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Small businesses in the US must file and pay various taxes to different jurisdictions, including the federal, state, and local ones. In the city of Fairfax, business owners will require to file a business return for tangible business personal property tax.

Before we get to that, you should know the difference between the City of Fairfax and Fairfax County as they have different regulations regarding tangible business personal property tax.

 

An Overview of The City of Fairfax, Virginia

Fairfax City

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Fairfax City is an independent city in the Commonwealth of Virginia. With the lowest tax rates in the state, it has a strong potential to grow a business. The city also has invested around $40 million to improve its public infrastructures, such as reducing traffic flows, upgrading pedestrians, and revamping the city’s aesthetics. 

The investment has made it worth it to incite the local economy. At this time, there have been more than 4 million square feet of its area used as office spaces, and 3 million square feet of it have become retail spaces. 

 

The City of Fairfax vs. Fairfax County: What’s the Difference?

 

Geographically speaking, the city of Fairfax is still a part of Fairfax County. However, being an independent city, Fairfax has its own regulations for collecting taxes. Which means that it doesn’t abide by the County regulations.

 For instance, in Fairfax County, every business is subject to Fairfax County BUSINESS TANGIBLE PROPERTY TAX (BPP). Business owners should file one for every business property located within the country on January 1st of the year. However, this requirement doesn’t apply to businesses in Fairfax City. 

In this jurisdiction, what you have to file is Business Return for Tangible Personal Property, Machinery & Tools. This administration is regulated by the Commissioner of the Revenue, City of Fairfax.

 

What is Business Tangible Personal Property Tax?

business personal property tax

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A business tangible personal property refers to any physical items that a business owns and uses to operate. Things included in this category are furniture, computer hardware, machines, vehicles, and even small tools like pencils and staplers.

On the other hand, a business return means a statement of incomes and expenses of a business and other crucial information. Every business running in the City of Fairfax must pay the tax and file the report before May 1st. 

 

How to file Business Return for Tangible Personal Property, Machinery & Tools in Fairfax City, Virginia?

 

As a start, you need to fill out this form: Business Return of Tangible Personal Property, Machinery and Tools and Instructions. Along with the form, you also need to attach these supporting worksheets:

  1. Reports of all furniture, fixtures, and non-computer equipment (Part 1)
  2. Complete Reports of all computer equipment (Part 2)
  3. Reports of all leased personal properties owned (Part 3)

These worksheets must provide lists of all items owned on January 1st of the current year. You also need to include essential information such as the date and price of the purchase, the date and cost of the lease, and the lessor’s names and addresses. 

To make your report more accurate and complete, you can also list down all the business properties you have disposed of, including the information about the date and cost of the original purchase as well as the date of disposal.

Any submission of the form without necessary worksheets will not be acceptable. The Commissioner of Revenue will return the document to you, demanding you to complete it for resubmission. 

Be sure to complete your submission before May 1st, or else you will receive penalties for being late. If you send the file via mail, the commissioner will consider the postal postmark date as the submission date.

 

Computation of Business Tangible Personal Property Tax in Fairfax City

business personal property tax computation

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The tax you have to pay depends on the total property values assessed. As determined by the Commissioner of the Revenue, the tax rate for personal property is $4.13 per $100 from the total value. That said, if your business has $500 worth of personal properties, then you must pay $20.65 as tax. 

 

Who is Exempted from Taxation?

 

Almost every business owner requires to file their tax returns annually. But, there are a few groups of people who are exempt from this obligation. These include:

  • Members of the US military, either are active, on extended duty or do not legally reside in Virginia. Vehicles must be registered under the name of active military personnel. 
  • US congressmen, congresswomen, their spouses, and recognized foreign diplomats
  • Legal residences of another state who only park their vehicles in Fairfax City can also get an exemption to pay the city tax. To be eligible for this exemption, they must show evidence that they have paid the personal property tax on their state for the said vehicles.
  • Any businesses or institutions granted the special exemption by the City of Fairfax.

 

Reduced Personal Property Tax

 

Vehicles owned by disabled veterans are eligible to receive a special tax rate of only $0.01 per $100 of assessed value, much lower than the regular rate. Every disabled veteran requires to apply for this once.

Click this link to download the form to fill if you want to apply. However, you should know that even after being granted the reduced tax, you still must file the report annually before May 1st. 

 

How to Pay Business Personal Property Tax in Fairfax City, VA?

pay tax in Fairfax City VA

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For your convenience, The City of Fairfax offers various methods to pay your business personal property tax. Here are the options you can choose:

 

  • Online Payment

This option is the most popular amongst taxpayers due to its utmost convenience. Online payments available for this purpose are:

  • eCheck with $1.5 administrative charge
  • PayPal with a convenience fee
  • American Express
  • Visa
  • Master Card
  • Discover Cards
  • Debit and Forget It with $1.5 administrative charge

 

  • Via Mail

If you don’t want to go the online route, you can send it by mail as well. You can put your cash inside an envelope and have it delivered to the Treasurer’s Office, City Hall at 10455 Armstrong Street, Room 234, Fairfax, VA 22030. 

 

  • Dropbox Payment

There are two drop boxes available for paying your personal property taxes in Fairfax. One is in the circle drive on Armstrong street (next to the flagpoles), and the other one is across the entrance of George Mason Drive. 

The officers usually collect the money from dropbox twice a day. But when the deadline is near, they will empty the dropbox three times a day.

 

  • Via Phone

A secure phone payment system is also available, which is mostly helpful for elderly citizens. All you need to is contact the Treasurer’s office at 703-385-7900, extension #5. The officer will require you to mention your account number to process the transaction.

 

  • Pay in Person

Visiting the City Hall in-person to pay with cash is still possible. However, you need to make an appointment beforehand, or else they will not process your payment on the spot.

When issuing the payment, make sure it is addressed to Fairfax City instead of Fairfax County. As mentioned before, these two jurisdictions share different regulations about business personal property tax even though the city is still a part of the county. 

 

Giundiuz Osmanov

Giundiuz Osmanov is CEO and cofounder of NumberSquad, which automates bookkeeping, tax, and payroll processing for small businesses. He is an IRS Enrolled Agent and he has a Masters Degree in Business.

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