Case Title: Strongsville Bd. of Edn. v. Wilkins

Citation: 2006-Ohio-248

Docket Number: 20041854

State: ohio

Court: Ohio Supreme Court

Date: 2006-02-08T00:00:00Z

Document:
[Cite as Strongsville Bd. of Edn. v. Wilkins, 108 Ohio St.3d 115, 2006-Ohio-248.] 
 
 
STRONGSVILLE BOARD OF EDUCATION, APPELLEE, v. WILKINS, TAX COMMR., 
APPELLEE; SALVATION ARMY, APPELLANT. 
[Cite as Strongsville Bd. of Edn. v. Wilkins, 108 Ohio St.3d 115, 2006-Ohio-248.] 
Property-tax exemption — R.C. 5713.08 — The Tax Commissioner has no 
jurisdiction to consider an application for exemption from property taxes 
unless county treasurer’s certificate evidencing compliance with R.C. 
5713.08 is attached to the taxpayer’s initial filing. 
(No. 2004-1854 — Submitted September 21, 2005 — Decided February 8, 2006.) 
APPEAL from the Board of Tax Appeals, No. 2002-G-2562. 
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SYLLABUS OF THE COURT 
The Tax Commissioner shall not consider an application for exemption of property 
unless the application has attached thereto a certificate executed by the 
county treasurer showing that all nonremittable taxes, interest, and penalties 
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 
nonremittable taxes, interest, and penalties charged against the property. 
R.C. 5713.08; Cleveland Clinic Found. v. Wilkins, 103 Ohio St.3d 382, 
2004-Ohio-5468, 816 N.E.2d 224, followed. 
__________________ 
 
MOYER, C.J. 
{¶ 1} The issue in this case is whether the Tax Commissioner has 
statutory authority to consider an application for a real-property-tax exemption 
when, at the time the application is filed, the property owner has not yet paid or 
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agreed to pay outstanding nonremittable taxes, interest, and penalties on the 
property. 
FACTUAL AND PROCEDURAL BACKGROUND 
{¶ 2} The Salvation Army, appellant, owns a building in Strongsville in 
which it operates a thrift store. The Salvation Army purchased the land for the 
store site in December 1997 and built the store during 1998 and early 1999. 
{¶ 3} On December 9, 1999, the Salvation Army filed with the 
Cuyahoga County Auditor a request for an exemption from real-property taxes on 
the property for tax year 1999 and a request for the remission of unpaid taxes for 
tax year 1998. The requests were based on R.C. 5709.12(B), which exempts from 
taxation any property that is used for charitable purposes. A certificate executed 
by the county treasurer was attached to the application and indicated that when 
the Salvation Army filed the application it still owed $813.28 in taxes from tax 
year 1997. 
{¶ 4} Upon receipt of a letter from the Tax Commissioner advising that 
the Tax Commissioner could not consider the application for exemption unless all 
taxes, interest, and penalties for tax year 1997 were paid within 30 days, the 
Salvation Army paid the outstanding balance within 30 days, and the tax 
exemption was granted. 
{¶ 5} The Strongsville Board of Education appealed to the Board of Tax 
Appeals (“BTA”), which reversed the decision of the Tax Commissioner and 
dismissed the exemption application of the Salvation Army. The BTA concluded 
that the failure of the Salvation Army to pay the 1997 taxes before filing the 
application with the county auditor deprived the Tax Commissioner of jurisdiction 
to consider the exemption request. 
{¶ 6} The matter is before this court upon an appeal as of right. 
STANDARD OF REVIEW 
January Term, 2006 
3 
{¶ 7} In reviewing a decision of the BTA, this court considers whether 
the decision was “reasonable and lawful.” Columbus City School Dist. Bd. of Edn. 
v. Zaino (2001), 90 Ohio St.3d 496, 497, 739 N.E.2d 783. We will reverse a 
decision of the BTA that is based on an incorrect legal conclusion. Gahanna-
Jefferson Local School Dist. Bd. of Edn. v. Zaino (2001), 93 Ohio St.3d 231, 232, 
754 N.E.2d 789. It is well settled that the court will defer to factual 
determinations of the BTA if the record contains reliable and probative support 
for them.  Am. Natl. Can Co. v. Tracy (1995), 72 Ohio St.3d 150, 152, 648 N.E.2d 
483. 
ANALYSIS 
{¶ 8} We begin our analysis by examining the relevant statutory 
language. R.C. 5713.08 provides: 
{¶ 9} “(A) * * *  
{¶ 10} “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 one of the following: 
{¶ 11} “(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; 
{¶ 12} “(2) That the applicant has entered into a valid delinquent tax 
contract 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. * * * 
{¶ 13} “(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 
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the commissioner, except as is provided in division (A) of section 5713.081 of the 
Revised Code.” 
{¶ 14} This court recently examined the meaning of R.C. 5713.08(A) in 
Cleveland Clinic Found. v. Wilkins, 103 Ohio St.3d 382, 2004-Ohio-5468, 816 
N.E.2d 224. In Cleveland Clinic, we held that the Tax Commissioner has no 
statutory authority to consider an exemption application when nonremittable 
special assessments remained unpaid to the date upon which the application for 
exemption was filed. Id. at syllabus. Although Cleveland Clinic concerned unpaid 
special assessments rather than unpaid taxes, the underlying principle applies. 
Under R.C. 5713.08(A), the Salvation Army must have paid or have agreed to pay 
in full all nonremittable taxes, interest, and penalties by the time it filed its tax-
exemption application. 
{¶ 15} The certificate executed by the treasurer shows that when the 
Salvation Army filed the exemption application in December 1999, it still owed 
$813.28 for tax year 1997. Tax year 1997 was not a year for which the Salvation 
Army could have sought remission of taxes, because it did not acquire the 
property until December of that year. See Cleveland v. Limbach (1988), 40 Ohio 
St.3d 295, 296, 533 N.E.2d 336. Thus, pursuant to R.C. 5713.08(A), the 
application was defective and the Tax Commissioner had no authority to consider 
the application. 
{¶ 16} Although the Salvation Army paid the past-due 1997 taxes in 
2000, that payment did not change the fact that the certificate executed by the 
county treasurer did not show that all nonremittable taxes on the property had 
been paid in full by the time the exemption application was filed. The 1997 taxes 
should have been paid before the Salvation Army filed the application. They were 
not, and the BTA correctly held that the application did not comply with the 
statute. 
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{¶ 17} The Salvation Army argues that R.C. 5713.08 does not require a 
property owner to pay in full all nonremittable taxes, interest, and penalties on a 
piece of property before seeking a tax exemption for that property. The Salvation 
Army contends that the Tax Commissioner may consider an exemption 
application so long as all nonremittable taxes are paid by the time the Tax 
Commissioner formally considers the application, even if the certification by the 
county treasurer shows that nonremittable taxes were unpaid when the application 
was filed. In support of this position, the Salvation Army refers to the 30-day 
letter it received from the Tax Commissioner in which the Tax Commissioner 
informed the Salvation Army that the application for exemption was deficient due 
to the failure to pay nonremittable taxes, penalties, and interest and that “[i]f these 
taxes, penalties, and interest are not paid within 30 days after receipt of this 
notice, the application for exemption will be dismissed.” 
{¶ 18} The Salvation Army contends that because it paid the taxes for the 
1997 tax year within 30 days of the date of the letter, the Tax Commissioner had 
jurisdiction to consider the application for exemption. The Tax Commissioner, 
however, does not have authority to waive the R.C. 5713.08(A) jurisdictional 
requirement, and sending such letters is not consistent with the language of the 
statute. 
{¶ 19} Accordingly, we hold that the Tax Commissioner shall not 
consider an application for exemption of property unless the application has 
attached thereto a certificate executed by the county treasurer showing that all 
nonremittable taxes, interest, and penalties 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 nonremittable taxes, interest, and penalties charged against the 
property. 
{¶ 20} For the foregoing reasons, we affirm the decision of the BTA. 
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Decision affirmed. 
 
