The following summarizes the personal property that is taxable and must be listed in a Form of List. This summary is formatted by the type of business ownership, since the type of ownership affects which items will be taxed locally. Most corporations pay a corporate excise to the Commonwealth of Massachusetts on their furniture, fixtures, equipment and inventory so they are exempt from paying a personal property tax locally on these items.
Individuals, Partnerships, Associations, Trusts and limited Liability Companies filing federally as partnerships, undesignated entities or other non-corporate entities:
All are taxable on all tangible personal property except: motor vehicles and trailers subject to an excise, boats subject to an excise and non-commercial registered airplanes. Individuals are not taxable on the following additional items: household furniture and effects at the place of domicile, farm utensils and tools of a mechanic's trade. Some examples of taxable items would be:
A. Poles, underground conduits, wire and pipes.
Includes such items as the parking lot lights with their corresponding poles, wire etc, located in a parking lot owned by the business.
B. Machinery, includes manufacturing machinery, copying and reproduction equipment, typewriters computers and word processing equipment, appliances, and any other machines and mechanical devices.
C. Tools and Equipment. Includes business, or professional tools and equipment, including restaurant, laboratory and medical equipment. Examples of non taxable "tools of a mechanics trade" are the instruments of a plumber, carpenter, auto mechanic or other tradesman such as: wrenches, hammers and saws. Taxable tools are implements of a professional (doctor, dentist, lawyer or accountant) such as: medical instruments or dental drills.
D. Business Furniture and Fixtures. Includes business, professional, commercial or service fittings and furnishings (desks, tables, cabinets, display cases), rugs floor coverings and draperies, lamps specialized lease-hold improvements (restaurant fittings, modular walls, etc.) works of art and decorations, books and professional libraries and other fittings and effects.
E. Merchandise. Includes goods, wares, or any stock in trade in any store or other place of sale, in any warehouse or other place of storage, out on lease or consignment, etc. This could be represented by a retailers inventory (the shoes of a shoe store) or any finished goods or products that may be for sale or lease. These items may also include any work in progress such as a partially completed product (furniture being built, jewelry being made) and any materials or supplies used to produce a finished product (paint for a house painter).
F. Unregistered Motor Vehicles and Trailers
G. Other. Includes animals, forest products and all other tangible personal property not specifically exempt from taxation.
Mass. Business and Out-of-State Corporations, Limited Liability Companies filing federally as corporations and Mutual Insurance Holding Companies (excludes: utilities, certain insurance companies, certain banks, and mfg. Corps.)
Business corporations are taxable on poles, underground conduits, wires and pipes. They are also taxable on all "machinery used in the conduct of business "except:
1. Machines that are stock in trade. Inventory for sale such as copy machines
for sale by a copy machine distributor or inventory for lease such as a computer being leased by a computer company is not taxable.
2. Machinery used directly in the dry cleaning or laundering process; to refrigerate goods or to air condition premises. Sewing machines and a mechanical clothes rack are not directly used in the cleaning or laundering process and would be taxable even if owned by incorporated dry cleaners. Refrigerators or air conditioners used in an incorporated restaurant or a supermarket would be non taxable.
3. Machinery used directly in the purchasing, selling, accounting or
administrative function of the business. For example the vending machines, bill changers and cash registers are not taxable because they are used in a selling or purchasing function. Taxable are those machines providing entertainment, such as pinball machines, video games and juke boxes. Machines that are used specifically and primarily for accounting or administrative functions are not taxable. If the machine is used to provide a service or produce a product for sale, it is taxable. For example, a photocopier owned by an incorporated restaurant and used in an administrative or accounting function in keeping the internal records for the business would not be taxable. Conversely, the photocopier of an incorporated copying business is used to generate a service, copying for a fee, and is taxable
Mass. And Out-of-State Manufacturing Corporations and Limited Liability Companies filing federally as corporations classified as "Manufacturing" by the Department of Revenue.
Businesses that are classified by the Department of Revenue as Manufacturing Corporations are taxable on: poles, underground conduits, wires and pipes.
Businesses are not automatically classified as manufacturers. If a business is seeking classification as a manufacturer, it must be incorporated and apply to the Commissioner of Revenue.