Property Tax FAQs

Under the terms of the lease agreement, the lessee agreed to reimburse us for any such taxes paid on the leased equipment.

Each taxing jurisdiction has a different lien date or fiscal start date for the year. There are 4 different lien dates used by jurisdictions: January 1st, April 1st, July 1st and October 1st. We are required to report leased equipment owned on the jurisdiction’s lien date to the taxing authorities. The full tax for the […]

Under the terms of the lease, a lessee is reimbursing us for property taxes paid on the lessee’s behalf. Many states consider this reimbursement as a taxable gross receipt for sales tax purposes. In these instances, we are required to collect and remit sales tax on this taxable gross receipt.

A true-up is when we reconcile the estimated taxes paid by the lessee to the actual tax billed by the tax jurisdiction. If the lessee overpaid the taxes, they will receive a credit, via check. If the lessee underpaid, we will invoice the difference. This is standard practice with leasing companies.

The property tax true-up is the reconciliation of actual property taxes paid by us on the leased equipment against the tax estimate the lessee was billed by us for a given tax year. Most state and local jurisdictions’ in the United States have laws that require us to report leased personal property and pay taxes […]

We, as the owner of the leased equipment, is required to report all leased equipment, even if the equipment is leased by lessees in the government, church or non-profit sectors. Since we are not a tax-exempt entity and is the owner of the equipment, the lessee’s tax exemption does not pass to us. The tax […]

Other companies do charge their customers taxes usually by building the cost into the lease factor rate. We do not build property taxes into its lease rates. Instead, we break out the taxes as a separate line item on the lease invoice so that the lease payment is easier to understand.

The property tax bill we receive contains information on all leased equipment in a given jurisdiction as opposed to a bill for each piece of equipment or for each lease. To preserve the confidentiality of our lessees, we cannot send you a copy of the actual tax bill, however, we can send you a detailed […]

We use tax software that is used by many leasing companies to compute the tax estimate. The software takes the contract’s assessed (depreciated) value and then multiplies that value by the tax jurisdictions’ previous year’s tax rate. If we have an actual tax assessment on file for the equipment, the rate used is 90% of […]

Each jurisdiction that collects personal property taxes, taxes the owner of the equipment. We are the legal owner of the equipment under the lease agreement. Under the terms of the lease agreement, the lessee agreed to reimburse us for any such taxes paid on the leased equipment.

We, as the owner of the leased equipment, is required to report all leased equipment, even if the equipment is leased by lessees in the government, church or non-profit sectors. Since we are not a tax-exempt entity and is the owner of the equipment, the lessee’s tax exemption does not pass to us. The tax […]

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