County Bulletin
TO: ALL COUNTY AUDITORS - Bulletin No. 239
FROM: Robert J. Kosydar, Tax Commissioner
DATE: March 29, 1974
RE: Valuation of Idle Equipment
Since 1948, property no longer being held for use in the
business conducted, but being held for disposal, has been
permitted to be valued at ten percent of owner's cost for
personal property tax purposes. The Ohio Supreme Court stated
in Syro Steel
Co. v. Kosydar, 34 Ohio St. 2d
9, decided April 11, 1973, that this valuation-method is
arbitrary and has no statutory support. Therefore it is
necessary in all cases to determine the true value in money
of such property.Personal property located in buildings
boarded up, or in departments closed off, or removed from the
production line, is ordinarily entitled to be valued
separately from that which is kept or maintained as part of a
plant capable of operation, if such property has been
rendered functionally inoperable and is held for disposal as
of tax listing day. The taxpayer must identify such property
separately in the tax return, with an explanation of the
circumstances and the basis for valuation. Temporary idleness
for purpose of overhauling and repair or resulting from
seasonal Operation or from reduced usage is not sufficient
cause for separate valuation.Such qualifying property is to
be separately valued as follows:1. If component parts have
been removed and the remainder is useless in the business,
the actual scrap or salvage value shall be taken as the true
value.2. If 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.3. If it
has been offered for sale, a bona fide asking price shall be
taken as the true value; but if it has been sold subsequent
to tax listing date through an arm's-length transaction, the
selling price shall be taken as the true value.Where the
value reported is less than depreciated book value, the
taxpayer must file a claim for deduction from book value in
writing at the time of making his return.
The unnumbered Directive on this subject, issued June 1,
1948, is hereby rescinded.