Personal Property Taxes FAQ
Assessors Frequently Asked Questions
What are Personal Property Taxes?
All personal property located in the Commonwealth of Massachusetts and personal property belonging to the residents of the Commonwealth, wherever located, is subject to taxation unless expressly exempt by law.
What property is taxable?
Tangible (that is, physical) property is subject to the personal property tax unless exempted by statute. Item defined as tangible personal property range from the chairs in a barbershop to the furnishings of a doctor's waiting room; from the drill used by a dentist to the poles owned by a utility.
Can personal property be exempt?
Professional tools used by plumbers, carpenters, auto mechanics and other trades are exempt from the personal property tax. In legal terms, this exemption covers tools of trade, (e.g. small tools that can fit in a toolbox).
Tools of other professionals not listed in the above paragraph are considered to be taxable. These include dentist's drills and X-ray machines. Computers are also subject to the personal property tax, but in cases where a corporation utilizes them for internal purposes only (e.g. for such functions as internal accounting or administrative operations); computers are not subject to the taxation.
Tangible personal property subject to some other type of local tax is also exempt from the personal property tax. Motor vehicle and trailer excise, ship and boat excise, the farm animal and equipment exercise, and mobile home park license fees are all included in this category. For example, boats, fishing gear and nets up to $10,000 in value owned and used in a commercial fishing business are exempt.
Intangible personal property is exempt from the personal property tax. Intangible personal property includes stock, bonds, cash, mortgages and other evidence of ownership of property rights.
Property owned by individuals, sole proprietors, partnerships and trusts
In general, all tangible personal property located in Springfield is taxable, unless expressly exempt. For business corporations, poles, underground conduits, wires, pipes (property generally owned by utility companies) and machinery used in the conduct of business are taxable. Taxable examples of machinery used in the conduct of business would include property used on behalf of that corporation's customers (e.g. using computers and equipment to process data on behalf of clients).
Exempt examples of machinery would include property directly used in any purchasing, selling, accounting or administrative function; inventory or stock in trade; or personal property directly used in connection with laundering or dry-cleaning processes, the refrigeration of goods or the air-conditioning of the premises.
Manufacturing corporations (domestic and foreign)
The Commissioner of Revenue for the Commonwealth determines what is a manufacturing corporation. Machinery of a manufacturing corporation (domestic or foreign) is NOT subject to personal property taxation; however; poles, underground conduits, wires and pipes of manufacturing corporations ARE taxable.
All other business corporations
Other business corporations, such as insurance companies, public service corporations, utilities, savings banks and cooperative banks are subject to taxation on poles, underground conduits, wires and pipes, as well as machinery used in the manufacture or in the supply or distribution of water.
Where is personal property assessed?
Generally, all tangible personal property is assessed in the city where it is situated on January 1. The principal exception is in situations where personal property has only a temporary location as of January 1. In the latter case, the property is assessed at the residence of the owner.
What is the Form of List?
Each year, by March 1, all persons subject to taxation in a city must submit a list if all their personal property that is not exempt from taxation. These personal estate items must be included on documentation known as the Form of List. Blank Forms of List are available in the Assessors Office in City Hall or by calling. Taxpayers are not required to estimate the value of the property included on the Form of List. The Assessors office will determine the value, based on standard reference tables. In the event the taxpayer does not submit a list, the assessors will ascertain as best they can the personal estate belonging to the taxpayer and will estimate its value. The form of List is NOT open to public inspection.
There is a penalty for failing to file the Form of List pursuant to Massachusetts General Law c 59, sec 64. A personal property taxpayer's application for abatement may not be granted unless the taxpayer can show good cause for failure to file timely. Further, if the assessment of the personal estate exceeds by 50% the amount that should have been assessed had the list been timely filed, then only the amount that exceeds this 50% may be abated. The Assessors may require an owner or lessee of personal property to provide certain information in writing, as may be reasonably necessary, to determine the actual fair cash valuation of the property. Failure to comply with the request within thirty (30) days will bar any appeal of the tax assessed, unless the owner or the lessee was unable to comply with the request for reasons beyond his/her control. Any false statement that is knowingly made will also bar the taxpayer from any statutory appeal.
Can Personal Property tax be abated?
Applications for abatement must be filed after the Third Quarter Actual Tax bill is issued. The filing deadline is 30 days after the date the bills were mailed. Applications may be obtained after the issuance of the third quarter bill in the Assessors Office at City Hall or by calling 413-787-6169.