Business Personal Property

All commercial business owners and all commercial farmers are required to file an annual listing of their taxable personal property with the Assessor’s Office by April 30 of each year.

Personal Property Tax

An explanation of Personal Property Tax:
  • Most people know that property tax applies to real property, but they may not realize that property tax also applies to personal property items used in a business or on a farm. Many business owners wonder why they have to pay tax on tools, furniture, and fixtures used in their business since they paid sales tax on these items when they purchased them.
  • Personal Property Tax is a tax based on the appraised value of items used in a business and is subject to the same levy rate as real property.
  • Property Tax is the oldest tax in Washington. Property Tax is an “ad valorem” tax, meaning it is based on the value of the property.
  • The Washington Department of Revenue has created an online video and a Personal Property Tax Fact Sheet (PDF) to help explain reporting requirements.
Personal Property Tax is the mirror image of Real Property Tax. When a house is built, sales tax is paid on the wood, stone, brick, and other materials used to build that house, then property tax is paid on the appraised value of that house every year. Tools and furniture and other personal property items are taxable because “All property now existing or that is hereafter created or brought into this state shall be subject to assessment and taxation…excepting such as is exempted from taxation by law.” (RCW 84.365) Most Personal Property owned by individuals is exempt. For example, your household goods and furnishings and personal effects are exempt from property tax until you start using these items for business purposes, then these items become taxable Personal Property.

Personal Property Listing Forms

Business owners and farmers must file a Tangible Personal Property Listing Form (PDF) listing all taxable property located in San Juan County as of Noon on January 1 of that year with the Assessor’s Office annually. Business owners are required to file a separate form for each place of business in the county.

The listing form must:
  • Identify each taxable category. For example, office equipment must be separately identified as computers, desks, facsimile machines, etc.
  • Include all supplies on hand as of January 1. This includes office and retail (cash register tapes, bags, etc.) supplies.
  • Include the date each item was acquired.
  • Include the total purchase cost of each item, excluding sales tax. The total purchase cost of an item includes all costs associated with making the property operational. For example, installation, freight charges and the value of any trade-in are costs that may be incurred while placing property into operation.
If the assessor does not receive your form, the assessor will estimate the value of the property based on the best information available. A maximum penalty of 100% can be levied on non-reporting or under-reporting businesses (WAC 458-12-105).

Penalty for Failing to File
To avoid a penalty, the assessor must receive your listing form by April 30. The penalty is 5% of the tax due per month, up to a maximum of 25%. Farmers must return the Application for Exemption of Farm Machinery and Equipment (PDF) each year or you will not be granted that exemption.