Why is the lessee billed for property taxes when the lessee did not own the equipment for a full year?

January 09, 2019

Each taxing jurisdiction has a different lien date or fiscal start date for the year. There are 5 different lien dates used by jurisdictions: January 1st, March 1st, April 1st, July 1st and October 1st. Marlin is required to report leased equipment owned on the jurisdiction’s lien date to the taxing authorities. The full tax for the equipment is incurred on the lien date. The tax is due even if the lessee business closes or the property is purchased, sold or transferred before the end of the year. For example, if in a January 1st taxing jurisdiction, a lessee pays off the lease on January 5th and sells the equipment, the taxing authority will still assess taxes for the full 2009 year. Under this example, these taxes would be due in 2010.

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