Q: What are personal property taxes?
A: All personal property located in the Commonwealth of Massachusetts and personal property belonging to the residents of the Commonwealth wherever located, is subject to taxation unless expressly exempted by law.
Q: What property is taxable?
A: 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.
Q: Can personal property be exempt?
A: Professional tools used by plumbers, carpenters, auto mechanics, and other trades are exempt from the personal property tax. In legal terms, this exemption covers tools of trade (e.g., small tools that can fit in a toolbox).
Tools of other professionals not listed in the above paragraph are considered taxable. These include dentist’s drills and x-ray machines. Computers are also subject to the personal property tax, but in cases where they are utilized by a corporation for internal purposes only (e.g., for such functions as internal accounting or administrative operations); these computers are not subject to taxation.
Tangible personal property subject to some other type of local tax is also exempt from the personal property tax. Motor vehicle and trailer excise, ship and boat excise, the farm animal and equipment excise, and mobile home park license fees are all included in this category. For example, boats, fishing gear and nets up to $10,000 in value owned and used in a commercial fishing business are exempt.
Intangible personal property is exempt from the personal property tax. Intangible property includes stocks, bonds, cash, mortgages, and other evidence of ownership of property rights.
Property owned by Individuals, Sole Proprietors, Partnerships, and Trusts.
In general, all tangible personal property located in Massachusetts is taxable unless expressly exempt.
Properties 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 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.
Q: Where is personal property assessed?
A: Generally, all tangible personal property is assessed in the city or town in which the personal property is situated as of January 1. The principal exception is in situations where personal property has only a temporary location as of January 1. In the later case, the property is assessed at the residence of the owner.
Q: What is the Form of List?
Each year, by March 1, all persons subject to taxation in a city or town must submit a list of all their personal property that is not exempt from taxation. These personal estate items must be included on the documentation known as the Form of List. Blank forms are available at the Assessor’s Office, 36 Main St., Agawam, MA 01001 or by calling (413) 786-0400.
Taxpayers are not required to estimate the value of the property included on the Form of List. The Assessor’s Office will determine the valuation, based on standard reference tables. In the event that a taxpayer does not submit the list, the assessor will ascertain as best he can the personal estate belonging to the taxpayer and will estimate its value. NOTE: The Form of List is NOT open to public inspection.
Q: Is there a penalty for not filing a Form of List?
A: There is a penalty for failing to file the Form of List pursuant to Massachusetts General Law’s c. 59, §64. A personal property taxpayer’s application for abatement may not be granted unless the taxpayer can show good cause for failure to file timely. Further, if the assessment of the personal estate exceeds by 50% the amount which would have been assessed had the list been timely filed, then only the amount which exceeds this 50% may be abated.
Information Requests – The Assessor’s Office may require an owner or lessee of personal property to provide certain information in writing, as may be reasonable necessary, to determine the actual fair cash valuation of the property. Failure to comply with the request within thirty (30) days will bar any appeal of the tax assessed, unless the owner or lessee was unable to comply with the request for reasons beyond his or her control Any false statement that is knowingly made will also bar the taxpayer from any statutory appeal.
Q: Can personal property tax be abated?
A: Yes. However, applications for abatement of personal property tax are available only for 30 days after the issuance of the fiscal year 3rd quarter tax bill. The filing deadline for FY 2006 will be February 1, 2006. You can download an abatement form here /filestorage/80/162/237/275/reppabate.pdf