Articles Posted in Ohio Supreme Court

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Cheryl and John Gallenstein, Kentucky residents, purchased a boat in Indiana. The couple docked their boat in Indiana but chose Cincinnati as the hailing port. In 2003, the Division of Watercraft of the Ohio Department of Natural Resources issued a registration certificate to Cheryl. in 2005, the Ohio tax commissioner assessed a use tax, imposed a penalty, and assessed pre-assessment interest, determining that Cheryl’s use of the boat in Ohio, combined with her declaration of Cincinnati as the boat’s hailing port and her registration of the boat in Ohio created a nexus between the boat and Ohio and that she did not qualify for the transient use exception. The Board of Tax Appeals (BTA) affirmed. The Supreme Court reversed, holding that the BTA acted unreasonably and unlawfully in affirming the commissioner’s use tax, penalty, and pre-assessment interest because Cheryl qualified for the transient use exception contained in Ohio Rev. Code 5741.02(C)(4). View "Gallenstein v. Testa" on Justia Law

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Appellants requested a tax refund from the City of Worthington in connection with municipal income tax they paid on stock-option income earned from 2005 through 2007, as reported on Form 1040, Schedule C of their federal income tax return. The Board of Tax Appeals (BTA) affirmed the denial of Appellants' refund based on its view that Ohio Rev. Code 718.01 governed the case because the City's definition of net profits in former Worthington Codified Ordinance 1701.15, which defined net profit for purposes of the City's income tax for an individual taxpayer "as the individual's profit, other than amounts required to be reported on schedule C," contravened the statutory definition of net profits set forth in section 718.01(A)(7). The Supreme Court reversed and ordered the City to refund the municipal taxes paid by Appellants on Schedule C during the tax years at issue, holding that the decision of the BTA was unreasonable and unlawful because the General Assembly did not exercise its power to limit or restrict the municipal power of taxation through section 718.01, and therefore, the statutory provisions at issue did not preclude the refund. View "Gesler v. City of Worthington Income Tax Bd. of Appeals" on Justia Law

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Five income tax assessments were levied against Appellant for the tax years 2003-2007 for Appellant's failure to file returns. Appellant filed reassessment petitions, which the tax commissioner denied. The Board of Tax Appeals (BTA) dismissed Appellant's appeal, concluding that it lacked jurisdiction to address the errors Appellant specified in his notices of appeal because those errors had not been raised before the tax commissioner. In so concluding, the BTA rejected another jurisdictional argument raised by the commissioner, namely, that because Appellant had not paid the assessment, the tax commissioner had lacked jurisdiction to hear Appellant's reassessment petitions. The BTA concluded, rather, that the prepayment provision of Ohio Rev. Code 5747.13(E)(3) was triggered by a failure to file tax returns and that Appellant had in fact filed returns for the tax years at issue. The Supreme Court reversed the BTA's ruling that the prepayment requirement did not apply in this case, vacated the remainder of the BTA's decision, and remanded with instructions that the reassessment petitions be dismissed for lack of prepayment. View "Abraitis v. Testa" on Justia Law

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A trust filed a valuation complaint seeking a reduction of a county auditor's valuation of a self-storage facility for the tax year 2008. The Groveport Madison Local Schools Board of Education (BOE) filed a countercomplaint requesting retention of the auditor's valuation. After a hearing, the County Board of Revision (BOR) ordered a reduction of the property value as requested by the trust. After the BOE appealed, the property was sold at a sheriff's sale. On appeal, the Board of Tax Appeals remanded with instructions that the BOR dismiss the valuation complaint for lack of jurisdiction because the complaint misidentified the owner of the property. The Supreme Court reversed, holding that because there is no statutory requirement that a valuation complaint accurately identify the legal owner of the subject property, identification of the owner is not a jurisdictional prerequisite. Remanded. View "Groveport Madison Local Schs. Bd. of Educ. v. Franklin County Bd. of Revision" on Justia Law

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Appellant was subject to an increased personal-property tax assessment. The tax commissioner subsequently issued final-assessment certificates, which included instructions for appealing the assessment. Instead of instructing Appellant to appeal directly to the board of tax appeals, which is the correct procedure for appealing a final assessment, the commissioner instructed Appellant to petition for reassessment with the tax commissioner. Appellant subsequently filed a petition for reassessment. Instead of conducting a substantive review of the petition, the commissioner dismissed the petition because Appellant did not appeal to the Board of Tax Appeals (BTA). The BTA affirmed the dismissal. The Supreme Court reversed, holding that the BTA erred in determining that Appellant had committed a fatal procedural error when it followed the appeal instructions given by the tax commissioner. Remanded with instructions to issue a final determination that addresses the assessment on the merits. View "Crown Commc'n, Inc. v. Testa" on Justia Law

