Tax deadline delay for business property may hurt schools, cities, assessor warns
State government proposals to delay the filing of business property tax statements could erode badly needed revenue for schools and other public agencies and intensify their coronavirus-linked problems, county assessors are warning.
Key state officials, including Gov. Gavin Newsom, are considering a proposal to extend the Thursday, May 7 deadline for businesses to file statements that estimate the value of the non-real-estate property they own, but county officials are alarmed that a delay could create severe financial problems for public agencies that already are reeling from the effects of the coronavirus.
The state’s Board of Equalization has pressed Newsom to grant the tax agency the emergency authority to extend the deadlines when the business tax statements are due and the deadlines by which counties must complete the annual process to create a tax roll for the new fiscal year.
“Taxpayers, particularly the thousands of businesses throughout the state that are now shut down, may not be able to file property statements” by the deadline, State Board of Equalization Chairman Antonio Vazquez wrote in a letter to the governor.
But a delay creates fresh problems for counties in California, giving assessors less time to process all of the business property statements that are pouring into their offices just ahead of this week’s traditional filing deadline.
Plenty of money is at stake. In Santa Clara County alone, the assessed value of the business property tax base is nearly $35 billion and generates $350 million in yearly revenue. In California, revenue from taxes on business property generates $3 billion in revenue, estimated Santa Clara County Assessor Lawrence Stone.
Public schools, special districts, cities, and county agencies are among the chief recipients of property tax revenue.
Equipment, computers, machinery, and fixtures that a business uses to operate are among the items that typically would be subject to these categories of taxes. Real estate such as a house, apartment complex, or commercial building wouldn’t be in this category.
For any business that doesn’t file a statement about the property it owns, the county assessor will have to make an educated guess about the value of the property so it can be entered onto the tax roll.
“If we guess too high, the company files an appeal, which is costly for the taxpayers and time-consuming for the county,” Stone said.
Case in point: Applied Materials filed a tax appeal in 2006 — that was finally resolved in 2020, according to Stone.
“If we guess low, the company says ‘thank you very much, you won’t hear from us’ and the public agencies lose out on that revenue,”