Utah Code in Title 59 requires the taxation of property for the funding of local government and Utah schools. Property tax is assessed on both real property and personal property. Generally, personal property used in business is subject to property taxes. Utah law requires business personal property to be reported to the county assessor where the property is located (has situs) on a tax form identified as a Personal Property Signed Statement. Personal Property is taxed based on its taxable value as of January 1 of each year. In order to value personal property, the Utah State Tax Commission provides personal property classification schedules which are used by all county assessors in Utah.

Merchandise Inventory

Wares and merchandise, held for sale in the ordinary course of business, which constitute the stock-in-trade of any retailer, wholesaler, manufacturer, farmer, or livestock owner, are exempted from ad valorem taxes

Farm Machinery and Equipment

Tractors, milking equipment, feed handling equipment, harvesters, storage and cooling facilities, choppers, grain drills and planters, tillage tools, scales, combines, seeders, sprayers, haying equipment and other machinery or equipment used primarily for agricultural purposes are exempt from ad valorem property tax. (UCA Section 59-2-1101). However, the exemption does not include motor vehicles required to be registered with the Tax Commission, as well as machinery and equipment used in processing of agricultural products.

Livestock

Livestock is exempt from ad valorem property taxation. (UCA Section 59-2-1112) Property Used for Irrigation Purposes Property used for irrigation purposes is exempt from property taxation. (UCA Section 59-2-1111) The exemption is limited to the property listed in Article XIII, Section 2 of the Utah Constitution.

Household Furnishings

Household Furnishings, furniture, and equipment used exclusively to maintain a primary or secondary residence are exempt form property taxation (UCA Section 59-2-1113 and Administrative Rule 884-24P-29).

Certain Tangible Personal Property

Tangible personal property of a taxpayer is exempt if the property has a total aggregate fair market value of $15,000 or less in 2020. The exemption does not apply to registered motor and recreational vehicles or mobile homes. To apply for this exemption, contact the Iron County Assessor. An item of taxable tangible personal property is exempt from taxation if the acquisition cost of that item was $1,000 or less and is valued at a percent good of 25% or less in 2019. The exemption only applies to personal property valued by schedules having a percent good residual of 25% or less. Note the definition of an item of taxable tangible personal property in Section I. (UCA Section 59-2-1115)

Registered Motor Vehicles, Recreational Vehicles and Aircraft

Registered motor vehicles, recreational vehicles and aircraft are exempt from ad valorem taxation and are taxed by uniform fees.

If you are a new business or have never filed: On Schedule A, list at 100% acquisition cost, by year of acquisition, all furniture & fixtures, machinery & equipment, and computer equipment including software, owned as of January 1. The class descriptions are located on a separate sheet. List all leased items and the lessor on a separate sheet. (Do not include any motor vehicles.)

If you have previously filed: On Schedule A, list only those items acquired or disposed of during 2019.

If you are no longer in business: Indicate the circumstances on the Business Change Form and return it by May 15, 2020.

Using the "Percent Good Table", depreciate each item to arrive at the current market value. Transfer this amount to line 4 of the Tax Notice, multiply the market value by the rate on line 5 to determine a tax amount for line 6.

If the total market value is $15,000 or less do not calculate the tax, go to the exempt portion of the signed statement. Sign in the box verifying you qualify for the exemption. Sign the bottom of the Tax Notice and return it with your "Schedule A" and a check for the amount due by May 15, 2020.

If no tax is due you must still sign the Tax Notice and return it by May 15, 2020. Failure to file a return will result in a penalty of 10% of the estimated tax due, but no less than $25.00. Interest will be charged on any outstanding balance. Penalty and interest charges, by law cannot be removed. (UC 59-2-307) The exemption cannot be applied after May 15, 2020 so the entire tax plus penalty & interest will be due.

Cost of Acquisition must include all costs required to put an item into service. In addition to the cost of the item, include the following costs:

• Freight in, includes shipping costs, loading at origin, unloading at destination, crating, skidding, and other applicable costs of shipping
• Installation, engineering, rigging, erection or assembly to include foundations, pilings, utility connections and any other costs related to installation
• Excise and sales taxes
• Any other costs related to putting personal property into service are to be included in acquisition cost
• Indirect costs such as debugging, licensing fees, permits, insurance or security are not included in acquisition cost.

An item of taxable tangible personal property means equipment, machinery, furniture or other tangible personal property that is functioning at its highest and best use for the purpose it was designed and constructed and is generally capable of performing that function without being combined with other items of personal property. An item of taxable tangible personal property is not an individual component part of a piece of machinery or equipment but the item of machinery or equipment as a whole. For example, a fully functioning computer is an item of taxable tangible personal property but the motherboard, hard drive, tower or sound card are not.

Class 28 Non-Capitalized Personal Property is an item of machinery, equipment, furniture, computers, or any other tangible personal property that the acquisition cost has been totally expensed or written off in the year of acquisition. Any item of personal property whose acquisition cost is or has been depreciated using MACRS, Straight Line, or ACRS over several years for federal tax purpose does not qualify as being treated as Non-Capitalized Personal Property (Class 28)

"Non-Capitalized Personal Property" is an item of personal property that meets the following criteria:

Has an acquisition cost of $1,000 or less;

Please Note:

Is claimed as allowed on a federal tax return as a deductible expense under Section 162 or Section 179, Internal Revenue Code, in the year of acquisition.

All Classes of Property qualify for the election to Class 28 (Non-Capitalized Personal Property)

Any person who elects to designate personal property as "Non-Capitalized Personal Property" under Class 28 would need to provide proof of the acquisition cost of all non-capitalized personal property if selected for State Audit in accordance to Utah Code Ann. 59-2-306(3). Any person who sells or disposes an item of taxable tangible personal property which has been designated as Non-Capitalized Personal Property or Class 28 must continue to pay taxes on such property until it reaches the 4th year on the Class 28 schedule.

Any person who elects to designate personal property as Non-Capitalized Personal Property or Class 28 property may not appeal the value of the property determined by the Class 28 Schedule. An election to use Non-Capitalized Personal Property or Class 28 may not be revoked or transferred to any other Recommended Personal Property Valuation Schedule.