As Reported by House Ways & Means Committee 1
123rd General Assembly 4
Regular Session Am. 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-HOLLISTER-BRITTON-BARNES- 15
JOLIVETTE-HAINES-AUSTRIA-PERRY 16
_________________________________________________________________ 17
A B I L L
To amend sections 5733.26 and 5747.08 and to enact 19
sections 5733.261 and 5747.132 of the Revised 20
Code to eliminate the payment of interest by a 21
taxpayer on repayment of certain excess refunds 22
of state income or corporation franchise taxes. 24
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 26
Section 1. That sections 5733.26 and 5747.08 be amended 28
and sections 5733.261 and 5747.132 of the Revised Code be enacted 30
to read as follows:
Sec. 5733.26. (A) If EXCEPT AS PROVIDED IN SECTION 39
5733.261 OF THE REVISED CODE, IF the tax imposed by section 41
5733.06 of the Revised Code, or any portion of that tax, whether 42
determined by the tax commissioner or the taxpayer, is not paid 43
on or before the date prescribed for its payment, interest shall 44
be assessed, collected, and paid, in the same manner as the tax, 45
upon such unpaid amount at the rate per annum prescribed by 46
section 5703.47 of the Revised Code from the date prescribed for 47
its payment until it is paid or until the day an assessment is 48
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issued under section 5733.11 of the Revised Code, whichever 49
occurs first.
(B) Interest shall be allowed and paid at the rate per 51
annum prescribed by section 5703.47 of the Revised Code upon 52
amounts refunded with respect to the tax imposed by section 54
5733.06 of the Revised Code. The interest shall run from
whichever of the following dates is the latest until the date the 56
refund is paid: the date of the illegal, erroneous, or excessive 57
payment; the ninetieth day after the final date the annual report 58
under section 5733.02 of the Revised Code was required to be 59
filed; or the ninetieth day after the date that report was filed. 60
If the overpayment results from the carryback of a net 62
capital loss to a previous taxable year, the overpayment is 63
deemed not to have been made prior to the filing date, including 64
any extension thereof, for the taxable year in which the net 65
capital loss arises. 66
Sec. 5733.261. (A) AS USED IN THIS SECTION, "QUALIFYING 69
REFUND OVERPAYMENT" MEANS AN AMOUNT RECEIVED BY A TAXPAYER IN 70
EXCESS OF A REFUND OR REQUEST FOR PAYMENT CLAIMED OR MADE BY OR 71
ON BEHALF OF THE TAXPAYER ON A RETURN, REPORT, OR OTHER DOCUMENT 72
FILED WITH THE TAX COMMISSIONER. 73
(B) A TAXPAYER IS NOT LIABLE FOR ANY INTEREST OR PENALTY 76
WITH RESPECT TO THE REPAYMENT OF A QUALIFYING REFUND OVERPAYMENT 77
IF THE TAXPAYER PAYS THE ENTIRE AMOUNT OF THE OVERPAYMENT TO THE 78
TAX COMMISSIONER NOT LATER THAN THIRTY DAYS AFTER THE TAXPAYER 79
RECEIVES AN ASSESSMENT FOR IT. IF THE TAXPAYER DOES NOT PAY THE 80
ENTIRE AMOUNT OF THE OVERPAYMENT TO THE COMMISSIONER WITHIN THE 81
TIME PRESCRIBED BY THIS SECTION, INTEREST SHALL ACCRUE ON THE 82
AMOUNT OF THE DEFICIENCY PURSUANT TO SECTION 5733.11 OF THE 84
REVISED CODE FROM THE DAY THE COMMISSIONER ISSUES THE ASSESSMENT 85
UNTIL THE DEFICIENCY IS PAID. 86
Sec. 5747.08. An annual return with respect to the tax 95
imposed by section 5747.02 of the Revised Code and each tax 96
imposed under Chapter 5748. of the Revised Code shall be made by 97
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every taxpayer for any taxable year for which the taxpayer is 98
liable for the tax imposed by that section or under that chapter, 99
unless the total credits allowed under divisions (E), (F), and 100
(G) of section 5747.05 of the Revised Code for the year are equal 101
to or exceed the tax imposed by section 5747.02 of the Revised 102
Code, in which case no return shall be required unless the 103
taxpayer is liable for a tax imposed pursuant to Chapter 5748. of 104
the Revised Code. 105
(A) If an individual is deceased, any return or notice 107
required of that individual under this chapter shall be made and 108
filed by that decedent's executor, administrator, or other person 110
charged with the property of that decedent.
