Business Tangible Property Tax

I have had several calls in the last few days regarding tax statements just received by businesses from the county tax offices.  Receiving one of these for the first time is a rude awakening for many small businesses.  Their thoughts are  1) they lease their business space and therefore have no property tax to pay, right? and 2) once they figure out that this is a tax on business equipment they wonder why they are being taxed on items that they already paid sales tax on.  Sorry folks, state sales tax and county property tax are two different things.  Odds are if you started a new business, you are now on the radar for paying ANNUAL property tax on your business furniture/equipment and inventory.  This tax is the reason car dealerships always have great year end deals!  

The tax bill you are receiving right now is based on values at January 1, 2008.  These values were either provided by you on a property rendition form mailed to you in early 2008, or the most likely scenario for a new business is that an agent from the county tax office paid a visit at your new location.  What I see quite often, especially in Galveston and Brazoria counties, are agents literally walking door to door, checking their databases to see if businesses have tax accounts.  Another way to be automatically signed up by the tax office in most cases is to apply for an assumed name (dba) with the county clerk.  Regardless, the RULES are that if you are operating a business within the county then you must obtain a tax account and render the January 1 value of the property used in your business.  Blank rendition forms can usually be found on the county appraisal district websites, if you do not receive a preprinted one.  The rendition forms are due by April 15 with an opportunity to file a 30 day extension.  You certainly want to complete the rendition form rather than ignore it.  Otherwise, you leave it wide open for potential penalties and for the county to estimate the values based on the industry and square footage.  I know from experience that they always estimate high!    

Introducing myself to the blogosphere

I never thought I would have a blog, but here I am...giving it a shot.  I have been doing taxes and accounting for more than 10 years and a Certified Public Accountant for 8 years.  I do tax planning and preparation for individuals, small businesses, non-profits, benefit plans, estates, trusts...you name it.  I also prepare financial statements for those various entity types.  I have been using QuickBooks software since I began my accounting career back in 1997 and have been a Certified QuickBooks ProAdvisor for the last several years.  I provide setup, training, and troubleshooting in QuickBooks software.  I pay Intuit (the parent company of QuickBooks) an annual fee and take an annual certification exam to retain this qualification.  By no means do I receive a commission from the sale of QuickBooks products.  On the other hand, I can get discounts (20% in most cases) for my clients on QuickBooks products, and I have access to United States based technical support.  The latter being probably the most valuable feature of my affiliation with QuickBooks.

I have observed many things during all these years in the world of taxes, accounting, and small business...what works and what doesn't.  I plan to discuss those things here in this blog.  Not only on the federal level, but also from a state and local perspective.

Beginning in January through April, when year end reporting and tax season start taking up more of my time, the posts here will probably become shorter and less frequent.  However, I will make an effort to post with some observations made during this next tax season that I hope will be helpful and informative to the readers.  It will also help me to improve tax season efficiency as it will be documentation that I can refer back to as how the season went and how things can improve.

If anyone has suggestions for topics of discussion, especially tax related, please let me know.  I will not give specific tax advice here in this blog but will answer general tax questions.