Property Tax is typically levied by local governments on real property only. However, in some states, including Wisconsin, property tax is levied on real property and personal property, which means that TIF assistance received by a project in Wisconsin may include both real property tax increment and personal property tax increment. Because personal property often depreciates quickly, however, the amount of personal property tax increment will likely decrease dramatically during the assistance period.
In Wisconsin, the State Department of Revenue applies a conversion factor to the original cost of personal property to assess personal property’s remaining value after depreciation. The conversion factor varies in accordance with the time that personal property was purchased. For instance, to determine the 2010 assessed value, shop equipment purchased in 2009 is assessed at a value equal to 92.5% of its original cost while shop equipment purchased in 2003 is only assessed at a value equal to 39.4% of its original cost.