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Personal Property Taxation of Leased Motor Vehicles DaimlerChrysler Services Sheryl L. Flynn, Senior Manager
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Personal Property Taxation of Leased Motor Vehicles · Personal Property Taxation of Leased Motor Vehicles ... determine tax assessments based on motor vehicle ... maintenance, repair

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Page 1: Personal Property Taxation of Leased Motor Vehicles · Personal Property Taxation of Leased Motor Vehicles ... determine tax assessments based on motor vehicle ... maintenance, repair

Personal Property Taxation of Leased Motor Vehicles

DaimlerChrysler Services Sheryl L. Flynn, Senior Manager

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There are 13 States which Impose Personal Property Tax on Leased Motor Vehicles

Arkansas

Connecticut

Kentucky

Louisiana – Orleans Parish only

Massachusetts

Missouri

North Carolina

Rhode Island

South Carolina

Tennessee

Texas

Virginia

West Virginia

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Methods of Assessing

Taxing jurisdictions employ one of two methods for determining which assets to assess. These two methods are Rendition filing or at Registration.

Rendition – States that employ the rendition method require that the taxpayer provide a tax return listing all assets located within their taxing jurisdiction on a given date. These are generally required to be filed two to three months following the assessment date. The states that are rendition states are as follows:

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Rendition States

Arkansas

Louisiana – Orleans Parish - only

Missouri

Tennessee – commercial vehicles only

Texas

Virginia

West Virginia

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Registration States

Registration states that employ this methodology determine tax assessments based on motor vehicle registration information obtained by the department of motor vehicles. These states are as follows:Connecticut

Kentucky

Louisiana * – Orleans Parish - only

Massachusetts

North Carolina

Rhode Island

South Carolina

Virginia

* Is technically a rendition state. However, Orleans Parish uses registration information to generate their tax bills

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Taxing jurisdictions employ various methods of determining a vehicle value. These methods can vary from taxing jurisdiction to taxing jurisdiction within the same state.

Tax bills can either be issued on an asset-by-asset basis or consolidated .

When our office receives tax bills we verify that the assessed value is within +/- 10% of our rendered value. If we disagree with the value assessed, we will dispute it with the taxing jurisdiction .

Billing and Assessment

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Billing and Assessment - Cont.

We also check to ensure that we are being billed for assets that are currently being leased. If we determine that we have received a tax bill on a terminated account we have a separate process based upon the state.

Certain states will withhold vehicle registrations if you have delinquencies. For these states we pay the tax bill and file for an abatement after the fact (e.g., CT – Some MA jurisdictions are starting to get aggressive, also.).

Other states will allow us to not pay the bill and request that it be abated so long as sufficient documentation is provided to support the abatement.

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Abatements

What is an abatement? An abatement is a process that allows a company to have a personal property tax bill adjusted by the appropriate taxing authority based upon a change in status.

The States that regularly allow for abatements are: Connecticut, Massachusetts, North Carolina, and Virginia.

Kentucky, Rhode Island and South Carolina will occasionally grant abatements.

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Abatement Filing Procedures

Each state has their own procedures for processing abatements.

Connecticut requires that the vehicle plate receipt and the bill of sale must be in the same year. Otherwise, they will abate based upon the most recent date.

Most jurisdictions within Connecticut will process an abatement with a letter from the leasing company and the bill of sale and plate receipt. However, the cities of Stamford and South Windsor require a specific form be filed.

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Abatement Filing Procedures

If you do not have the plate receipt, you can file form E-159 to report the plate lost or stolen. The fee for a lost plate is $20.00.

There are a group of lessors that are working with the State of CT to implement a lost plate request process through the internet to eliminate the $20.00 fee or at least minimize it.

Massachusetts requires that the vehicle plate receipt and the bill of sale must be in the same year. Otherwise, they will abate based upon the most recent date. Each request must be filed on State tax form 126. This form can be found at http://www dls state ma us/ptb/faq/faq5 htm

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Abatement Filing Procedures - Cont.

