ARM 42.21.155. CATEGORIES FOR PERSONAL PROPERTY; TRENDED DEPRECIATION SCHEDULES; TREND FACTOR CALCULATION

(1) The department has established eight categories of personal property for determination of trend factors and depreciation, and trended depreciation schedules of four, five, ten, fifteen, or twenty years have been assigned for each category based on its type and expected useful lifespan, as provided in (4). The equipment listings in (4) provide representative examples of property in a category and are not meant to be an exhaustive list. (2) Each trended depreciation schedule contains a residual trended percent good, designated as "older" in the final row of each schedule, which is applied to an item of personal property that exceeds the typical lifespan because personal property remains taxable until its disposal. The purpose of trended depreciation is to bring the cost of equipment acquired in a previous year to an approximate current cost before depreciating it. (3) Prior to January 1 of each year, the department will use cost index trends for equipment and depreciation percentages for furniture and fixtures from the previous July's edition of Marshall & Swift Valuation Service Guide (Marshall & Swift Guide) to calculate the trend factors and the trended percent good for the schedules in (4). The Marshall & Swift Guide is a widely recognized valuation authority which the department adopts and incorporates by reference. The Marshall & Swift Guide may be reviewed at the department's central office or purchased from the publisher: Corelogic, 777 South Figueroa, 12th Floor, Los Angeles, California 90026-0307. (a) The trends from the Marshall & Swift Guide represent industry-wide national average changes in equipment costs - customarily increases - from the base year, 1926. Trends are typically greater than a value of one, but may be less than one. (b) For trended depreciation schedules, the department calculates the year one trend for each schedule as the average trend of the first three quarters of the current year. The trend for each successive year is the final trend for that year. (i) Using year one as the base year, the department calculates the changes in equipment costs - the trend factors - for each schedule in (4), as the quotient of the year one trend and any following year's trend. (ii) The department then uses the depreciation percentages from the Marshall & Swift Guide to calculate the "percent good" over the period of years that is typical for each property category. Trended percent good is then calculated as the product of the percent good and the trend factor for each year represented in a schedule. (4) The trended depreciation schedules for the categories of personal property are as follows: (a) Computerized Equipment - a four-year depreciation and a residual percentage will be applied to computerized equipment such as computers, peripheral equipment that cannot function independently of a computer, computerized medical equipment, and gaming machines. The four-year depreciation schedule was developed and implemented after consultation with industry representatives; the trend factors are calculated from the office equipment category of the Marshall & Swift Guide. Computerized Equipment YEAR NEW/ ACQUIRED % GOOD TREND FACTOR TRENDED % GOOD 2018 70 1.000 70 2017 45 1.022 46 2016 20 1.039 21 2015 10 1.038 10 older 5 1.051 5 (b) Office and Commercial Equipment - a five-year depreciation and a residual percentage will be applied to non-computerized equipment such as office equipment and furnishings, specialized medical equipment, janitorial equipment, coin-operated washers and dryers, beauty and barber shop equipment, tanning beds, furnishings for hotels, motels, rental apartments, rental homes, nursing home and other care facilities, and locally assessed cable tv dishes. The trend factors are calculated from the average of all category of the Marshall & Swift Guide. Office and Commercial Equipment YEAR NEW/ ACQUIRED % GOOD TREND FACTOR TRENDED % GOOD 2018 85 1.000 85 2017 69 1.026 71 2016 52 1.047 54 2015 34 1.038 35 2014 23 1.048 24 older 18 1.062 18 (c) Furniture, Fixtures, and Miscellaneous Equipment - a ten-year depreciation and a residual percentage will be applied to all other commercial furniture and fixtures such as handheld and non-handheld shop and construction tools and equipment, medical and dental chairs and tables, theater equipment, survey equipment, billboards and signage, garbage bins, coin-operated pool and other game tables, gas pumps, bar and restaurant equipment and furnishings, bowling alleys and equipment, excepting auto-scorers which have a four-year depreciation, photo and developing equipment, mortuary equipment, safes, security systems, port-a-potties, locally