Terms  and  Concepts

Business and Personal Property Assessment

Business property and some personal property is taxable.

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Machinery, equipment, tools, furniture, fixtures, and leasehold improvements held or used in connection with a trade or business are taxable. In addition, most boats, aircraft and mobile homes are also taxable. Supplies on hand, demonstration equipment, and construction in-progress are also assessable. All costs before trade-in should be reported whether capitalized, expensed, or fully depreciated. Inventory held for sale, application software and licensed vehicles are not taxable.

Unlike real property in California, business property and taxable personal property are appraised annually at full market value. Several types of property statements are used to assist the Assessor to determine the taxable value of business and personal property; you can download any of these forms in PDF format from the Forms section of this web site:

Frequently Asked Questions about Business and Personal Property Taxes

Many people have questions about business and personal property taxes. Please click on one of the four main topics below to explore the related frequently asked questions and answers about it:

If you have other questions, concerns or comments for us, you can contact the Sonoma County Personal Property Division in the following ways:

Topic 1: The Business Property Statement and Filing Requirements

Why did I receive a Business Property Statement - Form 571-L (BPS)?
You were sent a property statement because our records indicate that you were in business on the Lien Date, January 1, and the Assessor is required to assess any taxable business personal property in your possession on that date.
What is business personal property?
Business Personal Property includes all supplies, equipment and any fixtures used in the operation of a business. Exempt from reporting are business inventory, application software and licensed vehicles (except "SE" tagged and off-road vehicles). SE tagged and off-road vehicles and equipment are taxable personal property and must be reported).
Is this something new?
No. Taxes on business personal property began with the signing of the California Constitution. They are governed by the State of California and administered by the various counties.
What is the purpose of the Business Property Statement (BPS)?
The BPS collects information regarding business equipment, supplies and fixtures for each business location. The information an owner provides on the statement is then used to assess and tax property in accordance with California State Law. The owner reports the acquisition costs of business equipment, supplies and fixtures that were owned on lien date at the address shown (location of the property). All 58 California County Assessors mail out similar statements that enable businesses to report the cost of their equipment, supplies, leased equipment, real property and improvements.
Who must file a Business Property Statement (BPS)?
If the Assessor sends you a BPS, the law requires that you complete, sign and return the statement to the Assessor's Office in the time period specified. Any business that owns Personal Property and/or Fixtures having a total combined cost of $100,000 or more is required to file a BPS even if the Assessor does not request that you file one.
Why do I have to pay taxes on my business property?

The California Constitution states in part that, 'Unless otherwise provided by this Constitution or the laws of the US, (a) All property is taxable...'. So unless otherwise exempted, all forms of tangible property are taxable in California and the Assessor must assess business personal property because the law requires him or her do so.

Some forms of personal property are exempt from taxation under the Constitution. For example, household furnishings, personal effects and business inventory are exempt under the law. However, Business Personal Property is not exempt under the law and neither are privately-owned or business-owned boats and aircraft. For information on boat and aircraft assessments, call us at (707) 565-2844 for boats and at 565-2861 for aircraft.

Is this a one-time tax?
No, this is an annual tax.
Where can I obtain assistance in completing the Business Property Statement (BPS)?
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You can contact us for assistance with completing a Business Property Statement; there is no charge for this service. Our office hours are from 8 AM to 5 PM, Monday through Friday, and you do not need to make an appointment.

We are located in Santa Rosa at the County Administration Center. We're in the east end of the Fiscal Building at 585 Fiscal Drive, in Suite 104. Our phone number is (707) 565-1330 and our FAX number is (707) 565-3317. We recommend that you bring a copy of your depreciation schedule (assets listing) along with you.

