Business Tangible Personal Property Taxes

Per Arlington County Code § 27-11, all tangible personal property (with a few exceptions) that are used in a business in Arlington County is subject to Business Tangible Personal Property Tax.  Therefore, all Arlington County businesses must file a Business Tangible Personal Property Return each year on or before May 1st. Payments, if applicable, are due each year on or before September 5th.

The Arlington County Board sets the tax rate.  For 2021, the rate has been set at $5.00 per $100 of assessed value.

The Commissioner of Revenue does not grant filing extensions beyond the May 1 filing deadline. We recommend that if you don’t have all the required information, you should file the return and amend it later because if you don't file your Business Tangible Tax return by 11:59 p.m. on May 1, a late-filing penalty fee of 10 percent of the tax determined to be due will be incurred.

You should attach the following items to your tax return:

  • Your current federal depreciation schedule, if one is available
  • An itemized list of all property owned by your business (indicate only items located in Arlington County and separately identify programmable computer equipment)

The assessed value of your property is determined by a set percentage of the original capitalized cost of each item, based on the purchase year.

  • The section titled “Part 1: Owned Property” on the return lists these percentages. (Note: Original capitalized cost is the actual cost of the business tangible personal property before any allowance for depreciation. It includes all costs associated with putting an asset into use (such as sales tax, delivery and freight charges, installation, labor, etc.). If you expensed the property under IRS Code Section 179, its original capitalized cost is the amount that you expensed for federal tax purposes.)

Such items include, but are not limited to:

  • Furniture
  • Machinery
  • Tools
  • Programmable computer equipment (including all computer and peripheral equipment hardware and all operational software).

Some potential exemptions from Business Tangible Personal Property Tax:

  • Application software and inventory for resale are exempt.
  • Some of the property of manufacturers may be exempt.
  • The property of nonprofit entities is NOT generally exempt, though a few categories of nonprofit organizations may be exempt. The best course of action for nonprofit organizations is to contact the COR office for more information on exemptions.

If you ceased business after January 1, your business tangible tax won’t be prorated and you must file your return on or before the May 1 filing deadline.

  • Be sure to indicate on your return the exact date of your business cessation to avoid automatic assessment for taxes in subsequent years.

If you own fully depreciated or IRS-expensed tangible personal property, you still must report these items.

  • If the IRS doesn’t require you to file a depreciation schedule, attach a list of all your business personal property to the return and include the property’s purchase date and the original cost.

If you own personal property that you lease to others for their business use:

If you own personal property that you lease to others for their business use — under a private agreement that requires the lessee to pay any local tax assessments — you, as the property owner, must file a return and pay the tax assessment.

If you lease tangible personal property from others:

If you lease tangible personal property from others, you must report all property in your possession, including leased property, even if the lessor also reports them.

To report any over-the-road vehicles, such as cars, trucks and trailers:

You should not use your Business Tangible return to report any over-the-road vehicles, such as cars, trucks and trailers. Instead, you must report them as part of your Vehicle Personal Property Taxes. For more information, call 703-228-3135.

For More Information