[Cite as Coppertree Properties, L.L.C. v. Harris, Tax Commr., 2024-Ohio-5932.]
COURT OF APPEALS STARK COUNTY, OHIO FIFTH APPELLATE DISTRICT
JUDGES: COPPERTREE PROPERTIES LLC : Hon. Patricia A. Delaney, P.J. : Hon. W. Scott Gwin, J. Plaintiff-Appellant : Hon. John W. Wise, J. : -vs- : : Case No. 2024 CA 00126 PATRICIA HARRIS, TAX : COMMISSIONER OF OHIO : : OPINION Defendant-Appellee
CHARACTER OF PROCEEDING: Appeal from the Ohio Board of Tax Appeals, Case No. 2022-1022
JUDGMENT: Affirmed
DATE OF JUDGMENT ENTRY: December 19, 2024
APPEARANCES:
For Plaintiff-Appellant For Defendant-Appellee
ROBERT E. SOLES, JR. DAVID YOST FAITH R. DYLEWSKI Ohio Attorney General 6545 Market Avenue North BY DANIEL G. KIM North Canton, OH 44721 30 East Broad Street Columbus, OH 43215 [Cite as Coppertree Properties, L.L.C. v. Harris, Tax Commr., 2024-Ohio-5932.]
Gwin, J.
{¶1} This is an appeal from a decision of the Board of Tax Appeals (“BTA”)
concerning a real property tax exemption. Appellant Coppertree Properties, LLC
[“Coppertree”] is a for-profit entity that owns the subject property, which is less than one
acre of land holding a modular building that Coppertree claims is owned by the United
States Postal Service ("USPS"). Coppertree leases the land to the USPS, and the USPS
is required to remove the modular building after the expiration of the lease. Coppertree
filed a real property tax exemption application for the 2020 tax year, and it sought an
exemption pursuant to R.C. 5709.08, which provides an exemption for public property
used for a public purpose. The Tax Commissioner denied the exemption because
Coppertree is not a public entity and, therefore, cannot satisfy the requirements of R.C.
5709.08. The BTA affirmed that decision. Coppertree appeals the decision of the BTA.
{¶2} Upon review of the entire record and relevant case law, we find that the
decision of the BTA is neither unlawful nor unreasonable; therefore, we affirm the BTA’s
decision.
Facts and Procedural History
{¶3} Coppertree filed an Application for Real Property Exemption with the
Tuscarawas County Auditor's Office on February 22, 2021. Coppertree purchased the
property on March 12, 2019, from the Romana Maple Revocable Trust. Coppertree
entered into a lease with the USPS for the subject property, for a term of five years, with
an annual rent of $3,600.
{¶4} Coppertree applied for a real property exemption under R.C. 5709.08, which
provides for exemption for "public property used exclusively for a public purpose." In a Stark County, Case No. 2024 CA 00126 3
final determination dated June 7, 2022, the Tax Commissioner denied Coppertree's
exemption application. In so doing, the Commissioner noted that only "the existence of a
permanent leasehold creates a sufficiently separate interest in property that the lessee
may be taxed apart from the owner of the property." The Commissioner also noted ·that
because the public purpose exemption statute is explicit in its grant of exemption, "not
only must the property be used exclusively for a public purpose, it must be owned by a
public entity." Because Coppertree is a private, for-profit entity that owns the subject
property, the Commissioner determined that the subject property is not entitled to a real
property tax exemption.
{¶5} Coppertree timely appealed the Commissioner's final determination to the
BTA. Originally, with the filing of Coppertree's BTA notice of appeal, a merit hearing
had been scheduled before the BTA. However, as neither party filed a witness or exhibit
list indicating its intent to present new evidence before the BTA, the BTA canceled
the hearing; directed the parties to file written argument in lieu of hearing; and invited
the parties to show good cause as to why the hearing should be reinstated. Neither
party requested reinstatement of the hearing.
