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Header of tax return form.
By: Jeffrey K. Lewis, Esq., Friday, June 14th, 2024

Income Tax Schools at The Ohio State University is excited to announce our dates and locations for our two-day, in-person tax schools, our 4-part webinar, introduction to tax preparation course, ethics webinar, and ag tax issues webinar. 

Our two-day, in-person tax schools and 4-part webinar will cover the following topics: 

  • Trusts and Estates
  • Related Party Issues
  • Limited Liability Company Issues 
  • Business Entity Tax Issues 
  • IRS Issues 
  • Agricultural and Natural Resource Tax Issues
  • Business Tax Issues
  • Rental Activities 
  • Individual Tax Issues 
  • New and Expiring Legislation
  • International Tax Issues 
  • Rulings and Cases

Our Agricultural Tax focused webinar will focus on: 

  • Business Entity Tax Issues: Split Interest Purchases, Partnership Issues
  • Disaster Tax Issues: Casualty Gains, Losses, Deferral, Demolition, Land Clearing, Etc. 
  • Expensing and Depreciation, with a Deep Dive on Section 179
  • Retirement Issues: Self-employment Tax/Social Security Issues,Review of Self-employment Tax Connection to Social Security, and Retirement Plan Options for Farmers. 
  • Lease v. Purchase, Capital Leases on the Farm
  • Tax Planning for Lean Years
  • Conservation Issues
  • Selling and Trading Property

Make sure to mark your calendars! A list of dates and locations can be found below: 

2024 Tax Schools Save the Date Graphic

Registration is not yet open! We hope to launch registration for the fall tax schools in early July. You can keep up to date with all the latest tax school information by visiting: go.osu.edu/taxschools

Registration for our summer course "An Overview of Small Businessses" is OPEN. You can find more information and register for the summer tax school by following: go.osu.edu/summertaxschool

If you have any questions, please do not hesitate to contact Barry Ward (ward.8@osu.edu) or Jeff Lewis (lewis.1459@osu.edu). We look forward to seeing you! 

Tax guide for small businesses.
By: Jeffrey K. Lewis, Esq., Friday, June 07th, 2024

Summer Tax School 2024
Income Tax Schools at The Ohio State University Announces A Summer Tax School "Overview of Small Businesses”
Barry Ward & Jeff Lewis, OSU Income Tax Schools

An Overview of Small Businesses is the focus of the upcoming Summer Tax School Webinar featured by Income Tax Schools at The Ohio State University. Long-time instructor, John Lawrence, will be the primary instructor for this webinar.

This webinar is scheduled for July 31st and registration is now open. The registration page can be accessed at: go.osu.edu/summertaxschool

This Summer Tax School is designed to help tax professionals learn about tax issues related to:

  • Selection and formation of a business entity
  • Operation of the business entity
  • Business entity transition and estate planning issues
  • Relevant updates on federal tax law issues 

By the end of this course, participants will have a thorough understanding of how to navigate the complex tax landscape, make informed decisions that optimize tax outcomes, and ensure the long-term success and sustainability of their businesses.

Webinar Agenda for July 31st:

9:00 Webinar room opens

9:20 Welcome and introductions

9:30 Session 1: Selection and Formation of the Business Entity: Tax Laws, Regulations, and Implications. 

10:50 Break

11:00 Session 2: Business Entity Operation: Tax Planning for the Present. 

Noon Lunch break

12:45 Session 3: Business Entity Transition and Estate Planning: Tax Planning for the Future. 

1:45 Break

1:55 Session 4: Update on State and Federal Tax Law Rules and Regulations for Small Businesses. 

2:50 Webinar concludes

Continuing Educations Credit Hours: 5
Continuing Legal Education Hours: 4

Registration cost is $200 and includes 5 hours of Continuing Education (CPE) and 4 hours of Continuing Legal Education (CLE).  Registration information and the online registration portal can be found online at: go.osu.edu/summertaxschool

Participants may contact Barry Ward at 614-688-3959, ward.8@osu.edu or Jeff Lewis at 614-292-2433, lewis.1459@osu.edu for more information.

2024 Summer Tax School informational flyer.

Department of Labor Website
By: Jeffrey K. Lewis, Esq., Friday, May 31st, 2024

With Memorial Day behind us, the unofficial start of summer is here, and we are back to bring you another edition of the Ag Law Harvest. In this Harvest we discuss OSHA’s proposed workplace heat hazard standards, DOL’s new H-2A Farmworker rule, an interesting income tax credit in Colorado, and a proposal to limit Ohio property tax increases. 

