With tax law, it is all about definition. There is no, or at least little, logic behind the functioning of much of the tax code. This is because the tax code is not written by the tax equivalent of Plato’s philosopher-kings, but by politicians in Columbus.
And many of those definitions need to be worked out in litigation, with a court finally ruling on what a particular word or phrase really means. This month, the Ohio Supreme Court authored one of those rulings, finding that property leased to public universities and colleges is not eligible for a property-tax exemption.
The language at question involved the phrase “connected with” in a state law that grants tax exemptions to property. If the property is “connected with” a college or university, it can receive the exemption.
The Ohio Supreme Court reversed a decision of the Ohio Board of Tax Appeals, which had allowed the exemption to private owners of property leased to Columbus State. A majority of the justices of the Court ruled that in addition to being used for educational purposes, it had to be on property owned, occupied and used by the educational institution for it to be “connected with” the institution.
The relevant factor was that the buildings had to be on land owned by the public college. The court relied on both the language of the statute and prior decisions of the court interpreting other property tax exemption cases involving public colleges and universities.
Because this case involved neither buildings nor land owned by the college, the court could find no justification for permitting the tax exemption.
The Columbus Dispatch, “College landlords not entitled to tax cuts, court rules,” Randy Ludlow, December 4, 2014