The Massachusetts form for reporting a lost plate is Form C19. The fee for processing this form is $5.00.

North Carolina requires that the vehicle plate receipt and the bill of sale must be in the same year. Otherwise, they will abate based upon the most recent date.

The North Carolina form for removal of registered vehicle from vehicle registration files is MVR-46F.

Virginia – not all jurisdictions in Virginia pro-rate. Virginia grants an abatement based upon when the vehicle was sold and not based upon the plate cancellation.

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Abatement Deadlines

Connecticut – Two years from the assessment year

Massachusetts – One year from the assessment year

North Carolina – One year from the assessment year

Virginia – Various

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We are currently in the process of implementing registration termination procedures.

These procedures vary by state and are necessary to discontinue personal property tax liabilities.

Our goal is to minimize the number of abatements required to be filed.

We also expect that our exposure to vicarious liability suits will be minimized.

Registration Termination Procedures

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In 2003 the ACVL conducted a study of motor vehicle lessors and determined that over 6.6 billion dollars in claims had been filed against lessors in the State of New York alone.

Additionally, we expect to reduce the number of parking tickets that we are being held liable for. Currently, there are many jurisdictions that hold the lessor liable for parking tickets. By terminating the lease in a timely manner, our liability will be limited.

Registration Termination Procedures - Cont.

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We file over 1000 renditions for two legal entities.

We pay property tax bills on over 100,000 leased motor vehicles.

Our Property Tax Staff consists of five individuals.

We have recently restructured our tax department to include a separate department that is specifically trained to assist in tax related customer service.

DaimlerChrysler Services Personal Property Tax Compliance Process

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DaimlerChrysler Services Personal Property Tax Compliance Process - Cont.

Oftentimes, the customer’s question is as simple as a request for a copy of a property tax bill.

However, the questions can become quite complicated. Especially when dealing with assessed values, assessment methodologies, etc.

We have recently implemented a thru-bill process for collecting personal property taxes imposed upon our leased assets.

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DaimlerChrysler Services Personal Property Tax Compliance Process - Cont.

We have implemented operational changes to support the policy change.

We are in the process of training special collectors that are familiar with personal property taxes in order to minimize our losses related to personal property tax collections.

This collection activity will occur shortly after the first thru-bill is processed.

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DaimlerChrysler Services Personal Property Tax Compliance Process - Systems

We use the PTMS (Property Tax Management System) by Tax Compliance, Inc. to file renditions, validate assessments, and pay tax bills.

The assets are first imported into the system.

The system tracks all asset movement.

We use depreciation tables and the state’s assessment methodologies to determine a rendered value.

Once the jurisdiction sends in an assessed value, this value is checked against the rendered value.

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DaimlerChrysler Services Personal Property Tax Compliance Process - Systems - Cont.

Once the tax bill is received, its value is input into the system and a check request is generated.

The check request process also has an interface into the A/R System.

The customer’s accounts are thru-billed automatically using this process.

We also use the PTMS screen prints to provide customers copies of their property tax bills. The screen print generated by PTMS has all relevant information on it. It generally satisfies most customers.

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Personal Property Tax Law Changes

Texas enacted Senate Bill 248 in 2001 with an effective date of January 2, 2001 and after. This was a significant tax law change.

Previously, all income producing personal property was subject to personal property tax in the State of Texas.

However, with this law change Texas exempted income producing personal property if it was leased by a lessee and more than 50 percent of the miles the vehicle is driven in a year are for non-income producing purposes.

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Personal Property Tax Law Changes - Cont.

In order to be eligible for the exemption, the lessee needs to complete the appropriate form and submit it to the lessor prior to the deadline for filing the rendition.

The lessor must then file two renditions to the taxing jurisdictions - one for exempt property and one for taxable property.

