Rev. Rul. 71-204

Advice has been requested whether real and personal property taxes imposed under the laws of the State of Ohio accrue, for Federal income tax purposes, on the assessment date.

The taxpayer, a domestic corporation, computes its income under an accrual method of accounting and files its Federal income tax return on a calendar year basis. During the current taxable year the taxpayer owned both real and personal property located in the State of Ohio.

Section 5711.03 of the Ohio Revised Code Annotated, as amended, provides that except as provided in sections 5711.01 to 5711.36, inclusive, all taxable property shall be listed as to ownership or control, valuation, and taxing districts as of the beginning of the first day of January, annually, except that taxable personal property used in business and credits used in business shall be listed as of the close of business of the last day of December, annually.

Section 5719.01 of the statutes, as amended, provides that the lien of the state for taxes levied for all purposes on the real and public utility tax list and duplicate for the year 1954 and each year thereafter shall attach to all real property subject to such taxes on the first day of January, annually.

Section 1.461-1(a)(2) of the Income Tax Regulations provides that, under an accrual method of accounting, an expense is deductible for the taxable year in which all the events have occurred which determine the fact of the liability and the amount thereof can be determined with reasonable accuracy.

Under Ohio law, the assessment date for real property taxes and the lien date for such taxes is January 1, hence, on this date, the events occur which determine the liability for Ohio real property taxes.

The personal property taxes under Ohio law are assessed and accrue annually on the last day of December.

Accordingly, in the instant case, the real property taxes imposed by the State of Ohio accrue, for Federal income tax purposes, on January 1 of each year. The personal property taxes imposed by the State of Ohio accrue, for Federal income tax purposes, on the last day of December annually.

I.T. 2632, C.B. X1-2, 74 (1932), Revenue Ruling 55-152, C.B. 1955-1, 67, and Revenue Ruling 57-616, C.B. 1957-2, 305, are hereby superseded since the positions set forth therein are restated in this Revenue Ruling.