Business Taxes

Fairfax County, Virginia

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Young Tarry,
Division Director

Understanding Business Tangible Property and Vehicle Taxes

Business Tangible Property and Vehicles

Tangible personal property, as defined by state code, is all personal property not otherwise classified as intangible personal property, merchants’ capital, or as short-term rental property (Code of Virginia, § 58.1-3500). In general, tangible personal property is a moveable item that is real, material, substantive, and not permanently affixed to any real property.

Business tangible property includes property owned by the business, property owned personally and used in the business on a full- or part-time basis, property received as a gift, property that is leased or rented, and property that is fully depreciated or expensed for federal tax purposes. Examples of business tangible property include furniture, fixtures, computer equipment, heavy equipment, and vehicles. In addition, machinery and tools (M&T) used in manufacturing, winery, mining, water well drilling, processing or reprocessing, radio or television broadcasting, dairy, dry cleaning, or laundry business are also subject to local taxation (Code of Virginia, § 58.1-3703).

When and How to File

Business furniture and fixtures, machinery and tools, and computer equipment that are located in Fairfax County, the towns of Herndon, Vienna or Clifton as of January 1 each year must be declared on county tax forms. The filing deadline is May 1. Late filing penalties may be assessed for renewals submitted after May 1. If the filing deadline falls on a Saturday, Sunday, or county holiday, the deadline is the following business day.

Businesses who filed with the Department of Tax Administration (DTA) in the previous year will receive an application form in the mail in January. First time applicants may download the Business Return of Tangible Personal Property and Machinery and Tools from our website.

In addition, business vehicles must also be reported. Business vehicles are assessed and taxed like any other vehicle in the county, except that they are not eligible to receive the state’s Personal Property Tax Relief Act subsidy that is available for personal use vehicles. Refer to our Understanding Vehicle Taxes page for more information about vehicle taxes.
 

Where to File

Mail your Business Tangible Personal Property Returns and supporting documentation by May 1 to:

County of Fairfax
Department of Tax Administration
PO Box 529
Southampton, PA 18966-0529

 

Tax Basis for Business Tangible Property

Tax on business tangible property (except vehicles) is not prorated. If the property is not in the county on January 1, then no taxes are owed for that year. Conversely, if the property is in the county as of January 1 but is disposed of during the year, then tax is still owed for the entire year. Assessed value of all business tangible property (except vehicles) is determined by a set percentage (based on the purchase year) of the original capitalized cost or the cost that would have been capitalized if the expense deduction in lieu of depreciation was elected under § 179 of the Internal Revenue Code. Original capitalized cost is the actual cost of the business tangible 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.).

Most business vehicles are assessed based on the January edition of the J.D. Power Associates Valuation Services Used Car Guide. For trucks with a gross weight of over 14,000 pounds, the value is determined by the percentage of cost and the year it was purchased. Taxicabs are valued at 50% of the average loan value. The vehicle tax is prorated for the portion of the year that the vehicle is located in the County.

Business Personal Property (except vehicles, computer equipment, and machinery & tools)

Depreciation Schedule

Most business tangible property (except vehicles, computer equipment, and machinery & tools) will assess property starting at 80% of its original cost in the first year of ownership, declining 10% each year, with the minimum assessed value reduced to 20%, as shown below.

Business Personal Property (except vehicles, computer equipment, and M&T)
Year of Ownership Depreciation Rate
Year 1 80%
Year 2 70%
Year 3 60%
Year 4 50%
Year 5  40%
Year 6 30%
Year 7 & Prior 20%

 

Tax Rate and Calculation Example

The current tax rate for Business Personal Property (except M&T) is $4.57 per $100 of assessed value.  

Year of Ownership Original Cost   Depreciation Rate Assessed Value
Year 1 $10,000 x 80% $8,000
Year 2 $7,000 x 70% $4,900
Year 3 $5,000 x 60% $3,000
Year 4 $20,000 x 50% $10,000
Year 5 $8,000 x 40% $3,200
Year 6 $25,000 x 30% $7,500
Year 7 & Prior $120,000 x 20% $24,000
      Total Assessed Value  $60,600
     

Total Assessed Value  x Tax Rate

= $60,600 x ($4.57/100)

$2,769.42
      Annual Tax Amount $2,769.42

 

Computer Equipment

Depreciation Schedule

Computer equipment is assessed starting at 50% of its original cost in the first year of ownership, declining at varying percentages each year, with the minimum assessed value reduced to 2%, as shown below.  

Computer Equipment
Year of Ownership Depreciation Rate
Year 1 50%
Year 2 35%
Year 3 20%
Year 4 10%
Year 5 & Prior 2%

Tax Rate and Calculation Example

 The current tax rate for Computer Equipment is $4.57 per $100 of assessed value. 

Year of Ownership Original Cost   Depreciation Rate Assessed Value
Year 1 $10,000 x 50% $5,000
Year 2 $7,000 x 35% $2,450
Year 3 $5,000 x 20% $1,000
Year 4 $20,000 x 10% $2,000
Year 5 & Prior $8,000 x 2% $160
      Total Assessed Value  $10,610
     

Total Assessed Value  x Tax Rate

= $10,610 x ($4.57/100)

$484.88
      Annual Tax Amount $484.88

Machinery & Tools

Depreciation Schedule

Retroactive to January 1, 2022, the M&T depreciation schedule will assess equipment starting at 50% of its original cost in the first year of ownership, declining 10% each year, with the minimum assessed value reduced to 10%, as shown below.  

Machinery & Tools
Prior Schedule   New Schedule  
Year of Ownership Depreciation Rate Year of Ownership Depreciation Rate
Year 1 80% Year 1 50%
Year 2 70% Year 2 40%
Year 3 60% Year 3 30%
Year 4 50% Year 4 20%
Year 5 40% Year 5 & Prior 10%
Year 6 30% --- ---
Year 7 & Prior 20% --- ---

Tax Rate and Calculation Example

Board of Supervisors' approved a Manufacturing and Tools (M&T) tax rate reduction from $4.57 to $2 per $100 of assessed value to be applied for Calendar Tax Year 2022 (Fiscal Year 2023).  

Year of Ownership Original Cost   Depreciation Rate Assessed Value
Year 1 $10,000 x 50% $5,000
Year 2 $7,000 x 40% $2,800
Year 3 $5,000 x 30% $1,500
Year 4 $20,000 x 20% $4,000
Year 5 & Prior $8,000 x 10% $800
      Total Assessed Value  $14,100
     

Total Assessed Value  x Tax Rate

= $14,100 x ($2.00/100)

$282.00
      Annual Tax Amount $282.00

Payments

You can pay your business tangible property taxes on your furniture, equipment, computers, machinery, tools, and business vehicles online. The due date for payment of business tangible property is October 5. The exceptions are business vehicles purchased or moved into the county on or after July 1, which have a due date of February 15 the following year. If the payment due date falls on a Saturday, Sunday, or county holiday, the due date is the following business day.

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