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    Indiana Business Personal Property Taxes [GUIDE]

    Posted by Eleshia Matheny on May 19, 2021 11:30:12 AM

    Indiana Business Personal Property Taxes [GUIDE]

    Finding it a challenge to stay on top of Indiana business personal property tax rules? This article summarizes the essentials of the tax, and highlights new policies you should be aware of for future filing.

    Indiana Business Personal Property Tax Return Dates

    Indiana business personal property includes all items that contribute to a business’ ability to produce an income, such as computers, fixtures, machinery, tools, etc. Every business, church, and nonprofit organization must file an Indiana business tangible personal property tax return each year, even if they qualify for an exemption (see the section below). Note that Indiana does not tax intangibles; also, computer software, inventory, and commercially planted crops in the ground are all non-taxable.

    The tax schedule is as follows:

    Date

    Explanation

    January 1

    Assessment date

    May 15

    Return deadline. Taxpayers may request up to a 30-day extension in writing from the assessor before the filing deadline, including a reason for the request. The assessor will provide a written response granting or denying the request. Failure to file by this date will result in a $25 penalty. If a return is not filed within 30 days of the return due date, a penalty of 20% of taxes due will be imposed.

    May 10*

    Tax bill—first installment due (for prior year’s assessment)

    June–October

    Assessment notices are mailed. If the assessor does not send a notice of assessment, the tax bill is the notice.

    November 10

    Tax bill—second installment due (for prior year’s assessment)

    Appeal deadline varies depending on when the assessment notice was mailed

    Appeals should be filed within 45 days of the date of the assessment notice using Form 130.

    Appeals filed for objective reasons-such as clerical errors, incorrect description of property, or denial of exemption-may be filed for up to three years of assessments.

    *Payment in Indiana happens in arrears, so the tax bill arrives the spring after the year in which you file the return.

    Indiana Business Personal Property Tax Return Forms

    While most states have a standard return form for all business and asset types, Indiana requires certain types of assets to be filed on specific return forms. (Tweet this!) The $40,000 exemption (see the box below) may be claimed on each of these four forms. The main forms include:

    • Form 102: Farmer’s tangible personal property tax return

    • Form 103 (Long): Business tangible personal property tax return form used by all taxpayers if:

      • Your business personal property assessment is $150,000 or more

      • You wish to claim any exemptions or deductions

      • You are claiming any special adjustments, such as equipment not placed in service, special tooling, permanently retired equipment or abnormal obsolescence

    • Form 103 (Short): Also a business tangible personal property tax return form. Business tangible personal property tax return form that can be used if:

      • You are not a manufacturer or processor

      • Your assessment is less than $150,000

      • You are not claiming any exemptions, deductions, or special adjustments

        Generally, businesses are required to file Form 103, but depending on the type of property being reported, additional forms may also be required. For example, if your company owns special tools such as dies, jigs, patterns, etc., Form 103-T, Return of Special Tools, is required in addition to Form 103. Here’s a complete list of Indiana Business Personal Property Tax Return Forms and their uses.

    • Form 104: Business tangible personal property tax return form used as a summary form for taxpayer reporting on Forms 102 and 103. If you are declaring the exemption for personal property, you do not need to complete and submit this form.

    Currently, property tax returns must be mailed to individual county assessors. However, the Indiana Department Of Local Government Finance is now working on building a system that will allow taxpayers to file online. The new system will allow companies to easily pull data from previous years; it is also expected to increase the efficiency of local county offices. The new system is expected to be up and running by January 2021.

    Don’t wait to simplify your filing process—you can do it now with CrowdReason advanced property tax software. Book a demo to see it live!

    Indiana Business Personal Property Tax Exemptions

    While Indiana has stopped short of a complete business personal property tax elimination, it has made repeated efforts to broaden the range of exemptions. In mid-2019, the Indiana General Assembly increased the business personal property tax exemption from $20,000 to $40,000 of taxable personal property cost per county. The change takes place starting with the 2020 property tax filing.

    (Note that Indiana is currently considering a bill (SB 336) that would increase the business personal property tax exemption to $80,000 (from $40,000). If passed, more businesses would be exempt from the tax and tax rates would increase on other properties.)

