Machinery & equipment
Machinery and equipment (as defined in Alberta Regulation 220/2004) means materials, devices, fittings, installations, appliances, apparatus and tanks other than tanks used exclusively for storage that are an integral part of an operational unit intended for or used in manufacturing or processing. The assessment of machinery and equipment is subject to taxation.
The Municipal Government Act permits council to pass a Business Tax Bylaw. In The City of Calgary, a Business Tax Bylaw is passed annually by council. When machinery and equipment is taxed to a property, a business tax cannot be imposed on the business premises.
The assessment for machinery and equipment is prepared by Assessment using a regulated cost approach. The Alberta Machinery and Equipment Assessment Minister's Guidelines specifies the procedures, formula 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.