OSHA Advances Proposed Rule to Mitigate Workplace Heat Hazards.  
The U.S. Department of Labor's Occupational Safety and Health Administration (“OSHA”) announced that it is advancing a proposed rule to mitigate workplace heat hazards, following unanimous approval from an advisory committee. The rule aims to protect workers from heat-related illnesses and fatalities, particularly in agriculture. While OSHA works to finalize the proposed rule, OSHA “continues to direct significant existing outreach and enforcement resources to educate employers and workers and hold businesses accountable for violations of the Occupational Safety and Health Act’s general duty clause, 29 U.S.C. § 654(a)(1) and other applicable regulations.” Assistant Secretary for Occupational Safety and Health Doug Parker explained that as OSHA moves through the regulatory process, “OSHA will use all of its existing tools to hold employers responsible when they fail to protect workers from known hazards such as heat. . .” Since 2022, OSHA's National Emphasis Program has conducted nearly 5,000 inspections to proactively address heat-related hazards in workplaces with high heat exposure. The agency prioritizes inspections in agricultural industries employing temporary H-2A workers, who face unique vulnerabilities. Employers are reminded that they are legally required to protect workers from heat exposure by providing cool water, breaks, shade, and acclimatization periods for new or returning workers. Training for both workers and managers on heat illness prevention is also essential.

Department of Labor Finalizes and Publishes Rule Enhancing Protections for H-2A Farmworkers. 
The U.S. Department of Labor (“DOL”) announced a final rule to strengthen protections for H-2A farmworkers. The new rule titled “Improving Protections for Workers in Temporary Agricultural Employment in the United States” includes the following provisions: 

  • Adding new protections for worker self-advocacy: The final rule enhances worker advocacy by expanding anti-retaliation protections and allowing self-organization and concerted activities. Workers can decline attending employer-led meetings that discourage union participation. The rule permits workers to consult legal and other key service providers and meet them in employer-furnished housing. Additionally, workers can invite guests, including labor organizations, to their employer-provided housing.
  • Clarifying “for cause” termination: The final rule clarifies that a worker is not “terminated for cause” unless the worker is terminated for failure to comply with an employer’s policies or fails to adequately perform job duties in accordance with reasonable expectations based on criteria listed in the job offer. Additionally, the rule identifies five conditions that must be met in order to ensure that disciplinary and/or termination processes are justified and reasonable: These five conditions are: (1) the worker has been informed, in a language understood by the worker, of the policy, rule, or performance expectation; (2) compliance with the policy, rule, or performance expectation is within the worker’s control; (3) the policy, rule, or performance expectation is reasonable and applied consistently to H-2A workers and workers in corresponding employment; (4) the employer undertakes a fair and objective investigation into the job performance or misconduct; and (5) the employer corrects the worker’s performance or behavior using progressive discipline. 
  • Seat Belts: Any employer provided transportation must have seat belts if the vehicle was manufactured with seat belts. All passengers and the driver must be wearing seat belts before the vehicle can be driven. 
  • Ensuring timely wage changes for H-2A workers:  The final rule establishes that the effective date of updated adverse effect wage rates is the date of publication in the Federal Register. 
  • Passport Withholding: The final rule prohibits an employer from holding or confiscating a worker’s passport, visa, or other immigration or government identification documents. An employer may, however, hold a worker’s passport for safekeeping only if: (1) the worker voluntarily requests that the employer keep the documents safe; (2) the employer returns the documents to the worker immediately upon their request; (3) the employer did not direct the worker to submit the request; and (4) the worker states, in writing, that the three conditions listed above have been met. 

The final rule is effective on June 28, 2024. However, the DOL has made it clear that H-2A applications filed before August 28, 2024, will be subject to the current applicable federal regulations. Applications submitted on or after August 29, 2024, will be subject to the new rule. For more information, visit the DOL’s “H-2A Employer’s Guide to the Final Rule ‘Improving Protections for Workers in Temporary Agricultural Employment in the United States.’

Colorado Establishes State Income Tax Credit for Qualified Agricultural Stewardship Practices. 
Beginning in 2026 Colorado farmers and ranchers will be able to qualify for an income tax credit for actively engaging in conversation stewardship practices. The newly enacted legislation creates three different tiers of income tax credits. 

  • Tier 1: A state income tax credit equal to at least $5 and no more than $75 per acre of land covered by one qualified stewardship practice, up to a maximum of $150,000 per tax year. 
  • Tier 2: A state income tax credit equal to at least $10 and no more than $100 per acre of land covered by two qualified stewardship practices, up to a maximum of $200,000 per tax year.
  • Tier 3: A state income tax credit equal to at least $15 and no more than $150 per acre of land covered by at least three qualified stewardship practices, up to a maximum of $300,000 per tax year. 

However, only $3 million worth of tax credits can be issued in one tax year. Any claims for the tax credit beyond the $3 million dollars are placed on a waitlist in the order submitted and a certificate will be issued for use of the agricultural stewardship credit in the next income tax year. No more than $2 million in claims shall be placed on the waitlist in any given calendar year. Additionally, only one tax credit certificate may be issued per qualified taxpayer in a calendar year, and the taxpayer can only claim the credit for up to three income tax years. 

