As Reported by the Senate Ways and Means Committee 1
123rd General Assembly 4
Regular Session Sub. H. B. No. 483 5
1999-2000 6
REPRESENTATIVES MOTTLEY-DISTEL-ASLANIDES-SENATOR BLESSING 8
_________________________________________________________________ 10
A B I L L
To amend sections 113.061, 718.01, 718.02, 718.08, 12
5703.053, 5703.19, and 5703.21, and to enact 13
sections 718.011, 5745.01 to 5745.03, 5745.031, 14
5745.04, 5745.041, and 5745.05 to 5745.16 of the
Revised Code to prescribe a uniform set of 16
procedures and remedies regarding municipal
taxation of electric light company income, to 17
provide for the collection of municipal taxes on 18
those companies by the state, and to authorize 19
the Tax Commissioner to discuss with other states
the development of a system to collect and 20
administer sales and use taxes from remote
sellers.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 22
Section 1. That sections 113.061, 718.01, 718.02, 718.08, 24
5703.053, 5703.19, and 5703.21 be amended and sections 718.011, 26
5745.01, 5745.02, 5745.03, 5745.031, 5745.04, 5745.041, 5745.05,
5745.06, 5745.07, 5745.08, 5745.09, 5745.10, 5745.11, 5745.12, 28
5745.13, 5745.14, 5745.15, and 5745.16 of the Revised Code be 29
enacted to read as follows: 30
Sec. 113.061. The treasurer of state shall adopt rules in 39
accordance with Chapter 119. of the Revised Code governing the 40
remittance of taxes by electronic funds transfer as required 41
under sections 5727.311, 5727.83, 5733.022, 5735.062, 5739.032, 42
5739.122, 5741.121, 5745.04, and 5747.072 of the Revised Code and 44
any other section of the Revised Code under which a person is 46
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required to remit taxes by electronic funds transfer. The rules 47
shall govern the modes of electronic funds transfer acceptable to 48
the treasurer of state and under what circumstances each mode is 49
acceptable, the content and format of electronic funds transfers, 51
the coordination of payment by electronic funds transfer and 52
filing of associated tax reports and returns, the remittance of 53
taxes by means other than electronic funds transfer by persons 54
otherwise required to do so but relieved of the requirement by 55
the treasurer of state, and any other matter that in the opinion 56
of the treasurer of state facilitates payment by electronic funds 57
transfer in a manner consistent with those sections. 58
Upon failure by a person, if so required, to remit taxes by 60
electronic funds transfer in the manner prescribed under section 61
5727.83, 5733.022, 5735.062, 5739.032, 5739.122, 5741.121, 63
5745.04, or 5747.072 of the Revised Code and rules adopted under 65
this section, the treasurer of state shall notify the tax 66
commissioner of such failure if the treasurer of state determines 67
that such failure was not due to reasonable cause or was due to 69
willful neglect, and shall provide the tax commissioner with any 70
information used in making that determination. The tax 71
commissioner may assess an additional charge as specified in the 72
respective section of the Revised Code governing the requirement 73
to remit taxes by electronic funds transfer. 74
The treasurer of state may implement means of 76
acknowledging, upon the request of a taxpayer, receipt of tax 77
remittances made by electronic funds transfer, and may adopt 78
rules governing acknowledgments. The cost of acknowledging 79
receipt of electronic remittances shall be paid by the person 80
requesting acknowledgment. 81
The treasurer of state, not the tax commissioner, is 83
responsible for resolving any problems involving electronic funds 84
transfer transmissions. 85
Sec. 718.01. (A) As used in this chapter: 94
(1) "Internal Revenue Code" means the Internal Revenue 96
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Code of 1986, 100 Stat. 2085, 26 U.S.C. 1, as amended. 98
(2) "Schedule C" means internal revenue service schedule C 100
filed by a taxpayer pursuant to the Internal Revenue Code. 102
(3) "Form 2106" means internal revenue service form 2106 104
filed by a taxpayer pursuant to the Internal Revenue Code. 105
(4) "Intangible income" means income of any of the 107
following types: income yield, interest, dividends, or other 108
income arising from the ownership, sale, exchange, or other 109
disposition of intangible property including, but not limited to, 110
investments, deposits, money, or credits as those terms are
defined in Chapter 5701. of the Revised Code. 111
(B) No municipal corporation with respect to that income 113
that it may tax shall tax such income at other than a uniform 115
rate.
(C) No municipal corporation shall levy a tax on income at 117
a rate in excess of one per cent without having obtained the 118
approval of the excess by a majority of the electors of the 119
municipality voting on the question at a general, primary, or 120
special election. The legislative authority of the municipal 121
corporation shall file with the board of elections at least
seventy-five days before the day of the election a copy of the 122
ordinance together with a resolution specifying the date the 123
election is to be held and directing the board of elections to 124
conduct the election. The ballot shall be in the following form: 125
"Shall the Ordinance providing for a ... per cent levy on income 126
for (Brief description of the purpose of the proposed levy) be
passed? 127
FOR THE INCOME TAX 129
AGAINST THE INCOME TAX" 131
In the event of an affirmative vote, the proceeds of the 133
levy may be used only for the specified purpose. 134
(D)(1) Except as otherwise provided in division (D)(2) of 136
this section, no municipal corporation shall exempt from a tax on 137
income, compensation for personal services of individuals over 138
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eighteen years of age or the net profit from a business or 139
profession.
(2) The legislative authority of a municipal corporation 141
may, by ordinance or resolution, exempt from a tax on income any 142
compensation arising from the grant, sale, exchange, or other 143
disposition of a stock option; the exercise of a stock option; or 144
the sale, exchange, or other disposition of stock purchased under 145
a stock option.
(E) Nothing in this section shall prevent a municipal 147
corporation from permitting lawful deductions as prescribed by 148
ordinance. If a taxpayer's taxable income includes income 149
against which the taxpayer has taken a deduction for federal 150
income tax purposes as reportable on the taxpayer's form 2106, 151
and against which a like deduction has not been allowed by the
municipal corporation, the municipal corporation shall deduct 152
from the taxpayer's taxable income an amount equal to the 153
deduction shown on such form allowable against such income, to 154
the extent not otherwise so allowed as a deduction by the 155
municipal corporation. In the case of a taxpayer who has a net
profit from a business or profession that is operated as a sole 156
proprietorship, no municipal corporation may tax or use as the 157
base for determining the amount of the net profit that shall be 158
considered as having a taxable situs in the municipal 159
corporation, a greater amount than the net profit reported by the
taxpayer on schedule C filed in reference to the year in question 160
as taxable income from such sole proprietorship, except as 161
otherwise specifically provided by ordinance or regulation. 162
(F) No A municipal corporation shall NOT tax any of the 164
following: 165
(1) The military pay or allowances of members of the armed 167
forces of the United States and of members of their reserve 168
components, including the Ohio national guard; 169
(2) The income of religious, fraternal, charitable, 171
scientific, literary, or educational institutions to the extent 172
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that such income is derived from tax-exempt real estate, 173
tax-exempt tangible or intangible property, or tax-exempt 174
activities;
(3) Except as otherwise provided in division (G) of this 176
section, intangible income; 177
(4) Compensation paid under section 3501.28 or 3501.36 of 179
the Revised Code to a person serving as a precinct election 180
official, to the extent that such compensation does not exceed 181
one thousand dollars annually. Such compensation in excess of 182
one thousand dollars may be subjected to taxation by a municipal
corporation. A municipal corporation shall not require the payer 183
of such compensation to withhold any tax from that compensation. 184
(5) Compensation paid to an employee of a transit 186
authority, regional transit authority, or regional transit 187
commission created under Chapter 306. of the Revised Code for 188
operating a transit bus or other motor vehicle for the authority 189
or commission in or through the municipal corporation, unless the
bus or vehicle is operated on a regularly scheduled route, the 190
operator is subject to such a tax by reason of residence or 191
domicile in the municipal corporation, or the headquarters of the 192
authority or commission is located within the municipal 193
corporation;
(6) The income of a public utility when that public 195
utility is subject to the tax levied under section 5727.24 or 196
5727.30 of the Revised Code, except starting January 1, 2002, the 197
income of an electric company or combined company, as defined in 198
section 5727.01 of the Revised Code, may be taxed by a municipal 200
corporation. For a combined company, only the income attributed 202
from the activity of an electric company shall be subject to
taxation by a municipal corporation. The income of an electric 203
company or combined company, subject to taxation by a municipal 204
corporation shall be computed by taking into account the 205
adjustments provided by division (I)(16) of section 5733.04 207
CHAPTER 5745. of the Revised Code. 208
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(7) On and after January 1, 2003, items excluded from 210
federal gross income pursuant to section 107 of the Internal 211
Revenue Code; 212
(8) On and after January 1, 2001, compensation paid to an 214
individual for personal services performed within the municipal 216
corporation, if the individual does not reside in the municipal 217
corporation, performs such personal services in the municipal 218
corporation on twelve or fewer days in the calendar year, and, if 219
the individual is an employee, the principal place of business of 221
the individual's employer is located outside the municipal
corporation. Division (F)(8) of this section does not apply to 222
professional entertainers or professional athletes or to 224
promoters of professional entertainment or sports events and 225
their employees, as reasonably defined by the municipal 226
corporation A NONRESIDENT INDIVIDUAL TO THE EXTENT PROHIBITED 227
UNDER SECTION 718.011 OF THE REVISED CODE. 228
(G) Any municipal corporation that taxes any type of 230
intangible income on March 29, 1988, pursuant to Section 3 of 231
Amended Substitute Senate Bill No. 238 of the 116th general 232
assembly, may continue to tax that type of income after 1988 if a 233
majority of the electors of the municipal corporation voting on 234
the question of whether to permit the taxation of that type of
intangible income after 1988 vote in favor thereof at an election 235
held on November 8, 1988. 236
(H) Nothing in this section or section 718.02 of the 238
Revised Code shall authorize the levy of any tax on income that a 239
municipal corporation is not authorized to levy under existing 241
laws or shall require a municipal corporation to allow a 242
deduction from taxable income for losses incurred from a sole 243
proprietorship or partnership.
Sec. 718.011. ON AND AFTER JANUARY 1, 2001, A MUNICIPAL 245
CORPORATION SHALL NOT TAX THE COMPENSATION OF AN INDIVIDUAL IF 246
ALL OF THE FOLLOWING APPLY: 247
(A) THE INDIVIDUAL DOES NOT RESIDE IN THAT MUNICIPAL 249
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CORPORATION. 250
(B) THE COMPENSATION IS PAID FOR PERSONAL SERVICES 252
PERFORMED BY THE INDIVIDUAL IN THAT MUNICIPAL CORPORATION ON 253
TWELVE OR FEWER DAYS IN THE CALENDAR YEAR. 254
(C) IN THE CASE OF AN INDIVIDUAL WHO IS AN EMPLOYEE, THE 256
PRINCIPAL PLACE OF BUSINESS OF THE INDIVIDUAL'S EMPLOYER IS 257
LOCATED OUTSIDE THAT MUNICIPAL CORPORATION AND THE INDIVIDUAL 258
PAYS TAX ON COMPENSATION DESCRIBED IN DIVISION (B) OF THIS 259
SECTION TO THE MUNICIPAL CORPORATION, IF ANY, IN WHICH THE 260
EMPLOYER'S PRINCIPAL PLACE OF BUSINESS IS LOCATED, AND NO PORTION 262
OF THAT TAX IS REFUNDED TO THE INDIVIDUAL.
(D) THE INDIVIDUAL IS NOT A PROFESSIONAL ENTERTAINER OR 264
PROFESSIONAL ATHLETE, THE PROMOTER OF A PROFESSIONAL 265
ENTERTAINMENT OR SPORTS EVENT, OR AN EMPLOYEE OF SUCH A PROMOTER, 266
ALL AS MAY BE REASONABLY DEFINED BY THE MUNICIPAL CORPORATION. 267
Sec. 718.02. (A) THIS SECTION DOES NOT APPLY TO ELECTRIC 276
COMPANIES OR COMBINED COMPANIES, OR TO ELECTRIC LIGHT COMPANIES 277
FOR WHICH AN ELECTION MADE UNDER SECTION 5745.031 OF THE REVISED 278
CODE IS IN EFFECT.
(A) In the taxation of income that is subject to municipal 281
income taxes, if the books and records of a taxpayer conducting a 282
business or profession both within and without the boundaries of 283
a municipal corporation disclose with reasonable accuracy what 284
portion of its net profit is attributable to that part of the 285
business or profession conducted within the boundaries of the 286
municipal corporation, then only such portion shall be considered 287
as having a taxable situs in such municipal corporation for 288
purposes of municipal income taxation. In the absence of such 289
records, net profit from a business or profession conducted both 290
within and without the boundaries of a municipal corporation 291
shall be considered as having a taxable situs in such municipal 292
corporation for purposes of municipal income taxation in the same 293
proportion as the average ratio of: 294
(1) The average net book value of the real and tangible 296
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personal property owned or used by the taxpayer in the business 297
or profession in such municipal corporation during the taxable 298
period to the average net book value of all of the real and 299
tangible personal property owned or used by the taxpayer in the 300
business or profession during the same period, wherever situated. 301
As used in the preceding paragraph, real property shall 303
include property rented or leased by the taxpayer and the value 304
of such property shall be determined by multiplying the annual 305
rental thereon by eight; 306
(2) Wages, salaries, and other compensation paid during 308
the taxable period to persons employed in the business or 309
profession for services performed in such municipal corporation 310
to wages, salaries, and other compensation paid during the same 311
period to persons employed in the business or profession, 312
wherever their services are performed, excluding compensation 313
described in division (F)(8) of section 718.01 THAT IS NOT 314
TAXABLE BY THE MUNICIPAL CORPORATION UNDER SECTION 718.011 of the 315
Revised Code; 316
(3) Gross receipts of the business or profession from 318
sales made and services performed during the taxable period in 319
such municipal corporation to gross receipts of the business or 320
profession during the same period from sales and services, 321
wherever made or performed. 322
If the foregoing allocation formula does not produce an 325
equitable result, another basis may be substituted, under uniform 326
regulations, so as to produce an equitable result. 328
(B) As used in division (A) of this section, "sales made 330
in a municipal corporation" mean: 331
(1) All sales of tangible personal property delivered 334
within such municipal corporation regardless of where title 335
passes if shipped or delivered from a stock of goods within such 336
municipal corporation;
(2) All sales of tangible personal property delivered 339
within such municipal corporation regardless of where title 340
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passes even though transported from a point outside such
municipal corporation if the taxpayer is regularly engaged 341
through its own employees in the solicitation or promotion of 342
sales within such municipal corporation and the sales result from 343
such solicitation or promotion; 344
(3) All sales of tangible personal property shipped from a 347
place within such municipal corporation to purchasers outside 348
such municipal corporation regardless of where title passes if 349
the taxpayer is not, through its own employees, regularly engaged 350
in the solicitation or promotion of sales at the place where 351
delivery is made.
