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Determining whether a farm purchase is exempt from Ohio sales tax can be confusing and, at times, frustrating. This blog post breaks down Ohio’s agricultural sales tax exemption by explaining what qualifies, what doesn’t, who can claim the exemption, and why the rules often seem unclear.
The Starting Point
In Ohio, the starting point in determining what qualifies for the agricultural sales tax exemption is simple: everything you buy at retail is taxable unless the law says otherwise. Ohio does have a special sales tax exemption for certain purchases connected to farming, but that exemption is limited. Just because something is commonly used on a farm does not automatically mean it qualifies for the agricultural sales tax exemption.
Put another way, Ohio’s agricultural sales tax exemption is narrow and fact specific. You cannot assume something is exempt simply because it is farm related. The question is usually the same: Is the item/property being purchased used primarily to produce an agricultural product that will be sold? If the answer is no, the exemption generally does not apply.
Overview of Ohio’s Agricultural Sales Tax Exemption
Both the Ohio Revised Code (ORC) and the Ohio Administrative Code (OAC) include provisions that exempt certain agricultural purchases from Ohio’s sales tax. The exemption most commonly relied on by farmers is found in R.C. § 5739.02(B)(17) and explained further in OAC 5703-9-23(B) and 5703-9-23(C).
Under those provisions, certain tangible personal property may qualify for Ohio’s agricultural sales tax exemption if it used in one of the following ways:
- Property used primarily in farming, agriculture, horticulture, or floriculture to produce products for sale.
- Property purchased for incorporation into tangible personal property produced for sale.
- Property used primarily in producing tangible personal property that will be used to produce products for sale.
- Property used primarily in conditioning or holding products produced for sale.
** For brevity, we refer to the four categories (farming, agriculture, horticulture, and floriculture) all under the terms “agriculture” or “agricultural.”
Some other more specialized code sections that provide a sales tax exemption to agricultural producers include:
- Materials for horticulture and livestock structures – R.C. 5739.02(B)(13) and R.C. 5739.02(B)(36)
- Agricultural land tile – R.C. 5739.02(B)(30)
- Grain Bins – R.C. 5739.02(B)(31)
- Preparation of eggs for sale – R.C. 5739.02(B)(24)
What Qualifies?
Beyond the language found directly in the statutes and regulations, it’s important to look at other legal guidance to understand how the sales tax exemption works in practice. Below are several key points about Ohio’s agricultural sales tax exemption that farmers should keep in mind when deciding whether a purchase qualifies.
- Farming, Agriculture, Horticulture, and Floriculture
Before claiming the agricultural sales tax exemption, a producer must determine whether their activity qualifies as “agriculture” under Ohio tax law. Ohio uses the following four definitions to determine what counts as agriculture for the purposes of the exemption:
Farming – occupation of tilling soil to produce crops as a business and includes raising livestock, bees, or poultry, if the purpose is to sell such livestock, bees, or poultry, or the products thereof as a business.
Agriculture – cultivation of the soil for the purpose or producing vegetables and fruits and includes gardening or horticulture, together with the raising and feeding of cattle or livestock for sale as a business.
Horticulture – the growing, cultivation, and production of flowers, fruits, herbs, vegetables, sod, mushrooms, and nursery stock for sale as a business and includes the operation of commercial vegetable greenhouses or nurseries.
Floriculture – the production of flowers and plants for sale as a business, either in the field or greenhouse.
- Primary Use
To qualify for Ohio’s agricultural sales tax exemption, an item must be used primarily in agricultural production. Problems often arise when farmers purchase items like all-terrain vehicles (ATVs) or other utility vehicles that serve multiple purposes on the farm.
Last year, the Supreme Court of Ohio issued a decision that helped clarify how courts should evaluate whether a purchase qualifies for the agricultural sales tax exemption. In Claugus Family Farm, L.P. v. Harris, the Court challenged some long-held assumptions about which types of purchases can qualify for the exemption.
In that case, a timber farm purchased a Mercedes-Benz Geländewagen and claimed the vehicle was used to transport people, chemicals, and equipment necessary to manage and maintain its forest. The Tax Commissioner and the Ohio Board of Tax Appeals (BTA) both concluded that the vehicle did not qualify the agricultural sales tax exemption. The Court, however, disagreed and ruled in favor of the taxpayer.
In Claugus, the tax commissioner argued that the timber farm had not shown that the Mercedes was used primarily for farming because the farm did not keep detailed use or mileage logs for the vehicle. In her opinion, the mere transportation of people and equipment to complete projects around the farm do not count as “primary use” under the tax exemption. The Court rejected that approach, explaining that the statute does not require taxpayers to maintain mileage or use logs. Instead, the Court held that the farm manager’s testimony, stating that approximately 95 percent of the vehicle’s use was related to farming activities, was sufficient to establish that the vehicle was primarily used for farming.
Key Takeaway: Use or mileage logs may be useful evidence when showing that an item is primarily used in agricultural production, but Ohio law does not require taxpayers to maintain written records to meet the primary-use standard.
- The Business Component
To claim Ohio’s agricultural sales tax exemption, it is not enough that an item is primarily used for an agricultural purpose. The purchaser of the item/property in question must also be engaged in the business of agriculture. Ohio law defines a “business” broadly as “any activity carried on with the goal of gain, benefit, or advantage, whether direct or indirect.” R.C. 5739.01(F).
The Supreme Court of Ohio also addressed this business-requirement in Claugus. One argument that the tax commissioner put forth to prove that the Claugus farm was not eligible for the agricultural sales tax exemption was that the farm was not an active business due to its lack of sales, income, and labor expenses. The Court rejected this argument and again ruled in favor of the taxpayer.
The Court made clear that a lack of profit does not prevent a taxpayer from being considered a business under Ohio law. While profits and sales can strengthen a taxpayer’s position, neither is required to meet the statutory definition of a business.
One practical way to support a claim that a taxpayer is engaged in an agricultural business is by filing Schedule F with a federal tax return. That said, Ohio courts and the ODT have also recognized that new and beginning farmers may still qualify for the exemption even if they have not yet filed a Schedule F, so long as they intend to do so in a subsequent year.
Key Takeaway: To qualify for Ohio’s agricultural sales tax exemption, a producer must be actively engaged in an agricultural business. Actual profits and sales are not required under Ohio law, but they can be strong evidence that the operation is a legitimate, profit-driven enterprise.
