Tax Relief

Corporations broken by COVID can obtain property tax relief

Delaware County commercial property owners have until September 2 to apply for a property tax break due to the economic impact of the COVID-19 coronavirus pandemic.

County auditor George Kaitsa said the program was approved by Ohio Senate Bill 57, which Governor Mike DeWine signed on April 27 and went into effect on August 3.

Kaitsa said the law makes use of the district audit committee, which includes the district auditor, district treasurer and a district commissioner.

The board routinely hears appeals from property owners claiming that market conditions have lowered their property values, which should lower the property’s valuation for property tax purposes, Kaitsa said.

The board also hears appeals from school districts filing complaints about under-valuation of property, a condition that would cut the district’s income, he said.

The board of directors holds hearings on such complaints annually, Kaitsa said.

Under SB 57, he said the board of directors, which is linked to the Court of Auditors, also heard complaints that the pandemic had reduced property value.

Property owners can file a complaint with the board on or before September 2 to request a property valuation downgrade by October 1, county communications director Jane Hawes said.

If the board ruled in favor of the property owner, Kaitsa said, the appraisal of the property would be retrospectively reduced by the same amount of the COVID-related loss as of January 1, 2020 and carried forward for the remainder of the valuation cycle of 2020, 2021 and 2022.

The taxable value of a property is 35% of the appraised value.

“The law requires the property owner to demonstrate two things: a direct link between COVID and pandemic and the value of the property,” Kaitsa said.

As of August 13, only two cases had been filed, a restaurant and a shop front, Kaitsa said. He said he expected more submissions in late August as more people become aware of the program.

The complaint needs to be specific about how the pandemic has reduced the property’s value, Hawes said. The information to provide evidence of impairment may include annual income and expense data, audited financial statements, or a property valuation, she said.

“We’ll likely be looking for audited financial statements that show, for example, that this business had half a million dollars in annual sales in 2019, and that year if it were a restaurant, for example, its revenues dropped to $ 300,000,” Kaitsa said. “So that would be evidence that could be presented. You could provide a valuation from a certified appraiser who will conduct an income approach to that value that shows that the decline in income from COVID has reduced the property’s value. These are some of the things we will look for in terms of evidence to support an impairment. “

Residential property owners can also file a complaint under the program, but filing a home complaint is more difficult because the owner must demonstrate that the property’s value is reduced, Kaitsa said. Taken alone, loss of income for the property owner would not affect the panel’s decision, he said.

State law also gives district auditors the power to reduce values ​​on properties damaged or destroyed by storms, according to a press release by Franklin County Auditor Michael Stinziano on Aug. 18.

Kaitsa said when a commercial property suffers a loss of income, that loss reflects the commercial property’s ability to generate income, which affects its market value and the appraisal used for tax collection purposes.

The pandemic “definitely has an impact on the business world – and especially a business world that relies on high levels of pedestrian traffic,” he said.

The normal cycle for challengeable property appraisals requires filing from January through March, with hearings on applications starting in April, Kaitsa said. Those who filed complaints during this cycle can also file under the terms of SB 57, he said.

For more information on the board’s complaint process, forms, instructions, rules and procedures, please visit https://auditor.co.delaware.oh.us/board-of-revision-covid/.

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