The case started in Fulton County when the Metamora Elevator Co. challenged an auditor’s assessment that its grain bins were not personal property and could be taxed as real property. Metamora’s attorney reached out to Ohio Farm Bureau for help in the case, which worked its way up to the Ohio Supreme Court. OFBF filed an amicus brief in the case and said some of its members have had their grain bins listed as taxable structures while others have not.
It is “unfair to charge real property taxes on items to which the law of real property tax does not apply,” OFBF said in its brief. Under state law, all buildings are taxed as real property unless they are business fixtures, which is defined as “an item of tangible personal property that has become permanently attached or affixed to the land or to a building, structure, or improvement, and that primarily benefits the business conducted by the occupant on the premises.” According to Ohio Revised Code, business fixtures include storage bins.
“The court was very straightforward in its opinion. It said storage bins clearly are a business fixture and clearly grain bins are storage bins and therefore they can not be taxed as real property,” said Leah Curtis, OFBF’s director of agricultural law. “We think there are a strong handful of counties that were taxing these grain bins and they will now have to take them off the tax rolls.”
What the ruling means for Ohio farmers
The Ohio Supreme Court’s ruling creates a uniform system of real estate taxation of grain storage bins. A separate law that can allow for recovery of wrongly collected taxes could apply; however, it has only a one year statute of limitations so farmers can only recover last year’s taxes. Curtis noted that the tax recovery process is complicated and can be expensive, making it unlikely to be worthwhile to go through the process to only recover a year’s worth of taxes. But she noted that the long-term effect of the ruling will add up for farmers.
“If you have a grain storage bin on your property for 30 to 50 years, the tax savings adds up over the years,” she said. “There are always questions about real property and what should be taxed and not taxed. Cases like this help better define what should not be taxed as real property.”
As significant landowners in many jurisdictions, farmers are especially interested in seeing property tax laws enforced appropriately and consistently across the state. The laws of real property, as properly enacted by the General Assembly, clearly remove from real property taxation non-permanent fabrications such as the grain bins in question.
~ Excerpt from Ohio Farm Bureau’s amicus brief