Ohio House of Representatives Proposes Joint Resolution to Limit Property Tax Increases for Ohio Property Owners. 
The Ohio House of Representatives have proposed to enact a new section in Article I of Ohio’s Constitution. Section 23 would limit property tax increases on Ohioans. Under the proposed change, the amount of real property taxes levied on a parcel of property cannot exceed the amount of tax levied on that parcel in the preceding year plus the rate of inflation or four percent, whichever is lower. There are some exceptions that allow a one-time increase in property tax liability in excess of the four percent limit. The exceptions include: (1) when a parcel is divided; (2) the expiration of a tax exemption, abatement, or credit that applied to the parcel in the preceding year; or (3) when a building is completed or significantly improved and is added to the tax list on the parcel. We will continue to closely monitor how the proposed resolution fares in committee and beyond. If the resolution passes both chambers of the Ohio Legislature, the proposed change would be voted on in the November 5, 2024, election.  

Ohio Statehouse with daffodils in foreground
By: Ellen Essman, Tuesday, April 16th, 2024

The Ohio General Assembly is back in Columbus after the March 19th primary election, and committee schedules are already filling up. Given the increased activity in recent weeks, we thought it was a good time to examine what has happened legislatively this year up until this point.

H.B. 64—Eminent Domain. This bill was first introduced by Representatives Kick (R-Loudonville) and Creech (R-West Alexandria) in February of 2023. The bill’s purpose is to make it more difficult for governmental agencies or private entities to take private property through eminent domain. On February 6, 2024, the bill was updated with a Substitute House Bill 64 in the House Civil Justice Committee.

The previous version of the bill excluded recreational trails from the definition of “public use,” meaning that property could not be taken by a government agency for recreational trails. The current version of the bill narrows this language, allowing for a taking for the purpose of creating recreational trails, but not in cases where the property is not adjacent to a public road and where the property’s primary use will be for a recreational trail.

Another substantial change between the versions involves compensation offers from the government entity to the landowner. In the original version of the bill, a government entity would not have been allowed to reduce an offer made to purchase property before proceedings commenced if the reduction was based on hard-to-discover issues with the property. The current version would exclude this provision, restoring an agency’s authority to reduce offers.

Substitute House Bill 64 would also make changes to compensation and awards landowners could receive if the issue goes to court.

H.B. 197—Solar Development. Sponsored by Representatives Hoops (R-Napoleon) and Ray (R-Wadsworth), H.B. 197 would establish a the community solar pilot program and the solar development program. Under the language of the bill, a “community solar facility” is defined as a single facility with at least three subscribers and a nameplate capacity of 10 megawatts or less, or 20 megawatts or less if on a distressed site. Furthermore, the bill would require The Public Utilities Commission of Ohio (PUCO) to establish a Community Solar Pilot Program of 250 megawatts on sites in the Appalachian region of the state. The bill would also amend the state competitive retail electric service policy to encourage community solar facilities in the state and allow subscribers to community solar facilities to receive monthly electric bill offsets.

H.B. 324—Motor Fuel. Introduced by Representatives McClain (R-Upper Sandusky) and Klopfenstein (R-Haviland) in November of 2023, H.B. 324 passed the House on February 7, 2024 and was referred to the Senate Ways and Means Committee on February 27. 

If passed, the bill would authorize a temporary, nonrefundable income or CAT tax credit of 5 cents per gallon for retail dealers who sell high-ethanol blend motor fuel containing between 15-85% ethanol. The tax credit would be limited to five years or to a total of $10 million, whichever occurs first.

H.B. 327—Employee Verification. H.B. 327, introduced by Representatives Wiggam (R-Wayne County), and Swearingen (R-Huron), had its first committee hearing in House Commerce & Labor on February 13, 2024. The bill would require political subdivisions, private employers employing 75 individuals within the state of Ohio, and nonresidential construction contractors to verify each new employee’s work eligibility through the federal E-verify program. E-Verify is an online program that helps employers verify employees’ eligibility for employment. If the bill were to pass, the employer would be required to keep a record of the verification for the duration of the employee’s employment, or three years, whichever is longer. During testimony on the bill, Representatives Wiggam and Swearingen indicated an interest in possibly lowering the employee threshold, citing Florida’s 25 employee threshold.

H.B. 347—Farming Equipment Taxes. This bill was introduced by Representative Don Jones (R-Freeport) and referred to the House Ways and Means Committee in early December of 2023. Since then, the bill has been heard in committee twice, once in January, and once in February, both times without testimony. The bill would change the way farmers claim a tax exemption on certain purchases.

Currently, when an Ohioan engaged in farming, agriculture, horticulture, or floriculture is buying a product for “agricultural use,” they must provide the seller with an exemption certificate. This certificate comes from the Ohio Department of Taxation and relieves the seller of the obligation to collect the sales tax on behalf of the state. However, the Department of Taxation can later determine that the purchase does not qualify for exemption, and then the farmer would be expected to pay the tax.

