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

Each taxing jurisdiction has a different lien date or fiscal start date for the year. There are 4 different lien dates used by jurisdictions: January 1st, April 1st, July 1st and October 1st. PEAC Solutions 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 after the state lien date. 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 2020 year.