D.C. Mun. Regs. tit. 9, r. 9-702

Current through Register Vol. 71, No. 43, October 25, 2024

Rule 9-702 - LEASEHOLD IMPROVEMENTS

702.1

Any real property improvement that does not become an integral part of the realty and leasehold improvements shall be subject to personal property tax if the improvement meets the following conditions:

(a) Primary function of the improvement is distinct and different from the functions ordinarily performed by the realty;

(b) The improvement is devoted primarily to the functions of the business conducted by the person who made the annexation;

(c) The improvement can be removed without material injury to the real property;

(d) The improvement can be removed without material injury to the improvement itself; and

(e) The improvement is not intended to be affixed permanently to real property by the person who makes the annexation at that time.

702.2

For purposes of § 702.1(e), the intention of the person making the annexation shall be inferred from the following;

(a) The nature of the affixed improvement;

(b) The relationship of the person making the annexation to the owner of the real property and the circumstances surrounding the transaction between these parties;

(c) The structure and mode of annexation;

(d) The existence of an agreement between the parties involved; and

(e) The purpose or use for which the annexation has been made.

702.3

Leasehold improvements shall include, but are not limited to, the following:

(a) Foundations;

(b) Pilings; and

(c) Supports related to the installation and use of personal property.

702.4

Improvements to real property that are personal property include, but are not limited to, personal property attached to the extent that the items are related to activities or processes conducted within or without the real property if the personal property is an integral part of the activity.

702.5

The following are examples of improvements to real property which are personal property for purposes of this section and the Act:

(a) Shelving, bins, counters, and related items;

(b) Nonpermanent partitions;

(c) Supplemental heating; humidification, and air conditioning;

(d) Extraordinary lighting; electrical and plumbing facilities;

(e) Carpeting over finished floor; and

(f) Draperies used as secondary window covering.

702.6

Any improvement to be taxed as personal property shall be valued in the same manner as any other depreciable personal property owned.

D.C. Mun. Regs. tit. 9, r. 9-702

Final Rulemaking published at 35 DCR 6014, 6017 (August 4, 1988)

Prior to August 5, 1988, the Department of Finance and Revenue published Final Rulemaking notice at 22 DCR 4445, 4447 (February 17, 1976).