Topic No. 64
PRIOR USE OF PROPERTY
When tangible personal property
is first distributed, stored, used or consumed in the City more than one (1)
year after its retail sale, "purchase price" shall mean its market
value rather than the acquisition cost. A credit is allowed for tax paid to
another municipality. However, certain tangible personal property which has
been owned and used for its intended purpose for more than one year before it
is moved into
Book value for assets subject to taxation may be used as evidence to approximate market value as long as straight line depreciation is being used. In the case of fully depreciated property, an approximation of salvage value is required.
ABC Construction Company moves its general offices
and construction equipment garage to
A) Computer equipment purchased 6 months
earlier for $12,000 on which no municipal tax was paid. Tax due
B) Office furniture purchased 18 months ago for
$100,000 which was immediately put in use at ABC's previous office location. No
C) Miscellaneous office supplies were purchased
in bulk over the last two years for $3,000 and placed in storage. No municipal
tax was paid. Tax due
D) A backhoe was purchased 5 years ago for
$20,000 on which a 1% municipal tax or $200 was paid. Present book value is
$10,000. Tax due
*DRMC Section 53-92(c). Legislative intent.
* DRMC Section 53-95(17). Definitions.
* DRMC Section 53-97(19). Exemptions.
* DRMC Section 53-106.2. Application to certain construction equipment.
THE ABOVE INFORMATION IS A
SUMMARY IN LAYMAN'S TERMS OF THE RELEVANT