In some states property taxes are levied on companies’ fixed assets. These states require their firms to prepare a rendition (declaration form) to state the assets’ historical values each year. This declaration is filed annually and serves as a basis for the values the tax assessor ultimately determines to be current market values for company assets. From those market values, property taxes are assessed and billed to the company or individual.
The rendition prepared each company must tie to the company’s financial statements and the asset values present. If the listing is not cleaned up annually, a company pays too much property tax even if the items are fully depreciated. This is the main reason to get rid of any fixed asset records that cannot be found.
Assign a person knowledgeable about the company assets to review the fixed asset list and mark those items no longer owned or those that have been scrapped from original use. (i.e. machinery, tooling, cars, trucks, tanks, lighting, overhead cranes, leasehold improvements now part of the building).