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As a small business owner, it’s important to understand the small business taxes that come with owning a business, including business property tax. Business owners need to meet local, state, and federal tax obligations to remain in good standing, though their specific responsibilities will depend on their specific business and location. When it comes to local taxes, business property tax pertains to the land or location that the business owner owns, along with personal property, products, or goods that they use to run their operations.
What Exactly Is Business Property Tax?
Business property tax is the kind of tax that business owners must pay on either the land or real estate that they own. Normally, the county or city where the business and property are located will assess business property taxes. These taxes help fund various components of municipalities, including roads, government administrators, local schools, public safety, and others.
The business property tax rate will depend on the property’s assessed value, not the fair market value. Business owners can determine how much they’ll need to pay in property taxes through notification from their local tax authority following an assessment. Additionally, business owners may also have to pay personal property taxes on top of other business property taxes.
How Business Personal Property Tax Works
Business personal property, or tangible personal property, consists of any type of products or goods that your business implements for business operations. For example, these items may include office furniture, computers, printers, or general office supplies that employees use to conduct business.
Depending on the location of a business, local tax authorities may require businesses to cover these in addition to taxes on real estate and land. Even if a business owner pays sales tax on these items, they may still need to cover annual value taxes on them.
Covering Property Taxes
There’s a lot that goes into calculating business property taxes, and the process will depend entirely on the location of the property. Once the local tax authority has conducted an assessment of the property, including business personal property, they will detail the taxes that the business owner must pay, along with how and when to pay them.
In some cases, business owners may disagree with the assessment, in which case they may appeal to their municipality. Depending on the location, the method of paying taxes may differ, requiring business owners to pay by mail or enabling them to pay electronically.
Seeking Help With Property Taxes
Business owners who are unfamiliar with the tax process and want to easily manage them can consult outside help if needed. For example, they could work with a local commercial property tax lawyer or a real estate attorney to better understand what they’ll need to pay. In the process, business owners can maintain compliance more easily while alleviating some of their tax burden.
Having a good understanding of business property taxes and tax bills can help avoid any potential issues they might otherwise experience with compliance. Subsequently, they can remain comfortable in knowing that they’re in consistently good standing while more readily anticipating how tax payments will affect their bottom line.
