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Everything you need to know about business property tax

You are responsible for certain taxes as a business owner. Business property tax is required if you have property you use to conduct business operations. You may be required to pay business personal property tax besides paying the business property tax on buildings and land. Learn how to calculate and pay property tax for businesses.

What is the business property tax?

The tax that a business owner must pay on its company-owned property is called business property tax. Your locality will determine how much tax your business property taxes. Most often, the county or city where the property is located determines how much property taxes you pay for your business. Taxes on business property are used to fund public safety and local schools as well as construction projects. 

The value of your land or other real estate will determine the business property tax rate. The value of your business property is determined by the local tax department. This determines how much annual property taxes you will have to pay. Property taxes may also be required when you buy or sell business property. Property taxes are required when you buy or sell a business. Depending on the length of time each person has owned the property, some localities divide the property tax among the buyers and sellers.

Personal property of businesses is exempt from tax

Your business’s personal property is any goods or services that your business uses to run its business. Here are some examples of business personal property – official furniture, computer and network systems, printers, telephones, tools, etc. Taxes on personal business property may be required depending on where you live. You may be required to pay an annual tax on personal property in addition to your business property tax. 

Calculating the business property tax

It can be complicated to calculate business property taxes because they vary by state, city, and county. Most often, your local authority will calculate the tax for you and mail you the assessment. There is no universal formula for calculating your business property tax bill. However, it can be calculated by multiplying the property tax rate and the assessed value. The property value of your property is usually a greater factor in your property tax bill. 

California uses four steps to calculate its property taxes. They also have different tax rates for different types. Here are the steps used to calculate property taxes – determining market value, calculating the assessed value, determine the transitional assessed value, and any exemptions to be applied. You can also contact your local tax office to get more information.

How to pay the property tax for your business

It is up to the city or county how and when you pay your business property taxes. The local tax authority will evaluate your property and send you the bill for the taxes owed. While most localities send property tax bills on an annual basis, some send them less frequently. Before you pay your bill, confirm that it is correct after you have received it. 

Contact your local tax office if your property tax bill appears to be incorrect. If you feel you are being charged too high, you can appeal to your local tax office. Pay your tax liability amount on the due date as indicated on your bill. You may be able to pay your property taxes electronically or by mail depending on where you live.


Yes, business property taxes are due based on where you live. You can deduct company property taxes as expenses. Publication 535 outlines the IRS guidelines for business expenses that you can deduct. The IRS also allows you to deduct personal property used in business for personal property tax.

Amanda Peterson: Amanda is an economist turned blogger who provides readers with an in-depth look at macroeconomic trends and their impact on businesses.