Property (ad valorem) taxes are taxes on real and/or business personal property. Real property includes land and improvements. Business personal property refers to items which are movable or not permanently fixed to the land.
The Revenue Commissioner's Office is responsible for determining property value which must, by law, be set according to "fair and reasonable market value."
In Alabama the collection of property taxes has been a source of revenue for state and local governments for many years. It is a major source of revenue for public education.
Real property generally includes land and permanently affixed improvements to the land. Code of Ala, 1975, Section 40-1-1.
Business Personal Property
Business Personal Property is generally defined as property not permanently affixed to or part of the realty. Generally, everything that is not real estate is considered business personal property. To differentiate between real property and business personal property, the Revenue Commissioner's Office must consider the manner in which property is attached to or secured at the location, and purpose for which the property is used.
Business Personal property has two categories:
Tangible Business Personal Property and Intangible Business Personal Property. Tangible Business Personal Property includes material items such as machinery and equipment, tools, furniture and fixtures, and numerous other items.
Intangible Business Personal Property includes an owners representation of rights to property (shares of stock, annuities, patents, market certificates, etc. ...). Intangible Business Personal Property is not taxable.
All persons, corporations, partnerships, including leasing companies, etc., owning business personal property and/or aircrafts, are subject to ad valorem tax. The property must be listed and assessed in the Revenue Commissioner's Office. Business Personal property is defined as all types of equipment, light and heavy, furniture and fixtures, computer or leasehold improvements used in the operation of a business. Failure to file a return by the third Monday in January will result in a 10% penalty and deliquent fees being added to the tax bill.