OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
H.B. 66 Bill Analysis
134th General Assembly
Click here for H.B. 66’s Fiscal Note
Version: As Reported by Senate Ways & Means
Primary Sponsor: Rep. Hoops
Effective Date:
Mackenzie Damon, Attorney
SUMMARY
Property taxation
Exemption reporting
 Requires the Tax Commissioner’s biennial report on state tax expenditures to include
information on property tax exemptions.
Community school tax exemption applications
 Removes a requirement that community schools file an annual statement after an initial
application with the Tax Commissioner as a condition of retaining a property tax
exemption.
Combined school district property and income tax levies
 Allows a school district to propose to renew an emergency property tax levy and a
combination income and property tax levy in a single ballot question.
 Applies the changes to resolutions adopted or proceedings that are pending or
completed on or before the provision’s effective date
ADAMHS district taxing authority
 Requires revenue from certain joint-county alcohol, drug addiction, and mental health
service (ADAMHS) district property taxes to be expended for the benefit of the residents
of the county from which it is collected.
This analysis was prepared before the report of the Senate Ways & Means Committee appeared in the
Senate Journal. Note that the legislative history may be incomplete.
December 14, 2022
Office of Research and Drafting LSC Legislative Budget Office
 Requires a member county of a joint-county ADAMHS district and, in certain
circumstances, a withdrawing county from such a district to continue to levy and collect
an ADAMHS-related tax following reorganization of the district.
 Requires, under certain circumstances, a new ADAMHS-related county tax to be labeled
as a renewal or replacement for ballot language purposes.
Tax abatements
 Provides a temporary period for the owner of property located in an enterprise zone to
apply for exemption from property taxation; and abatement and refund of unpaid taxes.
 Provides a temporary period for a school district that acquired property in February
2021 to apply for abatement and remission of paid taxes, penalties, and interest for that
tax year, payable to the person that paid them.
 Provides a temporary period for an agricultural society that acquired property from a
county in March 2021 to apply for tax exemption for the property, notwithstanding the
fact that the property has outstanding taxes assessed prior to its transfer.
Exemption and abatement of certain TIF property
 Allows municipal corporations that adopted a tax increment financing ordinance
between June 1 and December 31, 2002, to temporarily file for tax exemption according
to the terms of the ordinance, including parcel-by-parcel exemptions.
 Applies the temporary provision to exemption applications pending on or before the
bill’s deadline.
Sales and use tax exemptions
 Exempts from sales and use tax all of the following:
 Electronic tax filing and payment services used in business to report or pay income
tax, other than employee withholding, on behalf of an individual;
 Certain taxable services that might be provided incidentally or supplementally to
those electronic tax preparation services;
 Documentary service charges imposed by motor vehicle and manufactured home
dealers from the sales and use tax;
 Certain watercraft that are seasonally stored or repaired in Ohio.
Pollution control and energy conversion facility exemptions
 Modifies existing property and sales and use tax exemptions for facilities primarily
devoted to pollution control, energy conversion, and thermal efficiency improvement,
as follows:
 Extends the exemptions to leased property;
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 Extends the exemptions to property that primarily benefits a business, so long as
that benefit aligns with an exempt purpose;
 Extends the exemptions to property used to haul industrial waste to a point of
disposal or treatment, or to store, filter, process, or dispose of such waste.
 Applies the changes to new exemption applications and applications pending on the
provision’s effective date.
Income tax
Unemployment compensation income tax withholding
 Delays by two years, from 2023 to 2025, the date by which the Department of Job and
Family Services (ODJFS) must begin to accept state income tax withholding requests
from unemployment compensation recipients.
Tax credit for commercial vehicle operator training expenses
 Authorizes a temporary nonrefundable income tax credit of up to $25,000 per year for
training expenses paid by employers to train employees to operate a commercial
vehicle.
 Limits the total amount of credits that may be awarded each year to $1.5 million.
Tax credit for donations to scholarship organizations
 Modifies the credit cap of an existing income tax credit for donations to scholarship
granting organizations for joint filers.
Refunds of tax penalties
 Allows taxpayers to obtain a refund of any tax-related penalties and fees the taxpayer
overpaid or paid improperly.
Tax Expenditure Review Committee
 Eliminates the Tax Expenditure Review Committee as of the provision’s effective date.
Video service changes
 Limits “video service” to “the provision by a video service provider of video
programming” (a person granted video service authorization under Ohio’s Video Service
Authorization law is a video service provider).
 Provides that direct-to-home satellite services, as defined under federal law, and video
streaming content, are not video services.
 Clarifies that direct-to-home satellite services and video streaming services are subject
to sales tax.
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Appropriations
 Appropriates $30 million in FY 2023 to provide grants to eligible minor league sports
teams.
 Appropriates $35 million in the FY 2023 – FY 2024 biennium to fund certain cultural and
sports facilities projects.
