What is Personal Property Tax?
The personal property tax is a relict of the colonial era, when the number of goats, swine, and neat cattle owned was a valid measure of a person’s wealth. Today it is often a source of confusion and resentment. However, the law is still on the books, and the Assessors are required to collect property data and bill for qualified property.
Determining what property is subject to the personal property tax is confusing. The Massachusetts Department of Revenue defines personal property as "...goods, material objects and other things capable of ownership, which are not so firmly attached to, or specially designed for, real estate as to become part of the real estate ..."
However, there are numerous exemptions to the tax. The most significant are:
- Household furnishings and effects at the person’s domicile;
- Wearing apparel;
- Motor vehicles, trailers, and boats subject to the Excise Tax;
- Farming utensils (hand tools; simple, inexpensive farm equipment such as manure spreaders are specifically noted here)
- Tools of trade of a mechanic (also includes instruments of a plumber, carpenter, or other tradesman)
So what’s left? Typical items Leverett taxpayers need to report are:
- Merchandise and stock in trade. Goods and wares for sale, whether in a store or any other place for sale, on consignment, or in storage or a warehouse;
- Business and professional office furnishings, fixtures, and equipment; computers and other office equipment if used in a business; medical and dental office equipment; professional libraries;
- Animals ( any creature that might reside in a barn, coop, pen or paddock is taxable);
- Farm machinery (unless exempted above);
- Unregistered motor vehicles & trailers (includes tractors, snowmobiles, golf carts and all other unregistered vehicles);
- Household furnishings not situated in the owner’s primary residence, i.e. furnishings of second homes. (Please file Form 2HF.)
Personal property subject to taxation must be reported to the assessors on State Tax Form 2, known as the Form of List. In recent years, the Assessors have included a Form of List with every copy of the February Newsletter. Last year 89 forms were returned, 81 of which were marked "same as last year" or "none." To reduce this waste of paper and time, we are not sending a form to all households, but instead are mailing them to taxpayers who have been subject to the tax in past years, or we believe might have taxable property. Any taxpayer who believes (s)he is subject to the tax and does not receive a Form 1 should contact the Assessors office for a copy.
Appears in: Board of Assessors FAQs