Title: Toledo v. Levin

State: ohio

Issuer: Ohio Supreme Court

Document:

[Cite as Toledo v. Levin, 117 Ohio St.3d 373, 2008-Ohio-1119.] 
 
 
 
CITY OF TOLEDO ET AL., APPELLANTS, v. LEVIN, TAX COMMR., APPELLEE. 
[Cite as Toledo v. Levin, 117 Ohio St.3d 373, 2008-Ohio-1119.] 
Taxation — Exemption and remission of property taxes — R.C. 5715.27 — “Tax 
year” is the year in which the real property tax is levied and assessed. 
(No. 2007-0938—Submitted November 29, 2007—Decided March 19, 2008.) 
APPEAL from the Board of Tax Appeals, No. 2004-B-183. 
__________________ 
 
Per Curiam. 
{¶ 1} On March 19, 2003, the city of Toledo filed an application for 
exemption with respect to parcel number 38-28469 in the Monclova 
Township/Anthony Wayne Local Schools taxing district in Lucas County, Ohio.  
The parcel consists only of the new buildings – not the land – at an already 
exempt site that is leased to the Ohio Air National Guard.  The application does 
not state a specific theory of exemption for the buildings; instead, it generally 
cites R.C. Chapter 5709 and states that it seeks exemption for “new 
improvements” that “were made to the Air National Guard Building in 1994 and 
picked up for taxes in the year 1994.”  The application on its face seeks 
exemption for 2002 and requests remission of taxes and penalties for 1994 
through 2001. 
{¶ 2} The parcel owned by Toledo upon which the new buildings are 
situated constitutes part of the Toledo Express Airport.  The property has been 
leased for many years to the United States, which in turn grants use of the tract to 
the Ohio Air National Guard.  In 1994, the Ohio Air National Guard constructed 
the new buildings at the site.  Under the current arrangement, the city as owner 
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leases the property to the Toledo-Lucas County Port Authority, which then 
subleases it to the federal government. 
{¶ 3} The county auditor became aware of the new construction on the 
property during the 1994 reappraisal of properties in the county.  He listed it 
under a separate parcel from the land until exemption could be sought and 
obtained.  Neither Toledo nor Lucas County ever sought to exempt the 1994 
construction until the 2003 application for exemption that is the subject of this 
case. 
{¶ 4} Toledo advanced as a principal argument before the Tax 
Commissioner that the new construction constituted property owned by the 
federal government as lessee.  The Tax Commissioner found that (1) the parcel at 
issue was created as a temporary parcel in 1994 to distinguish the new buildings 
from “exempt land and structures situated on the same city property,” (2) in spite 
of the creation of the new parcel for the new buildings, there was no transfer of 
title to the federal government, and (3) as a result, the city continued to be the 
owner of record of the buildings, as well as the owner of the land underneath.  
The Tax Commissioner rejected the claim of intergovernmental tax immunity for 
the new buildings because he determined that splitting the ownership of land and 
buildings was not legally possible under these circumstances.  But the Tax 
Commissioner drew a separate and more favorable conclusion for the applicant:  
the property qualified for exemption under R.C. 5709.08 because (1) it constituted 
“public property,” inasmuch as the city of Toledo owned it, and (2) it was leased 
for use by the Air National Guard, which used the property for a “public 
purpose.”  See Dayton v. Haines (1959), 169 Ohio St. 191, 8 O.O.2d 159, 158 
N.E.2d 201 (city property leased to federal government and used by the latter for 
public purposes is exempt). 
{¶ 5} Procedurally, although the application on its face requested 
exemption for the 2002 tax year, the Tax Commissioner treated the application as 
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3 
pertaining to the 2003 tax year.1  Because the ownership and exempt use had been 
continuous since 1994, the Tax Commissioner granted remission of taxes for the 
three prior years pursuant to R.C. 5713.08(B) and 5713.081; thus, Toledo 
obtained tax relief back to 2000. 
{¶ 6} Because Toledo had sought remission all the way back to 1994, it 
appealed to the Board of Tax Appeals (“BTA”). 
{¶ 7} At the BTA hearing, testimony of three witnesses revealed a 
sequence of events by which the real property taxes were billed and paid with 
respect to the improvements.  The Toledo-Lucas County Port Authority leased the 
property to the federal government for use by the Ohio Air National Guard; it also 
leased another parcel to a private entity.  The private entity had constructed 
improvements on its parcel of nearly the same value as the National Guard 
improvements, but the private entity received its own tax bill.  The bills relating to 
the National Guard improvements went to the Port Authority.  Upon receiving the 
tax bills that related to the National Guard improvements, the Port Authority 
mistook them for bills that related to the private entity’s improvements and 
forwarded them to the private entity for payment.  The private entity then paid 
two bills:  the bill it received that actually pertained to improvements on the 
parcel it leased, and the bill it received through the Port Authority that pertained 
to the Air National Guard improvements.  This procedure continued from 1994 
through 2002 or 2003, until the private entity discovered it had been paying tax 
each year for improvements that belonged to the National Guard, in addition to 
paying the tax on its own property.  It was only after this discovery that Toledo 
finally applied to exempt the property in March 2003. 
                                                 