Common Examples of Items that Qualify under § 5739.02(B)(17)
- Property used Primarily in farming, agriculture, horticulture, or floriculture
- Row-crop and livestock production equipment: Tractors, planters, combines, sprayers, balers, milking equipment.
- ATVs and other utility vehicles: ATVs used to distribute seed or fertilizer, repair fences for livestock operations, or access timber plots for harvest planning may qualify – provided their primary use is farming, not recreation.
- Property Purchased for Incorporation into Tangible Personal Property Produced for Sale.
- Feed, seed, and livestock inputs: These products physically become part of the final agricultural product.
- Fertilizer, pesticides, and soil amendments: These products are incorporated into the production process and materially contribute to the resulting product.
- Packing incorporated in marketable products: Containers and packaging material that become part of the product sold (e.g., plant trays sold with nursery stock).
- Property Used Primarily in Producing Tangible Personal Property That will be Used to Produce Products for Sale.
- Equipment used to make production inputs: Examples include machinery used to prepare items such as feed mixes, compost, or bedding that will later be used in agricultural production can qualify.
- Other “intermediary agricultural production equipment”: We will discuss later how the Claugus decision significantly changed the analysis for this category. For now, it is enough to note that Ohio law no longer requires a qualifying item to be directly used on an agricultural product in order to qualify for the sales tax exemption.
- Property Used Primarily in Conditioning or Holding Products Produced for Sale
- Portable grain bins: Ohio law recognizes that portable grain bins used to store harvested grain prior to sale as a necessary step in bringing products to market.
- Cooling, washing, and sorting equipment: Equipment used to wash, cool, grade, or otherwise condition produce prior to sale qualifies when it preserves or prepares the product for market rather than processing it into a new product.
- Livestock handling and holding equipment: Chutes, pens, and temporary holding equipment used to manage livestock before sale may also qualify.
So Why All the Confusion?
- The Direct Connection.
For many years, Ohio law required that an item be used directly on an agricultural product produced for sale in order to qualify for the agricultural sales tax exemption. That is no longer the case.
The Supreme Court of Ohio’s decision in Claugus clearly explains why this “direct use” requirement no longer applies. In the Claugus case, the tax commissioner argued that the timber farm’s purchase of the Mercedes-Benz vehicle did not qualify for the exemption because the vehicle was not used directly on the timber itself. Instead, the vehicle was used to transport people, supplies, and equipment around the farm – what we will categorize as an “intermediate use.”
The Court rejected that argument. It noted that earlier versions of Ohio’s sales tax statute expressly required that property be used “directly” in agricultural production, but that the General Assembly deliberately removed that word when it amended the statute through House Bill 153 (effective Sept. 29, 2011). The Court explained that when the legislature removes specific language from a statue, that change reflects an intentional shift in meaning.
As a result, the Court held that property may qualify as being used in farming even if it is used to perform intermediate steps in the process of producing agricultural products for sale.
This decision marks a significant departure from past interpretations. Agricultural equipment no longer has to be used directly on crop or livestock to qualify for the sales tax exemption. Instead, equipment may qualify so long as its primary use is agricultural in nature, even if that use is an “intermediate use.”
- Other Statutory Schemes
Another common source of confusion for agricultural producers is that Ohio law does not use a single, consistent definition of agricultural equipment, farm machinery, or agriculture itself. Instead, different areas of Ohio law use different definitions, depending on the purpose of the statute.
For example, Ohio’s motor vehicle statutes define “farm machinery” very broadly. Under R.C. 4501.01(U), farm machinery includes “all machines and tools that are used in the production, harvesting, and care of farm products, and includes trailers that are used to transport agricultural produce or agricultural production materials between a local place of storage or supply and the farm, agricultural tractors, threshing machinery, hay-baling machinery, corn shellers, hammermills, and machinery used in the production of horticultural, agricultural, and vegetable products.”
This definition matters because Ohio law also provides that “farm machinery” is not a motor vehicle for purposes of Ohio’s motor vehicle laws. As a result, the license-plate requirement in R.C. 4503.21, which applies to motor vehicles, does not apply to farm machinery. In practical terms, equipment that qualifies as farm machinery may legally operate without a license plate under Ohio vehicle law.
This inconsistency adds to the confusion when producers try to determine whether an item qualifies for Ohio’s agricultural sales tax exemption. The sales tax exemption uses a far narrower and more use-specific analysis than Ohio’s motor vehicle laws. While motor vehicle statutes focus on road safety and traffic regulation, the sales tax exemption focuses on how property is used in agricultural production. Because the goals of these laws differ, the terms used in each statutory scheme also differ.
The Ag Sales Tax Equation
In conclusion, Ohio’s agricultural sales tax exemption is narrow, fact-specific, and heavily dependent on how an item is actually used.
To qualify a taxpayer must prove the following equation:
Business Component + Primary Use (or Intermediate Use) = Agricultural Sales Tax Exemption
Put simply, a purchase qualifies for the agricultural sales tax exemption when the buyer is engaged in an agricultural business and the item being purchased is primarily used in agricultural (or in an accepted intermediate step along the way).
As clarified by the Supreme Court of Ohio in Claugus, the exemption no longer requires that property be used directly on crop or livestock, but that the primary use must still be agricultural in nature. The Claugus decision can be found by following this link.
At the same time, producers must be mindful that Ohio law applies different definitions of “agriculture” depending on the legal context, and classifications that apply under one section of law do not automatically carry over to sales tax.
Understanding these distinctions can help producers avoid confusion, minimize audit risk, and correctly apply Ohio’s agricultural sales tax exemption.
Tags: Agricultural Sales Tax, Sales Tax Exemption, Ag Sales Tax Exemption, Ag Sales Tax
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Inheriting property is usually viewed as a financial windfall, but not every asset is a benefit. Some inherited assets come with liabilities, management burdens, or tax consequences that outweigh their value. When that happens, the law provides an option to refuse the inheritance through a process known as a disclaimer. However, disclaiming an asset is not as simple as turning it down. If done incorrectly, a disclaimer can trigger unintended tax consequences or fail altogether.
