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Question and Answer Library

NUMBER 1:

Can a nursery, which produces and sells plants grown in Georgia, be exempt from personal property taxation? Answer...

NUMBER 2:

Can a discovery [of additional fair market value], through an audit, be based strictly on a reclassification of personal property assets as reported in Schedule A of the property tax reporting form? Answer...

NUMBER 3:

Under the U.S. Farm Bill of 2002 [also Farm Security & Rural Investment Act of 2002, and the U.S. Warehouse Act], are farmers stock peanuts now totally exempt from personal property ad valorem taxes? How does this apply to both the farmer and the commercial sheller/processor? Answer...

NUMBER 4:

During the past year, a business closed and as of January 1st of the next year, all of their furniture and fixtures, machinery and equipment is still intact/in place, in the closed facility. Is the cost approach to value the best way to value the “idle equipment”, in such a closed facility? Is there any justification for not valuing the idle equipment at all? Answer...

NUMBER 5:

A business and it’s personal property tax returns have been audited and adjusted through tax year 2003. If for tax year 2004, that business fails to file a return or if they simply file the 2004 return ignoring or omitting the audit adjustments, can the final audited figures be considered as their 2004 return? Answer...

NUMBER 6:

The large retail department stores typically return their inventories at their cost and also deduct or want further consideration [reduction], for retail price markdowns that are taken around or on January 1st of the tax year. How should such retail merchandise inventories be valued? Answer...

NUMBER 7:

The Dawson County Board of Assessors is in the process of working on policies and procedure for selecting personal property accounts for audit. We have reviewed court cases over the past several years that discuss audits, and have decided that an audit selection process needs to be in place. What suggestions do you have for us Professor, in establishing such a policy and supporting procedures? Answer...

NUMBER 8:

If goods in transit are recorded on a company’s financial records, or are shipped f.o.b. shipping point, does this constitute legal title, and are such inventories assessable? Further, the IAAO publication 'Property Assessment Valuation states “goods in the hands of a common carrier.... are deemed to be in transit. Usually these goods are moving from one point to another and, if traveling interstate, are controlled by the ICC. In most such situations, the goods cannot be assessed if they have not reached their destination.' Do you agree? Answer...

NUMBER 9:

In 2004, the Georgia Legislature changed the law concerning the statute of limitations for auditing personal property. What were those changes and what effect does that really have on the assessors office and any personal property audit program that they are conducting? Answer...

NUMBER 10:

A business files it’s personal property tax return late, after the deadline date. What is the current penalty rate and when is it due? Answer...

NUMBER 11:

The Schedule A instructions for personal property asset classification, and the IRS Publication 946 exclude many personal property assets, [their class life]. What is the best way to classify such assets in Schedule A when they are not identified in these two guides? Answer...

NUMBER 12:

Hey Professor! The House & Senate passed a bill which helps the dealers of farm equipment. Do you know when this went into effect? What are some examples of this type of self propelled equipment? Since there is no place on the return to list this equipment how do I know if the inventory figures are correct? Answer...

NUMBER 13:

Dear Professor: A sand and gravel company mines and stockpiles sand and gravel here locally, but they never report their stockpiled sand and gravel as personal property inventory? The tax payer contends that the sand and gravel are not taxable as personal property because it is still real property. That certainly doesn’t seem right but what does the law say on this professor? Also, if the company does finally return the inventory this year and takes advantage of our 100% freeport exemption in 2005, couldn’t the BOA go back and assess all the prior years for the unreported inventories? Answer...

NUMBER 14:

In our personal property experience, we encounter many small service industry businesses [ie., painters, plumbers, contractors, etc.], who claim no inventories what so ever in their personal property returns. They say such has all been expended on the job. How can that be and should we audit? Answer...

NUMBER 15:

During the course of a personal property audit, the business being audited changes ownership, including all personal property. What now happens if a disagreement arises between the two parties, as to who must pay any additional taxes due? Answer...

NUMBER 16:

What is the policy for applying the 10% penalty? For example, one county may penalize a taxpayer 10% on the entire FMV and another county may penalize the taxpayer 10% on any assets purchased for that tax year. What are the codes on the 10% penalty? Is the entire amount taxable on any equipment that has not been reported that is late? If you conduct an audit is it fair to penalize the taxpayer 10% on the findings or should you pick up the additional findings and send out a tax bill for those amounts not on the digest Answer...

NUMBER 17:

If a business is situated/located on tax exempt property, [ie., a Krystal Restaurant on a college campus], what portion, if any of that business is tax exempt? How can you separate what items are taxable on a college campus and which are not? Answer...

NUMBER 18:

When reviewing [auditing] a motorcycle dealership for property tax purposes, what type documentation should be provided by the owner to: 1. Determine which inventoried motorcycles are to be tagged or licensed [exempt from personal property valuation],and 2. to determine which motorcycles are to be non-tagged vehicles [subject to personal property valuation]? Answer...

NUMBER 19:

A large computer manufacturing and sales company [a taxable corporation] leases their computers to a county school district [a tax exempt organization]. Under a lease-purchase agreement with the school district, are the computers taxable as personal property? Answer...

NUMBER 20:

Cell towers are such unique assets to value, and there seems to be concerns about them as to what is real property, and what's personal. And, what is the best way to value "towers", since there are various types of communications towers? Answer...

NUMBER 21:

If a College or University owns and operates a gift store and a restaurant should the inventory or equipment be taxable or exempt?   The inventory is all College themed like sweat shirts, t shirts, books, school supplies, etc and the restaurant is open to the public on Sundays and special occasions but the College does own the inventory/equipment and all profits are put back into the College.   This is not a Pizza Hut or other privately owned business leasing a building and operating on the College campus. Answer...

NUMBER 22:

One of the larger manufacturing companies in our county wants our Board of Assessors to consider granting them a lower valuation on their personal property equipment. They say the recession has caused them to lose money, and lower production - (Economic Obsolescence). Is there a way under the Georgia code to legally allow for such a valuation reduction? Answer...

Audit Questions

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