I am a home baker in Texas, operating under the Cottage Food laws. At the beginning of the year, I went ahead and filed a DBA with the county. Yesterday I received a letter from the appraisal district letting me know that I needed to complete a Business Personal Property Rendition of Taxable Property.
I am slightly confused as to what this includes. The stove? My mixer? Flour?
Also, is someone going to come knocking to verify what I do and don't have and what I'm using it for?
Does anyone have any insight on how all this goes? If so, I would sure appreciate some input here!
If it's like the personal property tax we have in Virginia it includes things like your pans and your mixers. Things that you use for the business. I'd call the tax office to see what they say though. it's always better to get it from the source.
And may I just say that the idea that I have to pay a tax on my cake pans is the dumbest thing I've ever heard.
I just declare that which I purchased exclusively for my business. So like....not much.... at least for a while.
My mixer (KitchenAid) was purchased and used for my family. I do not declare it as business property unless/until I buy a new one exclusively for business use. I go by the supplies/equipment line of the IRS 1040, schedule C forms (items that are not "one time" consumables).
HOWEVER--- that IS NOT what the TEXAS COUNTY tax man says (see FAQ clip below). So, as far as the tax man goes, I use a bowl and spoon. Frankly, I find the whole mess grossly unfair. Just because I start a new small home based business does not mean all of my family and personal baking things become taxable "business assets"....IMHO.
FAQs - Business Personal Property
What is Business Personal Property?
Business personal property is composed of Fixed assets and Inventory. Business personal property includes, but is not limited to, furniture, fixtures, equipment, tools, machinery, computers, copiers, motor vehicles, aircraft, watercraft, raw materials, goods in process, finished goods and/or those awaiting sale or distribution, and inventory held for sale on consignment. Please note: If you use your own personal tools, machinery, equipment, vehicles or any other item, gadget or thing to produce a product or provide a service and receive income, those items are included in the appraisal assessment.
Oh, and the answer to ..."The stove? My mixer? Flour? "... is YES, to all of the above.
flour= raw materials
in tn you pay tax on all that plus 'anything severed from the ground' so if i grew my own fruit to make fillings i'd have to pay tax on the strawberries & blackberries --
taxes always bite
Thank you, guys! I read about a gazillion articles yesterday and picked the brain of the guy who used to do my taxes, so I get it now. He said that most of the time people learn about this tax 1, 2, 3 years into being in business, so he was surprised I already had the head's up. Apparently the information exchange from the county clerk to the central appraisal office has improved considerably LOL.