Tax Rules: Final: 5703-3
5703-3-10 - Tangible personal
property tax; true value of depreciable assets; application
of "true value" or "302" computation
(A) Tangible personal property used in business in this state
must be returned, for purposes of the personal property tax,
at its true value in money. The true value of depreciable
tangible personal property is its book cost less book
depreciation, unless the tax commissioner finds that the
depreciated book value is greater or less than the true value
of such property.
(B) Application of the composite annual allowance procedure
provided for in rule 5703-3-11 of the Administrative Code
shall determine the prima facie true value of depreciable
tangible personal property used in business. The prima facie
valuations can be rebutted by probative evidence of higher or
(1) When an item of tangible personal property is acquired in
an arms-length transaction, its true value at the time of
purchase is the acquisition cost, including all costs
incurred to put the property in place and make it capable of
operation, which are normally capitalized in accordance with
generally accepted accounting principles.
(2) The true value in money of any tangible personal property
may be proved by establishing the amount for which the
property would sell in an open market by a willing seller to
a willing buyer in an arm's-length transaction. If market
value is estimated by an appraisal, the property must be
appraised as part of an ongoing business unless the taxpayer
can demonstrate that the property is more accurately
appraised on the basis of piecemeal liquidation or disposal.
(3) If a taxpayer believes that the composite annual
allowance procedure as determined by the commissioner does
not accurately reflect the true value in money of the
taxpayer's depreciable tangible personal property on hand,
the taxpayer may establish more accurate annual allowances by
(a) Such evidence must show that the published composite
annual allowance procedures are inappropriate because they
cause an unjust or unreasonable result, or must be modified
because of special or unusual circumstances.
(b) Such evidence may include, but is not limited to, an
aging of disposals study and any other studies, data, or
documentation the taxpayer wishes to submit for consideration
by the commissioner.
(c) Such evidence must cover a sufficient number of years to
demonstrate a pattern in the history of the useful life of
the subject property.
(C) A taxpayer must file a claim for deduction from book
value for every tax return on which depreciable tangible
personal property is returned at a value less than
depreciated book value. Such claim must be made in writing at
the time of filing the return on form 902, as prescribed by
the commissioner, or in a format containing substantially all
information as required on form 902.
Promulgated under: 5703.14
Authorized by: 5703.05
Amplifies: 5711.02, 5711.03, 5711.09, 5711.18