What to do around the sale
- File the rendition for January 1 by March 15, even if the sale is in progress
- Keep the asset list from the rendition handy for the buyer and the price allocation
- Agree in the purchase agreement how the year's personal property tax is split
- Pay any bills that come due before closing, or settle them at the closing table
- Tell the assessor about the sale so next year's forms go to the right owner
The Rendition
Oklahoma County requires every business, corporation, partnership and professional to file a business personal property rendition, often called Form 901. It lists what the business owned on January 1.
- Furniture and fixtures
- Machinery and equipment
- Computers and office equipment
- Leasehold improvements
- Inventory, with a schedule of monthly values from the past year
Each business location files its own return. It has to be signed by an owner, partner, officer or authorized agent. You file even if you think part of the property is exempt.
The Deadline and the Penalties
The rendition is due March 15. There is no extension. A late filing brings a 10 percent penalty, and if it is filed after April 15, the penalty rises to 20 percent.
Not getting a form in the mail doesn't excuse the filing. If you don't file, the assessor can set a value on its own, and you have only a short time to appeal it.
Who Owes the Tax in the Year You Sell
Property is valued as of January 1. The owner of record on that date files the rendition, and the tax bill for that year is tied to that filing.
If you sell in June, the bill for the whole year may still come to you or your company. Buyers and sellers usually split it in the purchase agreement, so each pays for the part of the year they owned the business.
Write the split into the agreement. Say who pays the bill when it arrives and how the other side reimburses its share. It is a small number next to the price, but leaving it vague causes friction later.
Why Buyers Care
A buyer's lender may check that the business has no unpaid property taxes, since unpaid tax on business property can become a lien. Show your paid bills from past years.
The rendition is also a ready list of your assets. It helps the buyer check the equipment schedule in the deal, and it helps your CPA with the price allocation.
If the values on your rendition are far from the values in the allocation, expect questions. Make sure both are reasonable.
Inventory Counts
The monthly inventory schedule on the rendition can be compared with the inventory count at closing. Big differences invite questions, so keep your counts consistent.
The sales tax side of inventory and equipment is in our guide to sales tax on equipment in a business sale.
Exemptions Some Companies Have
Some manufacturers and new or expanding companies qualify for property tax exemptions in Oklahoma. If yours has one, the buyer will want to know whether it continues after the sale, since an exemption that ends raises the buyer's costs.
Gather the paperwork that granted it and ask your CPA how a change in ownership affects it.
Equipment You Keep
If you keep some equipment after the sale, like a truck or tools you plan to sell on your own, it stays on your company's rendition until it is gone. Leaving it off can bring a penalty.
The same goes for equipment you sell off in pieces during the year. What matters is what your company owned on January 1, so keep a record of what left and when.
Outside Oklahoma County
Every Oklahoma county has its own assessor and the same basic rendition rule. If your company has locations in Cleveland County, like Norman or Moore, or in Canadian County, like Yukon, each county gets its own filing.
See our pages on Moore and Yukon for more on those markets.
After the Sale
Once the sale closes, tell the assessor so future forms go to the new owner. If you sold only some assets, your company files for what it still owned on January 1 next year.
The full timeline of a sale is on selling a business in Oklahoma City. For a sense of value first, use the valuation form or call (405) 555-0158.