OhioHB 186136th General Assembly (2025-2026)HouseWALLET

Regards school district property taxes, school funding formula

Sponsored By: David Thomas (Republican), James M. Hoops (Republican)

Signed by Governor

EducationPrimary and Secondary EducationHousing and Real PropertyTaxation

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Bill Overview

Analyzed Economic Effects

16 provisions identified: 10 benefits, 3 costs, 3 mixed.

Earlier property updates receive transition credits

For counties updated in 2023, qualifying transition credits cover real-property tax year 2025 and manufactured-home tax year 2026. For counties updated in 2024, they cover real-property tax years 2025–2026 and manufactured-home tax years 2026–2027. The Tax Commissioner also calculates and certifies factors for eligible property in counties updating in 2025. Savings equal the certified credit factor times taxes charged and payable. The full transition reduction for real-property tax year 2025 or manufactured-home tax year 2026 goes on the second-half bill.

Bigger tax reductions for eligible homes

The partial exemption for eligible homesteads rises from 2.5% to 5.70%, 8.92%, 12.15%, and then 15.38%. The 15.38% rate continues each year afterward. For real property, these rates start in tax years 2026, 2027, 2028, and 2029, respectively. For eligible manufactured or mobile homes, each rate starts one tax year later. An approved application is required, and the reduction covers only taxes from qualifying levies.

Farm properties get a tax break

Qualifying farm property gets a 10% reduction in taxes from covered levies. Eligible uses include farming, leasing land for farming, and vacant land the county auditor approves for future farming. Commercial timber production receiving the specified timber tax benefits, and related improvements, are excluded. The changes apply starting with real-property tax year 2026 and manufactured-home tax year 2027.

School tax credits for homes and farms

The law creates an inflation-cap credit for qualifying residential and farm property, excluding ponds and lakes, and covered manufactured homes. The county must undergo a reappraisal or three-year update, and the district must have taxed the property at its previous update. Districts must meet the millage-floor adjustment test or have covered current-expense rates below 20 mills for schools or 2 mills for vocational schools. When qualifying district revenue exceeds its inflation-adjusted amount, the credit equals covered taxes times one minus indexed revenue divided by floor revenue. The inflation adjustment uses the three-year GDP deflator change, never below zero; real-property credits cover the update year and next two years, while manufactured-home credits cover the three following years.

Residential tax breaks rise, then end

Qualifying residential property gets a covered-tax reduction of 7.5%, then 10%, then 12.5% over three tax years. The reduction drops to 0% in the fourth year and stays there. Eligible property includes occupied or leased one-, two-, or three-family homes and auditor-approved land for building those homes. For real property, the rates apply in 2026, 2027, and 2028, with relief ending in 2029. For covered manufactured homes, that schedule starts one tax year later.

County relief also covers manufactured homes

A county adopting the special county property-tax exemption must also reduce manufactured-home taxes each year. This county program is limited to counties with a Major League team and the specified sales-tax referendum in 1996. The home-tax reduction matches the percentage reduction for real property in the prior year. The county reimburses the auditor in two installments, and the money goes to taxing districts. Repealing the real-property exemption also ends the manufactured-home exemption.

Tax complainants face evidence and honesty rules

Property-tax complainants must give the board of revision all relevant information and evidence they know about or possess. Evidence withheld from the board generally cannot be used later on appeal. A tax appeals board or court can admit it only for good cause. Knowingly making a false statement in the covered property-tax affidavit is criminal falsification.

Limits on outsiders challenging property values

Nonowner, non-tenant complaints must seek an increase based on a recorded arm's-length sale within two years before the tax lien date. The sale price must exceed listed value by both 10% and the filing threshold. That threshold starts at $500,000 for tax year 2022; annual GDP deflator adjustments begin in 2023, round to $1,000, and never decrease. The Tax Commissioner certifies thresholds by October 1; local officials must approve complaints publicly after giving an owner seven calendar days' notice. School boards can counter only owner- or tenant-filed complaints, including those filed on their behalf, stating at least $17,500 in taxable value.

Private tax complaint payment deals banned

Local governments and their representatives cannot make private payment deals tied to not filing, dropping, or settling property-tax complaints. Prohibited deals are void and cannot be enforced. Agreements can still resolve claims through an auditor-approved value shown on the tax list, without prohibited payments.

Property complaints stay open without refiling

An original valuation complaint or counter-complaint continues into later years when the board misses its decision deadline. The filer does not need to refile annually before a final board or appeal decision. Complainants can also ask the Tax Commissioner to determine the county's assessment level for a stated year. The Commissioner uses recent sales studies and other relevant facts, measuring against true value or agricultural-use value for covered farmland.