Sec. 718.08. (A) As used in this section: 360
(1) "Estimated tax liability" means the amount that a 363
taxpayer estimates to be the taxpayer's liability for a municipal 364
corporation's income tax for a year prior to applying any 365
credits, estimated tax payments, or withheld taxes for the year. 366
(2) "Fiscal year taxpayer" means a taxpayer that reports 368
municipal income tax on the basis of a twelve-month period that 369
does not coincide with the calendar year. 370
(B) Beginning January 1, 2003, a municipal corporation 372
that requires taxpayers who are individuals to remit payment of 373
estimated taxes may require such taxpayers to remit such payments 375
only as prescribed by divisions (B)(1) to (4) of this section, 376
subject to divisions (C) and (E)(1) and (2) of this section: 377
(1) Not more than twenty-two and one-half per cent of the 379
taxpayer's estimated tax liability for the current year shall be 380
required to have been remitted on or before the thirtieth day of 381
April or the day on which the annual tax return for the prior 383
year is required to be filed disregarding any extension, as 384
prescribed by ordinance or rule of the municipal corporation; 385
(2) Not more than forty-five per cent of the taxpayer's 387
estimated tax liability for the current year shall be required to 388
have been remitted on or before the thirty-first day of July; 389
(3) Not more than sixty-seven and one-half per cent of the 391
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taxpayer's estimated tax liability for the current year shall be 392
required to have been remitted on or before the thirty-first day 393
of October;
(4) Not more than ninety per cent of the taxpayer's 395
estimated tax liability for the previous year REFERRED TO IN 396
DIVISION (B)(1), (2), AND (3) OF THIS SECTION shall be required 397
to have been remitted on or before the thirty-first day of 399
January.
(C) Any amount deducted and withheld for taxes from the 401
compensation of an individual shall be considered as estimated 402
taxes paid in equal amounts on each of the payment dates 403
prescribed by division (B) of this section. 404
(D) Beginning January 1, 2003, a municipal corporation 406
requiring taxpayers that are not individuals to remit payments of 408
estimated taxes may require such taxpayers to remit such payments 409
only as prescribed by divisions (D)(1) to (4) of this section, 410
subject to division (E)(2) of this section:
(1) Not more than twenty-two and one-half per cent of the 412
taxpayer's estimated tax liability for the current year shall be 413
required to have been remitted on or before the day on which the 414
annual tax return for the prior year is required to be filed 415
disregarding any extension or, in the case of a fiscal year 416
taxpayer, the fifteenth day of the fourth month of the taxpayer's 417
taxable year;
(2) Not more than forty-five per cent of the taxpayer's 419
estimated tax liability for the current year shall be required to 420
have been remitted on or before the fifteenth day of June or, in 421
the case of a fiscal year taxpayer, the fifteenth day of the 422
sixth month of the taxpayer's taxable year; 423
(3) Not more than sixty-seven and one-half per cent of the 425
taxpayer's estimated tax liability for the current year shall be 426
required to have been remitted on or before the fifteenth day of 427
September or, in the case of a fiscal year taxpayer, the 428
fifteenth day of the ninth month of the taxpayer's taxable year; 429
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(4) Not more than ninety per cent of the taxpayer's 431
estimated tax liability for the current year shall be required to 432
have been remitted on or before the fifteenth day of December or, 433
in the case of a fiscal year taxpayer, the fifteenth day of the 434
twelfth month of the taxpayer's taxable year. 435
(E) A municipal corporation shall not impose any penalty, 437
interest, interest penalty, or other similar assessment or charge 438
against a taxpayer for the late payment or nonpayment of 439
estimated tax liability in either of the following circumstances: 440
(1) The taxpayer is an individual who resides in the 442
municipal corporation but was not domiciled there on the first 444
day of January of the current calendar year; 445
(2) The taxpayer has remitted, pursuant to division (B) or 447
(D) of this section, an amount at least equal to one hundred per 448
cent of the taxpayer's tax liability for the preceding year as 449
shown on the return filed by the taxpayer for the preceding year, 450
provided that the return for the preceding year reflected a 451
twelve-month period and the taxpayer filed a return for the 452
preceding year.
Sec. 5703.053. As used in this section, "postal service" 461
means the United States postal service. 462
An application to the tax commissioner for a tax refund 464
under sections SECTION 4307.05, 4307.07, 5727.28, 5727.91, 465
5728.061, 5735.122, 5735.13, 5735.14, 5735.141, 5735.142, 468
5739.07, 5741.10, 5743.05, 5743.53, 5745.11, 5749.08, and OR 470
5753.06 of the Revised Code or division (B) of section 5703.05 of 471
the Revised Code, or a fee refunded under section 3734.905 of the 472
Revised Code, that is received after the last day for filing 473
under such section shall be considered to have been filed in a 474
timely manner if:
(A) The application is delivered by the postal service and 476
the earliest postal service postmark on the cover in which the 477
application is enclosed is not later than the last day for filing 478
the application; 479
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(B) The application is delivered by the postal service, 481
the only postmark on the cover in which the application is 482
enclosed was affixed by a private postal meter, the date of that 483
postmark is not later than the last day for filing the 484
application, and the application is received within seven days of 485
such last day; or 486
(C) The application is delivered by the postal service, no 488
postmark date was affixed to the cover in which the application 489
is enclosed or the date of the postmark so affixed is not 490
legible, and the application is received within seven days of the 491
last day for making the application. 492
Sec. 5703.19. (A) To carry out the purposes of the laws 501
that he THE TAX COMMISSIONER is required to administer, the tax 503
commissioner or any person employed by him THE COMMISSIONER for 504
that purpose, upon demand, may inspect books, accounts, records, 505
and memoranda of any person or public utility subject to those
laws, and may examine under oath any officer, agent, or employee 506
of that person or public utility. Any person other than the 507
commissioner who makes a demand pursuant to this section shall 508
produce his THE PERSON'S authority to make the inspection. 509
(B) If a person or public utility receives at least ten 511
days' written notice of a demand made under division (A) of this 512
section and refuses to comply with that demand, a penalty of five 513
hundred dollars shall be imposed upon the person or public 514
utility for each day the person or public utility refuses to 515
comply with the demand. Penalties imposed under this division 516
may be assessed and collected in the same manner as assessments 517
made under Chapter 3769., 4305., 5727., 5728., 5733., 5735., 518
5739., 5743., 5745., 5747., 5749., or 5753., or sections 3734.90 519
to 3734.9014, of the Revised Code. 520
Sec. 5703.21. (A) Except as provided in divisions (B), 529
AND (C), (D), (E), (F), and (G) of this section, no agent of the 531
department of taxation, except in the agent's report to the 532
department or when called on to testify in any court or 533
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proceeding, shall divulge any information acquired by the agent 534
as to the transactions, property, or business of any person while 535
acting or claiming to act under orders of the department. 536
Whoever violates this provision shall thereafter be disqualified 537
from acting as an officer or employee or in any other capacity 538
under appointment or employment of the department.
(B)(1) For purposes of an audit pursuant to section 117.15 540
of the Revised Code, or an audit of the department pursuant to 541
Chapter 117. of the Revised Code, or an audit, pursuant to that 542
chapter, the objective of which is to express an opinion on a 543
financial report or statement prepared or issued pursuant to 544
division (A)(7) or (9) of section 126.21 of the Revised Code, the 547
officers and employees of the auditor of state charged with 548
conducting the audit shall have access to and the right to 549
examine any state tax returns and state tax return information in 550
the possession of the department to the extent that the access 552
and examination are necessary for purposes of the audit. Any 553
information acquired as the result of that access and examination 555
shall not be divulged for any purpose other than as required for 556
the audit or unless the officers and employees are required to 558
testify in a court or proceeding under compulsion of legal 559
process. Whoever violates this provision shall thereafter be 560
disqualified from acting as an officer or employee or in any 561
other capacity under appointment or employment of the auditor of 562
state. 563
(2) As provided by section 6103(d)(2) of the Internal 565
Revenue Code, any federal tax returns or federal tax information 566
that the department has acquired from the internal revenue 567
service, through federal and state statutory authority, may be 568
disclosed to the auditor of state solely for purposes of an audit 569
of the department. 570
(C) Division (A) of this section does not prohibit 572
divulging ANY OF THE FOLLOWING: 573
(1) DIVULGING information contained in applications, 575
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complaints, and related documents filed with the department under 576
section 5715.27 of the Revised Code or in applications filed with 577
the department under section 5715.39 of the Revised Code.; 578
(D) Division (A) of this section does not prohibit the 580
department of taxation providing (2) PROVIDING information to 582
the division of child support within the department of job and 583
family services, or a child support enforcement agency, pursuant 585
to division (G)(2) of section 5101.31 of the Revised Code.; 586
(E) Division (A) of this section does not prohibit the 589
disclosure (3) DISCLOSING to the board of motor vehicle 591
collision repair registration of any information in the 592
possession of the department that is necessary for the board to 593
verify the existence of an applicant's valid vendor's license and 594
current state tax identification number under section 4775.07 of 595
the Revised Code.; 596
(F) Division (A) of this section does not prohibit the 598
department from providing (4) PROVIDING information to the 599
administrator of workers' compensation pursuant to section 601
4123.591 of the Revised Code.;
(G) Division (A) of this section does not prohibit the 603
department of taxation from providing (5) PROVIDING to the 605
attorney general information the department obtains under 607
division (J) of section 1346.01 of the Revised Code.;
(6) PERMITTING PROPERLY AUTHORIZED OFFICERS, EMPLOYEES, OR 609
AGENTS OF A MUNICIPAL CORPORATION FROM INSPECTING REPORTS OR 610
INFORMATION PURSUANT TO RULES ADOPTED UNDER SECTION 5745.16 OF 611
THE REVISED CODE.
Sec. 5745.01. AS USED IN THIS CHAPTER: 613
(A) "ELECTRIC COMPANY" AND "COMBINED COMPANY" HAVE THE 615
SAME MEANINGS AS IN SECTION 5727.01 OF THE REVISED CODE. 616
(B) "ELECTRIC LIGHT COMPANY" HAS THE SAME MEANING AS IN 618
SECTION 4928.01 OF THE REVISED CODE, AND INCLUDES THE ACTIVITIES 619
OF A COMBINED COMPANY AS AN ELECTRIC COMPANY, BUT EXCLUDES 620
NONPROFIT COMPANIES AND MUNICIPAL CORPORATIONS. 621
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(C) "TAXPAYER" MEANS AN ELECTRIC LIGHT COMPANY SUBJECT TO 623
TAXATION BY A MUNICIPAL CORPORATION IN THIS STATE FOR A TAXABLE 624
YEAR, EXCLUDING AN ELECTRIC LIGHT COMPANY THAT IS NOT AN ELECTRIC 626
COMPANY OR A COMBINED COMPANY AND FOR WHICH AN ELECTION MADE 627
UNDER SECTION 5745.031 OF THE REVISED CODE IS NOT IN EFFECT WITH 628
RESPECT TO THE TAXABLE YEAR. IF SUCH A COMPANY IS A QUALIFIED 629
SUBCHAPTER S SUBSIDIARY AS DEFINED IN SECTION 1361 OF THE 630
INTERNAL REVENUE CODE OR A DISREGARDED ENTITY, THE COMPANY'S 632
PARENT S CORPORATION OR OWNER IS THE TAXPAYER FOR THE PURPOSES OF 633
THIS CHAPTER AND IS HEREBY DEEMED TO HAVE NEXUS WITH THIS STATE 634
UNDER THE CONSTITUTION OF THE UNITED STATES FOR THE PURPOSES OF 635
THIS CHAPTER.
(D) "DISREGARDED ENTITY" MEANS AN ENTITY THAT, FOR ITS 637
TAXABLE YEAR, IS BY DEFAULT, OR HAS ELECTED TO BE, DISREGARDED AS 638
AN ENTITY SEPARATE FROM ITS OWNER PURSUANT TO 26 C.F.R. 639
301.7701-3. 640
(E) "TAXABLE YEAR" OF A TAXPAYER IS THE TAXPAYER'S TAXABLE 642
YEAR FOR FEDERAL INCOME TAX PURPOSES. 643
(F) "FEDERAL TAXABLE INCOME" MEANS TAXABLE INCOME, BEFORE 645
OPERATING LOSS DEDUCTION AND SPECIAL DEDUCTIONS, AS REQUIRED TO 646
BE REPORTED FOR THE TAXPAYER'S TAXABLE YEAR UNDER THE INTERNAL 647
REVENUE CODE. 648
(G) "ADJUSTED FEDERAL TAXABLE INCOME" MEANS FEDERAL 650
TAXABLE INCOME ADJUSTED AS FOLLOWS: 651
(1) DEDUCT INTANGIBLE INCOME AS DEFINED IN SECTION 718.01 653
OF THE REVISED CODE TO THE EXTENT INCLUDED IN FEDERAL TAXABLE 655
INCOME;
(2) ADD EXPENSES INCURRED IN THE PRODUCTION OF SUCH 657
INTANGIBLE INCOME; 658
(3) IF THE TAXPAYER IS A QUALIFYING TAXPAYER UNDER SECTION 660
5733.0510 OF THE REVISED CODE, DEDUCT THE AMOUNT BY WHICH THE 661
TAXPAYER REDUCED ITS NET INCOME TO THE EXTENT THAT AMOUNT IS 662
INCLUDED IN FEDERAL TAXABLE INCOME, OR ADD THE AMOUNT BY WHICH 663
THE TAXPAYER INCREASED ITS NET INCOME, FOR THE TAXABLE YEAR UNDER 664
16
DIVISION (B)(1) OF THAT SECTION, SUBJECT TO DIVISIONS (B)(3), 666
(4), AND (5) OF THAT SECTION TO THE EXTENT THOSE DIVISIONS APPLY 667
TO THE ADJUSTMENTS IN DIVISION (B)(1) OF THAT SECTION FOR THE 668
TAXABLE YEAR. A TAXPAYER SHALL NOT DEDUCT OR ADD ANY AMOUNT 669
UNDER DIVISION (G)(3) OF THIS SECTION THAT THE TAXPAYER DEDUCTED 670
OR ADDED UNDER DIVISION (G)(1) OR (2) OF THIS SECTION. 671
FOR THE PURPOSES OF DIVISION (G)(3) OF THIS SECTION, "NET 673
INCOME" HAS THE SAME MEANING AS IN SECTION 5733.04 OF THE REVISED 675
CODE.
(H) "INTERNAL REVENUE CODE" MEANS THE "INTERNAL REVENUE 678
CODE OF 1986," 100 STAT. 2085, 26 U.S.C.A. 1, AS AMENDED. 679
(I) "OHIO NET INCOME" MEANS THE AMOUNT DETERMINED UNDER 681
DIVISION (B) OF SECTION 5745.02 OF THE REVISED CODE. 682
Sec. 5745.02. (A) THE ANNUAL REPORT FILED UNDER SECTION 684
5745.03 OF THE REVISED CODE DETERMINES A TAXPAYER'S OHIO NET 685
INCOME AND THE PORTION OF OHIO NET INCOME TO BE APPORTIONED TO A 686
MUNICIPAL CORPORATION. 687
(B) A TAXPAYER'S OHIO NET INCOME IS DETERMINED BY 689
MULTIPLYING THE TAXPAYER'S ADJUSTED FEDERAL TAXABLE INCOME BY THE 692
SUM OF THE PROPERTY FACTOR MULTIPLIED BY ONE-THIRD, THE PAYROLL 693
FACTOR MULTIPLIED BY ONE-THIRD, AND THE SALES FACTOR MULTIPLIED 694
BY ONE-THIRD. IF THE DENOMINATOR OF ONE OF THE FACTORS IS ZERO, 695
THE REMAINING TWO FACTORS EACH SHALL BE MULTIPLIED BY ONE-HALF 696
INSTEAD OF ONE-THIRD; IF THE DENOMINATOR OF TWO OF THE FACTORS IS 697
ZERO, THE REMAINING FACTOR SHALL BE MULTIPLIED BY ONE. THE 698
PROPERTY, PAYROLL, AND SALES FACTORS SHALL BE DETERMINED IN THE
MANNER PRESCRIBED BY DIVISIONS (B)(1), (2), AND (3) OF THIS 699
SECTION.
