Timber lands adjacent to CAUV land, land enrolled in federal conservation programs, and land devoted to agritourism or bio-mass and similar types of energy production on a farm also qualify for CAUV. There must have been some farmers in the legislature when the CAUV law was enacted, because the legislature anticipated the possibility that qualifying CAUV lands would not always be actively engaged in agricultural production.
The law allows CAUV land to sit "idle or fallow" for up to one year and remain eligible for CAUV, but only if there's not an activity or use taking place on the land that's inconsistent with returning the land to agricultural production or that converts the land from agricultural production. After one year of lying idle or fallow, a landowner may retain the CAUV status for up to three years by showing good cause to the board of revision for why the land is not actively engaged in agricultural production.
The law would play out as follows. When the auditor sends the next CAUV reenrollment form for a parcel that qualifies for CAUV but was not planted this year due to the weather, a landowner must certify that the land is still devoted to agricultural production and return the CAUV form to the auditor. The auditor must allow the land to retain its CAUV status the first year of lying idle or fallow, as long as the land is not being used or converted to a non-agricultural use.
If the land continues to be idle or fallow for the following year or two years, the auditor could ask the landowner to show cause as to why the land is not being used for agricultural production. The landowner would then have an opportunity to prove that the weather has prevented plans to plant field crops, as intended by the landowner.
After three years, the landowner would have to change the land to a different type of commercial agricultural production to retain its CAUV status if the weather still prevents the ability to plant field crops on the parcel. Other agricultural uses could include commercial animal or poultry husbandry, aquaculture, algaculture, apiculture, the production for a commercial purpose of timber, tobacco, fruits, vegetables, nursery stock, ornamental trees, sod, or flowers, or the growth of timber for a noncommercial purpose, if the land on which the timber is grown is contiguous to or part of a parcel of land under common ownership that is otherwise devoted exclusively to agricultural use.
Being forced out of the fields due to rain is a frustrating reality for many Ohio farmers today.
One positive assurance we can offer in the face of prevented planting is that farmers won't lose agricultural property tax status on those fields this year. As we explain in another blog post , the state of Ohio uses CAUV to calculate how much tax owners of land devoted exclusively to an agricultural use must pay. The plaintiffs sought reimbursements from the state by arguing that the state failed to properly calculate CAUV in accordance with Ohio law. Those assessment increases led to a successful effort to change the CAUV formula so that drastic fluctuations would be less likely to occur moving forward.
However, some property owners wanted a reimbursement for previous assessments, not just a new formula.
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The case began on June 26, , when three parties filed a complaint in a county court of common pleas against the state tax commissioner. The three plaintiffs sought a class action certification to act on behalf of all owners of Ohio lands devoted to agricultural production. The complaint alleged that the state of Ohio illegally collected more than a billion dollars of property taxes from those owners. Therefore, the landowners first sought repayment under the legal doctrine of unjust enrichment. Over the next few months, the plaintiffs amended their complaint twice.
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The first amended complaint added a claim for repayment under the doctrine of equitable restitution. It also added more named plaintiffs, added then-Governor Kasich as a defendant, and asked for compensatory damages. The second amended complaint removed the Governor and tax commissioner as defendants, added the state of Ohio as a defendant, and removed all claims except for equitable restitution and a declaratory judgment.
Lots of adjustments, but what is equitable restitution? Equitable restitution is a type of recovery under the law that says one party has improperly benefitted at the expense of another, and therefore should return the benefit to its rightful owner. Therefore, the state of Ohio should have to return that benefit, which would mean a return of the property tax overpayments. However, there are two types of restitution under the law: legal and equitable. Legal restitution is available when a plaintiff cannot assert a right of possession to a particular property but is nonetheless able to shows grounds for compensation from the defendant.
If the money can be traced to particular funds, then equitable restitution is more likely to apply. For example, say that a plaintiff gave a defendant a five dollar bill, but something goes wrong and the plaintiff wants her money back. The plaintiff may have an equitable remedy if she seeks the return of that specific five dollar bill.
However, she may only have a legal remedy if she simply wants five dollars back. This distinction played an important role in the outcome of this case. The lawsuit was ultimately dismissed because the common pleas court determined that it could not hear the case because of the nature of the remedy sought. The Ohio Court of Claims is a special kind of state court that exists primarily to handle lawsuits against the state of Ohio. Its existence stems from the idea in the U. States may choose if and when to be sued; however, most have waived that immunity to some extent. Ohio chose to partially waive its sovereign immunity in particular types of cases by allowing people to sue it in a special court instead of in a county court of common pleas.
