A new line on every Ohio tax bill says "Inflation Cap Credit"
A new line on every Ohio tax bill says "Inflation Cap Credit"
2026-09-15 · Ohio · Legislation
Owners in Ohio associations are about to start asking their boards what a line item called “Inflation Cap Credit” is. The answer is House Bill 186, effective March 20, 2026, and the statute requires the county treasurer to print it under exactly that name.1
HB 186, sponsored by Representatives James M. Hoops and David Thomas, was signed December 19, 2025. It amends eleven sections and enacts R.C. 319.303.
The label is statutory
R.C. 319.303(G): “The county treasurer shall identify the reduction authorized under this section on each tax bill delivered under section 323.13 or 4503.06 of the Revised Code as the 'Inflation Cap Credit.'”
The mechanism behind it claws back school-district revenue growth above inflation in districts sitting at the 20-mill floor. Its definitional core, at R.C. 319.303(A)(7): “'Credit factor' means one minus the quotient obtained by dividing the applicable indexed property tax revenue by the applicable floor tax revenue.”
The rollback rewrite, and the phase-up
Separately, HB 186 replaced Ohio's familiar 10 percent non-business and 2.5 percent owner-occupancy rollbacks with a single partial exemption that climbs over four years. R.C. 323.152(B)(2):
“The amount of the reduction shall equal one of the following percentages of the amount of taxes to be levied by qualifying levies on the homestead or the manufactured or mobile home after applying section 319.301 of the Revised Code: (a) For the first tax year to which this amendment applies, 5.70%; (b) For the following tax year, 8.92%; (c) For the second following tax year, 12.15%; (d) For the third following tax year and every year thereafter, 15.38%.”
And a county option, with no application
R.C. 323.152(B)(3) lets a board of county commissioners add more:
“A board of county commissioners, by resolution, may authorize a partial exemption from the real property taxes or manufactured home taxes on any property or manufactured or mobile home that receives the partial exemption under division (B)(2) of this section. The resolution shall specify the amount of the partial exemption, which may equal up to two and one-half per cent of the amount of taxes to be levied by qualifying levies…no application shall be required under section 323.153 of the Revised Code to obtain the partial exemption authorized pursuant to this section.”
No application is required. It is a county-by-county decision that an owner cannot apply for and a board cannot pursue.
Owners will bring these questions to the board first. Our Ohio budget approval page covers the association budget they are really asking about.
Three things to tell owners, and one not to
Tell them the percentages are of qualifying levies, not of the whole bill. The 15.38 percent figure that arrives in year four applies to taxes levied by qualifying levies after the reduction under R.C. 319.301. It is not 15 percent off the bill, and an owner who expects that will be disappointed and will say so at an annual meeting.
Tell them it phases. 5.70, then 8.92, then 12.15, then 15.38. A household comparing its 2026 bill to its 2029 bill is looking at a moving credit on top of a moving valuation, which is why year-to-year comparisons in reappraisal counties are so hard to read.
Tell them the county piece is a lottery. Up to 2.5 percent more, by county commissioners' resolution, with no application. Owners in one county will get it and owners in the next will not, for reasons that have nothing to do with anything they did.
Do not tell them there is a form to file. The certification duties in the statute run from county auditors to the tax commissioner. This credit is not applied for. That distinguishes it from the homestead exemption, which is applied for — and which gates a separate one-time $350 million credit whose county-auditor headcount falls on November 1, 2026. Owners will conflate the two. Our Ohio assessment limits page covers the association budget conversation that follows.
The levy machinery changed underneath it
Two companion acts, both signed December 19, 2025 and both effective March 20, 2026, rewrote how the underlying levies behave.
House Bill 335 caps revenue growth from unvoted inside millage in reappraisal years. R.C. 5705.316(B) directs the county budget commission, in September of a reappraisal or update year, to adjust the rate so that the increase “do[es] not exceed the product of the base taxes charged and payable and the inflation factor certified under division (F) of this section for that tax year, rounded to the nearest multiple of one hundred dollars.” The reduced mills do not go anywhere else: “a county budget commission shall not reallocate mills reduced pursuant to this section to any other taxing unit.” A local government that wants the higher rate must adopt a resolution by November 1 “accompanied by information demonstrating the taxing unit's need for the higher rate.”
House Bill 129 narrowed school emergency levies and folded fixed-sum levies into the 20-mill floor calculation. R.C. 5705.194(B) now limits emergency levies to districts in fiscal caution, watch or emergency or hit by a declared disaster, and adds five words that matter: “A tax levied under division (B) of this section may not be renewed.” Levies approved before January 1, 2026 keep a renewal path under subsection (C); later ones do not.
Note also that HB 479, effective September 23, 2026, amends R.C. 5705.316 again. This machinery has moved three times in nine months.
What this means for a board
Nothing, on the tax side — none of this is an association obligation. But budget for the questions. In a reappraisal county the January 2027 bill will carry a new valuation, a newly named credit, a phased rollback replacement and possibly a county add-on, and the board is the nearest thing to an authority most owners have.
A short, accurate note to the membership in December, saying what the lines are and pointing to the county auditor, is worth more than a defensive answer in February.
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