All About Personal Property Tax

A personal property tax is the tax assessed by the state on the value of personal property, such as cars, boats, and stocks. Some states do not charge a personal property tax, while others offer exemptions based on age, income, or disability. Many states also exclude "intangible personal property," which includes stocks and bonds.

Most states use a tax assessor, which is a public official that determines the true value of items, or how much an average buyer would pay for the item. Often states will use the blue book value for vehicles and equipment.

The property that qualifies as personal property usually includes automobiles, boats, and any other vehicles (such as aircraft or ATVs). In some states mobile homes are also counted as personal property because they can be moved. Works of art and business inventory are also personal property. There's also something called intangible personal property, which includes things you cannot touch, such as stocks and bonds.

The following states do not charge a tax on personal property: Utah, Texas, Tennessee, South Dakota, Oklahoma, North Carolina, New York, Iowa, Idaho, Indiana, Hawaii, Delaware, Connecticut, Colorado.

Many states offer personal property tax exemptions for senior citizens, the disabled, homeowners, and veterans. Also, if a person is on active military duty and outside a state that imposes a personal property tax they are exempt from the tax.

There are four types of nonbusiness deductible taxes, of which personal property tax is one. To deduct your personal property tax on your federal income tax return, the tax must be imposed on you and it must be paid during the tax year. The personal property taxes that qualify to be deducted are only those that are based on the value of property like boats and cars. This tax must also be charged to you on a yearly basis, even though you may pay it more or less than once per year. It's also important to note that a yearly tax on personal property based on value qualifies for deduction even if it's referred to as a registration fee.

"How Personal Property Taxes Work." Howstuffworks.com. 12 April 2009. http://money.howstuffworks.com/personal-finance/personal-income-taxes/personal-property-taxes.htm

"Topic 503 - Deductible Taxes." IRS.gov. 25 March 2009. 12 April 2009. http://www.irs.gov/taxtopics/tc503.html