{¶6} In a July 15, 2024 Decision and Order ("BTA Decision"), the BTA affirmed
the Commissioner’s final determination, denying the real property tax exemption to
Coppertree for the subject property. The BTA first noted that because neither party
disclosed any new evidence to be presented at a hearing, its review "is confined to the
evidence in the statutory transcript." BTA Decision at 2. To this end, the BTA granted the
Commissioner's motion to strike extra-record materials that Coppertree attached to its
merit brief. Stark County, Case No. 2024 CA 00126 4
{¶7} The BTA further noted, Coppertree cited four assignments of error in its
notice of appeal to the BTA. Three of those refer, in some form, to Coppertree's argument
that the subject property at issue is not real property and, instead is either personal
property or a business fixture. Id. at 2-3. The BTA rejected this argument, because
Coppertree had filed an application for exemption from real property taxation, and that if
this were truly the case, then Coppertree's real forum for recourse would have been a
County Board of Revision.
{¶8} The BTA also rejected Coppertree's argument that the land qualifies as
public property for purposes of R.C. 5709.08. The BTA was skeptical as to whether
Coppertree had "properly specified error with regard to the land" - i.e., whether the BTA
even had jurisdiction to review that issue. Id. at 3. Regardless, the BTA noted that it is
undisputed that Coppertree is "a for-profit private entity, not a public entity" - and, as such,
the land is not public property. Id. As the Supreme Court "has been clear that only public
property qualifies for exemption under the public property exemption," the BTA
determined that the Commissioner correctly denied exemption here. Id. (citing Carney v.
Cleveland, 173 Ohio St. 56 (1962)).
Arguments of the Parties
{¶9} Coppertree contends that it is entitled to an exemption pursuant to R.C.
5709.08, which provides an exemption for public property used for a public purpose.
Coppertree argues that it owns the land and leased the land to the federal government;
however, the building on the land is solely owned by the federal government and operated
as a post office. Coppertree has no property or ownership rights in the modular building.
Coppertree contends that there is no independent use of the modular building other than Stark County, Case No. 2024 CA 00126 5
as a post office, and when the lease ceases, the modular building remains the property
of the United States and is intended to be removed from the realty.
{¶10} Coppertree further contends that property should not be taxed against
anyone other than the true owner of the property, and therefore, land owned by a private
owner shall not be taxed for the value of improvements owned by the government and
used for governmental purposes, citing Guckenberger v. Toledo & C. R. Co., 144 Ohio
St. 571, 575 (1945).
{¶11} The Commissioner argues that the plain language of R.C. 5709.08 clearly
provides that the subject property- owned by Coppertree, a private, for-profit entity - is not
"public property" and thus does not qualify for exemption under that statute.
{¶12} The Commissioner distinguishes Coppertree’s caselaw because it was not
based upon the explicit statutory language that now governs in R.C. 5709.08, and
further, the argument is predicated upon a finding that USPS is the true owner of the
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[Cite as Coppertree Properties, L.L.C. v. Harris, Tax Commr., 2024-Ohio-5932.]
COURT OF APPEALS STARK COUNTY, OHIO FIFTH APPELLATE DISTRICT
JUDGES: COPPERTREE PROPERTIES LLC : Hon. Patricia A. Delaney, P.J. : Hon. W. Scott Gwin, J. Plaintiff-Appellant : Hon. John W. Wise, J. : -vs- : : Case No. 2024 CA 00126 PATRICIA HARRIS, TAX : COMMISSIONER OF OHIO : : OPINION Defendant-Appellee
CHARACTER OF PROCEEDING: Appeal from the Ohio Board of Tax Appeals, Case No. 2022-1022
JUDGMENT: Affirmed
DATE OF JUDGMENT ENTRY: December 19, 2024
APPEARANCES:
For Plaintiff-Appellant For Defendant-Appellee
ROBERT E. SOLES, JR. DAVID YOST FAITH R. DYLEWSKI Ohio Attorney General 6545 Market Avenue North BY DANIEL G. KIM North Canton, OH 44721 30 East Broad Street Columbus, OH 43215 [Cite as Coppertree Properties, L.L.C. v. Harris, Tax Commr., 2024-Ohio-5932.]
Gwin, J.
{¶1} This is an appeal from a decision of the Board of Tax Appeals (“BTA”)
concerning a real property tax exemption. Appellant Coppertree Properties, LLC
[“Coppertree”] is a for-profit entity that owns the subject property, which is less than one
acre of land holding a modular building that Coppertree claims is owned by the United
States Postal Service ("USPS"). Coppertree leases the land to the USPS, and the USPS
is required to remove the modular building after the expiration of the lease. Coppertree
filed a real property tax exemption application for the 2020 tax year, and it sought an
exemption pursuant to R.C. 5709.08, which provides an exemption for public property
used for a public purpose. The Tax Commissioner denied the exemption because
Coppertree is not a public entity and, therefore, cannot satisfy the requirements of R.C.
