Tangible returns, property returns, personal property returns, tangible personal property returns, TPP, DR-405… you’re forgiven if you’re confused about personal and business property tax, especially because it differs from state to state. In Florida, tangible personal property (TPP)—as we’re going to call it—is a tax on businesses (not individuals, so don’t be fooled by the word “personal”). In this quick guide, we’ll help you figure out what a Florida tangible property tax return is and what you may need to do if your business operates out of Florida.
What is tangible personal property?
Tangible personal property (TPP) is all goods, property (excluding real estate), and other articles of value that the owner can physically possess and touch that have intrinsic value. However, some property items (such as inventory, household goods, and some vehicular items) are excluded.
We prepare TTP returns for clients with tangible property used for business at a business location (such as computers, printers, desks, chairs, machines, etc.).
Who files TPP returns?
Anyone who:
- Has a proprietorship/partnership/corporation
- Is a self-employed agent or contractor
- Leases, lends, or rents property
- AND owns TPP on January 1st
When is the deadline?
TPP returns must be with the county property appraiser by April 1st each year (for 2023, it’s April 3rd since the 1st falls on a weekend).
How to file a TPP return
To file a TTP return, you’ll need to complete Form DR-405 and submit it to your local property appraiser by April 1st. You are required to report all of your relevant property located in the county on January 1st.
What if I have multiple sites?
- You are required to file a single return for each site in the county where you conduct business
- If you have freestanding properties at multiple sites other than where you transact business, you must file a separate, single return for all your freestanding property located in the county
What to include in your TTP return
- Goods, general possessions, other articles of value (except certain vehicles)
- Equipment on some vehicles
- Inventory held for lease
- Personally owned property used in the business
- Fully depreciated items
What not to include
- Household goods
- Intangible personal property
- Most of your automobiles, trucks, and other licensed vehicles
- Any inventory that is for sale as part of your business
The $25,000 TPP exemption
If you own TPP at or below $25,000 in assessed value, you will be eligible for a property tax exemption (provided you file your TPP return on time). The waiver applies in all subsequent years that the value of the property stays at or below $25,000. By February 1st of each year, the property appraiser will notify TPP owners whose requirement for filing an annual return was waived in the previous year. However, if you received a filing waiver in the prior year and now own property worth more than $25,000 in assessed value, you must file a return on time, or you will be subject to penalties.
Property appraisers will also contact previously-exempt TTP owners if they believe that they have added new property or that their eligible property value has increased above the $25,000 exemption.
If a business has multiple owners, each TPP tax return is eligible for an exemption of up to $25,000 of assessed value. So, if the property appraiser has determined that your business’s property items have separate and distinct owners and each file a return, each owner may be eligible to claim the exemption.
What are the implications of failure to file or filing late?
If you fail to file or submit your TPP return late, you’ll be subject to penalties:
- Failure to file: A penalty of 2% of the total tax levied against the property for each year that you fail to file a return
- Filing late: A penalty of 5% of the total tax levied against the property covered by that return for each year, month, and part of a month that a return is late (amounting to not more than 25% of the total tax)
- Failure to list all TPP: A penalty of 15% of the tax attributable to the omitted property.
FSA can help with TTP returns
Get in touch to learn more about our Florida tangible property tax return filing and other tax preparation services.
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