There are two primary reasons someone might choose to disclaim an inheritance. First, the asset may simply be undesirable. For example, a parcel of farmland may have poor productivity, environmental concerns, or potential liability that makes ownership more of a burden than a benefit. Second, disclaimers are often used as an estate planning tool. If a beneficiary already has significant wealth, accepting additional assets may increase the size of their taxable estate and result in higher estate taxes in the future. In such cases, disclaiming allows the asset to pass to the next beneficiary without increasing the disclaiming party’s estate.
Disclaiming an inheritance requires strict compliance with Ohio law. Under Ohio Revised Code Section 5815.36, a valid disclaimer must be in writing, signed, and irrevocable. It must identify the governing document, such as a will or trust, clearly describe the property being disclaimed, and state the intent to disclaim. In some cases, the disclaimer must also be filed with the probate court or recorded with the county recorder. A person may disclaim all or only a portion of an inheritance, but any partial disclaimer must precisely identify the portion being refused. Because these requirements are technical, a poorly drafted disclaimer can be invalid.
In addition to state law requirements, federal tax rules must also be followed. To avoid being treated as a taxable gift, a disclaimer must qualify under Internal Revenue Code Section 2518. One of the most important requirements is timing. The disclaimer must be completed and delivered to the appropriate party within nine months of the decedent’s death. If this deadline is met and the other requirements are satisfied, the IRS will treat the disclaimed asset as if it had never been transferred to the beneficiary. If the deadline is missed, the disclaimer may be treated as a gift to the next beneficiary, potentially creating gift tax consequences.
A common mistake that prevents a valid disclaimer is the acceptance of benefits from the inherited property. To disclaim an asset, the beneficiary must not receive or use any benefit from it. This includes something as simple as depositing a rent check from inherited farmland or receiving income generated by the asset. Once a benefit is accepted, the law generally treats the inheritance as accepted, and the opportunity to disclaim is lost. Because acceptance can occur unintentionally, it is important to identify early whether a disclaimer might be appropriate and avoid any interaction with the asset until that decision is made.
Another important consideration is that a disclaimer does not allow the beneficiary to control who ultimately receives the property. Instead, the law treats the disclaiming party as if they predeceased the person who created the inheritance. The asset then passes according to the terms of the will, trust, or applicable law. In some cases, this means the property will pass to the disclaiming party’s heirs, but in other situations it may pass under the residuary clause of the estate to a different beneficiary entirely. Because of this, it is essential to review the governing document to understand where the property will go before making a disclaimer.
Disclaimers become more complicated when the beneficiary is a minor or lacks legal capacity. A child cannot execute a disclaimer, so a parent or guardian must act on the child’s behalf, and court approval is required. The court must determine that the disclaimer is in the child’s best interest, which can be difficult to establish unless there are clear risks or liabilities associated with the asset. Timing is also a challenge, because court approval takes time but the nine-month federal deadline still applies. These situations require careful planning to ensure the disclaimer is both valid and effective.
The process for disclaiming also depends on the type of asset involved. For assets that pass through a will or trust, the disclaimer must be delivered to the executor, administrator, or trustee. For non-probate assets, such as accounts with a designated beneficiary, the disclaimer must be delivered to the financial institution or plan administrator holding the asset. Each type of asset has its own procedures, and failing to follow the correct process can invalidate the disclaimer.
Special caution is required when Medicaid eligibility is a concern. Medicaid is a needs-based program with strict asset limits, and it may seem logical to disclaim an inheritance to remain eligible for benefits. However, Medicaid rules generally treat a disclaimer as an improper transfer of assets. This can result in a penalty period during which the individual is ineligible for benefits, meaning Medicaid will not cover care costs during that time. As a result, disclaiming an inheritance is usually not an effective strategy for protecting assets from long term care expenses.
Disclaiming an inheritance can be a useful planning tool, but it requires careful attention to detail and timing. The legal and tax rules are strict, and even small missteps, such as missing a deadline or accepting a minor benefit, can eliminate the ability to disclaim. It is also critical to understand the consequences, particularly that the disclaiming party cannot direct where the asset will go. For these reasons, anyone considering a disclaimer should evaluate their options as soon as possible and work with an attorney to ensure the decision aligns with their overall estate and financial planning goals.
The OSU Agricultural & Resource Law Program is thrilled to host the Agri-Law Summit 2026 in partnership with the Ohio State Bar Association's Agricultural Law Committee. The day-long conference will be on May 21, 2026 at Retreat 21 Venue & Tap House near Marysville, Ohio.
Agriculture plays a major role in Ohio’s history and economy, and agricultural businesses have unique legal needs. The Agri-Law Summit brings attorneys together to focus on those legal needs. In addition to practical legal skills, we'll discuss new and pending legislation and court cases, as well as emerging legal issues for agriculture. The goal is to grow our competency in meeting the legal needs of agricultural clients, both now and as new needs arise in the future.
Because we also want to grow the next generation of agricultural attorneys, we're offering full scholarships for the conference to current and recently graduated law students, with support from the Paul L. Wright Endowment in Agricultural Law at Ohio State.
The Summit program features a variety of speakers. Here's our line up for the day:
Ohio Department of Agriculture Updates
- Robin McGuire Rose, Chief Legal Counsel, Ohio Department of Agriculture
Court Cases and Legislation We’re Watching
- OSBA Ag Law Committee and OSU Ag Law Team
Farm Financial Stress: Are We There Yet?
- Bruce Clevenger, Farm Management Specialist, OSU Extension
- Eli Earich, Attorney, Barrett, Easterday, Cunningham & Eselgroth
- John Essman, Assistant Vice President and Lender, Kingston National Bank
Hazards Ahead: Farm Tax and Labor Law Myths
- Jeff Lewis, Attorney, OSU Ag & Resource Law Program
Farm Estate Planning Strategies for Non-titled Assets and Long-term Care
- Evin Bachelor, Attorney, Wright & Moore Law Co. LPA
- Robert Moore, Attorney, OSU Ag & Resource Law Program
How Does the Farm Service Agency Affect Our Clients?
- Gregory R. Flax, Attorney, Martin, Browne, Hull & Harper
The New Frontier for Agriculture: Dealing with Data Centers, Carbon Capture, and Competition for Land
- Peggy Kirk Hall, Director, OSU Ag & Resource Law Program
- Chad Endsley, General Counsel, Ohio Farm Bureau Federation
- Andrew Wecker, Attorney, Wright & Moore Law Co. LPA
The program has been submitted to the Ohio Supreme Court for 5.5 hours of Continuing Legal Education credit. We've also built a social aspect into the program, providing attendees time to engage with one another during a breakfast, lunch, and a post-conference social at Retreat 21's beautiful Tap House.