The State also allowed certain jurisdictions to Opt-Out of the exemption.

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Personal Property Tax Pending Legislation

Massachusetts has legislation pending which proposes to change their tax situs for business assets (House Bill 4600) .

They are currently taxed according to the garaging address of the asset.

The proposal would require that business assets be taxed according to the business location.

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Personal Property Tax Pending Legislation

Louisiana has a proposal to remove from the Louisiana Constitution a provision stating that the Louisiana property tax exemption for motor vehicles does not extend to municipal taxes (House Bill 694).

Currently, municipalities are allowed to assess a property tax on motor vehicles and the Orleans Parish Board of Assessors is the only entity that does so.

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Questions?

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State Lessee Lessor Lessee Lessor Lessee Lessor Lessee Lessor CommentsAK Required Required Required RequiredAL Required Optional Required Required

Rev. Rul. #03-002 Supplement , Ala. Dept. of Rev. (7/14/03). The Department held that even though the lessor in an equipment leasing transaction held title to the property, because substance controlled over form, the lessee was in a more comparable position of an actual owner and was the party responsible for paying the tax. The Department noted that the lessee bore the risk of loss and had the option to purchase the equipment for $1 at the end of the lease term. In addition, under the lease terms, the lessee was in possession of the property, bore all costs of taxes, maintenance, repair & insurance, and enjoyed all the benefits of property ownership. CCH 8/28/03; CCH 8/21/03.

AR Required RequiredAZ Required Required Capital leases, like operating leases, are assessed to the

owner regardless of who pays the taxes under the terms of the lease. Unpaid taxes are a lien against both the property and the owner. (DOR Personal Property Manual, Ch. 10)

CA Optional Required Optional Required Required Required Assessors will generally abide by the terms of lease agreements regarding responsibility for reporting and payment of taxes. For financing leases, they request both to file for discovery tool. Payment of taxes for financing leases depend on contract type; conditional sales contract's (CS) taxes are paid by lessee.

CO Required Required The assessor, as an accommodation, may send the tax bill in care of the lessee when the lease agreement requires the lessee to pay the tax.

CTStatutes 12-57 states all assets in your possession must be reported by lessee. Lessor must report all assets and include disposal, sale or transfer of property. Lease type and content of lease determine tax liability.

Either

Either Required

Finance OperatingReport Pay Tax Report Pay Tax

Legal Owner Legal Owner

Required

Legal Owner Legal OwnerLegal Owner* Legal Owner*

Survey of Local Assessing Authorities

Either

All information reported is based on the opinions of local assessing authorities. Care should be taken to verify local positions and tax code prior to filing.

Prepared by Kerry S. Comstock 5/2004 Page 1

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State Lessee Lessor Lessee Lessor Lessee Lessor Lessee Lessor Comments

Finance OperatingReport Pay Tax Report Pay Tax

Survey of Local Assessing Authorities

DC Required Required Required Required Capital leases, the lessor reports for information purposes and the lessee pays the taxes. Lessor is considered the owner of operating leases so they file and pay.

DEFL Required Required Required Required

Liability is specific to the lease agreement. Generally, whoever has "right of ownership" is considered owner and is liable. See http.taxlaw.state.fl.us\taxlawmenu.asp link-property tax administration link-opinion (92-0001)

GA Dependent on the terms of the lease. Code states, " owner is liable if known; user is liable if owner is unknown."

HIIAID Required For Finance Leases the Assessor will generally send a

copy of the lease agreement to the County Legal Department for interpretation; whoever is deemed to be the legal owner of the property is responsible for payment of the taxes.

ILIN Required Required Finance: Lessee considered owner (reports on regular

103 and 103-O; Lessor still reports 103-N only, even though instructions are confusing - might be able to get away with not doing so. Operating: Lessor files regular 103 and 103-O, and Lessee files 103-N. Townships generally accept either.

