Description of Business Property

The following categories are provided to help you understand how different types of business personal property should be reported. All taxable property owned or used as of January 1 must be listed.

Supplies and Materials
Includes office, cleaning, shop, and promotional supplies that are not consumed in manufacturing or do not become part of items held for sale. Spare parts kept for equipment maintenance and repair must also be included, even if recorded in an inventory account. Hotels and hospitals should report supplies provided as part of room charges, and medical offices should include drugs and medical supplies on hand.

Expensed equipment must be reported in the correct year of acquisition on Schedule A84.

Inventories held for sale in the regular course of business are exempt from property tax.

Construction in Progress (CIP)
Report 100 percent of the cost of personal property recorded in a CIP account as of January 1. Include a description of the types of property in the account and a breakdown of expenditures made during the prior calendar year.

Personal Property (General)
All tangible personal property must be listed as of January 1, regardless of your business’s fiscal year. This includes items such as machinery, furniture, fixtures, signs, computers, and purchased software treated as a capital asset. Property must be reported in the year acquired at its full historical installed cost, including freight, installation, sales tax, and related charges, and at the retail level of trade.

Businesses that lease or rent property to others must provide a detailed schedule showing the lessee’s information, description of the property, year acquired, and cost. Leased or rented property is not exempt from taxation.

Machinery and Equipment
Report the cost of all machinery and equipment used in the business, including warehouse, packaging, manufacturing, and production equipment. Fully depreciated assets that are still in use must be included.

Office Furniture and Fixtures
Includes desks, chairs, file cabinets, small office machines, window coverings, window air conditioners, telephones, intercom systems, and alarm systems used in the business.

Computer Equipment
Report non-production computers and peripherals such as computers, monitors, printers, scanners, servers, storage devices, and related hardware. Point-of-sale systems are also included in this category. Capitalized software purchased from an unrelated party should also be included. Do not report internally developed software or customization costs. Computer controlled equipment and high-tech machinery should be reported with machinery and equipment.

Other Personal Property
Include items that do not clearly fit into another category, such as testing equipment, farm equipment, rental equipment, greenhouses, electronic equipment, transmitting towers, and unlicensed vehicles, and attached special equipment. Licensed vehicles should not be listed in this category. Certain apportioned or IRP vehicles must be reported separately with supporting detail. Provide a clear description so the correct valuation schedule can be applied.

Property in Your Possession but Owned by Others
If you possess equipment on January 1 that is owned by another party, such as leased or loaned equipment, report a description and the owner’s information. This is for informational purposes only. The assessment will be made to the owner.

Improvements to Leased or Owned Property
Report the total cost of improvements placed in service during the prior calendar year that are considered personal property and not included in the real estate value. Examples include security systems, alarm and telephone systems, kitchen equipment, millwork, shelving, furnishings attached to the building, special purpose heating or cooling systems, coolers, and specialized piping.

Improvements typically included in the real estate value, such as floor and wall coverings, standard ceilings, standard lighting, building heating and air conditioning, building sprinkler systems, paving, fencing, and area lighting, should not be reported as personal property.

To determine if your property should be classified as real or personal property, please refer to the Wake County property classification schedule. 

Providing clear descriptions and itemized detail helps ensure property is classified and valued correctly. It is recommended that you submit your most recent depreciation schedule with your annual business listing.