Justia Ohio Supreme Court Opinion Summaries

The tax commissioner, in a final determination journalized on June 8, 2010, reduced to $927,513 the almost $17 million amortizable amount that International Paper Company had reported. The tax commissioner’s letter to International Paper memorializing this determination was not mailed until July 12, 2010. The Board of Tax Appeals (BTA) reinstated International Paper’s amortizable amount, concluding that the tax commission violated Ohio Rev. Code 5751.53(D) by failing to notify International Paper of its assessment by the June 30 deadline. The tax commissioner appealed. The Supreme Court reversed, holding (1) Ohio Rev. Code 5751.53(D) requires that a reduction in the amortizable amount be embodied in a timely issued final determination to effect a reduction of the amortizable amount; (2) Ohio Rev. Code 5751.53(D) requires the tax commissioner to enter his determination on the journal by June 30, but the determination need not be mailed to the taxpayer by that date to be effective; (3) thus, the BTA erred by finding the tax commissioner’s final determination void; and (4) International Paper did not jurisdictionally forfeit any right to a remand for consideration of its substantive claim by failing to file a protective cross-appeal. Remanded for consideration of International Paper’s substantive challenge to the tax commissioner’s decision. View "International Paper Co. v. Testa" on Justia Law

Jefferson Industries Corporation filed a complaint challenging the valuation for tax year 2011 of a plant involved in manufacturing and stamping car frames. The Madison County Auditor valued the property at $34,500,000. On appeal, the Madison County Board of Revision (BOR) adjusted the valuation to $28,000,000. Jefferson Industries again appealed and offered its appraisal valuation of $10,420,000. The Board of Tax Appeals (BTA) agreed with the BOR’s value, largely on the basis of the Jefferson Local School District Board of Education’s (BOE) appraisal. The Supreme Court vacated the decision of the BTA, holding that the BTA did not explicitly address important evidentiary conflicts but should have. Remanded to the BTA to reconsider the evidence in light of particular objections that were raised to the BOE’s appraisal but were not addressed by the BTA. View "Jefferson Indus. Corp. v. Madison County Bd. of Revision" on Justia Law

At issue in this case was property owned by Innkeeper Ministries, Inc. that contained two large residential buildings and various recreational amenities. Innkeeper’s mission was to invite religious leaders to stay at the property at no charge and to enjoy the amenities and free meals as a type of spiritual retreat. Innkeeper filed an exemption application in 2008 seeking an exemption for, inter alia, charitable use. The tax commissioner denied exemption, stating, as for charitable use, that the activity at issue did not meet the charity standard. The Board of Tax Appeals (BTA) reversed. The Supreme Court reversed, holding that, given the residential use of the property by a caretaker couple, the BTA erred by failing to require proof of the primacy of charitable hospitality. View "Innkeeper Ministries, Inc. v. Testa" on Justia Law

Appellant, a property owner, applied to exempt real property used as a public community school for tax year 2010. The tax commissioner denied the exemption to the property that Appellant leased to the community school. Appellant appealed, arguing that because it was wholly owned by a 501(c)(3) nonprofit corporation whose members include the community school to whom the property is leased, the property should qualify for exemption under the public-schoolhouse exemption and an exemption for exclusive charitable use. The Board of Tax Appeals (BTA) affirmed the denial of an exemption, concluding that the record showed a “view to profit” on the part of the lessor. The Supreme Court affirmed, holding that the record contained sufficient support for the BTA’s view-to-profit finding. View "250 Shoup Mill, LLC v. Testa" on Justia Law

James and Tina Renacci filed a joint Ohio tax return for tax year 2000 without reporting and paying Ohio individual income tax on amounts earned by a trust (Trust) that owned shares of three Subchapter S corporations. In 2003, the tax commissioner assessed the Renaccis in relation to the unreported S-corporation income. The Renaccis paid all amounts demanded by the state and then filed a refund claim for the double-interest penalty amount. The tax commissioner denied the refund claim. The Board of Tax Appeals affirmed the denial of penalty remission. The Supreme Court reversed, holding that the tax commissioner, under the circumstances of this case, abused his discretion in denying the refund request. Remanded with instructions that the penalty be refunded. View "Renacci v. Testa" on Justia Law

