Many states assess a personal property tax on certain items of personal property such as motor vehicles, boats, and aircraft. Business personal property taxes—taxes on tangible personal property items that are used to produce income—are often referred to as ad valorem taxes.
In California, personal property tax is applicable to certain items, but there is no state-level personal property tax on vehicles, boats, or aircraft. Instead, these items are subject to an in-lieu fee that is included in the annual registration fee. However, California does impose a business personal property tax, which is an ad valorem tax, meaning it is based on the assessed value of the tangible personal property used in a business to produce income. This includes machinery, equipment, fixtures, and improvements. Each county in California is responsible for assessing and collecting personal property taxes for businesses located within their jurisdiction. Business owners are required to file a property statement each year by April 1st to report the value of their taxable personal property. Tax rates and exemptions can vary by location, and there are certain exemptions available, such as for small businesses with a certain amount of personal property that falls below a specific value threshold.
