Ohio Tax Taxpayers Beware! Elimination of the Right to a Direct - - PDF document
27th Annual Tuesday & Wednesday, January 2324, 2018 Hya Regency Columbus, Columbus, Ohio Workshop T Ohio Tax Taxpayers Beware! Elimination of the Right to a Direct Appeal to the Ohio Supreme Court from the Ohio Board of Tax
27th Annual
Tuesday & Wednesday, January 23‐24, 2018
Hya Regency Columbus, Columbus, Ohio
Taxpayers Beware! Elimination of the Right to a Direct Appeal to the Ohio Supreme Court from the Ohio Board of Tax Appeals (BTA)
Tuesday, January 23, 2018 4:15 p.m. to 5:15 p.m.
Biographical Information
David D. Ebersole, Associate, McDonald Hopkins, LLC 250 West St., Suite 550, Columbus, OH 43215 (614) 484-0716 debersole@mcdonaldhopkins.com Dave is an associate attorney in McDonald Hopkins’ Tax and Benefits Group who advises clients on a multitude of tax issues, particularly state and local taxes. As a former Assistant Attorney General for the Ohio Attorney General, Mike DeWine, Dave has defended the Ohio Tax Commissioner in tax litigation before the Ohio Board of Tax Appeals and Ohio courts of appeal, including several cases before the Ohio Supreme Court. He has extensive experience with all types of state and local taxes. These taxes include the income tax, sales and use tax, excise tax, personal and real property tax, and Ohio’s gross receipts tax, the CAT. Dave also advises clients with respect to federal tax matters, including federal tax structuring and analysis for business transactions, federal tax controversies including IRS audits, executive compensation matters, and estate planning. Dave attended The Ohio State University Max M. Fisher College of Business, where he earned his B.S. with honors in Accounting and Finance. He also attended The Ohio State University Moritz College of Law on a full ride merit scholarship and graduated with honors. Bart Hubbard, Esq., Assistant Attorney General Ohio Attorney General's Office 30 E. Broad St., Taxation Section 25th Flr., Columbus, OH 43215-3428 barton.hubbard@ohioattorneygeneral.gov (614) 466-2941 Bart is the Principal Attorney in the Ohio Attorney General’s Taxation Section and has represented the Ohio Tax Commissioner for over twenty-five years. He is a graduate of Penn State (B.S., 1978) and the University of Pittsburgh Law School (J.D., 1981). Daniel W. Fausey, Assistant Section Chief – Taxation Section Office of Ohio Attorney General Mike DeWine 30 E. Broad St., 25th Floor, Columbus, Ohio 43215 614-995-9032 Fax: 866-513-0356 Daniel.Fausey@OhioAttorneyGeneral.gov Daniel Fausey is a 2005 graduate of the Ohio State University Moritz College of Law. Dan was a law clerk for Chief Justice Thomas Moyer and Chief Justice Eric Brown of the Ohio Supreme Court. Dan has worked as an Assistant Attorney General in several sections of the Ohio Attorney General’s Office, including Executive Agencies, Charitable Law, and currently Taxation, where he is the Assistant Section Chief. Dan also has been a Deputy Solicitor for the State Solicitor’s Major Appeals Group. Dan’s practice is mainly litigation, having appeared before more than 30 trial-level courts across the state and several administrative agency hearings. Dan’s practice has a heavy appellate focus: he has appeared before numerous Ohio appellate Courts, the Sixth Circuit Federal Court of Appeals, and has made multiple appearances before the Supreme Court of Ohio. Dan previously served as an Adjunct Professor at Ohio State’s Moritz College of Law, where he taught Appellate Advocacy. In his free time, Dan races mountain bikes and serves as a board member for the non-profit Central Ohio Mountain Biking Organization. Dan lives in Columbus with his wife and three children.