(1) THE PROPERTY FACTOR IS A FRACTION THE NUMERATOR OF 701
WHICH IS THE AVERAGE VALUE OF THE TAXPAYER'S REAL AND TANGIBLE 702
PERSONAL PROPERTY OWNED OR RENTED, AND USED IN BUSINESS IN THIS 704
STATE DURING THE TAXABLE YEAR, AND THE DENOMINATOR OF WHICH IS 705
THE AVERAGE VALUE OF ALL THE TAXPAYER'S REAL AND TANGIBLE 706
PERSONAL PROPERTY OWNED OR RENTED AND USED IN BUSINESS EVERYWHERE 707
17
DURING SUCH YEAR. PROPERTY OWNED BY THE TAXPAYER IS VALUED AT 709
ITS ORIGINAL COST. PROPERTY RENTED BY THE TAXPAYER IS VALUED AT 710
EIGHT TIMES THE NET ANNUAL RENTAL RATE. "NET ANNUAL RENTAL RATE" 711
MEANS THE ANNUAL RENTAL RATE PAID BY THE TAXPAYER LESS ANY ANNUAL 713
RENTAL RATE RECEIVED BY THE TAXPAYER FROM SUBRENTALS. THE 714
AVERAGE VALUE OF PROPERTY SHALL BE DETERMINED BY AVERAGING THE 715
VALUES AT THE BEGINNING AND THE END OF THE TAXABLE YEAR, BUT THE 716
TAX COMMISSIONER MAY REQUIRE THE AVERAGING OF MONTHLY VALUES 717
DURING THE TAXABLE YEAR, IF REASONABLY REQUIRED TO REFLECT 718
PROPERLY THE AVERAGE VALUE OF THE TAXPAYER'S PROPERTY.
(2) THE PAYROLL FACTOR IS A FRACTION THE NUMERATOR OF 720
WHICH IS THE TOTAL AMOUNT PAID IN THIS STATE DURING THE TAXABLE 721
YEAR BY THE TAXPAYER FOR COMPENSATION, AND THE DENOMINATOR OF 722
WHICH IS THE TOTAL COMPENSATION PAID EVERYWHERE BY THE TAXPAYER 724
DURING SUCH YEAR. COMPENSATION MEANS ANY FORM OF REMUNERATION
PAID TO AN EMPLOYEE FOR PERSONAL SERVICES. COMPENSATION IS PAID 726
IN THIS STATE IF: (a) THE RECIPIENT'S SERVICE IS PERFORMED 728
ENTIRELY WITHIN THIS STATE, (b) THE RECIPIENT'S SERVICE IS 729
PERFORMED BOTH WITHIN AND WITHOUT THIS STATE, BUT THE SERVICE 730
PERFORMED WITHOUT THIS STATE IS INCIDENTAL TO THE RECIPIENT'S 731
SERVICE WITHIN THIS STATE, (c) SOME OF THE SERVICE IS PERFORMED 732
WITHIN THIS STATE AND EITHER THE BASE OF OPERATIONS, OR IF THERE 733
IS NO BASE OF OPERATIONS, THE PLACE FROM WHICH THE SERVICE IS 734
DIRECTED OR CONTROLLED IS WITHIN THIS STATE, OR THE BASE OF 735
OPERATIONS OR THE PLACE FROM WHICH THE SERVICE IS DIRECTED OR 736
CONTROLLED IS NOT IN ANY STATE IN WHICH SOME PART OF THE SERVICE 737
IS PERFORMED, BUT THE RECIPIENT'S RESIDENCE IS IN THIS STATE. 738
(3)(a) SALES OF ELECTRICITY SHALL BE SITUSED IN THIS STATE 740
AS PROVIDED IN SECTION 5733.059 OF THE REVISED CODE. 742
(b) FOR ALL OTHER SALES, THE SALES FACTOR IS A FRACTION 744
THE NUMERATOR OF WHICH IS THE TOTAL SALES IN THIS STATE BY THE 746
TAXPAYER DURING THE TAXABLE YEAR, AND THE DENOMINATOR OF WHICH IS 747
THE TOTAL SALES BY THE TAXPAYER EVERYWHERE DURING SUCH YEAR. IN 748
DETERMINING THE NUMERATOR AND DENOMINATOR OF THE SALES FACTOR, 749
18
RECEIPTS FROM THE SALE OR OTHER DISPOSAL OF A CAPITAL ASSET OR AN 750
ASSET DESCRIBED IN SECTION 1231 OF THE INTERNAL REVENUE CODE 751
SHALL BE ELIMINATED. ALSO, IN DETERMINING THE NUMERATOR AND 753
DENOMINATOR OF THE SALES FACTOR, IN THE CASE OF A REPORTING 754
TAXPAYER OWNING AT LEAST EIGHTY PER CENT OF THE ISSUED AND 755
OUTSTANDING COMMON STOCK OF ONE OR MORE INSURANCE COMPANIES OR 756
PUBLIC UTILITIES, EXCEPT AN ELECTRIC COMPANY, OR OWNING AT LEAST 758
TWENTY-FIVE PER CENT OF THE ISSUED AND OUTSTANDING COMMON STOCK 759
OF ONE OR MORE FINANCIAL INSTITUTIONS, RECEIPTS RECEIVED BY THE 760
REPORTING TAXPAYER FROM SUCH UTILITIES, INSURANCE COMPANIES, AND 761
FINANCIAL INSTITUTIONS SHALL BE ELIMINATED.
FOR THE PURPOSE OF DIVISION (B)(3)(b) OF THIS SECTION, 764
SALES OF TANGIBLE PERSONAL PROPERTY ARE IN THIS STATE WHERE SUCH 765
PROPERTY IS RECEIVED IN THIS STATE BY THE PURCHASER. IN THE CASE 766
OF DELIVERY OF TANGIBLE PERSONAL PROPERTY BY COMMON CARRIER OR BY 767
OTHER MEANS OF TRANSPORTATION, THE PLACE AT WHICH SUCH PROPERTY 768
IS ULTIMATELY RECEIVED AFTER ALL TRANSPORTATION HAS BEEN 769
COMPLETED SHALL BE CONSIDERED AS THE PLACE AT WHICH SUCH PROPERTY 770
IS RECEIVED BY THE PURCHASER. DIRECT DELIVERY IN THIS STATE, 771
OTHER THAN FOR PURPOSES OF TRANSPORTATION, TO A PERSON OR FIRM 772
DESIGNATED BY A PURCHASER CONSTITUTES DELIVERY TO THE PURCHASER 773
IN THIS STATE, AND DIRECT DELIVERY OUTSIDE THIS STATE TO A PERSON 774
OR FIRM DESIGNATED BY A PURCHASER DOES NOT CONSTITUTE DELIVERY TO 775
THE PURCHASER IN THIS STATE, REGARDLESS OF WHERE TITLE PASSES OR 776
OTHER CONDITIONS OF SALE. 777
SALES OTHER THAN SALES OF ELECTRICITY OR TANGIBLE PERSONAL 779
PROPERTY ARE IN THIS STATE IF EITHER THE INCOME-PRODUCING 781
ACTIVITY IS PERFORMED SOLELY IN THIS STATE, OR THE 783
INCOME-PRODUCING ACTIVITY IS PERFORMED BOTH WITHIN AND WITHOUT 784
THIS STATE AND A GREATER PROPORTION OF THE INCOME-PRODUCING 785
ACTIVITY IS PERFORMED WITHIN THIS STATE THAN IN ANY OTHER STATE, 787
BASED ON COSTS OF PERFORMANCE.
(C) THE PORTION OF A TAXPAYER'S OHIO NET INCOME TAXABLE BY 790
EACH MUNICIPAL CORPORATION IMPOSING AN INCOME TAX SHALL BE 791
19
DETERMINED BY MULTIPLYING THE TAXPAYER'S OHIO NET INCOME BY THE 792
SUM OF THE MUNICIPAL PROPERTY FACTOR MULTIPLIED BY ONE-THIRD, THE 794
MUNICIPAL PAYROLL FACTOR MULTIPLIED BY ONE-THIRD, AND THE 796
MUNICIPAL SALES FACTOR MULTIPLIED BY ONE-THIRD, AND SUBTRACTING 797
FROM THE PRODUCT SO OBTAINED ANY "MUNICIPAL NET OPERATING LOSS 798
CARRYFORWARD FROM PRIOR TAXABLE YEARS." IF THE DENOMINATOR OF 799
ONE OF THE FACTORS IS ZERO, THE REMAINING TWO FACTORS EACH SHALL 800
BE MULTIPLIED BY ONE-HALF INSTEAD OF ONE-THIRD; IF THE
DENOMINATOR OF TWO OF THE FACTORS IS ZERO, THE REMAINING FACTOR 801
SHALL BE MULTIPLIED BY ONE. IN CALCULATING THE "MUNICIPAL NET 802
OPERATING LOSS CARRYFORWARD FROM PRIOR TAXABLE YEARS" FOR EACH 803
MUNICIPAL CORPORATION, NET OPERATING LOSSES ARE APPORTIONED IN 804
AND OUT OF A MUNICIPAL CORPORATION FOR THE TAXABLE YEAR IN WHICH
THE NET OPERATING LOSS OCCURS IN THE SAME MANNER THAT POSITIVE 805
NET INCOME WOULD HAVE BEEN SO APPORTIONED. ANY NET OPERATING 806
LOSS FOR A MUNICIPAL CORPORATION MAY BE APPLIED TO SUBSEQUENT NET 807
INCOME IN THAT MUNICIPAL CORPORATION TO REDUCE THAT INCOME TO 808
ZERO OR UNTIL THE NET OPERATING LOSS HAS BEEN FULLY USED AS A
DEDUCTION. THE UNUSED PORTION OF NET OPERATING LOSSES FOR EACH 809
TAXABLE YEAR APPORTIONED TO A MUNICIPAL CORPORATION MAY ONLY BE 810
APPLIED AGAINST THE INCOME APPORTIONED TO THAT MUNICIPAL 811
CORPORATION FOR FIVE SUBSEQUENT TAXABLE YEARS. NET OPERATING 812
LOSSES OCCURRING IN TAXABLE YEARS ENDING BEFORE 2002 MAY NOT BE
SUBTRACTED UNDER THIS SECTION. 813
A TAXPAYER'S MUNICIPAL PROPERTY, MUNICIPAL PAYROLL, AND 815
MUNICIPAL SALES FACTORS FOR A MUNICIPAL CORPORATION SHALL BE 816
DETERMINED AS PROVIDED IN DIVISIONS (C)(1), (2), AND (3) OF THIS 817
SECTION.
(1) THE MUNICIPAL PROPERTY FACTOR IS THE QUOTIENT OBTAINED 819
BY DIVIDING (a) THE AVERAGE VALUE OF REAL AND TANGIBLE PERSONAL 820
PROPERTY OWNED OR RENTED BY THE TAXPAYER AND USED IN BUSINESS IN 821
THE MUNICIPAL CORPORATION DURING THE TAXABLE YEAR BY (b) THE 823
AVERAGE VALUE OF ALL OF THE TAXPAYER'S REAL AND TANGIBLE PERSONAL 825
PROPERTY OWNED OR RENTED AND USED IN BUSINESS DURING THAT TAXABLE 826
20
YEAR IN THIS STATE. THE VALUE AND AVERAGE VALUE OF SUCH PROPERTY 828
SHALL BE DETERMINED IN THE SAME MANNER PROVIDED IN DIVISION 830
(B)(1) OF THIS SECTION.
(2) THE MUNICIPAL PAYROLL FACTOR IS THE QUOTIENT OBTAINED 832
BY DIVIDING (a) THE TOTAL AMOUNT OF COMPENSATION PAID BY THE 833
TAXPAYER TO ITS EMPLOYEES DURING THE TAXABLE YEAR THAT IS SUBJECT 835
TO INCOME TAX WITHHOLDING BY THE MUNICIPAL CORPORATION BY (b) THE 838
TOTAL AMOUNT OF COMPENSATION PAID IN THIS STATE BY THE TAXPAYER 839
TO ITS EMPLOYEES DURING THE TAXABLE YEAR. COMPENSATION HAS THE 840
SAME MEANING AS IN DIVISION (B)(2) OF THIS SECTION. 842
(3) THE MUNICIPAL SALES FACTOR IS A FRACTION THE NUMERATOR 845
OF WHICH IS THE TAXPAYER'S TOTAL SALES IN A MUNICIPAL CORPORATION 846
DURING THE TAXABLE YEAR, AND THE DENOMINATOR OF WHICH IS THE 847
TAXPAYER'S TOTAL SALES IN THIS STATE DURING SUCH YEAR. 848
FOR THE PURPOSE OF DIVISION (C)(3) OF THIS SECTION, SALES 850
OF TANGIBLE PERSONAL PROPERTY ARE IN THE MUNICIPAL CORPORATION 851
WHERE SUCH PROPERTY IS RECEIVED IN THE MUNICIPAL CORPORATION BY 852
THE PURCHASER. SALES OF ELECTRICITY DIRECTLY TO THE CONSUMER, AS 853
DEFINED IN SECTION 5733.059 OF THE REVISED CODE, SHALL BE 854
CONSIDERED SALES OF TANGIBLE PERSONAL PROPERTY. IN THE CASE OF 855
THE DELIVERY OF TANGIBLE PERSONAL PROPERTY BY COMMON CARRIER OR 856
BY OTHER MEANS OF TRANSPORTATION, THE PLACE AT WHICH SUCH
PROPERTY ULTIMATELY IS RECEIVED AFTER ALL TRANSPORTATION HAS BEEN 857
COMPLETED SHALL BE CONSIDERED AS THE PLACE AT WHICH THE PROPERTY 858
IS RECEIVED BY THE PURCHASER. DIRECT DELIVERY IN THE MUNICIPAL 859
CORPORATION, OTHER THAN FOR PURPOSES OF TRANSPORTATION, TO A 861
PERSON OR FIRM DESIGNATED BY A PURCHASER CONSTITUTES DELIVERY TO 862
THE PURCHASER IN THAT MUNICIPAL CORPORATION, AND DIRECT DELIVERY 864
OUTSIDE THE MUNICIPAL CORPORATION TO A PERSON OR FIRM DESIGNATED
BY A PURCHASER DOES NOT CONSTITUTE DELIVERY TO THE PURCHASER IN 865
THAT MUNICIPAL CORPORATION, REGARDLESS OF WHERE TITLE PASSES OR 866
OTHER CONDITIONS OF SALE. SALES, OTHER THAN SALES OF TANGIBLE 867
PERSONAL PROPERTY, ARE IN THE MUNICIPAL CORPORATION IF EITHER: 868
(a) THE INCOME-PRODUCING ACTIVITY IS PERFORMED SOLELY IN 870
21
THE MUNICIPAL CORPORATION; 871
(b) THE INCOME-PRODUCING ACTIVITY IS PERFORMED BOTH WITHIN 874
AND WITHOUT THE MUNICIPAL CORPORATION AND A GREATER PROPORTION OF
THE INCOME-PRODUCING ACTIVITY IS PERFORMED WITHIN THAT MUNICIPAL 876
CORPORATION THAN ANY OTHER LOCATION IN THIS STATE, BASED ON COSTS 877
OF PERFORMANCE.
