Legal Resources - Tax Rules

Tax Rules: Final: 5703-3

5703-3-22- Tangible personal property tax; valuation of idle equipment

(A) Tangible personal property that is being held for disposal and is no longer being held for use in business on tax listing day may be valued separately from that personal property kept or maintained as part of a plant or business that is capable of operation. To be so valued, such personal property must be:

(1) Located in closed-off buildings or rooms or otherwise segregated, if physically possible, from areas where manufacturing or other business is being conducted;

(2) Rendered functionally inoperative; and

(3) Held for disposal on tax listing date.

(B) Property meeting the requirements of paragraph (A) of this rule shall be valued as follows:

(1) If component parts have been removed or the item is otherwise incapable of use in its present form, the actual scrap or salvage value shall be taken as the true value.

(2) If it has been offered for sale, a bona fide asking price shall be taken as the true value. If it has been sold within one year of the tax listing date through an arm's-length transaction, the selling price shall be taken as the true value.

(3) If it has not been offered for sale and visual inspection confirms that its useful life has not ended, the true value shall be the greater of its depreciated book value or the actual salvage value.

(C) Property that is temporarily idle for purpose of overhaul or repair or due to seasonal or economic fluctuations or other temporary circumstance does not qualify for separate valuation under this rule.

(D) Property being separately valued under this rule must be separately identified on the tax return, with an explanation of the circumstances and the basis for the valuation. If the value reported is less than the depreciated book value, a claim for deduction from book value must be submitted in writing at the time the return is filed, pursuant to paragraph (C) of rule 5703-3-10 of the Administrative Code.

Effective: 2-3-86

Promulgated under: 5703.14

Authorized by: 5703.05

Amplifies: 5711.01, 5711.03, 5711.09, 5711.16, 5711.18