Businesses are required to itemize and report all assets used in the operation of their business every year. Filers use the Property Schedule Form 706-A or a reasonable substitute. The asset filing must be submitted to the Assessing Office no later than April 15th each year in order to avoid any growth factors. Businesses can apply for a filing extension if they require more time.
Some assets may be exempt but still need to be reported. These are reported separately on the BETE application form. Each year a business must reapply for the BETE exemption on all eligible items.
We send a packet to all known businesses every March. Included in the packet will be the “706-A form” or the property schedule form. By returning a complete and accurate list, the requirement to furnish the assessor with a “true and perfect list” is satisfied.
Click on the left hand menu item "Personal Property Forms" for versions of the 706-A form, Instructions, a sample filing, and other optional personal property forms.
Note: “Form 706-A” is a direct reference to the statute which requires taxpayers to list property. If you do not file, you may lose your right to an appeal.
Common personal property filing errors:
1) Not filing. This is the biggest error a business can make. If you do not file, we have no way of knowing what your assets are. We may assume that your assets are comparable to a similar business and we will estimate your total assets. For every year you do not file - we will also automatically add what is called a “growth factor”. Over time – these growth factors add up. After years of not filing the assessed value based on growth factors could actually exceed the true value of your assets. As soon as a complete return is filed, all growth factors are removed. We find that non-compliant filers with years of built-up growth factors often have their taxes reduced dramatically once they submit an actual return.
2) Including real property, repairs, shipping and taxes. Only personal property is required to be reported on the asset list and BETE application. The assessing office processes a lot of returns that include items that do not need to be submitted. We routinely omit items that have been incorrectly submitted, such as build-out (construction costs), interest, shipping costs, etc. Often some of these reported assets are not defined clearly and we may or may not be certain what these items are. We try to err on the side of the property owner, but it is incumbent on the filer to clearly report their assets. We are not asking you to report more than you need to.
3) Illegible returns. If we cannot read your return, we could be left to interpret what the items are. We will try to reach you for clarification when possible but this consumes your time and ours.
4) Incorrect or no age of asset reported. In order to depreciate your assets, we must know the age of each item. For tangible items of property that were gifted, you may estimate the age if unknown. Note the dates the items were put in service.
5) Omitting signs. Business signs are deemed to be personal property and must be included in the filing. These fall under the category of furniture and fixtures. When known to exist, the assessing office will add signs to the asset list if not reported. If your signs belong to another party, so state.
6) BETE assets listed on the 706-A form or vice versa. If your assets are BETE eligible, these exempt items should not be reported on the 706-A form. Use the BETE application to report your BETE eligible assets. If we deemed your assets not eligible, we will add them to your 706-A asset filing.
7) Only provide a list of additions or disposals. If you would like to submit a disposal or addition list, please do. However these may not be submitted in-lieu of a full asset list; a complete asset list is always required. Please do not comingle disposed items with the full asset list.
8) Reporting negative assets. If an asset has been disposed of, its value is $0. Some filers mistakenly report disposed items as negative assets (e.g report a disposed chair as -$50.) First, disposed assets do not need to be reported with the complete asset list. Second, negative assets misrepresent the total value and should not be used.
9) Report depreciated costs. Our office will depreciate the items on your asset list when we process the return (see the table on the form). Please do not submit a list with depreciated cost/value. Always report the original cost of the asset.
10) Assuming that the 706-A form or BETE application only has to be submitted once. We’ve noted that some filers believe that they are only required to file the form one time and expect to be compliant or receive the BETE exemption forever thereafter. A completed and signed 706-A form and BETE application (if eligible) is required every year.
Exemption or Reimbursement? The State of Maine has two personal property tax relief programs available, they are:
1) The Business Equipment Tax Exemption Program, aka “BETE” or “Betty”. This is a 100% exemption program for eligible assets. Note: Due to recently enacted legislation, businesses engaged in the sale of retail services will now generally be eligible to participate in the BETE program for qualifying property placed in service after April 1, 2007 and will be ineligible for the BETR program. BETE Applies only to certain qualifying items assessed and taxed for the first time in 2008 (i.e. items acquired after April 1, 2007).
2) The Business Equipment Tax Reimbursement Program, aka “BETR” or “Better”. BETR is a tax refund program for qualifying businesses/assets. BETR Applies to assets that were placed in service after April 1, 1995, and that are not eligible for BETE.
For specific details about the available State of Maine tax relief programs, here is a link to Maine Revenue Services webite:
Business Equipment Tax Programs | Maine Revenue Services
If you have any questions or require additional assistance, please contact our office: (207) 333-6601 Ask for Joe or Karen in Assessing.