(D) IF A TAXPAYER IS A COMBINED COMPANY AS DEFINED IN 879
SECTION 5727.01 OF THE REVISED CODE, THE MUNICIPAL PROPERTY, 880
PAYROLL, AND SALES FACTORS UNDER DIVISION (C) OF THIS SECTION 882
SHALL BE ADJUSTED AS FOLLOWS:
(1) THE NUMERATOR OF THE MUNICIPAL PROPERTY FACTOR SHALL 884
INCLUDE ONLY THE VALUE, AS DETERMINED UNDER DIVISION (C)(1) OF 885
THIS SECTION, OF THE COMPANY'S REAL AND TANGIBLE PROPERTY IN THE 886
MUNICIPAL CORPORATION ATTRIBUTED TO THE COMPANY'S ACTIVITY AS AN 888
ELECTRIC COMPANY USING THE SAME METHODOLOGY PRESCRIBED UNDER 889
SECTION 5727.03 OF THE REVISED CODE FOR TAXABLE TANGIBLE PERSONAL 890
PROPERTY.
(2) THE NUMERATOR OF THE MUNICIPAL PAYROLL FACTOR SHALL 892
INCLUDE ONLY COMPENSATION PAID IN THE MUNICIPAL CORPORATION BY 893
THE COMPANY TO ITS EMPLOYEES FOR PERSONAL SERVICES RENDERED IN 895
THE COMPANY'S ACTIVITY AS AN ELECTRIC COMPANY. 896
(3) THE NUMERATOR OF THE MUNICIPAL SALES FACTOR SHALL 898
INCLUDE ONLY THE SALES OF TANGIBLE PERSONAL PROPERTY AND 899
SERVICES, AS DETERMINED UNDER DIVISION (C)(3) OF THIS SECTION, 900
MADE IN THE MUNICIPAL CORPORATION IN THE COURSE OF THE COMPANY'S 901
ACTIVITY AS AN ELECTRIC COMPANY.
(E)(1) IF THE PROVISIONS FOR APPORTIONING ADJUSTED FEDERAL 903
TAXABLE INCOME OR OHIO NET INCOME UNDER DIVISION (B), (C), AND 905
(D) OF THIS SECTION DO NOT FAIRLY REPRESENT BUSINESS ACTIVITY IN 906
THIS STATE OR AMONG MUNICIPAL CORPORATIONS, THE TAX COMMISSIONER 907
MAY ADOPT RULES FOR APPORTIONING SUCH INCOME BY AN ALTERNATIVE
METHOD THAT FAIRLY REPRESENTS BUSINESS ACTIVITY IN THIS STATE OR 908
AMONG MUNICIPAL CORPORATIONS. 909
(2) IF ANY OF THE FACTORS DETERMINED UNDER DIVISION (B), 912
22
(C), OR (D) OF THIS SECTION DOES NOT FAIRLY REPRESENT THE EXTENT 913
OF A TAXPAYER'S BUSINESS ACTIVITY IN THIS STATE OR AMONG 914
MUNICIPAL CORPORATIONS, THE TAXPAYER MAY REQUEST, OR THE TAX 916
COMMISSIONER MAY REQUIRE, THAT THE TAXPAYER'S ADJUSTED FEDERAL 917
TAXABLE INCOME OR OHIO NET INCOME BE DETERMINED BY AN ALTERNATIVE 919
METHOD, INCLUDING ANY OF THE ALTERNATIVE METHODS ENUMERATED IN 920
DIVISION (B)(2)(d) OF SECTION 5733.05 OF THE REVISED CODE. A 922
TAXPAYER REQUESTING AN ALTERNATIVE METHOD SHALL MAKE THE REQUEST 923
IN WRITING TO THE TAX COMMISSIONER EITHER WITH THE ANNUAL REPORT, 924
A TIMELY FILED AMENDED REPORT, OR A TIMELY FILED PETITION FOR 925
REASSESSMENT. WHEN THE TAX COMMISSIONER REQUIRES OR PERMITS AN 926
ALTERNATIVE METHOD UNDER DIVISION (E)(2) OF THIS SECTION, THE TAX 927
COMMISSIONER SHALL CAUSE A WRITTEN NOTICE TO THAT EFFECT TO BE 929
DELIVERED TO ANY MUNICIPAL CORPORATION THAT WOULD BE AFFECTED BY 930
APPLICATION OF THE ALTERNATIVE METHOD. NOTHING IN THIS DIVISION 931
SHALL BE CONSTRUED TO EXTEND ANY STATUTE OF LIMITATIONS UNDER 932
THIS CHAPTER.
(F)(1) THE TAX COMMISSIONER MAY ADOPT RULES PROVIDING FOR 935
THE COMBINATION OF ADJUSTED FEDERAL TAXABLE INCOMES OF TAXPAYERS 936
SATISFYING THE OWNERSHIP OR CONTROL REQUIREMENTS OF SECTION 937
5733.052 OF THE REVISED CODE IF THE TAX COMMISSIONER FINDS THAT
SUCH COMBINATIONS ARE NECESSARY TO PROPERLY REFLECT ADJUSTED 938
FEDERAL TAXABLE INCOME, OHIO NET INCOME, OR THE PORTION OF OHIO 940
NET INCOME TO BE TAXABLE BY MUNICIPAL CORPORATIONS. 941
(2) A TAXPAYER SATISFYING THE OWNERSHIP OR CONTROL 943
REQUIREMENTS OF SECTION 5733.052 OF THE REVISED CODE WITH RESPECT 944
TO ONE OR MORE OTHER TAXPAYERS MAY NOT COMBINE THEIR ADJUSTED 945
FEDERAL TAXABLE INCOMES FOR THE PURPOSES OF THIS SECTION UNLESS 947
RULES ARE ADOPTED UNDER DIVISION (F)(1) OF THIS SECTION ALLOWING 948
SUCH A COMBINATION OR THE TAX COMMISSIONER FINDS THAT SUCH A 949
COMBINATION IS NECESSARY TO PROPERLY REFLECT THE TAXPAYERS' 950
ADJUSTED FEDERAL TAXABLE INCOMES, OHIO NET INCOMES, OR THE 952
PORTION OF OHIO NET INCOMES TO BE SUBJECT TO TAXATION WITHIN A 953
MUNICIPAL CORPORATION.
23
Sec. 5745.03. (A) FOR EACH TAXABLE YEAR, EACH TAXPAYER 955
SHALL FILE AN ANNUAL REPORT WITH THE TREASURER OF STATE NOT LATER 957
THAN THE FIFTEENTH DAY OF THE FOURTH MONTH AFTER THE END OF THE 958
TAXPAYER'S TAXABLE YEAR, AND SHALL REMIT WITH THAT REPORT THE 959
AMOUNT OF TAX DUE AS SHOWN ON THE REPORT LESS THE AMOUNT PAID FOR 960
THE YEAR UNDER SECTION 5745.04 OF THE REVISED CODE. THE 961
REMITTANCE SHALL BE MADE IN THE FORM PRESCRIBED BY THE TREASURER 962
OF STATE, INCLUDING ELECTRONIC FUNDS TRANSFER IF THE AMOUNT 963
PAYABLE WITH THE REPORT EXCEEDS ONE THOUSAND DOLLARS. THE 964
TREASURER OF STATE SHALL CREDIT NINETY-EIGHT AND ONE-HALF PER 965
CENT OF SUCH REMITTANCES TO THE MUNICIPAL INCOME TAX FUND, WHICH 966
IS HEREBY CREATED IN THE STATE TREASURY, AND CREDIT THE REMAINDER 967
TO THE MUNICIPAL INCOME TAX ADMINISTRATIVE FUND, WHICH IS HEREBY 968
CREATED IN THE STATE TREASURY. THE TREASURER OF STATE SHALL 969
INDICATE ON THE REPORT THE DATE IT WAS FILED AND THE AMOUNT 970
REMITTED, AND IMMEDIATELY SHALL TRANSMIT THE REPORT TO THE TAX 971
COMMISSIONER.
(B) ANY TAXPAYER THAT HAS BEEN GRANTED AN EXTENSION FOR 973
FILING A FEDERAL INCOME TAX RETURN MAY REQUEST AN EXTENSION FOR 974
FILING THE RETURN REQUIRED UNDER THIS SECTION BY FILING WITH THE 975
TAX COMMISSIONER A COPY OF THE TAXPAYER'S REQUEST FOR THE FEDERAL 976
FILING EXTENSION. THE REQUEST SHALL BE FILED NOT LATER THAN THE 977
LAST DAY FOR FILING THE RETURN AS REQUIRED UNDER DIVISION (A) OF 978
THIS SECTION. IF SUCH A REQUEST IS PROPERLY AND TIMELY FILED, 979
THE TAX COMMISSIONER SHALL EXTEND THE LAST DAY FOR FILING THE 981
RETURN REQUIRED UNDER THIS SECTION FOR THE SAME PERIOD FOR WHICH 982
THE FEDERAL FILING EXTENSION WAS GRANTED. THE TAX COMMISSIONER 983
MAY DENY THE FILING EXTENSION REQUEST ONLY IF THE TAXPAYER FAILS 984
TO TIMELY FILE THE REQUEST, FAILS TO FILE A COPY OF THE FEDERAL 985
EXTENSION REQUEST, OWES PAST DUE TAXES, INTEREST, OR PENALTY 986
UNDER THIS CHAPTER, OR HAS FAILED TO FILE A REQUIRED REPORT OR 987
OTHER DOCUMENT FOR A PRIOR TAXABLE YEAR. THE GRANTING OF AN 988
EXTENSION UNDER THIS SECTION DOES NOT EXTEND THE LAST DAY FOR 989
PAYING TAXES WITHOUT PENALTY PURSUANT TO THIS CHAPTER UNLESS THE 990
24
TAX COMMISSIONER EXTENDS THE PAYMENT DATE. 991
(C) THE ANNUAL REPORT SHALL INCLUDE STATEMENTS OF THE 994
FOLLOWING FACTS AS OF THE LAST DAY OF THE TAXPAYER'S TAXABLE 995
YEAR:
(1) THE NAME OF THE TAXPAYER; 997
(2) THE NAME OF THE STATE OR COUNTRY UNDER THE LAWS OF 999
WHICH IT IS INCORPORATED; 1,000
(3) THE LOCATION OF ITS PRINCIPAL OFFICE IN THIS STATE 1,002
AND, IN THE CASE OF A TAXPAYER ORGANIZED UNDER THE LAWS OF 1,004
ANOTHER STATE, THE PRINCIPAL PLACE OF BUSINESS IN THIS STATE AND 1,005
THE NAME AND ADDRESS OF THE OFFICER OR AGENT OF THE TAXPAYER IN 1,006
CHARGE OF THE BUSINESS CONDUCTED IN THIS STATE; 1,007
(4) THE NAMES OF THE PRESIDENT, SECRETARY, TREASURER, AND 1,009
STATUTORY AGENT IN THIS STATE, WITH THE POST-OFFICE ADDRESS OF 1,010
EACH; 1,011
(5) THE DATE ON WHICH THE TAXPAYER'S TAXABLE YEAR BEGINS 1,013
AND ENDS;
(6) THE TAXPAYER'S FEDERAL TAXABLE INCOME DURING THE 1,015
TAXPAYER'S TAXABLE YEAR; 1,016
(7) ANY OTHER INFORMATION THE TAX COMMISSIONER REQUIRES 1,018
FOR THE PROPER ADMINISTRATION OF THIS CHAPTER. 1,019
(D) THE TAX COMMISSIONER MAY REQUIRE ANY REPORTS REQUIRED 1,021
UNDER THIS CHAPTER TO BE FILED IN AN ELECTRONIC FORMAT. 1,023
(E) A MUNICIPAL CORPORATION MAY NOT REQUIRE A TAXPAYER 1,025
REQUIRED TO FILE A REPORT UNDER THIS SECTION TO FILE A REPORT OF 1,026
THE TAXPAYER'S INCOME, BUT A MUNICIPAL CORPORATION MAY REQUIRE A 1,027
TAXPAYER TO REPORT TO THE MUNICIPAL CORPORATION THE VALUE OF THE 1,028
TAXPAYER'S REAL AND TANGIBLE PERSONAL PROPERTY SITUATED IN THE 1,029
MUNICIPAL CORPORATION, COMPENSATION PAID IN THE MUNICIPAL 1,030
CORPORATION TO EMPLOYEES BY THE TAXPAYER, AND SALES MADE IN THE 1,031
MUNICIPAL CORPORATION BY THE TAXPAYER, TO THE EXTENT NECESSARY 1,032
FOR THE MUNICIPAL CORPORATION TO COMPUTE THE TAXPAYER'S MUNICIPAL 1,033
PROPERTY, PAYROLL, AND SALES FACTORS FOR THE MUNICIPAL 1,034
CORPORATION. 1,035
25
(F) ON OR BEFORE THE THIRTY-FIRST DAY OF JANUARY EACH 1,038
YEAR, EACH MUNICIPAL CORPORATION IMPOSING A TAX ON INCOME SHALL 1,039
CERTIFY TO THE TAX COMMISSIONER THE RATE OF THE TAX IN EFFECT ON 1,040
THE FIRST DAY OF JANUARY OF THAT YEAR. IF ANY MUNICIPAL 1,041
CORPORATION FAILS TO CERTIFY ITS INCOME TAX RATE AS REQUIRED BY 1,043
THIS DIVISION, THE TAX COMMISSIONER SHALL NOTIFY THE DIRECTOR OF 1,044
BUDGET AND MANAGEMENT, WHO, UPON RECEIVING SUCH NOTIFICATION, 1,045
SHALL WITHHOLD FROM EACH PAYMENT MADE TO THE MUNICIPAL 1,046
CORPORATION UNDER SECTION 5745.05 OF THE REVISED CODE FIFTY PER
CENT OF THE AMOUNT OF THE PAYMENT OTHERWISE DUE THE MUNICIPAL 1,048
CORPORATION UNDER THAT SECTION AS COMPUTED ON THE BASIS OF THE 1,049
TAX RATE MOST RECENTLY CERTIFIED UNTIL THE MUNICIPAL CORPORATION 1,050
CERTIFIES THE TAX RATE IN EFFECT ON THE FIRST DAY OF JANUARY OF 1,051
THAT YEAR.
THE TAX RATE USED TO DETERMINE THE TAX PAYABLE TO A 1,053
MUNICIPAL CORPORATION UNDER THIS SECTION FOR A TAXPAYER'S TAXABLE 1,054
YEAR SHALL BE THE TAX RATE IN EFFECT IN A MUNICIPAL CORPORATION 1,055
ON THE FIRST DAY OF JANUARY IN THAT TAXABLE YEAR. IF A 1,056
TAXPAYER'S TAXABLE YEAR IS FOR A PERIOD LESS THAN TWELVE MONTHS 1,057
THAT DOES NOT INCLUDE THE FIRST DAY OF JANUARY, THE TAX RATE USED 1,058
TO DETERMINE THE TAX PAYABLE TO A MUNICIPAL CORPORATION UNDER
THIS SECTION FOR THE TAXPAYER'S TAXABLE YEAR SHALL BE THE TAX 1,059
RATE IN EFFECT IN A MUNICIPAL CORPORATION ON THE FIRST DAY OF 1,060
JANUARY IN THE PRECEDING TAXABLE YEAR.
