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Personal property is subject to property tax in Washington State and is characterized by its mobility. Real property includes land, improvements to land such as structures and certain equipment affixed to the structures. Personal property includes machinery and equipment, furniture, fixtures and supplies used by businesses, farmers, and improvements to land that is leased from governments and tribal entities.
There are two types of Personal Property: tangible items which have physical existence and intangible items which consist of rights and privileges having a legal but not a physical existence.
Personal Property Valuation
Personal Property values are based on reported cost, year of acquisition, and type of asset. Valuation Tables are provided by the Washington State Department of Revenue and are used to determine the market value. Change of Value Notices are mailed to the property owner each year after the property has been assessed.
According to Washington State Law RCW 84.40.030, the Assessor is required to value all taxable property at 100% of true and fair market value taking into consideration its highest and best use of the property, this includes Personal Property.
Personal Property Owner Requirements
Business property owners are required to file an annual listing of Personal Property used to conduct business by April 30th of each year. The listing must including all taxable property located within Grays Harbor County as of 12:00 noon on January 1st of that year. Because the Assessor, by law, must allocate assessed values by the taxing districts in which the property is located, business property owners are required to file a separate listing for each business location within Grays Harbor County.
The Affidavit/Listing must:
Identify each personal property category. (For example, office equipment must be separately identified from computers, desks, facsimile machines, etc.)
Include date of acquisition for each item.
List the total purchase cost of each item, excluding sales tax. The total purchase cost of an item includes all costs associated with making the property operational. (For example, installation, freight and engineering charges are costs that may be incurred while placing property into operation. The value of any trade-in is to be included as part of the total purchase cost.
Contain a list of all supplies on hand as of January 1st, including office and retail supplies not held for sale. (i.e. cash register tapes, bags, etc.)
By law, property owners are responsible for filing the Personal Property Listing every year. This is true even if the property owner does not receive a listing in the mail. The penalty for failing to file a Personal Property Listing is 5% of the tax due per month, up to a maximum of 25% of the total assessed tax.
In the event an owner does not file or report personal property, the Assessor is required to estimate the value of personal property based on the best information available to them.
The person who owns the property as of January 1st of the assessment year owes the tax. The tax is due even if the business closes and the owner sells or transfers the property prior to the end of the year.
It is important to know that the lien follows the property. This means a new owner can be held liable if the previous owner did not pay the outstanding property tax balance.
Personal Property Valuation Guidelines
are posted on
Department of Revenue's Website.
Available in a PDF format