CAUV battle in Tuscarawas County

By Leisa Boley-Hellwarth

In Tuscarawas County, Ohio, the Dalton G. Bixler 2016 Trust owns nearly 68 acres that is leased to Brettenbach Wine Cellars that operates vineyards. All of the Bixler acreage was enrolled in the CAUV (Current Agricultural Use Value) program that Ohio provides for property tax purposes that farmland devoted exclusively to commercial agriculture may be valued according to its current use rather than at its “highest and best” use. The state initiated CAUV in 1973.

In 2018, the Tuscarawas County Auditor split two parcels from the 67.76 Bixler acres. One parcel referred to as the Toolshed is 3.76 acres. Another parcel of one acre is called the Warehouse. The Toolshed parcel includes a 6,000 square foot building, which acts as an event venue for wedding receptions and charitable events, and also stores and ages 40 to 60 barrels of wine. A wine press is also stored in the Toolshed, and wine processing sometimes takes place in the facility. The building was constructed to allow a truck to pull into the middle of the building. The Warehouse parcel includes a building used to store empty wine bottles and also stores filled wine bottles awaiting delivery.

After splitting out the two parcels, the Auditor then reclassified the two smaller parcels as commercial and valued the Toolshed at $620,550. Sixty-three acres of vineyards remained in CAUV, but the Toolshed and the Warehouse were denied CAUV. Why? It is always about the money. Always. The Auditor alleged that the Toolshed and the Warehouse were not agricultural and therefore not entitled to CAUV property tax valuation. Obviously, the county collects more property tax under the Auditor’s reclassification of the two parcels as commercial.

Bixler disagreed and appealed this determination to the Board of Revision, who ultimately determined the properties should be taxed as industrial property. Bixler then appealed the Board of Revision’s decision to the Board of Tax Appeals who affirmed that the property was industrial. Bixler then appealed the Board of Tax Appeals and argued to the Fifth Circuit that both parcels should be taxed as agricultural property.

The Ohio Court of Appeals found that both the Toolshed and the Warehouse were agricultural property. The Court, using the definition of agriculture found in Ohio Revised Code Section 1.61,. found that the primary use of both facilities was agricultural. Although the regulations defining agriculture for property taxation does not include the storage of wine, the statute trumps the administrative code’s definition of agriculture. Since Ohio Revised Code Section 1.61 specifically states that “viticulture, winemaking, and related activities…and the processing drying, storage and marketing of agricultural products” is agriculture, property taxation is required to use this definition over the definition within the regulations.

Definitions are a huge part of the practice of law. Legal dramas like to feature surprise witnesses running to testify at the last minute. It doesn’t work that way. Witnesses testifying at trial have to be disclosed to the Court and opposing counsel well before the case goes to trial. More cases have been won by the definition of a term than the words of an undisclosed witness. Arguments over definitions and the meaning of words, however, do not make for stimulating programming.

This case also demonstrates that sometimes you have to appeal to take the issue out of local hands. The county auditor, the Board of Revision and the Board of Tax Appeals all were persuaded by the administrative definition of agriculture. The Court of Appeals, however, applied the appropriate definition provided by Ohio law that supersedes any administrative promulgation.

I’ll leave you with the following thought. It isn’t equipment that wins the battles, it is the quality and the determination of the people fighting for a cause in which they believe.

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