Case Title: Cleveland Clinic Found. v. Wilkins

Citation: 2004-Ohio-5468

Docket Number: 20030235

State: ohio

Court: Ohio Supreme Court

Date: 2004-10-29T00:00:00Z

Document:
[Cite as Cleveland Clinic Found. v. Wilkins, 103 Ohio St.3d 382, 2004-Ohio-5468.] 
 
 
CLEVELAND CLINIC FOUNDATION, APPELLEE, v. WILKINS, TAX COMMR., 
APPELLANT. 
[Cite as Cleveland Clinic Found. v. Wilkins, 103 Ohio St.3d 382, 2004-Ohio-
5468.] 
Taxation — Real property — Exemption — R.C. 5713.08 — Tax Commissioner 
may not consider application for exemption that has treasurer’s 
certification showing unpaid special assessments, including penalties and 
interest. 
(No. 2003-0235 — Submitted June 8, 2004 — Decided October 29, 2004.) 
APPEAL from the Board of Tax Appeals, No. 1999-A-1006. 
__________________ 
SYLLABUS OF THE COURT 
The Tax Commissioner may not consider an application for exemption of 
property unless the application has attached thereto a certificate executed 
by the county treasurer showing that all assessments, interest, and 
penalties sought to be exempted have been paid in full to the date upon 
which the application for exemption is filed or that the applicant has 
entered into a valid undertaking with the county treasurer pursuant to R.C. 
323.31(A) to pay all of the delinquent assessments, penalties, and interest 
charged against the property. 
__________________ 
 
