Tangible Personal Property is all property owned or held by a business to operate that business, including but not limited to, furniture, fixtures, vehicles, tools, machinery, equipment, raw materials, and supplies. One of the most common tests used to differentiate “personal property” from “real property” is whether it is moveable (personal) or affixed (real). In Tennessee, personal property is assessed at 30% of its value for commercial and industrial property and 55% of its value for public utility property.
Tangible Personal Property Groups
GROUP 1 – FURNITURE, FIXTURES, GENERAL EQUIPMENT, AND ALL OTHER PROPERTY NOT LISTED IN ANOTHER GROUP
Includes all personal property not specifically identified in one of the other groups. For many businesses, all or most of the personal property will fall into this category. A partial list of the types of equipment to be reported in this group includes:
- Answering machines, mining and quarrying equipment
- Amusement devices (coin-operated), mortuary equipment
- Amusement park rides & equipment, office machines, furniture, fixtures, and equipment
- Auto and truck washes, paging system (including purchased pagers)
- Auto repair equipment (except tools: see Group 2), photographic equipment
- Barber and beauty shop equipment, recreational equipment (bowling lanes, billiard tables, etc.)
- Broadcasting equipment (except towers: see Group 4), repair and maintenance equipment
- Bulldozers, restaurant fixtures and equipment
- Cable television equipment, retail fixtures and equipment
- Cash register (except computer mainframe: see Group 2), signs (not Billboards: see Group 6)
- Dictation (transcribing) equipment, sound reinforcement and recording equipment
- Earth moving equipment, telephones
- Grocery fixtures and equipment, theater fixtures and equipment
- Hotel/motel/apartment furniture – fixtures – and equipment, trailers (office, over-the-road, equipment and hauling)
- Laundry and dry cleaning equipment, vending machines
- Law libraries, warehousing equipment
- Medical equipment and libraries
GROUP 2 – COMPUTERS, COPIERS, PERIPHERALS, FAX MACHINES AND TOOLS
Includes all computers, disk drives, tape drives, terminals, printers, operational software, cable, modems, etc.; Copiers, facsimile machines, portable hand and power tools.
GROUP 3 – MOLDS. DIES. AND JIGS
Includes all molds, dies, and jigs.
GROUP 4 – AIRCRAFT, TOWERS, AND BOATS
Includes all aircraft; radio and TV broadcast towers unless classified as real; watercraft. Includes all aircraft, boats, radio and TV broadcast towers reported last year as personal property. All new towers, except those excluded in T.C.A. § 7-59-102, should be classified as real property.
GROUP 5 – MANUFACTURING MACHINERY
Includes all machinery used in manufacturing processes.
GROUP 6 – BILLBOARDS, TANKS, AND PIPELINES
Includes all billboards, above ground tanks and pipelines unless classified as real. Billboards are free standing and commonly have a utility attached such as electricity. A sign attached to a building or which is easily movable should be listed in Group I (Underground tanks are classified as real property, do not report on this schedule)
GROUP 7 – SCRAP PROPERTY
Includes all property no longer capable of use and for which there is no expectation of repair, but which is still owned by the business or located at the business site.
GROUP 8 – RAW MATERIALS AND SUPPLIES
Raw Materials are defined as items of tangible personal property, crude or processed, which are held or maintained by a manufacturer for use through refining, combining or any other process in the production or fabrication of another item or product. Do not report goods in process.
Supplies are defined as expendable items of tangible personal property which are used or held for use in support of a business activity, including, but not limited to, office supply stocks, stocks of spare parts for maintenance of machinery and equipment, accessories used in manufacturing processes, printing supplies, and cleaning and maintenance supplies.
Report the original cost of all raw materials and supplies on hand as of January 1, as determined by the ‘first-in-first-out” (FIFO) method of accounting.
GROUP 9 – VEHICLES
Includes all automobiles, buses, tractors, trucks and other vehicles designed for over-the-road use. If a vehicle carries commercial tags it should be listed. If it is registered to a business or an individual operating as a business, whether or not the vehicle carries commercial tags, the vehicle should be listed. (Truck trailers are listed in Group 1).
GROUP 10 – CONSTRUCTION IN PROGRESS (CIP)
Personal Property that you treat as CIP for federal income tax purposes (as of January 1) may be reported in this group. Report only those costs included in your federal income tax return as CIP.
Online Filing
The Cumberland County Assessor’s Office offers an Online filing option, however it is not mandatory that you file online. You may still file a paper schedule if you prefer. If you choose to file your Personal Property schedule online, you will find your unique business login information on the schedule that was mailed to you.
Reporting
Not later than February 1st each year, the Assessor of Property is required to furnish each applicable business in the county with a schedule for listing all of their tangible personal property. Those business owners (or agents) must complete and return those forms to the Assessor of Property Office no later than March 1st.
In many cases, for an existing business, this simply involves listing the equipment acquired or disposed of during the previous year, so that it may be added to or removed from the schedule already on file. This is a self-reporting process and is subject to audit for verification.
