|TO:||Users of the 2000 Cost Index and Depreciation Schedules|
|FROM:||John C. Bailey, Director
Property Tax Division
|RE:||Enclosed 2000 Schedules|
We are enclosing the Depreciation and Valuation Schedules for the 2000 tax year. We recommend the use of these schedules in the valuation of business personal property and certain taxable personal property listed as of January 1, 2000.
There were a few changes this year, other than the usual percent good factor adjustments. The changes have been marked with an asterisk in the index and are described below:
- We have further clarified that Point of Sale (POS) equipment is included in the "STORE EQUIPMENT" major category. Information we have received at this time indicates that POS equipment does not depreciate at the same rate as PC's and other computers, nor does it have the same economic life as computers. Federal tax depreciation guidelines do not include POS equipment as either computers or peripherals. We suggest a 10-year life is appropriate as an average useful life for all store equipment as a group.
- Due to the economic downturn of the textile manufacturing industry and the recent closing of several textile-manufacturing facilities across the state, there is an excess supply of used textile machinery. To account for this, we have adjusted schedules A8 and A10 for the category "TEXTILE MILL PRODUCTS" to depreciate to a 15% residual value. The design of schedule A was altered to accommodate this change. The schedule A8 and A10 for textiles are calculated using the same trend factors as the regular schedule A, however textile equipment will depreciate to a 15% residual.
We will have the schedules on the web as soon as possible. The Department's site is at http://www.dor.state.nc.us/.
As a reminder, only actual PC's, midrange, or mainframe computers, either stand alone or servers in a networked environment, along with their peripherals fall under the guidelines of major category "DATA PROCESSING EQUIPMENT".
These schedules have been prepared by this office as a general guide to be used in the valuation of business personal property utilizing the replacement cost approach to value. It is important to remember that the schedules are only a guide. There will be situations where the appraiser may need to make adjustments for additional functional or economic obsolescence, or for other factors.
We feel that the proper use of the schedules will aid in the overall uniformity and equity of property tax assessment practices as required by North Carolina statutes. If you have any questions about these schedules please contact David Baker, Kirk Boone, or John Bailey at 919-733-7711.