In an effort to entice new business to the state, the Ohio Legislature approved a measure to freeze property values for commercial and industrial development until the projects are completed.
SB 235 exempts development property from being taxed on its increased value while in the early stages of development.
The exemption is allowed until one of the following occurs:
A certificate of occupancy is obtained
The owner transfers the property
The property is rezoned so as to prohibit commercial or industrial use
Business operations begin
The goal is to help developers predict costs and make more job-ready sites available.
The bill was introduced more than a year ago but underwent major changes during the lame-duck session of the Legislature when 20 amendments were added, including a $215 tax break for the oil and gas industry.
The wording of the tax break for developers was tweaked. A major concern was that developers could automatically get the tax break for up to 10 years, without local input and without having to actually follow-through on promises of development or job creation. Under revisions to the bill, developers must now get approval for the tax break from the municipality, township, or county where the parcel is located.
Initially a 10-year exemption was approved with the ability to renew. But in the current language, the tax break lasts just six years. The revised bill also allows for recoupment of property-tax savings for up to three years if the parcel is sold with no improvements. It prohibits a property owner from getting the tax break if he owes back property taxes.
SB 235 is on Gov. John Kasich's desk and is ready for his signature or veto, and includes a spending measure allowing the governor to line-item veto portions of the bill he may oppose.