H.B. 347 would slightly alter this current way of doing things when it comes to the purchase of certain vehicles and trailers. Under the bill, the purchaser could receive an agricultural use exemption for taxes on these vehicles if the purchaser shows the seller copies of the purchaser’s Schedule F—the federal income tax profit of loss from farming form—for three most recent preceding years. Alternatively, a farmer could obtain a certificate from the Department of Taxation verifying that they have filed a Schedule F for three years in lieu of providing the forms directly to the seller. Notably, the bill states that “no other documentation or explanation shall be required by the vendor or the tax commissioner” to prove that the purchase qualifies for the agricultural use exemption.

The following vehicles and trailers would be included under the bill:

  • Trailers, excluding watercraft trailers;
  • Utility vehicles, (vehicles with a bed, principally for the purpose of transporting material or cargo in connection with construction, agricultural, forestry, grounds maintenance, land and garden, materials handling, or similar activities);
  • All-purpose vehicles, (vehicles designed primarily for cross-country travel on land and water, or on multiple types of terrain, but excluding golf carts);
  • Compact tractors (garden tractors, small utility tractors, and riding mowers).

H.B. 364—Seed Labeling; Noxious Weeds. Sponsored by Representatives Dobos (R-Columbus), and Klopfenstein (R-Haviland), H.B. 364 had its first hearing in the House Agriculture Committee on February 6, 2024.  Specifically, the bill would allow the Ohio Prairie Association and other noncommercial entities sharing seeds to distribute milkweed seeds non-commercially to i members, with the intent of promoting habitats for pollinators like monarch butterflies.

The bill would legally define “non-commercial seed sharing” as the distribution or transfer of ownership of seeds with no compensation or remuneration. Also included in the definition are a list of situations that are not considered “non-commercial seed sharing,” including when:

  • The seeds are given as compensation of work or services rendered;
  • The seeds are collected outside of Ohio;
  • The seeds are patented, treated, or contain noxious weed species or invasive plants.

H.B. 364 also includes a definition of “seed library,” which it defines as a non-profit, governmental, or cooperative organization or association to which both of the following apply:

  • It is established for the purpose of facilitating the donation, exchange, preservation, and dissemination of seeds among the seed library’s members or the general public.
  • The use, exchange, transfer, or possession of seeds acquired by or from the non-profit governmental, or cooperative organization or association are obtained free of charge.

The bill would further exempt non-commercial seed sharers and seed libraries from labeling, advertising, handling, and sales restrictions under Ohio law.

To further the goal of promoting pollinators and habitats, H.B. 364 would make changes to the requirements for maintaining toll roads, railroads, or electric railways. Current law requires managers of such thoroughfares to destroy a number of noxious weeds along the roadway or in right of ways. The bill would no longer require the destruction of Russian thistle, Canadian thistle, common thistle, wild lettuce, wild mustard, wild parsnip, ragweed, milkweed, or ironweed. 

H.B. 447—Property Tax. Introduced on March 12, 2024 by Representative Loychik (R-Cortland), H.B. 447 was referred to the House Ways & Means Committee on April 2, 2024. The bill would modify and expand property tax homestead exemptions, gradually reduce school districts’ 20-mill floor for tax levies and modify the formula for determining farmland’s current agricultural use value (CAUV). The change to CAUV would involve the calculation of the overall capitalization rate for agricultural land.  Current law does not establish a minimum rate, but the bill would do so by stating that overall capitalization rate plus additur shall not be less than 10 percent.  Since a higher capitalization rate results in a lower CAUV value and because the current capitalization rate is around 8%, the change would likely lower CAUV values.

S.B. 156—Scenic Rivers. This bill, sponsored by Senators Reineke (R-Tiffin) and Hackett (R-London) passed the Ohio Senate on January 24, 2024, and was referred in the House to the Energy and Natural Resources Committee on February 6, 2024. The bill would transfer the Wild, Scenic, and Recreational Rivers Program from the Division of Parks and Watercraft to the Division of Natural Areas and Preserves (DNAP) in ODNR. The bill would narrow the scope DNAP’s authority to watercourses designated as wild, scenic, and recreational rivers. Currently, the law is written so that the regulatory agency has authority over areas. “Areas” encompass not just the water, but also the land surrounding rivers. On the other hand, “watercourses” are defined as “substantially natural channel[s] that [are] at least five miles in length with recognized banks and a bottom in which the flow or water occurs.” Thus, agency oversight would be diminished from the river and its surrounding area to just confines of the river itself.

The bill also clarifies that a watercourse designation does not affect private property rights adjacent to a designated river.

Finally, the bill would require DNAP to adopt rules for the use, visitation, and protection of scenic river lands and provide for the establishment of facilities and improvements that are necessary for their visitation, use, restoration, and protection, but do not impair their natural character.

S.B. 226—Agricultural Land. S.B. 226 was introduced by Senator Terry Johnson (R-McDermott) in late February and referred to the Veterans & Public Safety Committee on February 27, 2024. The bill would create the Ohio Property Protection Act, which would include protection of:

  • Agricultural land, defined as “land suitable for use in agriculture,” including the water on the land, airspace above the land, and natural products and products from the land;
  • Any land located within a twenty-five-mile radius of any installation under the jurisdiction of the United States Armed Forces;
  • Any land located within a twenty-five radius of a critical infrastructure facility.

