August 9, 2012
The Personalty tax is a tax on Personal Property, tangible and intangible, used, or held for use, in a business. Businesses include Partnerships, Corporations, other business associations not issuing stock and individuals operating for profit as a business or profession in Shelby County Tennessee.
There are 10 groups of Tangible Personal Property:Group 1 Furniture, Fixtures, General Equipment, and all other Property not listed in any other Group. Group 2 Computers, Copiers, Fax Machines, Peripherals, and Small tools. Group 3 Molds, Dies, and Jigs. Group 4 Aircraft, Towers, and Boats. Group 5 Manufacturing Machinery. Group 6 Billboards, Tanks, and Pipelines. Group Scrap Properties. Group 8 Raw Materials and Supplies. Group 9 Vehicles. Group 10 Construction-in-Process.
This group of property is taxed the same as real estate and those paying are responsible for reporting their value. It does not matter whether they are making a profit on the property or not as it is not an income tax. But do they all pay the same?
Here is a statement from the Pilot program eligibility requirements.
IV. The PILOT payment is based on 10% (for the City of Memphis) and 25% (for Shelby County) of the ordinary taxes on Personal Property and the improved value of the Real Property as provided in the PILOT Lease Agreement. The remaining 90% and 75%, respectively, are forgone by the city and county as an incentive for meeting the PILOT program criteria.
So those in the Pilot program are treated differently from those who are not in the Pilot program. I found a list in the 2011 Pilot annual report from the Shelby County Trustee’s Office. This list is headed as 2011 Debt Service Contracts. This is $6.5 million in personalty tax abatement and this for the County only as the City Pilots are not listed on line like the County. I have asked for the City list but have not received it yet.
This whole Pilot program has a certain smell to it. It needs to be aired out with a public citizen group to investigate all the aspects of the program, who is getting deals and who is being left out in the tax winter. With our declining tax base we need to weed out special deals and favors and have everyone pay a fair but reasonable share.
I’ve been told by more than one auto dealership’s service department that the personalty tax is the reason so many dealers have huge portions of their parts in warehouses across the state line in Mississippi.