires and pipes of a manufacturing corporations are taxable.
All Other Business Corporations
Other business corporations such as insurance companies, public service corporations, utilities, savings banks and cooperative banks are subject to taxation on poles, underground conduits, wires and pipes, as well as machinery used in the manufacture or in the supply or distribution of water.