For more information and to register, visit go.osu.edu/agrilawsummit. Current and recent law students should contact Peggy Kirk Hall at hall.673@osu.edu for scholarship information.
Although it was first introduced in August of 2025, House Bill 406 just had its first hearing in the House Agriculture Committee on March 25. During the hearing, an amended substitute version of the bill, sponsored by Representatives Deeter (R-Norwalk) and Dean (R-Xenia) was accepted by the Committee. This means that at future hearings, the House Agriculture Committee will consider the substitute version of the bill, which is available to read here.
The sale and consumption of raw milk have been widely debated across the country over the past few years, with proponents of raw milk claiming its health benefits, and opponents citing safety concerns (historically, the U.S. Food and Drug Administration has cautioned consumers to avoid raw milk because it could cause illness). So, if passed, how would Substitute H.B. 406 change the landscape for raw milk in the state of Ohio?
Current law
First things first—what does Ohio law currently say about raw milk? For all intents and purposes, Ohio Revised Code Section 917.04 (available here), outlaws the sale of raw milk to end, or “ultimate,” consumers in the state.
It is important to note that while current Ohio law does prohibit the sales of raw milk to the “ultimate consumer,” it does not prohibit animal owners from consuming raw milk from their own animals. As a result, the use of “herd share agreements” has proliferated throughout the state. A herd share agreement sells ownership in an animal, rather than selling the raw milk from the animal. Under the agreement, a person who pays the producer for a share of ownership in the animal may take their share of milk from the animal. The Ohio Department of Agriculture (ODA) challenged the use of herd share agreements as illegal in the 2006 case of Schitmeyer v. ODA, but the court did not uphold the ODA’s attempt to revoke the license of the dairy that was using herd share agreements. As a result, it appears that the herd share agreement approach for raw milk sales is currently legally acceptable.
Proposed language
Definitions
If passed, Sub. H.B. 406 would legalize the sale of raw milk and raw milk products for retailers who register as raw milk retailers with ODA. The bill defines “raw milk” as “unpasteurized milk from a cow, goat, or sheep,” and “raw milk products” as “all products derived from raw milk, including cream, butter, yogurt, cheese” and other products specifically allowed by ODA.
The bill would also formally define “herd-share agreement” as “an agreement in which a person acquires an undivided interest in a milk-producing mammal with the owner of such a mammal that includes an arrangement under which the person receives raw milk for personal use not to be sold or distributed for profit,” thus codifying the decision reached in Schitmeyer v. ODA.
Registration
To sell raw milk or raw milk products, Sub. H.B. 406 would require retailers to register annually with ODA. The bill further charges ODA with setting the fees and process for this registration, as well as with “establishing requirements governing the sanitary production, storage, transportation, manufacturing, handling, sampling, testing, examination, and sale of raw milk and raw milk products.”
Labeling, liability, and location requirements
Sub. H.B. 406 specifically spells out some of the basic requirements for the labeling and sale of raw milk and gives ODA the authority to establish other rules and regulations.
For the sale of raw milk or raw milk products to ultimate consumers, the bill requires that the label must state: “RAW MILK: This product has not been pasteurized and may contain harmful bacteria.”
Sub. H.B. 406 would require registered raw milk retailers to provide a liability waiver that must be signed by each consumer “acknowled[ing] the risks of consuming raw milk or raw milk products.” Further, the retailer would be required to keep the signed liability waiver in their records for a minimum of two years.
Finally, the bill would only allow raw milk and raw milk products to be sold on the farm where the raw milk or raw milk products are produced, or at a registered farm market.
Testing
Retailers would have to pass several safety tests in order to sell raw milk. Sub. H.B. 406 would require raw milk retailers to have a licensed, accredited veterinarian test all milking animals for brucellosis and tuberculosis at a frequency determined by ODA. Raw milk retailers would also be required to report every brucellosis and tuberculosis test result to ODA.
In addition to testing animal health, the bill would require raw milk retailers to test their water source and their milk monthly with an accredited laboratory. The milk would have to be tested for salmonella, listeria, e. coli 0157:H7, campylobacter, and staphylococci. Farms would also be subject to routine ODA inspections.
Ohio Quality Milk Production Service Program
Finally, Sub. H.B. 406 would establish the Ohio Quality Milk Production Service Program under ODA. The program’s purpose would be to improve the quality, health, and safety of milk and milking animals through research, testing, sampling, and education. The program would be modeled after the Cornell University College of Veterinary Medicine’s Quality Milk Production Services program, which tests milking animals, milk, and equipment and water sources used on dairies. More information about their services is available here.
Stay tuned
Sub. H.B. 406 would change Ohio law significantly. Current law essentially outlaws the sale of raw milk to the end consumer, and Sub. H.B. 406 would legalize and set up a regulatory framework for the sale of raw milk and raw milk products. Stay tuned to the Ohio Ag Law blog as we follow this bill on its way through the General Assembly.
Join us on Farm Office Live next Friday, April 17 for a conversation about Ohio's poultry industry with Jim Chakeres, Executive Vice President of the Ohio Poultry Association. Our Farm Office Live team will also cover timely economic and legal topics for the program. Here's the full agenda:
- A Conversation with Jim Chakeres, Ohio Poultry Association
- Crop Input Cost Outlook: ’26 and ‘27 - Barry Ward, Leader, Production Business Management, OSU Extension
- Legislative Update - Peggy Hall and Ellen Essman, OSU Agricultural & Resource Law Program
- Chart of Accounts from Tax Season Stress - Bruce Clevenger, Farm Management Field Specialist, OSU Extension
- Court Cases We're Watching - Ag Law Team, OSU Agricultural & Resource Law Program
We'll begin the program at 10 a.m. and as always, we will record it for those who can't make it. Find registration information and webinar replays on the Farm Office website on this page: https://farmoffice.osu.edu/farmofficelive.
