Ohio Tax Changes - January 2025
Property Tax Changes
- Amendment: The Ohio Department of Taxation has amended Ohio Admin. Code Ann. § 5703-3-10, effective January 17, 2025.
- Key Change: Taxpayers are no longer required to file a claim for deduction from book value for depreciable tangible personal property when reported at a value less than depreciated book value.
Sales & Use Tax Case
- Court Ruling: The Ohio Court of Appeals allowed a class action case to proceed regarding an insurance company's failure to pay sales tax on loss claims.
- Background: The plaintiff claimed that the insurance policy required payment of sales tax for replacing a damaged or stolen vehicle.
- Court Decision: The court upheld the class certification, rejecting the insurance company's arguments that exemptions made the class unascertainable.
- Limitation: The court specified that the class should only include insured parties with total loss claims. If successful, the insurance company may have to reimburse unpaid sales tax to these insured parties.
Ohio Property Tax—Ohio modifies tangible personal property reporting regulation.
The Ohio Department of Taxation has amended Ohio Admin. Code Ann. § 5703-3-10 (Tangible personal property tax; true value of depreciable assets; application of "true value" or "302" computation), effective January 17, 2025. Changes remove the requirement for taxpayers to file a claim for deduction from book value for every tax return on which depreciable tangible personal property is returned at a value less than depreciated book value.
Ohio Sales & Use Taxes—Ohio Court of Appeals allows class action case involving insurance company's failure to pay sales tax on loss claims to proceed.
The Ohio Court of Appeals affirmed in part, reversed in part, and remanded a trial court's decision to grant class certification to insured parties whose loss payments did not include sales tax. The plaintiff filed a complaint asserting that the insurance company's policy required it to pay sales tax when replacing a damaged or stolen vehicle, if required by law. The plaintiff filed the complaint individually and on behalf of all other similarly situated individuals. The court upheld the trial court's grant of plaintiff's motion for class certification. The court rejected the insurance company's argument that sales tax exemptions available in Ohio make the class overbroad and unascertainable, as the class could include parties that did not pay sales tax when purchasing their vehicle. The court also rejected the insurance company's argument that its sales tax obligations cannot be determined on a class-wide basis. The court did accept the insurance company's claim that the class definition should only include insured parties who suffered a total loss. If successful, the insurance company may have to reimburse the insured parties for unpaid sales tax. (Chambers v. Farmers Ins. of Columbus, Inc., Oh. Ct. App., Dkt. No. 113659, 01/02/2025.)
Ohio Property Tax—Ohio modifies tangible personal property reporting regulation.
The Ohio Department of Taxation has amended Ohio Admin. Code Ann. § 5703-3-10 (Tangible personal property tax; true value of depreciable assets; application of "true value" or "302" computation), effective January 17, 2025. Changes remove the requirement for taxpayers to file a claim for deduction from book value for every tax return on which depreciable tangible personal property is returned at a value less than depreciated book value.
Ohio Sales & Use Taxes—Ohio Court of Appeals allows class action case involving insurance company's failure to pay sales tax on loss claims to proceed.
The Ohio Court of Appeals affirmed in part, reversed in part, and remanded a trial court's decision to grant class certification to insured parties whose loss payments did not include sales tax. The plaintiff filed a complaint asserting that the insurance company's policy required it to pay sales tax when replacing a damaged or stolen vehicle, if required by law. The plaintiff filed the complaint individually and on behalf of all other similarly situated individuals. The court upheld the trial court's grant of plaintiff's motion for class certification. The court rejected the insurance company's argument that sales tax exemptions available in Ohio make the class overbroad and unascertainable, as the class could include parties that did not pay sales tax when purchasing their vehicle. The court also rejected the insurance company's argument that its sales tax obligations cannot be determined on a class-wide basis. The court did accept the insurance company's claim that the class definition should only include insured parties who suffered a total loss. If successful, the insurance company may have to reimburse the insured parties for unpaid sales tax. (Chambers v. Farmers Ins. of Columbus, Inc., Oh. Ct. App., Dkt. No. 113659, 01/02/2025.)