Title: Reynoldsburg Bd. of Edn. v. Licking Cty. Bd. of Revision

State: ohio

Issuer: Ohio Supreme Court

Document:

Reynoldsburg Board of Education, Appellee, v. Licking County Board of 
Revision, Appellant. 
[Cite as Reynoldsburg Bd. of Edn. v. Licking Cty. Bd. of Revision (1997), 
_____ Ohio St.3d _____.] 
Taxation -- Real property valuation -- Board of Tax Appeals’ 
decision finding sale price of vacant land in May 1994 as the 
true value in money was recent enough to establish the value 
for the property as of January 1, 1994, the tax lien date, and is 
reasonable and lawful. 
 
(No. 96-1547 -- Submitted January 14, 1997 -- Decided June 11 , 
1997.) 
 
Appeal from the Board of Tax Appeals, No. 95-J-873. 
 
On May 23, 1994, Mid-Ohio Development Corporation, appellee, 
purchased vacant land in the Reynoldsburg school district, designated 
permanent parcel number 13-030180-00-122 by the Licking County 
Auditor, for $368,392.50.  Noting that the auditor had valued the property 
for tax year 1994 at $337,000, the Reynoldsburg Board of Education 
(“BOE”), appellee, filed a complaint with the Licking County Board of 
Revision (“BOR”), appellant.  The BOE sought to increase the valuation of 
 
2
the property to the purchase price.  However, the BOR affirmed the 
auditor’s value of $337,000.  
 
The BOE appealed this decision to the Board of Tax Appeals 
(“BTA”).  At the BTA, the auditor, George D. Buchanan, explained his and 
the BOR’s position.  He accepted the sales price as the true value in money 
of the property as of May 23, 1994.  However, he reduced the value to what 
he concluded the property was worth as of January 1, 1993, the date of the 
last valuation update that the county had undergone.  He did this, he claims, 
to comply with Ohio Adm. Code 5705-3-07 and 5705-3-08. 
 
The BTA, nonetheless, rejected the auditor’s explanation.  The BTA 
found that the sale price on May 23, 1994, was recent enough to establish 
the value for the property as of January 1, 1994, the tax lien date in 
question.  The BTA, therefore, found that the true value of the property as 
of this date was $368,400. 
 
The cause is now before this court upon an appeal as of right. 
 
Green & Hughes Co., L.P.A., and Martin J. Hughes III, for appellee. 
 
Robert L. Becker, Licking County Prosecuting Attorney, and Pauline 
E. O’Neill, Assistant Prosecuting Attorney, for appellant. 
 
3
 
Per Curiam.  Appellant argues that the Tax Commissioner’s rules 
require the auditor to adjust a sale price to reflect the value of the parcel on 
the date of the last sexennial reappraisal or triennial update.  We disagree 
and affirm the BTA’s decision. 
 
Appellant cites Ohio Adm. Code 5705-3-07, which pertains to land, 
in support of its argument.  This rule states: 
 
“(A)  General -- All land shall be appraised at its true value in money 
as of tax lien date of the year in which the appraisal or update of value is 
made.  *** “ 
 
Appellants have taken this rule out of context.  Ohio Adm. Code 
5705-3-01 defines “true value in money,” the valuation standard in Ohio, as 
the fair market value of the property, if appraised, or “[t]he price at which 
property did change hands under the conditions described in section 
5713.03 of the Revised Code, within a reasonable length of time either 
before or after the tax lien date ***.”  (Emphasis added.) 
 
This complies with our directives.  In State ex rel. Park Invest. Co. v. 
Bd. of Tax Appeals (1964), 175 Ohio St. 410, 412, 25 O.O. 2d 432, 433, 195 
N.E. 2d 908, 910, we held that Section 2, Article XII, Ohio Constitution, 
 
4
requires that “all real property, regardless of its nature or use, may be 
assessed and taxed only by a uniform rule on the basis of value.”  We ruled 
that the true value in money was the standard and that the best method to 
determine this value was an actual arm’s-length sale of the property.  If a 
sale had not occurred, an appraisal employing the various methods of 
valuation would satisfy the Constitution.  Id. at 412, 25 O.O.2d at 434, 195 
N.E.2d at 910.  In conclusion, we ordered the BTA, then the agency 
required by statute to ensure uniformity of value, “to perform its statutory 
duty by reviewing the tax assessments * * * in relation to whether such 
assessments were made by uniform rule and if it finds that discrepancies 
exist in the tax assessments, as a whole or among the various classes of 
property, to direct such an order as is necessary to the county auditor to 
equalize such assessments.”  Id. at 414, 25 O.O.2d at 434, 195 N.E.2d at 
911. 
 
