As Introduced 1
123rd General Assembly 4
Regular Session H. B. No. 99 5
1999-2000 6
REPRESENTATIVES YOUNG-AMSTUTZ-BEATTY-BRADING-BUCHY- 8
CALLENDER-CAREY-CATES-CORBIN-CORE-COUGHLIN- 9
DAMSCHRODER-EVANS-FLANNERY-GARDNER-GRENDELL- 10
HARTNETT-HOOD-HOUSEHOLDER-JACOBSON-JERSE-JONES- 11
JORDAN-KREBS-LUCAS-MAIER-MEAD-R.MILLER-MOTTLEY-MYERS- 12
NETZLEY-OLMAN-PATTON-PRINGLE-ROMAN-SALERNO-SCHUCK- 13
SCHULER-SULLIVAN-TAYLOR-TERWILLEGER-VESPER-VAN VYVEN- 14
WESTON-WILLAMOWSKI-WILLIAMS 15
16
A B I L L
To amend sections 5733.26 and 5747.08 and to enact 18
sections 5733.261 and 5747.132 of the Revised 19
Code to eliminate the payment of interest by a 20
taxpayer on certain excess refunds of state 21
income or corporation franchise taxes. 22
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 24
Section 1. That sections 5733.26 and 5747.08 be amended 26
and sections 5733.261 and 5747.132 of the Revised Code be enacted 28
to read as follows:
Sec. 5733.26. (A) If EXCEPT AS PROVIDED IN SECTION 37
5733.261 OF THE REVISED CODE, IF the tax imposed by section 39
5733.06 of the Revised Code, or any portion of that tax, whether 40
determined by the tax commissioner or the taxpayer, is not paid 41
on or before the date prescribed for its payment, interest shall 42
be assessed, collected, and paid, in the same manner as the tax, 43
upon such unpaid amount at the rate per annum prescribed by 44
section 5703.47 of the Revised Code from the date prescribed for 45
its payment until it is paid or until the day an assessment is 46
issued under section 5733.11 of the Revised Code, whichever 47
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occurs first.
(B) Interest shall be allowed and paid at the rate per 49
annum prescribed by section 5703.47 of the Revised Code upon 50
amounts refunded with respect to the tax imposed by section 52
5733.06 of the Revised Code. The interest shall run from
whichever of the following dates is the latest until the date the 54
refund is paid: the date of the illegal, erroneous, or excessive 55
payment; the ninetieth day after the final date the annual report 56
under section 5733.02 of the Revised Code was required to be 57
filed; or the ninetieth day after the date that report was filed. 58
If the overpayment results from the carryback of a net 60
capital loss to a previous taxable year, the overpayment is 61
deemed not to have been made prior to the filing date, including 62
any extension thereof, for the taxable year in which the net 63
capital loss arises. 64
Sec. 5733.261. (A) AS USED IN THIS SECTION, "QUALIFYING 67
REFUND OVERPAYMENT" MEANS AN AMOUNT RECEIVED BY A TAXPAYER IN 68
EXCESS OF A REFUND OR REQUEST FOR PAYMENT CLAIMED OR MADE BY OR 69
ON BEHALF OF THE TAXPAYER ON A RETURN, REPORT, OR OTHER DOCUMENT 70
FILED WITH THE TAX COMMISSIONER. 71
(B) A TAXPAYER IS NOT LIABLE FOR ANY INTEREST OR PENALTY 74
WITH RESPECT TO THE REPAYMENT OF A QUALIFYING REFUND OVERPAYMENT 75
IF THE TAXPAYER PAYS THE ENTIRE AMOUNT OF THE OVERPAYMENT TO THE 76
TAX COMMISSIONER NOT LATER THAN THIRTY DAYS AFTER THE TAXPAYER 77
RECEIVES AN ASSESSMENT FOR IT. IF THE TAXPAYER DOES NOT PAY THE 78
ENTIRE AMOUNT OF THE OVERPAYMENT TO THE COMMISSIONER WITHIN THE 79
TIME PRESCRIBED BY THIS SECTION, INTEREST SHALL ACCRUE ON THE 80
AMOUNT OF THE DEFICIENCY PURSUANT TO SECTION 5733.11 OF THE 82
REVISED CODE FROM THE DAY THE COMMISSIONER ISSUES THE ASSESSMENT 83
UNTIL THE DEFICIENCY IS PAID. 84
Sec. 5747.08. An annual return with respect to the tax 93
imposed by section 5747.02 of the Revised Code and each tax 94
imposed under Chapter 5748. of the Revised Code shall be made by 95
every taxpayer for any taxable year for which the taxpayer is 96
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liable for the tax imposed by that section or under that chapter, 97
unless the total credits allowed under divisions (E), (F), and 98
(G) of section 5747.05 of the Revised Code for the year are equal 99
to or exceed the tax imposed by section 5747.02 of the Revised 100
Code, in which case no return shall be required unless the 101
taxpayer is liable for a tax imposed pursuant to Chapter 5748. of 102
the Revised Code. 103
(A) If an individual is deceased, any return or notice 105
required of that individual under this chapter shall be made and 106
filed by that decedent's executor, administrator, or other person 108
charged with the property of that decedent.
