1. What
is Tangible Personal Property (TPP)?
TPP can be defined as all
goods other than real estate that has value by itself.
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2. How long
have we had a TPP property tax?
This state-imposed tax was
first incorporated in 1941 by Governor Spessard L. Holland. The Tangible
Personal Property tax along with the Real Estate tax comprise the ad valorem
tax base we have in effect today.
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3. Who must
file a Tangible Personal Property (TPP) tax return (DR-405)?
Anyone in business as of
January 1 must file a TPP tax return (DR-405). The business could be established
as a proprietorship, partnership, corporation or as a self-employed individual.
Property owners who lease, lend, or rent property or equipment must also
file. All property owners who have been granted an agricultural exemption
must file a TPP return to maintain their agricultural exemption.
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4. Why must
I file a return?
Florida Statute 193.052 requires
that all TPP be reported each year to the Property Appraiser's Office.
If you receive a return, it is because our office has determined that you
may have property to report. If you feel the form is not applicable, return
it with an explanation and ensure you sign and date the return. Either
way, the form MUST be returned. Failure to receive a TPP Tax Return does
not relieve you of your obligation to file.
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5. What
are examples of TPP that must be reported?
All trade furniture, fixtures,
and equipment are TPP. Examples of TPP include appliances, art, computers,
communications towers, copiers, dishes, draperies, equipment, faxes, file
cabinets, fixtures, furniture, kitchen utensils, leasehold improvements,
linens, machinery, phones, radios, safes, scanners, security systems, signs,
tools, TV's, underground tanks, utility wires and poles, supplies and leased
equipment. Property owned by others but is located at your business and/or
used in your business must be reported. Property that you personally own
and use in your business must be reported. Licensed vehicles designated
as a tool rather than a hauling vehicle must be reported. Examples are
towing equipment, cranes, pump trucks, loaders forklifts, and excavators.
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6. Are leasehold
improvements tangible personal property?
If an improvement is of a
permanent nature that cannot be readily replaced, or if removing the improvement
would cause substantial damage to itself or the real estate, it is NOT
considered tangible personal property. If the improvement can be easily
removed without damaging itself or the real estate, then it is considered
tangible personal property.
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7. What
if I have old equipment that has been fully depreciated and written off
the books?
Whether fully depreciated
in your accounting records or not, all property still in use or physically
located at your business must be reported.
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8. How can
I obtain a TPP tax return (DR-405)?
TPP tax returns are mailed
to businesses that are currently on the tax roll on January 1. You may
also get a tax return from your accountant or CPA. If you do not receive
one by the end of January, contact the Property Appraiser's Office. A tax
return is also available from the Property
Appraiser's website.
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9. What
if I receive more than one tax return?
If you have more than one
location, the assets of each location should be listed on a separate return.
Fill out, sign, date and return each TPP tax return received.
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10. Do
I still have to file the return if I have no assets to report?
Yes. All businesses must
file a TPP tax return. Even if you feel you do not have anything to report,
fill out items 1 through 9 on the return, and attach an explanation of
why nothing was reported. Be sure you sign and date the return before mailing
it to our office.
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11. Is
there a minimum value that I do not have to report?
No. A TPP tax return must
be filed on all assets by April 1. If the taxes amount to less that $5.00,
you will not receive a tax bill.
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12. If
I'm no longer in business, should I still file a return?
Yes. If you were NOT in business
on January 1 of any given year, you MUST file a final TPP return to close
your account. On your final return, indicate the date you went out of business
and the manner in which you disposed of your business assets (e.g., sold,
disposed, or retained for personal use). Sign and date the final return
and clearly write "FINAL RETURN" across the top of the form. Mail the signed
and dated final return back to this office.
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13. Do
I have to report assets that I lease, loan, rent, borrow or are provided
in the rent?
Yes. There is an area on
the return specifically for those assets. Even though the assets are assessed
to the owner, they must be reported for informational purposes.
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14. If
I rent my furnished home or condo for a few months, do I have to file a
tangible personal property tax return?
In Okaloosa county , you
must file a TPP tax return if you own and rent five or more rental units.
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15. I am
having difficulty meeting the April 1 deadline for filing my TPP tax return,
can I file an extension?
Yes. A letter requesting
a 30-day extension must be received by the Property Appraiser's Office
prior to April 1.
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16. Are
there deadlines and penalties?
The deadline for filing a
TPP return is April 1. After April 1, Florida Statues require that penalties
be applied at 5% per month that the return is late. A maximum penalty of
25% is reached after the beginning of the fifth month. Additionally, Florida
Statutes require a 15% penalty for property that is not reported.
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17. If
I buy or sell an existing business during the year, who is responsible
for the taxes?
The owner of the equipment
on January 1 is responsible for filing a TPP tax return. The person(s)
responsible for paying taxes should be addressed at the time of closing.
A search for outstanding or back TPP taxes should also be made. Taxes always
follow the equipment. You should consult your realtor, attorney, or closing
agent to avoid problems in this area.
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18. What
is an office assessment?
When a TPP tax return is
not filed by April 1, we are required to place an assessment on the property.
This assessment represents the typical value of a similar business. Receiving
an office assessment because you did not file does not alleviate your responsibility
to file an accurate return.
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19. What
if I don't agree with the assessed value that appears on the Truth in Millage
(TRIM) notice of proposed property taxes that I receive in August of each
year?
Call this office or come
in and discuss the matter with us. We welcome the opportunity to review
any evidence you can provide that suggests the appraised value is more
than the actual fair market value of your property. If you still feel your
assessment is too high after talking with us, you may file a petition to
be heard at the Value Adjustment
Board.
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