Sec. 5745.031. AN ELECTRIC LIGHT COMPANY THAT IS NOT AN 1,062
ELECTRIC COMPANY OR A COMBINED COMPANY MAY ELECT TO BE A TAXPAYER 1,063
FOR THE PURPOSES OF THIS CHAPTER IF NOT LESS THAN FIFTY PER CENT 1,064
OF THE COMPANY'S TOTAL SALES IN THIS STATE CONSIST OF 1,065
ELECTRICITY, AS DETERMINED UNDER SECTION 5733.059 OF THE REVISED 1,067
CODE, AND OTHER ENERGY COMMODITIES DURING THE TAXPAYER'S MOST
RECENTLY CONCLUDED TAXABLE YEAR. THE COMPANY SHALL MAKE THE 1,069
ELECTION BY APPLICATION IN WRITING TO THE TAX COMMISSIONER BEFORE 1,070
THE FIRST DAY OF THE FIRST TAXABLE YEAR TO WHICH THE ELECTION IS 1,071
TO APPLY. THE ELECTION IS EFFECTIVE FOR FIVE CONSECUTIVE TAXABLE
26
YEARS AND, ONCE MADE, IS IRREVOCABLE FOR THE FIVE TAXABLE YEARS 1,072
FOR WHICH THE ELECTION WAS MADE. 1,073
THE FAILURE OF SUCH A COMPANY TO MAKE AN ELECTION UNDER 1,075
THIS SECTION SHALL NOT BE CONSTRUED TO EXEMPT OR EXCLUDE SUCH A 1,076
COMPANY FROM THE INCOME TAX OF ANY MUNICIPAL CORPORATION. 1,077
Sec. 5745.04. (A) AS USED IN THIS SECTION, "COMBINED TAX 1,079
LIABILITY" MEANS THE TOTAL OF A TAXPAYER'S INCOME TAX LIABILITIES 1,080
TO ALL MUNICIPAL CORPORATIONS IN THIS STATE FOR A TAXABLE YEAR. 1,081
(B) BEGINNING IN 2003, EACH TAXPAYER SHALL FILE A 1,083
DECLARATION OF ESTIMATED TAX REPORT WITH, AND REMIT ESTIMATED 1,084
TAXES TO, THE TREASURER OF STATE AT THE TIMES AND IN THE AMOUNTS 1,085
PRESCRIBED IN DIVISIONS (B)(1) TO (4) OF THIS SECTION, EXCEPT AS 1,086
PROVIDED IN DIVISION (C) OF THIS SECTION: 1,087
(1) NOT LESS THAN TWENTY-FIVE PER CENT OF THE COMBINED TAX 1,089
LIABILITY FOR THE PRECEDING TAXABLE YEAR OR TWENTY PER CENT OF 1,090
THE COMBINED TAX LIABILITY FOR THE CURRENT TAXABLE YEAR SHALL 1,091
HAVE BEEN REMITTED NOT LATER THAN THE FIFTEENTH DAY OF THE FOURTH 1,092
MONTH AFTER THE END OF THE PRECEDING TAXABLE YEAR; 1,093
(2) NOT LESS THAN FIFTY PER CENT OF THE COMBINED TAX 1,095
LIABILITY FOR THE PRECEDING TAXABLE YEAR OR FORTY PER CENT OF THE 1,096
COMBINED TAX LIABILITY FOR THE CURRENT TAXABLE YEAR SHALL HAVE 1,097
BEEN REMITTED NOT LATER THAN THE FIFTEENTH DAY OF THE SIXTH MONTH 1,098
AFTER THE END OF THE PRECEDING TAXABLE YEAR; 1,099
(3) NOT LESS THAN SEVENTY-FIVE PER CENT OF THE COMBINED 1,101
TAX LIABILITY FOR THE PRECEDING TAXABLE YEAR OR SIXTY PER CENT OF 1,102
THE COMBINED TAX LIABILITY FOR THE CURRENT TAXABLE YEAR SHALL 1,103
HAVE BEEN REMITTED NOT LATER THAN THE FIFTEENTH DAY OF THE NINTH 1,104
MONTH AFTER THE END OF THE PRECEDING TAXABLE YEAR; 1,105
(4) NOT LESS THAN ONE HUNDRED PER CENT OF THE COMBINED TAX 1,107
LIABILITY FOR THE PRECEDING TAXABLE YEAR OR EIGHTY PER CENT OF 1,108
THE COMBINED TAX LIABILITY FOR THE CURRENT TAXABLE YEAR SHALL 1,109
HAVE BEEN REMITTED NOT LATER THAN THE FIFTEENTH DAY OF THE 1,110
TWELFTH MONTH AFTER THE END OF THE PRECEDING TAXABLE YEAR. 1,111
(C) EACH TAXPAYER SHALL REPORT ON THE DECLARATION OF 1,113
27
ESTIMATED TAX REPORT THE PORTION OF THE REMITTANCE THAT THE 1,114
TAXPAYER ESTIMATES THAT IT OWES TO EACH MUNICIPAL CORPORATION FOR 1,115
THE TAXABLE YEAR.
(D) UPON RECEIVING A DECLARATION OF ESTIMATED TAX REPORT 1,117
AND REMITTANCE OF ESTIMATED TAXES UNDER THIS SECTION, THE 1,118
TREASURER OF STATE SHALL CREDIT NINETY-EIGHT AND ONE-HALF PER 1,119
CENT OF THE REMITTANCE TO THE MUNICIPAL INCOME TAX FUND AND 1,120
CREDIT THE REMAINDER TO THE MUNICIPAL INCOME TAX ADMINISTRATIVE 1,121
FUND, AND SHALL TRANSMIT THE REPORT TO THE TAX COMMISSIONER. 1,122
(E) IF ANY REMITTANCE OF ESTIMATED TAXES IS FOR ONE 1,124
THOUSAND DOLLARS OR MORE, THE TAXPAYER SHALL MAKE THE REMITTANCE 1,125
BY ELECTRONIC FUNDS TRANSFER AS PRESCRIBED BY SECTION 5745.04 OF 1,126
THE REVISED CODE.
(F) NOTWITHSTANDING SECTION 5745.08 OR 5745.09 OF THE 1,128
REVISED CODE, NO PENALTY OR INTEREST SHALL BE IMPOSED ON A 1,129
TAXPAYER IF THE DECLARATION OF ESTIMATED TAX REPORT IS PROPERLY 1,130
FILED, AND THE ESTIMATED TAX IS REMITTED, WITHIN THE TIME 1,131
PRESCRIBED BY DIVISION (B) OF THIS SECTION. 1,132
Sec. 5745.041. ANY TAXPAYER REQUIRED BY SECTION 5745.03 OR 1,134
5745.04 OF THE REVISED CODE TO REMIT TAX PAYMENTS BY ELECTRONIC 1,136
FUNDS TRANSFER SHALL REMIT SUCH PAYMENTS TO THE TREASURER OF 1,137
STATE IN THE MANNER PRESCRIBED BY RULES ADOPTED BY THE TREASURER 1,138
UNDER SECTION 113.061 OF THE REVISED CODE. EXCEPT AS OTHERWISE
PROVIDED IN THIS PARAGRAPH, THE PAYMENT OF TAXES BY ELECTRONIC 1,140
FUNDS TRANSFER DOES NOT AFFECT A TAXPAYER'S OBLIGATION TO FILE 1,141
REPORTS UNDER THIS CHAPTER. IF A TAXPAYER REMITS ESTIMATED TAX 1,142
PAYMENTS IN A MANNER, DESIGNATED BY RULE OF THE TREASURER OF 1,143
STATE, THAT PERMITS THE INCLUSION OF ALL INFORMATION NECESSARY
FOR THE TREASURER OF STATE TO PROCESS THE PAYMENT, THE TAXPAYER 1,144
IS NOT REQUIRED TO FILE THE DECLARATION OF ESTIMATED TAX REPORT 1,145
AS OTHERWISE REQUIRED UNDER SECTION 5745.04 OF THE REVISED CODE. 1,146
THE TREASURER OF STATE, IN CONSULTATION WITH THE TAX 1,148
COMMISSIONER, MAY ADOPT RULES GOVERNING THE FORMAT FOR REPORTING 1,149
AND PAYING ESTIMATED TAXES BY ELECTRONIC FUNDS TRANSFER. 1,150
28
A TAXPAYER REQUIRED TO REMIT TAXES BY ELECTRONIC FUNDS 1,153
TRANSFER MAY APPLY TO THE TREASURER OF STATE IN THE MANNER 1,154
PRESCRIBED BY THE TREASURER TO BE EXCUSED FROM THAT REQUIREMENT. 1,155
THE TREASURER OF STATE MAY EXCUSE THE TAXPAYER FROM THE 1,156
REQUIREMENT FOR GOOD CAUSE SHOWN FOR THE PERIOD OF TIME REQUESTED 1,157
BY THE TAXPAYER OR FOR A PORTION OF THAT PERIOD. THE TREASURER 1,158
SHALL NOTIFY THE TAX COMMISSIONER AND THE TAXPAYER OF THE 1,159
TREASURER'S DECISION AS SOON AS IS PRACTICABLE. 1,160
IF A TAXPAYER REQUIRED BY THIS SECTION TO REMIT TAXES BY 1,163
ELECTRONIC FUNDS TRANSFER REMITS THOSE TAXES BY SOME MEANS OTHER 1,164
THAN BY ELECTRONIC FUNDS TRANSFER AS PRESCRIBED BY THIS SECTION 1,165
AND THE RULES ADOPTED BY THE TREASURER OF STATE, AND THE
TREASURER DETERMINES THAT SUCH FAILURE WAS NOT DUE TO REASONABLE 1,166
CAUSE OR WAS DUE TO WILLFUL NEGLECT, THE TREASURER SHALL NOTIFY 1,167
THE TAX COMMISSIONER OF THE FAILURE TO REMIT BY ELECTRONIC FUNDS 1,168
TRANSFER AND SHALL PROVIDE THE COMMISSIONER WITH ANY INFORMATION 1,169
USED IN MAKING THAT DETERMINATION. THE TAX COMMISSIONER MAY 1,170
COLLECT AN ADDITIONAL CHARGE BY ASSESSMENT IN THE MANNER 1,171
PRESCRIBED BY SECTION 5745.12 OF THE REVISED CODE. THE 1,172
ADDITIONAL CHARGE SHALL EQUAL FIVE PER CENT OF THE AMOUNT OF THE 1,173
TAXES OR ESTIMATED TAX PAYMENTS REQUIRED TO BE PAID BY ELECTRONIC 1,174
FUNDS TRANSFER, BUT SHALL NOT EXCEED FIVE THOUSAND DOLLARS. ANY 1,175
ADDITIONAL CHARGE ASSESSED UNDER THIS SECTION IS IN ADDITION TO 1,176
ANY OTHER PENALTY OR CHARGE IMPOSED UNDER THIS CHAPTER, AND SHALL 1,177
BE CONSIDERED AS REVENUE ARISING FROM MUNICIPAL INCOME TAXES 1,178
COLLECTED UNDER THIS CHAPTER. THE TAX COMMISSIONER MAY REMIT ALL 1,179
OR A PORTION OF SUCH A CHARGE AND MAY ADOPT RULES GOVERNING SUCH 1,181
REMISSION.
NO ADDITIONAL CHARGE SHALL BE ASSESSED UNDER THIS SECTION 1,183
AGAINST A TAXPAYER THAT HAS BEEN NOTIFIED OF ITS OBLIGATION TO 1,184
REMIT TAXES UNDER THIS SECTION AND THAT REMITS ITS FIRST TWO TAX 1,185
PAYMENTS AFTER SUCH NOTIFICATION BY SOME MEANS OTHER THAN 1,186
ELECTRONIC FUNDS TRANSFER. THE ADDITIONAL CHARGE MAY BE ASSESSED 1,187
UPON THE REMITTANCE OF ANY SUBSEQUENT TAX PAYMENT THAT THE 1,188
29
TAXPAYER REMITS BY SOME MEANS OTHER THAN ELECTRONIC FUNDS 1,189
TRANSFER. 1,190
Sec. 5745.05. (A) PRIOR TO THE FIRST DAY OF MARCH, JUNE, 1,193
SEPTEMBER, AND DECEMBER, THE TAX COMMISSIONER SHALL CERTIFY TO 1,195
THE DIRECTOR OF BUDGET AND MANAGEMENT THE AMOUNT TO BE PAID TO 1,196
EACH MUNICIPAL CORPORATION, AS INDICATED ON THE DECLARATION OF 1,197
ESTIMATED TAX REPORTS AND ANNUAL REPORTS RECEIVED UNDER SECTIONS 1,198
5745.03 AND 5745.04 OF THE REVISED CODE, LESS ANY AMOUNTS 1,199
PREVIOUSLY DISTRIBUTED FOR THE TAXABLE YEAR. NOT LATER THAN THE 1,200
FIRST DAY OF MARCH, JUNE, SEPTEMBER, AND DECEMBER, THE DIRECTOR 1,202
OF BUDGET AND MANAGEMENT SHALL PROVIDE FOR PAYMENT OF THE AMOUNT
CERTIFIED TO EACH MUNICIPAL CORPORATION FROM THE MUNICIPAL INCOME 1,203
TAX FUND, PLUS A PRO RATA SHARE OF ANY INVESTMENT EARNINGS 1,204
ACCRUING TO THE FUND SINCE THE PREVIOUS PAYMENT UNDER THIS 1,205
SECTION APPORTIONED AMONG MUNICIPAL CORPORATIONS ENTITLED TO SUCH 1,206
PAYMENTS IN PROPORTION TO THE AMOUNT CERTIFIED BY THE TAX 1,207
COMMISSIONER.
(B) IF THE TAX COMMISSIONER DETERMINES THAT THE AMOUNT OF 1,209
TAX PAID BY A TAXPAYER AND DISTRIBUTED TO A MUNICIPAL CORPORATION 1,210
UNDER THIS SECTION FOR A TAXABLE YEAR EXCEEDS THE AMOUNT PAYABLE 1,211
TO THAT MUNICIPAL CORPORATION UNDER THIS CHAPTER AFTER ACCOUNTING 1,212
FOR AMOUNTS REMITTED WITH THE ANNUAL REPORT AND AS ESTIMATED 1,213
TAXES, THE TAX COMMISSIONER SHALL PERMIT THE TAXPAYER TO CREDIT 1,214
THE EXCESS AGAINST THE TAXPAYER'S PAYMENTS TO THE MUNICIPAL 1,216
CORPORATION OF ESTIMATED TAXES REMITTED FOR AN ENSUING TAXABLE
YEAR UNDER SECTION 5745.04 OF THE REVISED CODE. IF, UPON THE 1,218
WRITTEN REQUEST OF THE TAXPAYER, THE TAX COMMISSIONER DETERMINES 1,219
THAT THE EXCESS TO BE SO CREDITED IS LIKELY TO EXCEED THE AMOUNT 1,220
OF ESTIMATED TAXES PAYABLE BY THE TAXPAYER TO THE MUNICIPAL 1,222
CORPORATION DURING THE ENSUING TWELVE MONTHS, THE TAX
COMMISSIONER SHALL SO NOTIFY THE MUNICIPAL CORPORATION AND THE 1,223
MUNICIPAL CORPORATION SHALL ISSUE A REFUND OF THE EXCESS TO THE 1,224
TAXPAYER WITHIN NINETY DAYS AFTER RECEIVING SUCH A NOTICE. 1,225
INTEREST SHALL ACCRUE ON THE AMOUNT TO BE REFUNDED AND IS PAYABLE 1,227
30
TO THE TAXPAYER AT THE RATE PER ANNUM PRESCRIBED BY SECTION 1,228
5703.47 OF THE REVISED CODE FROM THE NINETY-FIRST DAY AFTER THE 1,229
NOTICE IS RECEIVED BY THE MUNICIPAL CORPORATION UNTIL THE DAY THE 1,230
REFUND IS PAID. 1,231
Sec. 5745.06. (A) AS USED IN THIS SECTION: 1,233
(1) "QUALIFYING PASS-THROUGH ENTITY" MEANS A PASS-THROUGH 1,235
ENTITY, AS DEFINED IN SECTION 5733.04 OF THE REVISED CODE, THAT 1,236
IS A TAXPAYER UNDER THIS CHAPTER. 1,237
(2) "QUALIFYING TAXPAYER" MEANS A TAXPAYER, THAT, DURING 1,239
ANY PORTION OF THE TAXABLE YEAR OF A QUALIFYING PASS-THROUGH 1,240
ENTITY, HOLDS A DIRECT OWNERSHIP INTEREST IN THAT QUALIFYING 1,241
PASS-THROUGH ENTITY.
