Business Listings: Who reports leased equipment?

Leased equipment is reported differently depending on the type of lease.

With a capital lease, the equipment is treated as owned by the business using it, with the lease functioning as a financing agreement. The party using the equipment (lessee) is responsible for reporting it as an asset on their property listing form in the appropriate category, and at the total capitalized cost, including the purchase price, shipping, and setup, in the year the equipment was acquired. The resulting tax is billed to the lessee.

With an operating lease, the equipment is rented for a set period of time and is expected to be returned at the end of the lease. The party using the equipment (lessee) discloses the leased property in the Leased Property section of the listing form for informational purposes, including the lease start and end dates, monthly rent, and total sales price. The owner of the equipment (lessor) reports the property on their listing form as an asset and is responsible for the property tax bill.