KS Required Optional Required Optional Required Required Finance: Lessee considered owner. Reports on Sch 5. Operating: Reporting: Lessee reports on Sch 7; Lessor reports on Sch 8; Assessor looks to see if Lessor reports & if so Lessor is responsible

KY Assets leased to government are exempt.

N/AN/AN/A

N/AN/A

N/A

N/AN/A

N/A N/A

N/AN/A

N/ARequired

N/ARequired

Legal Owner Legal Owner

Either

Either

N/A

Either

N/A

Either

Required

Required

Legal Owner Legal Owner

Either

All information reported is based on the opinions of local assessing authorities. Care should be taken to verify local positions and tax code prior to filing.

Prepared by Kerry S. Comstock 5/2004 Page 2

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State Lessee Lessor Lessee Lessor Lessee Lessor Lessee Lessor Comments

Finance OperatingReport Pay Tax Report Pay Tax

Survey of Local Assessing Authorities

LA Required Optional Required Optional Required Finance: Lessee considered owner, reports on regular Sch 3 M&E. Operating: Lessee reports on Section 5 Leased Property, Lessor reports by attaching a list of leased equipment. Liability follows a title, so whoever has legal ownership is liable, but sometimes a lessor may request that the jurisdiction send the tax bill to the lessee.

MA Required Optional Required Required Contract determines who is liable. Corporations are exempt if they are incorporated in MA.

MD Required Required The lessee can indicate on their return who is going to be paying the taxes (lessor or lessee) except with conditional sale--Lessee pays tax.

ME Required Required Either the contract will determine liability or the lessee has liability (if it is a capital lease). Lessor has liability for operating leases.

MI Required Required Finance: Looks to legal owner in lease document. Both unless Lessee is clearly the owner in lease document. Sec 211.13

MNMO Required

Finance: MO asks both to report, but if only one does, that is usually ok; County has discretion, and can go after either: St Louis indicates that Finance lease is handled just like operating. Operating: Lessee reports Section F; Lessor reports Section 1. Ultimately, the Lessor is responsible for reporting and paying taxes.

MS Optional Required Optional Required Return form requests information from both.

Either

Reporter

Either

N/AN/A N/A

Required

Required

N/A

Legal Owner Legal Owner

Legal Owner

Either

Required

Either

Required

All information reported is based on the opinions of local assessing authorities. Care should be taken to verify local positions and tax code prior to filing.

Prepared by Kerry S. Comstock 5/2004 Page 3

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State Lessee Lessor Lessee Lessor Lessee Lessor Lessee Lessor Comments

Finance OperatingReport Pay Tax Report Pay Tax

Survey of Local Assessing Authorities

MT RequiredPersonal property held for lease or rent by a leasing or rental business is classified (see ¶20-105 ) and assessed as class six property if the property (1) has an acquired cost of less than $15,000; (2) is leased generally on an hourly, daily, or weekly basis; and (3) is owned by a business that derives its primary income from leasing or rental of property, but does not obtain over 10% of its business from any single customer. (MCA 15-6-136 ) All other goods and equipment held for lease or rent are classified as class eight property. (MCA 15-6-138 )

NC Required Required Required Required Legal owner of assets carries liability.NDNE Required Optional Required Optional Optional Required Required Finance: Lessee considered owner. NHNJNM The party claiming the federal depreciation deduction on

the equipment is responsible for both reporting and payment.

NV Assessors generally abide by the terms of the lease agreement; default assessee is the legal owner of the property. See also Opinion of the Attorney General No. 80-22, where "owner" is construed by the concepts of possession and enjoyment.

NYOH Required Required Required Required Legal Owner is required to report.OK Required Optional Required Optional Required Case Law indicates that ownership follows equity

interest; therefore Finance lease shows Lessee to be owner. In Oklahoma County, Under any lease, Lessor is considered owner

ORWhoever has title has liability. Lessee has to file the leased equip in section 1. In case of default by both parties, the Assessor/Tax Collector will proceed primarily against the Lessor - this includes conditional sales.

