FROM: Stanley J. Bowers, Tax Commissioner

DATE: May 9, 1960

RE: Assessment of Certain Property Belonging to Towel and Linen, and Industrial Service Companies

To insure uniformity in the assessment of personal property belonging to towel and linen service companies and industrial service and supply companies, the following procedure will be followed beginning with the 1961 personal property tax returns.

The true value of such property as of the taxpayer's required listing date will be determined by the following method:

1) Cost value of all new inventory items (those not placed in service) on hand at the beginning of the current accounting period.

(2) Add to the above cost the value of all new purchases during this said period.

(3) Deduct from the above total, the cost of all new items (those not placed in service) on hand at the close the period.

(4) The resulting value will be the cost of all new items placed in service during the accounting year.

(5) The depreciated value of all new items in service at the close of the period, will be determined by using thirty per cent (30%) of the resulting value above.

(6) To this depreciated value will be added the cost of the new items (100%) not yet placed in service as of the close of the accounting period, with the result being the total true value.

(7) The total true value is then listable for taxation at seventy per cent (70%).

Under no circumstances should a county auditor or examiner, on analyzing the accounts of such companies, permit excessive charges from the inventory account to the "in service" account during the several months of the accounting period, which procedure would reduce the inventory value of new items on band.

All 1960 and prior years' returns should be processed on the same basis as has been followed in the past.