FROM: Edgar L. Lindley, Tax Commissioner

DATE:  March 8, 1976

RE: Personal Property Taxation of Foreign Imports

A recent decision of the United States Supreme Court has drastically changed the applicability of the Ohio personal property tax to property imported from foreign sources.

In Michelin Tire Corp. v. Wages, Tax Commissioner, et al., January 14, 1976, 96 S. Ct. 535, 46 L. Ed. 2d 495, the United States Supreme Court held that personal property imported from a foreign source is subject to a state's non-discriminatory ad valorem (property) tax in the same manner as domestic property.

Prior to this decision foreign imports were considered immune from state and local property taxes so long as they had not become a part of the mass of general property within a state. Previously, the determining factors were whether such property was still in the original package in which it was imported or, in the case of goods imported for use in manufacturing, whether such property was necessary to meet the current operational needs of the importer.

As the result of the Michelin decision, all property imported from a foreign source, whether it be for resale or for use in manufacturing, is subject to the Ohio personal property tax provided:

1.) the property is used in business as provided by Section 5701.08, Ohio    Revised Code, and

2.) the property is no longer in transit in interstate or foreign commerce, and

3.) the property has a situs in a taxing district in Ohio

All personal property tax returns for the years 1976 and thereafter shall be prepared and filed in accord with these principles.