COVID-19 has had a drastic impact on many different sectors of the economy, from hospitals to auto repair shops. However, a sector that has been significantly impacted is childcare facilities. On May 31, 2020, childcare facilities in Ohio were allowed to reopen for the first time since March 24. However, this reopening has come with additional restrictions in order to reduce the spread of COVID-19 in childcare facilities. While it has been announced that Ohio has received approximately $60 million in federal funding to assist with the reopening of these facilities, no details have been released on the criteria or how to access this funding.
With the recent events impacting childcare facilities, a little known provision under existing Ohio law may create a significant opportunity for the facility owners.
As part of the budget last year, the Ohio legislature included a unique provision for certain childcare providers. Effective for 2019 and beyond, “qualifying” child care centers are eligible for up to a 75% reduction on their property tax liability. A qualifying childcare center is a licensed childcare program that:
- Only serves children under six (6) years old;
- At least 25% of the children in the center reside in households that receive some type of public assistance;
- The childcare center cannot be a permanent resident of the licensee/administrator; and
- The childcare center cannot be used for another commercial purpose.
If a childcare facility meets the necessary criteria, it may apply for a property tax reduction effective for tax year 2020. Last year, we were able to achieve only the second ever approved partial property tax reduction for a childcare facility in Franklin County. Childcare centers face unique challenges in being able to successfully open their doors. Therefore, finding ways to reduce fixed expenses like property tax may be a great way to ensure sustained business operations.
If you’d like to learn more about this partial reduction in property taxes for your childcare facility please feel free to reach out to our Tax partner, Demetrius Robinson at firstname.lastname@example.org or (614) 427-5749.