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Arkansas property tax due date is Monday, October 16, 2017. Here are a few tips and other things to keep in mind as you try to figure out what might get taxed as personal, real, pet, livestock, small business, gig or hobby?

Arkansas property tax? What’s being taxed?

Arkansas property tax is divided into two categories, real property and personal property. Let’s take a quick look at both.

Real property applies to all tangible property that has a stationary location. Examples include your home, mobile homes, land, and improvements made to the land, such as the addition of a barn.

Generally, personal property tax is applied to all property that is tangible and movable and subject to ownership, except money. In 1992, Amendment 71 excluded items of household furniture, furnishings, clothing, appliances and other personal property used within a home.

Did you know?  Prior to 1992, many people actually assessed their home furnishings as “parent’s old furniture” and rarely would anyone admit to owning a color TV, which was taxed at a much higher rate than the old black and whites.

However, any furnishings or household equipment held in the home to be rented or used in a professional manner could be subject to property tax.

Cars, boats, recreational vehicles, motor homes, houseboats, travel trailers, motorcycles, and even livestock are examples of taxable personal property. Sometimes it’s difficult to determine, by looking anyway, whether something is real or personal. Is this a travel trailer, camper or small mobile home?

Wait a minute. What’s that about livestock? Yes, absolutely could be taxable. And this could also include all farm construction, manufacturing and other equipment classified as personal property for taxation purposes.

So, what exactly does Arkansas consider livestock? The State of Arkansas Personal Property Assessment Manual, 2017 Edition, Section IV gives a detailed listing of the types of livestock that are considered personal property, along with values for uses.

How is Arkansas property tax money used?

Income from real and property tax is an important revenue source of counties and cities. Revenue generated by the property tax is used to finance education, roads, hospitals, libraries, public safety, and for the general operation of county and city governments. Commercial and industrial establishments, utilities and farms, as well as homeowners and individuals who own property are responsible for paying taxes every year.

How is your Arkansas property tax rate determined?

Every year, Arkansans are required to assess their property by May 31st. Your property’s assessed value and tax rates are based on your property address. Bills are sent out per your assessment, and your Arkansas property tax is due by October 15th of the following year. Individual tax bills are calculated by multiplying the total assessment value by the current millage rate. A mill is equal to 1/1000, or one tenth of a percent. So if your tax rate is 30 mills and your assessed value is $20,000, your Arkansas property tax bill would be $600. That’s $20,000 x (30/1000). The millage rates in Arkansas vary depending on county, city and school district.

When is your Arkansas property tax due?

Normally, the deadline to pay your Arkansas property tax is October 15. However, this year, the 15th falls on a Sunday, so the deadline has been extended through Monday, October 16, 2017.

Anything else? Always.

There may also be some tax law changes by the IRS to add to the confusion as to whether you do or don’t owe Arkansas property tax on something. The issue can get especially tricky if you raise exotic birds, sell puppies a couple of times a year or rent out your cabin on the lake when you’re not using it. What about the alpaca tax loophole? Where does that stand relative to personal property?

These are things you should discuss with us to ensure your real and personal property taxes are calculated correctly.

What’s the Bottom Line?

Arkansas property tax is a fact of life. But, it doesn’t have to be a source of stress or confusion. As your CPA and tax professional, we’re here to help.

Schedule an appointment. We’ll review your real and personal property tax and make sure everything’s in order before the October 16th deadline. That’s what we do.

Contact Melanie Radcliff CPA, Inc.

Call 479.478.6831 or send us an email.

You may also find these topics useful:

Get a jump start on the IRS with these 6 tips

What do your federal taxes pay for?

 

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