Many people assume that if they pass away without a will, their property will simply go to their family or that everything will “work itself out.” Unfortunately, that is not how the law works. When someone dies without a will, called dying intestate, the State of Ohio effectively creates a will for them using a rigid set of statutory rules. These rules may not reflect the person’s wishes, family dynamics, or the needs of a farm operation.
For farm families, intestacy can be especially problematic. Land, equipment, and other farm assets often require careful planning to ensure continuity. Without a will or estate plan, those assets may be divided in ways that disrupt the operation or create conflict among heirs.
The State’s Plan: One-Size-Fits-All
Ohio’s intestacy laws, found in Chapter 2105 of the Ohio Revised Code, determine who inherits probate property when there is no will. The law follows a strict hierarchy —spouse, children, parents, siblings, and more distant relatives. The probate court must apply these rules exactly, with no flexibility to consider what the deceased may have intended.
For example, a farmer may expect that the child who has worked on the farm for years will take over the operation. Under intestacy law, however, that child is treated the same as any other heir, regardless of their involvement in the farm. This can result in shared ownership among multiple heirs, some of whom may want to sell rather than continue farming.
Not All Assets Go Through Probate
A critical and often misunderstood aspect of estate administration is that not all assets are subject to probate or intestacy laws. In fact, some assets pass automatically at death based solely on how they are titled or whether a beneficiary has been named. These are called non-probate assets, and they transfer directly to the named beneficiary without court involvement. This is typically done by identifying a payable on death or transfer on death beneficiary for the asset.
Common examples include:
- Life insurance policies with a designated beneficiary
- Retirement accounts such as IRAs and 401(k)s
- Bank or investment accounts with “payable-on-death” (POD) or “transfer-on-death” (TOD) designations
- Jointly owned property with rights of survivorship
- Assets held in a trust
For these assets, the beneficiary designation controls who receives the property rather than a will or intestacy law. Even if a person dies without a will, these non-probate assets will pass directly to the named individual.
For example, if a farmer has a life insurance policy and a bank account naming a child as beneficiary, that child will receive the proceeds automatically upon death. The probate court is not involved, and the intestacy statute does not apply to that asset.
Why Beneficiary Designations Matter
Because beneficiary designations override intestacy, they can be a powerful planning tool. In fact, it is possible for someone to structure much of their estate using beneficiary designations alone. However, this approach has limitations. Many farm assets such as machinery, livestock, and grain are often owned solely in an individual’s name and are not titled so do not have beneficiary designations. These assets must go through probate and will be distributed according to intestacy laws if no will exists.
This creates a split system:
- Non-probate assets (with beneficiaries) transfer automatically
- Probate assets (without beneficiaries) are controlled by intestacy
Without coordination, this can lead to unintended results. One heir might receive all the liquid assets (like insurance or accounts), while others inherit farmland or equipment through probate. That imbalance can create tension and complicate farm operations.
Probate Is Not Avoided, It’s Guaranteed
Some people believe that avoiding a will helps avoid probate. In reality, the opposite is true. Dying without a will often makes probate more complicated. When a valid will exists, it names an executor to manage the estate. Without a will, the probate court must appoint an administrator. This person performs the same duties but without guidance from the deceased. Ohio law gives priority to the surviving spouse and next of kin to serve as administrator. However, if those individuals are unwilling or unable to serve, the court may appoint someone else, including an attorney or even a creditor in some cases. This process can create additional delays, costs, and potential disputes.
Distribution Can Create Real Problems for Farms
Intestacy distribution works reasonably well for simple family situations, but it can create serious complications for farm families. Consider a situation where a surviving spouse and children from a prior marriage inherit the estate. Under Ohio law, the spouse will receive a portion of the estate, with the remainder divided among the children. This can result in multiple individuals owning undivided interests in farmland.
Now imagine one heir wants to continue farming, while another wants to sell the land. Because each owns a share, decisions require agreement. If they cannot agree, a court may order the property sold to divide the proceeds. This outcome can cause failure for a farm operation that took generations to build.
Additional Concerns: Minor Children and Public Proceedings
If minor children are involved, dying without a will creates further complications. A will allows parents to nominate a guardian. Without one, the probate court decides who will raise the children, based on what it believes is in their best interest. Additionally, any inheritance for a minor is typically held in a court-supervised account until the child reaches adulthood. This limits flexibility and may not align with how a parent would want funds managed. It is also important to remember that probate is a public process. Estate filings are accessible to others, which can expose details about land ownership and finances. For farm families, this transparency can invite unwanted attention from outside parties.
Take Control of the Outcome
Dying without a will does not mean avoiding decisions, it means accepting the state’s decisions instead of making your own. For farm families, the stakes are particularly high. Land, equipment, and business interests require thoughtful planning to ensure a smooth transition and to preserve the operation.
A basic estate plan can:
- Ensure assets go to the intended people
- Coordinate probate and non-probate transfers
- Support continuity of the farm operation
- Reduce the risk of family conflict
- Provide clarity during a difficult time
Beneficiary designations are an important tool and can help certain assets avoid probate entirely. But they are not a complete substitute for a well-designed estate plan, especially when significant farm assets are involved. Understanding how intestacy works is the first step. The next step is deciding whether that default plan is one you are willing to accept or whether it is time to create a plan of your own.
Ohio is a “top 5” state for its number of data centers, which currently number around 200. But that’s a title some in Ohio don’t embrace. In Ohio’s agricultural and rural communities, some citizens appreciate the technology and economic activity data centers bring while others fear loss of farmland, intensive water use, sales tax exemptions, and impacts on electric infrastructure and prices. Here’s a summary of recent developments that illustrate the challenges and discord Ohio faces as we determine how to deal with data centers.
- Ballot initiative for a constitutional amendment on data centers moves forward
Ohio Residents for Responsible Development wants Ohio citizens to determine the fate of data center development in the state. The group is petitioning for a constitutional amendment on data centers that would go before Ohio voters on the November ballot. The proposed constitutional amendment would prohibit the construction of any data center with a peak monthly load of more than 25 megawatts.
The Ohio Ballot Board on April 2, 2026 authorized the group to begin collecting the signatures for the ballot initiative. The Ohio Ballot Board approval and an earlier certification on March 16, 2026 by Ohio’s Secretary of State indicate that the group has satisfied the legal requirements for the petition and can begin the signature-gathering phase of the petition process.
