Items such as freight included with the sale, however, are part of the sales price. Yes, these items are treated like other types of special inventory with financing arrangements. Yes, dealers should include any leased or rented heavy equipment with purchase options when the dealers complete their declaration forms for tax year 2000. These items were not included on the monthly tax statements filed by dealers during 1999. So, dealers need to review their records for those items.
CADs use the declaration to appraise a dealer's inventory for the current tax year.
For tax year 2000, the market value of a dealer's inventory for property tax purposes is the total sales price of all sales for the 12-month period preceding the tax year, divided by 12. That period is January to December 1999, except for dealers who were not in business for the full 12 months. The total sales exclude sales to dealers, fleet transactions, and subsequent sales. Items of heavy equipment that are simply rented or leased with no purchase option will be appraised as regular business inventory under Property Tax Code Section 23.12. The dealer should render this equipment on the dealer's business personal property rendition.