State ex rel. Swetland v. Kinney

• Decision Date: 02 April 1980
• Docket Number: No. 79-1402,79-1402
• Citation: 16 O.O.3d 14,62 Ohio St.2d 23,402 N.E.2d 542
• Parties: , 16 O.O.3d 14 The STATE ex rel. SWETLAND v. KINNEY, Commissioner, et al.
• Court: Ohio Supreme Court

Page 23

62 Ohio St.2d 23

402 N.E.2d 542, 16 O.O.3d 14

The STATE ex rel. SWETLAND v. KINNEY, Commissioner, et al.

No. 79-1402.

Supreme Court of Ohio.

April 2, 1980.

Syllabus by the Court

1. R.C. 323.152(B), which partially exempts a "homestead" as defined within R.C. 323.151(A) from real estate taxation, is a valid exercise of the General Assembly's power to tax real property, and to exempt certain classifications of real property as provided by Section 2, Article XII of the Ohio Constitution.

2. The provision in R.C. 323.152(B) for the "rollback" or partial exemption from taxes charged and payable on homesteads is not such a classification that would be violative of Section 2, Article I, the equal protection section of the Ohio Constitution.

In this original action, relator, David W. Swetland, d. b. a. Park Investment Co., seeks a writ of mandamus directing respondents, Commissioner of Tax Equalization and Auditor of Cuyahoga County, "to rescind and withdraw any and all guidelines, forms and applications prepared and circulated by them which in any way whatsoever give or tend to give legal effect to R.C. 323.152(B) and to instruct all of their subordinates responsible for real property tax assessment, levy and collection in the State of Ohio that R.C. 323.152(B) is constitutionally invalid."

R.C. 323.152(B) was enacted by the 113th Ohio General Assembly as a part of Am.Sub.H.B.No. 204. It provides, in relevant part, that:

"Real property taxes on a homestead shall be reduced for each year for which the owner obtains a certificate of reduction from the county auditor under section 323.154 of the Revised Code. The amount of the reduction shall equal one-fourth of the amount by which the taxes charged and payable on the homestead are reduced for such year under division (B) of section 319.301 of the Revised Code."

Because R.C. 319.301(B) specifically speaks in terms of authorizing a ten-percent "reduction" in taxes on all real property in this state, the effect of R.C. 323.152(B) is to provide a further "reduction" in real estate taxes of two and one-half percent for "homesteads," as that term is defined in R.C. 323.151(A). ¹ The provisions of R.C. 323.152(B) are effective for the 1979 tax year and thereafter. ²

On October 23, 1979, this court sustained relator's motion for an alternative writ, and ordered respondents to show cause why the writ should not be allowed. By the same entry, the court ordered that arguments be expedited.

The cause is before the court on the pleadings and briefs of the parties, respondent commissioner's memorandum in response to the show cause order, respondents' motions to dismiss, and relator's motion for judgment on the pleadings.

Vorys, Sater, Seymour & Pease, Robert E. Leach, and Herbert R. Brown, Columbus, for relator.

William J. Brown, Atty. Gen., and John C. Duffy, Jr., Columbus, for respondent commissioner.

John T. Corrigan, Pros. Atty., Thomas P. Gill and William Mitchell, Jr., Cleveland, for respondent auditor.

HOLMES, Justice.

Section 2, Article XII of the Ohio Constitution, provides, in part, as follows:

" * * * Land and improvements thereon shall be taxed by uniform rule according to value, except that laws may be passed to reduce taxes by providing for a reduction in value of the homestead of permanently and totally disabled residents and residents sixty-five years of age and older, and providing for income and other qualifications to obtain such reduction. * * * (Certain bonds) shall be exempt from taxation, and without limiting the general power, subject to the provisions of Article I of this constitution, to determine the subjects and methods of taxation or exemptions therefrom, general laws may be passed to exempt burying grounds, public school houses, houses used exclusively for public worship, institutions used exclusively for charitable purposes, and public property used exclusively for any public purpose, but all such laws shall be subject to alteration or repeal; and the value of all property so exempted shall, from time to time, be ascertained and published as may be directed by law."

Relator argues that Section 2 of Article XII requires a tax rate that is uniform for all real property in this state, other than specifically set forth in that section and Section 36, Article II of the Ohio Constitution ³; and that R.C. 323.152(B), which provides for a real estate tax reduction of two and one-half percent for homesteads, is unconstitutional insofar as it violates this fundamental principle. It is argued further that the constitutional requirement of uniformity imposes a mandatory legal duty upon respondents, and that mandamus lies to compel performance thereof.

