Thanks for the explanation.I used to work for County Government in California and I was the Property Tax Accountant, so I hope you find this helpful.
The annual form you fill out every year is called a Business Property Statement and it lists all the property you own, possess, or control in the conduct of a business, profession, or trade. On this form, you list the year you acquired the property and the purchase amount. This information gets entered into a database (in this case at the County level) and those assets get assigned a class code for depreciation purposes. This is the basis for how the book value of each asset will be determined for each tax year.
The penalty someone mentioned is for late filing the statement. Typically, in CA it's 10% of the gross assessment. So, for example, someone who has $10,000 in business property can be penalized $1,000 for filing a late business property statement, increasing their total assessed amount to $11,000. Keep in mind, most tax rates are generally somewhere between 1 and 1.2%.
Unsecured property tax is for items that can be relocated and are not real estate. Hence, why it's called "unsecured" versus "secured" property taxes (property tax you pay for your residence).
Examples of items taxed on the Unsecured property tax roll include business property, aircraft, vessels, boats, and personal watercraft.
One caveat: The Assessor is required to assess all property owned/based in the county as of Jan 1st - called the "lien date". So, if you purchased an item anytime after Jan 1st, it escapes taxation for that year and the first year it will be taxed is the following year.
Just pay the damned taxes and don't loose your equipment and credit. there is a reason why section #9 of the contract is so ambiguous, it refers to "all taxes" All leased property (not homes) is considered yours for tax purposes.
Aztec has been ripping off people for a long time; trust me , they know how to write a contract.
next time don't lease with this companies. try and get yuor credit in good shape and get cash advances from credit cards at 0%Thanks for the explanation.
Since it's a lease, should I pay the property tax or Aztec financial?
I looked up the contract and here is section 9.
9. TAXES AND FEES. Lessee shall pay when due all taxes (including personal property tax, fines and penalties) and fees relating to this Lease or the Equipment. In the event Lessor pays any taxes or fees on Lessee’s behalf,
Lessee shall promptly repay to Lessor the amount, plus a processing fee. Lessee agrees to pay Lessor up to $600.00 on the date the first lease payment is due to cover the expense of originating this Lease. Furthermore,
Lessor acknowledges that the base rental payment shall be adjusted proportionately upward or downward to comply with the tax laws of the jurisdiction in which the Equipment is located. Lessee agrees to reimburse Lessor for
any amounts incurred by Lessor in connection with the enforcement of this Lease, including court costs and reasonable attorney fees.
I guess I will pay the property tax. I hope sharing my experience might help someone else who is considering leasing equipment.
I would appreciate if Aztec put property tax in the payment schedule before I signed the contract. I had no clue, to expect this extra cost...