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Is Equipment Personal Property, or Real Estate?

Red Baron

Red Baron

Active member
The appraisal district (Lubbock, Tx.) rejected my rendition stating that the $150,000 in equipment should be considered real estate. They say it's personal property because it would require major damage to the property to remove it. I was always told that if it's bolted down, it's real estate.

Your thoughts?
 
I am pretty sure it depends on local or state real estate regulations but I know one case in Georgia where it was considered personal property.
 
In WA equipment that makes the building what it is, is real estate, so whats in the eq room and the bays are part of the building/RE, vacs and signs etc are personal property.
 
Red Baron said:
The appraisal district (Lubbock, Tx.) rejected my rendition stating that the $150,000 in equipment should be considered real estate. They say it's personal property because it would require major damage to the property to remove it. I was always told that if it's bolted down, it's real estate.

Your thoughts?
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You may need some help or go to a higher up. There are different types of "Equipment" or "Fixtures" and "Trade Fixtures".

Some items may cause major damage and some may not. Car wash equipment is typicaly a trade fixture or equipment and simply because it is bolted to the floor or wall does not make it real estate. Other items become an integral part of the building such as certain wiring and Plumbing.

Their claim that loosening the bolts of something bolted to the floor to keep it from moving around causeing damage is basicaly beaurocrat BS.

One test is whethher the equipment services the building i.e heat, light, etc or perform a function which has nothing to do with keeping the building in proper repair.
 
In Florida the equipment is treated as personal property. Although they are taxed at the same rate, their valuation is determined in different ways. Equipment is initially valued at purchase price and declines yearly depending on its useful life. Land and building is valued by the county property appraiser.
 
Building insurance people also have a way of defining equipment or real estate that also has bearing on rates. I wonder if the assessor would or could use those definitions or vice versa.
 
In Maryland, it is personal property. I wonder what F'n idiot came up with the idea to tax property you already own, on a yearly basis.

I learned my lesson. Any improvements I make now I post as building improvements; therefore not taxable as personal property.
 
You and I are the only source of revenue, you have it, they need it, dud!!

One time, I told a friend that owned "something", he laughed and said, "Wrong, you are just renting it from the bank and the government"
 
Something else to consider if it's taxed as personal property is that it depreciates in value over time.
 
Property

If you're amazed at paying annual personal property tax on items you own, try this one on:

I used to rent an aircraft hangar from the County. Then I got the "owner's property tax bill." I complained and explained that I didn't own the hangar, I was just renting it. I was told: "you own the right to rent it, so pay up."

So I paid every year and finally said screw it and bought a hangar in another County.

In California, there is "real property" (real estate), "personal property", and trade fixtures. Trade fixtures are personal property that are affixed to real property and which would be substantially difficult or damaging to remove.
 
MEP001 said:
Our equipment is taxed separately from the building and land.
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I'm in Texas also and yours is the only wash I've heard that is done this way. All mine are taxed with the equipment as part of the value. I've tried fighting the appraisal district but got no where.



Red, I believe I am going to be in your neck of the woods in a couple of months as my high school senior wants to visit Texas Tech over spring break. Do you mind if I rattle your cage and see your place when I'm in town?
 
In Alabama its personal property. MEP is right, its better to be taxed as personal property. We are supposed to provide aquisition costs, and then it is depreciated over a 7 yr period until it gets to a salvage value of 5%. Real property is supposed to be based on market value, but while improvements depreciate, overall property values tend to increase (except for the last 2 yrs). Equipment can be removed and replaced with minimal damage to the the real property so for almost everybody in the private sector it would be considered personal property.
 
Ghetto Wash said:
I'm in Texas also and yours is the only wash I've heard that is done this way. All mine are taxed with the equipment as part of the value. I've tried fighting the appraisal district but got no where.



Red, I believe I am going to be in your neck of the woods in a couple of months as my high school senior wants to visit Texas Tech over spring break. Do you mind if I rattle your cage and see your place when I'm in town?
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Ghetto,

Stop by anytime, I'll give you the grand tour of Idalou...it takes about 2 minutes. :-) My cell number is on my website.
 
Because each state is different, what advantage is it for you to have the equipment be "real" property rather that tangible personal property? Are the taxes different? Maybe there is something that I could use in Florida?
 
OK, evidently no good way around that. Generally speaking, at $135,000 for a 6/1 (3 year old D&S 5000, plus 16 year old SS equip), have they value the "personal property" too high?
 
If you itemize your equipment from the original equipment cost. What does your accountant keep it on the books for? How does your taxing district assign depreciation schedules for car wash equipment? We have to keep two sets of equipment schedules, one for the IRS, and one for the property appraiser.

Every year we challenge the tax collector, you never know what will happen in front of the Value adjustment board.
 
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