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Virginia Business Personal Property Tax: A Guide

Posted by Eleshia Matheny on Mar 6, 2020 10:41:20 AM

Virginia Business Personal Property Tax: A Guide

A consistently high-ranking state for business competitiveness, Virginia is known for having a steady tax rate and a relatively business-friendly environment. Unfortunately, however, when it comes to business personal property taxes across the Commonwealth, the only consistent thing about Virginia is its inconsistencies. This article offers a round-up of information about Virginia business personal property tax for companies doing business—or planning to do business—in the state.

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Virginia Business Personal Property Tax Highlights

Key Dates

Explanation

1/1 Assessment date

 

1/31–5/31 Returns due

Due dates vary by city/town and county. File to local assessors.

Usually June and December taxes due

Dates vary by city/town and county and also by property type. Some locales bill in installments, and some bill for the full year.


Refer to Virginia Tax to find city- and county-specific tax rates, due dates, and payment information.

What business personal property is taxed in Virginia?

In Virginia, personal property taxes are administered by cities, counties, and towns. Only tangible business personal property is taxed. (Tweet this!) Tangible property includes machinery and equipment, furniture and fixtures of non-manufacturing businesses, certain computer hardware, trucks and automobiles, and any other tangible property used in a business unless specifically exempted.

Forty-five of Virginia’s 95 counties (and none of its cities) also impose a merchants’ capital tax, which is essentially a tax on merchandise for sale, including inventory of stock on hand.

Several categories of tangible personal property are segregated for taxation at assessment ratios and rates that may be below that of other tangible personal property, including:

  • Computer equipment
  • Aircraft
  • Heavy construction machinery
  • Research and development businesses
  • Biotechnology businesses
  • Interstate motor carriers
  • Energy generating and cogeneration equipment
  • Machinery & tools used in semiconductor manufacturing
  • Trucks and automobiles
  • Machinery & tools used in manufacturing, mining, water well drilling, processing or reprocessing, radio or television broadcasting, dairy, and dry cleaning or laundry businesses
  • Certified pollution control equipment

The following items are not taxed at either the state or local level:

  • Inventory (other than for merchants)
  • Tangible personal property used in manufacturing, mining, radio, or television broadcasting, dairy, or dry cleaning or laundry businesses (except machinery and tools, motor vehicles, and delivery equipment)
  • Office furniture, fixtures, computer equipment, and aircraft of a manufacturer’s corporate headquarters, regional offices, or research and development facilities located in Virginia, even if their entire manufacturing operations are conducted outside of Virginia
  • Computer application software
  • Money
  • Bonds, notes, shares of stock
  • Accounts receivable
  • All imported and exported foreign merchandise or domestic merchandise scheduled for export while in inventory located within a Virginia foreign trade zone
  • Capital used in the commercial fishing business to harvest or catch seafood

Methods of valuing property differ depending on the type of property, and the personal property tax rate is different in every jurisdiction. Some assessors depreciate assets based on the asset type and acquisition year, and may also consider the condition of the property, including technological obsolescence when appropriate. Others will depreciate all assets for a particular asset type at the same percentage regardless of acquisition year. However, any taxpayer may, at any time, request an explanation of a commissioner’s valuation methods.

Virginia Personal Property Tax Returns, Notices & Bills

Virginia businesses are required to fill out personal property return forms annually. The forms may differ depending on the type of assets you are filing for, whether it be tangible business personal property, machinery and tools, or vehicles. Many assessors accept the state form (Form 762), but many do not; instead, they require that forms specific to their locality be filed.

Tax bills serve as assessment notices. If you believe your business tangible property has been assessed unfairly, you may appeal the valuation by contacting the Commissioner of Revenue.

Need an easy way to keep track of your business tangible personal property tax in Virginia?

If you’re paying business property taxes across the state of Virginia as well as other states, you need a tool to help you manage it all more efficiently. TotalPropertyTax (TPT) software removes many of the manual burdens associated with the tax cycle, like data entry and information verification. As a result, tax teams that use it are better able to comply with tax requirements and have more time to strategize about lowering their tax bills. Schedule a free demo of TPT today to see how it can help your own team start working smarter.

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Topics: Business personal property tax