(B) If an individual is unable to make a return or notice 112
required by this chapter, the return or notice required of that 113
individual shall be made and filed by the individual's duly 114
authorized agent, guardian, conservator, fiduciary, or other 115
person charged with the care of the person or property of that 116
individual.
(C) Returns or notices required of an estate or a trust 118
shall be made and filed by the fiduciary of the estate or trust. 119
(D)(1)(a) Except as otherwise provided in division 122
(D)(1)(b) of this section, any pass-through entity may file a 124
single return on behalf of one or more of the entity's investors 125
other than an investor that is a person subject to the tax 127
imposed under section 5733.06 of the Revised Code. The single
return shall set forth the name, address, and social security 128
number of each of those pass-through entity investors and shall 131
indicate the distributive share of each of those pass-through 132
entity investor's income taxable in this state in accordance with 133
sections 5747.20 to 5747.231 of the Revised Code. Such 136
pass-through entity investors for whom the pass-through entity 137
elects to file a single return are not entitled to the exemption 138
or credit provided for by sections 5747.02 and 5747.022 of the 139
Revised Code; shall calculate the tax before business credits at 142
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the highest rate of tax set forth in section 5747.02 of the 143
Revised Code for the taxable year for which the return is filed; 145
and are entitled to only their distributive share of the business 146
credits as defined in division (D)(2) of this section. A single 148
check drawn by the pass-through entity shall accompany the return 150
in full payment of the tax due for such investors other than 151
investors who are persons subject to the tax imposed under 152
section 5733.06 of the Revised Code. 153
(b)(i) A pass-through entity shall not include in such a 156
single return any investor that is a trust to the extent that any 157
direct or indirect current, future, or contingent beneficiary of 158
the trust is a person subject to the tax imposed under section 159
5733.06 of the Revised Code. 160
(ii) A pass-through entity shall not include in such a 163
single return any investor that is itself a pass-through entity 164
to the extent that any direct or indirect investor in the second 165
pass-through entity is a person subject to the tax imposed under 166
section 5733.06 of the Revised Code. 167
(c) Nothing in division (D) of this section precludes the 171
tax commissioner from requiring such investors to file the return 172
and make the payment of taxes and related interest, penalty, and 173
interest penalty required by this section or section 5747.02, 174
5747.09, or 5747.15 of the Revised Code. Nothing in division (D) 176
of this section shall be construed to provide to such an investor 177
or pass-through entity any additional deduction or credit, other 178
than the credit provided by division (J) of this section, solely 180
on account of the entity's filing a return in accordance with 181
this section. Such a pass-through entity also shall make the 182
filing and payment of estimated taxes on behalf of the 183
pass-through entity investors other than an investor that is a 185
person subject to the tax imposed under section 5733.06 of the 186
Revised Code.
(2) For the purposes of this section, "business credits" 189
means the credits listed in section 5747.98 of the Revised Code 192
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excluding the following credits: 193
(b)(a) The retirement credit under division (B) of section 195
5747.055 of the Revised Code; 197
(c)(b) The senior citizen credit under division (C) of 200
section 5747.05 of the Revised Code;
(d)(c) The lump sum distribution credit under division (D) 203
of section 5747.05 of the Revised Code; 205
(e)(d) The dependent care credit under section 5747.054 of 208
the Revised Code; 209
(f)(e) The lump sum retirement income credit under 212
division (C) of section 5747.055 of the Revised Code; 214
(g)(f) The lump sum retirement income credit under 217
division (D) of section 5747.055 of the Revised Code; 219
(h)(g) The lump sum retirement income credit under 222
division (E) of section 5747.055 of the Revised Code; 224
(i)(h) The credit for displaced workers who pay for job 227
training under section 5747.27 of the Revised Code; 229
(j)(i) The twenty-dollar personal exemption credit under 232
section 5747.022 of the Revised Code; 234
(k)(j) The joint filing credit under division (G) of 237
section 5747.05 of the Revised Code; 239
(l)(k) The nonresident credit under division (A) of 242
section 5747.05 of the Revised Code; 244
(m)(l) The credit for a resident's out-of-state income 247
under division (B) of section 5747.05 of the Revised Code. 250
(3) The election provided for under division (D) of this 253
section applies only to the taxable year for which the election 254
is made by the pass-through entity. Unless the tax commissioner 255
provides otherwise, this election, once made, is binding and 256
irrevocable for the taxable year for which the election is made. 257
Nothing in this division shall be construed to provide for any 258
deduction or credit that would not be allowable if a nonresident 259
pass-through entity investor were to file an annual return. 260
(4) If a pass-through entity makes the election provided 262
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for under division (D) of this section, the pass-through entity 264
shall be liable for any additional taxes, interest, interest 265
penalty, or penalties imposed by this chapter if the tax 267