What is the 'Lien Date'?
The Lien Date is January 1 every year, and is also the date property taxes for any fiscal year become a lien against a business property owner. Where personal property is concerned, the lien is placed on the owner of the property (not the property).
How are personal property taxes used?
Approximately 53% of the property tax dollar is used to support junior colleges and Kindergarten through 12th Grade schools, 20% is allocated to city government and other special districts, while 27% is allocated to support county government. You can learn more about how personal property taxes are used by visiting this link.
What is the tax rate on personal property?
Throughout California, the property tax rate is 1% of assessed value (also applies to real property) plus any bonded indebtedness voted in by the taxpayers. In Sonoma County, the average overall tax rate including bond debt averages perhaps 1.1 to 1.2%.
How much in taxes will I have to pay due to this assessment?
The amount of taxes you will owe will depend on the amount of the assessment and the specific tax rate in your area. For example, if your personal property is assessed for $10,000, your personal property tax bill should be roughly $110.00 to $120.00.
What if the printed information on the Business Property Statement (BPS) is incorrect?
If the business has moved or changed its mailing address, then draw a single line through the incorrect information (Please DO NOT make the preprinted information unreadable). Then legibly print or type the new information on the form and also indicate the effective date of the move or when the change became effective. When reporting a sale, include the new owner's name and mailing address. When reporting that the business has been closed, provide the date(s) and information relating to the disposition of any taxable personal property. Complete the BPS, sign and return it to the Assessor's Office.
I do not own the real property where my business is located. Do I still need to fill out the Business Property Statement (BPS)?
Yes. Even if you don't own the real property where your business is located, you must still file the BPS because it is used to report business personal property (equipment, supplies, etc.) you do own. You must also complete any related schedules that apply to your particular business. If you do not own the real property, you may not need to complete Schedule B, columns 1, 3, and 4. If you own or have added any tenant-owned improvements, you will need to report their costs in column B-2 (see official instructions for the 571-L).
What does the Assessor's Office do with the Business Property Statement (BPS) after I mail it in?
We review the form for completeness and accuracy and then employ a number of methods to convert reported costs to an estimate of their lien date, fair market value equivalent (see question #16 - How is the assessed value of my business property determined?). After the Assessor has assessed your property and has finished processing your BPS, the form is then scanned and filed. By law, your BPS is NOT a public document and it is not open to public inspection in any case. The assessment itself is then forwarded to the County Auditor, who computes the taxes owed and then forwards that information on to the Tax Collector, who in turn creates the bill and collects the tax.
How is the assessed value of my business property determined?
The Assessor is required to annually assess most taxable personal property at 100% of its fair market value as of the lien date. In order to determine that fair market value, the assessor employs a number of methodologies. For example: Unlike most real property which is assessed under Proposition 13, most personal property does not fall under Prop 13's umbrella (although it does enjoy the same, maximum 1 per cent tax rate). The only exception are personal property 'fixtures,' which are defined as real property for property tax purposes and are subject to Proposition 13 restrictions. Thankfully, fixtures are not subject to Supplemental Assessment.
What happens if I do not return the BPS or return an Incomplete BPS?

Failure to File: Where a BPS is not filed as required by law or requested by the Assessor, we must then rely on the best information available in order to estimate the value of any personal property owned by the non-reporting business. In the absence of a BPS, an estimate of value is made based on the nature of the business. Our office may also perform a field inspection of your business property, during which an estimate of the lien-date, fair market value of the business personal property discovered there will be made. Additionally, a 10% penalty must also be added to any assessment made as a result of a failure to file the BPS.

Incomplete Filing: If you file an incomplete BPS, the Assessor may return it to you for proper completion. In that case, penalties may be assessed if the Assessor's Office does not receive a properly completed BPS by the normal due date. An incomplete filing is treated the same as a 'failure to file' and a 10% penalty must be added in that circumstance.

What if I disagree with my assessment?
If you disagree with an assessment made by the Assessor, you can do one of the following:
  1. Send us a letter stating the year of assessment in question and area(s) of disagreement. Attach the following to your letter:
    1. a completed property statement for the current year if one has not been filed
    2. the entity’s complete income tax return covering the lien date in question (12:01 AM January 1); if the assessment year in question is 2005 and the entity is on a calendar year end, send the income tax return for year end 12/31/04, but if the assessment year in question is 2005 and the entity is on a fiscal year end, send the income tax return covering 12/31/04
    3. a current detailed depreciation schedule
    4. any other documentation supporting your claim
    Additional documentation may be requested depending on our initial review of the above as well as your area(s) of disagreement.
  2. Visit us at 585 Fiscal Drive, Room 104F, in Santa Rosa, California. Bring along with you your letter of dispute, completed property statement, income tax return(s), current depreciation schedule, and any other documentation that will support your contention.
Whether or not you discuss the matter with our office, you also have the right to file an Application for Changed Assessment (an assessment appeal) with the Assessment Appeals Board. The Appeals Board is an independent agency representing the Board of Supervisors; it is not connected with the Assessor’s Office nor is it under our control in any way. You may download an appeal application or you may request one by telephone by contacting the Appeals Board at (707) 565-2241. You may also request an appeal application by mail or in person; the Appeals Board is located at 575 Administration Drive, Room 100A, in Santa Rosa, California 95403.
How do I file an Application For Changed Assessment?
An application must be filed, in writing, with the Assessment Appeals Board at 575 Administration Dr, Room 100A, Santa Rosa, CA 95403. You may request an application by calling (707) 565-2241, or by mail at that address.
When can I file an Application For Changed Assessment?
The normal filing period for filing an Application for Changed Assessment is July 2 to November 30 of the current fiscal year. That filing period applies to any assessment produced for the annual assessment roll. If a bill for current assessment roll is mailed to you after the normal filing period has expired, the filing period is extended and you must then file an application within 60 days from the date printed on the assessment notice or the postmark date of the notice, whichever is later.
What happens when I file an Assessment Appeal?

