State ex rel. Park Inv. Co. v. Board of Tax Appeals

• Decision Date: 02 June 1971
• Docket Number: No. 68-277,68-277
• Citation: 26 Ohio St.2d 161,270 N.E.2d 342
• Parties: , 55 O.O.2d 338 The STATE, ex rel. The PARK INVESTMENT CO., v. BOARD OF TAX APPEALS et al.
• Court: Ohio Supreme Court

Page 161

26 Ohio St.2d 161

270 N.E.2d 342, 55 O.O.2d 338

The STATE, ex rel. The PARK INVESTMENT CO., v. BOARD OF TAX APPEALS et al.

No. 68-277.

Supreme Court of Ohio.

June 2, 1971.

Syllabus by the Court

1. The Board of Tax Appeals has the power and the mandatory duty to direct and supervise the assessment for taxation of all real property in this state. (R.C. 5715.01, effective May 14, 1969.)

2. The Board of Tax Appeals has the mandatory duty, in the exercise of its supervisory power and duty, pursuant to R.C. 5715.01, to take such steps as are necessary to effect an orderly correction of any inequalities in the percentage of true value at which all real property and all classes thereof are assessed for taxation. (R.C. 5715.011, effective May 14, 1969.)

3. Action taken pursuant to the mandatory provisions of R.C. 5715.01 and 5715.011 must carry out the constitutional command, set forth in Section 2 of Article XII of the Ohio Constitution, that 'land and improvements thereon shall be taxed by uniform rule according to value,' and the provisions of Section 1 of the Fourteenth Amendment to the Constitution of the United States.

The facts of this case are stated in the opinion.

Forrester & Kovanda, Cleveland, for relator.

William J. Brown, Atty. Gen., Shelby V. Hutchins and Thomas V. Martin, Columbus, for respondent Board of Tax Appeals.

John T. Corrigan, Pros. Atty., A. M. Braun, John L. Dowling and Thomas P. Cyrus, Cleveland, for respondent Ralph J. Perk, Auditor of Cuyahoga County.

C. WILLIAM O'NEILL, Chief Justice.

This cause is before this court on relator's motion for an order to require respondent Board of Tax Appeals to show cause why it should not be adjudged in contempt for failing to perform its statutory and constitutional duties as required by the granting of the writ of mandamus by this court in December 1968, as reported in State ex rel. Park Invest. Co. v. Bd. of Tax Appeals, 16 Ohio St.2d 85, 242 N.E.2d 887. In that case, the court stated that:

'* * * it is the mandatory duty of the Board of Tax Appeals to see that all real property within the state of Ohio is assessed at a uniform percentage of its true value in money * * *.'

This court ordered the board to perform its statutory duty under R.C. 5715.24, which 'imposes an obligation upon the Board of Tax Appeals to establish an equal and uniform statewide rule for the determination of the taxable value and assessment of real property in this state.'

In compliance with that order, the Board of Tax Appeals proposed an amendment to its rules BTA-5-01 (Rule 100) and conducted a public hearing thereon in March 1969. The proposed amended rule would have established a taxable value for real property of either 40, 42, 41, 39 or 38 per cent of its true value in money.

Before the board completed action on the proposed amendment to its rules, the General Assembly amended R.C. 5715.01, effective May 14, 1969, providing in part that:

'The power of the board of tax appeals to issue rules concerning the determination of the taxable value of real property and the percentage to be applied in such determination shall be effective for the year 1972 and thereafter. * * *'

At the same time, the General Assembly, by amendment of R.C. 5715.24, provided that the duties imposed upon the board by that section should be operative 'beginning in 1972 and thereafter.'

The board thereupon took no further steps to implement this court's holding in State ex rel. Park Invest. Co. v. Bd. of Tax Appeals, supra, apparently on the ground that its authority to proceed was suspended until 1972 under the amendments to R.C. 5715.01 and R.C. 5715.24, referred to above.

To support the board's action, respondent board cits Steward v. Evatt (1944), 143 Ohio St. 547, 56 N.E.2d 159, which held, in paragraph one of the syllabus, that:

'The Board of Tax Appeals is a creature of statute and is limited to the powers with which it is thereby invested.'

While the board indeed is a creature of statute, it is elementary that a statute or a separable portion thereof which offends a constitutional provision is invalid.