(B) THERE IS HEREBY ALLOWED A NONREFUNDABLE CREDIT AGAINST 1,243
THE AMOUNT OF TAX PAYABLE UNDER THIS CHAPTER TO A MUNICIPAL 1,244
CORPORATION BY A QUALIFYING TAXPAYER. THE CREDIT SHALL EQUAL THE 1,245
QUALIFYING TAXPAYER'S PROPORTIONATE SHARE OF THE LESSER OF THE 1,246
TAX DUE FROM OR THE TAX PAID BY A QUALIFYING PASS-THROUGH ENTITY 1,247
TO THAT MUNICIPAL CORPORATION UNDER THIS CHAPTER FOR THE ENTITY'S 1,248
TAXABLE YEAR ENDING IN THE QUALIFYING TAXPAYER'S TAXABLE YEAR. 1,249
THE TAXPAYER SHALL CLAIM THE CREDIT FOR THE TAXPAYER'S TAXABLE 1,250
YEAR IN WHICH THE QUALIFYING PASS-THROUGH ENTITY'S TAXABLE YEAR 1,251
ENDS. IN DETERMINING THE TAXPAYER'S PROPORTIONATE SHARE OF THE 1,252
TAX DUE OR TAX PAID BY THE QUALIFYING PASS-THROUGH ENTITY, THE 1,253
TAXPAYER SHALL FOLLOW THE CONCEPTS SET FORTH IN SUBCHAPTERS J AND 1,254
K OF THE INTERNAL REVENUE CODE. 1,256
IF THE AMOUNT OF THE CREDIT CLAIMED FOR A TAXABLE YEAR 1,258
EXCEEDS THE AMOUNT OF TAX DUE TO THAT MUNICIPAL CORPORATION FOR 1,259
THAT YEAR, THE EXCESS SHALL BE ALLOWED AS A CREDIT AGAINST THE 1,260
TAXES PAYABLE TO THAT MUNICIPAL CORPORATION FOR ENSUING TAXABLE 1,261
YEARS UNTIL THE FULL AMOUNT OF THE CREDIT IS CLAIMED. ANY AMOUNT 1,262
OF THE CREDIT CLAIMED FOR A TAXABLE YEAR SHALL BE DEDUCTED FROM 1,263
THE BALANCE CARRIED FORWARD TO THE ENSUING TAXABLE YEAR. 1,264
Sec. 5745.07. IF THE TAX REQUIRED TO BE PAID UNDER THIS 1,266
CHAPTER, OR ANY PORTION OF THAT TAX, WHETHER DETERMINED BY THE 1,268
31
TAX COMMISSIONER OR THE TAXPAYER, IS NOT PAID ON OR BEFORE THE 1,269
DATE PRESCRIBED FOR ITS PAYMENT, INTEREST SHALL BE ASSESSED, 1,270
COLLECTED, AND PAID, IN THE SAME MANNER AS THE TAX, UPON SUCH 1,271
UNPAID AMOUNT AT THE RATE PER ANNUM PRESCRIBED BY SECTION 5703.47 1,272
OF THE REVISED CODE FROM THE DATE PRESCRIBED FOR ITS PAYMENT 1,273
UNTIL IT IS PAID OR UNTIL THE DAY AN ASSESSMENT IS ISSUED UNDER 1,274
SECTION 5745.12 OF THE REVISED CODE, WHICHEVER OCCURS FIRST. 1,275
Sec. 5745.08. (A) THE FOLLOWING PENALTIES SHALL APPLY 1,278
UNDER THE CIRCUMSTANCES INDICATED:
(1) IF A TAXPAYER REQUIRED TO FILE A REPORT OR REMIT TAX 1,281
AS REQUIRED BY THIS CHAPTER FAILS TO MAKE AND FILE THE REPORT 1,283
WITHIN THE TIME PRESCRIBED, INCLUDING ANY EXTENSIONS OF TIME 1,284
GRANTED BY THE TAX COMMISSIONER, THE TAX COMMISSIONER MAY IMPOSE 1,285
A PENALTY NOT EXCEEDING THE GREATER OF FIFTY DOLLARS PER MONTH OR 1,287
FRACTION OF A MONTH, NOT TO EXCEED FIVE HUNDRED DOLLARS, OR FIVE 1,288
PER CENT PER MONTH OR FRACTION OF A MONTH, NOT TO EXCEED FIFTY 1,289
PER CENT, OF THE TAX REQUIRED TO BE SHOWN ON THE REPORT, FOR EACH 1,290
MONTH OR FRACTION OF A MONTH ELAPSING BETWEEN THE DUE DATE, 1,291
INCLUDING EXTENSIONS OF THE DUE DATE, AND THE DAY ON WHICH THE
REPORT IS FILED. 1,292
(2) IF A TAXPAYER FAILS TO PAY ANY AMOUNT OF ESTIMATED TAX 1,295
REQUIRED TO BE PAID UNDER DIVISION (B) OF SECTION 5745.04 OF THE 1,297
REVISED CODE BY THE DATES PRESCRIBED FOR PAYMENT, THE TAX 1,299
COMMISSIONER MAY IMPOSE A PENALTY NOT TO EXCEED TWICE THE 1,301
INTEREST CHARGED UNDER SECTION 5745.09 OF THE REVISED CODE FOR 1,302
THE DELINQUENT PAYMENT.
(3) IF A TAXPAYER FILES WHAT PURPORTS TO BE A REPORT 1,304
REQUIRED BY THIS CHAPTER THAT DOES NOT CONTAIN INFORMATION UPON 1,306
WHICH THE SUBSTANTIAL CORRECTNESS OF THE REPORT MAY BE JUDGED OR 1,307
CONTAINS INFORMATION THAT ON ITS FACE INDICATES THAT THE REPORT 1,308
IS SUBSTANTIALLY INCORRECT, AND THE FILING OF THE REPORT IN THAT 1,309
MANNER IS DUE TO A POSITION THAT IS FRIVOLOUS OR A DESIRE THAT IS 1,310
APPARENT FROM THE REPORT TO DELAY OR IMPEDE THE ADMINISTRATION OF 1,311
THIS CHAPTER, A PENALTY OF UP TO FIVE HUNDRED DOLLARS MAY BE 1,313
32
IMPOSED.
(4) IF A TAXPAYER MAKES A FRAUDULENT ATTEMPT TO EVADE THE 1,316
REPORTING OR PAYMENT OF THE TAX REQUIRED TO BE SHOWN ON ANY 1,317
REPORT REQUIRED UNDER THIS CHAPTER, A PENALTY MAY BE IMPOSED NOT 1,320
EXCEEDING THE GREATER OF ONE THOUSAND DOLLARS OR ONE HUNDRED PER
CENT OF THE TAX REQUIRED TO BE SHOWN ON THE REPORT. 1,321
(5) IF ANY PERSON MAKES A FALSE OR FRAUDULENT CLAIM FOR A 1,323
REFUND UNDER SECTION 5745.11 OF THE REVISED CODE, A PENALTY MAY 1,324
BE IMPOSED NOT EXCEEDING THE GREATER OF ONE THOUSAND DOLLARS OR 1,325
ONE HUNDRED PER CENT OF THE CLAIM. ANY PENALTY IMPOSED UNDER 1,326
DIVISION (A)(5) OF THIS SECTION, ANY REFUND ISSUED ON THE CLAIM, 1,327
AND INTEREST ON ANY REFUND FROM THE DATE OF THE REFUND, MAY BE 1,328
ASSESSED UNDER SECTION 5745.12 OF THE REVISED CODE WITHOUT REGARD 1,329
TO ANY TIME LIMITATION FOR THE ASSESSMENT IMPOSED BY DIVISION (A) 1,331
OF THAT SECTION.
(B) FOR THE PURPOSES OF THIS SECTION, THE TAX REQUIRED TO 1,333
BE SHOWN ON THE REPORT SHALL BE REDUCED BY THE AMOUNT OF ANY PART 1,334
OF THE TAX PAID ON OR BEFORE THE DATE, INCLUDING EXTENSIONS OF 1,335
THE DATE, PRESCRIBED FOR FILING THE REPORT. 1,336
(C) EACH PENALTY IMPOSED UNDER THIS SECTION SHALL BE IN 1,338
ADDITION TO ANY OTHER PENALTY PROVIDED IN THIS SECTION. ALL OR 1,339
PART OF ANY PENALTY IMPOSED UNDER THIS SECTION MAY BE ABATED BY 1,340
THE COMMISSIONER. THE TAX COMMISSIONER MAY ADOPT RULES GOVERNING 1,341
THE IMPOSITION AND ABATEMENT OF SUCH PENALTIES. 1,342
(D) ALL AMOUNTS COLLECTED UNDER THIS SECTION FROM A 1,344
TAXPAYER SHALL BE CONSIDERED AS TAXES COLLECTED UNDER THIS 1,346
CHAPTER AND SHALL BE CREDITED AND DISTRIBUTED TO MUNICIPAL 1,347
CORPORATIONS IN THE AMOUNTS FOUND TO BE DUE SUCH MUNICIPAL 1,348
CORPORATIONS.
Sec. 5745.09. (A) IN CASE OF ANY UNDERPAYMENT OF THE 1,350
ESTIMATED TAX UNDER SECTION 5745.04 OF THE REVISED CODE, THERE 1,353
SHALL BE ADDED TO THE TAX AN AMOUNT DETERMINED AT THE RATE PER 1,354
ANNUM PRESCRIBED BY SECTION 5703.47 OF THE REVISED CODE UPON THE 1,355
AMOUNT OF UNDERPAYMENT FOR THE PERIOD OF UNDERPAYMENT. 1,357
33
(B) THE AMOUNT OF THE UNDERPAYMENT SHALL BE THE EXCESS OF 1,359
DIVISION (B)(1) OVER DIVISION (B)(2) OF THIS SECTION: 1,360
(1) THE AMOUNT OF THE ESTIMATED TAX PAYMENT THAT WOULD BE 1,362
REQUIRED TO BE PAID FOR THE TAXABLE YEAR IF THE TOTAL ESTIMATED 1,363
TAX WERE EQUAL TO THE TOTAL TAX SHOWN TO BE DUE ON THE ANNUAL 1,365
REPORT, OR IF NO REPORT WAS FILED, THE TAX FOR SUCH YEAR; 1,366
(2) THE AMOUNT, IF ANY, OF THE ESTIMATED TAX PAID ON OR 1,368
BEFORE THE LAST DAY PRESCRIBED FOR SUCH PAYMENT. 1,369
(C) THE PERIOD OF THE UNDERPAYMENT SHALL RUN FROM THE DATE 1,371
THE ESTIMATED TAX PAYMENT WAS REQUIRED TO BE MADE TO THE DATE ON 1,372
WHICH SUCH PAYMENT IS MADE. FOR PURPOSES OF THIS SECTION, A 1,373
PAYMENT OF ESTIMATED TAX ON ANY PAYMENT DATE SHALL BE CONSIDERED 1,374
A PAYMENT OF ANY PREVIOUS UNDERPAYMENT ONLY TO THE EXTENT SUCH 1,375
PAYMENT EXCEEDS THE AMOUNT OF THE PAYMENT PRESENTLY DUE. 1,376
(D) ALL AMOUNTS COLLECTED UNDER THIS SECTION SHALL BE 1,378
CONSIDERED AS TAXES COLLECTED UNDER THIS CHAPTER AND SHALL BE 1,379
CREDITED AND DISTRIBUTED TO MUNICIPAL CORPORATIONS IN THE SAME 1,380
PROPORTIONS AS THE TAXPAYER'S TAXES ARE DISTRIBUTED FOR THE 1,381
REPORTING PERIOD UNDER SECTION 5745.05 OF THE REVISED CODE. 1,382
Sec. 5745.10. EXCEPT AS OTHERWISE PROVIDED IN SECTION 1,385
5703.053 OF THE REVISED CODE, IF ANY REPORT, CLAIM, STATEMENT, OR
OTHER DOCUMENT REQUIRED TO BE FILED, OR ANY PAYMENT REQUIRED TO 1,386
BE MADE, WITHIN A PRESCRIBED PERIOD OR ON OR BEFORE A PRESCRIBED 1,387
DATE UNDER THIS CHAPTER IS, AFTER SUCH PERIOD OR SUCH DATE, 1,389
DELIVERED BY UNITED STATES MAIL TO THE AGENCY, OFFICER, OR OFFICE 1,391
WITH WHICH SUCH REPORT, CLAIM, STATEMENT, OR OTHER DOCUMENT IS 1,392
REQUIRED TO BE FILED, OR TO WHICH SUCH PAYMENT IS REQUIRED TO BE 1,393
MADE, THE DATE OF THE POSTMARK STAMPED ON THE COVER IN WHICH SUCH 1,394
REPORT, CLAIM, STATEMENT, OR OTHER DOCUMENT, OR PAYMENT IS MAILED 1,395
SHALL BE DEEMED THE DATE OF DELIVERY OR THE DATE OF PAYMENT. 1,396
"THE DATE OF THE POSTMARK" MEANS, IN THE EVENT THERE IS 1,398
MORE THAN ONE DATE ON THE COVER, THE EARLIEST DATE IMPRINTED ON 1,399
THE COVER BY THE POST OFFICE. 1,400
Sec. 5745.11. AN APPLICATION TO REFUND TO A TAXPAYER THE 1,404
34
AMOUNT OF TAXES PAID ON ANY ILLEGAL, ERRONEOUS, OR EXCESSIVE 1,406
ASSESSMENT, WITH INTEREST ON THAT AMOUNT AS PROVIDED BY SECTION 1,407
5745.07 OF THE REVISED CODE, SHALL BE FILED WITH THE TAX 1,409
COMMISSIONER WITHIN THREE YEARS AFTER THE DATE OF THE ILLEGAL, 1,410
ERRONEOUS, OR EXCESSIVE PAYMENT OF THE TAX, OR WITHIN ANY 1,411
ADDITIONAL PERIOD ALLOWED BY DIVISION (A) OF SECTION 5745.12 OF 1,412
THE REVISED CODE. THE APPLICATION SHALL BE FILED IN THE FORM 1,414
PRESCRIBED BY THE TAX COMMISSIONER.
