Tom, Your reply is the the info I was looking for. Thanks for your reply. I do believe you are correct but I'll double-check with my county and CPA. I've moved so many times around the country that I cant keep up! Just a note, we have been paying our property taxes by default because of our lessor passes it on to us. The reason I'm inquiring is in preparation for when our lease is paid off (early next year). With that said, I have an additional question: Do you pay property taxes on every screw, nut, & bolt? -RickG
On Tue, Nov 10, 2009 at 1:36 PM, Tom DeReggi <wirelessn...@rapiddsl.net>wrote: > Rick, > > No your assumption is not true. > > Property Tax is applied on "property". When you buy radio CPE it shows up > on your financials as "property", and if you TAX DEDUCT the cost of the > CPE, > which I sure hope you do for your benefit, you have claimed those purchases > as property. A Auditor isn;t going to go look for a single small purchase. > But I assure you CPEs, a line item which adds up to be a huge inaggregate > cost, they will immediately see that property and recognize whether that > property was declared, and property tax properly paid on it or not. As a > matter of fact some counties will check you federal returns, to find your > claimed deductions and depreciations, and automatically assess your > property > tax based on your Federal Tax Returns. > > SO.... IF your county charges "Property Tax" then your CPEs are "TAXABLE > PROPERTY" UNLESS your county specifically has passsed a law to "excemption" > radio equipment. Loudon County Virgina is one specific County that made > Wireless CPE exempt from property tax to foster local investment in > Broadband. I wish more counties were as insightful, because it was a very > effective program. Property Tax is NOT just for large real estate. Its > paid > on EVERY TANGIBLE ASSET you own. That include an office chair, a computer, > a > telephone, a router, a CPE, what ever it is that you own. > > Mike, Just because nobody has been commming around asking for Property Tax > on CPE does not make it not owed. Property Tax is self claimed, so the > government doesn't know you have that property until they decide to audit > you, or you tell them. But why do you pay any tax of any kind at all? After > all, if you aren't audited you wont have to pay it? Because you know when > you are audited, you'll be in big trouble if you didn't. The same applied > to > Property Tax. The burden is on the Property Owner to know the law and > properly report Tax, or it is illegal TAX Evading, if the owner does not > report it. > > Yes, I've fully qualified the above with attorneys and accountants. I > learned this the hard way. > I originally over paid my property taxes, because I didn't know the laws. > When I learned I over paid, I stopped reporting and paying Property tax. > I got audited by the county, and they decided to estimate my Property Tax > based on data reported on my income tax returns, which was about 10 times > more than I actually owed. > The way it work is, you pay everything the government claims, and then if > you protest the amounts and win, they'll send you a refund. > I made the mistake of fighting the process, and when I didn't pay the wrong > amounts, they simply immediately cancelled my corporate status, reported it > to credit agencies, and made it impossible for me to get a LOAN for over > 1.5 > years. I couldn't even renew my ARIN IP, until I got it cleared up. > > The reason you report Property Tax on CPE is so you can report the correct > amounts. The government does not have access to the fact to assess a > correct > amount and will always grossly over estimate. You should also include a > letter explaining anything that might look odd. > > This is the thing.... Property Tax is paid to the State that the property > is > located and installed in. So if you are a Pennsylvania business, and buy > equipment from California, and install the CPE into Maryland, you pay > Property Tax on that CPE to Maryland. The problem here is that most WISPs > dont track where they will install a CPE at the time they buy bulk CPE, so > there is usually not a good record of where to pay tax to. SO... IF you > buy > 100 CPEs and Pay Tax on 100 CPEs to your State, and then isntall 30 of > those > CPEs in another State, you owe that second State Property Tax for 30 CPEs. > This means that you are at risk of paying Tax TWICE, if you do not properly > track where property resides and break tax payments down appropriately to > match. > > This is one of the reasons I am against tracking an ISP's end user > locations. The States/Counties will then have a clear record to track how > many CPEs an ISP has in their County. > > To find out if you owe property tax, you need to look at county code. Dont > look for something to say that you have to pay tax on CPE, because it wont > be there. By default you are obligated to pay tax on EVERYTHING, unless an > excemption was given. So you are looking for an Excemption in the County > Tax > Code specifically for broadband investment. > If you cant find one, Contact your County and point them to the fine > example > that Loudon County Virginia has made to help make their County one of the > most advanced Broadband Counties in the Country, and ask them to follow in > their foot steps. > > It was funny, when I contacted my County about Property Tax and that I'd > likely be applying for a BTOP grant bringing in a large amount of new > property, the first thing they saw was Dollar signs, and it was inferred > they had no intentions of waiving the Property Tax. I found it extremely > hippocritical, that they'd not waive property tax to help private companies > invest in Broadband, but they were first in line to ask for $130 million in > Federal grants to help pay for Broadband. > > In Summary, PPT was a big problem for me when I OVER PAID my PPtaxes, and > the County actually owed me money. Just think how hard Tax Collectors will > come after you if they learn you have not paid anything at all, and > possibly > guilty of Tax evading? > > If you haven;t paid to date, I wouldn;t recommend going back in time and > bringing it up. But I'd highly recommend that you start reporting your > current year property purchases, and establishing a method to track what > would be owed on an on going basis. > > Tom DeReggi > RapidDSL & Wireless, Inc > IntAirNet- Fixed Wireless Broadband > > > ----- Original Message ----- > From: "RickG" <rgunder...@gmail.com> > To: "WISPA General List" <wireless@wispa.org> > Sent: Monday, November 09, 2009 10:58 PM > Subject: Re: [WISPA] CPE - who buys it? > > > > Also note that many leases pass the property taxes on to leasee, so you > > may > > not escape it that way either. But, that takes me to another question > > (more > > likely for my CPA). Doesnt property taxes only apply to higher dollar > > items > > that are usually on a depreciation scheule? In other words, if you are > > expensing CPE straight off the books, then property tax does not apply? > > -RickG > > > > On Mon, Nov 9, 2009 at 4:32 PM, Tom DeReggi > > <wirelessn...@rapiddsl.net>wrote: > > > >> It should be noted that if you buy CPE and keep ownership of CPE, you > are > >> likely open to pay Property Tax on it. In MD that equates to about 3% x > 4 > >> years. > >> As well if you own it, it is not covered by the customer's home owner > >> insurance if stolen or damaged by weather or other acts of god. (Not > that > >> Customers often are willing to claim it.) > >> > >> Having the customer own it, reduces a WISP's assets. > >> > >> Some lease types solve that problem, simply turning CPE into an expense. > >> After the three years, if you bought it from the Leasor, you could list > >> it > >> on your books at depreciated value (near nothing) tax free, and could > >> also > >> list it on your balance sheeet, showing the retail value and > depreceiated > >> value, as an Asset that still has a perceived value, even if > depreciated. > >> > >> Tom DeReggi > >> RapidDSL & Wireless, Inc > >> IntAirNet- Fixed Wireless Broadband > >> > >> > >> > >> > >> > -------------------------------------------------------------------------------- > >> WISPA Wants You! 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