(B) If an individual is unable to make a return or notice 110
required by this chapter, the return or notice required of that 111
individual shall be made and filed by the individual's duly 112
authorized agent, guardian, conservator, fiduciary, or other 113
person charged with the care of the person or property of that 114
individual.
(C) Returns or notices required of an estate or a trust 116
shall be made and filed by the fiduciary of the estate or trust. 117
(D)(1)(a) Except as otherwise provided in division 120
(D)(1)(b) of this section, any pass-through entity may file a 122
single return on behalf of one or more of the entity's investors 123
other than an investor that is a person subject to the tax 125
imposed under section 5733.06 of the Revised Code. The single
return shall set forth the name, address, and social security 126
number of each of those pass-through entity investors and shall 129
indicate the distributive share of each of those pass-through 130
entity investor's income taxable in this state in accordance with 131
sections 5747.20 to 5747.231 of the Revised Code. Such 134
pass-through entity investors for whom the pass-through entity 135
elects to file a single return are not entitled to the exemption 136
or credit provided for by sections 5747.02 and 5747.022 of the 137
Revised Code; shall calculate the tax before business credits at 140
the highest rate of tax set forth in section 5747.02 of the 141
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Revised Code for the taxable year for which the return is filed; 143
and are entitled to only their distributive share of the business 144
credits as defined in division (D)(2) of this section. A single 146
check drawn by the pass-through entity shall accompany the return 148
in full payment of the tax due for such investors other than 149
investors who are persons subject to the tax imposed under 150
section 5733.06 of the Revised Code. 151
(b)(i) A pass-through entity shall not include in such a 154
single return any investor that is a trust to the extent that any 155
direct or indirect current, future, or contingent beneficiary of 156
the trust is a person subject to the tax imposed under section 157
5733.06 of the Revised Code. 158
(ii) A pass-through entity shall not include in such a 161
single return any investor that is itself a pass-through entity 162
to the extent that any direct or indirect investor in the second 163
pass-through entity is a person subject to the tax imposed under 164
section 5733.06 of the Revised Code. 165
(c) Nothing in division (D) of this section precludes the 169
tax commissioner from requiring such investors to file the return 170
and make the payment of taxes and related interest, penalty, and 171
interest penalty required by this section or section 5747.02, 172
5747.09, or 5747.15 of the Revised Code. Nothing in division (D) 174
of this section shall be construed to provide to such an investor 175
or pass-through entity any additional deduction or credit, other 176
than the credit provided by division (J) of this section, solely 178
on account of the entity's filing a return in accordance with 179
this section. Such a pass-through entity also shall make the 180
filing and payment of estimated taxes on behalf of the 181
pass-through entity investors other than an investor that is a 183
person subject to the tax imposed under section 5733.06 of the 184
Revised Code.
