Bill Summary – FastDemocracy

OHIO LEGISLATIVE SERVICE COMMISSION
                                              Office of Research                              Legislative Budget
         www.lsc.ohio.gov                       and Drafting                                        Office
                             H.B. 57                               Bill Analysis
                  135th   General Assembly
                                                                     Click here for H.B. 57’s Fiscal Note
Version: As Reported by House Ways & Means
Primary Sponsors: Reps. Hall and Demetriou
Effective Date:
Zachary P. Bowerman, Attorney
                                                         SUMMARY
                    Indexes, for all property tax homestead exemptions, the amount of the exemption so
                          that the exemption, and resulting tax savings, increases in proportion to the increase in
                          a broad price inflation index (gross domestic product deflator).
                                               DETAILED ANALYSIS
Homestead exemption
        The bill indexes the amount of the property tax homestead exemption for a homeowner
who is elderly or disabled, a disabled veteran, or the surviving spouse of a public service officer
killed in the line of duty so that the exemption amounts – and therefore the tax savings –
increase according to increases in the prices of all goods and services composing the national
gross domestic product (GDP).
        Continuing law provides a property tax credit for the residence, or “homestead,” of
certain qualifying individuals. Under current law, this “homestead exemption” equals the taxes
that would be charged on up to $25,000 of the true value of a home owned by a person who is
65 years of age or older, permanently and totally disabled, or at least 59 years old and the
surviving spouse of an individual who previously received the exemption (referred to in this
analysis as the “general homestead exemption”). (“True value” is the appraised fair market
value.) The credit essentially exempts $25,000 of the value of a homestead from taxation.
        Also under current law, special “enhanced” exemptions of $50,000 are available for
homes of military veterans who are totally disabled and their surviving spouses (referred to in
this analysis as the “disabled veteran exemption”) and for surviving spouses of peace officers,
firefighters, or other emergency responders who die in the line of duty or by an injury or illness
sustained in the line of duty (referred to in this analysis as the “public service officer
exemption”).
                                                                                                            April 24, 2023
Office of Research and Drafting              LSC                           Legislative Budget Office
       Regardless of whether a homeowner qualifies for the general homestead exemption,
the disabled veteran exemption, or the public service officer exemption, the amount of the tax
savings depends on the local tax rate: the higher the tax rate, the greater the tax reduction.
       All three homestead exemptions also apply to manufactured and mobile homes,
regardless of whether they are taxed as real property or taxed under the manufactured home
tax.
        Homeowners who first receive the general homestead exemption for tax year 2014 or
later (or tax year 2015 for homeowners who pay the manufactured home tax) must have an
Ohio modified adjusted gross income of $36,100 or less, as computed for state income tax
purposes (including all business income and excluding Social Security and disability benefits).
Under continuing law, this income limit is increased each year to adjust for inflation.
Homeowners who received the general homestead exemption before 2014 are not subject to
the income limit, and no income limit applies to the disabled veteran exemption or public
service officer exemption.
Inflation adjustment of exemption amount
       The bill requires the amount of each homestead exemption to be adjusted for inflation
each year. The adjustments are made in the same manner as inflationary adjustments are made
to the income limit for the general homestead exemption: by multiplying the current year’s
exemption amount by the percentage increase in the GDP deflator over the preceding year and
adding that result to the current exemption amount. An adjustment would not be made for any
year the GDP deflator does not increase.
        The Tax Commissioner must compute the adjustments and certify the resulting amounts
to each county auditor by December 1 to be applied the following tax year, or, in the case of
the manufactured home tax, the second ensuing tax year. The difference in application is
accounted for by the fact that the manufactured home tax is payable on a current-year basis,
whereas property tax is payable in arrears.1 Because of this, the bill’s adjustment and
certification requirements begin to apply in tax year 2023 or, for the manufactured home tax,
2024.2
1   R.C. 323.152 and 4503.065.
2   Section 3.
P a g e |2                                                                                 H.B. 57
                                                                As Reported by House Ways & Means
Office of Research and Drafting         LSC                           Legislative Budget Office
                                      HISTORY
                             Action                                 Date
Introduced                                      02-16-23
Reported, H. Ways & Means                       04-19-23
ANHB0057RH-135/ar
P a g e |3                                                                            H.B. 57
                                                           As Reported by House Ways & Means
Statutes affected: 
As Passed By House: 323.152, 4503.065
As Reported By House Committee: 323.152, 4503.065
As Introduced: 323.152, 4503.065