5709.08. The BTA affirmed that decision. Coppertree appeals the decision of the BTA.
{¶2} Upon review of the entire record and relevant case law, we find that the
decision of the BTA is neither unlawful nor unreasonable; therefore, we affirm the BTA’s
decision.
Facts and Procedural History
{¶3} Coppertree filed an Application for Real Property Exemption with the
Tuscarawas County Auditor's Office on February 22, 2021. Coppertree purchased the
property on March 12, 2019, from the Romana Maple Revocable Trust. Coppertree
entered into a lease with the USPS for the subject property, for a term of five years, with
an annual rent of $3,600.
{¶4} Coppertree applied for a real property exemption under R.C. 5709.08, which
provides for exemption for "public property used exclusively for a public purpose." In a Stark County, Case No. 2024 CA 00126 3
final determination dated June 7, 2022, the Tax Commissioner denied Coppertree's
exemption application. In so doing, the Commissioner noted that only "the existence of a
permanent leasehold creates a sufficiently separate interest in property that the lessee
may be taxed apart from the owner of the property." The Commissioner also noted ·that
because the public purpose exemption statute is explicit in its grant of exemption, "not
only must the property be used exclusively for a public purpose, it must be owned by a
public entity." Because Coppertree is a private, for-profit entity that owns the subject
property, the Commissioner determined that the subject property is not entitled to a real
property tax exemption.
{¶5} Coppertree timely appealed the Commissioner's final determination to the
BTA. Originally, with the filing of Coppertree's BTA notice of appeal, a merit hearing
had been scheduled before the BTA. However, as neither party filed a witness or exhibit
list indicating its intent to present new evidence before the BTA, the BTA canceled
the hearing; directed the parties to file written argument in lieu of hearing; and invited
the parties to show good cause as to why the hearing should be reinstated. Neither
party requested reinstatement of the hearing.
{¶6} In a July 15, 2024 Decision and Order ("BTA Decision"), the BTA affirmed
the Commissioner’s final determination, denying the real property tax exemption to
Coppertree for the subject property. The BTA first noted that because neither party
disclosed any new evidence to be presented at a hearing, its review "is confined to the
evidence in the statutory transcript." BTA Decision at 2. To this end, the BTA granted the
Commissioner's motion to strike extra-record materials that Coppertree attached to its
merit brief. Stark County, Case No. 2024 CA 00126 4
{¶7} The BTA further noted, Coppertree cited four assignments of error in its
notice of appeal to the BTA. Three of those refer, in some form, to Coppertree's argument
that the subject property at issue is not real property and, instead is either personal
property or a business fixture. Id. at 2-3. The BTA rejected this argument, because
Coppertree had filed an application for exemption from real property taxation, and that if
this were truly the case, then Coppertree's real forum for recourse would have been a
County Board of Revision.
{¶8} The BTA also rejected Coppertree's argument that the land qualifies as
public property for purposes of R.C. 5709.08. The BTA was skeptical as to whether
Coppertree had "properly specified error with regard to the land" - i.e., whether the BTA
even had jurisdiction to review that issue. Id. at 3. Regardless, the BTA noted that it is
undisputed that Coppertree is "a for-profit private entity, not a public entity" - and, as such,
the land is not public property. Id. As the Supreme Court "has been clear that only public
property qualifies for exemption under the public property exemption," the BTA
determined that the Commissioner correctly denied exemption here. Id. (citing Carney v.
Cleveland, 173 Ohio St. 56 (1962)).
Arguments of the Parties
{¶9} Coppertree contends that it is entitled to an exemption pursuant to R.C.
5709.08, which provides an exemption for public property used for a public purpose.
Coppertree argues that it owns the land and leased the land to the federal government;
however, the building on the land is solely owned by the federal government and operated
as a post office. Coppertree has no property or ownership rights in the modular building.
