About Business Property Assessments
Unlike real property, business personal property is appraised annually.
The Business Personal Property Division (BPP) of the Office of the Assessor-Recorder is responsible for assessing all unsecured property owned by businesses located in the City and County of San Francisco and conducts business audits mandated by the State. Business Personal Property includes items like machinery, equipment, fixtures, and leasehold improvement held or used in connection with a trade or business. Unlike Real Property, Business Personal Property taxes are based on information provided to the Office of the Assessor-Recorder on an annual basis. Business Personal Property is reassessed annually because businesses may have acquired new or disposed of existing personal property during the course of the year.
Business property owners must file a property statement each year detailing the acquisition cost of all supplies, equipment, fixtures, and improvements owned at each location within the City and County of San Francisco. Refer to our fact sheet at www.sfassessor.org/sites/default/files/uploaded/ASR_Factsheet_BusinessPe...
The State Constitution indicates that all property is subject to property tax unless otherwise exempt. Failure to file the Business Property Statement (i.e., Form 571-L, 571-R, 571-STR) will subject business owners to an arbitrary assessment plus a 10% penalty.
Assessment begins with the cost of the asset, including sales tax, freight and installation per filed Business Property Statement (Form 571-L). The Assessor applies a valuation factors (for reference, please see the Business Factor Table and Vessel Factor Table ) to the cost of the asset to arrive at the assessed value.
Business Personal Property (BPP) is any tangible property owned, claimed, used, possessed, managed or controlled in the conduct of a trade or business. This includes all machinery, fixtures, office furniture and equipment. In general, business personal property is all property owned or leased by a business except licensed vehicles, business inventory, intangible assets or application software.
Use this easy guide to BPP reportable assets.
The State Constitution says that all property is subject to property tax unless otherwise exempt. Most people are familiar with the property taxes on their home. The assets of a business are also subject to assessment and taxation. Section 201 of the Revenue and Taxation Code of California states that “All property in this State, not exempt under the laws of the United States or of this State, is subject to taxation under this code”.
R & T Code, Sec. 441(a) Each person owning taxable personal property, other than a manufactured home subject to Part 13 (commencing with Section 5800), having an aggregate cost of one hundred thousand dollars ($100,000) or more for any assessment year shall file a signed property statement with the assessor. Every person owning personal property that does not require the filing of a property statement or real property shall, upon request of the assessor, file a signed property statement. Failure of the assessor to request or secure the property statement does not render any assessment invalid, as cited at https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC§ionNum=441
You may have not filed the Form 571-L in past years because your business personal property value has not exceeded $4,000 (exempt per San Francisco City Ordinance 308-97 and discussed further at BOE website, https://www.boe.ca.gov/proptaxes/lvo_exemption.htm), however you may be required to file the Form 571-L this year if the business information has changed.
Lien Date.
Every taxing entity wants to make clear who has the responsibility for paying property taxes on real and personal property. California Revenue and Taxation Code Section 117 says the “lien date is the time when taxes for any fiscal year become a lien on property.” The owner of the property on a certain date and time has that responsibility. The owners on the lien date are shown as the roll assessee on tax bills issued after that lien date until tax bills are issued after the next lien date. The word lien relates back to the Latin verb ligare meaning “to tie or bind” and entered the English language from the medieval French noun meaning a “band or tie.” Thus placing a lien against someone or their property is a way of “binding” that property to show an obligation owed by that owner to the person who holds the lien. In this case, the obligation is to pay the taxes and the “person” who holds the lien is the taxing entity. January 1 at 12:01 AM is the current lien date in California.
Unsecured property taxes on boats, aircraft, unsecured business property, and possessory interests are usually not prorated when there is a transfer. Thus, someone who sells a boat in February that they owned on January 1 is still responsible for the property taxes for the fiscal year beginning July 1 after that February and running through June 30 of the next calendar year. Persons who sell their boat or aircraft between January 1 and when the bill comes out should collect the expected amount of taxes from the buyer. The reverse happens if someone buys a boat or aircraft after January 1. They will not receive a regular bill until July following the next January after their purchase.
Secured property taxes on real property such as land, homes, commercial/industrial structures, and ranches/vineyards are usually prorated in escrow as of the date of the transfer. The lien date does not make a significant impact on these transactions. The lien date is important, however, because decline in value reviews are made as of the lien date which sets the value for the coming tax year.
In short, unlike real property, business personal property is appraised annually. Owners of all businesses must file a business property statement each year with the Assessor’s Office detailing the cost of all their supplies, equipment, and fixtures at each location. This is required unless the Assessor’s Office has already established the value of the business property and sent out a notification of “direct billing” or “low value exemption”. Business inventory is exempt from taxation.
Yes. The filing laws apply to non for profits, includes religious organizations, who may qualify for property tax exemptions.
