A Brief History of Current Problems with the State of Ohio:
This document will help you get a better idea of the problems the G W Adams Educational Center has been facing with the state of Ohio and the property tax exemption process in this state. The Adams Center was granted 501(c)3 status by the federal government in 2006. This makes the center tax exempt at the federal level. We are also sales tax exempt in Ohio (this is automatic when an organization receives the 501 status). All donations to the Adams Center are also tax deductible for the donor. What is not automatic in Ohio is property tax exemption for properties owned by “tax exempt” organizations. Ohio has a process whereby you must make up any unpaid back taxes on the property (up to three years prior to the date of application - the three years preceding the application may be forgiven). In many states the property tax exemption is in effect automatically when a 501 status is granted. Here a form must be submitted to the Ohio Tax Commissioner. It is then arbitrarily up to his office to approve or deny the application. If approved you are good to go. If denied you have a right to appeal his decision to the Ohio Board of Tax Appeals.
In 2010 the Adams Center became aware that we had to actually file for the exemption and did so. We paid back taxes for the year 2006 and requested the three year forgiveness. The Muskingum County Treasurer at the time, Philip Murphy, abandoned his post. He failed to send in an amended tax certificate for us reflecting the paid taxes for 2006. Because of this the Tax Commissioner denied our exemption. We appealed the decision and after two years waiting on the Board of Tax Appeals we were finally given a hearing date. The Board of Tax Appeals agreed with us that we had proven our point (without a hearing) and recommended what they called a “joint remand” of the case back to the Tax Commissioner for approval.
At fter another year of waiting on the Tax Commissioner we received another denial. Absolutely NO MENTION was made of our original complaint. This new denial was basically very bizarre. It concluded that we provided no real educational benefit to the community (despite offering no cost field trips to schools, civic organizations, scout troops, etc.). The Tax Commissioner asserted that we ONLY provided ghost hunts and that the property was used exclusively for that purpose (which is bunk)! Ghost hunting is a means of fundraising and we operate no differently from the Ohio State Reformatory at Mansfield which is also owned by a private 501(c)3 organization (like ours) and is property tax exempt.
We are now, once more, in the appeals process (appealing the Tax Commissioners second decision). All the while this continues taxes also continue to mount (as well as fees and penalties). During the appeals process we are effectively tax exempt but should we finally lose a great deal of money will be owed (currently over $16,000). We intend to take this case all the way to the Ohio Supreme Court if need be. We are certainly being held to a double standard where OSR (and other organizations) are concerned. If you are an Ohio citizen you should know that YOUR tax money is being used to fight us. We estimate that the state has already wasted in excess of $50,000 fighting the Adams Center on this issue. Another appeal will cost you another $50,000 and in the Supreme Court possibly a lot more. The state is throwing good money after bad here as if they ever eventually win they will never recover anything near the investment they have in fighting us through the system. And if they do in the end win consider that your donations will no longer entirely support our mission with adults and children but a considerable amount will simply be sent to the state in taxes!
We are also not alone in this struggle. There are many many examples of the state doing this to churches, private 501(c)3s, not for profit hospitals, etc., etc. This state government seems to think that regardless of what the Federal government states that Ohio should still be allowed to tax tax-exempt organizations!
UPDATE: JANUARY 2016:
It has been a while since we updated here. We had our hearing before the BTA and not unexpectedly we were denied on our appeal. Consider you are not appealing to an impartial board (the BTA) but to a board which is employed by the Tax Commissioner, the very department which turned you down in the first place! We had to go through the process of the BTA though in order to qualify to appeal to the Ohio Supreme Court. This is where we are now (even though the arrogant young attorney from the AG's office who represented the Tax Commissioner made the statement "we will never let it go to the Supreme Court" on the record in the BTA hearing -- sorry pal, it is not in your power to deny anyone their constitutional right to appeal). Our appeal to the SC has been entered and we are awaiting the brief schedule. Our volunteer attorney, William Todd, is enthusiastic about our chances because it is pretty clear cut that the BTA ignored our status as a 501 (c)(3) organization and blatantly disregarded the Ohio Revised Code with respect to the Adams Center. In addition our constitutional right to self representation was denied in the BTA hearing which is contradictory to both the Ohio constitution as well as the posted rules of the BTA itself!