Why Would I Need a Business Property Statement?
July 16, 2021
If you own a business in California, you’ll need to file a Business Property Statement (BPS) with your taxes. It requires using Form 571-1, and applies to all businesses with personal property totaling $100,000 or more, including LLCs. Should you be new to BPS filings, use this guide from your local Los Angeles accounting firm to start your education.
Types of Business Personal Property
For a Business Property Statement to apply, you must own and use specified personal property worth $100,000 or more. Among the most common types of business personal property include computers and similar electronics, office furniture, lab equipment, printing equipment, copiers, fax machines, hand and power tools, shop and restaurant equipment, and video equipment. All other business equipment, supplies, and leasehold improvements apply.
However, there are items considered exempt by the IRS. They include application software such as Microsoft Office programs, DMV-licensed vehicles, and business inventory used for selling, renting, or leasing purposes.
What the Statement Does
If you receive Form 571-1 in the mail, you must declare all valid business personal property. The information you provide is used to assess and subsequently tax your business according to California state laws. Even if the assessor for your county does not send you the form, you must provide personal property information. If you do not file, an assessment will be done for you using whatever information is available. Equipment will subsequently not depreciate and you will receive a 10% penalty on the assessment for failing to file.
Deadlines
The lien date for Form 571-1 is 12:01am on January 1st. This date is the same every year and refers to date on which the property “becomes assessable.” You must send the BPS in by April 1st of the same year; it is considered late and therefore delinquent if you file on May 7th after 5pm. The mail must be postmarked by May 7th or later to be deemed delinquent–if the date falls on a weekend or holiday, the form is due the following day by 5pm.
Work with the Encino tax consultants at Wallace & Associates regarding all of your business filings. The accountant service in Los Angeles provides a full suite of tax services.
