Ohio Doubles Film Tax Credit

In good news for Ohio filmmakers, the General Assembly recently passed legislation to double Ohio's film making tax incentive in order to encourage big-budget films to be shot in the Buckeye State.

From the Columbus Dispatch:

The legislation, passed by the Ohio General Assembly and signed by Kasich last month, will go into effect at the end of September. In addition to doubling the incentive cap, the law removes the $5 million cap for each project and raises the incentive rate to 30 percent of production dollars spent in Ohio.

Since 2011, when the state increased the tax credit to $20 million, 1,729 full-time jobs have been created and more than $400 million in total economic impact has been generated, according to the Ohio Department of Development.

In addition to the state tax credit, Section 181 of the Internal Revenue Code includes various federal incentives for filmmakers. Congress has extended these incentives through the end of 2016.

A previous blog post has additional information on the tax incentives available to filmmakers.

Just The Facts, Ma'am: Recording an Affidavit Related to Title

Ohio law permits anyone knowledgeable about facts which may affect the title to property to record an Affidavit of Facts Relating to Title with the county recorder.  This affidavit serves as evidence of facts and matters that have a bearing on title to the property.

The statute allows the affiant to state facts about a wide variety of matters, such as birth and death, the identity of parties, possession of the property, the location of physical features such as fences or streams and, most broadly, "[t]he happening of any condition or event that may create or terminate an estate or interest" in the property.

An Affidavit of Facts Relating to Title warns potential purchasers that another party may have an interest in the real estate.  Before purchasing a property, it is wise to do a comprehensive title search to ensure that you will receive clean title to the real estate.

Ohio Real Estate Tax Exemptions For Places Of Worship

Article XII Sec. 2 of the Ohio Constitution permits the enactment of general laws exempting from taxation public school houses, houses used exclusively for public worship, institutions used exclusively for charitable purposes, and public property used exclusively for any public purpose. Pursuant to this authority, the Ohio Legislature enacted Ohio Revised Code (the “ORC”) §5709, “Taxable Property – Exemptions.”

Church tax exemptions are found in ORC §5709.07. The ORC defines “Church” to mean a fellowship of believers, congregation, society, corporation, convention, or association that is formed primarily or exclusively for religious purposes and that is not formed for the private profit of any person. R.C. §5709.07(D)(1). A church can be exempt from taxation under ORC §5709.07(A)(3) if the real property owned and operated by the church is “used ordinarily for public worship.” Beth Hamidrosh Hagodol v. Kinney, 16 Ohio App. 3d, 474 N.E.2d 658 (1984).

There are a few important mentionables: (1) A church that is both a religious institution and a charitable institution cannot receive both tax exemptions under ORC §5709.12 and §5709.121. Mt. Calvary Evangelical Lutheran Church v. Kinney, 19 Ohio App. 3d 267, 483 N.E.2d 1199, 1984 Ohio App. LEXIS 11301 (Ohio Ct. App., Montgomery County 1984); (2) Property which is owned by a church and leased to another church for church purposes is exempt from taxation. New Jerusalem Soc. v. Richardson, 10 Ohio N.P. 214 (1910); (3) Partial exemptions are allowed - that is, ORC §5713.04 permits real property to be split into “exempt” and “nonexempt” if those parts can be precisely delineated (i.e., first floor and second floor). Faith Fellowship Ministries, Inc. v. Limbach, 32 Ohio St. 3d 432, 513 N.E.2d 1340, 1987 Ohio LEXIS 403 (Ohio 1987); (4) Where a church is being reconstructed (i.e., torn down and rebuilt) and if within a reasonable period of time, the church does not lose its tax exemption. In re Ohave Scholem Congregation, 156 Ohio St. 183, 46 Ohio Op. 56, 101 N.E.2d 767 (1951); (5) Lastly, if a church purchases vacant land with the intent to use the property exclusively for public worship and there is evidence of prepared plans and available funds that establish this intent, then that land is entitled to a tax exemption. Peoples Faith Chapel, Inc. v. Limbach, 18 Ohio St. 3d 236, 480 N.E.2d 781, 1985 Ohio LEXIS 442 (Ohio 1985).

Traditionally, places of “public worship” are often thought of as churches, synagogues, and the like. In other words, they are physical, tangible places where people go to worship. However, the Ohio Supreme Court recently ruled that “public worship” can also extend to property owned to further gospel through music, preaching and teaching radio programs. Specifically, Christian Voice of Central Ohio, most famously known for their radio station, WCVO’s 104.9 “The River,” was granted a tax exemption for the property upon which their radio stations existed upon. In the opinion, Justice Sharon Kennedy wrote that Christian Voice functioned as a place of “public worship” because the non-profit dedicates all its land and buildings to charity and religion -- it has all the necessary attributes of a church, minus the physical presence of a traditional church. Ultimately, the Court interpreted ORC §5709.07 broadly and held that institutions can embody and perpetuate the meaning of “public worship” even though they may not have the physical presence of a church on their property.

