As Introduced
133rd General Assembly
Regular Session H. B. No. 449
2019-2020
Representatives Green, Skindell
Cosponsor: Representative Scherer
A BILL
To amend sections 319.202, 319.54, 322.01, 322.02, 1
and 322.07 of the Revised Code to apply the real 2
estate transfer tax to transfers of a 3
controlling interest in a pass-through entity 4
that, directly or indirectly, owns real estate. 5
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 319.202, 319.54, 322.01, 322.02, 6
and 322.07 of the Revised Code be amended to read as follows: 7
Sec. 319.202. (A) Before the county auditor indorses any 8
real property conveyance or manufactured or mobile home 9
conveyance presented to the auditor pursuant to section 319.20 10
of the Revised Code or registers any manufactured or mobile home 11
conveyance pursuant to section 4503.061 of the Revised Code, the 12
grantee or the grantee's representative shall submit in 13
triplicate a statement, prescribed by the tax commissioner, and 14
other information as the county auditor may require, declaring 15
the value of real property or manufactured or mobile home 16
conveyed, except that when the transfer is exempt under division 17
(G)(3) of section 319.54 of the Revised Code only a statement of 18
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As Introduced
the reason for the exemption shall be required. Each statement 19
submitted under this section shall contain the information 20
required under divisions (A)(1) and (B) (2) of this section. 21
(A) (1) Each statement submitted under this section shall 22
either: 23
(1) (a) Contain an affirmation by the grantee that the 24
grantor has been asked by the grantee or the grantee's 25
representative whether to the best of the grantor's knowledge 26
either the preceding or the current year's taxes on the real 27
property or the current or following year's taxes on the 28
manufactured or mobile home conveyed will be reduced under 29
division (A) of section 323.152 or under section 4503.065 of the 30
Revised Code and that the grantor indicated that to the best of 31
the grantor's knowledge the taxes will not be so reduced; or 32
(2) (b) Be accompanied by a sworn or affirmed instrument 33
stating: 34
(a) (i) To the best of the grantor's knowledge the real 35
property or the manufactured or mobile home that is the subject 36
of the conveyance is eligible for and will receive a reduction 37
in taxes for or payable in the current year under division (A) 38
of section 323.152 or under section 4503.065 of the Revised Code 39
and that the reduction or reductions will be reflected in the 40
grantee's taxes; 41
(b) (ii) The estimated amount of such reductions that will 42
be reflected in the grantee's taxes; 43
(c) (iii) That the grantor and the grantee have considered 44
and accounted for the total estimated amount of such reductions 45
to the satisfaction of both the grantee and the grantor. The 46
auditor shall indorse the instrument, return it to the grantee 47
H. B. No. 449 Page 3
As Introduced
or the grantee's representative, and provide a copy of the 48
indorsed instrument to the grantor or the grantor's 49
representative. 50
(B) (2) Each statement submitted under this section shall 51
either: 52
(1) (a) Contain an affirmation by the grantee that the 53
grantor has been asked by the grantee or the grantee's 54
representative whether to the best of the grantor's knowledge 55
the real property conveyed qualified for the current 56
agricultural use valuation under section 5713.30 of the Revised 57
Code either for the preceding or the current year and that the 58
grantor indicated that to the best of the grantor's knowledge 59
the property conveyed was not so qualified; or 60
(2) (b) Be accompanied by a sworn or affirmed instrument 61
stating: 62
(a) (i) To the best of the grantor's knowledge the real 63
property conveyed was qualified for the current agricultural use 64
valuation under section 5713.30 of the Revised Code either for 65
the preceding or the current year; 66
(b) (ii) To the extent that the property will not continue 67
to qualify for the current agricultural use valuation either for 68
the current or the succeeding year, that the property will be 69
subject to a recoupment charge equal to the tax savings in 70
accordance with section 5713.34 of the Revised Code; 71
(c) (iii) That the grantor and the grantee have considered 72
and accounted for the total estimated amount of such recoupment, 73
if any, to the satisfaction of both the grantee and the grantor. 74
The auditor shall indorse the instrument, forward it to the 75
grantee or the grantee's representative, and provide a copy of 76
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As Introduced
the indorsed instrument to the grantor or the grantor's 77
representative. 78
(B) As used in this section, "qualifying transfer" means 79
the transfer of more than fifty per cent of the ownership 80
interest in a pass-through entity that, directly or indirectly, 81
owns real property. A "qualifying transfer" may occur in one 82
transaction or in a series of transactions. Transactions which 83
occur within one year of each other shall be considered a series 84
of transactions. 85
Within thirty days after the qualifying transfer of an 86
ownership interest in a pass-through entity, the transferor of 87
the ownership interest shall submit to the county auditor of 88
each county in which the real property owned by the entity is 89
located a statement, prescribed by the tax commissioner, and any 90
other information as the auditor may require, except that, when 91
the qualifying transfer is exempt under division (G)(3) of 92
section 319.54 of the Revised Code, only a statement of the 93
reason for exemption shall be required. Each statement shall 94
include the following information: 95
(1) The total amount paid to the transferor as 96
consideration for the ownership interest, and the portion of 97
that total that is attributable to real property located in the 98
county and owned, directly or indirectly, by the entity; 99
(2) The percentage of the ownership interest in the entity 100
being transferred; 101
(3) With respect to real property owned indirectly by the 102
entity in which the ownership interest is being transferred, 103
that entity's percentage ownership interest in the person that 104
directly owns the property. 105
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(C) The grantor or transferor shall pay the fee required 106
by division (G)(3) or (4) of section 319.54 of the Revised Code; 107
and, in the event the board of county commissioners of the 108
county has levied a real property or a manufactured home 109
transfer tax pursuant to Chapter 322. of the Revised Code, the 110
amount required by the real property or manufactured home 111
transfer tax so levied. Payment of the fee or tax imposed on a 112