Epic Aviation, LLC, a vendor of jet fuel, sold jet fuel to AirNet Systems, Inc., collected sales tax on it, and remitted the tax to the state. Epic, on behalf of AirNet, sought a refund of sales tax paid by AirNet on its purchases of jet fuel from Epic from January 1, 2006 through April 30, 2009. The tax commissioner denied the claim for refund. The Board of Tax Appeals (BTA) affirmed. Epic appealed, arguing that AirNet’s jet fuel purchases were exempt from sales tax because AirNet purchased the fuel intending to use the fuel “directly in the rendition of a public utility service” under Ohio Rev. Code 5739.02(B)(42)(a). The tax commissioner denied the exemption, finding that the business of AirNet, which does not hold a certificate of public convenience and necessity from the federal government, was not sufficiently regulated to qualify as a “public utility service.” The Supreme Court vacated the BTA’s decision and remanded, holding that Epic should have an opportunity to present evidence to establish the portion of the jet fuel purchased by AirNet that is exempt from taxation under the common-carrier standard as clarified in this opinion. View "Epic Aviation, LLC v. Testa" on Justia Law

For tax years 2002 through 2007, Appellants filed no Ohio tax returns, contending that income was earned outside Ohio. The tax commissioner assessed Ohio individual income tax against Appellants for the tax years at issue but initially failed to give notice of his reliance on the unrebutted presumption that Appellants were, in fact, Ohio residents and domiciliaries. Appellants challenged the commissioner’s assessment. The Board of Tax Appeals affirmed, concluding that Appellants failed to provide sufficient evidence to demonstrate an error in the commission’s final determination. The Supreme Court affirmed, holding (1) all income of Ohio residents is taxable, regardless of where the income is earned or received; and (2) Appellants failed to prove that they do not have to pay the amounts assessed, despite the tax commissioner’s failure to give notice of his reliance on the presumption of Ohio residency. View "Krehnbrink v. Testa" on Justia Law

Appellant, a nonresident taxpayer, filed a refund claim for an unpaid 2004 tax liability assessment. Appellant contested Ohio Rev. Code 5747.212’s imposition of income tax on a portion of the capital gain that he realized in 2004 when he sold his ownership interest in a limited liability company. The tax commissioner denied the refund claim. The Board of Tax Appeals (BTA) affirmed. Appellant appealed, arguing that applying section 5747.212 to him was unconstitutional and that he should be permitted to allocate the gain entirely outside Ohio. At issue before the Supreme Court was whether Ohio may levy income tax on Appellant’s capital gain as if it were income from the business itself. The Supreme Court reversed the decision of the BTA, holding that section 5747.212, as applied to Appellant, violates the Due Process Clause of the Fourteenth Amendment. Remanded to the tax commissioner to grant Appellant a refund. View "Corrigan v. Testa" on Justia Law

In 2009, Spire Institute (Spire), a nonprofit corporation, entered into an agreement to lease land from Roni Lee, LLC, a for-profit company. By 2012, Spire had constructed Olympic-grade athletic facilities and related improvements on about a quarter of the property. In 2010, Spire sought a real-estate-tax exemption for the entire property under the charitable-use exemption. The tax commissioner denied exemption, finding that Roni Lee used the property for land development and commercial leasing and that Spire was not “engaged in charitable activity in any substantial way.” The commissioner also denied exemption of he undeveloped property under the prospective-use doctrine. The Board of Tax Appeals (BTA) affirmed the denial of exemption. The Supreme Court affirmed the BTA’s decision, holding that Spire failed to establish that any portion of the subject property qualified for a charitable-use exemption. View "Geneva Area Recreational, Educ. & Athletic Trust v. Testa" on Justia Law

Christian Voice of Central Ohio operated a radio station from offices located in New Albany. In 1991, the tax commissioner granted an exemption for the property on the grounds that it was being used for church purposes. In 2007, following the relocation of Christian Voice’s offices to Gahanna, a complaint was filed challenging the continued exemption of Christian Voice’s New Albany property. The tax commissioner denied the complaint. In 2008, Christian Voice applied for the same exemption for its Gahanna property. The tax commissioner denied the exemption, finding no evidence that people assembled to worship together on the subject property. The Board of Tax Appeals (BTA) affirmed. The Supreme Court reversed, holding that the BTA should have allowed the exemption under Ohio Rev. Code 5709.07(A)(2) because the primary use of the property was for public worship. View "Christian Voice of Cent. Ohio v. Testa" on Justia Law