Machinery and equipment assessment
Machinery & equipment
Machinery and equipment (M&E) is one of four property assessment classes in the Province of Alberta. M&E is defined in Alberta Regulation 203/2017), an includes such examples as materials, devices, fittings, appliances and others.
M&E includes items prescribed by the Minister that forms an integral part of an operational unit intended for or used in (i) manufacturing, (ii) processing, (iii) the production or transmission by pipeline of natural resources or products or by-products of that production, but not including pipeline as defined in clause (i), (iv) the excavation or transportation of coal or oil sands as defined in the Oil Sands Conservation Act, (v) a telecommunications system, or (vi) an electric power system, other than a micro-generation generating unit that is the subject of an order under section 3, whether or not the materials, devices, fittings, installations, appliances, apparatus, tanks, foundations, footings or other things are affixed to land in such a manner that they would be transferred without special mention by a transfer or sale of the land.
The assessment for machinery and equipment is prepared by Assessment & Tax using a regulated cost approach. The Alberta Machinery and Equipment Assessment Minister's Guidelines specifies the procedures, formulae, and rates to be used for assessing machinery and equipment.The following formula is used to arrive at the value for machinery and equipment.
a x b x c x d = machinery and equipment value, when Assessment:
- Establishes the base cost of machinery and equipment described in or out of Schedule A.
- Multiplies the base cost by the appropriate Assessment Year Modifier AYM.
- Multiplies the product determined from steps a. and b. by the appropriate depreciation factor described in schedule C.
- If applicable, adjusts the amount in step c. for any additional depreciation that may be appropriate.
- The final assessment value for machinery and equipment must then reflect 77 per cent of its value as derived from the formula calculation.
Tax status: exempt
The assessment of machinery and equipment is subject to municipal taxation. However, M&E is not taxable for education tax purposes. Historically, The City of Calgary council has issued a bylaw every year to exempt machinery and equipment from any municipal property tax. (MGA 364 (1.1)).