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.
###
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.
|