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Ohio Bill Seeks to Expand Transfer Taxes

by Robert Boxley, Chicago, February 2020

 

Proposed legislation could lead to more tax exposure for Ohio companies that transfer controlling interest in a pass-through entity that, directly or indirectly, owns real estate.

 

House Bill 449 applies tax when there is a “qualifying transfer” involving more than 50% ownership. Currently, these types of transfers are not subject to transfer tax.

 

If the bill becomes law, the transferor of the ownership interests would be required within 30 days to submit to the county a statement with the following information:

 

  • The percentage of ownership interest that is being transferred

  • The total amount paid as consideration for the ownership interest

  • The portion of the total that is attributable to real property

  • For the real property transferred, the entity’s percentage of ownership

Failure to submit the information and pay the transfer tax could result in a penalty that would become a lien on the property.

 

Critics charge that the information in the statement would be used by the county auditor for reassessment purposes. It would also be available to other third parties like boards of education that could use the information to pursue increased assessments and higher taxes.