Coppertree contends that there is no independent use of the modular building other than Stark County, Case No. 2024 CA 00126 5
as a post office, and when the lease ceases, the modular building remains the property
of the United States and is intended to be removed from the realty.
{¶10} Coppertree further contends that property should not be taxed against
anyone other than the true owner of the property, and therefore, land owned by a private
owner shall not be taxed for the value of improvements owned by the government and
used for governmental purposes, citing Guckenberger v. Toledo & C. R. Co., 144 Ohio
St. 571, 575 (1945).
{¶11} The Commissioner argues that the plain language of R.C. 5709.08 clearly
provides that the subject property- owned by Coppertree, a private, for-profit entity - is not
"public property" and thus does not qualify for exemption under that statute.
{¶12} The Commissioner distinguishes Coppertree’s caselaw because it was not
based upon the explicit statutory language that now governs in R.C. 5709.08, and
further, the argument is predicated upon a finding that USPS is the true owner of the
building, which the BTA correctly found is not clear from the record. Finally, if the building
is not real property, the BTA is correct that Coppertree's remedy is with the county auditor
and board of revision.
Assignment of Error
{¶13} Coppertree raises one Assignment of Error,
{¶14} “I. THE BOARD OF TAX APPEALS ACTED UNLAWFULLY
AND UNREASONABLY BY UPHOLDING THE TAX COMMISSIONER'S FINDING
THAT THE BUILDING OWNED BY THE UNITED STATES GOVERNMENT AND
USED EXCLUSIVELY FOR A PUBLIC PURPOSE WAS NOT EXEMPT FROM
TAXATION PURSUANT TO R.C. 5709.08.” Stark County, Case No. 2024 CA 00126 6
Standard of Review
{¶15} Section 5717.04 of the Ohio Revised Code confers jurisdiction over appeals
from the BTA on this Court and further sets forth our standard of review: “If upon hearing
and consideration of such record and evidence the court decides that the decision of the
board [of tax appeals] appealed from is reasonable and lawful it shall affirm the same, but
if the court decides that such decision of the board is unreasonable or unlawful, the court
shall reverse and vacate the decision or modify it and enter final judgment in accordance
with such modification.” R.C. 5717.04. Accordingly, “[w]hen reviewing a BTA decision, we
determine whether the decision is reasonable and lawful; if it is both, we must affirm.”
NWD 300 Spring, L.L.C. v. Franklin Cty. Bd. of Revision, 2017-Ohio-7579, ¶ 13. A
judgment is unreasonable when “there is no sound reasoning process” to support such
judgment. AAAA Ents., Inc. v. River Place Community Urban Redevelopment Corp., 50
Ohio St.3d 157, 161 (1990).
{¶16} We defer to the BTA’s factual findings if they are supported by reliable and
probative evidence in the record. Bd. of Edn. of the Westerville City Schools v. Franklin
Cty. Bd. of Revision, 2016-Ohio-1506, ¶ 26. Furthermore, the BTA possesses “wide
discretion in determining the weight to be given to the evidence and the credibility of the
witnesses that come before it.” EOP-BP Tower, L.L.C. v. Cuyahoga Cty. Bd. of Revision,
2005-Ohio-3096, ¶ 9. Nevertheless, although the BTA is responsible for determining
factual issues, this Court will reverse a BTA decision that is based on an incorrect legal
conclusion. Bd. of Edn. of the Westerville City Schools, 2016-Ohio-1506, ¶ 21. Such
questions of law are reviewed de novo. Terraza 8, L.L.C. v. Franklin Cty. Bd. of Revision, Stark County, Case No. 2024 CA 00126 7
2017-Ohio-4415, ¶ 7; Columbus City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision,
2017-Ohio-2734, ¶ 13.
