Personal property taxes (PPT) are ad valorem taxes imposed by states or local jurisdictions on tangible movable assets, not land or buildings. Think business equipment, machinery, furniture, and computers. Many states and localities tax business personal property (BPP) that generates profit within your commercial property.
While most jurisdictions levy PPT on business assets, some states apply it to individual personal property, such as vehicles, boats, or aircraft.
Since there is no single federal rule for PPT, in this article, learn what personal property tax is in your state, and who’s expected to pay it.
Personal Property Tax vs. Real Estate Tax
Topic | Personal Property Tax (PPT) | |
|---|---|---|
What’s taxed | Tangible, movable items (often business assets; sometimes vehicles) | Land and buildings |
Who usually pays | Mostly businesses; some states tax vehicles owned by individuals | Property owners (residential/commercial) |
Basis | Ad valorem (assessed value × local rate) | Ad valorem (assessed value × local rate) |
Common examples | Equipment, machinery, computers, furniture; in some states, vehicles | Homes, commercial properties, land |
Bottom line: PPT targets movable property; real estate tax targets immovable property.
What Counts as Personal Property?
Typical (taxable) business items: equipment, machinery, computers, furniture, fixtures, tools, supplies, spare parts, point-of-sale systems, leasehold improvements (varies).
May be taxable in some places: inventory (many states now exempt or offer de minimis thresholds).
Vehicles: policy varies — California uses VLF (not property tax) for registered vehicles; Virginia taxes vehicles locally; West Virginia taxes vehicles but offers a state credit against the tax paid.
Who Pays Personal Property Tax? Business vs. Individual
Businesses: In most states, companies must list (“render”) and pay PPT on BPP used to operate the business, such as:
Equipment
Machinery
Furniture
Computers
Appliances in rental units
Individuals:
Most jurisdictions don’t tax personal items under PPT. However, some states do tax vehicles locally (e.g., Virginia) or via special mechanisms (e.g., West Virginia credit offsets tax). Check your state and county's rules.
Does My State Levy a Personal Property Tax?
According to 2025 Tax Foundation data, 36 states levy PPT on businesses. Twelve of these states offer 'de minimis exemptions' or a tangible personal property tax exemption to ease the burden on companies with minimal taxable property. The remaining 14 states broadly exempt tangible personal property from taxation.
States that levy PPT on business personal property | States that tax personal vehicles/items under PPT |
|---|---|
Connecticut Mississippi Missouri Rhode Island Virginia West Virginia |
In Texas, for example, if your commercial property uses tangible personal property to produce income, you must file an annual rendition using Form 50-144 with your local County Appraisal District.
How Are Personal Property Taxes Calculated and Reported?
Calculations and reporting of personal property taxes usually follow these general steps:
1. Rendition
Many states require businesses to file a rendition reporting assets, costs, and year acquired by a set deadline. For example, in Texas, you must submit your rendition by April 15 using Form 50-144. Consult the relevant local authority for exact filing dates and requirements.
2. Assessment and Depreciation
After the rendition, your local appraiser reviews the asset you’ve reported and assigns an assessed value by combining your rendition with IRS-prescribed depreciation schedules. However, state rules might vary. For example, Texas appraisers use cost schedules for BPP in different counties.
3. Local Tax Rates
Local governments set millage and PPT rates. Once they establish your BPP assessed value, they multiply it by your local tax rate and subtract any deductible personal property taxes to calculate what you owe. They’ll then issue the bill after the calculation, which is usually paid annually.
Assessed (taxable value) X local PPT/tax rate = Taxes due
What Are the Penalties for PPT Non-Compliance?
Lack of compliance with the local PPT requirement can result in costly consequences:
Late/Failure to File a Rendition
Failure to submit your rendition on time or to not file at all can trigger financial penalties and interest. For example, in Texas counties like Tarrant, Bexar, and Milam, the penalty for late rendition is 10% of the total taxes due. If the court finds that the failure to file a rendition was part of fraudulent conduct, like intentional evasion or falsification, you’ll get an additional 50% penalty on the tax due.
A willful failure to file is deemed tax evasion and can be charged as a Class A misdemeanor, which carries a penalty of up to one year in county jail or a $4,000 fine.
Increased Appraisal
If you don’t file a rendition, the local appraisal district may assign a high assumed value based on the best information available, which can inflate your tax bill. Even if you successfully protest later, you may still pay penalties or interest.
Reduce Property Tax Liability for Your Commercial Property
If your commercial property uses BPP to generate income, managing multi-state property taxes can be overwhelming. You have to juggle depreciation schedules and navigate state-specific rendition forms.
At Ownwell, we understand the complexities of commercial property taxes, including PPT. Our experts can help you:
Identify opportunities to reduce your real estate tax liability so you never pay more than your property’s fair share.
Accurately value your commercial property to prevent inflated assessments that raise your overall tax bill.
Apply available exemptions and abatements to lower your taxable value.
File and appeal the property tax assessment on your behalf to save time and administrative effort.
Don’t let excessive property taxes eat into your commercial property’s profits. Start an appeal today and learn how Ownwell’s local experts can help you get the savings you deserve.
