Welcome to our community

Be a part of something great, join today!

Log in
  • Hey all, just changed over the backend after 15 years I figured time to give it a bit of an update, its probably gonna be a bit weird for most of you and i am sure there is a few bugs to work out but it should kinda work the same as before... hopefully :)

Los Angeles Camera Tax Bill: "Unsecured Property Tax Bill." WTF???

Gene Sung

Gene Sung

Well-known member
Joined
Nov 14, 2014
Messages
531
Reaction score
1
Points
0
Location
Los Angeles
I’m getting a Weapon Mag when it comes out so this Tax Bill from the city of Los Angeles worries me.

Just seeing if any of you owner / operators in LA have ever received this bill that I received in the mail a few weeks ago. It’s titled: “Unsecured Property Tax Bill,” and the city is billing for $140 annually for my Sony FS7 package. This seems like a desperate way for the city to generate tax dollars as I already paid the camera sales tax, pay $800 a year for my production business LLC and my income tax.

I’ve never received this type of bill before so it’s a bit of shock, and since my FS7 package is only worth $8K now (I sold some stuff), I hate to see how much the Unsecured Property Tax bill will be when I spend $45K on the Weapon (including accessories).

I talked my accountant and he says he received the same bill for office equipment he purchased so it’s legit.

I think the reason the city caught this was because I financed the FS7 ($12K) since Sony was offering 0% interest for 1 year and while I could have bought it upfront, I figured it would make things a bit easier over the year and no interest, so nothing to lose. The Finance company then reported the transaction to the city which is probably why I got the bill.

When I buy my Weapon, I will have to finance about 70% of the cost since it’s so pricey.

So yeah, have any of you LA guys get this bill lately? Any way around it? Seems really shady.
 
Guess the city really does want everyone to move out. I'm not sure I understand how this is legal. Sales Tax, yes. Income tax, yes. Business LLC, yep I pay that in MA too. Unsecured property tax, hmm...

Here's what I could dig up, but I'm not too familiar with CA tax laws.

Unsecured property tax is an ad-valorem (value based) property tax that is the liability of the person orentity assessed. The assessment of unsecured property taxes against an individual constitutes a personal lien against the owner of record, not a lien against the property.
The tax is assessed to the owner of record as of the lien date (January 1) and remains the responsibility of that owner of record regardless of any sale or transfer of the property. The lien date for unsecured property, as of 1997, is January 1. Prior to 1997, the lien date was March 1 (§2192).
Unsecured property tax is applied to personal property that is tangible or moveable and is not attached to real estate. All property that is not real property is considered personal property. The Assessor is responsible for making the distinction between secured property and unsecured property (§134).
Unsecured property also includes personal business property such as furniture, fixtures, machinery, and equipment. Luxury items such as boats, jet skis, and planes are also unsecured property.
Finally, improvements to land are considered unsecured property when they are not permanently attached to the land or they are made to land owned by another person or entity. For example, if a restaurant owner leases property from a property owner and renovates the property for his or her business by adding bathrooms and a kitchen, unsecured property taxes would be due on the increased value of the property as a result of the added bathroom and kitchen.
 
What particularly sucks about this kind of tax is the opportunism of the city to collect money from a citizen without offering any services related to it. Sort of like saying they want to collect a dollar from everyone with an even number in their license plate.

I think I'd be tempted to take delivery of my camera outside of LA. Any friends on Orange County?
 
Troy Bakewell said:
Time to move if you ask me.
Click to expand...

Even a business friendly state like Texas has a personal property tax on revenue producing equipment. You are obligated to file a rendition to the tax appraiser in your county. If you don't you have to pay a 10% of the tax bill penalty if discovered you didn't file a timely rendition.
 
I've never heard of such a thing.

How many states have such a tax? I'd bet fewer than 5 no?
 
Troy Bakewell said:
I've never heard of such a thing.

How many states have such a tax? I'd bet fewer than 5 no?
Click to expand...


Terry VerHaar said:
What particularly sucks about this kind of tax is the opportunism of the city to collect money from a citizen without offering any services related to it. Sort of like saying they want to collect a dollar from everyone with an even number in their license plate.

I think I'd be tempted to take delivery of my camera outside of LA. Any friends on Orange County?
Click to expand...


