Ohio Dramatically Changes Property Tax Assessment Procedures, Reducing Local Governments’ Ability to Initiate, Appeal, and Settle Tax Assessment Cases | Epstein Becker & Green

A new Ohio law dramatically changes the landscape of property tax assessment challenges in the state. In general, this severely restricts the rights of school districts to initiate and appeal property tax assessment challenges. Governor DeWine signed the bill on April 21, 2022. It will take effect July 19, 2022 and will affect valuation complaints related to tax year 2022 valuations.

The following bullet points summarize the significant changes made by the law. Every situation is different and can vary depending on various factors. We encourage each reader to contact their own real estate tax attorney for advice on their particular situation.

  • House Bill 126 significantly limits the ability of school boards to file original property assessment complaints. Under previous law, school boards could challenge the assessment of any taxable property located in their constituency. Under the new law, school boards and other political subdivisions can only file raise complaints when:
    • The property was sold in a recent arm’s length sale that took place before January 1 of the tax year to which the complaint relates;
    • The sale price exceeds the auditor’s valuation of the property by at least 10% and $500,000.00; and
    • The council or subdivision passes a resolution authorizing the complaint and the council or subdivision has given notice to the owner at least seven days before the council or subdivision passes the resolution authorizing the filing of the complaint.
  • Once in effect, the amended Surrogate Home Bill 126 will prohibit private wage settlement agreements, commonly referred to as “direct payments,” as a means of resolving school-initiated assessment appeals. Under the previous law, the landlord and the school board could agree to resolve a tax assessment case, with the landlord paying the school board a sum of money; in exchange, the school board would dismiss his assessment complaint or any appeal relating to the assessment of the property.

The effect of this practice was to benefit landowners and school boards who were parties to these cases and agreements, while excluding other tax districts from benefiting from revenue increases resulting from school-initiated assessment complaints. The terms of the law that abolish direct compensation agreements would apply to agreements entered into on or after the bill’s effective date of July 19, 2022.

  • The new law will also prohibit school boards and other political subdivisions from appealing County Board of Review (“BOR”) decisions to the Ohio Board of Tax Appeals (“BTA”). It’s not yet clear what effect the bill would have on an attempt by a school board or other subdivision to appear as a respondent in a landlord-initiated BTA case, assuming the school board filed a counter-complaint in response to the original landlord complaint, or in the case of a school board-initiated raise complaint that resulted in a landlord-initiated BTA appeal.
  • The act also makes a variety of other procedural changes, including removing the current requirement that county auditors notify school boards of certain landlord complaints, changing the time frame within which school boards can file counter-complaints in response to landlord-filed complaints and requiring the county BORs to dismiss government-filed assessment complaints that the BOR does not resolve within one year of filing. The law applies to property tax complaints and counter-complaints set for the 2022 tax year (which would typically be filed between January 1 and March 31, 2023).

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