UPON THE FILING OF A REFUND APPLICATION, THE TAX 1,416
COMMISSIONER SHALL DETERMINE THE AMOUNT OF REFUND DUE AND CERTIFY 1,418
THE AMOUNT OF THE REFUND TO EACH MUNICIPAL CORPORATION TO WHICH 1,419
THE OVERPAYMENT WAS MADE. THE MUNICIPAL CORPORATION SHALL ISSUE 1,420
A REFUND TO THE TAXPAYER, OR, UPON THE TAXPAYER'S WRITTEN 1,421
REQUEST, SHALL CREDIT THE AMOUNT OF THE REFUND AGAINST THE 1,422
TAXPAYER'S ESTIMATED TAX PAYMENTS TO THE MUNICIPAL CORPORATION 1,423
FOR AN ENSUING TAXABLE YEAR. ANY PORTION OF THE REFUND NOT 1,424
ISSUED WITHIN NINETY DAYS AFTER THE TAX COMMISSIONER'S NOTICE IS 1,425
RECEIVED BY THE MUNICIPAL CORPORATION SHALL BEAR INTEREST AT THE 1,426
RATE PER ANNUM PRESCRIBED BY SECTION 5703.47 OF THE REVISED CODE
FROM THE NINETIETH DAY AFTER SUCH NOTICE IS RECEIVED BY THE 1,428
MUNICIPAL CORPORATION UNTIL THE DAY THE REFUND IS PAID OR
CREDITED. 1,429
Sec. 5745.12. (A) IF ANY TAXPAYER REQUIRED TO FILE A 1,432
REPORT UNDER THIS CHAPTER FAILS TO FILE THE REPORT WITHIN THE 1,433
TIME PRESCRIBED, FILES AN INCORRECT REPORT, OR FAILS TO REMIT THE 1,434
FULL AMOUNT OF THE TAX DUE FOR THE PERIOD COVERED BY THE REPORT, 1,435
THE TAX COMMISSIONER MAY MAKE AN ASSESSMENT AGAINST THE TAXPAYER 1,436
FOR ANY DEFICIENCY FOR THE PERIOD FOR WHICH THE REPORT OR TAX IS 1,438
DUE, BASED UPON ANY INFORMATION IN THE COMMISSIONER'S POSSESSION. 1,439
THE TAX COMMISSIONER SHALL NOT MAKE OR ISSUE AN ASSESSMENT 1,441
AGAINST A TAXPAYER MORE THAN THREE YEARS AFTER THE LATER OF THE 1,443
FINAL DATE THE REPORT SUBJECT TO ASSESSMENT WAS REQUIRED TO BE 1,444
FILED OR THE DATE THE REPORT WAS FILED. SUCH TIME LIMIT MAY BE 1,445
EXTENDED IF BOTH THE TAXPAYER AND THE COMMISSIONER CONSENT IN 1,446
35
WRITING TO THE EXTENSION. ANY SUCH EXTENSION SHALL EXTEND THE 1,447
THREE-YEAR TIME LIMIT IN SECTION 5745.11 OF THE REVISED CODE FOR 1,448
THE SAME PERIOD OF TIME. THERE SHALL BE NO BAR OR LIMIT TO AN 1,449
ASSESSMENT AGAINST A TAXPAYER THAT FAILS TO FILE A REPORT SUBJECT 1,451
TO ASSESSMENT AS REQUIRED BY THIS CHAPTER, OR THAT FILES A
FRAUDULENT REPORT. THE COMMISSIONER SHALL GIVE THE PARTY 1,453
ASSESSED WRITTEN NOTICE OF THE ASSESSMENT BY PERSONAL SERVICE OR 1,454
CERTIFIED MAIL. 1,455
(B) UNLESS THE TAXPAYER TO WHICH THE NOTICE OF ASSESSMENT 1,458
IS DIRECTED FILES WITH THE COMMISSIONER WITHIN SIXTY DAYS AFTER 1,459
SERVICE THEREOF, EITHER PERSONALLY OR BY CERTIFIED MAIL, A 1,460
PETITION FOR REASSESSMENT IN WRITING, SIGNED BY THE AUTHORIZED 1,461
AGENT OF THE TAXPAYER ASSESSED HAVING KNOWLEDGE OF THE FACTS, AND 1,462
MAKES PAYMENT OF THE PORTION OF THE ASSESSMENT REQUIRED BY 1,463
DIVISION (E) OF THIS SECTION, THE ASSESSMENT SHALL BECOME FINAL, 1,464
AND THE AMOUNT OF THE ASSESSMENT SHALL BE DUE AND PAYABLE FROM 1,465
THE TAXPAYER TO THE TREASURER OF STATE. THE PETITION SHALL 1,466
INDICATE THE TAXPAYER'S OBJECTIONS, BUT ADDITIONAL OBJECTIONS MAY 1,467
BE RAISED IN WRITING IF RECEIVED PRIOR TO THE DATE SHOWN ON THE 1,468
FINAL DETERMINATION BY THE COMMISSIONER. 1,469
UNLESS THE PETITIONER WAIVES A HEARING, THE COMMISSIONER 1,471
SHALL ASSIGN A TIME AND PLACE FOR THE HEARING ON THE PETITION AND 1,472
NOTIFY THE PETITIONER OF THE TIME AND PLACE OF THE HEARING BY 1,473
PERSONAL SERVICE OR CERTIFIED MAIL, BUT THE COMMISSIONER MAY 1,474
CONTINUE THE HEARING FROM TIME TO TIME IF NECESSARY. 1,475
THE COMMISSIONER MAY MAKE SUCH CORRECTION TO THE ASSESSMENT 1,477
AS THE COMMISSIONER FINDS PROPER. THE COMMISSIONER SHALL SERVE A 1,479
COPY OF THE FINAL DETERMINATION ON THE PETITIONER BY PERSONAL 1,480
SERVICE OR BY CERTIFIED MAIL, AND THE COMMISSIONER'S DECISION IN 1,481
THE MATTER SHALL BE FINAL, SUBJECT TO APPEAL AS PROVIDED IN 1,483
SECTION 5717.02 OF THE REVISED CODE. ONLY OBJECTIONS DECIDED ON 1,484
THE MERITS BY THE BOARD OF TAX APPEALS OR A COURT SHALL BE GIVEN 1,485
COLLATERAL ESTOPPEL OR RES JUDICATA EFFECT IN CONSIDERING AN 1,486
APPLICATION FOR REFUND OF AMOUNTS PAID PURSUANT TO THE 1,487
36
ASSESSMENT.
(C) AFTER AN ASSESSMENT BECOMES FINAL, IF ANY PORTION OF 1,489
THE ASSESSMENT REMAINS UNPAID, INCLUDING ACCRUED INTEREST, A 1,490
CERTIFIED COPY OF THE COMMISSIONER'S ENTRY MAKING THE ASSESSMENT 1,492
FINAL MAY BE FILED IN THE OFFICE OF THE CLERK OF THE COURT OF 1,493
COMMON PLEAS IN THE COUNTY IN WHICH THE TAXPAYER HAS AN OFFICE OR 1,494
PLACE OF BUSINESS IN THIS STATE, THE COUNTY IN WHICH THE 1,495
TAXPAYER'S STATUTORY AGENT IS LOCATED, OR FRANKLIN COUNTY. 1,496
IMMEDIATELY UPON THE FILING OF THE ENTRY, THE CLERK SHALL 1,498
ENTER A JUDGMENT AGAINST THE TAXPAYER ASSESSED IN THE AMOUNT 1,499
SHOWN ON THE ENTRY. THE JUDGMENT MAY BE FILED BY THE CLERK IN A 1,500
LOOSE-LEAF BOOK ENTITLED "SPECIAL JUDGMENTS FOR MUNICIPAL INCOME 1,501
TAXES," AND SHALL HAVE THE SAME EFFECT AS OTHER JUDGMENTS. 1,503
EXECUTION SHALL ISSUE UPON THE JUDGMENT UPON THE REQUEST OF THE 1,504
TAX COMMISSIONER, AND ALL LAWS APPLICABLE TO SALES ON EXECUTION 1,505
SHALL APPLY TO SALES MADE UNDER THE JUDGMENT.
THE PORTION OF AN ASSESSMENT NOT PAID WITHIN SIXTY DAYS 1,508
AFTER THE DAY THE ASSESSMENT WAS ISSUED SHALL BEAR INTEREST AT 1,509
THE RATE PER ANNUM PRESCRIBED BY SECTION 5703.47 OF THE REVISED 1,510
CODE FROM THE DAY THE TAX COMMISSIONER ISSUES THE ASSESSMENT 1,511
UNTIL THE ASSESSMENT IS PAID. INTEREST SHALL BE PAID IN THE SAME 1,513
MANNER AS THE TAX AND MAY BE COLLECTED BY ISSUING AN ASSESSMENT 1,514
UNDER THIS SECTION.
(D) ALL MONEY COLLECTED UNDER THIS SECTION SHALL BE 1,516
CREDITED AND DISTRIBUTED TO THE MUNICIPAL CORPORATION TO WHICH 1,517
THE MONEY IS OWED BASED ON THE ASSESSMENT ISSUED UNDER THIS 1,518
SECTION.
(E) THE PORTION OF AN ASSESSMENT WHICH MUST BE PAID UPON 1,520
THE FILING OF A PETITION FOR REASSESSMENT SHALL BE AS FOLLOWS: 1,521
(1) IF THE SOLE ITEM OBJECTED TO IS THE ASSESSED PENALTY 1,523
OR INTEREST, PAYMENT OF THE ASSESSMENT EXCLUDING ANY PENALTY IS 1,525
REQUIRED.
(2) IF THE TAXPAYER THAT IS ASSESSED FAILED TO FILE, PRIOR 1,527
TO THE DATE OF ISSUANCE OF THE ASSESSMENT, THE ANNUAL REPORT 1,528
37
REQUIRED BY SECTION 5745.03 OF THE REVISED CODE, FULL PAYMENT OF 1,531
THE ASSESSMENT INCLUDING PENALTY AND INTEREST IS REQUIRED. 1,532
(3) IF THE TAXPAYER THAT IS ASSESSED FILED, PRIOR TO THE 1,534
DATE OF ISSUANCE OF THE ASSESSMENT, THE ANNUAL REPORT REQUIRED BY 1,535
SECTION 5745.03 OF THE REVISED CODE, AND A BALANCE OF THE TAXES 1,537
SHOWN DUE ON THE REPORTS AS COMPUTED ON THE REPORTS REMAINS 1,538
UNPAID, PAYMENT OF ONLY THAT PORTION OF THE ASSESSMENT 1,539
REPRESENTING THE UNPAID BALANCE IS REQUIRED. 1,540
(4) IF NONE OF THE CONDITIONS SPECIFIED IN DIVISIONS 1,543
(E)(1) TO (3) OF THIS SECTION APPLY, NO PAYMENT IS REQUIRED.
(F) NOTWITHSTANDING THE FACT THAT A PETITION FOR 1,545
REASSESSMENT IS PENDING, THE TAXPAYER MAY PAY ALL OR A PORTION OF 1,547
THE ASSESSMENT THAT IS THE SUBJECT OF THE PETITION. THE
ACCEPTANCE OF A PAYMENT BY THE TREASURER OF STATE DOES NOT 1,548
PREJUDICE ANY CLAIM FOR REFUND UPON FINAL DETERMINATION OF THE 1,549
PETITION. 1,550
IF UPON FINAL DETERMINATION OF THE PETITION AN ERROR IN THE 1,552
ASSESSMENT IS CORRECTED BY THE COMMISSIONER, UPON PETITION SO 1,553
FILED OR PURSUANT TO A DECISION OF THE BOARD OF TAX APPEALS OR 1,554
ANY COURT TO WHICH THE DETERMINATION OR DECISION HAS BEEN 1,555
APPEALED, SO THAT THE AMOUNT DUE FROM THE TAXPAYER UNDER THE 1,556
CORRECTED ASSESSMENT IS LESS THAN THE PORTION PAID, THERE SHALL 1,557
BE ISSUED TO THE TAXPAYER, ITS ASSIGNS, OR LEGAL REPRESENTATIVE A 1,559
REFUND IN THE AMOUNT OF THE OVERPAYMENT AS PROVIDED BY SECTION 1,560
5745.11 OF THE REVISED CODE, WITH INTEREST ON THAT AMOUNT AS 1,562
PROVIDED BY SECTION 5745.11 OF THE REVISED CODE. 1,563
Sec. 5745.13. IF, UPON EXAMINATION OF ANY BOOKS, RECORDS, 1,565
REPORTS, OR OTHER DOCUMENTS OF A TAXPAYER, THE TAX COMMISSIONER 1,566
DETERMINES THAT AN ADJUSTMENT SHALL BE MADE IN THE PORTION OF THE 1,567
TAXPAYER'S INCOME THAT IS TO BE APPORTIONED TO A MUNICIPAL 1,568
CORPORATION, THE TAX COMMISSIONER SHALL NOTIFY THE TAXPAYER AND 1,569
EACH MUNICIPAL CORPORATION TO THE TAXPAYER'S INCOME HAS BEEN 1,570
ADJUSTED.
