Tax Rules: Final: 5703-3
5703-3-13 - Tangible personal
property tax; replacement allowance; hotels
(A) Taxpayers who operate hotels and motels and maintain no
records of actual disposals of furniture and fixtures may
compute replacement allowances used in the true value
computation when replacing furniture and fixtures in the
current tax year. This computation method assumes that a
hotel or motel has a fixed floor plan with a constant amount
of furnishings for the rooms.
(B) The cost index to be used in computing replacement
allowances under this rule shall be the annual comparative
equipment costs for the hotel industry published by the
"Marshall and Stevens Publication Co." in "Stevens Valuations
Quarterly."
(C) It shall be assumed that the oldest acquisitions are the
first replaced.
(D) The replacement allowance is computed in the following
manner: Divide the cost index applicable for the year during
which the personal property being replaced was acquired by
the cost index for the current tax year. The cost of the
current acquisition is multiplied by this quotient to compute
the estimated original cost of the property replaced. The
resulting amount is deducted from the cost in the oldest year
of acquisition. If there is insufficient cost in the oldest
year, the index for the next oldest year should be calculated
and applied to the remaining cost.
(E) Furniture and fixtures installed in a new addition or new
rooms of an existing hotel or motel must be treated
separately from the pre-existing portion of the facility for
purposes of computing replacement allowances under this rule.
Effective: 3-21-86
Promulgated under: 5703.14
Authorized by: 5703.05
Amplifies: 5711.03, 5711.18, 5711.21, 5711.22