What You Need To Know About Personal Property Taxes

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What You Need To Know About Personal Property
Taxes

• Were all familiar with paying taxes. What many
  dont realize, however, is that there are
  different kinds of taxes that you may be required
  to pay in addition to federal income tax, such as
  real estate and personal property taxes. While
  these taxes may seem like they have little to do
  with your daily life, you should still pay
  attention to your personal property taxes to
  avoid any issues down the road. In this article,
  well talk about what personal property taxes are
  and how you can be sure youre paying them
  correctly on time each year.

The Basics Of Personal Property Taxes
It is almost certain that you have personal
property. As its name implies, personal property
is everything other than real estate.
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Why Are They So Important?

• More formally, it can be defined as any tangible
  asset that isnt part of a home or business. It
  includes everything from appliances and furniture
  to jewelry and cars. In many areas of the
  country, personal property taxes are due
  annually. Often referred to as Car Tax Day in
  those areas, everyone who owns a car has likely
  had their registration fees or renewal notices
  come in at around that time each year. Failure to
  pay these taxes often results in fines and
  possible vehicle repossession.

If youre a homeowner, chances are youve got at
least one piece of furniture in your home thats
considered personal property. These items arent
what your real estate is valued on instead, they
form part of your annual taxes and if you dont
pay them, you could be subject to hefty fines or
even jail time. But how can a tax increase
someone elses property value? What exactly do
these taxes cover? Read on for an overview.
How Do They Affect Me?
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How Can I Manage My Property Tax Burden?

• Most people are at least somewhat familiar with
  their local property taxes, but fewer are aware
  of personal property taxes and how they affect
  them. After all, if you have no real estate
  investments or business assets, you might assume
  that there is nothing for you to pay in terms of
  these taxes. While its true that many people
  never come into contact with personal property
  taxes, its worth taking a look at how these
  levies work to make sure that your affairs are in
  order and avoid any unpleasant surprises down the
  road. Read on for a list of frequently asked
  questions about personal property taxes.

Given that there are so many different types of
personal property taxes, it can be difficult to
understand how they affect you as a homeowner. To
get started, consider some general principles
First, most taxes are based on what you own. This
means that if you move into a new house in
December and then wants to sell it in April, you
will probably owe more taxes than if youd owned
it for longer.
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When Does The State Get Involve?

• The same logic applies if your business has
  equipment changes oftenfor example if you
  remodel your office every two years. Second, just
  because something is listed as taxable doesnt
  mean that it always is there may be exemptions
  or exclusions.

With tax reform on everyones mind, personal
property taxes are being brought up more and
more. Proponents of eliminating personal property
taxes say that it would simplify both collection
and compliance, as well as reduce certain costs
to taxpayers, such as having a car licensed in
multiple states. However, opponents counter that
if allowed to take effect nationally, eliminating
personal property taxes would result in a
significant shift of state-level revenue
generation towards sales taxes (which they argue
will increase economic inequality). This is just
one small part of a broader debate regarding
which kinds of taxation are most equitable or
least likely to create economic distortions.
Those interested in learning more about these
topics should look into how federalism can impact
tax policy specifically about corporate income
tax rates and how progressive taxation works.
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Do I Have Any Control Over Them?

• A lot of people think they dont have any control
  over property taxes, but thats not true. The tax
  code is extensive and complicated, and there are
  many ways you can influence your annual bill. For
  example, if you own a home in a county with an
  especially high tax rate for certain kinds of
  real estatelike second homes or commercial
  propertiesyou may be able to negotiate a special
  classification for your residence so it has lower
  taxes. (Note This will only work if you live in
  one area year-round.) A different strategy is to
  lobby local government officials for changes on a
  more macro level.

The Future Of Personal Property Taxes In America
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• Governor Rick Snyder of Michigan signed a law
  that effectively bans towns and cities from
  imposing personal property taxes. Now, many other
  states are following suit to stop personal
  property taxes. Why is happening? As people
  become increasingly aware of how much money local
  governments collect through their property taxes
  which can account for anywhere between 20 and
  30 of a households annual income theyre
  starting to question how these governments make
  up such a large portion of it. It turns out that
  much of that revenue comes from taxing personal
  property (or individual belongings), not just
  real estate.

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  ow-about-personal-property-taxes/