ANY MUNICIPAL CORPORATION TO WHICH SUCH A NOTICE IS ISSUED 1,572
38
MAY REQUEST A REVIEW AND REDETERMINATION OF THE TAXPAYER'S 1,573
FEDERAL TAXABLE INCOME, OHIO NET INCOME, OR THE PORTION OF OHIO 1,574
NET INCOME APPORTIONED TO THE MUNICIPAL CORPORATION BY FILING A 1,575
PETITION WITH THE TAX COMMISSIONER NOT LATER THAN SIXTY DAYS 1,576
AFTER THE TAX COMMISSIONER ISSUES THE NOTICE. THE PETITION SHALL 1,577
BE FILED EITHER PERSONALLY OR BY CERTIFIED MAIL, AND SHALL 1,578
INDICATE THE OBJECTIONS OF THE MUNICIPAL CORPORATION. 1,579
UPON RECEIVING SUCH A PETITION, IF A HEARING IS REQUESTED 1,581
THE TAX COMMISSIONER SHALL ASSIGN A TIME AND PLACE FOR A HEARING 1,583
ON THE PETITION AND SHALL NOTIFY THE PETITIONER OF THE TIME AND 1,584
PLACE OF THE HEARING BY ORDINARY MAIL. THE TAX COMMISSIONER MAY 1,585
CONTINUE THE HEARING FROM TIME TO TIME AS NECESSARY. THE TAX 1,586
COMMISSIONER SHALL MAKE ANY CORRECTION TO THE TAXPAYER'S FEDERAL 1,587
TAXABLE INCOME, OHIO NET INCOME, OR APPORTIONMENT OF OHIO NET 1,588
INCOME THAT THE COMMISSIONER FINDS PROPER, AND ISSUE NOTICE OF 1,590
ANY CORRECTION BY ORDINARY MAIL TO THE PETITIONER, TO EACH OTHER 1,592
MUNICIPAL CORPORATION AFFECTED BY THE CORRECTION OF THE 1,593
APPORTIONMENT, AND TO THE TAXPAYER. THE TAX COMMISSIONER'S 1,594
DECISION ON THE MATTER IS FINAL, AND IS NOT SUBJECT TO FURTHER
APPEAL. 1,595
Sec. 5745.14. IF ANY OF THE FACTS, FIGURES, COMPUTATIONS, 1,597
OR ATTACHMENTS REQUIRED IN A TAXPAYER'S REPORT TO DETERMINE THE 1,600
TAX DUE A MUNICIPAL CORPORATION MUST BE ALTERED AS THE RESULT OF 1,601
AN ADJUSTMENT TO THE TAXPAYER'S FEDERAL INCOME TAX RETURN, 1,602
WHETHER THE ADJUSTMENT IS INITIATED BY THE TAXPAYER, THE INTERNAL
REVENUE SERVICE, OR THE TAX COMMISSIONER, AND SUCH ALTERATION 1,604
AFFECTS THE TAXPAYER'S TAX LIABILITY TO A MUNICIPAL CORPORATION, 1,605
THE TAXPAYER SHALL FILE AN AMENDED REPORT WITH THE TAX 1,606
COMMISSIONER IN SUCH FORM AS THE COMMISSIONER REQUIRES. THE 1,607
AMENDED REPORT SHALL BE FILED NOT LATER THAN ONE YEAR AFTER THE 1,608
ADJUSTMENT HAS BEEN AGREED TO OR FINALLY DETERMINED. 1,609
(B) IN THE CASE OF AN UNDERPAYMENT, THE AMENDED REPORT 1,611
SHALL BE ACCOMPANIED BY PAYMENT OF AN ADDITIONAL TAX AND INTEREST 1,612
DUE AND IS A REPORT SUBJECT TO ASSESSMENT UNDER SECTION 5745.12 1,613
39
OF THE REVISED CODE FOR THE PURPOSE OF ASSESSING ANY ADDITIONAL 1,614
TAX DUE UNDER THIS DIVISION, TOGETHER WITH ANY APPLICABLE PENALTY 1,615
AND INTEREST. IT SHALL NOT REOPEN THOSE FACTS, FIGURES, 1,616
COMPUTATIONS, OR ATTACHMENTS FROM A PREVIOUSLY FILED REPORT NO 1,617
LONGER SUBJECT TO ASSESSMENT THAT ARE NOT AFFECTED, EITHER 1,618
DIRECTLY OR INDIRECTLY, BY THE ADJUSTMENT TO THE TAXPAYER'S 1,619
FEDERAL INCOME TAX RETURN. 1,620
(C) IN THE CASE OF AN OVERPAYMENT, AN APPLICATION FOR 1,622
REFUND MAY BE FILED UNDER SECTION 5745.11 OF THE REVISED CODE 1,623
WITHIN THE ONE-YEAR PERIOD PRESCRIBED FOR FILING THE AMENDED 1,624
REPORT EVEN IF IT IS FILED BEYOND THE PERIOD PRESCRIBED BY THAT 1,625
SECTION, IF IT OTHERWISE CONFORMS TO THE REQUIREMENTS OF SUCH 1,627
SECTION. AN APPLICATION FILED UNDER THIS DIVISION SHALL CLAIM 1,628
REFUND OF OVERPAYMENTS RESULTING FROM ALTERATIONS TO ONLY THOSE 1,629
FACTS, FIGURES, COMPUTATIONS, OR ATTACHMENTS REQUIRED IN THE 1,630
TAXPAYER'S REPORT THAT ARE AFFECTED, EITHER DIRECTLY OR 1,631
INDIRECTLY, BY THE ADJUSTMENT TO THE TAXPAYER'S FEDERAL INCOME 1,632
TAX RETURN UNLESS IT IS ALSO FILED WITHIN THE TIME PRESCRIBED BY 1,634
SECTION 5745.11 OF THE REVISED CODE. IT SHALL NOT REOPEN THOSE
FACTS, FIGURES, COMPUTATIONS, OR ATTACHMENTS THAT ARE NOT 1,636
AFFECTED, EITHER DIRECTLY OR INDIRECTLY, BY THE ADJUSTMENT TO THE 1,637
TAXPAYER'S FEDERAL INCOME TAX RETURN. 1,638
Sec. 5745.15. (A) EACH TAXPAYER SHALL MAKE ITS RECORDS, 1,641
DOCUMENTS, RETURNS, AND REPORTS OPEN TO INSPECTION BY THE TAX 1,642
COMMISSIONER DURING NORMAL BUSINESS HOURS, AND SHALL PRESERVE 1,643
THOSE RECORDS, DOCUMENTS, RETURNS, AND REPORTS FOR A PERIOD OF 1,644
THREE YEARS AFTER THE DATE THE RETURN OR REPORT, OR RETURN OR 1,645
REPORT TO WHICH SUCH A RECORD OR DOCUMENT PERTAINS, WAS REQUIRED 1,646
TO BE FILED OR ACTUALLY WAS FILED, WHICHEVER IS LATER. THE TAX 1,647
COMMISSIONER MAY CONSENT IN WRITING TO THE DESTRUCTION OF SUCH 1,648
RECORDS, DOCUMENTS, RETURNS, OR REPORTS WITHIN THAT THREE-YEAR 1,649
PERIOD. 1,650
(B) THE TAX COMMISSIONER SHALL ADMINISTER AND ENFORCE THIS 1,652
CHAPTER. IN ADDITION TO ANY OTHER POWERS CONFERRED BY LAW ON THE 1,654
40
TAX COMMISSIONER, THE TAX COMMISSIONER MAY PRESCRIBE ALL FORMS 1,655
REQUIRED TO BE FILED UNDER THOSE SECTIONS, ADOPT RULES THAT, IN 1,656
THE OPINION OF THE TAX COMMISSIONER, ARE NECESSARY TO CARRY OUT 1,657
THOSE SECTIONS, AND APPOINT AND EMPLOY SUCH PERSONNEL AS MAY BE 1,658
NECESSARY TO CARRY OUT THE TAX COMMISSIONER'S DUTIES UNDER THOSE 1,659
SECTIONS.
Sec. 5745.16. WITH RESPECT TO REPORTS FILED WITH THE TAX 1,662
COMMISSIONER UNDER THIS CHAPTER, AND ANY OTHER INFORMATION GAINED 1,665
IN THE PERFORMANCE OF THE TAX COMMISSIONER'S DUTIES PRESCRIBED BY 1,666
THIS CHAPTER, THE TAX COMMISSIONER SHALL ADOPT RULES GOVERNING 1,667
THE TERMS AND CONDITIONS UNDER WHICH SUCH REPORTS OR INFORMATION 1,668
SHALL BE AVAILABLE FOR INSPECTION BY PROPERLY AUTHORIZED 1,669
OFFICERS, EMPLOYEES, OR AGENTS OF THE MUNICIPAL CORPORATION TO 1,670
WHICH THE TAXPAYER'S OHIO NET INCOME IS APPORTIONED UNDER 1,671
DIVISION (D) OF SECTION 5745.02 OF THE REVISED CODE. THE RULES
SHALL PROHIBIT DISCLOSURE OF SUCH REPORTS OR INFORMATION TO ANY 1,672
PERSON OTHER THAN A PROPERLY AUTHORIZED OFFICER, EMPLOYEE, OR 1,674
AGENT OF A MUNICIPAL CORPORATION, AND SHALL PROVIDE FOR 1,675
DISCLOSURE OF ONLY SUCH INFORMATION AS IS NECESSARY, IN THE
OPINION OF THE TAX COMMISSIONER, FOR PROPERLY AUTHORIZED 1,676
OFFICERS, EMPLOYEES, OR AGENTS OF A MUNICIPAL CORPORATION TO 1,677
ASCERTAIN THE SHARE OF A TAXPAYER'S NET INCOME TO BE APPORTIONED 1,678
TO THAT MUNICIPAL CORPORATION. 1,679
AS USED IN THIS DIVISION, "PROPERLY AUTHORIZED OFFICER, 1,681
EMPLOYEE, OR AGENT" MEANS AN OFFICER, EMPLOYEE, OR AGENT OF A 1,682
MUNICIPAL CORPORATION WHO IS AUTHORIZED BY CHARTER OR ORDINANCE 1,683
OF THE MUNICIPAL CORPORATION TO VIEW OR POSSESS INFORMATION 1,684
REFERRED TO IN SECTION 718.13 OF THE REVISED CODE. 1,685
Section 2. That existing sections 113.061, 718.01, 718.02, 1,687
718.08, 5703.053, 5703.19, and 5703.21 of the Revised Code are 1,689
hereby repealed.
Section 3. Sections 113.061, 718.01, 718.011, 718.02, 1,691
718.08, 5703.053, 5703.19, 5703.21, and 5745.01 to 5745.16 of the 1,693
Revised Code, as amended or enacted by this act, take effect
41
January 1, 2002. 1,694
Section 4. Notwithstanding division (B) of section 5745.04 1,696
of the Revised Code as enacted by this act: 1,697
(A) Each electric company and combined company, as defined 1,699
in section 5727.01 of the Revised Code, shall file a declaration 1,700
of estimated tax report and remit 20% of the combined tax 1,701
liability for its taxable year ending in 2002 on the fifteenth 1,702
day of the fourth, sixth, ninth, and twelfth month of that 1,704
taxable year. The company shall indicate on the report the 1,706
portion of the remittance that is payable to each municipal 1,707
corporation to which the company estimates its Ohio net income
will be apportioned for that taxable year under section 5745.02 1,708
of the Revised Code as enacted by this act. No penalty or 1,710
interest shall be imposed on such a company if the estimated tax 1,711
remitted under division (B) of this section is remitted within 1,712
the time prescribed by that division and the total of the 1,713
estimated taxes remitted equals at least 80% of the combined tax 1,714
liability for the taxable year.
(B)(1) Except as otherwise provided in division (B)(2) of 1,716
this section, each electric light company that is not an electric 1,717
company or combined company as defined in section 5727.01 of the 1,718
Revised Code and that paid a municipal corporation's income tax 1,719
in 2001 shall file a declaration of estimated tax report and 1,720
remit 25% of the company's combined tax liability for 2001, in 1,721
lieu of the estimated combined tax liability for 2002, on the 1,722
fifteenth day of the fourth, sixth, ninth, and twelfth month 1,723
after the end of the company's taxable year ending in 2001. The 1,724
company shall indicate on the report the portion of the 1,725
remittance that is payable to each municipal corporation to which 1,726
the company estimates its Ohio net income will be apportioned for 1,727
that taxable year under section 5745.02 of the Revised Code as 1,729
enacted by this act. No penalty or interest shall be imposed on 1,730
such a company if the total of the estimated taxes remitted 1,731
equals at least 80% of the combined tax liability for the taxable 1,733
42
year ending in 2001 or 100% of the combined tax liability for the
taxable year ending in 2000. 1,734
(2) Division (B)(1) of this section applies only to an 1,736
electric light company described in that division that makes an 1,737
election under section 5745.031 of the Revised Code that is in 1,738
effect for tax year 2002. 1,739
Section 5. Notwithstanding sections 5745.03 and 5745.04 of 1,742
the Revised Code, as enacted by this act, the Treasurer of State 1,743
shall credit to the Municipal Income Tax Administrative Fund, 1,744
from remittances received under those sections for taxable years 1,746
ending in 2002 and 2003, the amount certified by the Tax 1,747
Commissioner as the amount necessary to defray the Tax 1,748
Commissioner's expenses of administering Chapter 5745. of the 1,749
Revised Code for 2002 and 2003, respectively. The amount shall 1,750
not exceed 5% of the remittances received for the respective 1,751
year. The Tax Commissioner shall certify that amount to the 1,752
Treasurer of State not later than January 31, 2002, and January 1,753
31, 2003, respectively. 1,754
Section 6. (A) The Tax Commissioner may discuss with 1,756
other states the development of a multi-state, voluntary, and 1,757
simplified system for the collection of the sales and use tax 1,758
from remote sellers, and administration of such tax. The 1,759
discussions shall focus on a system that will have the capability 1,760
to determine whether a sale of goods or a service is taxable or 1,761
tax exempt, the appropriate tax rate that applies to the sale, 1,762
and the total tax due on the sale. The system shall provide a 1,763
method for collecting and remitting sales and use taxes to this 1,764
state, and may provide compensation for the costs of collecting 1,765
and remitting such taxes. Discussions between the Tax 1,766
Commissioner and other states may address the following: 1,767
(1) The development of a Joint Request for Information 1,769
from public and private parties governing the specifications for 1,770
the system; 1,771
(2) The mechanism for compensating parties for the 1,773
43
development and operation of the system; 1,774
(3) The establishment of minimum statutory measures 1,776
necessary for state participation in the system; 1,777
(4) Methods to preserve confidentiality of taxpayer 1,779
information and the privacy rights of consumers. 1,780
Following these discussions, the Tax Commissioner may issue 1,782
a Joint Request for Information. 1,783
(B) The Tax Commissioner may participate in a sales and 1,785
use tax pilot project with other states and selected businesses 1,786
to test means for simplifying administration of the sales and use 1,787
tax, and may enter into joint agreements for that purpose. The 1,788
agreements shall establish provisions for the administration, 1,789
imposition, and collection of sales and use taxes resulting in 1,790
revenues paid that are the same as would be paid under Chapters 1,791
5739. and 5741. of the Revised Code. All such agreements shall 1,792
terminate no later than December 31, 2001. 1,793
Parties to the agreements may be exempted from compliance 1,795
with Chapters 5739. and 5741. of the Revised Code to the extent a 1,796
different procedure is required by the agreements, except for 1,797
confidentiality of taxpayer information under division (C) of 1,798
this section. 1,799
(C) Return information submitted to any party acting for 1,801
and on behalf of this state under division (A) or (B) of this 1,802
section shall be treated as confidential taxpayer information. 1,803
Disclosure of confidential taxpayer information necessary under 1,804
division (A) or (B) of this section shall be pursuant to a 1,805
written agreement between the Tax Commissioner and the party. 1,806
The party shall be bound by the same requirements of 1,807
confidentiality as the Department of Taxation and its agents 1,808
under section 5703.21 of the Revised Code. 1,809
(D) The Tax Commissioner, by November 1, 2000, shall 1,811
provide a report on the progress of multi-state discussions to 1,812
the Governor, Speaker of the House of Representatives, President 1,813
of the Senate, Minority Leaders of the House of Representatives 1,814
44
and Senate, and chairpersons of the House of Representatives' and 1,815
Senate's standing committees with primary responsibility for 1,816
sales and use tax legislation. Not later than March 1, 2001, the 1,817
Tax Commissioner shall provide a final report to these entities 1,818
on the status of multi-state discussions held under this section. 1,819
If a proposed system for the collection and administration of 1,820
sales and use taxes has been agreed upon by participating states, 1,821
the Tax Commissioner, in the final report, shall recommend 1,822
whether this state should participate in the system and what 1,823
legislation is needed to implement it. 1,824
Section 7. Section 5703.053 of the Revised Code is 1,826
presented in this act as a composite of the sections as amended 1,828
by both Am. Sub. H.B. 283 and Am. Sub. S.B. 3 of the 123rd 1,829
General Assembly, with the new language of neither of the acts 1,830
shown in capital letters. This is in recognition of the 1,831
principle stated in division (B) of section 1.52 of the Revised 1,832
Code that such amendments are to be harmonized where not 1,833
substantively irreconcilable and constitutes a legislative 1,834
finding that such are the resulting versions in effect prior to 1,835
the effective date of this act.