Now, let’s say that an individual or company acquires a business in the state of Virginia. The cost of the assets to the present owner (what personal property  appraisers define as original cost) will be the values that the will be carried on the company’s books for accounting purposes. This  could result in a “step-up” or a “step-down” in value and could be different than what the opinion defines as the ”original cost” of the assets.  How will the assets be valued for tax assessment purposes?

According to this opinion, the assets must still be valued using the “original cost” of the assets (trended & depreciated). An issue arises due to the fact that the taxpayer would now, theoretically,  need to maintain two sets of books (one for accounting and one for property tax reporting). Furthermore, what if the taxpayer does not have the “original cost” information (I have seen this happen many times)? Now, the taxpayer would have to accept the figures on the personal property return and make additions and deletions going forward.

I am just skimming the surface of this issue here, but hopefully you can see how this has the potential to result in innaccurate assessments of personal property assets in Virginia and elsewhere.