Personal Property Tax

County Bulletin

TO: ALL COUNTY AUDITORS - Bulletin No. 223

DATE:  March 11, 1968

FROM: G. W. Porterfield, Tax Commissioner

RE:  Steel Service Centers - Personal Property Tax Returns

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No. 96 concerning the classification of inventory and machinery and equipment of steel service centers is hereby rescinded.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 Chesterfield 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.