To protect property in the above categories, the bill would make it illegal for the following people and entities to acquire or purchase such property:

  • Those persons and foreign adversaries listed on a registry compiled by the Ohio Secretary of State;
  • A government of a foreign adversary;
  • An individual who is a citizen of a foreign adversary;
  • A business that is headquartered in a foreign adversary;
  • A business that is directly or indirectly owned or controlled by one or more of the above persons and entities; and
  • An agent, fiduciary, or trustee of the above persons and entities.
By: Barry Ward, Wednesday, February 07th, 2024

Barry Ward, Leader, Production Business Management

Large increases in the Current Ag Use Value (CAUV) of farmland throughout Ohio in 2023 has resulted in higher property taxes (some have seen significant increases) for farmland owners in 2024. Forty-one of Ohio’s eighty-eight counties will see property tax increases in 2024 due to higher CAUV. Several factors have led to this increase in ag use valuation.

The Current Agricultural Use Value (CAUV) Program is a differential real estate tax assessment program for owners of farmland. The program allows for the farmland parcels to be taxed according to their use value in agriculture (or their value related to income from agriculture) rather than the market value (defined as the value if the land were sold by a willing seller to a non-related willing buyer). To arrive at this “use value”, a formula is used that includes several variables to capitalize the net income from agricultural products.

Landowners with farmland and woodlands in Ohio are eligible to sign-up for the CAUV program through their county auditor’s office if they meet the requirements.

There are two paths for a parcel to qualify for the Current Agricultural Use Valuation (CAUV) Program. To qualify for CAUV, land must meet one of the following requirements during the three years preceding an application.

•             Ten or more acres must be devoted exclusively to commercial agricultural use; or

•             If under ten acres are devoted exclusively to commercial agricultural use, the farm must produce an average yearly gross income of at least $2,500.

Each of the approximately 3500 different soil types in Ohio is assigned a CAUV value each tax year. The value represents the expected net present value of an acre of land devoted solely to agricultural production for the dominant field crops in Ohio. To determine this value, an average of yields and prices for corn, soybeans, and wheat is used to determine gross income. Non-land costs are then subtracted from gross income for a measure of net income. Finally, this net income is divided by a capitalization rate based upon recent values of farm interest and equity rates.

Large increases in the Current Ag Use Value (CAUV) of farmland in Ohio in 2023 has resulted in higher property taxes (some have seen significant increases) for farmland owners in 2024. Counties are subject to an update in CAUV every 3 years so only a portion (41 of the 88 Ohio counties) have been updated in 2023 that have impacted 2024 property taxes. As counties see updated values only every three years, there is the opportunity for large changes as many farmland owners will see this year.

Several factors have led to much of this increase in ag use valuation. Higher crop market prices and increased crop yields included in the formula have been significant drivers in the higher current ag use values. Price increases have been substantial as compared to the prices used in the 2020 calculations.

Corn price increased 16%, soybean price increased 12% and wheat price increased 7.4%. Yields used to determine values for each soil type increased 7.3% for corn, 5.4% for soybeans and 7.2% for wheat as compared to the yields used for the 2020 calculations. These are substantial increases in both prices and yields in an historical context.

Low interest rates (capitalization rate) have also contributed to the increasing current ag use values as recent higher interest rates aren’t yet fully represented in the formula. The capitalization rate used in the formula in 2023 CAUV calculations was 8.0% as compared to the rate of 7.9% used in 2020, the last time these counties saw an update in CAUV. Recent higher interest rates will increase the capitalization rate (denominator in the CAUV calculation) in future years which will likely help to moderate current ag use values.

For a detailed look at the variables and calculations that are used to determine CAUV for farmland, access the Ohio Department of Taxation online publication “2023 Current Agricultural Use Value of Land Tables Explanation of the Calculation of Values for Tax Year 2023”.

The Ohio Department of Taxation annually publishes this explanation of the CAUV valuation method complete with the measures used to calculate CAUV and examples of the calculations for certain soil units for the present year. This year’s document is titled “2023 Current Agricultural Use Value of Land Tables Explanation of the Calculation of Values for Tax Year 2023” and is available online at:

https://tax.ohio.gov/government/real-state/cauv

 

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Ohio capitol lit with red and green lights and a lampost wrapped in garland
By: Peggy Kirk Hall, Thursday, December 21st, 2023

Written by Ellen Essman, J.D., OSU CFAES Government Relations

Just like there won’t be snow flurries on Christmas this year, there was not a flurry of activity at the Statehouse over the last few months. That being said, we will be carefully following several ag-related bills that progressed in committees but have not yet been passed by the full body, as the calendar turns to 2024. Here’s a summary of the bills we’re watching. 