1.  Neither the BTA nor the parties have offered any commentary on the Tax Commissioner’s 
authority to treat an application as one for the year in which it is filed, even though on its face the 
application seeks exemption for the prior tax year.  Apparently, the BTA assumed the Tax 
Commissioner had that authority, and so do we. 
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{¶ 8} On April 20, 2007, the BTA issued its decision.  The BTA found 
that the Tax Commissioner had not possessed jurisdiction to consider the 
application and ordered that the case be dismissed for want of jurisdiction.  
Because the application on its face sought exemption for tax year 2002, the 
application was untimely under R.C. 5715.27(F) because it was filed after 
December 31, 2002.  Toledo v. McAndrew (Apr. 20, 2007), B.T.A. No. 2004-B-
183, at 5. The Tax Commissioner’s decision to treat the application as one for 
2003 did not save the application; if the application was viewed as pertaining to 
2003, then the county treasurer’s certification was not adequate, because it did not 
indicate that taxes and assessments had been paid to the time of the application.  
See R.C. 5713.08(A).  Specifically, the county treasurer had certified payment 
though tax year 2001, and the BTA held that “[f]or the Tax Commissioner to 
consider the merits of the application for the tax year 2003, appellants would have 
had to attach the treasurer’s certificate corresponding to tax year 2002 rather than 
tax year 2001.”  Id. at 7. 
{¶ 9} Toledo appealed, and we now reverse. 
I 
{¶ 10} Toledo first argues that R.C. 5715.27(F) is ambiguous, and it 
proposes a clarifying construction that it contends resolves the ambiguity.  R.C. 
5715.27(F) states: 
{¶ 11} “An application for exemption and a complaint against exemption 
shall be filed prior to the thirty-first day of December of the tax year for which 
exemption is requested or for which the liability of the property to taxation in that 
year is requested.” 
{¶ 12} Toledo avers that “tax year” is ambiguous because it could mean 
one of two things:  the year in which the property tax is levied and assessed, or a 
subsequent year in which the tax actually becomes due and is collected.  For each 
year, real property tax becomes a lien on the property on January 1, and the 
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5 
auditor determines value and certifies the tax duplicate as of October 1, which 
permits calculation of the tax.  R.C. 323.11 (tax lien); R.C. 319.28 (county auditor 
calculates value and certifies duplicate to county treasurer); Cleveland v. Limbach 
(1988), 40 Ohio St.3d 295, 296-297, 533 N.E.2d 336.  Toledo refers to that year 
as the “assessment year,” and contrasts it to the “collection year,” which is the 
time when the tax is usually paid.  See R.C. 323.12. 
{¶ 13} Applying its theory, Toledo points out that 2003 was the 
“collection year” for the “assessment year” 2002, the year for which it sought 
exemption.  If “tax year” in R.C. 5715.27(F) means “collection year,” then the 
deadline for its application was December 31, 2003, rather than December 31, 
2002.  As a result, its March 2003 application was timely. 
{¶ 14} We reject this argument because we find no ambiguity in the 
statute’s use of the term “tax year,” and we conclude that the term refers to what 
Toledo calls the “assessment year,” not the “collection year.”  This conclusion 
arises from our reading of the statutes and the case law, which establish that, both 
in the context of exemption proceedings and valuation proceedings, “tax year” 
refers to the year as to which real property is valued and in which the tax is levied 
and assessed.  It follows that the term “tax year” does not refer to a subsequent 
year in which the tax may actually be collected. 
{¶ 15} First, the basic logic of R.C. 5715.27 dictates our conclusion.  The 
very essence of “exempting” property from taxation lies in relieving it from the 
levy and assessment of tax, not in forestalling the collection of taxes that have 
previously been levied.  Consistent with this logic is the definition of “tax-
exempt” as “[b]y law not subject to taxation.”  Black’s Law Dictionary (8th 
Ed.2004) 1501.  When R.C. 5715.27(A) speaks of an owner “requesting that such 
property be exempted from taxation,” the request is that the property be “not 
subject to taxation,” not that the owner be freed from the obligation to pay the tax 
that accrued in the prior year.  Thus, the requirement in R.C. 5715.27(F) that the 
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application be filed by December 31 “of the tax year for which exemption is 
requested” means that the application must be filed by the end of the year as to 
which the tax would be levied and assessed. 
{¶ 16} This logic is even more clearly illustrated by the portion of R.C. 
5715.27(F) that uses the term “tax year” in connection with a complaint that seeks 
to terminate the exempt status of another’s property.  Complaints against 
exemption are subject to the same time limitation as applications for exemption:  
under R.C. 5715.27(F), such a complaint must be filed “prior to the thirty-first 
day of December of the tax year * * * for which the liability of the property to 
taxation in that year is requested.”  This language plainly couples “tax year” with 
the year in which the property at issue becomes “liable to taxation,” that is, the 
year in which the tax ought to be levied and assessed, not a later year in which 
that tax might be collected.  This construction of the plain language then accounts 
for the result we reached in Olmsted Falls Bd. of Edn. v. Tracy (1996), 76 Ohio 
St.3d 386, 667 N.E.2d 1200, where we held that a complaint against exemption 
filed in “tax year” 1992 did not jurisdictionally raise a challenge to the exempt 
status of the property for “tax years” 1989, 1990, and 1991. 
{¶ 17} Our conclusion as to the proper meaning of “tax year” as used in 
R.C. 5715.27 is confirmed when we examine the use of that same term in 
connection with complaints that challenge the valuation of property.  R.C. 
5715.19 authorizes such complaints and provides that they must be filed “on or 
before the thirty-first day of March of the ensuing tax year or the date of closing 
of the collection for the first half of real and public utility property taxes for the 
current tax year, whichever is later.”  The phrase “ensuing tax year” plainly 
establishes the meaning of “tax year.”  The passage permits the filing of 
complaints up to March 31 of the year that comes immediately after the year as to 
which the tax has been levied and assessed; it does not contemplate, as Toledo’s 
theory suggests, that the party contesting value may wait a whole additional year 
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7 
to file its complaint.  The very fact that an alternative deadline is tied to the 
schedule for collection of the tax verifies this reading of “tax year.” 
{¶ 18} Finally, our construction of “tax year” is borne out by the BTA’s 
consistent application of this deadline for filing valuation complaints; in both of 
the following BTA cases, the BTA found that jurisdiction did not exist, based 
upon the “tax year” constituting the year when the value was determined – what 
Toledo calls the “assessment year” as opposed to the “collection year.”  See 
Strongsville Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision (Apr. 8, 1994), B.T.A. 
Nos. 1993-K-1088 and 1993-K-1089 (complaint filed in March 1992 found to be 
untimely to contest value as assessed for 1990); Bill v. Ottawa Cty. Bd. of 
Revision (Nov. 5, 2004), B.T.A. No. 2004-A-920 (holding that “a complaint 
contesting a property’s valuation for tax years 1988-1994 would have had to have 
been filed by March 31 of the year following the tax year in question, i.e. March 
31, 1989 through March 31, 1995”). 
{¶ 19} For the foregoing reasons, we hold that “tax year” in R.C. 
5715.27(F) refers to the year in which the real property tax is levied and assessed, 
not a later year in which the tax is actually collected.  To the extent that Toledo’s 
application for exemption sought exempt status for 2002, that application had to 
be filed by December 31, 2002, to comply with the statute.  Since it was not filed 
until March 2003, the application was untimely as to the 2002 tax year.  
Therefore, the BTA acted reasonably and lawfully when it held that the Tax 
Commissioner had no authority to consider the application as one seeking 
exemption for 2002. 
II 
{¶ 20} As noted, the Tax Commissioner treated the exemption application 
not as one for tax year 2002, but as one for tax year 2003.  Because this was the 
theory of the Tax Commissioner’s final determination, the BTA addressed the 
viability of the application as a 2003 application and found that the county 
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treasurer’s certification was not sufficient to create jurisdiction for a 2003 
application. 
{¶ 21} In appealing this aspect of the BTA’s decision, Toledo places 
primary reliance on its argument that the application was timely when viewed as 
an application for the 2002 tax year.  Toledo argues that the treasurer’s 
certification is sufficient to invoke jurisdiction for a 2002 application.  Since we 
have rejected Toledo’s contention that the application may be entertained as one 
that pertains to tax year 2002, Toledo’s argument that the treasurer’s certification 
is sufficient as to tax year 2002 is moot. 
III 
{¶ 22} Toledo contends, in arguing that the county treasurer’s certification 
was sufficient for the 2003 tax year, that the certification “identified no unpaid 
taxes or assessments for any tax year.”  The application thus “made it clear” that 
“no taxes for the subject Parcel were unpaid.”  Toledo argues that, in contrast to 
decisions of this court that ordered dismissal where the certification showed 
unpaid taxes, its own application was “not defective” because it “does not show 
that there were unpaid taxes at the point of filing as was true in the cases cited by 
the Board.”   According to Toledo, the county treasurer’s certification in this case 
satisfied “the core requirement – that all taxes be paid when the application was 
filed” because it identified no taxes (or assessments) as remaining unpaid.2 
                                                 