Schools get temporary tax revenue offsets

The state pays eligible school and joint vocational districts for positive revenue gaps linked to the transition tax reductions. The calculation compares specified prior-year taxes with current-year taxes after those reductions. Payments are due by August 15, 2026, and August 15, 2027, for the respective calculations. The 2026 payments use money transferred from the Expanded Sales Tax Holiday Fund to the new School Revenue Temporary Offset Fund.

School tax credits for business property

Qualifying business-class property gets an inflation-cap credit when district floor revenue exceeds its inflation-adjusted amount; vacant business-class property is excluded. The county must undergo a reappraisal or three-year update, and the district must have taxed the property at its previous update. Districts must meet the millage-floor adjustment test or have covered current-expense rates below 20 mills for schools or 2 mills for vocational schools. The credit equals covered taxes times one minus indexed revenue divided by floor revenue, using a three-year GDP deflator adjustment never below zero. Starting with real-property tax year 2025, credits cover the update year and the following two tax years.

Additional homestead savings count existing relief

The law counts existing tax reductions when calculating additional homestead relief for eligible owners. The formula uses one minus the sum of covered farm or residential reductions, inflation-cap credits, and the homestead partial exemption. Counting those reductions can lower the additional relief. Parallel rules apply to manufactured or mobile homes, with an approved application and a calculation based on the home's tax system.

Ohio shoppers lose 2026 tax holiday

Ohio does not hold a sales tax holiday in calendar year 2026. Shoppers receive no holiday-based sales tax savings that year.

Disputed tax payments carry interest protections

Owners who file complaints and pay less than the final amount owe statutory interest on the difference from the original due date. Depending on the final amount compared with the bill, this interest replaces some or all usual penalties and interest. Owners who do not file and tender payment on time remain subject to the usual charges. During a covered court case, taxpayers can tender taxes based on the value claimed in their complaint. If the treasurer rejects that tender, no penalty applies for failing to pay the full assessed amount.

Counties can change added homeowner exemptions

County commissioners can change or repeal an added partial exemption for homes already receiving the covered homestead exemption. A change can raise or lower the added tax relief. Commissioners must pass a resolution naming the first tax year affected. They must send it to the county auditor and Tax Commissioner.

Sponsors & Cosponsors

Cosponsors

Adam C. Bird
Republican • House
Adam Holmes
Republican • House
Adam Mathews
Republican • House
Angela N. King
Republican • House
Bernard Willis
Republican • House
Beth Lear
Republican • House
Bill Reineke
Republican • Senate
Bill Roemer
Republican • House
Bob Peterson
Republican • House
Brian Lampton
Republican • House
Brian Lorenz
Republican • House
Brian Stewart
Republican • House
Gary Click
Republican • House
Heidi Workman
Republican • House
Jack K. Daniels
Republican • House
Jason Stephens
Republican • House
Jennifer Gross
Republican • House
Jerry C. Cirino
Republican • Senate
Jodi Salvo
Republican • House
Johnathan Newman
Republican • House
Josh Williams
Republican • House
Kellie Deeter
Republican • House
Kevin Ritter
Republican • House
Kristina D. Roegner
Republican • Senate
Kyle Koehler
Republican • Senate
Levi Dean
Republican • House
Marilyn John
Republican • House
Mark Johnson
Republican • House
Mark Romanchuk
Republican • Senate
Matthew Kishman
Republican • House
Melanie Miller
Republican • House
Michael D. Dovilla
Republican • House
Michele Reynolds
Republican • Senate
Monica Robb Blasdel
Republican • House
Phil Plummer
Republican • House
Riordan T. McClain
Republican • House
Rodney Creech
Republican • House
Sandra O'Brien
Republican • Senate
Sarah Fowler Arthur
Republican • House
Sean P. Brennan
Democratic • House
Sharon A. Ray
Republican • House
Tex Fischer
Republican • House
Theresa Gavarone
Republican • Senate
Thomas Hall
Republican • House
Tim Schaffer
Republican • Senate
Tom Young
Republican • House
Ty D. Mathews
Republican • House
William P. DeMora
Democratic • Senate

Roll Call Votes

All Roll Calls

Yes: 228 • No: 50

House vote • 11/20/2025

Concurred in Senate amendments

Yes: 72 • No: 15

Senate vote • 11/19/2025

Local Government: Reported

Yes: 5 • No: 2

Senate vote • 11/19/2025

Passed

Yes: 30 • No: 3

House vote • 10/22/2025

Passed

Yes: 73 • No: 23

House vote • 10/22/2025

Finance: Reported

Yes: 25 • No: 6

House vote • 10/21/2025

Ways and Means: Reported

Yes: 11 • No: 1