Eliminating the Taxpayer Right of Appeal to the Ohio Supreme Court
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David Ebersole McDonald Hopkins, LLC Barton Hubbard Ohio Attorney General Daniel Fausey Ohio Attorney General
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– See, 101 Ohio Laws 399, HB 68; 102 Ohio Laws 224, HB 491 (creating the Tax Commission)
– 1910‐1916: Decisions Final and Binding
978 (Cuy. Cty. Comm. Pleas) (“star chamber tribunal”)
– 1917‐1939: Appeal to Common Pleas Court
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– See, 118 Ohio Laws 344, 355, SB 159 (repealing the Tax Commission and creating new admin. structure)
– 1939‐1953: Appeal To Ohio Supreme Court Only
– 1953‐2017: Appeal To Ohio Sup. Ct. OR Ct. of Appeals
– 2017‐Present: Appeal to Ct. of Appeals Only
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Budget Bill, Am. Sub. HB 49, 132nd GA (2017)
decisions to the Ohio Supreme Court
Supreme Court “if the appeal involves a substantial constitutional question or a question of great general or public interest”
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Direct Right of Appeal to OSC In R.C. 5717.02
Conference Report
Line Item Vetoes)
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5717.04 Added 8 Days Prior to Passage
Justice O’Connor
Oppose Amendment
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– “No bill shall contain more than one subject, which shall be clearly expressed in its title.” – See, Simmons‐Harris v. Goff, 86 Ohio St.3d 1 (1999) (enforcing one subject rule in biennial budget bill)
– “Every bill shall be considered by each house on three different days, unless two‐thirds of the members elected to the house in which it is pending suspend this requirement, and every individual consideration of a bill or action suspending the requirement shall be recorded in the journal of the respective house. * * * ”
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“The proceeding to obtain a reversal, vacation, or modification of a decision of the board of tax appeals shall be by appeal to the court of appeals for the county in which the property taxed is situated or in which the taxpayer resides. If the taxpayer is a corporation, then the proceeding to obtain such reversal, vacation, or modification shall be by appeal to the court of appeals for the county in which the property taxed is situated, or the county of residence of the agent for service of process, tax notices, or demands, or the county in which the corporation has its principal place of business. In all
vacation, or modification shall be by appeal to the court of appeals for Franklin county.” (Underlining added).
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– Is a venue defect jurisdictional? Should it be? – See, Am. Rest. & Lunch v. Glander, 147 Ohio St. 147
– What is a corporation’s “principal place of business”?
– Which rule applies to pass‐through entities? – What does “In all other instances” mean in R.C. 5717.04? See, discussion in the next slide.
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– R.C. 5717.04: “In all other instances, the proceeding to
appeal to the court of appeals for Franklin county.”
– All tax appeals other than property tax appeals to 10th Dist.
– See also, Marion v. Marion Income Tax Bd., 2008‐Ohio‐ 2496 (3rd Dist. 2008); Oakwood Pub. Sch. Lib. v. Budget Comm'n of Mont. Cty., 1977 WL 200386, (10th Dist. 1977).
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– “In all other instances” means exclusive jurisdiction to the Franklin Cty. Ct. of App. for Budget Comm. appeals with no taxpayer or taxed property. – See, Lucas Cty. Commr’s v. Lucas Cty. Bud. Comm., 12 Ohio St.2d 47 (1967) (Herbert, J., dissenting); Toledo v. Lucas Cty.
– Contrary to Judge Whiteside’s explanation in Stines, the definition of “taxpayer” in R.C. 5717.04 is not limited to property tax taxpayers. – Dewey, Alternative Methods of Appeal from Decisions of the Ohio Bd. of Tax Appeals, 14 Ohio St. Law. J. 494, 496 (1953)
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“The court of appeals in which notice of appeal is first filed shall have exclusive jurisdiction of the appeal, unless jurisdiction over the appeal is transferred to the supreme court pursuant to this paragraph. Within thirty days after a notice of appeal is filed with the appropriate court of appeals, a party to the appeal may file a petition with the supreme court to transfer jurisdiction over the appeal to the supreme
appeal be taken directly to the supreme court if the appeal involves a substantial constitutional question or a question of great general or public interest. Appeals for which jurisdiction is transferred to the supreme court under this paragraph shall proceed as though the decision of the board
Appeals for which jurisdiction is not transferred to the supreme court shall proceed in the court of appeals.” (Underlining added).
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Transfer BTA Appeal from Court of Appeals to the Ohio Supreme Court (September 29, 2017)
Court of Appeals Under R.C. 5717.04
– But Untested: What is a “substantial constitutional question or question of great general or public interest”?
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No Legislative Hearings
– Volume Of BTA Appeals To Ohio Supreme Court Trending Downward
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Year Number of BTA Appeals to Sup. Ct. 2010 42 2011 21 2012 42 2013 55 2014 152 2015 106 2016 69 2017 38
Source: Ohio Sup. Ct. Online Docket Searches
– Administrators may face conflicting precedent for one taxpayer in multiple jurisdictions – Compare with adjudication of federal tax law
– Efficiency: Tax appeals require the arbiter to have expertise is specialized fields including tax law and accounting
– Expertise deciding tax appeals has been concentrated in the Ohio Supreme Court – Burdening local governments: county courts of appeal may not have the required resources or institutional knowledge
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– Uniformity Concerns
– Common Procedural Issues – Very Complex
– Very Complex
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– Associate, McDonald Hopkins, LLC – Phone: (614) 484‐0716 – Email: debersole@mcdonaldhopkins.com
– Principal Assistant Attorney General, Ohio Attorney General – Barton.Hubbard@OhioAttorneyGeneral.gov
– Assistant Section Chief, Ohio Attorney General – Daniel.Fausey@OhioAttorneyGeneral.gov
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