Either

N/A

Legal Owner*

N/A N/A N/A

N/AN/AN/AN/A

Either

Either

Required

Required

N/A N/A

N/A N/A

Either

EitherN/AN/A

N/A

Required

Required

N/A

Either

Either

Required

Either

Either

Either

All information reported is based on the opinions of local assessing authorities. Care should be taken to verify local positions and tax code prior to filing.

Prepared by Kerry S. Comstock 5/2004 Page 4

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State Lessee Lessor Lessee Lessor Lessee Lessor Lessee Lessor Comments

Finance OperatingReport Pay Tax Report Pay Tax

Survey of Local Assessing Authorities

PARI Required Optional Required RequiredSC Required Required Required Required Whoever claims income tax depreciation is considered

legal owner and is held liableSDTN Required Required Required Required Code 67-5-502 requires assets assessed to user. TX Required Required Finance: If lessee is legal owner, then reported with

regular BPP; If lessor is legal owner, then reports in leasing section per State. Counties respond interpret in a variety of ways.

UT Both lessee and lessor are to render the asset and the contract determines who is to pay the taxes. This is for finance and operating leases.

VALegal owner held liable; Code VA.58.1-3518 indicates Lessee reports for information only. Fin Leases - the contract will determine who is liable (Capital Leases - lessee liable). If the lessee is determined by the contract to be the legal owner, then they are liable. Assessors across the state interpret in a variety of ways.

VT PP taxability is a local option. WA Required Required WA makes no distinction between financing vs.

operating. Counties typically default to title holder. WI Required Required Statutes allow for taxes to be levied to either lessee or

lessor (Ch 70.18). 'Reported' computer equipment is exempt (Ch 70.11 (39)).

WV Optional Required Optional Required Required Required Information requested from lessee.WY Required Required Lessee is never assessed, as leaseholds are not subject

to taxation under Wyoming law. This holds even when the lessor is an exempt entity. (WY DOR, Ch. 14 Sec. 14)

Either

Legal Owner Legal Owner

N/A N/A N/A

N/AN/AN/A

Legal Owner

Required

Legal Owner

Legal Owner

N/A

N/A

Legal Owner

Holder of Title Holder of Title

Legal Owner Legal Owner

Legal Owner

Required

Legal OwnerLegal Owner

Legal Owner

Either Either Either Either

All information reported is based on the opinions of local assessing authorities. Care should be taken to verify local positions and tax code prior to filing.

Prepared by Kerry S. Comstock 5/2004 Page 5

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2004 ELA Tax Executives RoundtablePersonal Property Tax Survey Results

Up to 1,000 46.7%1,000 to 5,000 44.4%Over 5,000 8.9%Up to 1,000 43.9%1,000 to 5,000 48.8%Over 5,000 7.3%

Up to 10,000 45.4%10,000 to 100,000 34.1%Over 100,000 20.5%Up to 1,000 37.5%1,000 to 5,000 47.5%Over 5,000 15.0%1 to 3 66.7%4 to 6 24.2%More than 6 9.1%

A. Yes 29.5%

B. No 29.5%

C. Varies 40.9%State CAIssue Valuation

A. yes 11.9%B. No 47.6%C. Varies 40.5%State: OHIO

Issue:Tax Owner must file

assessed Property tax even though the original lessor had filed and paid on the same equipment

A. Yes common practice 6.1%

B. Yes limited cases 71.4%

C. No 22.4%If B under what situation do you allow lessee to file?

Question Results1. How many property tax returns do you file annually?

2. How many jurisdictions do you file in?

3. How many assets do you report each year?

If lessee has tax incentives that he cannot take advantage of unless he files directly. Also where the lessee has an agreement with the assessor to file directly.

6. On leases you sell ownership rights of property do you maintain responsibility for personal property tax filing?

If yes have you had any issues under audit?