The information presented is for information purposes only and is not intended to be legal advice, and it should not be acted upon as such. It also does not constitute advertising or solicitation.

This post was prepared with the assistance of Lauren Augostini, a student at Capital University Law School.

Negative Online Reviews: What Can You Do?

Recent studies have found that 88% of customers have been influenced by an online customer service review and that almost half of job seekers had researched companies on GlassDoor, an online company review site.  If these reviews are negative (and particularly false), however, they can have a lasting negative impact on your business.

In some cases, businesses may have a claim for defamation against individuals who post false negative reviews online.  Ohio courts have defined defamation as follows:

"Defamation is the publication or communication of a false statement of fact that injures someone by adversely affecting the person's (1) reputation, (2) business, or (3) position by exposure to public hatred, contempt, ridicule, shame, or disgrace. The essential elements of a claim for defamation are that (1) the defendant made a false statement; (2) that false statement was defamatory in the sense that it reflected unfavorably on the plaintiff's character or injured his trade or business; (3) the statement was published or communicated; and (4) the defendant acted with the necessary degree of fault."  Fuchs v. Scripps Howard Broad. Co., 170 Ohio App. 3d 679.

The Columbus Dispatch recently reported on a lawsuit between a tenant accused of making defamatory comments that injured the landlord's business.

[James] Raney was a tenant at the Meridian Apartments in the Fifth by Northwest neighborhood of Columbus, then owned by Connor Group. While living there, he commented online about what he saw as conditions that fell short of the “luxury” described in marketing materials.

He moved out the complex but continued blogging about Connor Group.

Connor Group said Raney’s claims were false and harmful to the company, while Raney and his attorney argued that the online postings were constitutionally-protected opinion.

As in this case, the most difficult questions are often: 1) Were the negative statements presented as fact or opinion? and 2) Did the statements result in actual damages to the business?  

If your business has been adversely affected by negative online reviews, please contact our firm to discuss the best course of action. 

Ohio Real Estate Tax Exemptions For Charitable Uses

Article XII Sec. 2 of the Ohio Constitution permits the enactment of general laws exempting from taxation public school houses, houses used exclusively for public worship, institutions used exclusively for charitable purposes, and public property used exclusively for any public purpose. Pursuant to this authority the Ohio Legislature enacted Ohio Revised Code (the "ORC") §5709, "Taxable Property -- Exemptions."

The exemption for charitable uses is found in ORC §5709.12 and §5709.112. To be exempted from taxation under ORC §5709.12, the property must (1) belong to an institution and (2) be used exclusively for charitable purposes. True Christianity Evangelism v. Zaino, 91 Ohio St.3d 117, 118, 2001-Ohio-295, 742 N.E.2d 638, 639 (2001) Black's Law Dictionary (6 Ed.1990) 800, defines “institution” as: “An establishment, especially one of eleemosynary or public character or one affecting a community. An established or organized society or corporation. It may be private in its character, designed for profit to those composing the organization, or public and charitable in its purposes, or educational (e.g. college or university)." Any institution, irrespective of its charitable or non-charitable character, may take advantage of a tax exemption if it is making exclusive charitable use of its property. Wehrle Foundation v. Evatt (1943), 141 Ohio St. 467,[26 O.O. 29], 49 N.E.2d 52.

Statutes granting tax exemptions are interpreted strictly (Cincinnati Community Kollel v. Testa, 135 Ohio St.3d 219, 2013-Ohio-396, 985 N.E.2d 1236, ¶ 17.), so it is critical to ensure that the charitable use is both exclusive and charitable. If any part of the property is used for the purpose of profit making, that part of the property will be denied the exemption. Exemptions can be split if there is both an exempt and non-exempt use, and such splits will usually be made on a pro-rata basis based on the square footage or acreage used.

Sometimes the charitable use being made of the property is being made by an institution other than the title holder. This might be the case if a tenant is making an exempt use. Ohio Revised Code §5709.12(B) states that “[r]eal and tangible personal property belonging to institutions that is used exclusively for charitable purposes shall be exempt from taxation.” The words "property belonging to institutions" means ownership. Humphries v. Little Sisters of the Poor, 29 Ohio St. 201, 207 (1876). Possessing a leasehold interest, even under a long-term lease, is not ownership. See, e.g., Toledo v. Jenkins, 143 Ohio St. 141, 158–159, 54 N.E.2d 656 (1944); Evans Invest. Co. v. Limbach, 51 Ohio App.3d 104, 106, 554 N.E.2d 941 (10th Dist.1988). However, separating ownership and use is not be fatal to the exemption if the situation fits under ORC §5709.112. There, in certain cases exemptions can be granted for the use tenants make of the property if the property belongs to a charitable institution.

Reminder: The information presented is for informational purposes only and is not intended to be legal advice, and it should not be acted upon as such. It also does not constitute advertising or solicitation.