Issue for Appellate review: Whether the BTA’s decision denying the real
property tax exemption to Coppertree for the subject property is reasonable and lawful
{¶17} Because laws that exempt property from tax are in derogation of equal
rights, they must be strictly construed. First Baptist Church of Milford v. Wilkins, 2006-
Ohio-4966, ¶ 10; Campus Bus Serv. v. Zaino, 2003-Ohio-1915, ¶ 8. The principle of strict
construction requires that the statute’s language be construed against the exemption,
meaning that the onus is on the taxpayer to show that the language of the statute “clearly
express[es] the exemption” in relation to the facts of the claim. Ares, Inc. v. Limbach, 51
Ohio St.3d 102, 104, (1990); Lakefront Lines, Inc. v. Tracy, 75 Ohio St.3d 627, 629 (1996);
H.R. Options, Inc. v. Wilkins, 2004-Ohio-2085, ¶ 2; In re Estate of Roberts, 94 Ohio St.3d
311, 314 (2002). The fact that the burden is on the taxpayer means that “‘[i]n all doubtful
cases exemption is denied.’” A. Schulman, Inc. v. Levin, 2007-Ohio-5585, ¶ 7, quoting
Youngstown Metro. Hous. Auth. v. Evatt, 143 Ohio St. 268, 273 (1944).
{¶18} The statute we must consider is currently codified at R.C. 5709.08 and
provides,
(A)(1) Real or personal property belonging to the state or United
States used exclusively for a public purpose, and public property used
exclusively for a public purpose, shall be exempt from taxation. (Emphasis
added).
{¶19} In other words, both real and personal property qualify for the public
property exemption when it satisfies three prerequisites: “(1) the property must be public Stark County, Case No. 2024 CA 00126 8
property, (2) the use thereof must be for a public purpose, and (3) the property must be
used exclusively for a public purpose.” Carney v. Cleveland, 173 Ohio St. 56(1962),
paragraph one of the syllabus; Cincinnati v. Testa, 2015-Ohio-1775, ¶ 17. For property to
be considered public property under R.C. 5709.08 requires that there be ownership “by
the state or some political subdivision thereof, and title to which is vested directly in the
state or one of its political subdivisions, or some person holding exclusively for the benefit
of the state.” Dayton Metro. Hous. Auth. v. Evatt, 143 Ohio St. 10(1944), paragraph one
of the syllabus; Columbus City School Dist. Bd. of Edn. v. Zaino, 90 Ohio St.3d 496, 499
(2001).
{¶20} On appeal to the BTA, Coppertree attempted to argue that the structure, as
opposed to the land, qualified for the exemption because the structure belongs to the
USPS and is used exclusively as a post office. Coppertree cites to Guckenberger v.
Toledo & C. R. Co., 144 Ohio St. 571 (1945) as holding that structures erected by the
federal government upon land occupied by it for governmental purposes, under a lease
by the terms of which the structures remain federal property and may be removed upon
expiration of the lease, are exempt during the period of such use and occupancy. In
Guckenberger, as in the present case, the Court found that even though the land was
taxable because it was owned by a private entity, the structures were not because they
were owned by the government. Guckenberger at 572; 573. In Guckenberger, the Court
noted that, “various taxing statutes of this state discloses a requirement that land and
improvements thereon be separately valued and the value of each separately stated upon
the auditor’s duplicate.” 144 Ohio St. at 574. The Court found that the fixtures “were Stark County, Case No. 2024 CA 00126 9
exempt from taxation and should be placed by the county auditor on the ‘list of exempted
property,’ separate and apart from the land covered by the lease.” Id. at syllabus.
{¶21} In this regard, the BTA found the record contained insufficient evidence to
classify the structure as real property. BTA Decision at 3. The BTA further found,
“Coppertree leaves open the possibility that the mode (sic.) the building is a (sic.) not real
property, the Commissioner is wholly correct that Coppertree's remedy is with the county
auditor and board of revision. Similar challenges are regularly made at boards of
revision…” Id. citing Metamora Elevator Co. v. Fulton Cty. Bd. of Revision, 2015–Ohio–
2807.
{¶22} In the Application for Real Property Tax Exemption and Remission, filed
Feb. 22, 2021, found within the section titled “County Auditor’s Findings” is the following
information:
Taxable value in the year of application 2021 (tax year) Land
2820 Building 20070 Total 22890
SR at 3-51. This section contains the signature of the County Auditor dated February 9,
2021. Id. The record also contains the tax card for the property listing the appraised value
of the "Land" at $4,020.00, and the appraised value of the "Improvement" (the structure)
at $57,350.00. SR at 22-25.