2.  It is important to reiterate that the Tax Commissioner, after granting exemption for the 2003 
year, remitted taxes back to 2000.  That is consistent with the theory presented on the face of the 
application that the exempt use was in place from 1994 through the filing of the application.  
Taxes that may be remitted need not be certified as having been paid.  R.C. 5713.08(A)(1).  As a 
result, the certification that all taxes were paid through tax year 2001 suffices to create jurisdiction 
as far as taxes are concerned, because any taxes levied and assessed after 2001 were subject to 
remission.  Indeed, the record shows that taxes were paid through the first half of 2002, but that 
payment was not a jurisdictional prerequisite.  By contrast, special assessments are not subject to 
remission under R.C. 5713.08(B).  See Cleveland Clinic Found. v. Wilkins, 103 Ohio St.3d 382, 
2004-Ohio-5468, 816 N.E.2d 224, ¶ 12-13.  As a result, the certification could only be deficient 
with respect to special assessments.    
January Term, 2008 
9 
{¶ 23} Quite simply, this argument sets up a conflict between two 
portions of the form of certification that the Tax Commissioner prescribes for 
county treasurers.  The first portion of the form requires the county treasurer to 
certify that taxes, assessments, interest, and penalties “have been paid in full to 
and including the full tax year ____.”  In this case, the county treasurer filled in 
the blank with “2001.” 
{¶ 24} The BTA emphasizes this first portion of the certification.  The 
BTA held that, because the treasurer had certified payment of taxes, assessments, 
interest, and penalties only through tax year 2001, the certification failed to create 
jurisdiction for an application that pertained to tax year 2003.  In order to create 
jurisdiction for a 2003 application, the BTA opined, the treasurer must certify all 
amounts paid though tax year 2002. 
{¶ 25} Toledo’s argument focuses on the second portion of the 
certification form.  That portion requires the county treasurer to identify “the only 
unpaid taxes, special assessments, penalties and interest which are a lien and 
unpaid” on the property, as of the date of the certification.  In this case, Toledo 
filed the application with the county auditor on March 19, 2003, and the county 
treasurer certified the payment of taxes and assessments as of March 26, 2003.  In 
the second portion of the form, the treasurer affirmatively indicated that there 
were no unpaid taxes or assessments.  Toledo contends that this satisfies the 
mandate of R.C. 5713.08(A)(1) that the treasurer certify “[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,” even though the first part of the form certifies 
payments only through tax year 2001 rather than tax year 2002. 
{¶ 26} We agree with Toledo’s emphasis on the second portion of the 
certification, and we find that Toledo’s argument points to a legal error committed 
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by the BTA.3  Affirming the BTA’s holding would require two inferences that we 
decline to draw.  First, the BTA inferred from the statement that all taxes, 
assessments, interest, and penalties have been paid through a certain tax year that 
some portion of those items has not been paid with respect to later years.  If this 
statement stood as the only one in the certification, we might find it appropriate to 
predicate a dismissal for lack of jurisdiction upon drawing that kind of inference.  
But the certification form’s additional requirement that the county treasurer 
identify unpaid taxes and assessments makes an inference of nonpayment 
completely unjustified when, as in this case, the treasurer does not identify any 
taxes or assessments as being unpaid. 
{¶ 27} Second, the BTA inferred that, when the county treasurer drew 
lines through the spaces where he would otherwise indicate unpaid taxes and 
assessments, he did not mean to certify that all payments had been made up to the 
date on which he executed the certification – March 26, 2003.  Instead, the BTA 
must have concluded that the treasurer meant only that there were no unpaid taxes 
or assessments as of some earlier date; most probably, the BTA construed the 
second portion of the form in light of the first and concluded that the treasurer 
only meant to indicate that there were no unpaid items as of the end of tax year 
2001. 
{¶ 28} We find the second inference as unjustified as the first.  On its 
face, the certification purports to state that there were no unpaid taxes or 
assessments, as of March 26, 2003, that had become a lien and that remained 
unpaid.  We presume that a public official means what he says and that he is duly 
                                                 
