News Releases

News Release

September 19, 2008 - Last Tangible Personal Property Tax Payments Now Due

COLUMBUS, Ohio – The elimination of Ohio's century-and-a-half old local property tax on machinery, equipment and inventory used in business will soon be at hand.

The final tax payments for 2008 – the last year of the tangible personal property tax for the vast majority of businesses in Ohio – are due to county treasurers by Monday, Sept. 22, unless extended locally.

Since the usual due date for payments of Sept. 20 falls on a Saturday this year, it is automatically extended until Monday. Individual county treasurers may further extend the deadline, depending on local circumstances.

The upcoming payment deadline marks another milestone in the elimination of the tax, a key element of tax reforms enacted in 2005 by the Ohio General Assembly and embraced by Governor Ted Strickland in his 2008-09 state budget plan.

For decades, analysts had criticized the tangible personal property tax as hurting Ohio’s ability to attract business investment. In 2009, Ohio will join a select group of nine other states without a general business tax on tangible personal property.

“This is a historic achievement, one that ultimately should put Ohio in a stronger position to compete for business investment,” Ohio Tax Commissioner Richard A. Levin said.

The uniform taxation of personal property in Ohio can be traced back to 1846. Since 1931, state law has limited taxes on tangible personal property to machinery, inventory, furniture, fixtures and other equipment used in the course of conducting business.

The personal property tax is now being phased out by gradually lowering the percentage of value at which personal property is assessed. The assessment rate was 6.25 percent for the 2008 tax year. In 2009, the rate drops to zero for all businesses except certain telephone companies – which are being phased out according to a different schedule – and certain classes of public utilities that will continue to pay the tax.

Payment schedules vary according to the taxpayer. For businesses with property in only one county, one-half of their tax liability was due to their county treasurer on April 30, with the balance to be paid by next Monday, Sept. 22, unless extended locally. For businesses with property in more than one county, the total tax liability is due by Monday, Sept. 22 to county treasurers.

The elimination of the personal property tax, which is Ohio’s largest local business tax, is expected to save business owners about $1.6 billion annually. The phase out is part of a larger series of reforms that also include the gradual elimination of the corporation franchise tax and a 21 percent, across-the-board cut in state income tax rates. Overall net savings from the reforms when complete is estimated at $3.9 billion annually.

Revenue from the new commercial activity tax (CAT) is being used to compensate schools and local governments for lost personal property tax revenue. Also, the Ohio Department of Taxation will continue to conduct audits of personal property taxpayers and lead other oversight measures to ensure all businesses are meeting their personal property tax obligations.

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TAXPAYER CONTACT: Personal Property Tax Division at (614) 466-8123.

MEDIA CONTACT: John Kohlstrand at (614) 644-3858 or Mike McKinney at (614) 466-5461.