Business Personal Property

Business personal property refers to items used in a business that are movable or not permanently fixed to the land. All persons, corporations, or partnerships owning business personal property, aircraft, or commercial mobile/portable units are subject to ad valorem tax.

Those owning such property must list and assess it in the Revenue Commission Office between October 1 and December 31 each year. The list must include all property, with acquisition dates and costs.

Failure to assess by the third Monday in January will result in a 10% penalty and fees, which will be added to each business personal property tax bill. All property is appraised by the County Revenue Commissioner, based on cost new with an allowance for depreciation.

A copy of the depreciation schedule from your Alabama or Federal income tax return may be accepted as your business personal property listing, provided it includes all property owned on the October 1 lien date. Expensed items not capitalized must also be added. Each entry should list acquisition date and cost, including items with zero book value still owned as of October 1.

Property grouped on a depreciation schedule must be itemized by category (furniture, equipment, machinery, etc.) to meet reporting requirements.

Personal property includes two categories:

• Intangible personal property – items representing ownership rights, such as stocks, annuities, patents, or certificates. These are not taxable in Alabama.
• Tangible personal property – physical items such as machinery, tools, furniture, fixtures, and similar assets. Tangible personal property is taxable for Alabama business property purposes. Aircraft, avionics, and vehicle “add-on” equipment are also taxable.

Business personal property is considered Class II property and is taxed at 20% of market value. Market value × 20% = assessed value, which is then multiplied by the applicable millage rate to determine the tax due.

Alabama is a situs state for taxability — if property is located in Alabama on October 1, it is taxable unless specifically exempted. For questions, call the Alabama Department of Revenue at (334) 242-1525.

For full regulations, refer to the Alabama Department of Revenue Administrative Rules or Title 40, Chapters 2 and 7 .