{¶23} The case at bar mirrors the situation in Guckenberger where the Court
found that because the fixtures, as opposed to the land itself, were exempt, only the
fixtures should be removed from the record and placed on the auditor’s list of exempt
property. As we have already observed, both real and personal property belonging to the
1 The Statutory Record of Proceedings, Board of Tax Appeals Transcript will be referred to as “SR” Stark County, Case No. 2024 CA 00126 10
United States is exempt from taxation if the other requirements of the statute are met.
The Court in Guckenberger recognized that the improvements on the land were placed
there by the government and belonged exclusively to the United States. 144 Ohio St. at
573-574. Thus, if R.C. 5709.08 were in effect at that time, the first requirement of R.C.
5709.08, that “the real or personal property belong to the state or United States,” had
been met in Guckenberger with respect to the improvements. In the case at bar, the BTA
never addressed any of the other requirements of R.C. 5709.08.
{¶24} R.C. 5715.271, Burden of Proof, provides, “In any consideration concerning
the exemption from taxation of any property, the burden of proof shall be placed on the
property owner to show that the property is entitled to exemption. The fact that property
has previously been granted an exemption is not evidence that it is entitled to continued
exemption.”
{¶25} As the land is owned by a private, for profit entity, not a public entity,
Coppertree has failed to present evidence to show the land is public property entitled to
a real property tax exemption pursuant to R.C. 5709.08. Dayton Metro. Hous. Auth. v.
Evatt, 143 Ohio St. 10 (1944), paragraph one of the syllabus; Columbus City School Dist.
Bd. of Edn. v. Zaino, 90 Ohio St.3d 496, 499 (2001). Thus, our review of the record
indicates the BTA’s determination that Coppertree failed to meet its burden of providing
probative evidence that the land is entitled to exemption pursuant to R.C. 5709.08 is
neither unlawful nor unreasonable2.
{¶26} As we have already observed, whether the structure is classified as real or
personal property, it is nonetheless exempt from taxation if the other requirements of R.C.
2 We note that the “original lease” citied in Appellant’s brief is not included as part of the record
before this Court. See, Appellant’s brief at 5. Stark County, Case No. 2024 CA 00126 11
5709.08 are proven. We must now separately review whether the record before us
contains probative evidence that the structure in this case, as opposed to the land,
belongs to the USPS.
{¶27} Nothing in the record before this Court establishes the ownership of the
structure. The “Certificate of Transfer of Title to Leased Property and Lease Assignment
and Assumption” and the “Ground Lease” refer only to the land. SR. at 10-21. Although
the lease appears to give the USPS the right to make alterations, improvements, attach
fixtures and so forth, that is simply a right, it is not conclusive evidence of ownership of
the structure. Although this provision is similar to the provision in Guckenberger, the Court
in that case had evidence that the fixtures were placed upon the land, and owned by the
government. 144 Ohio St. 571, 572 - 573. The fact that a structure was placed on the
premises, without more, does not prove that it was put there and that it is owned by the
USPS. The burden of proof was on Coppertree to present probative evidence to establish
the ownership of the structure. Coppertree was offered the opportunity to present
additional evidence at a hearing before the BTA; however, it declined the opportunity to
present evidence. Nonetheless, whether the structure is classified as real or personal
property, it is exempt from taxation if the other requirements of R.C. 5709.08 are proven.
Therefore, if the structure is found to be a business fixture or personal property, then
Coppertree's remedy for seeking a public property tax exemption would be with the county
auditor and board of revision. R.C. 5701.02(C); 5701.03(B); Metamora Elevator Co. v.
Fulton Cty. Bd. of Revision, 2015–Ohio–2807, ¶23 (“It is apparent that the General
Assembly has expressed its intent that fixtures are real property and that business fixtures
are personal property[.]”). Stark County, Case No. 2024 CA 00126 12
{¶28} Coppertree has failed to present evidence to prove that the structure
belongs to the USPS and that the structure, as opposed to the land, is entitled to a real
property tax exemption pursuant to R.C. 5709.08. Thus, our review of the record indicates
the BTA’s determination that Coppertree failed to meet its burden of providing probative
evidence that the structure is entitled to a real property tax exemption pursuant to R.C.
5709.08 is neither unlawful nor unreasonable.
{¶29} Coppertree’s sole Assignment of Error is denied.
{¶30} The judgment of the Board of Tax Appeals is affirmed.
By Gwin, J.,
Delaney, P.J., and
Wise, J.,concur