Since Ohio abrogated most ad valorem real property taxes on personal property in 2009, the classification of property as real or personal ceased to be academic — aside from public utility property, if an item constitutes personal property, Ohio’s real property taxes will not apply to it. Under Ohio law, business fixtures are a statutory category of personal property that primarily benefits the business conducted on the real estate, not the real estate itself. Business fixtures are not real property; therefore, they are not subject to annual ad valorem real property taxes in Ohio.
In 2018 the Ohio Board of Tax Appeals (BTA) concluded that a large commercial greenhouse constituted a business fixture. The taxing authorities appealed. In early 2021 the Ohio Court of Appeals for the Ninth Judicial District affirmed the BTA’s decision. Though the affected county and school board appealed the court of appeals’ decision to the Ohio Supreme Court, that court recently declined to accept the decision for review. The decisions — which related to six tax years beginning with 2015 — resulted in a refund to the taxpayer of more than $4 million.
The case, Viola Associates LLC v. Lorain County Board of Revision (though commonly called Green Circle Growers,6 after the largest of the affiliated property owners), has drawn interest from inside and outside Ohio, perhaps because Ohio’s greenhouse and horticulture industry is large and growing. The industry employs some 12,500 Ohioans, who work at more than 1,100 farms in the state growing garden plants, flowers, nursery stock, and ornamental flowers under glass or other similar protection, making Ohio’s specialty horticulture industry the 10th largest in the country.
Besides garnering attention from those in the greenhouse industry, the new Green Circle Growers decision provides insight into the BTA’s and Ohio courts’ treatment of the business fixture category of property and illustrates the importance that the BTA attached to the substantial factual record developed during the case’s progression.