Opinion
Nos. 31770 and 31771
Decided November 9, 1949.
Taxation — Classification — Power of General Assembly not limited except as to land and improvements — Section 2, Article XII, Constitution — Personal property may be taxed as land and improvements — Structure or building included within term "real property," when — Section 5322, General Code — Buckeye Lake cottage on land leased from state, "real property."
1. Except as to land and improvements thereon, Section 2, Article XII of the constitution, specifically recognizes and provides against limiting the general power of the General Assembly, subject to the provisions of Article I (Bill of Rights), to determine the subjects and methods of taxation or exemptions therefrom.
2. The General Assembly has the power to provide that personal property shall be taxed by the same method and to the same extent as land and improvements thereon must be taxed.
3. Even if a structure or building located on land is personal property, such structure or building will, for purposes of taxation, be included within the definition of "real property" as that term is defined in Section 5322, General Code, unless the General Assembly has otherwise specified.
4. A cottage, erected on land leased from the state and situated on the banks of Buckeye Lake, is a structure or building located on land and is, therefore, real property within the definition of that term in Section 5322, General Code.
APPEALS from the Board of Tax Appeals.
The appellants, owners of cottages erected on land leased from the state of Ohio and situated on the banks of Buckeye Lake, filed their complaints with the Board of Revision of Fairfield County for the tax year 1947, stating that the cottages were overvalued by the county auditor for such taxable year, and that the cottages were illegally classified as real property instead of personal property. The board of revision denied the relief sought in the complaints, sustained the valuations and treated the property in dispute as real property.
Appeals were taken to the Board of Tax Appeals. The cases were consolidated by the board for final consideration and disposition. The Board of Tax Appeals held that the board of revision did not err in affirming the auditor's assessed valuations.
The cases are here on appeals from the decision of the Board of Tax Appeals. Although the question of valuation was before the Board of Tax Appeals, the appeals here involve only the question of classification.
Messrs. Butler, Summer Hoffman, for appellants.
Mr. James S. Peterson, prosecuting attorney, and Mr. Aubrey A. Wendt, for appellees.
Appellants' complaints are that these cottages were classified as real estate instead of personal property for purposes of taxation. There is no contention that the cottages could not be taxed at all because they were located on land leased from the state. Cf. City of Toledo v. Jenkins et al., Bd. of Tax Appeals, 143 Ohio St. 141, 54 N.E.2d 656.
State lands adjacent to Buckeye Lake are leased as provided in Sections 471, 13965, 13966 and 13968, General Code. Section 13966, dealing with the leasing of such lands, provides in part:
"* * * provided always, however, that each and every building or other valuable structure erected thereon by any person, or persons, or corporation may be taxed as other property of individuals or corporation in the same locality."
This reference must be to the taxation of other similar property of individuals and corporations.
Appellants contend first that these cottages are not "land and improvements thereon," within the meaning of Section 2 of Article XII of the Constitution. For the reasons hereinafter stated it is not necessary to pass upon that contention.
Section 2, Article XII, provides in part:
"Land and improvements thereon shall be taxed by uniform rule according to value."
Nothing in the Constitution prohibits the taxation of other classes of property "by uniform rule according to value." Section 2, Article xII, specifically recognizes and provides against "limiting the general power" of the General Assembly "subject to the provisions of Article I" (Bill of Rights) "to determine the subjects and methods of taxation or exemptions therefrom."
It follows that the General Assembly has authority to make provision for taxation of personal property by uniform rule according to value. No contention is made that the General Assembly could not classify these cottages for such taxation, even if they are personal property and even though the General Assembly classified other kinds of personal property for taxation in a different manner. Cf. State, ex rel. Struble, v. Davis et al., Tax Comm., 132 Ohio St. 555, 9 N.E.2d 684.
Section 5322, General Code, provides:
"The terms `real property' and `land' as so used, include not only land itself, whether laid out in town lots or otherwise, and all growing crops, including decidous and evergreen trees, plants and shrubs, with all things contained therein but also, unless otherwise specified, all buildings, structures, improvements, and fixtures of whatever kind thereon, and all rights and privileges belonging or appertaining thereto." (Emphasis ours.)
It is not "otherwise specified" that "buildings" and "structures" of the kind represented by these cottages are to be excluded from the term "real property" as defined in Section 5322, General Code. In Zangerle, Aud., v. Republic Steel Corp., 144 Ohio St. 529, 60 N.E.2d 170, and Roseville Pottery, Inc., v. County Board of Revision of Muskingum County, 149 Ohio St. 89, 77 N.E.2d 68, this court held that it had been "otherwise specified" that the buildings and structures there involved were not to be included in the term "real property" as defined in that section of the General Code. In Zangerle, Aud., v. Standard Oil Co. of Ohio, 144 Ohio St. 506, 60 N.E.2d 52, and Standard Oil Co. v. Zangerle, Aud., 144 Ohio St. 523, 60 N.E.2d 59, it was apparently not contended that the items of property involved were included within the definition of real property in Section 5322, General Code.
There is no constitutional provision which prevents the General Assembly, for the purposes of classification for taxation, from including items of personal property within its definition of real property.
It is argued that the definition of real property in Section 5322, General Code, was enacted under the old constitutional provision taxing all real and personal property according to its true value in money. We fail to see why this factor should be given any effect in limiting the ordinary meaning of the language of Section 5322, General Code. When that section was enacted, Section 2 of Article XII of the Constitution provided:
"Laws shall be passed, taxing by a uniform rule, all moneys, credits, investments in bonds, stocks, joint stock companies, or otherwise; and also all real and personal property, according to its true value * * *."
By reason of those provisions, the distinction between real property and personal property for purposes of taxation was not then important. Both were to be taxed "by a uniform rule." When the distinction became significant because of the amendment to the Constitution which required that only land and improvements thereon be taxed by such a rule, the General Assembly had an opportunity to revise its definition of real property so as to eliminate therefrom those kinds of property which might properly be classified as personal property. While it did this to some extent, by other statutory enactments ( Roseville Pottery, Inc., v. County Bd. of Revision, supra, paragraph two of the syllabus, and Zangerle, Aud., v. Republic Steel Corp., supra 538), it failed to do so with regard to the kind of property involved in these cases.
Decision affirmed.
WEYGANDT, C.J., MATTHIAS, HART, ZIMMERMAN, STEWART and TURNER, JJ., concur.