Opinion
No. 34800
Decided December 26, 1956.
Taxation — Application for exemption and remission of taxes — Jurisdiction of Board of Tax Appeals — Sections 5703.02 and 5715.39, Revised Code — Determination of validity of taxes — Filled-in land along Lake Erie — Title conveyed by state to city — Land occupied by public improvements.
APPEAL from the Board of Tax Appeals.
This is an appeal from a decision of the Board of Tax Appeals denying applications of the city of Cleveland for exemption and remission of taxes and of the state of Ohio for remission of taxes, assessed against certain parcels of filled-in land occupied by various public improvements on the Cleveland lake front.
The title to this land was in the state of Ohio by virtue of Section 3699 a, General Code (Section 123.03, Revised Code), until the year 1953, at which time the state conveyed a large part thereof to the city of Cleveland, reserving under such conveyance the underlying mineral rights.
The land first appeared on the tax duplicate in 1938, at which time the auditor by extending the lot lines of the upland owners created new parcels, which he listed, and assessed the taxes thereon in the names of the owners of the uplands. Since such time the property has been so listed and assessed, but the taxes thereon have never been paid.
The city of Cleveland after such land had been conveyed to it filed applications for the exemption and remission of the taxes assessed against such land, on the basis that it was public property used for a public purpose. In 1955, the state filed an application for remission of the accrued taxes from 1938 to 1953, on the basis that such taxes being against the upland owners were taxes on littoral rights and illegal.
The Board of Tax Appeals, although conceding that the land here involved was public land used for a public purpose, denied the applications of the city, on the grounds that there were accrued taxes thereon, that the board does not have jurisdiction to determine whether such taxes were illegal, and that under the provisions of Section 5713.08, Revised Code, the board does not have jurisdiction to exempt such property from taxation so long as the accrued taxes remain unpaid.
As to the application of the state, the board denied the remission of taxes on the ground that the assessment of the property against the upland owners was merely a clerical error, and that property of the state is subject to taxation like that of other property owners, unless an exemption has been properly granted by the board.
Mr. C. William O'Neill, attorney general, and Mr. Hugh A. Sherer, for appellant state of Ohio.
Mr. Ralph S. Locher, director of law, Mr. Joseph H. Crowley and Mr. Richard O. Horn, for appellant city of Cleveland.
Mr. Frank T. Cullitan, prosecuting attorney, and Mr. George W. Leddon, for appellee John J. Carney, auditor of Cuyahoga County.
The principal question presented by this appeal is whether on an application for remission of taxes the Board of Tax Appeals, under the provisions of Sections 5703.02 and 5715.39, Revised Code, has jurisdiction to declare a tax illegal.
The board, relying on the case of Carney, Aud., v. State, 158 Ohio St. 348, 109 N.E.2d 281, determined that it has no jurisdiction to declare a tax illegal and that, since Section 5713.08, Revised Code, provides that "the board shall not consider an application for exemption of property under such sections unless the application has attached thereto a certificate or affidavit executed by the county treasurer certifying that taxes, assessments, penalties, and interest levied and assessed against the property sought to be exempted have been paid in full to the date upon which the application for exemption is filed," it has no jurisdiction to grant an exemption in the instant case.
However, an examination of the Carney case shows that an entirely different question was before the court. That case involved the legality of special assessments rather than ordinary real property taxes.
A special assessment is not a tax as such. It is an assessment against real property based on the proposition that, due to a public improvement of some nature, such real property has received a benefit. Such an assessment is levied only against the property benefited by the improvement.
Real property taxes on the other hand have no relation to benefit but are levied at a uniform rate on all the real property in a tax district for the purpose of raising revenue for governmental operation.
To determine the jurisdiction of the Board of Tax Appeals to resolve questions relating to the validity of taxes, we must consider the statutes which confer the jurisdiction of the board.
Section 5703.02, Revised Code, reads in part as follows:
"The Board of Tax Appeals shall exercise the following powers and perform the following duties of the Department of Taxation:
"* * *
"(I) Exercise the authority provided by Section 5715.39 of the Revised Code relative to remitting taxes and penalties against real property found to have been illegally assessed or to have been assessed in consequence of the negligence or error of an officer required to perform a duty relating to the assessment of such property for taxation, or the levy or collection of such taxes * * *."
Section 5715.39, Revised Code, reads in part as follows:
"The Board of Tax Appeals may remit taxes and penalties thereon found by it to have been illegally assessed and penalties that have accrued because of the negligence or error of an officer required to perform a duty relating to the assessment of property for taxation or the levy or collection of taxes."
Clearly under these sections the Board of Tax Appeals is not vested with jurisdiction to determine the validity of special assessments, as we held in the Carney case. It is, however, specifically vested with jurisdiction to determine the legality of taxes, on an application for remission of such taxes.
The board, in this case, must first determine the legality of the taxes assessed against this property, pursuant to the applications for remission filed under the provisions of Section 5715.39, Revised Code, before it considers the application for exemption filed under the provisions of Section 5713.08, Revised Code. In the event such taxes are determined to be illegal, then no taxes are due on such property, the treasurer may so certify, and the board may then consider the application for exemption.
The jurisdiction to determine the validity of taxes, on an application for remission, being vested by statute in the Board of Tax Appeals, it is clear that its refusal to do so in the present case rendered its decision unreasonable and unlawful.
Since the legality of the assessed taxes on this filled-in land is the basis of a determination of the rights of both the city and the state, the decision of the Board of Tax Appeals is reversed, and the cause is remanded to the board for further proceedings according to law.
Decision reversed and cause remanded.
WEYGANDT, C.J., MATTHIAS, HART, ZIMMERMAN, STEWART, BELL and TAFT, JJ., concur.