Why is the lessee billed or refunded for a property tax true-up?
The property tax true-up is the reconciliation of actual property taxes paid by PEAC Solutions on the leased equipment against the tax estimate the lessee was billed by PEAC Solutions for a given tax year.
Most state and local jurisdictions’ in the United States have laws that require PEAC Solutions to report leased personal property and pay taxes on this leased equipment annually. PEAC Solutions will estimate the annual tax cost and then invoice the lessee that estimated amount for the same year as the lease is ending. In some instances, we may charge you 2 years property tax depending on the time of year the lease is ending.
In some cases, the actual taxes charged by the taxing jurisdiction(s) (city, county or state) are different from the estimated amount billed by PEAC Solutions. If the actual taxes are less than the estimate the lessee will receive a refund. If the actual taxes are higher than the estimate, the lessee is invoiced the difference.