H.B. 162—Agriculture Designations. H.B. 162 was introduced by Representatives Roy Klopfenstein (R-Haviland) and Darrell Kick (R-Loudonville) on May 5, 2023, and was passed by the House in October, and had its first hearing in the Senate Agriculture and Natural Resources Committee on December 5. The bill would designate the following days and weeks to honor Ohio Agriculture:

  • March 21 of each year as “Agriculture day;”
  • The week beginning on the Saturday before the last Saturday of each February through the last Saturday in February as “FFA Week;”
  • October 12 of each year as “Farmer’s Day;” and
  • The week ending with the second Saturday of March as “4-H Week.”

H.B. 347—Farming Equipment Taxes. This bill was introduced by Representative Don Jones (R-Freeport) and referred to the House Ways and Means Committee in early December.  The bill would change the way farmers claim a tax exemption on certain purchases. 

Currently, when an Ohioan engaged in farming, agriculture, horticulture, or floriculture is buying a product for “agricultural use,” they must provide the seller with an exemption certificate. This certificate comes from the Ohio Department of Taxation and relieves the seller of the obligation to collect the sales tax on behalf of the state.  However, the Department of Taxation can later determine that the purchase does not qualify for exemption, and then the farmer would be expected to pay the tax. 

H.B. 347 would slightly alter this current way of doing things when it comes to the purchase of certain vehicles and trailers.  Under the bill, the purchaser could receive an agricultural use exemption for taxes on these vehicles if the purchaser shows the seller copies of the purchaser’s Schedule F—the federal income tax profit of loss from farming form—for three most recent preceding years. Alternatively, a farmer could obtain a certificate from the Department of Taxation verifying that they have filed a Schedule F for three years in lieu of providing the forms directly to the seller.  Notably, the bill states that “no other documentation or explanation shall be required by the vendor or the tax commissioner” to prove that the purchase qualifies for the agricultural use exemption.

The following vehicles and trailers would be included under the bill:

  • Trailers, excluding watercraft trailers;
  • Utility vehicles, (vehicles with a bed, principally for the purpose of transporting material or cargo in connection with construction, agricultural, forestry, grounds maintenance, land and garden, materials handling, or similar activities);
  • All-purpose vehicles, (vehicles designed primarily for cross-country travel on land and water, or on multiple types of terrain, but excluding golf carts);
  • Compact tractors (garden tractors, small utility tractors, and riding mowers).

H.B. 364—Agriculture (seed sharing). House Bill 364 was introduced in the House by representatives Dave Dobos (R-Columbus) and Roy Klopfenstein (R-Haviland) on December 14.  The bill would allow the Ohio Prairie Association to distribute milkweed seeds non-commercially to its members, with the intent of promoting habitats for pollinators like monarch butterflies.

The bill would legally define “non-commercial seed sharing” as the distribution or transfer of ownership of seeds with no compensation or remuneration.  Also included in the definition are a list of situations that are not considered “non-commercial seed sharing,” including when:

  • The seeds are given as compensation of work or services rendered;
  • The seeds are collected outside of Ohio;
  • The seeds are patented, treated, or contain noxious weed species or invasive plants.

H.B. 364 also includes a definition of “seed library,” which it defines as a non-profit, governmental, or cooperative organization or association to which both of the following apply:

  • It is established for the purpose of facilitating the donation, exchange, preservation, and dissemination of seeds among the seed library’s members or the general public.
  • The use, exchange, transfer, or possession of seeds acquired by or from the non-profit governmental, or cooperative organization or association are obtained free of charge.

The bill would further exempt non-commercial seed sharing for the purposes of pollinator conservation, creating and conserving native habitats, and operation of a seed library from labeling, advertising, handling, and sales restrictions under Ohio law.

To further the goal of promoting pollinators and habitats, H.B. 364 would make changes to the requirements for maintaining toll roads, railroads, or electric railways. Current law requires managers of such thoroughfares to destroy a number of noxious weeds along the roadway or in right of ways. The bill would no longer require the destruction of Russian thistle, Canadian thistle, common thistle, wild lettuce, wild mustard, wild parsnip, ragweed, milkweed, or ironweed. 

Ohio statehouse and lawn
By: Peggy Kirk Hall, Friday, December 08th, 2023

Responding to concerns about potential increases in Ohio property taxes, the Senate passed House Bill 187 (HB 187) this week to provide some relief from property tax hikes.  That relief, however, affects only the Ohio homestead exemption.  The Senate removed provisions the House had passed in HB 187 offering relief on other property taxes, including Current Agricultural Use Valuation (CAUV) taxes.  The House and Senate differences mean the CAUV adjustments originally in HB 187 are currently at a standstill.

House Bill 187.  The House passed its version of HB 187 in October.  The House version included provisions that would temporarily adjust CAUV calculations until 2026.  When updating the CAUV value, a county auditor would be required to use an average of the CAUV formula value for the current year along with CAUV values that would have been assigned in each of the preceding two years, since the last update.  This three year averaging would lower the expected increase in the new CAUV value.  But the Senate drafted and passed a substitute of HB 187, and the substitute bill does not contain the CAUV language. The House and Senate must now confer on its differing versions of HB 187 to work out the differences.

