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1. Has the personal property tax been phased out?
Yes. Returns due in 2008 were the final returns for all general business taxpayers. No annual or new taxpayer returns, either form 920 or 945, are required to be filed for tax years 2009 and thereafter. This is a direct result of the listing percentage being reduced to zero as the final component of the phase-out.
2. Are there exceptions to the phase-out?
Telephone and inter-exchange telecommunications companies, or entities leasing property to telephone and inter-exchange telecommunications companies, will continue to be subject to the tangible personal property tax.
3. Besides the types of companies named as exceptions, who does the information in the remaining FAQs pertain to?
Any entities, who were subject to the tangible personal property tax in taxable year 2008 or any year before 2008, who failed to file a return for the taxable year. The information also pertains to any formerly subject entities who may be assessed for the tax through an audit.
4. Are there any changes to be aware of when filing my 2008 personal property tax return?
Yes. As part of Ohio’s tax reform initiative, Am. Sub. H.B. 66, the tangible personal property tax on general business machinery and equipment, furniture and fixtures, and inventories is phased out over a four year period. The listing percentages – applicable to all property reported in Schedules 2, 3, 3A and 4 - for the phase-out period can be found in Ohio Revised Code (R.C.) 5711.22 and are as follows:
Return Year |
Listing % |
2006 |
18.75% |
2007 |
12.50% |
2008 |
6.25% |
2009 |
0.00% |
Additionally, all manufacturing equipment first placed in service in Ohio by a manufacturer on or after Jan. 1, 2005, is immediately exempt. “Manufacturing equipment” includes machinery, equipment, tools, implements and patterns, jigs dies & drawings used at a manufacturing facility by a manufacturer. A “manufacturing facility” is a facility or portion of a facility used for manufacturing, mining, refining, rectifying or combining different materials with a view to profit.
In addition to supplying new definitions for “manufacturing equipment” and “manufacturing facility”, R.C. 5711.16, as amended by Am. Sub. H.B. 66, provides definitions for “manufacturer” and “manufacturing inventory”. New manufacturing equipment meeting this definition should be listed at zero percent of its true value beginning with the 2006 return (R.C. 5711.22). A new schedule – Schedule 5 - has been added to the 920 and 945 tax forms to report only that manufacturing equipment that is exempt as a result of this law change.
All manufacturing equipment first used in business prior to Jan. 1, 2005 is required to be listed and assessed in Schedule 2. Note that the new manufacturing definitions apply to property required to be listed in Schedule 2. Only taxpayers meeting the new manufacturing definitions should report the value of manufacturing equipment placed in service prior to Jan. 1, 2005, in Schedule 2. All other equipment should be reported in Schedule 4.
