WDA advises members to speak with their certified public accountant
The 2017-2019 state budget, recently signed into law by Governor Scott Walker, included an important change long asked for by small-business owners by repealing the personal property tax on machinery. This can have a significant impact on your tax bill. While the Department of Revenue is still creating official guidelines, there are basic steps that you can take to ensure that your office takes advantage of this new tax break.
What changes were made in the tax schedule?
- The repeal exempts all property previously included under Schedule C of the Statement of Personal Property and includes machinery, patterns and tools.
- “Machinery” is defined as a “structure or assemblage of parts that transmits forces, motion or energy from one part to another in a predetermined way by electrical, mechanical or chemical means.”
- This generally means that if something is plugged in, it is now exempt.
Some offices may have reported their office equipment under a different schedule. However, it is recommended that you examine all items of personal property to see if it fits the definition of “machinery.”
These changes take effect with the Statement of Personal Property due in March 2018. The Department of Revenue will provide further guidelines soon. It is advised that you speak with your CPA about how these changes may affect your business.
Matt.
I don’t think my earlier comment went through so i will repeat.
Will this include x-ray equipment? It is plugged in and mechanical for panoramic and iCAT machines where the tube head revolves around the patient.
Hi Dr. Durtsche,
Yes, to the best of our knowledge, x-ray equipment is included. Here is the most up-to-date information we’ve got, with the caveat that all of this should be discussed with your CPA:
1. Statements of Personal Property will be due March 1, 2018 and will no longer include schedules for Machinery, Tools & Patterns or Computers and Related Equipment.
2. Start compiling and reviewing your personal property/fixed asset list now.
3. Each individual item/personal property owned will be to be individually evaluated to determine whether it is “Furniture & Fixtures”, “Other” or “Machinery”. If it falls under the definition of machinery, it does not need to be included on your Statement of Personal Property. The definition of machinery is: a structure or assemblage of parts that transmits forces, motion or energy from one part to another in a predetermined way by electrical, mechanical or chemical means.
4. By law, assessors have the right to view personal property based on the Statement, so be prepared to justify items previously reported as taxable that are now exempt.