Yesterday I got a personal property tax bill in the mail for ‘Business Equipment.’
Considering the main tools of my trade are little plastic horses, sandpaper, paintbrushes, paint, notebooks, pens (and index cards! :D)… I was confused as to where the $1k of equipment was coming from.
The Thing About Assumptions…
When I called in to figure out what the heck they were taxing me for I was told they assumed I had a computer because I had a website. (Turns out the assumption was that I had $3k worth of equipment since they only tax 1/3 of the inital cost.)
Well I do have a personal computer, several in fact, but since they don’t meet the requirements to count as a business computer per IRS Publication 529, I had assumed that meant it wasn’t included in my business inventory. I do have an old laptop that I’d meant to convert over, but never got around to.
I pointed out that the business did not own the computer, that I did, they said they didn’t care.
I pointed that it didn’t qualify as a business asset per the IRS (even if I wanted it to), they said they didn’t care.
I pointed out that a website doesn’t mean I own and computer: I could be using a friend’s computer or the computer at the library, they said they didn’t care.
I pointed out that the laptop I am using is almost ten years old and that I don’t have a record of how much I paid for it, but that if I bought it today it would only be worth $50.00… they said they didn’t care, the tax would be based on the cost when I bought it and if I couldn’t prove what that was, they were going with the default of $3k.
I have a website, so per The City of Newport News that means I have a computer and the computer cost me $3,000. So here have another $42.50 in yearly taxes, kthxbai.
Because I am stubborn, I got the tax code they said backs up their claim… § 58.1-3503. General classification of tangible personal property.
16. Programmable computer equipment and peripherals used in business which shall be valued by means of a percentage or percentages of original cost to the taxpayer, or by such other method as may reasonably be expected to determine the actual fair market value.
And here’s the kicker– they don’t care how much of the time I use it for business, just that I do. In fact, if they wanted to be a pain about it, they could claim any computer that I’ve accessed my website administration on as a business asset.
So fine, I’ll be buying a new business-only laptop on Black Friday, paying three hundred dollars for it and paying $4.00 a year in tax instead of $40.00. *mutters*
(UPDATE: Oh look, I finally found the form I was supposed to have turned in this past January: Business Personal Property Return (Form COR4). Live and learn, live and learn…)