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Maralgate, L.L.C v. Greene County Board of Revision et al

October 26, 2011

MARALGATE, L.L.C.,
APPELLEE,
v.
GREENE COUNTY BOARD OF REVISION ET AL.,
APPELLANTS.



APPEAL from the Board of Tax Appeals, No. 2008-M-644.

Per curiam.

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as Maralgate, L.L.C. v. Greene Cty. Bd. of Revision, Slip Opinion No. 2011-Ohio-5448.]

NOTICE

This slip opinion is subject to formal revision before it is published in an advance sheet of the Ohio Official Reports. Readers are requested to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65 South Front Street, Columbus, Ohio 43215, of any typographical or other formal errors in the opinion, in order that corrections may be made before the opinion is published.

SLIP OPINION NO. 2011-OHIO-5448

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as Maralgate, L.L.C. v. Greene Cty. Bd. of Revision, Slip Opinion No. 2011-Ohio-5448.]

Real property taxation--Valuation for current agricultural use--Transfer of part of property to related entity--Common ownership and contiguity of parcels--R.C. 5713.30(A)--Noncommercial timber.

Submitted October 18, 2011

{¶1} This is an appeal by the Greene County auditor and the Greene County Board of Revision ("BOR") from a decision of the Board of Tax Appeals ("BTA") that reversed the BOR and granted current-agricultural-use-valuation ("CAUV") status to a 70.959-acre parcel owned by Maralgate, L.L.C. The parcel was purchased by the Turner Family Partnership as part of a 749-acre farm in March 2005. Apparently, the entire farm enjoyed CAUV status until the parcel was transferred from the family partnership to the Maralgate entity on July 28, 2006. Thereafter, the Greene County auditor denied the CAUV application for tax year 2007, and Maralgate filed a complaint with the BOR, which held a hearing and denied the application. Maralgate then filed an appeal to the BTA, which held a hearing of its own and issued a decision reversing the BOR and granting the CAUV status. The county has appealed.

{¶2} Central to all the county's arguments is its contention that because of the transfer of the one parcel from Turner Family Partnership to Maralgate, the tax status of that parcel had to be determined in isolation, without regard to the use of adjacent parcels still directly owned by the partnership. Because almost 60 percent of the parcel has trees that are not grown for commercial purposes, the most important consideration is whether the parcel is, for purposes of R.C. 5713.30(A)(1), under "common ownership" with the rest of the farm.

{¶3} We hold that the parcel was under common ownership with the rest of the farm. Guided by that central holding, we reject two additional arguments advanced by the county. First, contrary to the county's assertion, the phrase "growth of timber for a noncommercial purpose" in R.C. 5713.30(A)(1) does not require that the trees in question be grown as a crop. Second, the county is mistaken when it contends that Maralgate could receive the tax preference only for that portion of the parcel that was being actively cultivated; as a result, Maralgate did not have the burden to present a land survey showing how much of the parcel was devoted to different uses. Contrary to the county's argument, the case law requires such a survey only if there is a commercial use of part of a parcel that is not an agricultural use. In the present case, those portions of the parcel not actively cultivated were not used for any commercial purpose.

{¶4} Because we reject the arguments advanced by the appellants, we affirm the decision of the BTA.

I. Facts

{¶5} In March 2005, the Turner Family Partnership acquired a 749-acre farm consisting of more than one parcel in a single transaction. One component of that farm was the 70.959-acre parcel that is at issue. In July 2006, the partnership assigned that parcel to Maralgate L.L.C., in order to limit liability in case of a drowning in one of the quarry ponds on the property.

{¶6} Because of the change of ownership, the auditor declined to treat the parcel as part of the larger farm. Instead, she reviewed the application solely in light of the uses of the parcel itself. Pursuant to that review, the auditor and subsequently the BOR determined that the parcel did not qualify for CAUV treatment for 2007.

{ΒΆ7} Maralgate appealed to the BTA, which held a hearing on October 15, 2009. At that hearing, Maralgate offered the testimony of Albert J. Turner III, a principal and the ...


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