Unlike the system for assessing real property, where the appraisal is based on fair market value and equalized across the entire jurisdiction, the appraisal of personal property is based on the actual cost of the property plus depreciation. Personal property is categorized in 10 groups for reporting. Each of those groups has its own depreciation schedule that is outlined in state statutes. In Tennessee, leased personal property used by a business is assessed to the lessee (user) and must also be reported on a company’s reporting schedule.
All businesses are required to use the Schedule B form, both permitted and those not needing a permit. On the Schedule B, there is an option to check Small Accounts Certifications. By checking this option, you certify that the total depreciated value of your property (all groups) is $2,000 or less, or between $2,000 and $10,000.
The deadline for filing Tangible Personal Property Schedules is March 1st each year. Failure to timely file your tangible personal property schedule will generate a forced assessment. If filing late, your business will not receive the equalization rate. If you do not file your tangible personal property schedule, your account will be forced assessed using “like” businesses and penalized 25% for non-compliance as required in Tenn. Code Ann. §67-5-903.
Appeals
As with “real property”, a property owner has the right to appeal their personal property assessment, beginning with the County Board of Equalization and continuing until satisfied or their appeals are exhausted. For the initial appeal to be heard, however, the taxpayer must first file a completed schedule.
For more information on tangible personal property, reporting procedures, and your rights and responsibilities as a property owner please contact the Assessor of Property Office.
Frequently Asked Questions
What is Tangible Personal Property?
Tangible Personal Property is all property owned or held by a business to operate that business, including but not limited to, furniture, fixtures, vehicles, tools, machinery, equipment, raw materials, and supplies. The tangible personal property reporting schedule and its accompanying instructions contain a good, but not all inclusive list of the items that make up personal property. Finished goods in the hands of the manufacturer and inventories of merchandise held for sale or exchange are not considered tangible personal property.
How is Tangible Personal Property reported and assessed in Tennessee?
Not later than 1 February each year, the Assessor of Property is required to furnish each applicable business in the county with a schedule for listing all of their tangible personal property. Those business owners (or agents) must complete and return those forms to the Assessor of Property’s office prior to 1 March. In many cases, for an existing business, this simply involves listing the equipment acquired or disposed of during the previous year, so that it may be added to or removed from the schedule already on file. This is a self-reporting process, but is subject to audit for verification.
I no longer operate a business, why do I still receive a schedule?
If you closed or sold your business, state law requires you to, notify the Assessor of Property in writing.
Send written notification to:
Assessor of Property
Attn: Personal Property Division
2 South Main Street #101
Crossville TN 38555
Or email your closed or sold business notification to: CumberlandAssessorOffice@cot.tn.gov
To view the statute pertaining to the Sale or Termination of a business, click here.
What happens if I fail to return your tangible personal property schedule?
If a business owner fails to complete and file a schedule, the Assessor of Property must make a “forced assessment” regarding the quantity and value of the personal property held by that business by using information available on businesses of similar size and function, plus apply a 25% penalty for non-compliance.
I have a personal vehicle that I use for business purposes, do I have to list that vehicle as business property?
Yes. Vehicles must be listed if more than 50% of their use is for business purposes; or you claim the vehicle on your business’s income taxes; or it is titled in the business name; or the vehicle has a commercial license plate.
Some of the equipment or machinery that I use to run my business is leased, do I report that property on my schedule?
Yes, under Tennessee Code, leased or rented equipment is assessed to the lessee and you are required to list it on your schedule.
I run a small business out of my home that uses very little equipment or supplies, do I have to individually list those items?
IIn lieu of detailing acquisition costs on your reporting schedule, you may certify that the depreciated value of tangible personal property is < $2,000 or less >or < less than $10,000 but more than $2,000 >. Our office will accept the certification, subject to audit. As part of an audit, the business owner will be required to provide a detailed list, with the acquisition date and cost, for all equipment used or held for use in the business.
What if I disagree with the value assigned to my personal property by the Assessor?
As with “real property”, a property owner has the right to appeal their tangible personal property assessment, beginning with the County Board of Equalization and continuing until satisfied or their appeals are exhausted. For the initial appeal to be heard, however, the taxpayer must first file a completed schedule. With minimal exceptions, the depreciations schedule applied to your assets is established in Tennessee Code and cannot be altered.
Will I be audited?
Every business owner is subject to selection for audit. A member of the Assessor of Property’s staff reviews each completed form, and where necessary, works with the business owner to obtain an accurate reporting. Audit methods vary, generally based on the size and type of business involved. An inspection of the business premises may be required, or a detailed examination of records of purchases may be needed. You can help by doing the most thorough job possible when completing the Schedule B form.
How will I know if my assessment is changed?
We will send you an Assessment Notice by May 20th indicating any changes in your assessment. If you disagree with the changes, you should contact our office to request an appeal. As in the case of real property assessments, you should prepare to provide any documentation you have to support your case. If you still don’t agree with the Assessor of Property’s action, you may file an appeal to the independent Cumberland County Board of Equalization, which begins its meetings in June.