The group behind the initiative is a grassroots organization of citizens whose goal is responsible growth that protects Ohio communities, resources, and local voices. The group now has until July 1 to collect about 413,000 valid signatures from at least half of Ohio’s counties on the petition. Verification of the signatures collected by the Secretary of State will then determine whether the measure will be on the November ballot. Read the “Prohibition of Construction of a Data Center” petition language on the Ohio Attorney General’s website, and learn more about ballot measures on the Secretary of State’s website.
- AEP data center tariff goes before Ohio Supreme Court
The parties have filed their briefs with the Ohio Supreme Court in a challenge to an unprecedented data center tariff by AEP. The Public Utilities Commission of Ohio (PUCO) approved the statewide data center tariff last July. Backed by AEP, the Ohio Consumers Counsel, the Ohio Energy Group, Ohio Partners for Affordable Energy, and Walmart the tariff aims to prevent the possibility that residential electricity customers will bear the costs of data center development by requiring data centers with a load of 25 MW or more to pay a minimum of 85% of their committed load over a 12-year contract. The approved tariff also requires AEP to end the moratorium it had placed on connecting new data centers. The Ohio Manufacturers’ Association Energy Group (OMAEG) appealed the PUCO tariff approval, arguing that the tariff is discriminatory. OMAEG had backed an alternative narrower proposal that would have applied to any electric service agreement for a single location with a load in excess of 50 MW if AEP could prove that the load would create transmission capacity constraints. All parties filed their briefs in the case by the March 24, 2026 briefing deadline, and we now await a date for the oral arguments before the Court. Read the briefs and follow the case on the Ohio Supreme Court’s website.
- Ohio House passes Data Center Study Commission bill
We’ve reported previously on Ohio House Bill 646, which proposes establishing a commission to study the data center development issue in Ohio. The Ohio House of Representatives passed a revised version of the bill on March 18, 2026. The bill would have the Governor, Speaker of the House, and President of the Senate appoint a Data Center Study Commission to examine data center issues and submit a report of findings and any legislative recommendations to the Governor and Ohio General Assembly within six months. The report must also contain suggested best practices and considerations for local decision-making bodies dealing with data center development.
The thirteen-member Commission must include persons knowledgeable in data center operations, agriculture, county and township government, rural electric cooperatives, water and environment impacts, municipalities, public utilities and economic development and tax incentives. The Commission must hold at least four public hearings and examine the following topics related to data centers:
- Environmental impact;
- Effect on the electrical grid, including on behind the meter electric supply and on
- consumer utility rates;
- Water usage, wastewater discharge, and impact on the local water supply;
- Noise pollution;
- Light pollution;
- Impact on the local economy;
- Impact on farmland;
- Value to national security and the development of artificial intelligence;
- Reports of foreign propaganda intended to create opposition to data centers;
- Any other relevant topics determined by the Commission.
The bill is now before the Ohio Senate and was referred to the Senate’s Financial Institutions, Insurance and Technology Committee on March 25.
- Other data center bills linger in the General Assembly
Several additional bills addressing concerns with data center development don’t appear to be moving forward quickly.
H.B. 706 focuses on the infrastructure impacts of data centers and aims to “ensure costs of new infrastructure and grid upgrades needed to serve these facilities are not shifted onto existing Ohio ratepayers.” The bill would require long-term service agreements of at least 12 years with electric utilities for data center customers, require the Public Utilities Commission to create standards for interconnection practices, load study deposits, and milestone requirements. It would also prohibit utilities from recovering data center costs from other customer classes, set minimum gilling standards, and require financial assurance prior to facility construction. The bill received its first hearing before the committee on March 4.
A second bill, H.B. 695, doesn’t address data centers directly but instead targets elected local officials who could have knowledge of such developments. The bill, sponsored by Rep. Adam Bird (R- New Richmond) and Rep. Brian Stewart (R-Ashville) would prohibit county commissioners, township trustees, and village mayors and council members from knowingly entering into nondisclosure agreements that prohibit “disclosing, discussing, describing, or commenting on” matters related to official duties, a repeated complaint of citizens. The bill would make the agreements void and unenforceable and impose civil fines of up to $1,000 on officials who violate the law.” A first hearing before the House Local Government Committee took place on March 11, 2026.
Most recently, Senators Kent Smith (D-Euclid) and Louis Blessing (R-Colerain Township) introduced a proposal to limit sales tax exemptions for data centers beginning on October 1, 2027. The pair introduced S.B. 374 on March 11, but the bill has not received any hearings since its referral to the Senate Finance Committee on March 25, 2026. The bill fills a gap left when Ohio legislators declined to attempt an override of Governor DeWine’s veto of a law passed by the legislature last June that would have ended the sales tax exemptions.
Also referred to committee on March 25, 2026 is H.B. 784, sponsored by Rep. Christine Cockley (D-Columbus) and Rep. Crystal Lett (D-Columbus), which would require any data center that withdraws waters of the state to submit monthly and annual data center water consumption reports to the Division of Water Resources. The bill also contains non-disclosure prohibitions similar to H.B. 695. A third bill also referred to committee on March 25, 2026 is S.B. 381. Rep. Casey Weinstein (D-Hudson) introduced the proposal, which requires interconnection approval from the Public Utilities Commission of Ohio prior to connecting a data center with a monthly maximum demand of more than 25,000 kilowatt hours. The bill is now before the Senate Public Utilities Committee.
Stay tuned to the Ohio Agricultural Law Blog for continued legal information on data center development in Ohio. Also see an analysis of the fiscal costs of data centers from Dr. Gabriel Lade, OSU’s Swank Chair in Rural Urban Policy, though this link to Substack.
As artificial intelligence (“AI”) becomes increasingly integrated into daily life, more people are turning to AI for emotional support and personal decisions. (For more on this topic, see this Arizona State University news article.)
It’s no surprise that many now also use it for legal guidance, oftentimes as a “starting point” before consulting a lawyer.
That’s exactly what the defendant did in United States v. Heppner. The defendant’s communications with AI unintentionally caused him to waive the protections of the attorney-client privilege over sensitive case information.
Attorney-Client Privilege
Most people are familiar with “attorney-client privilege,” but what exactly is it? It is one of the oldest and most sacred protections for confidential communications. The privilege belongs to the client, not the attorney. Its purpose is to encourage open and honest dialogue between lawyers and clients, which ultimately serves the public interest by promoting compliance with the law and the fair administration of justice.