Senate Bill 153.  The Senate isn’t completely ignoring the CAUV adjustments—they exist in another bill.  Senate Bill 153 (SB 153), introduced in the Senate back in September, contains the same CAUV language as HB 187.  The Senate Ways and Means Committee held four hearings on SB 153 in September and October.  But the committee has not taken any action on the bill since the last hearing on October 11.

What’s next for CAUV relief?  There are two avenues to enacting the CAUV three year averaging provisions that could bring some relief from CAUV increases.  First is for the Senate to reinsert the provisions in HB 187.  The second is for the Senate to pass SB 153 and send it over to the House for consideration.  From our view, it’s difficult to gauge if the House and Senate are on the same page for completing either route.

Follow HB 187on the legislature’s website at https://www.legislature.ohio.gov/legislation/135/hb187 and track SB 153 at https://www.legislature.ohio.gov/legislation/135/sb153.

Combine in a field.
By: Jeffrey K. Lewis, Esq., Friday, December 01st, 2023

Farmer and Farmland Owner Income Tax Webinar
Barry Ward & Jeff Lewis, OSU Income Tax Schools

Are you a farmer or farmland owner wanting to learn more about the recent tax law issues? If so, join us for this webinar on Friday, December 15th, 2023 from 10am to noon. This webinar is a part of our Farm Office Live Series and serves as our Farm Office Live! Webinar for December. To register for this webinar go to: https://go.osu.edu/register4fol

This webinar will focus on issues related to farmer and farmland owner income tax returns as well as the latest news on CAUV and property taxes in Ohio and the big changes to the Ohio Commercial Activity Tax (CAT). This two-hour program will be presented in a live webinar format via Zoom by OSU Extension Educators Barry Ward, David Marrison and Jeff Lewis along with Purdue faculty member Dr. Michael Langemeier. Individuals who operate farms, own property, or are involved with renting farmland should participate.

Topics to be discussed during this webinar include (subject to change based on tax law change):

  • Economic Outlook 

  • Depreciation Update 

  • Employee vs. Independent Contractor 

  • Corporate Transparency Act/Beneficial Owners Information Reporting

  • 1099-K Changes 

  • Charitable Remainder Trusts 

  • Basis Allocation Land Acquisition – Allocating Basis to Residual Fertility for Future Deductions 

  • Defining Farm Income to Avoid Paying Estimated Tax 

  • Keeping an Eye Forward on Estate/Gift Tax Limitation 

  • Reminder – Keeping an Eye on Tax Cuts and Jobs Act Provisions Sunsetting After 2025 Tax Year

  • Ohio Tax Update (CAUV/Property Tax Update, CAT Changes, Beginning Farmer Tax Credit, Ohio Tax Law Interpretation – Ohio Supreme Court Issues New Ruling)

  • Indiana Tax Update

To register: https://go.osu.edu/register4fol

For more information, contact Barry Ward at ward.8@osu.edu or Jeff Lewis at lewis.1459@osu.edu

Posted In: Tax
Tags: Farm Tax, Ag Tax, Income Tax
Comments: 0
Combine in the field.
By: Jeffrey K. Lewis, Esq., Friday, October 27th, 2023

Agricultural & Natural Resources Income Tax Issues Webinar
Barry Ward, Director, Income Tax Schools at The Ohio State University
Jeff Lewis, Income Tax Schools at The Ohio State University

Tax practitioners, farmers, and farmland owners are encouraged to connect to the Agricultural and Natural Resources Income Tax Issues Webinar (via Zoom) on December 13 from 8:45 a.m. to 3:20 p.m. The event is sponsored by Income Tax Schools at The Ohio State University.

The webinar focuses on issues specific to farm tax returns related to agriculture and natural resources and will highlight timely topics and new regulations.

The program is an intermediate-level course for tax preparers whose clients include farmers and rural landowners. Farmers who prepare and file their own taxes will also benefit from the webinar.

Tentative topics to be covered during the Ag Tax Issues webinar include:

  • Timely Tax Issues Facing Agricultural Producers
    • Employee vs Independent Contractor
    • Cost-Sharing Exclusion
    • Farm Trade or Business
    • Farming S Corporations
    • Timber Taxation
  • Legislative and Regulatory Update
  • Form 1099s Requirements for Farmers and Ranchers
  • Tax Schemes Targeting the Farm 
  • Tax Issues Arriving at the Death of a Farmer
  • Ohio Tax Update

Other chapters included in the workbook not included in the webinar includes: Material Participation Rules for Farmers, Ranchers and Landowners, Livestock Tax Issues, Depreciating and Expensing Farm Assets, Sale and Exchange of Farm Property, Sample Tax Return.

The cost for the one-day school is $180 if registered by November 29th. After November 29th, the registration increases to $230. Additionally, the course has been approved for the following continuing education credits:

•          Accountancy Board of Ohio, CPAs (6 hours)

•          Office of Professional Responsibility, IRS (6 hours)

•          Supreme Court of Ohio, Attorneys (5 hours)

Registration includes the Agricultural Tax Issues Workbook. Early registration (at least two weeks prior to the webinar) guarantees that you’ll receive a workbook prior to the webinar. 