commissioner determines that the single return does not reflect 268
the correct tax due by nonresident pass-through entity investors 269
covered by that return. Nothing in this division shall be 270
construed to limit or alter the liability, if any, imposed on 271
pass-through entity investors for unpaid or underpaid taxes, 272
interest, interest penalty, or penalties as a result of the
pass-through entity's making the election provided for under 273
division (D) of this section. For the purposes of division (D) 276
of this section, "correct tax due" means the tax that would have 277
been paid by the pass-through entity had the single return been 278
filed in a manner reflecting and including the findings and 279
determinations made by the tax commissioner. Nothing in division 281
(D) of this section shall be construed to make or hold a 282
pass-through entity liable for tax attributable to a pass-through 283
entity investor's income from a source other than the 284
pass-through entity electing to file the single return. 285
(E) If a husband and wife file a joint federal income tax 287
return for a taxable year, they shall file a joint return under 288
this section for that taxable year, and their liabilities are 289
joint and several, but, if the federal income tax liability of 290
either spouse is determined on a separate federal income tax 291
return, they shall file separate returns under this section. 292
If either spouse is not required to file a federal income 294
tax return and either or both are required to file a return 295
pursuant to this chapter, they may elect to file separate or 296
joint returns, and, pursuant to that election, their liabilities 297
are separate or joint and several. If a husband and wife file 298
separate returns pursuant to this chapter, each must claim the 299
taxpayer's own exemption, but not both, as authorized under 300
section 5747.02 of the Revised Code on the taxpayer's own return. 303
(F) Each return or notice required to be filed under this 305
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section shall contain the signature of the taxpayer or the 307
taxpayer's duly authorized agent and of the person who prepared 308
the return for the taxpayer, and shall include the taxpayer's 309
social security number. Each return shall be verified by a 310
declaration under the penalties of perjury. The tax commissioner 311
shall prescribe the form that the signature and declaration shall 312
take.
(G) Each return or notice required to be filed under this 314
section shall be made and filed as required by section 5747.04 of 315
the Revised Code, on or before the fifteenth day of April of each 316
year, on forms that the tax commissioner shall prescribe, 317
together with remittance made payable to the treasurer of state 318
in the combined amount of the state and all school district 319
income taxes shown to be due on the form, unless the combined 320
amount shown to be due is one dollar or less, in which case that 321
amount need not be remitted. 322
Upon good cause shown, the commissioner may extend the 324
period for filing any notice or return required to be filed under 325
this section and may adopt rules relating to extensions. If the 326
extension results in an extension of time for the payment of any 327
state or school district income tax liability with respect to 328
which the return is filed, the taxpayer shall pay at the time the 329
tax liability is paid an amount of interest computed at the rate 330
per annum prescribed by section 5703.47 of the Revised Code on 331
that liability from the time that payment is due without 332
extension to the time of actual payment. In EXCEPT AS PROVIDED 334
IN SECTION 5747.132 OF THE REVISED CODE, IN addition to all other 336
interest charges and penalties, all taxes imposed under this
chapter or Chapter 5748. of the Revised Code and remaining unpaid 340
after they become due, except combined amounts due of one dollar 341
or less, bear interest at the rate per annum prescribed by
section 5703.47 of the Revised Code until paid or until the day 342
an assessment is issued under section 5747.13 of the Revised 343
Code, whichever occurs first. If 344
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IF the commissioner considers it necessary in order to 347
ensure the payment of the tax imposed by section 5747.02 of the 348
Revised Code or any tax imposed under Chapter 5748. of the 349
Revised Code, the commissioner may require returns and payments 350
to be made otherwise than as provided in this section. 351
(H) If any report, claim, statement, or other document 353
required to be filed, or any payment required to be made, within 354
a prescribed period or on or before a prescribed date under this 355
chapter is delivered after that period or that date by United 356
States mail to the agency, officer, or office with which the 357
report, claim, statement, or other document is required to be 358
filed, or to which the payment is required to be made, the date 359
of the postmark stamped on the cover in which the report, claim, 360
statement, or other document, or payment is mailed shall be 361
deemed to be the date of delivery or the date of payment. 362
If a payment is required to be made by electronic funds 364
transfer pursuant to section 5747.072 of the Revised Code, the 365
payment is considered to be made when the payment is received by 366
the treasurer of state or credited to an account designated by 367
the treasurer of state for the receipt of tax payments. 368
"The date of the postmark" means, in the event there is 371
more than one date on the cover, the earliest date imprinted on 372
the cover by the United States postal service.
