Justia Tax Law Opinion Summaries

A group of landowners challenged the Ohio Tax Commissioner’s decision to set a woodland-clearing-cost rate of $1,000 per acre for the purpose of calculating the current agricultural use valuation (CAUV) of their properties for tax years 2015 through 2020. The landowners argued that the rate was too low and not based on reliable evidence, causing their woodlands to be overvalued and resulting in higher property taxes.The Board of Tax Appeals (BTA) upheld the Tax Commissioner’s decision, finding that the Commissioner did not abuse her discretion in setting the $1,000 rate. The BTA concluded that the rate was within the Commissioner’s discretion and based on input from the agricultural advisory committee. The BTA also rejected the Tax Commissioner’s argument that some landowners lacked standing to challenge the CAUV entries for certain years.The Supreme Court of Ohio reviewed the case and found that the Tax Commissioner abused her discretion by adopting the $1,000 rate without reliable evidence or a sound reasoning process. The court noted that the decision was arbitrary and not supported by any fixed rules or standards. The court also found that the Tax Commissioner failed to comply with Ohio Administrative Code 5703-25-33, which requires obtaining information from reliable sources and ensuring that CAUV tables are accurate, reliable, and practical.The Supreme Court of Ohio reversed the BTA’s decision and remanded the case to the Tax Commissioner with instructions to adopt a woodland-clearing-cost rate that complies with the administrative code. The court emphasized that the Tax Commissioner must base the rate on reliable evidence and follow the prescribed standards. View "Adams v. Harris" on Justia Law

In this case, Dean and Dave Cook filed a complaint with the Union County Board of Revision in February 2022, seeking an increase in the property valuation of an apartment complex owned by The Residence at Cooks Pointe, L.L.C. The Marysville Exempted Village Schools Board of Education filed a counter-complaint in May 2022, supporting the Cooks' claim that the property was undervalued. The Board of Revision held a hearing in August 2022 and decided not to change the property valuation due to insufficient evidence.The Marysville Exempted Village Schools Board of Education appealed the Board of Revision's decision to the Board of Tax Appeals (BTA) in September 2022. However, the BTA dismissed the appeal in December 2022, citing a recent amendment to R.C. 5717.01, effective July 21, 2022, which restricted the ability of school boards to appeal property valuation decisions unless they owned or leased the property in question. The school board then appealed to the Third District Court of Appeals, which reversed the BTA's decision, ruling that the amendment did not apply to cases pending before the Board of Revision when the amendment took effect.The Supreme Court of Ohio reviewed the case and affirmed the Third District Court of Appeals' decision. The court held that the amended R.C. 5717.01, which limits a political subdivision's ability to appeal a county board of revision's property valuation decision, does not apply to cases that were pending before a board of revision when the amendment took effect. The court emphasized that the language of the amended statute is written in the present tense and ties the right of appeal to the moment a complaint is filed with a board of revision. Therefore, the school board's appeal to the BTA should be considered under the former version of R.C. 5717.01. The case was remanded to the BTA for further proceedings. View "Marysville Exempted Village Schools Bd. of Edn. v. Union Cty. Bd. of Revision" on Justia Law

A pipeline running through 13 Ohio counties was valued by the Ohio Tax Commissioner at $1,620,358,699 for tax year 2019. The pipeline's owner, Nexus Gas Transmission, L.L.C., appealed this valuation to the Board of Tax Appeals (BTA), arguing for a lower value of $615,695,340. The dispute was settled through an agreement between Nexus and the Tax Commissioner, setting the pipeline's value at $950,000,000 for 2019 and resolving valuation issues for 2020 and 2021. The Tax Commissioner issued a final determination reflecting these agreed values.The Lorain County Auditor, dissatisfied with the settlement, appealed the Tax Commissioner’s final determination to the BTA, arguing that the Commissioner had not followed statutory criteria in valuing the property. The BTA dismissed the appeal, stating that the valuation dispute had been resolved through the settlement agreement and that the auditor had not participated in the initial appeal process.The Supreme Court of Ohio reviewed the case, focusing on reconciling the Tax Commissioner’s authority to settle tax disputes under R.C. 5703.05(C) with the county auditor’s right to appeal under R.C. 5717.02(A). The court held that while a county auditor can appeal a final determination, this right does not extend to challenging the substance of a settlement agreement reached by the Tax Commissioner. The court emphasized that allowing such appeals would undermine the Commissioner’s statutory authority to settle disputes. The court affirmed the BTA’s decision, concluding that the county auditor’s appeal, which contested the valuation methodology rather than the validity of the settlement itself, could not proceed. View "Snodgrass v. Harris" on Justia Law

During the COVID-19 pandemic, the Ohio General Assembly passed a temporary law (H.B. 197) stating that for a limited time, Ohio workers would be taxed by the municipality that was their “principal place of work” rather than the municipality where they actually performed their work. Josh Schaad, who primarily worked from his home in Blue Ash during the pandemic, challenged this law after his employer withheld municipal taxes from his wages and forwarded them to Cincinnati, the location of his employer's business. Schaad's principal argument was that the Due Process Clause of the Fourteenth Amendment to the United States Constitution forbids an Ohio municipality from taxing a nonresident for work performed outside of that municipality. The Supreme Court of Ohio rejected Schaad's argument and affirmed the judgment of the First District Court of Appeals, holding that the Due Process Clause did not prohibit the General Assembly from directing that an Ohio citizen pay taxes to the municipality where the employee’s principal place of work was located rather than to the subdivision of the state where the employee actually worked. The court also held that the General Assembly's power to pass emergency legislation did not expand its substantive constitutional powers. View "Schaad v. Alder" on Justia Law