The privilege generally protects communications between an attorney and client made for the purpose of seeking or providing legal advice. These protections last indefinitely, even after the attorney-client relationship ends of the client dies.
Waivers and Exceptions
Although attorney-client privilege is strong and long-lasting, it can be waived, intentionally or unintentionally, by the client. There are also limited circumstances where an attorney may be compelled to disclose the protected communications.
One common way privilege is waived by the client is by sharing confidential case information with a third party. This includes bringing a friend or family member to meeting with your attorney or casually discussing case details with a confidant over coffee or drinks. Those communications are not privileged and thus, the information discussed will no longer be protected by confidentiality.
And that is exactly what the judge decided happened in Heppner.
United States v. Heppner
In United States v. Heppner, the defendant, a senior executive indicted for securities fraud, used AI to analyze his legal situation and develop a defense strategy. The government sought to use the AI search results, while the defense argued the information remained protected by attorney-client privilege.
The judge ruled that the defendant waived privilege by disclosing sensitive information to AI, which constituted a third-party disclosure. The court further held that even if the defendant later intended to share the AI results with his attorneys, the privilege could not be restored once the information had already been revealed to a third party.
The Heppner Effect
This case serves as a timely reminder of how attorney-client privilege works and how easily it can be waived. While Heppner is a New York decision, it is the first ruling addressing AI and attorney-client privilege, and it is likely to influence courts nationwide.
The case highlights an important lesson: AI is a powerful tool, but it can also unintentionally work against you. What seems like a helpful resource may become a costly mistake.
Key takeaway: If you are involved in any type of litigation, never disclose sensitive case information to friends, family, or even AI.
Tags: Legal news, Litigation strategy, artificial intelligence, AI, Lawyer, attorney, litigation
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Over the decades, the legality of cultivating hemp in the United States has gone through some changes. In 1970, the Controlled Substances Act made hemp cultivation totally illegal, rolling “hemp” in with the definition of “marijuana.” This criminalized approach to hemp changed with the 2018 Farm Bill, which removed hemp from the definition of “marijuana” and gave states a chance to create their own hemp regulation programs. Within the past year, there has been a change made to the regulation of the cultivation of hemp at the state level, as well as a change in the federal legal definition of “hemp.” Both of these changes will likely affect hemp producers.
Changes to regulatory oversight in Ohio
After the passage of the 2018 Farm Bill, the state of Ohio, through the Ohio Department of Agriculture (ODA), submitted its plan to the United States Department of Agriculture (USDA) to regulate the cultivating and processing of hemp. In the spring of 2020, ODA began accepting applications for both the cultivation and processing of hemp.
As we shared in a blog post last summer, language included in the state operating budget, passed in June 2025, gave up ODA’s authority to regulate hemp cultivation within the state. On July 25, 2025, ODA started the process of transferring the regulation of hemp cultivation to the USDA. As of January 1, 2026, if you are growing hemp in Ohio, you must be licensed through USDA, and all ODA cultivation licenses are now void. ODA continues to regulate hemp processors. ODA has a webpage explaining these changes, which is available here. For further reading, the state operating budget, H.B. 96, is available here.
Federal changes to the legal definition of “hemp”
When cultivation of hemp was legalized in the 2018 Farm Bill, “hemp” was defined by Congress as “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinolic [THC] concentration of not more than 0.3 percent on a dry weight basis.” Following the passage of the 2018 Farm Bill, however, Congress discovered that this definition of “hemp” created an unintended loophole. While delta-9 THC is the primary psychoactive compound that can lead to intoxication found both in both hemp and marijuana, it is not the not the only such compound. Since its legalization, hemp products have been sold that do not contain more than 0.3 percent delta-9 THC, but do contain other cannabinoids, like delta-8 THC, that can cause intoxication if ingested.
To close this loophole allowing intoxicating hemp products, Congress changed the definition of hemp in H.R. 5371, which was signed into law on November 12, 2025. The federal definition of hemp is now “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a total [THC] concentration (including tetrahydrocannabinolic acid [THCA]) of not more than 0.3 percent on a dry weight basis.” As a result, instead of just regulating the amount of delta-9 THC, federal law now regulates the total THC concentration of hemp and its components. Thus, growers who have hemp plants that have a total THC concentration of more than 0.3 percent would be in violation of federal law. Importantly, this definition also applies to industrial hemp, or “hemp grown for the use of the stalk, whole grain, oil, cake, nut, hull, or any other non-cannabinoid derivative of the seeds.” The new definition of hemp becomes effective a year from the signing of the law, on November 12, 2026. The text of H.R. 5371 is available here.
Be sure to follow the Ohio Ag Law Blog for any further updates on hemp regulation!
Tags: hemp cultivation, hemp regulations, industrial hemp, Ohio Law, Federal Law
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Welcome back to our blog series on “Principles of Government,” where we explain key legal doctrines shaping today’s public discourse. In this article, we examine a legal strategy that has recently drawn attention: class action lawsuits. We will explain this concept in the context of the alleged fertilizer price-fixing cases currently pending in federal courts.
Several lawsuits have been filed alleging that large fertilizer companies engaged in price fixing. If history is any guide, it will not be long before farmers begin receiving letters from law firms suggesting they “sign up” for the case. This bulletin explains how class action lawsuits actually work and what farmers should do when those letters start showing up in the mailbox.1
The Class Action
When a large number of people or businesses are affected by the same or similar alleged misconduct, a class action lawsuit is often used as the legal remedy. These lawsuits allow one or a few lead plaintiffs to represent a much larger group of individuals in the same position.
In practical terms, instead of 10,000 separate lawsuits alleging fertilizer price fixing, a single lawsuit is filed on behalf of the entire group. One or a few plaintiffs serve as representatives, while the remaining affected individuals are included in the “class” and share in any recovery. For example, a class action was used a few years ago when Syngenta was sued due to China rejecting U.S. corn shipments due to an unapproved GMO trait.
Rule 23 of the Federal Rules of Civil Procedure sets out the criteria federal courts use to determine whether a case can proceed as a class action. To qualify, four requirements must be met:
(1) the class is so numerous that joining all members in a single lawsuit is impractical;
(2) there are common questions of law or fact shared by the class;
(3) the claims or defenses of the representative parties are typical of those of the class; and
(4) the representative parties will fairly and adequately protect the interests of the class.