assessed cable tv towers, ski lift equipment including aerial lifts, surface lifts, portable lifts and tows including the towers, cables, ropes, sheave assemblies, the conveying devices, power units, and all accessories. The trend factors are calculated from the average of all category of the Marshall & Swift Guide. Furniture, Fixtures, and Miscellaneous Equipment YEAR NEW/ ACQUIRED % GOOD TREND FACTOR TRENDED % GOOD 2018 92 1.000 92 2017 84 1.026 86 2016 76 1.047 80 2015 67 1.038 70 2014 58 1.048 61 2013 49 1.062 52 2012 39 1.070 42 2011 30 1.101 33 2010 24 1.135 27 2009 21 1.127 24 older 20 1.159 23 (d) Seismograph Units and Allied Equipment - a five-year depreciation and a residual percentage will be applied to seismograph units and allied equipment. An 80 percent wholesale factor is used for wheeled seismograph units. The trend factors are calculated from the chemical industry category of the Marshall & Swift Guide. Wheeled Seismograph Units YEAR NEW/ ACQUIRED % GOOD TREND FACTOR WHOLESALE FACTOR WHOLESALE TRENDED % GOOD 2019 100 1.000 80 80 2018 85 1.000 80 68 2017 69 1.019 80 56 2016 52 1.032 80 43 2015 34 1.021 80 28 2014 23 1.030 80 19 2013 and older 18 1.042 80 15 Seismograph Allied Equipment YEAR NEW/ ACQUIRED % GOOD TREND FACTOR TRENDED % GOOD 2019 100 1.000 100 2018 85 1.000 85 2017 69 1.019 70 2016 52 1.032 54 2015 34 1.021 35 2014 23 1.030 24 2013 and older 18 1.042 19 (e) Oil Drilling, Workover, and Service Rigs - a ten-year depreciation and a residual percentage will be applied to all oil drilling, workover, and service rigs. An 80 percent wholesale factor is applied to self-propelled wheeled workover and service rigs. The trend factors are calculated from the chemical industry category of the Marshall & Swift Guide. Self-Propelled Wheeled Workover and Service Rigs YEAR NEW/ ACQUIRED % GOOD TREND FACTOR WHOLESALE FACTOR WHOLESALE TRENDED % GOOD 2019 100 1.000 80 80 2018 92 1.000 80 74 2017 84 1.019 80 68 2016 76 1.032 80 63 2015 67 1.021 80 55 2014 58 1.030 80 48 2013 49 1.042 80 41 2012 39 1.044 80 33 2011 30 1.072 80 26 2010 24 1.101 80 21 2009 21 1.086 80 18 older 20 1.124 22 18 Drill Rigs YEAR NEW/ ACQUIRED % GOOD TREND FACTOR WHOLESALE TRENDED % GOOD 2019 100 1.000 100 2018 92 1.000 92 2017 84 1.019 86 2016 76 1.032 78 2015 67 1.021 68 2014 58 1.030 60 2013 49 1.042 51 2012 39 1.044 41 2011 30 1.072 32 2010 24 1.101 26 2009 21 1.086 23 older 20 1.124 22 (f) Oil and Gas Field Machinery and Equipment - a fifteen-year depreciation and a residual percentage will be applied to oil and gas field machinery and equipment. The trend factors are calculated from the chemical industry category of the Marshall & Swift Guide. Oil and Gas Field Machinery and Equipment YEAR NEW/ ACQUIRED % GOOD TREND FACTOR TRENDED % GOOD 2019 100 1.000 100 2018 95 1.000 95 2017 90 1.019 92 2016 85 1.032 88 2015 79 1.021 81 2014 73 1.030 75 2013 68 1.042 71 2012 62 1.044 65 2011 55 1.072 59 2010 49 1.101 54 2009 43 1.086 47 2008 37 1.124 42 2007 31 1.175 36 2006 26 1.244 32 2005 23 1.307 30 2004 21 1.418 30 older 20 1.467 29 (g) Farm Machinery and Equipment - a twenty-year depreciation and a residual percentage will be applied to farm machinery and equipment. A 50 percent wholesale factor is applied. The trend factors are calculated from the average of all category of the Marshall & Swift Guide. Farm Machinery and Equipment YEAR NEW/ ACQUIRED % GOOD TREND FACTOR WHOLESALE FACTOR WHOLESALE TRENDED % GOOD 2019 100 1.000 50 50 2018 97 1.000 50 49 2017 93 1.026 50 48 2016 90 1.047 50 47 2015 86 1.038 50 45 2014 82 1.048 50 43 2013 78 1.062 50 41 2012 74 1.070 50 40 2011 70 1.101 50 39 2010 65 1.135 50 37 2009 60 1.127 50 34 2008 55 1.159 50 32 2007 50 1.205 50 30 2006 45 1.271 50 29 2005 40 1.330 50 27 2004 35 1.430 50 25 2003 31 1.479 50 23 2002 27 1.504 50 20 2001 24 1.513 50 18 2000 22 1.526 50 17 1999 21 1.554 50 16 older 20 1.559 50 16 (h) Heavy Equipment - a twenty-year depreciation and a residual percentage will be applied to heavy equipment. A 50 percent wholesale factor is applied. The trend factors are calculated from the contractor's equipment category of the Marshall & Swift Guide. Heavy Equipment YEAR NEW/ ACQUIRED % GOOD TREND FACTOR WHOLESALE FACTOR WHOLESALE TRENDED % GOOD 2019 100 1.000 50 50 2018 97 1.000 50 49 2017 93 1.018 50 47 2016 90 1.034 50 47 2015 86 1.032 50 44 2014 82 1.045 50 43 2013 78 1.059 50 41 2012 74 1.079 50 40 2011 70 1.115 50 39 2010 65 1.147 50 37 2009 60 1.143 50 34 2008 55 1.177 50 32 2007 50 1.214 50 30 2006 45 1.257 50 28 2005 40 1.313 50 26 2004 35 1.403 50 25 2003 31 1.444 50 22 2002 27 1.466 50 20 2001 24 1.478 50 18 2000 22 1.486 50 16 1999 21 1.512 50 16 older 20 1.524 50 15 (5) This rule is effective for tax years beginning after December 31, 2018.