Ohio Supreme Court Agrees That Taxpayers’ Appeals Were Timely Due to COVID 19 Tolling Provisions
On July 15, 2021, the Ohio Supreme Court reversed the Board of Tax Appeals (“BTA”) and held that two taxpayers had timely filed appeals from final determinations of the Tax Commissioner (“Commissioner”) as a result of tolling provisions enacted due to the COVID-19 global health emergency thus highlighting the importance of these provisions around the country. Chapman Enters., Inc. v. McClain, 2021-Ohio-2386 and Chapman v. McClain, BTA No. 2020-1162, 2020 Ohio Tax LEXIS 2017, *1 (October 13, 2020), rev’d and remanded by Chapman Enters., Inc., v. McClain, 2021-Ohio-2386.
Facts: The facts in the two cases are identical. The Commissioner completed service of final determinations upholding tax assessments to an individual and a related company on May 4, 2020. The taxpayers had 60 days to file an appeal with the BTA. Because the BTA’s offices were closed on that day due to the July 4th holiday, the deadline for filing the appeal fell on July 6, 2020. The taxpayers delivered notices of appeal to the Commissioner on June 26, 2020, but did not file notices of appeal with the BTA until July 27, 2020.
The BTA issued decisions dismissing both appeals as untimely. While the BTA acknowledged that the General Assembly had tolled certain statutory time limits as a result of COVID‑19, it concluded that “such extension does not apply to notices of appeal filed with this board.”
The Decision: Although the Commissioner had filed motions to dismiss both cases at the BTA as untimely, at the Supreme Court the Commissioner finally agreed that the taxpayers had timely appealed and filed motions to remand each case to the BTA rather than address the merits of the case.
The Court, however, determined that, since the issue was jurisdictional, it did not matter whether the parties agreed that the appeals to the BTA were timely. Instead, it was required to determine whether the appeals were timely filed.
The Court then reviewed the tolling provision which provided that “[t]he following that are set to expire between March 9, 2020, and July 30, 2020, shall be tolled:” a statute of limitations for “any administrative action or proceeding” and “[a]ny other criminal, civil, or administrative time limitation under the Revised Code.” H.B. 197, Section 22(A). It concluded that the taxpayers’ appeal deadlines were tolled under the first provision and, even if they were not, the deadlines were tolled under the second provision. Accordingly, the appeals were held to be timely.
As the closedown of many offices due to COVID‑19 made the filing of protests and refund claims difficult, if not impossible, to accomplish within the statutory time limits, the tolling provisions enacted by most states provide taxpayers the ability to nonetheless obtain a proper tax result.
This article is one in a series of articles written for the August 2021 edition of The BR State + Local Tax Spotlight.