The Supreme Court denied a writ of mandamus sought by the Board of Education of the Ottawa Hills Local School District ordering the Lucas County Board of Elections to place a tax levy on the November 7, 2023 general election ballot, holding that the Board of Elections did not abuse its discretion or act in disregard of applicable legal provisions when it refused to place the levy on the ballot.On August 28, 2023, the Board of Education brought this original action seeking a writ of mandamus ordering the Board of Elections to certify the levy at issue and place it on the November 2023 general election ballot. The Supreme Court denied the writ, holding (1) the Board of Education failed to certify an accurate resolution to proceed to the Board of Elections "not later than four p.m. of the ninetieth day before the day of the election," as required by Ohio Rev. Code 35.01.02(F); and (2) the Board of Education's error was not a technical violation that did not affect the public interest. View "State ex rel. Ottawa Hills Local School District Bd. of Education v. Lucas County Bd. of Elections" on Justia Law

The Supreme Court affirmed the decision of the Board of Tax Appeals upholding the final determination by the tax commissioner assessing a use tax against Appellant, holding that the Board did not err in upholding that tax commissioner's final determination.The challenged assessment in this action related to items used in the construction of a data center that Appellant contracted to have built. The Supreme Court affirmed the Board's decision upholding the use tax assessed against Appellant, holding (1) Appellant failed to cite to any authority to support its argument that it was not liable for the use tax because a contractor had already paid it on the items in question; (2) Appellant forfeited the arguments under its third and fourth positions of law; and (3) Appellant's first and second propositions of law were moot. View "PCM, Inc. v. Harris" on Justia Law

The Supreme Court affirmed in part and reversed in part the judgment of the Ohio Board of Tax Appeals (BTA) that some of Taxpayer's equipment used in fracking was subject to Ohio's sales and use tax, holding most of the equipment at issue was exempt from taxation.While Ohio law generally exempts from taxation equipment used direction in oil and gas production not everything in the production of oil and gas qualifies for the exemption. After Taxpayer purchased equipment for use in its fracking operations the tax commissioner issued use-tax assessments, one for each piece of equipment. The commissioner then canceled about half the assessments. The BTA affirmed. The Supreme Court reversed in part, holding that equipment consisting of blenders, hydration units, chemical-additive units, t-belts, and sand kings are tax exempt. View "Stingray Pressure Washing, L.L.C. v. Harris" on Justia Law

An Ohio tax lien on real property is enforced through a foreclosure action, which may result in a sale of the property at auction. If such a sale occurs and the price exceeds the amount of the lien, the excess funds may go to junior lienholders or the owner. If the tax-delinquent property is abandoned, an auction may not be required; the property may be transferred directly to a land bank, free of liens. When that happens, the county gives up its right to collect the tax debt, and any junior lienholders and the owner get nothing. The properties at issue were transferred directly to county land banks. US Bank owned one foreclosed property and claims to have held mortgages on the other two. US Bank alleges that at the time of the transfers, the fair market value of each property was greater than the associated tax lien and that the transfers to the land banks constituted takings without just compensation.The Supreme Court of Ohio affirmed the dismissals of the suits. US Bank lacks standing in one case; it did not hold the mortgage at the time of the alleged taking. As to the other properties, US Bank had adequate remedies in the ordinary course of the law. It could have redeemed the properties by paying the taxes; it could have sought transfers of the foreclosure actions from the boards of revision to the common pleas courts; it could have appealed the foreclosure adjudications to those courts. View "US Bank Trust, National Association v. Cuyahoga County" on Justia Law

The Supreme Court reversed in part the decision of the Board of Tax Appeals (BTA) affirming a final assessment imposed by the tax commissioner determining that NASCAR owed taxes, interest, and penalties in the amount of $549,520, holding that the bulk of the tax assessment was unlawful.The Ohio Department of Taxation conducted an audit and determining that NASCAR had improperly failed to pay Ohio's commercial-activity tax (CAT), Ohio Rev. Code 5751.91 et seq., from 2005 to 2010 and owed Ohio more than in back taxes and penalties. The BTA affirmed the assessment, determining that for the four revenue streams under review - broadcast, media, licensing, and sponsorship - the receipts were properly situated to Ohio. NASCAR appealed, arguing that its broadcast revenue, media revenue, licensing revenue, and sponsorship revenue were not subject to the CAT. The Supreme Court reversed the tax assessment as to NASCAR's broadcast revenue, media revenue, licensing fees, and sponsorship fees, holding (1) the broadcast revenue was not based on the right to use NASCAR's property in Ohio; and (2) the media revenue, licensing fees, and sponsorship fees situated to Ohio were not "based on the right to use" NASCAR's property in Ohio. View "NASCAR Holdings, Inc. v. McClain" on Justia Law

The Supreme Court affirmed the decision of the Board of Tax Appeals (BTA) upholding the decision of the tax commissioner denying Colonial, Inc.'s application for a tax refund, holding that there was no error.In its application, Colonial argued that it was entitled to a refund of $269,432 in resort-area taxes that it paid from 2011 through 2016. Specifically, Colonial sought to recover a locally-imposed resort-area gross receipts excise tax that the village of Put-in-Bay originally enacted in 1995, arguing that, under Ohio Rev. Code 5739.101, the village must react the resort-area tax after each decennial census. The tax commissioner denied the refund claim, and the BTA affirmed. The Supreme Court affirmed, holding that the BTA correctly affirmed the tax commissioner's denial of Colonial's application for a refund. View "Colonial, Inc. v. McClain" on Justia Law