Court permits school district to challenge apartment complex’s property tax value despite a change in state law limiting tax valuation appeals.

Court permits school district to challenge apartment complex’s property tax value despite a change in state law limiting tax valuation appeals.

The Supreme Court of Ohio ruled today that the Marysville Exempted Village School District can continue to challenge the property tax value of a private residential complex despite a 2022 change in state law limiting the ability of local governments to appeal tax valuation decisions.

In a 6-1 decision, the Supreme Court ruled the Marysville school board could appeal the tax value of The Residence of Cooks Pointe to the state Board of Tax Appeals (BTA). The school board’s appeal could go forward even though the 2022 state law has limited the rights of local governments to appeal tax valuation decisions of local Boards of Revision to only the property the local government owns or leases.

Writing for the Court majority, Justice Melody Stewart explained that the school board’s objection to the county auditor’s $8.8 million valuation of the apartment complex was pending with the county board of revision before the new law took effect. Because of the state law’s wording, the school board retained its right to appeal to the BTA after the law changed.

“We hold that the plain language of amended R.C. 5717.01 makes clear that the amended statute does not apply to cases in which a challenge to an auditor’s property valuation was pending before a board of revision when the amendment took effect,” the Court concluded.

The Court affirmed a Third District Court of Appeals decision, which found Marysville could still go to the BTA. The Court remanded the case to the BTA for further proceedings.

Chief Justice Sharon L. Kennedy and Justices R. Patrick DeWine, Michael P. Donnelly, Jennifer Brunner, and Joseph T. Deters joined Justice Stewart’s opinion.

In a dissenting opinion, Justice Patrick F. Fischer wrote the change in state law prohibited the school board from appealing to the BTA regardless of when its complaint with the county board was filed. He stated that the right to appeal to the BTA was triggered by notification to the school board that the board of revision affirmed the auditor’s valuation. That happened after the new law took effect and barred Marysville from appealing to the BTA, he concluded.

Law Changed in Midst of Tax Challenge
The Union County auditor assessed the fair market value of The Residence at Cooks Pointe at $8,787,310 for the 2021 tax year. In February 2022, two county taxpayers filed a complaint with the Union County Board of Revision, arguing the tax valuation should be higher because the property’s fair market value was nearly three times greater than the auditor’s assessment. In May 2022, the Marysville school board joined the case by filing a “counter-complaint.” While the school board’s calculation of the complex’s value differed from the taxpayers, the board still argued the county auditor significantly undervalued the property.

As the appeal was pending, state lawmakers in April 2022 passed House Bill 126, which amended the ability of local governments, including school boards, to challenge the property tax valuations made by county auditors. HB 126 took effect in July 2022 and allowed local governments to only appeal decisions by the county boards of revision to the BTA for property that the government body owned or leased.

The Union County board met in August 2022 to decide The Residence at Cooks Pointe valuation and voted to maintain the $8.8 million value determined by the county auditor. The school board appealed the valuation to the BTA in September 2022.

The BTA dismissed the school board’s appeal. Citing HB 126, the BTA ruled that as of July 2022, it could no longer hear an appeal from a school board for property it did not own or lease. The school board appealed the decision to the Third District Court of Appeals, which reversed the BTA’s decision.

The apartment complex owners appealed the Third District’s decision to the Supreme Court, which agreed to hear the case.

Supreme Court Analyzed Tax Law Changes
The Court’s opinion explained the process for setting and challenging property tax rates. The county auditor is responsible for appraising and calculating property tax valuations. R.C. 5715.19 provides the method for challenging an auditor’s valuation to a three-member county board of revision. R.C. 5717.01 sets the procedures for appealing a board of revision’s decision to the BTA.

When anyone files a complaint about a county auditor’s property valuation that is more than $17,500, the county auditor must notify the school board whose district may be affected by the complaint. The school board has 30 days to file a complaint in support of or objecting to the auditor’s valuation. After receiving an unfavorable board of revision ruling, R.C. 5717.01 gives the state tax commissioner, several local government bodies, and taxpayers 30 days to file an appeal with the BTA.

Justice Stewart explained that HB 126 did not change who could appeal decisions to a county board of revision but limited the circumstances under which a political subdivision can appeal to the BTA.  The law now states a board of revision ruling can be appealed, “except that a subdivision that files an original complaint or counter-complaint under that section with respect to property the subdivision does not own or lease may not appeal the decision of the board of revision with respect to that original complaint or counter-complaint.”

The opinion stated the amendment is written in the present tense and applies to a subdivision “that files” a complaint or counter-complaint with the board of revision. Because the wording is in the present tense instead of the past tense “filed” or “has filed,” the amended law applies only to cases filed with county boards of revision after the July 2022 effective date, the Court stated.

“Had the General Assembly used the past tense in its phrasing, that would have indicated an intent that the statutory amendment be applied to cases pending before a board of revision when the amendment took effect. But that is not what the General Assembly did,” the opinion stated.

The Court found the wording of R.C. 5701.01 “clearly ties the right of appeal” to filing a complaint with the board of revision, not to filing an appeal to the BTA.

The Court explained it reached a similar conclusion in its 2024 State ex rel. Thomas v. Wood Cty. Bd. of Elections decision. While that case dealt with appealing zoning amendments, the Court ruled that when a law change is tied to a “specific operative event,” then the date of the event determines whether the old version or the new version of state law applies. If HB 126 had made the filing of the appeal to the BTA the operative event, then Maryville’s appeal would have been prohibited because it happened after the law change, the opinion noted. Since the law made filing a complaint with the board of revision the operative event, the Court concluded that Marysville’s right to appeal was secured before the law changed.

School board unable to appeal, Dissent Maintained
Justice Fischer wrote the majority opinion’s analysis “overcomplicates” the reading of R.C. 5701.01. The provision regarding filing a complaint with the board of revision describes “who” can participate in the appeals of board of revision decisions. The wording does not impact “how” or “when” an appeal can be filed.

Justice Fischer also cited the Thomas decision, and maintained that if the Court properly applied that ruling to this case, then Marysville could not appeal to the BTA. In Thomas, the operative event that triggered the application of the changed law was a local government’s approval of a zoning amendment. Opponents had 30 days to challenge a zoning amendment. The Court ruled in Thomas that if the zoning amendment was approved more than 30 days before the law took effect, the old version of the law applied, and if the zoning change took place within 30 days or fewer, then the new version of the law applied. 

Marysville’s ability to appeal the board of revision decision started when it received notice that its challenge had been rejected. That rejection was the “specific operative event” that gave the school board the right to appeal to the BTA, the dissent stated. However, that event occurred in September 2022, after the law took effect, and the change prevented the school board from appealing valuations of property it did not own or lease, the dissent concluded.

2023-0964. Marysville Exempted Village Schools Bd. of Edn. v. Union Cty. Bd. of Revision, Slip Opinion No. 2024-Ohio-3323.

View oral argument video of this case.

Please note: Opinion summaries are prepared by the Office of Public Information for the general public and news media. Opinion summaries are not prepared for every opinion, but only for noteworthy cases. Opinion summaries are not to be considered as official headnotes or syllabi of court opinions. The full text of this and other court opinions are available online.

PDF files may be viewed, printed, and searched using the free Acrobat^® Reader
Acrobat Reader is a trademark of Adobe Systems Incorporated.