5. How many employees are dedicated to the property tax compliance function?

4. How many tax bills are paid each year?

7. On leases you purchase ownership rights of property do you allow the seller to maintain responsibility for personal property tax filing?If yes have you had any issues

under audit?

8. Where you are considered the owner of the equipment (i.e. tax lease) do you ever grant your customer the ability to report and pay property taxes directly?

Mobile Fleet Lessee's Relationship with assessor lessee request w/good credit additional indemnity & Agency

When the lessee argues to much about it.

If lessee makes arrangement directly with taxing district and we are notified by the County offical that approval for them to report/pay directly has been granted.

Large contracts where the customer believes they can reduce theit tax liability by dealing directly with the asssssor.

Property cannot be easily tracked for location purposes High Credit Rating

Usually self filing is limited to lessees that have mobile equipment that they would apportion based on mileage. We have to be confident they have the capacity to report. We have them sign an addendum to the lease agreement. We have them annually certify that they are filing.Larger companies with history of compliance we can verify. Primarily specialized equipment with assessment issues

Small jurisdiction where our lessee is a prominent corporation in the jurisdiction and has a relationship with the assessor's office.

Assets that are moving all the time like construction equipment. Buses and trucks in TX where we do an appointment of agent for lessees that us an agent to report.

If we purchased a portfolio and strong indemnification is provided by the original lessor.

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2004 ELA Tax Executives RoundtablePersonal Property Tax Survey Results

Question Results1. How many property tax returns do

State: Ohio TexasIssue: Lessee failed to report.State: CA Various

Issue:

The informational filing will typically protect us in an audit situation. Occasionally however a lessee will forget to file or pay a tax bill and we will need to get involved to resolve.

A. Yes 32.6%B. No 32.6%C. in some states 34.8%AZ CT KS MS NV RI WA WV FL. CA.MI if lessee not specified in contractAll except CACalifornia - for reporting purposes only.FL, CAAZ, MD, NC, OR, TN, UT, WVAL, CO, CT, FL, GA, ID, IN, KS, MI, MS, MT, NC, OK, TX, UT, VA, WY

AL, CA, FL, MI, RI

If you selected C above please list states:

Tennessee CaliforniaWith the exception of Tennessee and California where the taxing districts allow for lessees to be billed direct on conditional sales. We still report all equipment. There are a few other isolated situations where we may allow the lessee to report and pay.

On our CSA the $1 buy is required. It is not an option. We do not hold title to property under our CSA. A provision in our lease changes the language from lessee/lessor to borrower/lender if it is a $1 buy.

CO CT RI However we have changed out title language to transfer title to the lessee at the inception of the lease. We no longer report $1out leases with this language since we do not have title.

If its option yes if its obligation no.

9. If you allow lessee to file have you

If we state lessee will file and lessee fails to file we are charged liability and applicable penalties and interests upon audit.

10. Do you report and pay property tax on $1 out or conditional sale lease agreements?

Ownership

We will allow when the lessee wishes to negotiate value and be directly assessed for property taxes and when the jurisdiction accepts the arrangement. We check the lessee for credit rating and payment timeliness criteria and also put a contractual agreement in place which lists responsibilities and holds us harmless. We still file an informational return with the taxing jurisdiction explaining the arrangement and the lessee's desire to be directly assessed.

If for any reason a customer insists on paying direct the following procedures must be strictly adhere: - We must receive a letter from an authorized representative of the taxing jurisdiction releasing us from any and all current and future assessments for the property under a specific lease. The property must be described in detail including serial numbers or some other fashion so there is no possibility of confusion over which property is under direct pay. In instances where a customer wishes to pay direct and the taxing jurisdiction refuses to release lessor on a very limited exception basis we will require an indemnification letter from the customer. - The customer agrees to indemnify us for any and all property taxes levied against the equipment while it is in the customer’s possession as of any and all lien dates. - They must also agree to indemnify us for any penalties interest and/or late fees. - We must have the ability to declare him in default of the lease if he does not pay any of the taxes when due. - The customer must submit evidence of payment of the tax to us at the time the tax is paid directly including a copy of the tax assessment.