(2) For the purposes of this section, "business credits" 187
means the credits listed in section 5747.98 of the Revised Code 190
excluding the following credits: 191
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(b)(a) The retirement credit under division (B) of section 193
5747.055 of the Revised Code; 195
(c)(b) The senior citizen credit under division (C) of 198
section 5747.05 of the Revised Code;
(d)(c) The lump sum distribution credit under division (D) 201
of section 5747.05 of the Revised Code; 203
(e)(d) The dependent care credit under section 5747.054 of 206
the Revised Code; 207
(f)(e) The lump sum retirement income credit under 210
division (C) of section 5747.055 of the Revised Code; 212
(g)(f) The lump sum retirement income credit under 215
division (D) of section 5747.055 of the Revised Code; 217
(h)(g) The lump sum retirement income credit under 220
division (E) of section 5747.055 of the Revised Code; 222
(i)(h) The credit for displaced workers who pay for job 225
training under section 5747.27 of the Revised Code; 227
(j)(i) The twenty-dollar personal exemption credit under 230
section 5747.022 of the Revised Code; 232
(k)(j) The joint filing credit under division (G) of 235
section 5747.05 of the Revised Code; 237
(l)(k) The nonresident credit under division (A) of 240
section 5747.05 of the Revised Code; 242
(m)(l) The credit for a resident's out-of-state income 245
under division (B) of section 5747.05 of the Revised Code. 248
(3) The election provided for under division (D) of this 251
section applies only to the taxable year for which the election 252
is made by the pass-through entity. Unless the tax commissioner 253
provides otherwise, this election, once made, is binding and 254
irrevocable for the taxable year for which the election is made. 255
Nothing in this division shall be construed to provide for any 256
deduction or credit that would not be allowable if a nonresident 257
pass-through entity investor were to file an annual return. 258
(4) If a pass-through entity makes the election provided 260
for under division (D) of this section, the pass-through entity 262
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shall be liable for any additional taxes, interest, interest 263
penalty, or penalties imposed by this chapter if the tax 265
commissioner determines that the single return does not reflect 266
the correct tax due by nonresident pass-through entity investors 267
covered by that return. Nothing in this division shall be 268
construed to limit or alter the liability, if any, imposed on 269
pass-through entity investors for unpaid or underpaid taxes, 270
interest, interest penalty, or penalties as a result of the
pass-through entity's making the election provided for under 271
division (D) of this section. For the purposes of division (D) 274
of this section, "correct tax due" means the tax that would have 275
been paid by the pass-through entity had the single return been 276
filed in a manner reflecting and including the findings and 277
determinations made by the tax commissioner. Nothing in division 279
(D) of this section shall be construed to make or hold a 280
pass-through entity liable for tax attributable to a pass-through 281
entity investor's income from a source other than the 282
pass-through entity electing to file the single return. 283
(E) If a husband and wife file a joint federal income tax 285
return for a taxable year, they shall file a joint return under 286
this section for that taxable year, and their liabilities are 287
joint and several, but, if the federal income tax liability of 288
either spouse is determined on a separate federal income tax 289
return, they shall file separate returns under this section. 290
If either spouse is not required to file a federal income 292
tax return and either or both are required to file a return 293
pursuant to this chapter, they may elect to file separate or 294
joint returns, and, pursuant to that election, their liabilities 295
are separate or joint and several. If a husband and wife file 296
separate returns pursuant to this chapter, each must claim the 297
taxpayer's own exemption, but not both, as authorized under 298
section 5747.02 of the Revised Code on the taxpayer's own return. 301
(F) Each return or notice required to be filed under this 303
section shall contain the signature of the taxpayer or the 305
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taxpayer's duly authorized agent and of the person who prepared 306
the return for the taxpayer, and shall include the taxpayer's 307
social security number. Each return shall be verified by a 308
declaration under the penalties of perjury. The tax commissioner 309
shall prescribe the form that the signature and declaration shall 310
take.
(G) Each return or notice required to be filed under this 312
section shall be made and filed as required by section 5747.04 of 313
the Revised Code, on or before the fifteenth day of April of each 314
year, on forms that the tax commissioner shall prescribe, 315
together with remittance made payable to the treasurer of state 316
in the combined amount of the state and all school district 317
income taxes shown to be due on the form, unless the combined 318
amount shown to be due is one dollar or less, in which case that 319
amount need not be remitted. 320
Upon good cause shown, the commissioner may extend the 322
period for filing any notice or return required to be filed under 323
this section and may adopt rules relating to extensions. If the 324
extension results in an extension of time for the payment of any 325
state or school district income tax liability with respect to 326
which the return is filed, the taxpayer shall pay at the time the 327
tax liability is paid an amount of interest computed at the rate 328
per annum prescribed by section 5703.47 of the Revised Code on 329
that liability from the time that payment is due without 330
extension to the time of actual payment. In EXCEPT AS PROVIDED 332
IN SECTION 5747.132 OF THE REVISED CODE, IN addition to all other 334
interest charges and penalties, all taxes imposed under this
chapter or Chapter 5748. of the Revised Code and remaining unpaid 338
after they become due, except combined amounts due of one dollar 339
or less, bear interest at the rate per annum prescribed by
section 5703.47 of the Revised Code until paid or until the day 340
an assessment is issued under section 5747.13 of the Revised 341
Code, whichever occurs first. If 342
IF the commissioner considers it necessary in order to 345
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ensure the payment of the tax imposed by section 5747.02 of the 346
Revised Code or any tax imposed under Chapter 5748. of the 347
Revised Code, the commissioner may require returns and payments 348
to be made otherwise than as provided in this section. 349
(H) If any report, claim, statement, or other document 351
required to be filed, or any payment required to be made, within 352
a prescribed period or on or before a prescribed date under this 353
chapter is delivered after that period or that date by United 354
States mail to the agency, officer, or office with which the 355
report, claim, statement, or other document is required to be 356
filed, or to which the payment is required to be made, the date 357
of the postmark stamped on the cover in which the report, claim, 358
statement, or other document, or payment is mailed shall be 359
deemed to be the date of delivery or the date of payment. 360
If a payment is required to be made by electronic funds 362
transfer pursuant to section 5747.072 of the Revised Code, the 363
payment is considered to be made when the payment is received by 364
the treasurer of state or credited to an account designated by 365
the treasurer of state for the receipt of tax payments. 366
"The date of the postmark" means, in the event there is 369
more than one date on the cover, the earliest date imprinted on 370
the cover by the United States postal service.