In summary, R&T codes state
- Section 441 (https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC§ionNum=441) where any property owner with aggregate personal property costs of $100,000 or more must file 571-L statement due by May 7th without penalty (section 463) with the Assessor.
- Section 267 (https://www.boe.ca.gov/proptaxes/pdf/ah267.pdf) where claim form can be filed by property owner to exempt the value that will be reported on the property owner's annual 571-L statement to the Assessor. Therefore, to receive the exemption of value, property owner must complete both the exemption claim form AND the 571-L statement submission for each property.
The above 2 R&T code rules relate to 801/802 annual reporting requirement, which applies to the Assessors, where they must report annually to California Board of Equalization re all business personal property values and exemption values, as assessed in their county.
For more information, please contact (415) 554-5596 and ask for the Exemptions Division of the Assessor's Office.
The Assessor-Recorder’s Office, directed by state law, will arbitrarily determine an assessable value. In addition, a 10% penalty for failure to file will be added to your assessment (R&T Code, Sections 441, 463 and 501).
For lien year 2023, it is 1.1797 %, and the Office of Treasurer & Tax Collector will mail tax bills for unsecured property to taxpayers in July 2023, and payments will be due by August 31, 2023, which is per CA law, § 2922 Rev. & Tax. Code, https://www.boe.ca.gov/proptaxes/calendar.htm
When you file your business property statement in a timely manner, you should receive your bill by the end of July. Payment is due on or before August 31st, and becomes delinquent after that date and will be subject to penalties and interest. If the business owner also owns the building in which the business resides, the business property tax will be included with the secured tax bill. The secured tax bill is sent by the end of October with the 1st installment due by November 1st. Although the assessment is the responsibility of the Assessor, the tax bills are the responsibility of the Tax Collector’s Office. The assessor can handle any questions related to how your tax bill was determined. Questions related to billing and payment of bills should be directed to the Tax Collector’s Office. The Tax Collector’s website is www.sftreasurer.org
Whenever a taxpayer has a question re unsecured property tax bill related to an assessment, they should always contact Assessor Recorder at askBPP@sfgov.org or call us at 415.554.5531 or visit us at City Hall, room 190, for the Assessor Recorder.
There could be various reasons why an unsecured tax bill may have increased from prior year, and this list includes
- leasehold improvements acquired after 2012 appreciate in value per Proposition 13 (unlike most other unsecured property assets which depreciate in value).
- penalty of 10% per R&T code, section 463, was added to the unsecured property assessment because the taxpayer was required to file but did not, or filed late after the due date.
- estimated value per R&T code, section 501, was the basis of the unsecured property assessment because the taxpayer was required to file but did not, and so appraisal judgement was used to assess estimated value.
- additional assets relating to business personal property were acquired since prior year.
- tax rate may have increased since prior year.
What if I disagree with my regular assessment?
If you disagree with an assessment made by the Assessor, we recommend you first discuss it with an Auditor-Appraiser at the Assessor's Office. An Auditor-Appraiser is available Monday through Friday, 8 A.M. to 5 P.M. via e-mail at askbpp@sfgov.org or call us at (415) 554-5531. Whether or not you discuss the matter with the Assessor, you also have the right to file an assessment appeal with the Assessment Appeals Board. The Appeals Board is an independent agency representing the Board of Supervisors and is not connected with, nor is it under the control of, the Assessor's Office, and Burden of Proof is requirement per CA law, https://www.boe.ca.gov/proptaxes/pdf/rules/Rule321.pdf
If I file an appeal do I still have to pay the property tax bill?
Yes. Filing an appeal does not exempt you from paying your property taxes as due because the assessment of your property is deemed correct until a change is made by the Assessment Appeals Board.
How do I file an Application for Changed Assessment?
An application must be filed, in writing with the Assessment Appeals Board at 1 Dr. Carlton B. Goodlett Pl., City Hall, Rm #405, San Francisco, CA 94102. You may request an application by calling the Assessment Appeals Board Clerk at 415-554-6778 or by mail at that address. The Assessment Appeals website is: https://www.sfgov.org/aab
When can I file an “Application for Changed Assessment”?
The normal filing period for filing an Application for Changed Assessment is July 2 to September 15th of the current fiscal year per CA law, https://www.boe.ca.gov/proptaxes/pdf/filingperiods.pdf
The filing period applies to any assessment produced for the annual assessment roll. If a bill for an assessment roll is mailed to you after the normal filing period has expired, the filing period is extended and you must then file an application within 60 days of the date of mailing of that tax bill.
Even if you file an appeal, you must still pay the bill by August 31st of the current fiscal year to avoid late payment penalties; a refund will be issued if the Assessment Appeals Board rules in your favor. August 31 due date for payments is per CA law, § 2922 Rev. & Tax. Code, https://www.boe.ca.gov/proptaxes/calendar.htm