TO: ALL COUNTY AUDITORS - Bulletin No. 223
DATE: March 11, 1968
FROM: G. W. Porterfield, Tax Commissioner
RE: Steel Service Centers - Personal Property Tax
In view of the recent Board of Tax Appeals decisions in the
cases of Purdie
Metals Inc. v. Porterfield B. T. A. No.
65206, decided December 19, 1967, and Chesterfield Steel Service
Company v. Porterfield B. T. A. No.
65588, decided February 8, 1968, Personal Property Tax
Division Directive No. 96 concerning the classification of
inventory and machinery and equipment of steel service
centers is hereby rescinded.
The two decisions noted above have materially broadened the
scope of what constitutes manufacturing as applied to the
operations and processes of steel service centers. However,
in both the Purdie case and the
case the Board of Tax Appeals distinguished operations
conducted by those companies from the mere cutting and
shearing operations which were held not to be manufacturing
in the case of Green Steel Company v.
Bowers B. T.
A. No. 41439, decided May 10, 1960.
Therefore, mere cutting or shearing of steel to size is not,
in and of itself, manufacturing. Steel service centers that
perform only such processes are not entitled to the
manufacturing classification. However, any further operations
on or processing of steel, including the uncoiling and
slitting of steel, does constitute
manufacturing under the provisions of Sections 5711.16 and
5711.22, Revised Code, and the inventory and machinery and
equipment so used is entitled to the preferential listing
accorded property used in manufacturing.