3.  Although the court “will defer to factual determinations of the BTA if the record contains 
reliable and probative support for them,” the court “will reverse a decision of the BTA that is 
based on an incorrect legal conclusion.”  Strongsville Bd. of Edn. v. Wilkins, 108 Ohio St.3d 115, 
2006-Ohio-248, 841 N.E.2d 303, ¶ 7.  The issue before us is the jurisdictional sufficiency of the 
county treasurer’s certification, and that issue presents a question of law.  As a result, we review 
the BTA’s determination without deference.  We also conclude that, in determining the legal issue 
January Term, 2008 
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performing the function that the law calls upon him to perform.  See State ex rel. 
Shafer v. Ohio Turnpike Comm. (1953), 159 Ohio St. 581, 590, 50 O.O. 465, 113 
N.E.2d 14 (“in the absence of evidence to the contrary, public officers, 
administrative officers and public boards, within the limits of the jurisdiction 
conferred by law, will be presumed to have properly performed their duties and 
not to have acted illegally but regularly and in a lawful manner”); Wheeling Steel 
Corp. v. Evatt (1944), 143 Ohio St. 71, 28 O.O. 21, 54 N.E.2d 132, paragraph 
seven of the syllabus (“The action of an administrative officer or board within the 
limits of the jurisdiction conferred by law is presumed, in the absence of proof to 
the contrary, to be valid and to have been done in good faith and in the exercise of 
sound judgment”).  If the treasurer meant something different from what he said, 
we would expect that he would say so. 
{¶ 29} Our holding in this regard is fully consistent with the cases on 
which the BTA relied.  In Cleveland Clinic Found. v. Wilkins, 103 Ohio St.3d 
382, 2004-Ohio-5468, 816 N.E.2d 224, ¶ 15, we held that the treasurer’s 
certification must show that all assessments, interest, and penalties have been 
“paid in full to the date upon which the application for exemption is filed.”  We 
ordered dismissal of the application for exemption because, in that case, “[t]he 
treasurer’s certificate attached to the application stated that there were taxes, 
special assessments, penalties, and interest unpaid for tax year 1997.”  Id. at ¶ 2.  
Likewise, in Strongsville Bd. of Edn. v. Wilkins, 108 Ohio St.3d 115, 2006-Ohio-
248, 841 N.E.2d 303, we affirmed dismissal of the application, but did so in a 
case where the certificate executed by the county treasurer indicated that when the 
owner filed the application it still owed taxes from a prior tax year.  In other 
words, in both Cleveland Clinic and Strongsville, the treasurer’s certificate 
affirmatively showed unpaid tax or assessment amounts.  By contrast, the 
                                                                                                                                     
