Stephen K. Hall, JD, LLM – Member
Ohio Senate Passes Bill to Limit School Districts' Ability to Protest Real Estate Tax Values
Bill now goes to Ohio House for concurrence
The Ohio Senate voted December 15, 2021, to enact Sub. HB 126, a bill that would significantly reform the way real estate tax values are protested by local governments, including public school districts. The bill contains several pro-taxpayer provisions, and if the bill is ultimately enacted into law, it would be a positive step towards transparency and fairness in the way taxpayers’ real estate tax liabilities are determined in Ohio.
Under current Ohio law, schools and other local governmental entities have broad powers to challenge real estate values established by another government agency--county auditors. Such challenges, which nearly all other states prohibit, often result in an increase of the amount of the real estate taxes that taxpayers must pay on both commercial and residential properties. The challenges also result in the Ohio Board of Tax Appeals’ (BTA) docket being significantly tied up with such cases, thereby slowing down the process of decisions by the BTA for other Ohio state and local taxes (personal income, CAT, sales and use, excise tax, municipal income tax, etc.).
Here is a high-level summary of what the final amended Sub. H.B. bill would do, beginning with respect to valuation complaints filed with respect to Tax Year 2022 (for taxes payable in calendar year 2023):
School districts and other local taxing authorities will not be permitted to initiate valuation complaints for property that they don’t own.
School districts and other local taxing authorities will be able to file counter complaints if a property owner requests a decrease in value, but the School Board must pass a resolution first.
School districts will have to present evidence to support a counterclaim when the school district alleges a valuation amount greater than the county auditor's valuation.
School districts may not appeal a Board of Revision decision to the Ohio Board of Tax Appeals (BTA). But, if a taxpayer appeals a matter to the BTA which had initially involved a counter-complaint by a school district, the schools will be able to participate at the BTA, as in current law because the schools were a party at the board of revision.
Taxpayers and school districts will not be permitted to enter into “direct payment” or “private payment” settlement agreements related to valuation challenges.
The bill will go back to the House in early calendar year 2022 for either: a.) Concurrence or b.) Conference Committee. Concurrence means the bill would go to the Governor for consideration. If the House instead chooses to direct the bill to a Conference Committee, then further changes could dilute the bill’s provisions.
ZHF Observation: The school districts have come out swinging against this pro-taxpayer bill. Anyone who favors passage should immediately contact their House members to encourage concurrence. If the bill goes to a conference committee, property owners should get involved to ensure the Senate version of the bill is not watered down by the House.
Because of the impact of the possible law changes, property owners that are currently involved in a challenge to valuation should carefully consider how Sub. H.B. 126 may impact any such challenge or related appeal. As indicated, the changes described would first apply to complaints filed with respect to Tax Year 2022 values.
If you would like more information on this bill or how it might impact your real property taxes, please contact Steve Hall or any of our professionals.