Bill would aid non-profits with back taxes

LISBON – State Rep. Nick Barborak is working on legislation to help government agencies and non-profit organizations that owe back taxes, and the county Port Authority could be one of the beneficiaries.

Barborak spoke of his proposed bill when meeting last week with Columbiana County commissioners, telling them it was designed to help groups eligible for exemption from property taxes. This group includes government agencies and non-profit organizations, such as churches, charities and service clubs.

Although these groups are eligible for the property-tax exemption, they must apply to prove they qualify. Barborak said these groups may already have an exemption but then fail to seek an exemption for any new property they acquire, while other groups/government agencies simply forget or neglect to apply.

When these groups eventually do file for an exemption, they must first put up what they owe in back taxes, which is held in abeyance, while the Ohio Department of Taxation considers the application. Once the exemption is granted, the money is refunded in its entirety to the applicant.

Barborak said having to provide the up-front money while waiting to get an exemption approved is often a financial hardship for some of the groups, especially small churches, non-profits and service clubs.

For example, when West Township trustees built a new township hall they neglected to get an exemption and then had to put up the money while awaiting state approval. Barborak said the same thing happened to a local church.

The bill he is working on would eliminate the requirement these groups that owe back taxes provide up-front money before receiving the exemption. The bill would retain the provision in the law limiting retroactive waivers to three years.

“If you neglected it for more than three years, too bad,” Barborak said.

His proposed bill would also transfer approval authority for exemptions from the state, where it can often take two to three years because of the backlog of cases, to the county board of revision, which consists of the county auditor, treasurer and a commissioner.

Barborak believes this would speed up the approval process significantly if each county could handle its own exemptions.

During Barborak’s meeting with commissioners, Commissioner Mike Halleck noted the Port Authority was delinquent on its property taxes and had yet to seek an exemption, instead letting the debt accumulate.

“For the life of me I don’t know why they don’t address this. It’s $700,000-plus in back taxes ($706,992, to be exact), said Halleck, who served on the Port Authority board from 2006-2010. He said the delinquency predated his time on the board.

Barborak was aware of the Port Authority’s delinquency problem and had encouraged them to seek an exemption while he served as county treasurer before being elected state representative last year.

“At the end of the day, if a property is entitled to an exemption, fine. If not, they should pay their taxes,” he said. The Port Authority’s debt dates back at least to 2008 and involves 88 properties.

For most of the previous decade Port Authority finances were stretched thin because of underperforming and failed projects, but the organization’s economic fortunes have turned around in recent years because of the oil and natural gas boom underway in the region.

Port Authority attorney Tim Brookes was contacted, and he said they are preparing to deal with the issue this year. “We are in the process of applying for an exemption for these properties over the next several months,” he said.

“This has become quite an issue” with school districts, which get 70 percent of property taxes, Halleck said. “They’re kind of barking about when is someone going to do something.”

Even though the Port Authority is a government agency, Commissioner Tim Weigle questioned whether the organization would qualify for the tax exemption since its various projects and leases generate revenue.