CAT 2006-08 - Commercial Activity Tax: Situsing Receipts from
Periodic Payments for Mobile Property; Issued October, 2006;
Revised October, 2006; Revised January, 2007
This rule is to assist taxpayers in situsing receipts from
the sale or other exchange of mobile property for purposes of
the commercial activity tax (CAT). This rule is
now final and effective. No further changes
were made following the October, 2006 revision. Please
continue to direct any questions to the CAT Division of the
Ohio Department of Taxation at 1-888-722-8829.
Rule 5703-29-20 Situsing receipts from periodic
payments for mobile property.
(A)(1) Gross receipts from the sale or other exchange of
tangible personal property are sitused based on the location
where the purchaser receives the property in accordance with
division (E) of section 5751.033 of the Revised Code. When
dealing with receipts from mobile property upon which lease
payments are made, the location to situs such receipts may be
unclear and paragraphs (B) and (C) of this rule shall be used
in those situations.
(2) As used in this rule, the term “lease payments” also
includes rental payments or other similar periodic payments.
(B) As a general rule, when lease payments are made regarding
a piece of mobile property, such receipts shall be sitused
based on the following:
(1) In the case of airplanes or other aircraft, receipts from
the lease shall be sitused to the location where the aircraft
is primarily hangared.
(2)(a) In the case of motor vehicles used in business for the
transportation of passengers or property in interstate
commerce and railcars, receipts from the lease shall be
sitused in accordance with division (G) of section 5751.033
of the Revised Code if that information is known. If such
information is not known, receipts shall be sitused in
accordance with paragraph (B)(2)(b) of this rule.
(b) In the case of all other motor vehicles, receipts from
the lease shall be sitused based on the primary property
location for the period in which the charges are incurred.
(3) In the case of all other lease payments, including those
for construction equipment, receipts from the initial lease
payment shall be sitused to the location where the lessee
takes possession of the property. Receipts from all
subsequent lease payments shall be sitused to the primary
property location for the period in which the charges are
(C)(1) In the event a taxpayer believes that a strict
application of the standards set forth in this rule do not
fairly represent the operations of the taxpayer, receipts may
be sitused to this state using any reasonable, consistent,
and uniform method of apportionment that is supported by the
lessor’s business records as they existed at the time the
lease payments were made. In the event the tax commissioner
disagrees with a taxpayer’s reasonable, consistent, and
uniform method of situsing its gross receipts, the
commissioner will not impose a penalty if the situsing was
found to be made in good faith. While different methods may
be used for different types of leases, the same method must
be consistently used for all types of similar leases.
(2) A taxpayer may file in writing with the commissioner a
request to use an alternative means of situsing gross
receipts from the sale or other exchange of mobile property
that is reasonable, consistent, and uniform under paragraph
(C)(1) of this rule. Such request must be made prior to the
end of the reporting period for which the request is to
(D) For purposes of this rule, “primary property location”
means an address for tangible personal property provided by
the lessee that is available to the lessor from its records
maintained in the ordinary course of business, when use of
that address does not constitute bad faith.