|TO:||Users of the 2002 Cost Index and Depreciation Schedules|
|FROM:||John C. Bailey, Director
Property Tax Division
|RE:||Enclosed 2002 Schedules|
We are enclosing the Depreciation and Valuation Schedules for the 2002 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, 2002.
There were a few changes this year, other than the usual percent good factor adjustments. These changes are for appraisals as of January 1, 2002 and forward only and are not retroactive. The changes have been marked with an asterisk in the index and are described below:
- We have included "structures housing cell equipment" in the 25-year cellular equipment category. This would be for those structures not appraised as real property.
- We have expanded the description of "Data Processing Equipment" to include computers designed to be used for any purpose, but are being used for POS equipment. If the point-of-sale computer were proprietary in nature (designed specifically by the manufacturer to be used as point-of-sale equipment) then it would be appraised under the store equipment category.
- We recommend using valuation guides or pricing guides for the appraisal of tractors, combines, and cotton harvesters. As an alternative, a special schedule, U 12, has been developed for the appraisal of this type of equipment. The U 12 schedule recognizes a higher residual value and a longer life, which is reflected in the market for this type of used farm equipment.
- The store equipment schedule includes a description for POS equipment and electronic cash registers and allows their appraisal on the D6 schedule. If the POS equipment is an actual PC compatible computer, then it may be appraised using the computer schedule.
- We are recognizing the continued decline in the textile equipment market and are allowing a 10% residual value on all textile manufacturing equipment.
We will have the schedules on the web as soon as possible. The Division's publication site is at http://www.dor.state.nc.us/publications/property.html.
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 may be situations where the appraiser will need to make adjustments for additional, or less, 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.