Amended R.C. 5715.01 did not take away the duty or the power of the Board of Tax Appeals to determine the method by which the taxable value of real property was to be determined in the several counties of the state and applied by the county auditors annually in the determination of taxable value of real property. That section provides:

'The board of tax appeals shall direct and supervise the assessment for taxation of all real property.' (Emphasis added.)

The language of the section which purports to delay until 1972 action by the board to carry out its duty, as announced in State ex rel. Park Invest. Co. v. Bd. of Tax Appeals, supra (16 Ohio St.2d 85, 242 N.E.2d 887), did not affect the above quoted language, but related only to the power of the Board of Tax Appeals 'to issue rules.'

In addition to the language of R.C. 5715.01, quoted above, R.C. 5715.011, effective May 14, 1969, provides in part:

'* * * the board shall, in the exercise of its supervisory authority under Section 5715.01 of the Revised Code, take such steps as are necessary to effect an orderly correction of any inequalities in the percentage of true value at which all real property and all classes thereof are assessed for taxation.' (Emphasis added.)

It is clear under the language quoted above from R.C. 5715.01 and R.C. 7515.011 that the Board of Tax Appeals, effective May 14, 1969, has not only the supervisory power, but the mandatory duty, to correct any inequalities in the uniform percentage of true value by which the taxable value of real property is to be determined and applied in the several counties of this state.

Section 2, Article XII of the Ohio Constitution, mandates that 'land and improvements thereon shall be taxed by uniform rule according to value.' (Emphasis added.)

This court stated the law with regard to this question in plain, succinct and unmistakably clear language in an opinion written by Justice Schneider in Frederick Bldg. Co. v. Bd. of Revision, 13 Ohio St.2d 59, 233 N.E.2d 594. The syllabus of that case reads as follows:

'1. Taxation by uniform rule, within the requirements of Section 2 of Article XII of the Ohio Constitution and Section 1 of the Fourteenth Amendment to the United States Constitution, requires uniformity in the mode of assessment. Real property, whether commercial, residential or vacant, must be assessed on the basis of the same uniform percentage of actual value. (State ex rel. Park Investment Co. v. Board of Tax Appeals, 175 Ohio St. 410, 195 N.E.2d 908; Koblenz v. Board of Revision, 5 Ohio St.2d 214, 215 N.E.2d 384; and Goldberg v. Board of Revision, 7 Ohio St.2d 139, 218 N.E.2d 723, approved and followed.)

'2. The same percentage of fair market value must be applied to every parcel of property to determine the taxable value thereof. Any variance from the percentage which reflects the common level of assessment is discriminatory and violates the constitutional command of uniformity.'

In Koblenz v. Board of Revision (1966), 5 Ohio St.2d 214, 215 N.E.2d 384, it is pointed out in the opinion, at page 218, 215 N.E.2d at page 388, that this result is not only required by the Ohio Constitution, but also by Section 1 of the Fourteenth Amendment to the Constitution of the United States:

'On this point, the legal authorities are clear that the constitutional requirements of uniformity and equal protection of the laws prevail. Sioux City Bridge Co. v. Dakota County, supra (260 U.S. 441, 43 S.Ct. 190, 67 L.Ed. 340). Cheif Justice William Howard Taft, in the opinion in that case, stated the applicable law succinctly, at page 446, 43 S.Ct. at page 192:

"* * * This court holds that the right of the taxpayer whose property alone is taxed at 100 per cent of its true value is to have his assessment reduced to the percentage of that value at which others are taxed even though this is a departure from the requirement of the statute. The conclusion is based on the principle that where it is impossible to secure both the standard of the true value, and the uniformity and equality required by law, the latter requirement is to be preferred as to the just and ultimate purpose of the law. * * *' (Emphasis added.)'

Therefore, any 'such steps as are necessary to effect an orderly correction of any inequalities in the percentage of true value' are unconstitutional unless 'such steps' provide for uniformity in the percentage of true value at which real property and all classes thereof are assessed for taxation.

Likewise, the following provision in amended R.C. 5715.01, effective May 14, 1969, which states that 'the method by which taxable value of real property was determined in the several counties of the state in 1968 shall be applied by the county auditors annually in the determination of the taxable...