Subject: Reclassification of Storage Condominiums for Tax Purposes
Source: Ohio House Bill No. 17 (As Introduced), 136th General Assembly
Sponsor: Representative Lorenz
Cosponsors: Representatives Gross, Johnson, Thomas, D., Dean, Deeter, Thomas, C., Hiner, Workman, Schmidt
Summary:
This bill seeks to amend Section 5713.041 of the Ohio Revised Code to classify certain storage condominiums as residential property for tax purposes. The bill defines “storage condominium” and outlines the conditions that must be met for a property to be classified as such. The primary effect of this reclassification is to impact the tax reductions outlined in section 319.301 of the Revised Code.
Main Themes and Important Ideas:
- Reclassification for Tax Purposes: The core purpose of the bill is to reclassify specific types of storage condominiums from nonresidential to residential property for tax purposes. This reclassification will affect the tax reductions outlined in section 319.301 of the Revised Code.
- Definition of “Storage Condominium”: The bill provides a specific definition of “storage condominium,” establishing criteria that must be met for a property to qualify. These criteria include:
- Individual Ownership: “All persons with a direct ownership interest in the property are individuals.”
- Storage Use: “Each such owner has an individual ownership interest in one or more units of the property dedicated to the storage of a motor vehicle, boat, trailer, recreational vehicle, or of household items.”
- Undivided Ownership in Common Elements: “Each such owner may have an undivided ownership interest with the other owners in the common elements of the property.”
- County Auditor’s Role: The county auditor is responsible for classifying each separate parcel of real property based on its “principal, current use.” The bill mandates that storage condominiums meeting the specified criteria be classified as residential/agricultural real property.
- Limited Application of Reclassification: The bill explicitly states that the classification required by this section is “solely for the purpose of making the reductions in taxes required by section 319.301 of the Revised Code.” It further clarifies that “this section shall not apply for purposes of classifying real property for any other purpose authorized or required by law or by rule of the tax commissioner.”
- Tax Commissioner’s Rulemaking Authority: The bill empowers the tax commissioner to “adopt rules governing the classification of property under this section, and no property shall be so classified except in accordance with such rules.”
- Effective Date: The amendment applies to tax years ending on or after the effective date of the section.
Key Quotes:
- “As used in this section, ‘storage condominium’ means real property to which all of the following apply: (1) All persons with a direct ownership interest in the property are individuals; (2) Each such owner has an individual ownership interest in one or more units of the property dedicated to the storage of a motor vehicle, boat, trailer, recreational vehicle, or of household items; (3) Each such owner may have an undivided ownership interest with the other owners in the common elements of the property.”
- “For purposes of this section, lands and improvements thereon used for residential or agricultural purposes or as a storage condominium shall be classified as residential/agricultural real property, and all other lands and improvements thereon and minerals or rights to minerals shall be classified as nonresidential/agricultural real property.”
- “The classification required by this section is solely for the purpose of making the reductions in taxes required by section 319.301 of the Revised Code, and this section shall not apply for purposes of classifying real property for any other purpose authorized or required by law or by rule of the tax commissioner.”
Potential Implications:
- Tax Revenue: The reclassification could potentially affect tax revenue at the local level, depending on the number and value of storage condominiums that meet the bill’s criteria.
- Property Owner Benefits: Owners of qualifying storage condominiums could benefit from reduced property taxes as a result of the reclassification.
- Market for Storage Condominiums: The change could potentially influence the market for storage condominiums.
Next Steps:
- Monitor the bill’s progress through the Ohio General Assembly.
- Review the rules adopted by the tax commissioner regarding the classification of property under this section.
- Analyze the potential fiscal impact of the reclassification on local governments.