(I) The amounts withheld by the employer pursuant to 372
section 5747.06 of the Revised Code shall be allowed to the 373
recipient of the compensation as credits against payment of the 374
appropriate taxes imposed on the recipient by section 5747.02 and 376
under Chapter 5748. of the Revised Code.
(J) If, in accordance with division (D) of this section, a 380
pass-through entity elects to file a single return and if any 381
investor is required to file the return and make the payment of 382
taxes required by this chapter on account of the investor's other 383
income that is not included in a single return filed by a 384
pass-through entity, the investor is entitled to a refundable 385
credit equal to the investor's proportionate share of the tax 386
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paid by the pass-through entity on behalf of the investor. The 387
investor shall claim the credit for the investor's taxable year 388
in which or with which ends the taxable year of the pass-through 389
entity. Nothing in this chapter shall be construed to allow any 390
credit provided in this chapter to be claimed more than once. 391
For the purposes of computing any interest, penalty, or interest 392
penalty, the investor shall be deemed to have paid the refundable 393
credit provided by this division on the day that the pass-through 394
entity paid the estimated tax or the tax giving rise to the 395
credit.
Sec. 5747.132. (A) AS USED IN THIS SECTION: 397
(1) "QUALIFYING TAXPAYER" MEANS A TAXPAYER, EMPLOYER, OR 399
PASS-THROUGH ENTITY. 400
(2) "QUALIFYING REFUND OVERPAYMENT" MEANS AN AMOUNT 402
RECEIVED BY A QUALIFYING TAXPAYER IN EXCESS OF A REFUND OR 403
REQUEST FOR PAYMENT CLAIMED OR MADE BY OR ON BEHALF OF THE 404
QUALIFYING TAXPAYER ON A RETURN, REPORT, OR OTHER DOCUMENT FILED 406
WITH THE TAX COMMISSIONER.
(B) A QUALIFYING TAXPAYER IS NOT LIABLE FOR ANY INTEREST 409
OR PENALTY WITH RESPECT TO THE REPAYMENT OF A QUALIFYING REFUND 410
OVERPAYMENT IF THE TAXPAYER PAYS THE ENTIRE AMOUNT OF THE 411
OVERPAYMENT TO THE TAX COMMISSIONER NOT LATER THAN THIRTY DAYS 412
AFTER THE TAXPAYER RECEIVES AN ASSESSMENT FOR IT. IF THE 413
TAXPAYER DOES NOT PAY THE ENTIRE AMOUNT OF THE OVERPAYMENT TO THE 414
COMMISSIONER WITHIN THE TIME PRESCRIBED BY THIS SECTION, INTEREST 415
SHALL ACCRUE ON THE AMOUNT OF THE DEFICIENCY PURSUANT TO SECTION 416
5747.13 OF THE REVISED CODE FROM THE DAY THE COMMISSIONER ISSUES 418
THE ASSESSMENT UNTIL THE DEFICIENCY IS PAID. 419
Section 2. That existing sections 5733.26 and 5747.08 of 421
the Revised Code are hereby repealed. 422
Section 3. The amendment or enactment by this act of 424
sections 5733.26, 5733.261, 5747.08, and 5747.132 of the Revised 426
Code shall be applied to prohibit the accrual of interest on tax 427
refund overpayments received by taxpayers after the effective 428
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date of this act, regardless of the time of claim for the refund. 429