Lundberg Stratton, J. 
{¶1} 
The Tax Commissioner has raised two issues in his appeal.  
Because one of those issues is dispositive of this appeal, we will address only that 
issue, which is whether the Tax Commissioner can consider an application for 
exemption that has attached to it a certification of the treasurer that shows unpaid 
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2 
special assessments, including penalties and interest.  We find that R.C. 5713.08 
does not permit the Tax Commissioner to consider an application for exemption 
in that situation. 
{¶2} 
In July 1998, the Cleveland Clinic Foundation filed an application 
with the Tax Commissioner, requesting that he exempt certain real property for 
tax year 1998 and grant remission of taxes and penalties for tax year 1997.  The 
real property for which the clinic sought exemption was property it had leased in 
Strongsville.  The application filed by the clinic stated that title to the property 
was in the clinic’s name and that it had received title on December 19, 1996.  
However, the auditor’s property card attached to the application showed the 
owner of the title to be Royalton Road Joint Venture.  The treasurer’s certificate 
attached to the application stated that there were taxes, special assessments, 
penalties, and interest unpaid for tax year 1997. 
{¶3} 
The Tax Commissioner denied the application for exemption, 
finding that the clinic was not the owner of the property and that the treasurer’s 
certificate showed taxes, penalties, assessments, and interest outstanding on the 
property.  The clinic appealed to the Board of Tax Appeals, which found that the 
clinic controlled such a large “bundle of rights” in the property that it had 
standing to file an application for exemption and that the requirement in R.C. 
5713.08 that the taxes and assessments be paid did not preclude the commissioner 
from considering the application. 
{¶4} 
This matter is before the court as an appeal as of right. 
{¶5} 
Former R.C. 5713.08 provided: 
{¶6} 
“(A) * * *  
{¶7} 
“The commissioner shall not consider an application for exemption 
of property unless the application has attached thereto a certificate executed by 
the county treasurer certifying either of the following: 
January Term, 2004 
3 
{¶8} 
“(1) That all taxes, assessments, interest, and penalties levied and 
assessed against the property sought to be exempted have been paid in full to the 
date upon which the application for exemption is filed, except for such taxes, 
interest, and penalties that may be remitted under division (B) of this section; or 
{¶9} 
“(2) That the applicant has entered into a valid undertaking with 
the county treasurer pursuant to division (A) of section 323.31 of the Revised 
Code to pay all of the delinquent taxes, assessments, interest, and penalties 
charged against the property, except for such taxes, interest, and penalties that 
may be remitted under division (B) of this section. * * *  
{¶10} “(B) Any taxes, interest, and penalties which have become a lien 
after the property was first used for the exempt purpose, but in no case prior to the 
date of acquisition of the title to the property by the applicant, may be remitted by 
the commissioner, except as is provided in section 5713.081 of the Revised Code 
[which limits remission to three years].” 1990 Am.Sub.S.B. No. 332, 143 Ohio 
Laws, Part I, 1691. 
{¶11} The treasurer’s certificate attached to the clinic’s application for 
exemption sets forth that there were unpaid taxes, including penalties and interest, 
in the amount of $53,712.18 for tax year 1997.  In addition, the treasurer’s 
certificate showed unpaid special assessments, including penalties and interest, in 
the amount of $8,929.45 for tax year 1997.  The Tax Commissioner contends that 
these unpaid taxes and assessments prevent him from considering the application 
for exemption. 
{¶12} R.C. 5713.08(A)(1) then and now specifically requires that the 
treasurer’s certificate state that “all * * * assessments, interest, and penalties 
levied and assessed against the property * * * have been paid in full to the date 
upon which the application for exemption is filed.”  In State v. Carney (1956), 
166 Ohio St. 81, 83, 1 O.O.2d 210, 139 N.E.2d 339, the court distinguished taxes 
from special assessments, stating: “A special assessment is not a tax as such.  It is 
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4 
an assessment against real property based on the proposition that, due to a public 
improvement of some nature, such real property has received a benefit.”  Thus, a 
special assessment is different from a tax.  That difference between taxes and 
special assessments is recognized in R.C. 5713.08. 
{¶13} R.C. 5713.08(A)(1) requires all taxes, assessments, interest, and 
penalties to be paid in full at the time an application for exemption is filed, except 
for such taxes, interest, and penalties that may be remitted under R.C. 5713.08(B).  
Therefore, while taxes, interest, and penalties that may be remitted under R.C. 
5713.08(B) need not be shown as paid in full on the treasurer’s certificate, there is 
no comparable provision that assessments do not need to be paid in full.  As a 
result, the treasurer’s certificate submitted with the application for exemption 
must show the assessments, interest, and penalties as being paid in full.  If the 
assessments, interest, and penalties are not shown as being paid in full on the 
treasurer’s certificate, the Tax Commissioner cannot consider the attached 
application for exemption. 
{¶14} The treasurer’s certificate submitted with the application for 
exemption in this case showed unpaid special assessments, interest, and penalties.  
In dismissing an application for exemption in Ursuline Academy of Cleveland v. 
Bd. of Tax Appeals (1943), 141 Ohio St. 559, 561-562, 26 O.O. 151, 49 N.E.2d 
680, the court stated in reference to the predecessor of R.C. 5713.08: “Under the 
statute above quoted a certificate of the county treasurer certifying that such taxes, 
assessments, penalties and interest have been paid in full to the date upon which 
the application for exemption is filed is a condition precedent to the consideration 
of the application by the Board of Tax Appeals [the board has now been replaced 
in the statute by the Tax Commissioner].”  Likewise, in Carney v. State (1952), 
158 Ohio St. 348, 349, 49 O.O. 213, 109 N.E.2d 281, the court dismissed an 
application for exemption for property for which special assessments were 
unpaid, quoting G.C. 5570-1, the predecessor of R.C. 5713.08, as follows: “[T]he 
January Term, 2004 
5 
‘Board of Tax Appeals [the board has been replaced in the statute by the Tax 
Commissioner] shall not consider an application for exemption’ unless the 
application has attached thereto a treasurer’s certificate that assessments against 
the property sought to be exempted have been paid in full.”  (Emphasis sic.)  That 
same result is applicable to this case.  The clinic’s application for exemption was 
properly dismissed by the Tax Commissioner for failure to comply with R.C. 
5713.08.  Therefore, we need not address the issue of standing. 
{¶15} Therefore, we hold that the Tax Commissioner may not consider 
an application for exemption of property unless the application has attached 
thereto a certificate executed by the county treasurer showing that all assessments, 
interest, and penalties sought to be exempted have been paid in full to the date 
upon which the application for exemption is filed or that the applicant has entered 
into a valid undertaking with the county treasurer pursuant to R.C. 323.31(A) to 
pay all of the delinquent assessments, penalties, and interest charged against the 
property.  Because the applicant here did neither one, we find the decision of the 
Board of Tax Appeals to be unreasonable and unlawful and hereby reverse it. 
Decision reversed. 
 
MOYER, C.J., RESNICK, F.E. SWEENEY, PFEIFER, O’CONNOR and 
O’DONNELL, JJ., concur. 
__________________ 
 
Tucker, Ellis & West, L.L.P., Irene C. Keyse-Walker, Brian W. 
FitzSimons and Benjamin C. Sasse, for appellee. 
Jim Petro, Attorney General, and Richard C. Farrin, Senior Deputy 
Attorney General, for appellant. 
__________________