qualifying transfer of an ownership interest in a pass-through 113
entity shall accompany the statement filed by the transferor 114
under division (B) of this section. If the conveyance or 115
qualifying transfer is exempt from the fee provided for in 116
division (G)(3) or (4) of section 319.54 of the Revised Code and 117
the tax, if any, levied pursuant to Chapter 322. of the Revised 118
Code, the reason for such exemption shall be shown on the 119
statement. "Value" means, in the case of any deed or certificate 120
of title not a gift in whole or part, the amount of the full 121
consideration therefor, paid or to be paid for the real estate 122
or manufactured or mobile home described in the deed or title, 123
including the amount of any mortgage or vendor's lien thereon. 124
If property sold under a land installment contract is conveyed 125
by the seller under such contract to a third party and the 126
contract has been of record at least twelve months prior to the 127
date of conveyance, "value" means the unpaid balance owed to the 128
seller under the contract at the time of the conveyance, but the 129
statement shall set forth the amount paid under such contract 130
prior to the date of conveyance. In the case of a gift in whole 131
or part, "value" means the estimated price the real estate or 132
manufactured or mobile home described in the deed or certificate 133
of title would bring in the open market and under the then 134
existing and prevailing market conditions in a sale between a 135
willing seller and a willing buyer, both conversant with the 136
property and with prevailing general price levels. In the case 137
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of the qualifying transfer of an ownership interest in a pass- 138
through entity, "value" means the portion of the total amount 139
paid as consideration for the ownership interest that is 140
reported under division (B)(1) of this section as being 141
attributable to real property located in the county and owned, 142
directly or indirectly, by the entity. No person shall willfully 143
falsify the value of property conveyed or of an ownership 144
interest subject to a qualifying transfer. 145
(D) The auditor shall indorse each conveyance on its face 146
to indicate the amount of the conveyance fee and compliance with 147
this section and if the property is residential rental property 148
include a statement that the grantee shall file with the county 149
auditor the information required under division (A) or (C) of 150
section 5323.02 of the Revised Code. The auditor shall retain 151
the original copy of the statement of value, forward to the tax 152
commissioner one copy on which shall be noted the most recent 153
assessed value of the property, and furnish one copy to the 154
grantee or the grantee's representative. 155
(E) In order to achieve uniform administration and 156
collection of the transfer fee required by division divisions 157
(G)(3) and (4) of section 319.54 of the Revised Code, the tax 158
commissioner shall adopt and promulgate rules for the 159
administration and enforcement of the levy and collection of 160
such fee. 161
(F) As used in this section, "residential rental property" 162
has the same meaning as in section 5323.01 of the Revised Code. 163
Sec. 319.54. (A) On all moneys collected by the county 164
treasurer on any tax duplicate of the county, other than estate 165
tax duplicates, and on all moneys received as advance payments 166
of personal property and classified property taxes, the county 167
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auditor, on settlement with the treasurer and tax commissioner, 168
on or before the date prescribed by law for such settlement or 169
any lawful extension of such date, shall be allowed as 170
compensation for the county auditor's services the following 171
percentages: 172
(1) On the first one hundred thousand dollars, two and 173
one-half per cent; 174
(2) On the next two million dollars, eight thousand three 175
hundred eighteen ten-thousandths of one per cent; 176
(3) On the next two million dollars, six thousand six 177
hundred fifty-five ten-thousandths of one per cent; 178
(4) On all further sums, one thousand six hundred sixty- 179
three ten-thousandths of one per cent. 180
If any settlement is not made on or before the date 181
prescribed by law for such settlement or any lawful extension of 182
such date, the aggregate compensation allowed to the auditor 183
shall be reduced one per cent for each day such settlement is 184
delayed after the prescribed date. No penalty shall apply if the 185
auditor and treasurer grant all requests for advances up to 186
ninety per cent of the settlement pursuant to section 321.34 of 187
the Revised Code. The compensation allowed in accordance with 188
this section on settlements made before the dates prescribed by 189
law, or the reduced compensation allowed in accordance with this 190
section on settlements made after the date prescribed by law or 191
any lawful extension of such date, shall be apportioned ratably 192
by the auditor and deducted from the shares or portions of the 193
revenue payable to the state as well as to the county, 194
townships, municipal corporations, and school districts. 195
(B) For the purpose of reimbursing county auditors for the 196
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expenses associated with the increased number of applications 197
for reductions in real property taxes under sections 323.152 and 198
4503.065 of the Revised Code that result from the amendment of 199
those sections by Am. Sub. H.B. 119 of the 127th general 200
assembly, there shall be paid from the state's general revenue 201
fund to the county treasury, to the credit of the real estate 202
assessment fund created by section 325.31 of the Revised Code, 203
an amount equal to one per cent of the total annual amount of 204
property tax relief reimbursement paid to that county under 205
sections 323.156 and 4503.068 of the Revised Code for the 206
preceding tax year. Payments made under this division shall be 207
made at the same times and in the same manner as payments made 208
under section 323.156 of the Revised Code. 209
(C) From all moneys collected by the county treasurer on 210
any tax duplicate of the county, other than estate tax 211
duplicates, and on all moneys received as advance payments of 212
personal property and classified property taxes, there shall be 213
paid into the county treasury to the credit of the real estate 214
assessment fund created by section 325.31 of the Revised Code, 215
an amount to be determined by the county auditor, which shall 216
not exceed the percentages prescribed in divisions (C)(1) and 217
(2) of this section. 218
(1) For payments made after June 30, 2007, and before 219
2011, the following percentages: 220
(a) On the first five hundred thousand dollars, four per 221
cent;