RESNICK, O’CONNOR and LANZINGER, JJ., concur. 
 
PFEIFER, LUNDBERG STRATTON and O’DONNELL, JJ., dissent. 
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PFEIFER, J., dissenting. 
{¶ 21} R.C. 5713.08(A) determines when the Tax Commissioner may 
consider an application for exemption.  Pursuant to R.C. 5713.08(A)(1), the 
commissioner may “not consider” an exemption until the county treasurer 
certifies “[t]hat all taxes * * * 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.” (Emphasis added.)  The key phrase in R.C. 5713.08(A)(1) is 
“paid in full to the date” the application is filed.  The statute does not require that 
taxes be paid in full “on the date” the application is filed or “at the date the 
application is filed” or “upon the date the application is filed.”  The General 
Assembly purposely picked a prepositional phrase — “to the date” — that does 
not require taxes to be paid on the date the exemption application is filed.  The 
limitation is upon when the application may be considered.  The General 
Assembly tells taxpayers that they may file an application for exemption but that 
the Tax Commissioner cannot act upon it until the taxes that were due on the date 
of the application are paid. 
{¶ 22} The Tax Commissioner here did not consider the application for 
exemption until the Salvation Army paid the taxes it owed up to the date it filed 
its application.  At that point, the commissioner properly considered the 
application. 
{¶ 23} There is a key difference between this case and Cleveland Clinic 
Found. v. Wilkins, 103 Ohio St.3d 382, 2004-Ohio-5468, 816 N.E.2d 224.  In 
Cleveland Clinic, the applicant had never paid the taxes owed, and thus, we held 
that the Tax Commissioner could not consider the application for exemption.  
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Cleveland Clinic does not apply to an entity that has paid its applicable taxes and 
thus does not apply to the Salvation Army in this case.  A holding in favor of the 
Salvation Army does not overturn Cleveland Clinic; it simply means that entities 
that pay their taxes are treated differently from those that do not. 
__________________ 
 
