On September 28, 2010, the Supreme Court of Ohio held that a county auditor’s sexennial reappraisal of a property’s value "cuts off" the "carry-over effect" of a pending appeal. AERC Saw Mill Village, Inc. v. Franklin Cty. Bd. of Revision (Sept. 28, 2010), ___ Ohio St. 3d ___, 2010-Ohio-4468
In this case, the parties to a property tax appeal relating to tax year 2002 agreed to resolve the dispute in 2006 by stipulating that the property’s value was $20.1 million. The Ohio Board of Tax Appeals (BTA) issued a decision in 2006 that carried the parties’ stipulation into effect. Under the carry-over effect rule set forth in R.C. 5715.19(D), the owner’s taxes for 2002 “and each succeeding year until the complaint [w]as finally determined” would be “based upon the . . . valuation . . . as finally determined.” Thus, if only the carry-over rule were applied, the owner’s taxes for 2002–2006 would have been based on the BTA’s order that the property’s value was $20.1 million.
However, a different series of statutes requires county auditors to reappraise property at least once every six years (“the sexennial reappraisal”), and to update those values after three years (“the triennial update”). In this case, 2005 was a sexennial reappraisal year, and the Franklin County Auditor determined that the property’s value for 2005 was $17.9 million.
hen the BTA issued its decision, the Franklin County Auditor applied the carry-over effect rule and increased the property’s value not only for 2002–2004, but also for 2005–2006, to $20.1 million. Thus, the auditor replaced his lower 2005 sexennial reappraisal value for 2005 and 2006 with the BTA’s higher value, which related to 2002.
The property owner appealed, arguing that the Franklin County Auditor’s duty to perform the sexennial reappraisal trumped the carry-over effect rule. The Dublin City School District disagreed, arguing that the carry-over effect rule superseded the reappraisal statute. The Franklin County Board of Revision and the BTA both agreed with the Dublin City School District; however, the court reversed the BTA, holding that the reappraisal and the carry-over effect statutes must be read together, and that the statutes are best harmonized by finding that the final decision on an appeal will apply to the original tax year, as well as each subsequent tax year, until the county auditor performs a new valuation of the property pursuant to a statutory duty.
Thus, the BTA’s decision should have applied to 2002–2004, while the Auditor’s 2005 sexennial reappraisal should have applied to 2005 and 2006. The court suggested that a triennial update that falls during the pendency of a property tax appeal should be applied not to the auditor’s original value, but instead that the update should be applied to the BTA’s final determination of value.