Once a formal assessment appeal has been filed with the Appeals Board, a hearing date will be set by the Board. Before the hearing takes place, you will need to gather data and evidence to support your opinion of value and then present it during the scheduled hearing. The Assessor's Office will also prepare evidence to present to the Board. At the hearing, all evidence and argument are presented to a three-member Appeals Board panel appointed by the Board of Supervisors. Once all presentations are complete, the Appeals Board may make a determination of value on the spot, or it may defer its decision until a later date so that it has time to review all the data and make a proper determination of value. If the decision is deferred, you will be notified of the decision by US mail once it has been rendered.

For guidance on how to prepare for an appeal, you may contact the Sacramento County Assessment Appeals Board at (916) 874-7894. Additionally, an appeal guideline has been published by the State Board of Equalization has published an appeal guideline. It is available on their Internet site at: www.boe.ca.gov/proptaxes/pdf/pub30.pdf (although the pamphlet is entitled Residential Property Appeals, it is helpful for personal property appeals as well). If you do not have Internet access, request a free copy Pamphlet #30 from the Board of Equalization by phone at (916) 324-4019, or request it by mail at: SBOE Policy Planning & Standards, PO Box 942879, Sacramento, CA 94279-0064.

Topic 2: Completing the Business Property Statement

What if I sold or closed my business before the lien date, January 1? Do I still have to complete the BPS?
You will need to complete the cover page only. If sold, indicate the new owner's name, address, date of sale, and sales price of the equipment, furniture, and fixtures. If closed, indicate the date the business closed under "Date of Sale". Also indicate how the business property was disposed of. Any business property that you retain may still be assessable.
What if I sold or closed my business after the lien date, January 1? Do I still have to complete the BPS?
Yes. All property is assessable to the owner as of the lien date. The lien date is the date that property taxes for any fiscal year become a lien against a property owner.
All the equipment I use is my own personal equipment; must I report it?
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If you are using any personal equipment in your business, then yes, it must be reported. For example, persons working out of their homes must report personal desks, computers, calculators and etc., if those items are used in their business. Other examples include:
All the equipment I use was given to me and I don't know what to report?
Where the equipment you use in your business was acquired as a gift, you may report your estimate of its current market value on the BPS (that is, what you think it would sell for in the open market place). Enter that estimated value in the most current year's cost line and add a note indicating that the entry is an estimate.
Most of the equipment I use does not belong to me; a friend is letting me use it and I have no idea what it cost. Must I report their equipment on my BPS?
Yes. The BPS must show all taxable property owned, claimed, possessed, controlled or managed by the person filing the form. If you are responsible for paying the tax on the equipment, then you may estimate its value (see question #2 above - All the equipment I use was given....) and report it on the BPS. On the other hand, if you are not responsible for its tax, then you should declare the equipment in Part III of the BPS (Equipment belonging to others). Where equipment is declared in Part III of the BPS, the Assessor will also send a BPS to the person reported as the equipment's actual owner.
I only rent an office and all of the furniture and equipment belongs to the landlord. Do I still have to complete the BPS?
Yes. In this case, you need to write a remark about that circumstance on the BPS, or on an attachment to it. Also fill out Part III (Equipment Belonging To Others) of the form, and then sign and return it to the Assessor's Office. If you own any small equipment, such as a printer, copier, etc., that you are using in the business, you should report these costs under Part II of the BPS and Schedule A.
What is a supply item?
Image of Office Supplies
Any item that you are consuming in your business, such as office supplies, pencils, paper, calculator tape, stationary, envelopes, cleaning supplies, fuel and etc. is a supply item. If you are a manufacturer, 'supplies' would not include anything that becomes part of the finished product. Materials or supplies that are integrated into the products you market are exempt because they become business inventory once in the products, and business inventory is exempt from property taxation.
Can I just write 'Same as Last Year' on the BPS and return it?

No. You must report personal property holdings in detail and as requested or mandated.

If nothing has changed from the prior year (no equipment was purchased or sold), then you may refer to your prior year's BPS filing in order to be consistent in completing the current BPS. If you failed to keep a copy of the prior year's filing, you may request a copy of it from the Assessor's Office.

