Ohio

General Business Tangible Personal Property Phase-Out

Am. Sub. H.B. 66 (126th General Assembly) phased out the personal property tax on general business machinery and equipment, inventory, and furniture and fixtures. R.C. 5711.22(G) lists the assessment percentages of true value: 25 percent for tax year 2005; 18.75 percent for 2006; 12.5 percent for 2007; 6.25 percent for 2008; and zero percent for tax year 2009 and each tax year thereafter. R.C. 5711.22(I) provides that during and after the tax year in which the assessment rate equals zero percent, the property described in division (E), (F), (G), or (H) of that section shall not be listed for taxation. The Ohio Department of Taxation states that returns due in 2008 were the final returns for all general business taxpayers.

Sources: https://codes.ohio.gov/ohio-revised-code/section-5711.22. https://tax.ohio.gov/help-center/faqs/personal-property/personal-property. https://dam.assets.ohio.gov/image/upload/tax.ohio.gov/personal_property/tpp_guidelines_final_2006_bw_120705.pdf

Telephone and Interexchange Telecommunications Company Exception

R.C. 5711.22(H)(1) provided a later phase-out for personal property used by a telephone company, telegraph company, or interexchange telecommunications company: 20 percent of true value for tax year 2007, 15 percent for 2008, 10 percent for 2009, 5 percent for 2010, and zero percent for tax year 2011 and each tax year thereafter. The Ohio Department of Taxation states that telephone and inter-exchange telecommunications companies, or entities leasing property to telephone and inter-exchange telecommunications companies, were phased out after the 2010 filings, and no returns are due in 2011 and thereafter.

Sources: https://codes.ohio.gov/ohio-revised-code/section-5711.22. https://tax.ohio.gov/help-center/faqs/personal-property/personal-property

Goods Held for Storage and Shipment (R.C. 5711.22(D))

R.C. 5711.22(D)(1) provides that merchandise or an agricultural product shipped from outside this state and held in this state in a warehouse or a place of storage without further manufacturing or processing and for storage only and for shipment outside this state, but that does not qualify as "not used in business in this state" under division (B)(1) or (2) of section 5701.08 of the Revised Code, is nevertheless not used in business in this state for property tax purposes. R.C. 5711.22(D)(2) provides a separate rule for merchandise or an agricultural product owned by a qualified out-of-state person shipped from outside this state and held in this state in a public warehouse without further manufacturing or processing and for temporary storage only and for shipment inside this state, subject to the definitions of "qualified out-of-state person" and "public warehouse" in division (D)(3). For tax year 2009 and thereafter, general business personal property described in R.C. 5711.22(G) is listed at zero percent of true value and, under R.C. 5711.22(I), shall not be listed for taxation.

Source: https://codes.ohio.gov/ohio-revised-code/section-5711.22

Commercial Activity Tax (CAT)

The Ohio Department of Taxation states that the Commercial Activity Tax (CAT) is an annual tax imposed on the privilege of doing business in Ohio, based on the total sales and services a taxpayer does in Ohio. For tax years 2025 and forward, businesses with more than $6 million a year in Ohio taxable gross receipts need to pay the CAT. The CAT is taxed at .26% (.0026) of Ohio taxable gross receipts. If a business or person is not based in Ohio, they only have to pay the CAT if they have a bright-line presence in the state — which includes owning property in Ohio worth $50,000 or more — and a business must meet both the bright-line presence test and the sales threshold to owe CAT. From 2024 onward, they only owe CAT if their Ohio sales are over the exclusion amount ($6 million in 2025 and after). Only gross receipts sourced to Ohio are considered taxable gross receipts; sales of tangible personal property that was shipped outside Ohio are not subject to the CAT.

Source: https://tax.ohio.gov/business/commercial-activity-tax

Is business inventory taxed in Ohio?

Not for general business taxpayers. For tax year 2009 and each tax year thereafter, personal property used in business is listed and assessed at zero percent of true value (R.C. 5711.22(G)(5)), and that property shall not be listed for taxation (R.C. 5711.22(I)). The Ohio Department of Taxation states that returns due in 2008 were the final returns for all general business taxpayers.

Do I need to file a tangible personal property tax return in Ohio?

Not for tax years 2009 and thereafter, for general business taxpayers. The Ohio Department of Taxation states that no annual or new taxpayer returns, either form 920 or 945, are required to be filed for tax years 2009 and thereafter. Entities that were subject to the tax in taxable year 2008 or any year before 2008 and failed to file a return for a taxable year must still file a return for the outstanding period.

When was Ohio's tangible personal property tax phased out?

The listing percentage for general business personal property used in business was reduced to 18.75 percent for tax year 2006, 12.5 percent for 2007, 6.25 percent for 2008, and zero percent for tax year 2009 and each tax year thereafter (R.C. 5711.22(G)). Telephone, telegraph, and interexchange telecommunications company personal property reached zero percent for tax year 2011 and thereafter (R.C. 5711.22(H)(1)).

What is the Ohio listing date for taxable personal property?

R.C. 5711.03 provides that taxable personal property and credits used in business shall be listed as of the close of business of the last day of December, annually. For tax year 2009 and thereafter, general business personal property described in R.C. 5711.22(G) shall not be listed for taxation (R.C. 5711.22(I)).

Does Ohio have a goods-in-transit or freeport-type rule?

R.C. 5711.22(D)(1) treats merchandise or an agricultural product shipped from outside Ohio and held in a warehouse or place of storage without further manufacturing or processing and for storage only and for shipment outside Ohio as not used in business in this state for property tax purposes, even if it does not otherwise qualify under R.C. 5701.08(B)(1) or (2). For tax year 2009 and thereafter, general business personal property is listed at zero percent of true value and shall not be listed for taxation, so that listing-percentage phase-out is the operative rule for general business inventory.

What is the Ohio Commercial Activity Tax?

The Ohio Department of Taxation states that the Commercial Activity Tax (CAT) is an annual tax imposed on the privilege of doing business in Ohio, based on taxable gross receipts sourced to Ohio. For tax years 2025 and forward, businesses with more than $6 million a year in Ohio taxable gross receipts need to pay the CAT, taxed at .26% of those receipts. An out-of-state person must have a bright-line presence in Ohio — which includes owning property in Ohio worth $50,000 or more — and also meet the sales threshold to owe CAT.