After a series of decisions, we ruled, in State ex rel. Park Invest. Co. 
v. Bd. of Tax Appeals (1972), 32 Ohio St.2d 28, 61 O.O. 2d 238, 289 N.E.2d 
579, that the BTA’s efforts, and the General Assembly’s enactments, 
satisfied our mandate.  The legislature commanded and the BTA set up a 
 
5
staggered, sexennial system of re-evaluating counties, later amended to 
include a triennial update, that practically brought all properties into 
uniformity in valuation.  Nevertheless, we have always insisted that the sale 
price of an arm’s-length transaction occurring within a reasonable time of 
the tax lien date was the value of the property as of the tax lien date.  
Dublin-Sawmill Properties v. Franklin Cty. Bd. of Revision (1993), 67 Ohio 
St.3d 575, 621 N.E.2d 693. 
 
In Meyer v Cuyahoga Cty. Bd. of Revision (1979), 58 Ohio St.2d 328, 
12 O.O.3d 305, 390 N.E.2d 796, we approved valuing a property at its sale 
price despite values of other, neighboring properties being the appraised 
value as of the last sexennial reappraisal date.  In paragraph one of the 
syllabus we held that a county board of revision does not violate Section 2, 
Article XII, Ohio Constitution, when it reappraises the individual parcel 
based on its most recent sale price.  In paragraph two of the syllabus, we 
held that this process does not violate the Equal Protection Clause of the 
Fourteenth Amendment to the United States Constitution.  In closing, we 
stated, id. at 335, 12 O.O.3d at 309, 390 N.E. 2d at 800: 
 
6
 
“The system of taxation unfortunately will always have some 
inequality and nonuniformity attendant with such governmental function.  It 
seems that perfect equality in taxation would be utopian, but yet, as a 
practicality, unattainable.  We must satisfy ourselves with a principle of 
reason that practical equality is the standard to be applied in these matters, 
and this standard is satisfied when the tax system is free of systematic and 
intentional departures from this principle.” 
 
Accordingly, we affirm the decision of the BTA because it is 
reasonable and lawful. 
 
 
Decision affirmed. 
 
MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY and COOK, JJ., 
concur. 
 
PFEIFER and LUNDBERG STRATTON, JJ., dissent. 
 
LUNDBERG STRATTON, J., dissenting. The majority affirmed the 
BTA’s finding that the auditor’s reduction of the sale price of the subject 
property by an inflationary reduction factor in order to value said property 
for tax purposes was contrary to law.  I disagree.     
 
7
 
In Ratner v. Stark Cty. Bd. of Revision (1986), 23 Ohio St. 3d 59, 23 
OBR 192, 491 N.E. 2d 680, syllabus, we held:  
 
“Although the sale price is the ‘best evidence’ of true value of real 
property for tax purposes, it is not the only evidence.  A review of 
independent appraisals based upon factors other than the sale price is 
appropriate where it is shown that the sale price does not reflect true value.” 
 
The court in Ratner rejected the view that true value was synonymous 
with the sale price.  Stating that the court “has never adopted an absolutist 
interpretation” of R.C. 5713.03, Ratner held that the sale price could be 
supplemented with or refuted by other compelling evidence.  The court cited 
“abnormal economic conditions” as one example of other factors that could 
be considered in determining true value.  Id. at 61, 23 OBR at 194, 491 N.E. 
2d at 682. 
 
The parcel in question sold for $368,392.50.  However, the BOR 
determined the value of the parcel to be $337,000.  In reviewing the BOR’s 
affirmation of the auditor’s $337,000 valuation, the BTA stated:  “The 
Licking County Auditor is of the opinion that this sale [$368,392.50] should 
not be considered in determining the value of the subject real property for 
 
8
the tax year 1994.”  However, the testimony of the auditor refutes that this 
was his opinion.        
 
