Business Property Filing Declarations

Procedure for Assessing Business Personal Property

In 2005, §137.122, RSMo was enacted into law to provide for uniform assessment of business personal property beginning in 2007 for property put into service after January 1, 2006. To establish the assessment under that section, the following process must be followed:

1. The original cost paid by the current owner, less freight, installation, and sales or use taxes and date of purchase is reported by the owner. Assessors may access sample forms at www.moassessorsassn.org/ in the "Assessor Use Only" section.
2. The Class Life and Recovery period is determined by using IRS Publication 946, Appendix B, Table B-1 & B-2 – Table of Class Lives and Recovery Periods (see cite to IRS internet source below).
3. The assessor applies the proper depreciation schedule found in §137.122.3, RSMo, by applying the years since acquisition and the appropriate recovery period to determine the appraised value.
4. The appraised value is multiplied by the statutory assessment level for personal property, 33 1/3% to establish the assessed value.

Example

To determine the 2007 value of a special mold used for manufacturing motor vehicles, bought in February 2006 for $100,000 the process would be as follows:

1. The cost and acquisition date is reported by the owner.
2. A recovery period of 3 years is determined (Asset Class 37.2) by using Publication 946.
3. Because the statute instructs that "the percentage shown for the first year shall be the percentage of the original cost used for January first of the year following the year of acquisition," a depreciation factor of 75% is used. In other words, by using the table in section 137.122.3, RSMo, and applying a Recovery Period 3 and using Year 1, 75permil; is indicated. Then multiply 75% by the cost, $100,000, for an appraised value of $75,000.
4. Multiply $75,000 by 33 1/3% (the assessment level) to determine an assessed value of $25,000.

Source: Missouri State Tax Commission