    Taxpayers who claim this exemption must still file a return, which should include:

    • A declaration that the taxpayer’s business personal property is exempt.
    • An indication as to whether the property is in one location or multiple locations.
    • An address for the location (or locations) of the property.

    In addition, the $50 local service fee that was previously imposed by counties on taxpayers claiming exemption has been eliminated.

    Beyond the exemption listed above, additional exemptions or deductions may be requested by submitting the applicable claim form. Some of these include:

    • Exemption of Air Or Water Pollution Control Facilities (Form 103-P, Form 103)
    • Exemption Of Enterprise Information Technology Equipment (Form 103-IT, Form 103)
    • Deduction From Assessed Valuation Personal Property In Economic Revitalization Area (Form 103-ERA, 103 (Long))
    • Deduction From Assessed Valuation, Maritime Opportunity District (Form MOD-1, Form 103 (Long))

    6 FAQs About Indiana Business Personal Property Tax

    1. What is business personal property?

    Often called personal property, business personal property refers to business-owned, tangible assets (not real property) that are subject to taxation in 38 states, of which Indiana is one. Billboards, computers, and furniture are all examples of personal property. Notably, intangible personal property—that is, property that has no physical form such as computer software—is not taxable in Indiana.

    In some states, a single state entity is involved in the administering of personal property tax. However, Indiana has numerous jurisdictions with local assessors who use their own guidelines, valuation factors, and the like for personal property taxes.

    2. How has COVID changed the process of filing business personal property returns in Indiana?

    The global pandemic has had a significant impact on the state. Due to Indiana’s approach of assessing personal property at the local level, you should check with your jurisdiction’s assessor to learn about specific changes related to COVID, such as whether there are any extended filing deadlines.

    Also, while not a direct result of the pandemic, the state launched its Personal Property Online Portal for Indiana (PPOP-IN) in February 2021. Businesses can now file their personal property returns online as an alternative to traditional paper forms.

    3. I need assistance in filing my personal property return. Can the county assessor help me?

    Since Indiana’s personal property tax requires self-assessment, the responsibility for return filing lies with the taxpayer. Other than answering general questions or directing taxpayers to available resources, taxpayers should not expect, in general, county assessors to offer much assistance with filing. Experiences may vary from county to county depending on their individual policies.

    If you’re looking to make your filing process simpler, take a look at CrowdReason’s advanced property tax software. It speeds up many of the tasks associated with filing, saving your tax team a lot of time and headaches.

    4. Are there any circumstances that allow for not filing a tax return, such as a minimum assessment amount?

    The state does allow taxpayers to claim a personal property tax exemption in a county if the value of the personal property is less than $40,000. However, all businesses, churches, and nonprofit organizations are required to file personal property returns each year, even if qualified for such an exemption.

    5. If my business moved or ceased operations, am I required to notify the assessor of this change?

    While not required by Indiana law, it is prudent to alert the county assessor if you no longer have personal property in that county. This is because the assessor may believe you have not filed a return and estimate the value of your personal property, subsequently taxing you for that value. You can be proactive in avoiding such a circumstance by notifying them of your business standing. Note, however, that you also have the right to challenge an undue assessment within 45 days of the date of notice.

    6. What is the penalty if I fail to file my personal property tax return by the due date?

    If you do not file your personal property tax return with the appropriate country assessor by the due date, you will incur an initial penalty of $25. Further, if within 30 days after the due date you still have not filed a return, you will incur an additional penalty of 20% of the tax due amount.

    Wish you could simplify the filing process?

    You can, thanks to our advanced property tax software, TotalPropertyTax (TPT) and MetaTaskerPT. Taking advantage of these tools will reduce the amount of time your team spends on the low-value tasks associated with the property tax cycle, so you have more time to focus on building strong appeals and lowering your organization’s taxes. With our software you can:

    • Automate data entry
    • Stay on top of deadlines
    • Depreciate assets in minutes
    • Generate hundreds of tax returns in minutes
    • Pay bills automatically

    Our software also ensures you get the process right for Indiana—and every other state you’re doing business in. If you’d like to learn more about our software, visit our website or book a demo today!

    Download Now: Property Tax Comparison By State

    Topics: Business personal property tax, Personal property, Indiana business personal property tax