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Ohio's Agricultural Use Value

Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A.

The Current Agricultural Use Value (CAUV) is a real estate tax program that allows land owners to have their real estate taxed according to its agricultural value rather than its fair market value. The CAUV program was a referendum passed by Ohio voters in 1973, which amended the Ohio Constitution, Article II, Section 36, to provide this specialized tax treatment for agricultural lands.  The program is controlled by the Department of Tax Equalization, which is a division of the Ohio Division of Taxation.  Local County Auditors administer the program in each county by supplying the appropriate forms to complete and verifying the real estate meets the CAUV requirements.

In order to qualify, the land must be at least 10 acres or more, and be used exclusively for agricultural use during the 3 calendar years prior to the year in which the application is filed.   Agricultural use refers to land devoted exclusively to commercial animal or poultry husbandry, aquaculture, apiculture, the production for a commercial purpose of timber, field crops, tobacco, fruits, vegetables, nursery stock, ornamental trees, sod or flowers, or the growth of timber for a non-commercial purpose in certain circumstances.  In determining whether you have 10 acres devoted exclusively to agricultural use, be sure that you do not include any homes located on the property or any roads, drives and any road frontage which is not used for agricultural use.

Even if you have less than 10 acres, you still may qualify for the CAUV, if during the 3 calendar years prior to the year in which the application is filed, the land was used exclusively for agricultural use, as defined above, and produces an average yearly gross income of at least $2,500 during the 3-year period.

However, with all benefits come certain drawbacks.  In the event the agricultural use ceases, the State will recoup any tax savings associated with the real estate’s CAUV during the previous 3 years.  Under Revised Code Section 5713.34, the recoupment is charged to the current owner regardless of whether that owner received the benefit of the previous CAUV.  As a result, purchasers of agricultural land should be cautious and determine whether the real estate they are purchasing is currently the subject of a CAUV.  In such cases, the seller and purchaser should address in their agreement who will be responsible for the any recoupment.

In order to receive the CAUV, the land owner must first file an application between January 1 and the first Monday of March.  Failure to file in this time frame will generally prevent the landowner from receiving the CAUV. Applications can be obtained by contacting the applicable County Auditor.  Upon receipt of a qualifying application, the County Auditor will value the land at the current value such land has for agricultural use.  Information on the formulas used to calculate the CAUV can be found on the Tuscarawas County Auditor’s website at www.co.tuscarawas.oh.us/auditor’s/filingprocedures.htm.    Additional information on the history and arguments for and against the CAUV can be found at http://ohioline.osu.edu/cd-fact/1267.html.

NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice.

 
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