Fourteen states have no personal property tax in any broad sense: Delaware, Hawaii, Illinois, Iowa, Minnesota, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Pennsylvania, South Dakota, and Wisconsin. Wisconsin is the newest name on the list, having eliminated its tax effective January 2024 under 2023 Wisconsin Act 12.1Tax Foundation. Tangible Personal Property De Minimis Exemptions by State If you own a small business or a personal vehicle in any of these fourteen states, you will not receive a personal property tax bill.
Two catches are worth knowing before you treat the list as final. Some of these states still tax narrow categories of property. And a state can appear nowhere on this list yet still charge you nothing, because generous exemption thresholds do the same job as an outright repeal.
What “Fully Exempt” Actually Means
Six of the fourteen states, Minnesota, New Jersey, New Mexico, New York, North Dakota, and South Dakota, exempt personal property generally but may still tax centrally assessed property or a narrow class of assets. Centrally assessed property typically means utility infrastructure, railroad equipment, or pipeline assets that cross multiple jurisdictions and get valued by a state agency instead of a local assessor. A homeowner with a car in the driveway or a shop owner with equipment on the floor is not the target. A utility company running transmission lines across the state might be.
For everyone else in those six states, “fully exempt” behaves like full exemption. The distinction matters mostly if you operate the kind of business whose assets span county lines by design.
The Vehicle Catch
The tricky part of the list is vehicles. Roughly half the states charge an annual value-based tax on cars, separate from the sales tax you pay at purchase and separate from a flat registration fee. That annual value-based charge is a personal property tax in substance, even when the state calls it something else on the bill.
About 25 states charge no annual value-based tax on vehicles. Most of the fourteen exempt states listed above fall into that group, along with Florida, Georgia, Oregon, Texas, and Washington, all of which tax business personal property but leave vehicles alone.
The states that do tax vehicles annually based on value include Virginia, Mississippi, Missouri, South Carolina, Maine, Nebraska, Connecticut, Kansas, Colorado, Wyoming, Kentucky, Montana, North Carolina, Arkansas, Iowa, Alabama, California, and Michigan, among others. Effective rates run from under 0.5% of vehicle value on the low end up to nearly 4% in Virginia, one of the highest vehicle property tax burdens in the country.2Institute on Taxation and Economic Policy. How Do Personal Property Taxes Work
Two names on that list also appear on the fully exempt list above. Iowa broadly exempts tangible personal property but charges a value-based fee on vehicles. New Hampshire does the same. If your reason for looking at the exempt-state list is to avoid an annual tax on your car, the list alone is not enough. Check whether the state imposes a separate vehicle excise or registration tax based on value.
States Where Most Small Businesses Still Owe Nothing
Another dozen or so states technically impose a personal property tax but set the exemption threshold high enough that many small and mid-sized businesses never pay. These de minimis exemptions work like a standard deduction: if your total taxable personal property falls below the threshold, you skip the tax. The dollar amounts vary widely.1Tax Foundation. Tangible Personal Property De Minimis Exemptions by State
- $1,000,000: Indiana, Montana
- $500,000: Arizona
- $250,000: Idaho
- $80,000: Michigan
- $75,000: Wyoming
- $56,000: Colorado
- $50,000: Rhode Island
- $29,300: Utah
- $25,000: Florida
- $20,000: Georgia, Maryland
- $1,500 or less: Kansas, Kentucky
Indiana’s $1,000,000 threshold means most small and mid-sized businesses pay nothing. Florida’s $25,000 covers a home office setup and not much beyond that. Kansas and Kentucky set the bar low enough that a business with a desk and a printer still owes.
One detail catches business owners off guard. These thresholds are typically based on the original cost of the property, not its current depreciated value. Equipment you bought for $30,000 five years ago might be worth $8,000 today, but it still counts at $30,000 when measuring whether you cross the line.
Filing Even When You Owe Nothing
Being under a de minimis threshold does not always excuse you from the paperwork. Some states still require an annual return listing your taxable property, its original cost, and its acquisition year, even when the resulting tax is zero. Deadlines typically fall between January and April.
Skipping a required filing is expensive. The common penalty is a surcharge on the taxes owed, often around 10% of the assessed value of unreported property. A few states treat willful failure to report as a misdemeanor. In some jurisdictions the assessor can estimate your property’s value without your input and bill you from that estimate, which is almost always higher than what you would have reported yourself. Check with your county assessor’s office or state department of revenue before assuming the exemption also excuses the return.
Where the List Is Heading
The direction is toward elimination. Wisconsin repealed its tax in 2023, and West Virginia introduced credits to offset personal property taxes as part of a broader income tax reduction. Arizona, Colorado, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Texas, and Wyoming have all seen legislative proposals to eliminate the tax, though most have not passed.3MultiState. States Continue to Move Away from Taxing Personal Property
The obstacle is revenue replacement. Local governments rely on personal property tax collections, and any repeal has to be paired with a substitute source. Wisconsin’s deal allowed Milwaukee to raise its local sales tax to backfill the loss. That tradeoff is the sticking point in every state still debating the issue, which is why the list of fourteen has grown slowly rather than all at once.