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Due to the phase-out of the personal property tax, the 2008 return is the final annual return required to be filed by most general taxpayers except public utility lessors (see below.) The personal property tax is being replaced by the Commercial Activity Tax (CAT.) For information and forms on the CAT visitwww.tax.ohio.gov or call 1.800.282.1782.
What's New for 2008
Due to the phase-out of the personal property tax, the 2008 return is the final annual return required to be filed by most general taxpayers except public utility lessors (see below).
Tangible Personal Property
Telephone and inter-exchange telecommunications companies – previously classified as public utility taxpayers – have been redefined as general business taxpayers under Ohio Revised Code (R.C.) section 5711.01(B), effective with the 2007 tax return. The taxable property reported by telephone and interexchange telecommunications companies will be listed and assessed under R.C. 5711 while the taxable value of telephone and inter-exchange telecommunications personal property will continue to be apportioned under R.C. 5727. All telephone and inter-exchange telecommunications companies will use the same composite allowances and other valuation procedures as prescribed by the tax commissioner for such property for 2006 in tax year 2007 and subsequent tax years, unless otherwise notified of any changes. Even if a telephone or interexchange telecommunications company has property in only one Ohio county, form 945TL, 945IX (long distance) or 945IX (other) must be filed so that the value of the property reported can be accurately apportioned. These forms are required to be filed between Feb. 15 and April 30 (June 15 as extended) each year. The assessment of telephone and interexchange tele-communications companies personal property will be phased out over a four-year period at the following percentages:
Return Year List Percentage
2008: 15%
2009: 10%
2010: 5%
2011: 0%
Note that the new manufacturing definitions apply to property required to be listed in Schedule 2. Only taxpayers meeting the new manufacturing definitions should report the value of manufacturing or mining equipment, placed in service before Jan. 1, 2005, in Schedule 2. All other equipment should be reported in Schedule 4. Am. 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 3%. Under revised law, the interest rate will be equal to the federal short-term rate without any adjustment. Form 945S has been revised to include a restatement of the listed values computed at 6.25% as opposed to the 2007 listing percentage of 12.5%. This restatement will allow for a comparison of taxable value at the same listing percentages. Changes greater than $500,000 will be a result of an actual change in true value and not caused by the decreased listing percentage. Beginning with tax year 2009, any person or entity that is not a public utility or an interexchange telecommunications company and that leases its personal property to a public utility will be considered a “public utility lessor” and will be required to report and pay tax on its property in the same manner as the utility to which it leases its property. This treatment applies to all such leased property that would otherwise be subject to public utility property tax if it were owned and used directly by the utility except 1) property leased to public utility in a sale and leaseback transaction, and 2) property leased to a railroad, water transportation, telephone or telegraph company. See R.C. 5727.01(M) and 5727.06 for more information.
Starting in 2009
Further updates will follow on reporting requirements and the forms to be used by public utility lessors, as well as how to report tangible personal property leased to a telephone or interexchange telecommunications company for return years 2009 and 2010. Additionally, R.C. 5727.031 requires a taxpayer that produces electricity for its own (nonutility) business and sells excess electricity to others to be treated as an electric company for property taxation purposes. Those taxpayers are required to report and pay the tax on a percentage of the true value of their eligible equipment based on the amount of electricity generated in the preceding year that was sold to other parties. |