Can I just report current acquisitions?
No. You must report all business personal property that you own, control, or posses as of the lien date.
The BPS shows my home address, but my office is located elsewhere. Do I still need to complete the BPS?
Yes. Note that circumstance in a remark on the BPS, or on attachment to it, and also include the proper location and mailing address of your main office. Then sign and return the BPS to the Assessor's Office.
As a store owner, do I report the actual cost of my video tapes?
No. You should only report the number of tapes that were out on rent the night of December 31, and you should report their cost as $5.00 per tape (the approximate cost of a blank, commercial quality tape). All other tapes in your stock would be considered inventory and are not taxable. You only report the equivalent cost of a blank tape because the material or movie recorded on the tape is considered an intangible and is also not taxable.
I do not own anything and lease all my equipment. Must I still complete a BPS?
Yes. You are required to report this information in Part III of the BPS so that the Assessor can properly locate and assess the actual owner for the equipment.
I have a business in my home. Do I still have to complete the BPS?
Yes. Any equipment used for a home business is considered to be business personal property and must be reported on the BPS.
I am a hairdresser and rent space from the Salon Owner? Do I still need to complete the BPS?
Yes. Note these facts on the BPS, or on an attachment to it, and include the name and address of the business that actually owns the equipment. Then sign the BPS and return it. You also need to report any equipment you might own in Part II of the BPS.
My business/organization is exempt. Do I still need to complete the BPS?
Yes. You still are required to complete the BPS even if you are an exempt organization. You may contact the Exemption Section at (707) 565-1887 to verify your exempt status or to file an exemption claim.
What happens if I simply refuse to file a Property Statement?

Topic 3: Requesting Copies and Additional Forms

How do I request copies of prior year filings?
The owner or their agent may contact us and request copies either in person, in writing or by phone. Our offices are located at the Sonoma County Administration Center in the east end of the Fiscal Building at:
  • Sonoma County Assessor's Office
  • Business Property Division
  • 585 Fiscal Drive, Room 104-F
  • Santa Rosa, California 95403
  • Phone: (707) 565-1330
  • FAX: (707) 565-3317
How do I request additional forms?
You can download PDF editions of Forms 571-A and 571-L (and several other business and personal property forms as well) from the Forms section of this web site or you can request additional forms by phone, by fax or by mail (see above for address and telephone information).
How do I obtain a copy of the current year's BPS after it has been processed by the Assessor and shows the assessed values?
When requesting current value information, please include the request with your completed BPS, a copy of the completed BPS, and enclose a self-addressed stamped return envelope.

Topic 4: You are Out Of Business or Do Not Own A Business

I went out of business on January 15th, do I still have to complete the BPS and pay personal property taxes?
Yes. The law specifies that all taxable personal property must be assessed as of a specific point in time, and that point is precisely at 12:01 A.M. January 1 (regardless of what transpires after that date). Even if closed shortly after the lien date, a business must still file a BPS and pay taxes for the coming fiscal year on any taxable property they owned on the lien date.
I was not open for business on January 1, do I still have to complete the BPS?
Yes. A business does not have to be open for its taxable personal property to be subject to assessment. For example, let's presume that on the lien date, January 1, a new pizza parlor is under construction and nearly ready for its grand opening. Even though the pizza parlor was not open for business on the lien date, taxable business personal property (such as furniture, ovens and supplies) was in the owner's possession on the lien date and the Assessor is required to assess it. See also Question #20.
I went out of business prior to January 1, do I still have to complete the BPS?

Yes. Anytime a person receives a BPS from the Assessor and their business is no longer in operation, the BPS must still be signed and returned to the Assessor. You should also include a note on the BPS indicating that the business has closed, because if you don't, the Assessor will not be aware of that fact, and may continue to assess the property despite its true circumstance.

On the BPS or an attachment to it, please write a note that includes the date you went out of business, as well as the status and disposition of any equipment owned or used by you at the time the business closed. If any of the property was sold to another person or business, please indicate the buyer's name and address. If any of the property reverted to your own personal use as household personal property, we need to know what property did that as well. Please then sign and return the BPS to the Assessor's Office.

Note: Where a business has closed but you still own equipment previously used in the business, it may still be taxable despite the fact the business is closed. If the equipment you still own can be converted to household uses (that is, could become your personal effects), then it may not be assessable. For both instances, see the first question under Topic 2: Completing The Business Property Statement.

All I have is a business phone number. I'm no longer in business and I'm not conducting any other business at the present time. Must I still file the BPS?
Yes. Please note those facts on the BPS, or attachment to it, and return the signed BPS to the Assessor's Office. The Assessor needs to know these facts in order to prevent an improper assessment from being issued to you.
Although I have a license to do business, I haven't purchased any equipment or conducted any business as yet. Must I still file the BPS?
Yes. Please note those facts on the BPS, or attachment to it, and return the signed BPS to the Assessor's Office. The Assessor needs to know these facts in order to prevent an improper assessment from being issued to you.
I am only an employee of the company and I don't own any Business Personal Property myself. Must I still file the BPS?
Yes. Please note those facts on the BPS, or attachment to it, and return the signed BPS to the Assessor's Office. Please also include the name of the company you work for and its mailing address among your notes. The Assessor needs to know these facts in order to prevent an improper assessment from being issued to you.

For more information or to discuss further questions you may have, please visit our offices or contact us by phone at 707-565-1330 or 1-800-797-4707.