(I) The amounts withheld by the employer pursuant to 374
section 5747.06 of the Revised Code shall be allowed to the 375
recipient of the compensation as credits against payment of the 376
appropriate taxes imposed on the recipient by section 5747.02 and 378
under Chapter 5748. of the Revised Code.
(J) If, in accordance with division (D) of this section, a 382
pass-through entity elects to file a single return and if any 383
investor is required to file the return and make the payment of 384
taxes required by this chapter on account of the investor's other 385
income that is not included in a single return filed by a 386
pass-through entity, the investor is entitled to a refundable 387
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credit equal to the investor's proportionate share of the tax 388
paid by the pass-through entity on behalf of the investor. The 389
investor shall claim the credit for the investor's taxable year 390
in which or with which ends the taxable year of the pass-through 391
entity. Nothing in this chapter shall be construed to allow any 392
credit provided in this chapter to be claimed more than once. 393
For the purposes of computing any interest, penalty, or interest 394
penalty, the investor shall be deemed to have paid the refundable 395
credit provided by this division on the day that the pass-through 396
entity paid the estimated tax or the tax giving rise to the 397
credit.
Sec. 5747.132. (A) AS USED IN THIS SECTION: 399
(1) "QUALIFYING TAXPAYER" MEANS A TAXPAYER, EMPLOYER, OR 401
QUALIFYING ENTITY. 402
(2) "QUALIFYING REFUND OVERPAYMENT" MEANS AN AMOUNT 404
RECEIVED BY A QUALIFYING TAXPAYER IN EXCESS OF A REFUND OR 405
REQUEST FOR PAYMENT CLAIMED OR MADE BY OR ON BEHALF OF THE 406
QUALIFYING TAXPAYER ON A RETURN, REPORT, OR OTHER DOCUMENT FILED 408
WITH THE TAX COMMISSIONER.
(B) A QUALIFYING TAXPAYER IS NOT LIABLE FOR ANY INTEREST 411
OR PENALTY WITH RESPECT TO THE REPAYMENT OF A QUALIFYING REFUND 412
OVERPAYMENT IF THE TAXPAYER PAYS THE ENTIRE AMOUNT OF THE 413
OVERPAYMENT TO THE TAX COMMISSIONER NOT LATER THAN THIRTY DAYS 414
AFTER THE TAXPAYER RECEIVES AN ASSESSMENT FOR IT. IF THE 415
TAXPAYER DOES NOT PAY THE ENTIRE AMOUNT OF THE OVERPAYMENT TO THE 416
COMMISSIONER WITHIN THE TIME PRESCRIBED BY THIS SECTION, INTEREST 417
SHALL ACCRUE ON THE AMOUNT OF THE DEFICIENCY PURSUANT TO SECTION 418
5747.13 OF THE REVISED CODE FROM THE DAY THE COMMISSIONER ISSUES 420
THE ASSESSMENT UNTIL THE DEFICIENCY IS PAID. 421
Section 2. That existing sections 5733.26 and 5747.08 of 423
the Revised Code are hereby repealed. 424
Section 3. The amendment or enactment by this act of 426
sections 5733.26, 5733.261, 5747.08, and 5747.132 of the Revised 428
Code shall be applied to prohibit the accrual of interest or 429
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penalty with respect to tax refund overpayment assessments 430
received by taxpayers after the effective date of this act, 432
regardless of the time of claim for the refund. 433