CAT 2005-07 - Commercial Activity Tax: Transfers of Property
Into the State - December, 2005
This rule is to clarify when a taxpayer shall include the
value of property transferred into this state within one year
from the receipt of the property outside of this state.
This rule is now final and effective. Please direct
any questions to the Commercial Activity Tax Division of the
Ohio Department of Taxation at 1-888-722-8829.
Rule 5703-29-06 Transfers of Property Into the
State.
(A) This rule provides the circumstances when a
taxpayer/purchaser will be required to include the value of
property that is transferred into this state within one year
from the receipt of the property outside of this state
pursuant to section 5751.013 of the Revised Code.
(B)(1) Subject to paragraph (B)(2) of this rule, the value of
property brought into this state within one year after it is
received outside this state does not have to be included as
taxable gross receipt by the purchaser. However, upon
audit, the tax commissioner may require the value of such
property to be included as a taxable gross receipt if the
commissioner finds that such transfer within one year was
intended in whole or in part to avoid the commercial activity
tax.
(2) The commissioner may identify and post on the department
of taxation’s website one or more descriptions of transfers
that the commissioner deems are intended to avoid the
commercial activity tax. If a transfer is one so described,
the taxpayer must include the value of the property
transferred as a gross receipt for that tax period in which
the transfer is made. The property shall be valued at
its fair market value at the time of transfer. The taxpayer
may file a refund claim if the taxpayer believes that it can
show that the acquisition and subsequent transfer was not
intended in whole or in part to avoid the commercial activity
tax.
(C) No penalty shall be imposed by the commissioner under
paragraph (B)(1) of this rule. A penalty may imposed by
the commissioner under paragraph (B)(2) of this rule.