before us, it is unnecessary to address the parties’ dispute as to whether a “strict compliance” or a 
“substantial compliance” standard applies to the treasurer’s certification. 
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certificate in this case affirmatively indicates no unpaid amounts.  As a result, the 
certification sufficed to invoke the Tax Commissioner’s jurisdiction to consider 
the exemption application on its merits. 
IV 
{¶ 30} Because the BTA erred by determining that the Tax Commissioner 
had no jurisdiction to consider Toledo’s application for exemption as an 
application for the 2003 tax year, we reverse the BTA’s decision and remand for 
the BTA to consider Toledo’s appeal on the merits. 
Decision reversed  
and cause remanded. 
MOYER, C.J., and LUNDBERG STRATTON, O’CONNOR, O’DONNELL, 
LANZINGER, and CUPP, JJ., concur. 
 
PFEIFER, J., concurs in judgment only. 
__________________ 
 
Spengler Nathanson P.L.L., Michael W. Bragg, and Teresa L. Grigsby, for 
appellant Toledo-Lucas County Port Authority. 
 
John T. Madigan, Toledo Law Director, and Paul F. Syring, for appellant 
city of Toledo. 
 
John I. Mattimoe, for appellant Lucas County Auditor. 
 
Marc Dann, Attorney General, and Damion M. Clifford, Assistant 
Attorney General, for appellee. 
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