O’DONNELL, J., dissenting. 
{¶ 24} R.C. 5713.08(A) provides, “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 one of the 
following: 
{¶ 25} “(1) That all taxes * * * assessed against the property * * * have 
been paid in full to the date upon which the application for exemption is filed * * 
*.” 
{¶ 26} Here, the legal issue for our consideration concerns whether R.C. 
5713.08(A) requires a property owner to have paid all taxes before filing an 
application for a tax exemption or only before the Tax Commissioner considers 
that application.  The fact is that the Salvation Army purchased the property in 
question in 1997; the tax delinquency occurred before it owned the real estate.  
Because it is a charitable organization, it is by law entitled to this tax exemption.  
R.C. 5709.12(B).  Upon proper filing with the county auditor and in accordance 
with the ministerial duties of the county treasurer’s office, the county treasurer 
attaches a certificate to the application, as is done in every other exemption case 
to effect the purposes of the law and to afford to the Salvation Army and others 
similarly situated that to which they are entitled.  R.C. 5713.08(A).  In this case, 
then, on June 22, 2000, the Ohio Department of Taxation sent a letter advising the 
Salvation Army of a tax deficiency for 1997 and indicating that “taxes * * * for 
the year [it] acquired the property must be paid before the Tax Commissioner can 
consider this application.” Elemental due process accorded to all litigants consists 
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of providing notice of and an opportunity for a hearing.  In my view, the Ohio 
Department of Taxation merely provided appropriate due process to the Salvation 
Army in this case, thereby permitting it to correct the deficiency; nothing 
contained in any statute precludes such notice. 
{¶ 27} The record further reveals that on January 30, 2001, the Salvation 
Army filed an amended application with the county auditor and it also contains a 
second treasurer’s certificate showing that all taxes had been paid in full as of July 
10, 2000.  Accordingly, in my view, the Tax Commissioner properly considered 
the Salvation Army’s amended application for exemption because, at the time the 
Tax Commissioner considered the matter, it contained a treasurer’s certificate 
certifying that all taxes had been paid in full to the date upon which the 
application for exemption was filed.  It makes little difference to the Tax 
Commissioner whether the taxes have been paid in full at the time the application 
is filed or at some later date, provided they are paid in full at the time the Tax 
Commissioner considers the application.  The process followed here of giving 
notice to the taxpayer does not violate any law and, in this instance, caused the 
taxpayer to obtain the appropriate certification for consideration by the Tax 
Commissioner. 
{¶ 28} R.C. 5713.08(A) provides, “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 * * * [t]hat 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.”  (Emphasis added.)  This statute, therefore, in 
my view, restricts the authority of the Tax Commissioner to consider an 
exemption application; it does not refer to the date of payment of the taxes by the 
taxpayer or provide a timetable for the treasurer to certify such payments.  Hence, 
the Tax Commissioner is not concerned with the actual date the taxpayer pays the 
January Term, 2006 
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taxes.  The statute merely precludes the Tax Commissioner’s consideration of 
applications that do not bear a treasurer’s certificate at the time of consideration. 
{¶ 29} In Cleveland Clinic Found. v. Wilkins, 103 Ohio St.3d 382, 2004-
Ohio-5468, 816 N.E.2d 224, we held that the Tax Commissioner lacked statutory 
authority to consider an application in which nonremittable special assessments, 
penalties, and interest remained unpaid after the treasurer attached his 
certification.  By way of analogy, Cleveland Clinic is informative, but I would 
submit that R.C. 5713.08(A) does not specify the date on which a taxpayer must 
make payment of taxes in full, as payment before filing is not an obligation 
imposed on a taxpayer.  The majority holds that the statute requires that the 
taxpayer must have paid all taxes “by the time it filed its tax-exemption 
application.”  However, that is not what this statute specifies. 
{¶ 30} There has been no violation of the statute in this case because at 
the time the Tax Commissioner considered the application, all taxes had been paid 
in full to the date of the filing.  Nothing in the statute suggests that the provisions 
are anything but a restriction on the authority of the Tax Commissioner, nor does 
any statutory language deprive the Tax Commissioner of jurisdiction to entertain 
the exemption application of the Salvation Army. 
{¶ 31} Accordingly, I concur with Justice Pfeifer and respectfully dissent 
from the majority’s opinion to the contrary. 
 
LUNDBERG STRATTON, J., concurs in the foregoing opinion. 
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Kolick & Kondzer and Daniel J. Kolick, for appellee Strongsville Board of 
Education. 
Peckinpaugh & Thornton, L.L.C., and A. Clifford Thornton Jr., for 
appellant. 
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