Ohio Senate Passes Important Property Tax Reforms

The Ohio Senate recently passed, by a vote of 24 to 7, Amended House Bill 126 (“HB 126”) that will significantly change the administration of Ohio’s property tax system. if it is also adopted by the House and signed by the Governor. It is unusual for us to report on pending legislation, but given the significance of the changes and the fact that it is already impacting pending issues, this unusual step is warranted.

Below is a summary of the important aspects of the bill. It is likely that these changes will have a different impact on each owner, buyer, seller or tenant. Please contact your Vorys real estate tax lawyer to discuss your specific situation.

  1. The primary change is that HB 126 would eliminate tax increase cases filed by school boards (“BOE”). This would first be effective for tax year 2022 cases that would otherwise have been filed in March 2023 – the BOE can still file tax year 2021 cases. Only owners and in some cases , sole tenant occupants of the property will be allowed to file original complaints to dispute property taxes.
  2. BOEs could file counter-complaints IF the BOE first passes a separate resolution authorizing the deposit of such a meter with supporting documentation as to value if the BOE intends to deposit a meter for a higher value than originally appraised.
  3. Eliminates the possibility for the owner and the BOE to enter into a private payment agreement. This is the section that has an immediate impact even if it is not yet adopted. Ongoing business may be affected by the change as well as existing agreements with payment obligations for future years. There are several different interpretations as to how this ban will be implemented. If you have existing or planned settlements, please contact your Vorys attorney to discuss them.
  4. Even if the BOE files a meter, the BOE will not be able to appeal the decision of the Board of Revision (“BOR”). Their only chance is at the BOR.
  5. These changes would first be effective for complaints filed for the 2022 tax year, meaning the BOE would still be able to file tax increase cases for the 2021 tax year.

HB 126 now returns to the Ohio House for a possible vote of approval. The next scheduled session of the House on January 19, 2022, although there is no guarantee at this time that this issue will be considered in the first session. If the House disagrees, the bill would go to a conference committee before being sent to the governor. The Governor’s position on the bill is unknown at this time. The current vote count in the Senate, if it remained the same, would be enough to override a veto. The count in the House will be important to watch.