Rule 23 also establishes the procedures courts follow in managing and administering class action lawsuits.
The Class Action Process
The first step in a class action lawsuit is identifying one or a few lead plaintiffs who have suffered damages due to the alleged misconduct of the defendant. The law firm filing the lawsuit will seek out a “named” plaintiff to represent the group. In the fertilizer cases, for example, Union Line Farms of Iowa is the lead plaintiff for a lawsuit filed in Colorado, while Fire Creek Farms of New York serves as the lead plaintiff for a separate lawsuit filed in Illinois. These plaintiffs have been identified as having experienced financial losses allegedly caused by price fixing among the fertilizer companies.
Next, the law firm representing the lead plaintiff asks the court to certify the case as a class action. The attorneys argue that many others have suffered the same type of damages from the same conduct, and that a class action is the most efficient and effective way to handle the claims. After reviewing the arguments from all parties, the judge will either approve the case as a class action or deny certification, in which case the lawsuit can proceed only on behalf of the named plaintiff(s).
As mentioned earlier, an Iowa farm is the lead plaintiff in a Colorado federal court, and a New York farm is the lead plaintiff in an Illinois federal court. Why not file in their home states? When the actions of the defendants affect people across the country, the lawsuit is often filed in federal court. Federal courts allow a person from one state to sue a defendant from another state as long as the defendant does business within that court’s jurisdiction. In the fertilizer case, the Colorado court can hear the Iowa farm’s lawsuit because the defendants sell products and conduct business in Colorado. This type of jurisdiction is sometimes called “diversity.” The law firm representing the lead plaintiff typically chooses the court based on geographic convenience and the court’s experience handling large, complex class actions. In other words, the location of the lawsuit is usually about strategy and efficiency, not where the plaintiff or defendant is physically located.
At some point, the lawsuits filed in different jurisdictions will likely be combined. For example, the Colorado federal case may be consolidated with the Illinois federal case. If the issues and defendants are the same, there is little reason to have separate actions in different courts. Expect, therefore, that multiple class action lawsuits against the fertilizer companies will eventually be consolidated into a single case in one federal court.
Eventually, the matter will be resolved either through a settlement or a trial. Most class actions end in a settlement, but if the parties cannot agree, the case will proceed to trial. If there is a settlement or the plaintiff wins at trial, funds will be awarded to the lead plaintiff and other members of the class. The judge will also determine the legal fees for the plaintiff’s law firms and decide how the funds are distributed among class members. Generally, the available funds are divided based on the amount of damages each plaintiff suffered. In the fertilizer case, the more fertilizer a farmer purchased during the designated period, the larger their share of any award is likely to be. While these awards can be significant, they rarely fully compensate plaintiffs for their actual damages.
At this stage, everyone in the class will be asked to provide evidence and records to document their damages. In the fertilizer case, farms will submit records of their fertilizer purchases to show how much of the settlement or award they are entitled to receive. The law firms and the court use this information to calculate each farm’s share of the available funds. Accurate and complete records are important, because the amount of money each farm receives is generally based on the verified purchases during the designated period. While providing records may require some effort, it ensures that each farm receives a fair portion of the settlement.
Opt-Out
Most class actions automatically include all eligible persons in the class. However, if someone would rather file their own lawsuit or simply does not want to be part of the class, they can opt out. The court usually sends a form that allows class members to opt out. The form must be completed and returned by the deadline specified in the notice.
Remedies
A class action seeks legal remedies from the court. The most obvious remedy is financial compensation for economic damages. But class actions also serve another important purpose: deterring future misconduct. If the class action is successful, it can prevent the defendants from engaging in the same behavior again and signals to others in similar situations that such actions are likely to result in liability and payment of damages.
The Law Firms
While it would be appealing to imagine class action lawsuits arising when a group of aggrieved citizens bands together, the reality is that most are initiated by experienced law firms. These firms play a vital role in the legal system by identifying potential widespread harms, thoroughly investigating the merits of the claims, assessing the likelihood of success, and calculating potential damages or settlement values. They then locate suitable lead plaintiffs willing to represent the broader group. In doing so, plaintiff law firms provide an important service: they enable individuals and small businesses, such as farmers, who might otherwise lack the resources or expertise to pursue complex litigation on their own to seek justice and hold large corporations accountable. Without this mechanism, many legitimate claims would never be brought forward due to the high costs and risks involved.
It will likely come as no surprise that class action lawsuits can be very lucrative for law firms. For example, in the Syngenta class action settlement, the legal fees awarded were in excess of $500 million dollars. These fees were divided over many law firms and attorneys who represented individual clients. But, as is obvious, there is great incentive for law firms to find and litigate large class action suits.
The legal fees must be approved by the judge overseeing the case. The legal fees are usually 30-40% of the total damages. It should be noted that the law firms work on contingency and often pay all the costs. There is a risk that if the lawsuit is not successful that the law firms will receive no legal fees and are out their costs. However, law firms are careful to take on class actions that are likely to prevail, limiting their risk.
Letters from Law Firms
Even if a person is automatically part of a class action, they may still receive letters from multiple law firms inviting them to “join” the case. These firms want to identify additional class members, gather evidence, and sometimes recruit lead plaintiffs.
Receiving letters does not mean you need to sign up. If you are already in the class, the law firms representing the lead plaintiff automatically represent you. Ignoring the letters will not exclude you from the lawsuit, nor will it prevent you from receiving your share of any settlement or award.
Think of the letters as part of the law firm’s outreach, they are trying to maximize participation and document damages, which ultimately helps the case. Multiple firms may send letters for the same case because more participation can increase the potential recovery and, in turn, the legal fees.
Conclusion
If price fixing is proven or the parties reach a settlement, most farms across the country will likely be eligible for a share of any payments. For now, there is nothing farmers need to do. Eligible farmers are automatically included in the class and will have an opportunity later to submit fertilizer purchase records to establish eligibility and determine their share of any recovery.
These lawsuits will take many months, if not years, to resolve through settlement or trial. In the meantime, farmers should monitor the farm press and other reliable sources for updates as the cases develop.
1 It is important to note that the price fixing claims are only allegations, have not been been proven by plaintiffs and are denied by the defendants.