[ACFR-contacts-news] GASB 87: Coding Facilities Taxes

[CHASE Stacey A * DAS]

Good afternoon.

ACFR contacts,
An agency recently asked me about how to properly record facilities taxes in a post-GASB 87 environment; specifically, the comptroller object (cobj) used and the corresponding taxability of such payments.

Historically, facilities taxes paid to a lessor for leased facilities were charged to the same cobj as the lease payment. In a post-GASB 87 environment, the coding for lease payments varies based on whether the amount relates to principal, interest, variable costs, and other lease components, to name a few. [Refer to the proposed GASB 87 profile changes<https://www.oregon.gov/das/Financial/Acctng/Documents/GASB%2087%20Chart%20of%20Account%20Changes.03-12-2021.pdf> on the SARS training and resources webpage.]

When determining which cobj to use to record the payment of facilities taxes for leased property, agencies should evaluate: (1) the specific contract language and (2) who the payment is being made to.

Facilities taxes paid directly to a government tax assessor are not 1099-reportable; therefore, these payments may be recorded using cobj 4801.

Facilities taxes paid directly to the lessor are 1099-reportable; therefore, these payments should be recorded using an appropriate 1099-reportable cobj. Again, the cobj may vary based on the specific contract language. For example, if the facilities taxes are paid directly to the lessor and qualify as a lease component, cobj 4804, Other Lease Payments, may be used.

To ensure the accurate usage of cobj 4801 in a post-GASB 87 environment, the title has been updated in R*STARS as follows:

Cobj 4801 - FACILITIES TAXES-PAID DIRECTLY TO GOVT

Please verify all payments of facilities taxes, as described above, are reported correctly.

Thank you.
s

Stacey A. Chase
Senior Financial Reporting & Policy Analyst
Chief Financial Office
Department of Administrative Services
Call via Teams or (971) 900-9993
https://www.oregon.gov/das/financial/acctng/pages/index.aspx

Data Classification: Level 1 - Published

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