No one enjoys paying property taxes on their leased equipment or otherwise. But, business owners do enjoy the impact that the equipment has on their productivity, efficiency and sales. If your company leases equipment, you may be wondering who’s responsible for paying the property taxes on it and if there is anything else you should know about the process. The following information is important for Global Financial & Leasing Services (GFLS) clients to know.
Who pays property tax on leased equipment?
The one whose name is on the agreement or as the owner of the business leasing the equipment is responsible for the property tax payments on the leased equipment.
However, the company you’re leasing from will be the middleman. For example, if you lease from GFLS, we receive the tax bill and pay it—and then you would reimburse us through a debit transfer from your bank account.
The reason that GFLS receives and pays for the bill directly is because we are the legal owner of the equipment being leased. This means that we’re responsible for reporting it to your local taxing jurisdictions and ensuring it’s paid on time, which brings us to the due date.
When are property taxes due?
Each state’s property tax due date is different, so it’s a good idea to verify the deadline in your state.
When GFLS receives the tax bill for the equipment you’re leasing, our team will send a copy of the bill to you at the address we have on record. We also will remind you that the tax amount will be deducted from your bank account.
Because we initially pay the property tax bill, you benefit from a little extra time. Having a few extra days to make that payment can make a big difference for a business owner and his or her cash flow. We also offer payment plans so that you don’t have to reimburse the entire bill to us at once—you can pay incrementally, which can reserve cash for your business.
Should my accountant be involved?
Sure! Although who pays property tax on leased equipment is clear, it’s important to many business owners for their accountant to be aware of and on the same page about all things financial.
As the property owners, we will set up, process, and post all property tax accounts and bills—so your business accountant won’t be doing this; we will. This cuts down on your accounting expenses because if you had to pay the property taxes directly, you would have to pay for your accountant’s time.
What other details will I be given?
When it comes to taxes, clarity and organization are key. That’s why we not only notify you about the property tax; we also verbally review the lease agreement with you so that there are no surprises about property taxes or otherwise.
Why is a responsible equipment leasing provider so important?
We know that your equipment is important for your business, and so is paying property taxes correctly and promptly on it. We take this responsibility very seriously, and we want you to know that we always pay on time.
At Global Financial & Leasing Services, we are happy to answer questions you may have about property tax on your leased equipment. Our goal is to make the tax-paying process as smooth and stress free as possible!