Commercial personal property is that family of items used for the production of income. This may be through the sale of items, the provision of a service, or the production of items to be sold. Everything from a hot dog cart to a nuclear power plant, along with all their components, constitutes commercial personal property.
Inventory items are those goods produced or held for sale in the normal course of business, with the intent of making profit thereon. The potential value of inventory lies in its ability to be exchanged for another asset, usually money. Inventory is valued for assessment purposes, according to Arkansas law, at its prior year average value. For more information please see the COMMERCIAL PERSONAL PROPERY ASSESSMENT INFORMATION GUIDE here .
Fixed assets are those items used in the course of business, but not held for sale. These include: furniture, fixtures, machinery, equipment, vehicles, tools, and any other non-inventory items. By definition, fixed assets are those items whose value is related to their usefulness and are assessed according to their value on a specific date, January 1. Unlike inventories, fixed assets suffer depreciation, a loss in value through use. For more information please see the COMMERCIAL PERSONAL PROPERTY ASSESSMENT INFORMATION GUIDE here.
Personal property in the possession of a business but belonging to someone else should be assessed to its true owner (the lessor when a lease exists). To facilitate this, a section is provided on the assessment form to list leased or borrowed property. It is necessary to provide the assessor with this information to prevent the assessment of such property to the business in possession of it. For more information please see the COMMERCIAL PERSONAL PROPERTY ASSESSMENT INFORMATION GUIDE here.
No automatic exemption from assessment applies to tangible personal property of businesses. In two instances, personalty may be subject to exemption, but all property should be listed with the assessor. The potential exemption applies to some inventory of manufacturers and to certain fixed assets. For more information please see the COMMERCIAL PERSONAL PROPERTY ASSESSMENT INFORMATION GUIDE here.