The live webinar will also feature options for interaction and the ability to ask questions about the presented material.

More information on the workshop, including how to register, can be found at: https://farmoffice.osu.edu/tax/2023-ag-tax-issues-webinar

Contact Barry Ward at ward.8@osu.edu or Jeff Lewis at lewis.1459@osu.edu

The word "taxes" laid in grain.
By: Jeffrey K. Lewis, Esq., Friday, October 20th, 2023

Income Tax Schools 2023
OSU Extension Announces Two-Day Tax Schools for Tax Practitioners &
Agricultural & Natural Resources Income Tax Issues Webinar 
Barry Ward & Jeff Lewis, OSU Income Tax Schools

Tax provisions related to new legislation as well as issues related to trusts and estates, retirement, sales of business property, and income for both individuals and businesses are among the topics to be discussed during the upcoming Tax School workshop series offered throughout Ohio in October, November, and December.

The annual series is designed to help tax preparers learn about federal tax law changes and updates for this year as well as learn more about issues they may encounter when filing individual and small business 2023 tax returns.

The tax schools are intermediate-level courses that focus on interpreting tax regulations and changes in tax law to help tax preparers, accountants, financial planners and attorneys advise their clients. The schools offer continuing education credit for certified public accountants, enrolled agents, attorneys, annual filing season preparers and certified financial planners.

Our instructors are what make the difference in our program. Most have been teaching OSU tax schools for over 20 years and make themselves available long after the class to make sure attendees get through the tax filing season.

Attendees also receive a class workbook that alone is an extremely valuable reference as it offers over 600 pages of material including helpful tables and examples that will be valuable to practitioners. Summaries of the chapters in this year’s workbook can be viewed by visiting: 
2023 National Income Tax Workbook Topics

A sample chapter from a past workbook can be found at: 
https://taxworkbook.com/about-the-tax-workbook/

This year, OSU Income Tax Schools will offer both in-person schools and an online virtual school presented over the course of four afternoons.

In-person schools:
October 26-27, Ole Zim’s Wagon Shed, Gibsonburg/Fremont
October 30-31, Presidential Banquet Center, Kettering/Dayton
November 2-3, Old Barn Restaurant & Grill, Lima
November 7-8, Muskingum County Conference and Welcome Center, Zanesville
November 16-17, Hartville Kitchen, Hartville
November 20-21, Ashland University, John C. Meyers Convocation Center, Ashland
November 28-29, Nationwide & Ohio Farm Bureau 4-H Center, Columbus

Virtual On-Line School presented via Zoom:
December 1, 4, 6, & 8, 12:30 – 4:45 p.m.

Register two weeks prior to the school date and receive the two-day tax school early-bird registration fee of $425.  This includes all materials, lunches, and refreshments. The deadline to enroll is 10 business days prior to the date of each school. After the school deadline, the fee increases to $475. 

Additionally, the 2023 Checkpoint Federal Tax Handbook is available to purchase by participants for a discounted fee of $70 each. Registration information and the online registration portal can be found online at: https://go.osu.edu/tax2023

In addition to the tax schools, the program offers a separate, two-hour ethics webinar that will broadcast Monday, December 11th at 1 p.m. The webinar is $25 for school attendees and $50 for non-attendees and is approved by the IRS and the Ohio Accountancy Board for continuing education credit.

A webinar on Ag Tax Issues will be held Wednesday, December 13th from 8:45 a.m. to 3:20 p.m. If you are a tax practitioner that represents farmers or rural landowners or are a farmer or farmland owner that prepares your own taxes, this five-hour webinar is for you. It will focus on key topics and new legislation related specifically to those income tax returns.

Registration, which includes the Ag Tax Issues workbook, is $180 if registered at least two weeks prior to the webinar. After November 29, registration is $230. Register by visiting: https://go.osu.edu/tax2023.

NEW! Introduction to Tax Preparation Course. 
New this year, we are offering an introduction to tax preparation course. Our instructors are highly qualified tax professionals presenting a real-world approach to tax preparation. This course is designed for professionals with 0-5 years of experience and seeks to help build a foundation for which all tax professionals can continue to build off of. To read more about our introductory course and the topics covered visit, https://farmoffice.osu.edu/tax/new-introduction-tax-preparation-course.

The introductory course will be held on November 13th and 14th at the Der Dutchman in Bellville, Ohio. The course has been approved for continuing education credits by the IRS, the Ohio Accountancy Board, and the Ohio Supreme Court. Registration is $425 prior to October 30th. Registration fees increase to $475 beginning November 1st. Registration includes a 300+ page workbook created by our instructors to help you throughout the beginning of your career! 

Contact Barry Ward at 614-688-3959, ward.8@osu.edu or Jeff Lewis at 614-247-1720, lewis.1459@osu.edu for more information.

Posted In: Legal Education, Tax
Tags: tax, Tax Preparation, Tax Professional
Comments: 0

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