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Ten valuation complaints were filed by a salaried employee on behalf of a corporate entity as the property owner. In each case, the county board of revision (BOR) ordered a decrease in value. The school board argued before the board of tax appeals (BTA) that the original complaints should be dismissed because a salaried employee of the corporation who was not himself a lawyer but purported to act on behalf of the corporate owner signed the complaints. The school board acknowledged that Ohio Rev. Code 5715.19(A)(1) explicitly authorizes salaried corporate employees to file on behalf of the corporate owner but argued that the statute cannot be given effect because that kind of filing constitutes the unauthorized practice of law. The BTA granted the school board's motion and ordered that the appeals be remanded to the BOR to be dismissed for lack of jurisdiction. The Supreme Court reversed, holding that the complaints properly invoked the jurisdiction of the BOR where the legislature acted within its authority in amending section 5715.19(A)(1) to permit a salaried employee of a corporation who is not a lawyer to file a complaint on behalf of the corporation. Remanded. View "Marysville Exempted Village Sch. Dist. Bd. of Educ. v. Union County Bd. of Revision" on Justia Law

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In 2006, Taxpayers acquired a two-story building pursuant to a contract by which they acquired a business on the first floor of the building. Thus, the asset purchase included personal property consisting of restaurant equipment and a covenant not to compete, as well as the realty. In 2007, the auditor used the entire aggregate price, $325,000, as the property value even though in 2006 the auditor had determined the value to be only $116,700. The county board of revision (BOR) reduced the value to $175,000. The board of tax appeals reinstated the $325,000 aggregate price as the value of the property. The Supreme Court ordered the value be modified to $160,000, a figure supported by the mortgage loan secured by the real property, holding that the adoption of the full sale price was unreasonable and unlawful. View "Sapina v. Cuyahoga County Bd. of Revision" on Justia Law

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At issue in this case was the 2007 tax-year valuation of six properties owned by Appellant. Appellant filed six valuation complaints regarding the properties. The county board of revision (BOR) retained the auditor's valuation for five parcels and ordered a reduction for one. On appeal, the board of tax appeals (BTA) concluded (1) in the case of the one parcel, the complaint's failure to state an actual dollar amount of value reduction was a jurisdictional defect, and thus the case was remanded to the BOR for dismissal; and (2) with respect to the other five parcels, the evidence offered by Appellant was insufficient to find a value different from that determined by the BOR. The Supreme Court affirmed, holding (1) the BTA properly ordered dismissal of Appellant's appeal of the case of the one parcel; and (2) the BTA acted reasonably and lawfully in adopting the BOR's valuation with respect to the other parcels. View "Shinkle v. Ashtabula County Bd. of Revision" on Justia Law

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Cincinnati Community Kollel, an educational institution for purposes of Ohio Rev. Code 4709.121(A)(2), sought exemptions for three residential apartment buildings based on the claim that the properties were being used in furtherance of its educational purposes. The statute provides that real property belonging to an educational institution is exempt from taxation if it is made available under the direction of the institution for use in furtherance of or incidental to its educational purposes and not with a view to profit. The tax commissioner denied the exemptions, and the board of tax appeals (BTA) affirmed. The Supreme Court reversed, holding that the BTA applied the wrong legal standard and failed to cite reliable and probative evidence to support its decision. Remanded to the BTA to review the evidence submitted in this case and determine whether the subject property was used in furtherance of the kollel's educational purposes. View "Cincinnati Cmty. Kollel v. Levin" on Justia Law

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Appellants, contractors and engineers, filed a declaratory judgment action against Appellee, the tax commissioner of Ohio, seeking a judgment declaring that the Ohio commercial activity tax (CAT), as it related to motor-vehicle-fuel sales, violated Ohio Const. art. XII, 5a. The trial court granted summary judgment for the tax commissioner. The appellate court affirmed, applying the rationale of Ohio Grocers Ass'n v. Levin, concluding that the background and history of Section 5a did not support the contention that the CAT was a tax "relating to" motor vehicle fuel sales. The Supreme Court reversed, holding that the expenditure of the CAT revenue that was derived from motor-vehicle-fuel sales were "related to" fuels used for propelling motor vehicles on a highway, within the meaning of Section 5a, and consequently, the excise tax violated the Ohio Constitution to the extent that the revenue raised was used for purposes other than those specified in Section 5a. View "Beaver Excavating Co. v. Testa" on Justia Law