Frequently Asked Questions
Q. What is Business Personal Property?
A. Business property is any tangible property owned, claimed, used, possessed or controlled in the conduct of a trade or business. In general, business personal property is ALL property owned or leased by a business except real property and inventory. Inventory is property held for sale or lease to others in the course of your business operations.
Q. Why are my business assets being taxed?
A. The State Constitution says ALL property is subject to property tax. Most people are familiar with the property taxes on their home. Similarly, the assets of a business are subject to assessment. Assessable business assets include all machinery, office furniture and equipment, non-licensed vehicles trade fixtures, and any equipment that is out on rent or lease on January 1st. Stand-alone application software, business inventories, licensed vehicles and any intangible assets are exempt from assessment.
Q. How is assessed value determined?
A. Assessment begins with the cost of the asset, including sales tax, freight and installation, but not including any trade-ins. Using an asset classification and the year of acquisition, the Assessor applies a depreciation factor to the asset cost to derive the assessed value.
Q. What is a Business Property Statement Form?
A. Each year, the Assessor’s Office sends a Business Property Statement Form (Form 571L) to businesses within Santa Cruz County as a request to file information about the original costs and acquisition years of their assets. All business property that is owned by the business and located within the county on January 1st should be reported on the statement.
If you receive a Business Property Statement OR your business owns assets with an aggregate original cost of $100,000 or more, you are required to file the property statement by April 1st. The property statement needs to be completed and returned to the Assessor’s Office every year, even if there are no new acquisitions or disposals.
Q. What should I do if I am a new business owner?
A. If you have recently opened, or are planning to soon open, a business within Santa Cruz County, please complete and return the New Business Owner Questionnaire.
Q. How do I make changes to my existing business?
A. If you would like to make changes to your business information including:
- Business Name (DBA)
- Business Location
- Business Mailing Address
Please complete and return a Business Property Account Update form so that we may update our records accordingly.
Q. What should I do if I am closing, selling, or moving my business out of Santa Cruz County?
A. If you have closed your business, sold your business, or have moved the business out of the county, please complete and return a Business Property Account Closure form. Please note that you are responsible for paying the tax on any business personal property owned on January 1st of the year you closed, sold, or moved your business out of county.
Q. I owned business property within Santa Cruz County, but my business was not open on January 1st. Am I required to file?
A. Yes. A business does not have to be open for its taxable personal property to be subject to assessment. For example, a new business may still be under construction as of lien date January 1st, but business personal property assets such as equipment and furniture are in the owner’s possession. In this scenario, the owner is required to file a Business Property Statement to report those assets.
Q. Is the Business Property Statement Confidential?
A. Yes. Business Property Statements are confidential documents and are not part of the public record.
Q. How much will my tax bill be?
A. The tax rate is approximately 1% of the assessed value.
Q. When will I receive a tax bill?
A. You will receive your tax bill in July. Payment will become delinquent and subject to penalties after August 31st. If you own the real property where the business is operated, the assessed value of your business assets may be added to the value of the real property and you will receive a secured tax bill in October.
If your Business Property Statement is not filed timely you will still receive a bill in July. However, you may receive an additional bill once the reported information is processed to account for any escape assessment that may have not been processed in time to be a part of the assessment reflected on the July bill.
Q. What’s the difference between the secured and unsecured tax roll?
A. Business property may be assessed on either the secured or unsecured tax roll. The basic differences between the two are outlined below:
||Land, structural improvement, and business property are assessed on the same bill
||Assessments are separate from the land and not contingent upon land ownership
|Tax Bill Due Date
||Two installments due by December 10 and April 10
||One installment due by August 31