Upon written request combined with appropriate wording in the lease.

If lessee has existing equipment in the jurisdiction (in addition to the equipment leased with us) we will let the lessee file together if requested

Only in the State of Tennessee where the state allows. We still file but the taxing districts bill lessees direct regardless of lease type.

Only on large negotiated deals. Very rare.

Dependant on customer and state.

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2004 ELA Tax Executives RoundtablePersonal Property Tax Survey Results

Question Results1. How many property tax returns do State OH Florida

IssueDouble assessement to Lessee and Lessor

State MI CA

Issue

reporting responsibility; Sale/ownership issue; Valuation; Double assessement to lessee and lessor

State CO RI

Issue

Title remained with lessor therefore they wanted the lessor to report and pay.

A. Return Preparation 22.9%B. Bill Payment 20.8%C. Support 10.4%D. Do not outsource 77.1%A. In house product 5.0%B. None 12.5%C. Vendor Software (Name) 82.5%

Burr Wolff - PTS 6.7%TCI - PTMS 83.3%

Vertex Quantum 6.7%InfoLease 3.3%

Return Preparation 100.0%Bill Payment 77.8%Customer Billing 66.7%AV Calculation 11.1%

G/L system 2.9%In House Product 2.9%

Lease Accounting System 29.4%Lease Acctg System / In-house 2.9%Lease Acctg System / Manually 5.9%

Manually 20.6%PPT Software 26.5%

PPT Software / G/L system 2.9%PPT Software / Manual 5.9%

A. Yes 69.4%

B. No 8.2%C. In some cases 22.4%A. Yes 31.9%B. No 68.1%

Fixed Amount 68.8%

31.2%A. Don't - use assessor value 40.8%B. Reconcile to system calculated value 42.9%C. Other 16.3%

66.7%

16.7%

8.3%

8.3%

If you selected A above please check the uses for this product:

If you answered yes is this fee a set amount or a percentage?

If you selected B or C how is this process done?

14. What system do you use or have you developed to track receipt and payment of property tax bills?

Percentage with a Minimum & Maximum

Compare Property Tax System Calculation to Assessor's value

Rely on third party Processor

Compare to prior year amounts

Manual Calculations and Comparison to Assessors Values

16. Do you charge a fee for property tax administration?

17. How do you verify the accuracy of assessed values?

13. If you do not oursource what property tax compliance software do you use?

15. Do you include an amount for estimated property tax at time of lease payoff/maturity for future bills expected?

Title remained with lessor therefore they wanted the lessor to report and pay.

12. Do you outsource to a third party any portion of the property tax compliance function? If so what process? Please list all that apply.

11. Have you had issues in an audit relating to conditional sale $1 out leases?

Option instead of Mandatory Purchase

Who owns equipment: We report for informational purposes some jurisdictions came back to assess us stating we hold title therefore we pay taxes..

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Page 33: Personal Property Taxation of Leased Motor Vehicles · Personal Property Taxation of Leased Motor Vehicles ... determine tax assessments based on motor vehicle ... maintenance, repair

2004 ELA Tax Executives RoundtablePersonal Property Tax Survey Results

Question Results1. How many property tax returns do

Challenges by lessee of taxable valueAbatements not documented or not communicated to lessor

18. What are the most common causes for filing amended returns/refund claims?

Lessee moved equipment without proper notification.Double assessment, reported by both lessee and lessor.Termination Information not timley entered into lease / asset system or retroactive terminations.Filing with incorrect jurisidiction, resulting from inaccurate addresses, or errors in jurisdiction assignment

Incorrect Classification of asset type for valuation purposesIncorrect contract information entered in lease accounting system

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