The Lorain County Auditor's Office is hoping to take the battle to the Ohio Supreme Court to see if greenhouses should be eligible for property tax.
On April 28, Lorain County Commissioners Michelle Hung, David J. Moore and Matt Lundy voted 3-0 to approve legal fees for County Auditor Craig Snodgrass.
The Auditor & # 39; s Office will hire an outside legal counsel to assist in its request to the state Supreme Court to review an appeals court ruling on the greenhouse tax litigation.
The case arises from the property tax dispute with Green Circle Growers, in which it was argued that the greenhouses are personal property that is not subject to property tax on its 186 acre site at US 51051 Route 20 in Camden Township.
Firelands Local Schools and Snodgrass have argued that the greenhouses are legal "buildings" and "structures" that should be included in the company's property valuation for property taxes.
In March, Ohio's 9th District Court of Appeal justices ruled 2-1 that the structures were real estate.
Snodgrass will ask the state Supreme Court to review this ruling, but stated that the Supreme Court is under no obligation to hear the case.
Meet the breeder
The appeals court's decision upheld a 2018 Ohio Board of Tax Appeals ruling in favor of Green Circle Growers that lowered the property tax the company owed for the 2015 and 2016 tax years, Columbus attorney Jonathan T. Brollier said who represented the company.
"The (Board of Appeal), and now the Court of Appeal, have approved the company's position that greenhouses on the property are 'business equipment' as defined in the Revised Ohio Code and are therefore not subject to property tax. Brollier said in a statement following the court ruling. “In contrast, permanent buildings on Green Circle Growers property, including the office building and warehouse, are subject to property tax.
“With its 900 employees, Green Circle Growers has a significant and positive economic impact on the local community. In addition to the company's share of property taxes, employees pay federal, state, and local income taxes. The company and its owners have historically been generous in supporting nonprofits in the local community and beyond. "
Ohio Tax Act
The problem may seem mysterious, but Snodgrass said it would have far-reaching implications for Ohio tax law if business owners start arguing that various structures are personal property that shouldn't count towards property taxes paid to school districts and local governments.
"We can think of other companies making the same arguments," he said.
Snodgrass cited car washes and storage units as other examples.
Lorain County's Assistant Attorney Dan Petticord gave the example of golf courses and their sprinkler systems, and the 9th District Court of Appeals cited an earlier High Court ruling on the tax status of an amusement park roller coaster.
County claims
Green Circle Growers is among the top 10 largest greenhouses in the country, said Snodgrass.
If the company prevailed in court, the Green Circle Growers would have to refund the taxes paid – possibly $ 400,000 from Lorain County and about $ 2.2 million from Firelands Schools, he said.
Lorain County JVS, Camden Township, Kipton Village, Lorain County Public Health, and the local common ambulance district are other political subdivisions that would be affected, Snodgrass said.
In the future, other companies and property owners would have to pay more because the tax burden would shift to them, he said.
"It's not necessarily against business, but it's for taxpayers," said Snodgrass. "We're trying to protect the tax base so everyone pays their fair share."
The County Commissioners approved $ 35,000 spending on appeal to the Ohio Supreme Court.
If accepted, the Auditor's Office will spend up to $ 150,000 on the trial.
Snodgrass will use his office's real estate appraisal funds to pay for legal counsel.
It is not general fund money, and Snodgrass acknowledged that it is a significant amount of money that his office has saved through its internal operations.
The county's accountancy office plans to discontinue Tucker Ellis LLP, Petticord said.
The district attorney's office lacks the skills or resources to specialize in this work, he said.
"I think that's exactly why we're going to an outside lawyer," said Petticord.
"Craig is right," he said. “The long-term consequences of this decision will be significant.
"In my opinion it is a fight that is worth it and it is a fight that the right people are used to have it."
Lundy noted that Lorain County officials are not targeting any particular business.
However, they argue that Ohio's tax law is incorrect, he said.
"It's just important that everyone pays their fair share," said Lundy.