In California, business owner must complete and file a Form 571L annually. This is the Form that the County Assessor uses to compute the amount of tax that you must pay for Unsecured Property Taxes for personal property used in your business.
The State is aggressively auditing these forms currently. You must make sure that you keep records of your assets in your business to make sure that you are able to adequately respond to an audit of your Form 571L. The Assessor routinely compares the amount that you report on your tax return to the amount that you report on your Form 571L to make sure they are consistent. If they are not consistent, and audit usually ensues. Therefore, you must be careful to complete the form in conjunction with the preparation of your income tax return.
If your form is audited, make sure you have a tax professional represent you before the assessor. If your tax is increase it is not only for this year, but for the years going forward.