In opposition, respondent commissioner contends that the General Assembly intended to grant a partial exemption from real estate taxes to homesteads, that the legislative exemption power is subject only to the equal protection provisions of Section 2 of Article I of the Ohio Constitution, and that a reasonable basis exists for distinguishing homesteads from other real property for purposes of a partial tax exemption. Respondent also contends that mandamus does not lie where the relief sought is primarily injunctive, and that, in any event, it would be inappropriate for the court to determine that a legal duty exists and simultaneously mandate the performance of that duty.

In resolving the issues presented in this action, we first examine the uniformity and exemption provisions of Section 2, Article XII. This court has previously held in a number of notable cases that the constitutional requirement of uniformity mandates uniformity in the valuation of the real property and uniformity in the percentage of value which would constitute the property tax base. State ex rel. Park Invest. Co. v. Bd. of Tax Appeals (1964), 175 Ohio St. 410, 195 N.E.2d 908; Koblenz v. Bd. of Revision (1966), 5 Ohio St.2d 214, 215 N.E.2d 384; Goldberg v. Bd. of Revision (1966), 7 Ohio St.2d 139, 218 N.E.2d 723; Frederick Bldg. Co. v. Bd. of Revision (1968), 13 Ohio St.2d 59, 233 N.E.2d 594; State ex rel. Park Invest. Co. v. Bd. of Tax Appeals (1968), 16 Ohio St.2d 85, 242 N.E.2d 887; State ex rel. Park Invest. Co. v. Bd. of Tax Appeals (1971), 26 Ohio St.2d 161, 270 N.E.2d 342.

Certainly no serious issue may be taken with the fact that all of these cases held steadfastly to the constitutional requirement that "land and improvements thereon shall be taxed by uniform rule according to value." We hasten to add that the majority herein take no issue with, and affirm, the basic law enunciated in those cases to the effect that the Constitution mandates that real estate be taxed by way of a uniform rule both as to mode of valuation, as well as percentage of value constituting the base of the tax. However, none of the Park Investment cases or their progeny discussed the issue of the constitutional authority of the General Assembly to provide for a lower tax for certain types of real estate by way of exemption or, as in this instance, partial exemption of real estate taxes.

The issue of the constitutional authority of the General Assembly to provide by law for real estate tax exemptions was considered in the case of Denison University v. Bd. of Tax Appeals (1965), 2 Ohio St.2d 17, 205 N.E.2d 896, a case involving a real estate tax exemption for buildings connected with a public college, in which this court held, in paragraph three of the syllabus that:

"By reason of the amendment of Section 2 of Article XII of the Ohio Constitution effective in 1931 the General Assembly now has a power to determine exemptions from taxation that is limited only by the provisions of Article I of the Ohio Constitution. * * * (Citations omitted.)"

In arriving at the decision in Denison, Chief Justice Taft stated, at page 27, 205 N.E.2d at page 902:

"It is significant that the word 'all' does not now appear before the words 'land and improvements thereon.' The presence of the word 'all' before 'property' in the 1851 version of this constitutional provision was always given by this court as the reason why the General Assembly had no power to provide for any exemptions from taxation not specifically authorized by Section 2 of Article XII. * * * The removal of the specific requirement that 'all' real or personal property be taxed fortifies our conclusion that the people intended, as they stated, to return to the General Assembly as part of its legislative power 'the general power * * * to determine * * * exemptions' from taxation subject only to the limitations set forth in Article I of the Ohio Constitution, the so-called Bill of Rights. * * *"

In cases decided subsequent to Denison, supra, this court reaffirmed the holding of that case. See, e. g., Graf v. Warren (1967), 10 Ohio St.2d 32, 37, 225 N.E.2d 262; Cleveland State Univ. v. Perk (1971), 26 Ohio St.2d 1, 5-6, 268 N.E.2d 577; Cleveland v. Perk (1972), 29 Ohio St.2d 161, 164, 280 N.E.2d 653; Dayton v. Cloud (1972), 30 Ohio St.2d 295, 285 N.E.2d 45.

This court, in Dayton v. Cloud, again held that the General Assembly has "plenary" power to determine exemptions from taxation, subject only to the Equal Protection Clause of the Ohio Constitution. Paragraph one of the syllabus provides:

"The General Assembly has plenary power to determine exemptions from taxation, limited only by the provisions of Article I of the Constitution of Ohio, and, therefore, Section 2, Article XII of the Ohio Constitution, is not a constitutional prohibition against the issuance of urban renewal bonds in accordance with R.C. Chapter 725."

In Dayton v. Cloud, supra, this court considered the constitutionality of R.C. Chapter 725, which chapter, dealing with urban renewal areas, provided among its features that all improvements to real property in an urban renewal area made subsequent to its designation as such an area are a public purpose and are exempt from real property taxation by all political subd...