Personal Property Tax

County Bulletin

AMENDED BULLETIN NO. 286

TO:  All County Auditors

FROM:  Wesley Luthy, Supervisor

DATE:  December 21, 2011

RE: Interest Charges on Personal Property Taxes

Amd. Sub. H.B. 66 changed the method used to calculate the interest rate applied to personal property tax underpayments and overpayments, effective July 1, 2005. Previously, the interest rate was equal to the federal short term rate plus three percent. Under revised law, the interest rate will be equal to the federal short-term rate rounded to the nearest whole number per cent.

As provided in R.C. 5719.041, monthly interest is chargeable on underpayments and allowable for overpayments of personal property taxes. Bulletin Number 253 dated December 30, 1982 detailed the manner of calculating the statutory interest charges and allowances.

The percentage of interest for any month is equal to 1/12 of the annual rate, as indicated in the chart below, for the year in which the month falls. The rates for each year and the monthly accrual are shown in the table below.


TAX YEAR

ANNUAL RATE

MONTHLY ACCRUAL

TAX

YEAR

ANNUAL RATE

MONTHLY ACCRUAL

1985

9%

.75%

1999

8%

.67%

1986

8%

.67%

2000

8%

.67%

1987

6%

.50%

2001

9%

.75%

1988

10%

.83%

2002

7%

.58%

1989

11%

.92%

2003

6%

.50%

1990

11%

.92%

2004

4%

.33%

1991

11%

.92%

Jan – Jun 2005

5%

.42%

1992

10%

.83%

Jul – Dec 2005

2%

.17%

1993

7%

.58%

2006

3%

.25%

1994

7%

.58%

2007

5%

.42%

1995

9%

.75%

2008

5%

.42%

1996

9%

.75%

2009

2%

.17%

1997

9%

.75%

2010

1%

.08%

1998

9%

.75%

2011

1%

.08%

     

2012

0%

.00%

 

When interest accrues over a period of time and covers more than one calendar year, care must be taken to apply each year’s interest rate to its own months. The accompanying charts accomplish this and display the total percentage of interest to be charged or allowed for September 1983 through December 2012.

EXAMPLE:

As a result of an audit of a timely filed 2005 single county return, $10,000 of additional taxes are required to be billed. The bill is issued in March 2007 with the taxes paid in full in April 2007. One-half of the taxes due were paid at the time the 2005 return was filed. The second half payment was received before September 20, 2005.


NOTE: Interest accrues from the first of the month following the month in which the second half payment was due. Interest can be charged for full months only (e.g., 0.17% interest for Nov-05 is for the month of Oct-05). No interest is charged for Sep-05.       

 

Year

Interest Rate

 

Monthly or Yearly Accrual

     
             

2005

2.0%

Nov-05

0.17%

     
   

Dec-05

0.17%

     

2006

3.0%

Yearly

3.00%

     

2007

5.0%

Jan-07

0.42%

     
   

Feb-07

0.42%

     
   

Mar-07

0.42%

     
             
     

4.60%

     
             

Interest per Table:

         
             

Oct-05 through Apr-07

4.58%

 (Difference due to rounding)

             

Interest Due ($10,000 x 4.58%)

 $  458.00

     
 

Second-half payments for single-county filers and full payments for inter-county filers are due September 20 or by October 20 if extended. “New taxpayer” payments are due at the time the return is filed (within 90 days of commencing business, or 135 days if extended). Payments of deficiency assessments and “new taxpayer” assessments may be paid without a late payment penalty within 60 days from certification by the Auditor to the Treasurer. However, interest accrues from the first of the month following the month in which the second-half payment or “new taxpayer” payment was due. For example, if the second-half payment is due September 20, 2006, interest begins accruing October 1, 2006.

This bulletin replaces Bulletin Number 286 last amended November 17, 2010.


Footnote:  1 The lower interest rate applies only to general business property and estate taxes. Real property and public utility property taxes are still subject to the federal short term rate plus three percentage points.