Personal Property Frequently Asked Questions


Do I have to pay personal property taxes on my vehicle or aircraft?

Most motor vehicles pay a Specific Ownership Tax (registration fee) which is paid in lieu of personal property taxes. Mobile machinery and self-propelled construction equipment is designated as Class F personal property and is commonly referred to as Special Mobile Machinery (SMM). SMM is subject to registration and annual specific ownership taxation in lieu of ad valorem taxation as provided in §§ 42-3-103(1) and 106(1), C.R.S., unless it meets one of the exceptions in § 42-3-104(3), C.R.S. For more information on SMM assessment, see Assessors' Reference Library, Volume 5, Chapter 7 or the Division of Motor Vehicle's SMM website.

Personal aircraft pay a fuel excise tax in lieu of personal property taxes pursuant to § 43-10-111, C.R.S. Some commercial aircraft also pay the fuel excise tax in lieu of personal property taxes. However, commercial aircraft doing business in Colorado as an "airline company" pursuant to § 39-4-101, C.R.S., are considered public utilities and are subject to state assessment by the Division of Property Taxation.

For more information on the Specific Ownership Tax, motor vehicle registration requirements, and the fuel excise tax, contact the Department of Revenue. For more information on the assessment of airline companies, contact the Division of Property Taxation's State Assessed Section.

How is my personal property valued?

Colorado county assessors are required to determine the “actual value” of taxable property located in their county on the January 1 assessment date each year (§§ 39-1-103(5) and 39-1-104(12.3)(a)(I), C.R.S.). Colorado statutes define actual value as that value determined by appropriate consideration of the following approaches to value: the Cost Approach, the Sales Comparison (Market) Approach, and the Income Approach. For more information on specific valuation procedures, see the Valuation section.

Are furnishings in a short-term or vacation rental property taxable?

Yes. Household furnishings and fixtures that are productive of income are taxable as business personal property. Any household furniture and freestanding appliances and security systems found in private residences that are used to produce income at any time during the year are taxable for the entire year, otherwise they are exempt pursuant to § 39-3-102, C.R.S. Furniture, freestanding appliances, and security systems found in rental properties are taxable regardless of the terms or duration of the lease agreement or the physical characteristics of the rental property.

Section 39-5-108.5, C.R.S., requires the "owner of furnished residential real property or an agent of the owner who advertises the property for rent to provide identifying information regarding the property to the assessor of the county in which the property is located upon the request of the assessor." An "agent" includes "a real estate broker...a property management company, a lodging company, an internet website listing service, a print-based listing service, or any other person that either separately or as part of a package of services advertises furnished residential real property in the state for rent on behalf of the owner of the property in exchange for compensation."

Do I have to declare expensed or fully depreciated assets?

Yes. Personal property valuation for ad valorem property tax purposes differs from valuation and accounting procedures allowable for income tax and financial reporting purposes. All personal property is taxable in Colorado unless it is specifically exempted by law. Generally, assets cannot be "expensed" for ad valorem purposes and fully depreciated assets remain taxable. However, there are exemptions for certain types of personal property that may apply. For a list of possible exemptions, see the Exemptions section.

Are leasehold improvements personal property?

Leasehold improvements are not defined in statute for property tax classification purposes. Most leasehold improvements meet the definition of personal property. Contact your local county assessor with questions about whether or not a specific item is considered personal property.

In Del Mesa Farms, et al. v. Montrose CBOE, 956 P.2d 661 (Colo. App. 1998), using the definition of fixtures as stated in § 39-1-102(4), C.R.S., the court reasoned that a distinction must be made for classification purposes for property that are related to the operation of the building and property that are related to the operation of a business in the building. The court noted, "Thus, in our view, regardless of whether a particular item is affixed to a building and may otherwise constitute a fixture system, the item constitutes personal property if its use is primarily tied to a business operation" (emphasis added).

Are renewable energy systems on residential properties exempt?

Renewable energy personal property that is located on a residential classified property, owned by the residential property owner, and produces energy that is used by the residential property is exempt from Colorado property taxation. Note that this exemption only applies to the renewable energy personal property and not the underlying real property. The Division recommends that the county assessor conduct an analysis of the residential sales with and without renewable energy personal property in each economic area, during each reappraisal year, to determine if renewable energy personal property contributes an incremental increase to the total residential property values. If it is determined that they do, then those sales that include exempt residential renewable energy personal property should be adjusted to exclude the contributory value of the renewable energy personal property.

Independently owned residential solar electric generation facilities (photovoltaic solar systems) that meet criteria listed in § 39-1-102 (6.8), C.R.S. are exempt from Colorado property taxation under § 39-3-102, C.R.S. To qualify for the exemption the solar electric generation facility must be located on residential real property, used to produce electricity from solar energy primarily for use in the residential improvements, and have a production capacity of no more than one hundred (100) kilowatts of AC electricity.

Please note that renewable energy property that meets the definition of a real property fixture is not exempt under § 39-3-102, C.R.S.


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