Reasons of Personal Property Assessment

Everyone should know where his tax dollars are spent.

Taxes and death are often referenced together as being inevitable. If you avoid state income tax because your state doesn't assess it, you may pay property tax or sales tax. Many states levy personal property taxes that often comprise taxes on automobiles, boats, business equipment and furniture in rental properties.

Assessment Procedure

The property owner is responsible for providing assessment information to officials.

Most states that assess personal property require the property owner to complete a form with the office of the taxing official declaring its value for assessment purposes. If the owner does not declare the personal property then the assessing official will often assign a value based on his best estimate and in some states will be allowed to increase the amount of taxes due, if the owner conceals or attempts to conceal the property's existence. Other states may allow the taxing official to place a lien against all real property owned if the personal property tax bill becomes delinquent. Personal property taxes are generally merged with real property taxes prior to distribution to organizations and communities dependent on tax money.

Schools

Property taxes help fund local education.

A large percentage of property taxes collected in many states and counties are applied to fund local schools. As of 2011, personal property taxes distributed to schools in three jurisdictions are as follows: 34 percent in Douglas County, Nevada; 57 percent in Frankfort, Illinois; and 50.2 percent in King County, Washington.

Cities, Towns and Districts

Cities and towns benefit from county-level property taxes.

Property taxes collected at the county level are distributed to cities, towns and districts for use in their communities. In 2011, municipal governments and districts in Douglas County, Nevada, received 30 percent; Johnson County, Kansas, 15 percent; and counties in Arkansas received 16 percent. Distributions to municipalities may vary greatly in some states. For instance, in Indiana, Clark County's municipalities received 34.12 percent while Owen County receives just 6.94 percent. Reasons for this may be population, as Clark County has almost five times more residents than Owen County, as of the 2010 census.

Police and Fire Protection

Property taxes help fund public-safety services like police and fire protection.

Police and fire allotments may be separate but are often included in the amount set aside for cities, towns and other districts. As of 2011, Douglas County, Nevada's, fire and paramedic services received 10 percent; Hesperia, California's, fire protection district received 15.5 percent; and Fremont, California, allotted 75 percent of its general fund -- approximately one-half of which comprises property taxes -- for police and fire protection.

County Government

Counties keep a portion of personal property taxes to fund government services.

County governments that collect personal property taxes retain a percentage in their general fund. These funds may be used for recreational areas, libraries, animal control and other county-provided services.

States and Community Colleges

Some states get a small share of county taxes.

Personal property taxes collected at the county level may be passed up to state government or higher education. Some states may receive from 1 percent to 7 percent of property taxes for their use. A minimal percentage of property taxes collected may assist in funding community colleges.

References

• Retirement Living Information Center: Taxes by State
• Prince William County of Virginia: Personal Property Tax Information
• Ted Thran, Douglas County Clerk-Treasurer; It Pays to Know; 2011
• Frankfort Township Assessor's Office: Property Tax FAQ
• Metropolitan King County Council: Understanding the King County Budget
• Johnson County Kansas, Budget & Financial Planning; FY 2011 Public Budget Hearing; July 2010

Resources

• Arkansas.gov: FAQ's
• Clark County; Who Pays Property Taxes: Who Spends Property Taxes and How?; 2010
• Owen County; Who Pays Property Taxes: Who Spends Property Taxes and How?; 2010
• "The New York Times"; Few Californians Understand the State's Tax...; Jonathan Weber; January 2011
• "HesperiaStar.com"; Where Do Your Property Taxes Go?; Beau Yarbrough; February 2011
• Steuben County Treasurer: Frequently Asked Questions
• Washington State Department of Revenue; Personal Property Tax; Ocotber 2010
• Fremont County, Idaho: Personal Property Valuation
• Lane County, Oregon: Personal Property Tax Collection