PP 2007-01 and RP 2007-01 - Classification of Certain
Business Assets as Real or Personal Property - Issued
September 2007; Revised January 2008
This information release is a replacement for release PP
2007-01 and RP 2007-01 issued September 2007. It is
being issued to correct the classification of certain types
of property used for storage. The corrections are found
in items 24 and 30, below.
The purpose of this information release is to provide
guidance regarding the proper classification of certain
business assets. With the phase-out of the personal property
tax in Ohio, the classification of what constitutes personal
property or real property has been heightened in importance.
While this release is being issued to address some types of
property, this information release is not meant to, and it
should not be construed to, encompass all types of property
potentially subject to personal or real property taxation in
Ohio. This information can also be found in Amended County
Auditor Bulletin No. 290, issued December 18, 2007.
The Department of Taxation recently has reviewed the county
auditor bulletins that classify assets as either real
property or personal property. In light of recent case
law and statutory amendments, many of these bulletins were
found to be obsolete or unnecessary. In order to align
the property classifications reflected in these bulletins
with current law, the Tax Commissioner has rescinded them
pursuant to Amended Bulletin No. 288 (Bulletins 33, 70, 74,
77, 80, 85, 110, 135, 154, 166, 247, and 284) issued
September 7, 2007 and is replacing them with this
The classifications set forth below are not intended to alter
the sales/use tax consequences of the purchase or
installation of real or personal property. In the case
of purchases of personal property, Ohio sales/use tax will
apply unless the taxpayer has some statutory claim of
exemption. While transfers of real property are
subject to Ohio sales/use tax, construction contractors
continue to have sales/use tax responsibilities for any
personal property or taxable services used in performing a
Further, Ohio’s sales/use taxes apply to certain enumerated
services. For example, R.C. 5739.01(B)(3)(g) includes
landscaping and lawn care services within the definition of a
“sale” for sales/use tax purposes. In transactions
where such services are being provided, the service may be
taxable regardless of the fact that the service results in an
improvement to real property. Other services that are
subject to sales/use tax (not inclusive) include the repair
of personal property, installation of personal property,
exterminating services, and private investigation and
security services. This bulletin does not address the
existence of any services that may be subject to sales/use
tax at the issuance or after the issuance of this
The following classifications of certain business property
are intended to supplement, expound upon, and comport with
the definitions set forth in R.C. 5701.02 and 5701.03, and
the classifications set forth in Ohio Adm. Code
5703-3-01. This bulletin does not address the
classification of assets on residential property. In
addition, property classified in this bulletin as “real
property” still may be deemed to be personal property if it
meets the definition of a “business fixture” and/or the
property does not meet the definition of a “fixture” (e.g.,
certain property subject to an operating
The following business property is properly classified as
1. Air conditioning
systems that utilize specialized cooling equipment to
maintain specific environmental conditions in computer rooms,
manufacturing areas, research areas, storage areas, or other
areas that require specific environmental conditions for the
business that is conducted on the premises. But, see 26
2. Amusement park
3. Bank vault
doors unless an integral part of the building and the
removal of which would damage the structural integrity of the
building. Also, see 13 below.
4. Boilers and
ancillary equipment such as, but not limited to, feed water
heaters, pumps, steam traps, steam lines, and return water
storage tanks, that are used for any purpose other
than environmental control for buildings or structures
housing people or animals. But, see 26 below.
5. Chemical lines
used for fire protection of business equipment.
6. Concrete fire
walls and earthen structures surrounding oil and
gasoline storage tanks.
windows, but only that portion that constitutes the
window itself and not the framing.
8. Electrical lines
and ancillary equipment that are specialized and used in
9. Fuel storage
tanks, whether above ground or below ground.
10. Generators when used as
a power source for manufacturing equipment or when used
exclusively to maintain specific environmental conditions,
e.g., in computer rooms. But, see 32 below.
communication systems, including public address
used in the drying, burning, firing, baking or similar
processes of brick, grain, pottery, ceramics, lumber, and
13. Modular bank
vault rooms. Also, see 3 above.
14. Pneumatic tube
15. Portable grain
storage bins regardless of size. But, see 30 below.
16. Process water
transportation equipment used to transport water from
a well to a processing operation of a business establishment,
including equipment, lines, and pipes whether above ground or
below ground used to transport manufacturing process water.
This classification does not include equipment used to
transport water for the general use of the building, such as
for drinking, bathing, cooking, or fire suppression.
17. Pumps, motors,
or pipes used in connection with cooling towers,
manufacturing equipment, spray ponds, storage tanks, or
irrigation related to the business, e.g., golf courses.
cold areas, including equipment such as panels and
insulation and the enclosure around or incident to the
equipment, excluding supporting structures.
19. Service station
canopies, all electrical wiring for the canopies, any
appurtenances to the canopies, and any concrete pads or
islands used as foundations for the canopies.
including neon signs and billboards.
21. Skip hoists and
tipples. But, see 37 and 38 below.
22. Sliding boards,
diving boards, diving platforms, lifeguard stands, lighting,
rails, ladders, and filtration and chlorination
systems associated with swimming pools. But, see 39
23. Special purpose
lighting and associated electrical wiring, whether inside or
outside, including lighting for miniature golf courses and
lighting for illuminating or displaying inventory, e.g., on
automobile dealer lots. But, see 31 below.
24. Storage silos,
bins, or tanks, whether above or below ground, and
regardless of the type of facility where used. But, see 30
25. Water softening
equipment when used for industrial clothes cleaning or
in a manufacturing process. But, see 40 below.
The following property is properly classified as real
conditioners, boilers and ancillary equipment such as, but
not limited to, feed water heaters, pumps, steam traps, steam
lines, and return water storage tanks primarily used
for environmental control for buildings or structures housing
people or animals. But, see 1 and 4 above.
installed and attached to a finished or unfinished interior
surface so as to indicate permanent affixation for the useful
life of the carpet. For sales tax purposes, note that the
installation of carpet is taxable. See R.C. 5739.01(B)(5).
28. Cement parking
pads, driveways, and walkways in use at trailer
29. Chemical and
water lines used for fire protection installed within
and an integral part of a building or structure. But, see 5
storage bins, and storage silos used in agricultural
operations. But, see 15 and 24 above.
31. General parking
lot lighting. But, see 23 above.
32. Generators that have
been installed as an integral part of a building or structure
and that supply power for general usage to the building or
structure. But, see 10 above.
33. Greenhouses attached to
magazines and any other buildings or structures
constructed in compliance with R.C. Chapter 3743 for the
storage of fireworks or other types of explosives.
37. Skip hoist
houses. But, see 21 above.
38. Supports for
cranes, skip hoists, tipples, or similar property that
are an integral part of the building or structures. But, see
pools. But, see 22 above.
40. Water softening
systems when used in relation to potable water. But,
see 25 above.