When it created the Ohio Court of Claims, the Ohio General Assembly decided that people seeking relief at law must file their lawsuit with the Ohio Court of Claims, while those seeking equitable relief may file their lawsuit with a county court of common pleas. Restitution happens to be a type of remedy that can be classified as either legal or equitable in nature. The focus is not on what the parties call the restitution they seek, but what they actually want from it.
In looking at the facts, the court determined that the plaintiffs sought the return of funds that could not be traceable into any state account, and therefore the remedy sought was legal in nature. Absent this transfer, the specific tax dollars that the plaintiffs allege were wrongfully paid to the state were not traceable to any state accounts.
Without this traceable link, the plaintiffs could only seek a return of money in general, rather than the return of specific funds. Because of this, only the Ohio Court of Claims could hear this case and award this remedy. It was on the basis of this distinction that the Franklin County Court of Common Pleas dismissed the case, and that the Tenth District Court of Appeals affirmed the dismissal.
This can be common when the case is dismissed on a procedural basis where there could be a claim with some merit that has neither been decided on the merits nor settled. At this time, it does not appear that the plaintiffs have refiled the case in the Ohio Court of Claims, and we cannot predict whether or not they will do so.
cauv | Ohio Agricultural Law Blog
The case is cited as Vance v. State , Ohio 10th Dist. What exactly is a differential tax assessment? Instead of assessing property taxes on the basis of the market rate for developable land, CAUV uses a different formula that assesses the land on its value for agricultural production. CAUV is a form of differential tax assessment.
While each state utilizes differential tax assessments for agricultural lands, they use different definitions of agriculture, different formulas, and different application processes. Some areas of law utilize model acts that states may adopt in order to make it easier to do business across state lines. An example close to home illustrates what this means. Commercial timber qualifies, but non-commercial timber only qualifies if it located on or next to land that otherwise would qualify for CAUV.
Exclusive use requires just that: the land is exclusively used for an activity listed as an agricultural use. That is an example of a definition of what qualifies as agriculture for the purposes of the differential tax assessment. The differential tax assessment project compiled the approaches taken by all fifty states, and the compilations are available on the National Agricultural Law Center website HERE. Department of Agriculture. A landowner may present evidence regarding the value and acreage of his or her land, but the Board of Tax Appeals BTA is free to weigh that evidence as it wishes, according to the Ohio Supreme Court.
All seven justices agreed that the BTA in the case of Johnson v. Clark County Board of Revision acted with appropriate discretion, although two justices did not sign onto the reasoning as to why the BTA acted appropriately. Since its inception, CAUV has generally provided landowners with qualifying property a lower tax bill than they otherwise would have using market value. Ohio most recently changed the formula for CAUV in If CAUV land is converted to a use that no longer qualifies for CAUV treatment, the land is again assessed based upon its fair market value and the landowner must pay to the county the difference between the CAUV value and the fair market value for the prior three years.
First, if a landowner believes that all or part of his or her parcel qualifies for CAUV, an application must be submitted to the county auditor where the land is located. Landowners should contact their county auditors about filing instructions.
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Second, the procedure to appeal whether land qualifies for CAUV is different than the procedure to appeal a tax valuation assessment. Decisions of courts of common pleas can be appealed to the state district court of appeals, and those decisions can be appealed to the Ohio Supreme Court. If a Board of Revision believes that the county auditor made an error in applying the CAUV statute and rules, the board has the authority to revise tax assessments.
Ohio Board of Tax Appeals and Appellate Court Decisions
Decisions of the BTA can be appealed to the respective state district court of appeals where the land in question is located, and those decisions can be appealed to the Ohio Supreme Court. Johnson appealed to the Clark County Board of Revision. Further, Mr. Johnson then appealed to the Ohio Board of Tax Appeals. Again, Mr. Johnson testified and produced a number of exhibits. At this appeal, he elicited testimony from an employee of the Ohio Department of Taxation. The BTA also rejected Mr. Johnson then filed an appeal to the Ohio Supreme Court in Johnson represented himself pro se, or without an attorney.
This requirement to convince the Board of Tax Appeals is known as the burden of proof. The burden of proof determines which party must play an active role in proving his or her argument, while the opposing side will only have to present proof to counter if the board finds that the first party has carried its burden. Johnson then appealed to the Ohio Board of Tax Appeals.