Unfortunately, I do not know of any community that does not have a tax on business property.
Just like any manufacturer with a thousand employees pays tax on the equipment they use to produce their product, tax assessors consider a single person using equipment to generate income (earn a living) to be subject to property tax on their equipment. Incorporated or not.
It is one of the methods they use to cover their annual budget (others include income from real estate and auto taxes, as well as state assistance). In most communities, the largest expense is education - which is immediately inequitable as a childless individual pays the same rate as someone with a half dozen kids. Never heard anyone say that the tax system is fair.
Let’s not forget about waste and graft - someone needs to pay for that (every one of us).

As filmmakers, we do use services such as fire and police protection, infrastructure (such as roads, street lights), sometimes public works or other department services.

Some parts of the country have exemptions on motion picture equipment and services but those are often state programs rebated to the community. Unfortunately, that translates to more paperwork.
In the case of my city, their requirements to file the property declaration ends in October, not the end of the year as most. That means I need to create two different depreciation schedules (one federal, one local). It takes a special type of sadist to come up with a system like that.

As far as claiming you disposed of a piece of gear, better have paperwork. They can audit your records - including invoices to customers (and share info between each other). Penalties can be quite severe.

Terry, it’s not where the equipment is purchased, it’s where the business that bought it has it’s legal address - where you file taxes from and have your primary location.
Never-the-less, choosing OC wouldn’t help anyhow: http://ocgov.com/gov/assessor/personalproperty/business

If anyone knows of a community that does not have a business property tax, please share!
 
California (city / county / state) lusts for money ... tax money. If you have applied for a city business license and/or if you have "written-off," depreciated, or deducted your production equipment on your income tax return, the various taxing agencies and authorities share information with each other in their never-ending quest to squeeze every possible tax dollar that they can from you.
 
Good news for me (and bad news as well) I haven't made any money from my cameras and won't until I sell a movie. I do so look forward to paying this tax. '-)
 
California is one of the worst states for small businesses. A quick google search and you will find California consistently on the bottom of the list for the past decade from both conservative and liberal media sources. Time, Forbes, SBE, and many more ranks California pretty badly and I'm not surprised. "The annual tax is prepaid for the privilege of doing business in California" (Form 568 Instructions), statements like that shows California government's attitude towards business and it's total bullshit. States are fortunate that there are entrepreneurs trying to start and run a business in their state. Businesses that can afford it pay CPAs to handle all the filings, but when you're just starting up or filing things yourself for whatever reason it's extremely complicated and overly convoluted. The instructions do not cover everything you need to fill out on the forms, some are not clear, and some contradict the FTB website information orr other instructions.

Even if you start a business on December 10th, you still have to pay the full $800 for that year and another $800 in a months time for the following year. The $800 may be nothing to many businesses, but it hurts those starting with next to nothing (think Jim with $300 starting Oakley) it certainly feels like paying protection money to some mafia; these taxes are nothing more than a racket. It does not cost $800 from every business to maintain a database, which is not even for the benefit of the business but for the people of the state. The $800 doesn't even go toward business affairs, it is added to the general funds for the state.

The biggest advantage California does have? A really strong and educated employee pool to choose from (even tho CA has one of the highest unemployment rates at the moment) and beautiful location with awesome weather. Except 29 palms, 29 palms sucks balls but at least its a great place to blow stuff up:-P

This is the only issue where I've seriously considered moving to Nevada or Texas... well... this and guns of course hehe.
 
Milan Spasic said:
Funny how people think that they don't have to contribute.
Click to expand...

Or feel like they have to over-contribute. Like George Tsai said in his post, these constant requirements make it difficult if not impossible for a small-business start-up or owner to get a foothold. Not a problem so much for a larger entity but onerous in time and treasure for the independent-leaning person.

Seems govts. of all ilk do not want to have to deal with the many... So they end up, perhaps without actually meaning to, favoring the larger few through policy.
 
Unsecured or personal property tax is not a new thing and is a thing in many states. Usually it's at the city or county level -- we have it where I'm at in CO. It varies somewhat from place to place and I would recommend consulting your CPA or tax advisor. Some things like computers, cameras, etc.. that depreciate rapidly are scheduled out differently and don't always apply. As they can often be viewed as short-term assets, tools, consumables, etc..
 
You must log in or register to reply here.
Back
Top