Is that Big Ass Fan Personal or Real Property?

Guest Post by Dave LeVan.

BAF-Ind-WareHouse-aaron-co-pfx-1500x998
No, I’m not being purposefully crude by asking the question. Several of our customers at Advantax have proudly pointed out their Big Ass Fans on facility tours. Initially we thought it odd that they would be so excited about their fans, not to mention, so descriptive. Turns out the fans are made by the Big Ass Fan Company.  Big Ass Fans is a provider of industrial, commercial and residential fans. Some of your companies probably purchase the same fans and they are really… well, big. Perhaps you have them and didn’t even know it, or maybe you were just a little too uncomfortable to put the full name on your fixed asset listing.

Whether you use the full name on your fixed assets or just use “fan” isn’t really the issue. The real question is “Should that Big Ass Fan be included on your personal property return?” Or is it part of the real estate? Do best practices in property tax compliance require reporting of such items as personal property? Behind (no pun intended) these questions is the underlying issue of whether the fans are personal property or real property in the first place. Real property assets are usually not reported on the personal property return (with a few exceptions) so as not to double count them as both real and personal property. If the intended use of your fan is to provide cooling for equipment, it feels like personal property. If the intended use of your fan is to provide cooling to the facility and the people working in it, it feels like real property. Speaking of feeling, the next time you’re touring a facility and feel a cool breeze, look up. It might just be a Big Ass Fan.

 

Dave LeVan is the founder and CEO of Advantax Group, LLC.  Since its inception in 1994, Advantax has offered low-risk solutions for tax challenges including recouping past tax overpayments, minimizing future tax liabilities, and handling tax compliance. Their unique approach to problem solving has helped their client base grow to include some of the largest corporations in America.