Court Orders Recalculation of Woodland Tax Rates

The Supreme Court of Ohio today ruled the Ohio Department of Taxation did not base the tax rate for the clearing of wooded areas of agricultural lands on any data or evidence and must recalculate the tax rates based on reliable data and evidence.

In a unanimous opinion, the Supreme Court found the current agricultural use values (CAUVs) for woodlands for tax years 2015 to 2020 are not "accurate, reliable, and practical," which is required by the Ohio Administrative Code. A group of landowners challenged the tax values, arguing the state underestimates the costs of clearing wooded land, which results in taxes being too high for unfarmed wooded areas.

Writing for the Court, Justice Melody Stewart explained the tax commissioner, now Patricia Harris, acknowledged the $500-per-acre clearing cost rate used prior to 2015 was too low and the tax department was having difficulties finding reliable data to produce a more accurate figure. The commissioner adopted a $1,000-per-acre clearing cost rate. Some forestry experts argued the cost of clearing woodland was far higher than the cost rate the tax commissioner adopted, leading to woodlands being overtaxed.

"But the problem is that simply doubling the rate does not necessarily result in a reasonable endpoint," Justice Stewart wrote. "The doubling method used to calculate the rate is not supported by any recognized authority, whether it be statistical, legal, agricultural, or otherwise."

The decision reversed an Ohio Board of Tax Appeals (BTA) decision, which allowed the tax commissioner to use the $1,000 figure. The Court remanded the case to the tax commissioner with instruction to adopt a new clearing-cost rate that complies with the directives of Adm. Code 5703-25-33.