Personal Property Tax

County Bulletin

TO: ALL COUNTY AUDITORS Bulletin No. 256

FROM: Joanne Limbach, Tax Commissioner

DATE:  October 31, 1983

RE: $10,000 tangible personal property exemption

With the enactment and signing into law of Am. Sub. H.B. 291 (the biennial budget bill, effective July 1, 1983), a new personal property tax exemption has been created. Every taxpayer engaged in business is entitled to an exemption of $10,000 against the taxable value of tangible personal property for each taxyear. The statute provides that "taxable value means "listed value," i.e., the true value as reduced by the listing percentage. Prior years' tax liabilities are not affected, nor are taxes on intangible property for any year.The law provides that the exemption is to be applied in the taxing district in which the taxpayer has the greatest taxable value of tangible personal property required to be listed in the tax return. If the exemption reduces that amount to zero without being fully utilized, the remainder of the exemption is to be applied in the taxing district with the next greatest taxable value, if any. The process is to be repeated until either the exemption is fully utilized or no taxable property remains to which it can be applied. There are no provisions in the law for carryover of any remainder.The law also provides for reimbursement of the "lost" taxes from the State General Revenue Fund. In order to claim reimbursement, the County Auditor must compute the amount of taxes that would have been charged in the current year if the exemption had not been taken. This computation is then to be certified to the County Treasurer on the third Monday in August, when the general duplicate of personal property is delivered. Within thirty days after the October settlement, when the County Treasurer certifies to the Auditor of State that the settlement has been made, the latter will draw a warrant on the General Revenue Fund for the amount of certified "lost" taxes. The County Auditor will then distribute this amount among the taxing districts as if it had been levied, collected and settled as personal property taxes.The law specifies reimbursement at 82% of "lost" taxes for 1984 and at 100% for future years.

It is important that all tangible property reported in every tax return filed by a taxpayer engaged in business be entered on the general tax list, even if it indicates that the exemption reduces the tax due to zero. Otherwise, the "lost" taxes cannot be certified. Also, the amount of exemption taken and the taxing district(s) in which it is applied are subject to audit and may require adjustment.

The tax return for unincorporated business (Form 910) and for corporations with property in one county (Form 930) have been combined into a single return- Form (Form 920) for use by every taxpayer engaged in business except those who are required to file the inter-county return (Form 945). Form 920 must be filed in duplicate because, based on other statutory changes, all business returns are now "state size." The Tax commissioner’s copy is needed for both compliance-checking and auditing purposes. The amount of claimed exemption is to be deducted on the face of the return by the taxpayer, to enable the County Auditor to accumulate the exemption data, by taxing district, for certification.

Preliminary assessment certificates for inter-county corporations, which you receive on the second Monday in August, will indicate separately the amount of exemption claimed and the taxing district(s) in which applied.

In the event that taxable values are subsequently amended because of audit, final determination or court decision, the resulting assessment certificate will indicate any change in the exemption allowed. Exemption data must be accumulated from such changes as well as from the assessment of late-filed returns, in order to be included in the annual certification of "lost" taxes.

If a tax return is received in which no deduction (or a partial deduction) for the exemption is taken, it is not advisable to insert the exemption on the taxpayer’s behalf. The exemption may have been taken in a return filed (perhaps in error) in another county.

In a consolidated tax return, each corporation in the group is entitled to a $10,000 exemption. In no event is one business-taxpayer entitled to more than $10,000 of exemption in Ohio in the same year.

When a late-filing penalty is appropriate, it applies only to the taxable value remaining after the exemption has been deducted.