Complying with every applicable tax law can be a daunting obligation even for a taxpayer well versed in tax rules. For start-ups, the task can be more than daunting when the taxing authorities do not tell you about your reporting obligations. This can frequently happen with city business taxes on gross receipts or the peculiar Seattle square footage tax.
Another such tax is the property tax on personal property. Non-businesses do not have property taxes on their personal belongings, because the state exempts them. Non-businesses typically pay “in lieu of” taxes instead of property taxes. For example, the motor vehicle and watercraft excise taxes are paid in lieu of the property tax.
For start-up businesses however, it is easy to overlook the personal property tax. With the real property tax, the county knows who owns real property. Each year, it will send you a notice of the value and a bill for the taxes due. Unlike the real property tax, the county does not know who owns tangible personal property in the county until you tell it. So, until you have begun reporting the personal property tax, the county will not send you a personal property tax affidavit to remind you to report and pay it.
Because so many businesses are unaware of this obligation, King County has enacted an amnesty to give the taxpayers who are unaware of the obligation an opportunity to come forward. If you report previously unreported tangible personal property before July 1, 2012, King County will offer tax amnesty and waive the penalty (which can be as high as 25% of the tax due) for failing to report them in a timely fashion.
For more information about startup tax issues:
- ASSAULT ON THE B&O HIGH TECHNOLOGY TAX CREDIT
- NEW, HIGHER TAX PROPOSALS FLOATING AROUND OLYMPIA
- TIME FOR A TAX INCREASE?