Energy Conversion Facilities Corporate Tax Exemption

Summary

As part of Ohio’s Tax Reform, personal property tax was phased-out by 2009 and corporate franchise tax was phased-out by 2010 for most taxpayers. Ohio may provide an exemption for certain property from real and personal property taxation*, state sales and use taxes, and the state's corporate franchise tax where applicable. The exemption applies to property used in energy conversion, thermal-efficiency improvements and the conversion of solid waste to energy. Generally, "energy conversion" refers to the replacement of fossil-fuel resources with alternative fuels or technologies; "thermal efficiency improvements" refers to the recovery of waste heat or steam produced in any commercial or industrial processes; and "solid waste conversion" refers to the use of waste to produce energy and the utilization of such energy. Eligible technologies may include solar-thermal systems, photovoltaic systems, wind, biomass, landfill gas and waste-recovery systems. Upon receipt of certification from the tax commissioner, such property is exempt from Ohio's sales and use tax. In addition, such property is not considered to be an improvement on the land for purposes of real property taxation or as 'used in business' for purposes of personal property taxation.* Such property is also not considered in the assessment of Ohio's corporate franchise tax. These provisions have been in effect since 1978. Contact the Department of Taxation for more information. The Application for Energy and Solid Waste Energy Conversion and Thermal Efficiency Improvement Facility is found at on the Ohio Department of Taxation website (form number ECF). *It should be noted that Ohio's personal property taxes for general business filers have been phased out. See the Department of Taxation fact sheet on this subject. It should be noted that public utilities are not considered "general business filers" and tangible personal property of public utilities is still taxed. Furthermore, for tax purposes, a business that produces electricity and sells excess electricity to others will be subject to personal property taxes as well. See the Department of Taxation's fact sheet for more information.