In explaining how he arrived at the $337,000 appraisal value, the 
auditor stated that he recognized and implemented the procedure of using 
arm’s-length transactions to determine the valuation of property.  
Specifically, in this case, the auditor stated that he clearly considered the 
sale price of  the parcel and used that figure as the basis for his valuation.  
However, the auditor went on to state:  “It is our contention that 
appreciation of values in a county will cause the new buyers of real property 
to be paying higher taxes than comparable properties which have not sold 
since the tax lien date referred to in rules 5705-3-07 and 5705-3-08.” 
 
Citing the “rapid inflation” in western Licking County, the auditor 
explained that “[i]n this case we used a reduction factor of 8.5% because the 
sale is nearly five full months into 1994. When you apply this reduction 
factor to the selling price of  $368,393, you will arrive at a value of 
$337,080.    * * *  This was the value used as of the tax lien date of January 
1, 1993, the date of the last reappraisal of all properties in Licking County.”  
Thus, contrary to the BTA’s conclusions, the auditor did consider the sale 
 
9
price in appraising the parcel.  The auditor adjusted the amount of the sale 
price to reflect the inflation that had taken place since the last reappraisal of 
property in Licking County. 
 
R.C. 5713.01(B) states, in part, that the county auditor “* * * may 
increase or decrease the true or taxable value of any lot or parcel of real 
estate in any township, municipal corporation, or other taxing district by an 
amount which will cause all real property on the tax list to be valued as 
required by law, or he may increase or decrease the aggregate value of all 
real property, or any class of real property, in the county, township, 
municipal corporation, or other taxing district, or in any ward or other 
division of a municipal corporation by a per cent or amount which will 
cause all property to be properly valued and assessed for taxation in 
accordance with Section 36, Article II, Section 2, Article XII, Ohio 
Constitution, this section, and sections 5713.03, 5713.31, and 5715.01 of 
the Revised Code.”  (Emphasis added.) 
Ohio Adm. Code 5705-3-07(A) states: 
 
10
 
“* * * All land shall be appraised at its true value in money as of the 
tax lien date of the year in which the appraisal or update of values is made. 
* * *”  (Emphasis added.) 
 
The valuation of the parcel in question for taxation purposes was not 
accurately represented by the sale price only.  The issue was not whether the 
sale was too remote in time, but whether other factors, such as rapid 
inflation, impacted that true value.  The auditor’s application of a reduction 
factor may have been justified to achieve a more accurate valuation.  The 
$18,392.50 increase in the sale price of the property within a twenty-one-
day period also supported the auditor’s position.  The admission of other 
evidence (such as inflation of other county property) should be allowed. 
Ratner.  An inaccurate valuation could result in an inflated (or deflated) tax 
value that is not uniform as is required by the Revised Code. 
 
Perhaps because the September 16, 1993 sale price was $337,000 and 
the auditor assessed that amount as the tax value as of the January 1, 1993 
tax lien, the BTA may have dismissed the 8.5 percent figure as merely a 
convenient artifice and not credible.  However, the decision is silent as to 
whether the BTA even evaluated that evidence.  If the BTA evaluated that 
 
11
evidence and discarded it as not credible, then its decision would be 
supported.  This court does not sit as a super court to reweigh the evidence.  
Since the decision erroneously concluded that the auditor ignored the 
$368,000 sale price, we must assume the BTA also did not judge the merits 
of the 8.5 percent inflation factor.  
 
Therefore, I would find the BTA’s decision to be unlawful and 
unreasonable.  Cuyahoga Cty. Bd. of Revision v. Fodor (1968), 15 Ohio St. 
2d 52, 44 O. O. 2d 30, 239 N.E. 2d 25.  Under Ratner, I would hold that the 
BTA “must at least consider and review evidence presented” that would 
affect true value.  Ratner, 23 Ohio St.3d at 62, 23 OBR at 194, 491 N.E. 2d 
at 642.  Such a review could even lead to the same conclusion as before.  
But it appears from the record here that the BTA did not consider the other 
evidence at all, but only relied on the sales price to establish true value. 
 
I would reverse and remand this case to the BTA to consider the 
credibility of the evidence of “abnormal economic conditions,” i.e., the 
alleged rapid inflation of property values in 1994, and to render a decision 
based on the evidence presented.  Therefore, I respectfully dissent. 
 
PFEIFER, J., concurs in the foregoing dissenting opinion.