TABLE OF CONTENTS
Property taxation ............................................................................................................................ 5
Exemption reporting ................................................................................................................... 5
Community school tax exemption applications .......................................................................... 6
Combined school district property and income tax levies .......................................................... 6
Applicability to pending proceedings ..................................................................................... 7
ADAMHS district taxing authority ............................................................................................... 8
Overview ................................................................................................................................. 8
Tax revenue use limitations.................................................................................................... 8
Reorganization of a joint-county district ................................................................................ 9
Renewal or replacement designation .................................................................................. 10
Tax abatements ......................................................................................................................... 10
Enterprise zone property...................................................................................................... 10
Certain school district property ............................................................................................ 11
Certain agricultural society property ................................................................................... 11
Exemption and abatement of certain TIF property .................................................................. 12
Sales and use tax exemptions ....................................................................................................... 12
Electronic filing fees .................................................................................................................. 12
Incidental taxable electronic services exemption ................................................................ 13
Documentary service charges ................................................................................................... 13
Watercraft use tax exemption .................................................................................................. 14
Pollution control and energy conversion facility exemptions ...................................................... 15
Background................................................................................................................................ 15
Extension of exemptions ........................................................................................................... 15
Application to pending cases .................................................................................................... 16
Income tax..................................................................................................................................... 16
Unemployment compensation income tax withholding .......................................................... 16
Tax credit for commercial vehicle operator training expenses ................................................ 17
Application process .............................................................................................................. 17
Credit limits .......................................................................................................................... 17
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Carry forward........................................................................................................................ 18
Reporting requirements ....................................................................................................... 18
Application date and rules.................................................................................................... 18
Tax credit for donations to scholarship organizations .............................................................. 18
Refunds of tax penalties ............................................................................................................... 19
Tax Expenditure Review Committee............................................................................................. 19
Video service changes ................................................................................................................... 20
Appropriations .............................................................................................................................. 20
DETAILED ANALYSIS
Property taxation
Exemption reporting
The bill expands the scope of the existing Tax Expenditure Report to include the
evaluation of property tax exemptions.
Continuing law requires the Tax Commissioner to produce a report on tax expenditures
that is submitted with the Governor’s biennial budget. This Tax Expenditure Report must
include a description of each tax expenditure, as well as a detailed estimate of the loss to the
General Revenue Fund (GRF) for the current and previous biennium resulting from the tax
expenditure. A “tax expenditure” is any tax exemption, credit, deduction, or other provision
that reduces the revenue that would otherwise be collected from a tax levied by the state.
Since property taxes are levied by local governments – not the state – they are currently
not considered “tax expenditures” for the purpose of the Report. The bill requires the Report to
include a description of each property tax exemption authorized in the Revised Code.
Under the bill, the Report must classify each property tax exemption into one of the
following categories: (1) charitable and public worship, (2) public and educational, (3) local
economic development, or (4) other exemptions. The Report must also include the aggregate
true (market) value of property exempted in the state during the preceding year as a result of
the exemption, and the amount of revenue paid from the GRF to reimburse subdivisions in
relation to the exemption. (Currently, the state reimburses local governments for the revenue
lost due to the homestead exemption and for certain taxes subject to the 2.5% and 10%
rollbacks, resulting in a debit to the GRF.)
The bill defines a property tax exemption as any provision that either exempts, or
authorizes a local government to exempt, all or part of the value of otherwise taxable real
property from property tax, but includes only those exemptions reported on forms prescribed
by the Tax Commissioner. Some examples of such exemptions include the homestead
exemption; a 10% tax rollback for nonbusiness property; exemptions for schools, nature
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preserves, and property used for charitable purposes; and partial tax increment financing
exemptions, community reinvestment area exemptions, and enterprise zone exemptions.1
Community school tax exemption applications
Under current law, enacted in H.B. 166 of the 133rd General Assembly, a community
school seeking a tax exemption for its property is excused from the requirement to file an
exemption application with the Tax Commissioner as a condition of obtaining the exemption
after its initial application is approved, but must instead file an annual statement with the
Commissioner affirming that it continues to qualify for the exemption. This bill discontinues this
provision.
Under continuing law, property used for an educational purpose, including property
used as a community school, qualifies for a property tax exemption.2 To obtain a property tax
exemption, a property owner, including a community school, is required to apply to the Tax
Commissioner, by the last day of the taxable year for which exemption is sought, to obtain the
exemption, with only a few exceptions. The Commissioner evaluates each application and
decides whether to approve the exemption. If approved, the Commissioner will order the
county auditor to remove the property from the tax list.
H.B. 166 changed the exemption process for a community school. Instead of being
required to obtain the Tax Commissioner’s approval for any year after the Commissioner
approves the initial application, a community school is excused from refiling an application for
any future year, so long as the community school submits an annual statement to the
Commissioner attesting that its property continues to qualify for the educational purpose
exemption.
By discontinuing this provision, the bill again requires community schools to follow the
same exemption application procedures applicable to other schools and most other property
owners seeking a tax exemption.3
The change applies to tax year 2021 and thereafter. If a community school did not
receive the tax exemption for tax year 2021 or 2022 due to a failure to submit the annual
statement, the school may apply to the Commissioner for an abatement or refund of taxes on
the property for that year.4
Combined school district property and income tax levies
Under continuing law, a school district may levy an emergency property tax levy for up
to ten years, which collects a fixed sum of tax revenue each year (referred to in this analysis as
1 R.C. 107.03 and 5703.48.
2 R.C. 5709.07(A), not in the bill.
3 R.C. 5713.08 and 5717.27.
4 Section 23.
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