As Passed by the House 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-PETERSON-BUEHRER-GOODMAN- 16
WINKLER-CLANCY-TIBERI-DePIERO-D.MILLER-HARRIS-SCHURING- 17
SUTTON-STAPLETON-HOOPS-THOMAS-WILSON-OGG 18
_________________________________________________________________ 19
A B I L L
To amend sections 5733.26 and 5747.08 and to enact 21
sections 5733.261 and 5747.132 of the Revised 22
Code to eliminate the payment of interest by a 23
taxpayer on repayment of certain excess refunds 24
of state income or corporation franchise taxes. 26
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 28
Section 1. That sections 5733.26 and 5747.08 be amended 30
and sections 5733.261 and 5747.132 of the Revised Code be enacted 32
to read as follows:
Sec. 5733.26. (A) If EXCEPT AS PROVIDED IN SECTION 41
5733.261 OF THE REVISED CODE, IF the tax imposed by section 43
5733.06 of the Revised Code, or any portion of that tax, whether 44
determined by the tax commissioner or the taxpayer, is not paid 45
on or before the date prescribed for its payment, interest shall 46
be assessed, collected, and paid, in the same manner as the tax, 47
upon such unpaid amount at the rate per annum prescribed by 48
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section 5703.47 of the Revised Code from the date prescribed for 49
its payment until it is paid or until the day an assessment is 50
issued under section 5733.11 of the Revised Code, whichever 51
occurs first.
(B) Interest shall be allowed and paid at the rate per 53
annum prescribed by section 5703.47 of the Revised Code upon 54
amounts refunded with respect to the tax imposed by section 56
5733.06 of the Revised Code. The interest shall run from
whichever of the following dates is the latest until the date the 58
refund is paid: the date of the illegal, erroneous, or excessive 59
payment; the ninetieth day after the final date the annual report 60
under section 5733.02 of the Revised Code was required to be 61
filed; or the ninetieth day after the date that report was filed. 62
If the overpayment results from the carryback of a net 64
capital loss to a previous taxable year, the overpayment is 65
deemed not to have been made prior to the filing date, including 66
any extension thereof, for the taxable year in which the net 67
capital loss arises. 68
Sec. 5733.261. (A) AS USED IN THIS SECTION, "QUALIFYING 71
REFUND OVERPAYMENT" MEANS AN AMOUNT RECEIVED BY A TAXPAYER IN 72
EXCESS OF A REFUND OR REQUEST FOR PAYMENT CLAIMED OR MADE BY OR 73
ON BEHALF OF THE TAXPAYER ON A RETURN, REPORT, OR OTHER DOCUMENT 74
FILED WITH THE TAX COMMISSIONER. 75
(B) A TAXPAYER IS NOT LIABLE FOR ANY INTEREST OR PENALTY 78
WITH RESPECT TO THE REPAYMENT OF A QUALIFYING REFUND OVERPAYMENT 79
IF THE TAXPAYER PAYS THE ENTIRE AMOUNT OF THE OVERPAYMENT TO THE 80
TAX COMMISSIONER NOT LATER THAN THIRTY DAYS AFTER THE TAXPAYER 81
RECEIVES AN ASSESSMENT FOR IT. IF THE TAXPAYER DOES NOT PAY THE 82
ENTIRE AMOUNT OF THE OVERPAYMENT TO THE COMMISSIONER WITHIN THE 83
TIME PRESCRIBED BY THIS SECTION, INTEREST SHALL ACCRUE ON THE 84
AMOUNT OF THE DEFICIENCY PURSUANT TO SECTION 5733.11 OF THE 86
REVISED CODE FROM THE DAY THE COMMISSIONER ISSUES THE ASSESSMENT 87
UNTIL THE DEFICIENCY IS PAID. 88
Sec. 5747.08. An annual return with respect to the tax 97
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imposed by section 5747.02 of the Revised Code and each tax 98
imposed under Chapter 5748. of the Revised Code shall be made by 99
every taxpayer for any taxable year for which the taxpayer is 100
liable for the tax imposed by that section or under that chapter, 101
unless the total credits allowed under divisions (E), (F), and 102
(G) of section 5747.05 of the Revised Code for the year are equal 103
to or exceed the tax imposed by section 5747.02 of the Revised 104
Code, in which case no return shall be required unless the 105
taxpayer is liable for a tax imposed pursuant to Chapter 5748. of 106
the Revised Code. 107
(A) If an individual is deceased, any return or notice 109
required of that individual under this chapter shall be made and 110
filed by that decedent's executor, administrator, or other person 112
charged with the property of that decedent.
(B) If an individual is unable to make a return or notice 114
required by this chapter, the return or notice required of that 115
individual shall be made and filed by the individual's duly 116
authorized agent, guardian, conservator, fiduciary, or other 117
person charged with the care of the person or property of that 118
individual.
(C) Returns or notices required of an estate or a trust 120
shall be made and filed by the fiduciary of the estate or trust. 121
(D)(1)(a) Except as otherwise provided in division 124
(D)(1)(b) of this section, any pass-through entity may file a 126
single return on behalf of one or more of the entity's investors 127
other than an investor that is a person subject to the tax 129
imposed under section 5733.06 of the Revised Code. The single
return shall set forth the name, address, and social security 130
number of each of those pass-through entity investors and shall 133
indicate the distributive share of each of those pass-through 134
entity investor's income taxable in this state in accordance with 135
sections 5747.20 to 5747.231 of the Revised Code. Such 138
pass-through entity investors for whom the pass-through entity 139
elects to file a single return are not entitled to the exemption 140
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or credit provided for by sections 5747.02 and 5747.022 of the 141
Revised Code; shall calculate the tax before business credits at 144
the highest rate of tax set forth in section 5747.02 of the 145
Revised Code for the taxable year for which the return is filed; 147
and are entitled to only their distributive share of the business 148
credits as defined in division (D)(2) of this section. A single 150
check drawn by the pass-through entity shall accompany the return 152
in full payment of the tax due for such investors other than 153
investors who are persons subject to the tax imposed under 154
section 5733.06 of the Revised Code. 155
(b)(i) A pass-through entity shall not include in such a 158
single return any investor that is a trust to the extent that any 159
direct or indirect current, future, or contingent beneficiary of 160
the trust is a person subject to the tax imposed under section 161
5733.06 of the Revised Code. 162
(ii) A pass-through entity shall not include in such a 165
single return any investor that is itself a pass-through entity 166
to the extent that any direct or indirect investor in the second 167
pass-through entity is a person subject to the tax imposed under 168
section 5733.06 of the Revised Code. 169
(c) Nothing in division (D) of this section precludes the 173
tax commissioner from requiring such investors to file the return 174
and make the payment of taxes and related interest, penalty, and 175
interest penalty required by this section or section 5747.02, 176
5747.09, or 5747.15 of the Revised Code. Nothing in division (D) 178
of this section shall be construed to provide to such an investor 179
or pass-through entity any additional deduction or credit, other 180
than the credit provided by division (J) of this section, solely 182
on account of the entity's filing a return in accordance with 183
this section. Such a pass-through entity also shall make the 184
filing and payment of estimated taxes on behalf of the 185
pass-through entity investors other than an investor that is a 187
person subject to the tax imposed under section 5733.06 of the 188
Revised Code.
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(2) For the purposes of this section, "business credits" 191
means the credits listed in section 5747.98 of the Revised Code 194
excluding the following credits: 195
(b)(a) The retirement credit under division (B) of section 197
5747.055 of the Revised Code; 199
(c)(b) The senior citizen credit under division (C) of 202
section 5747.05 of the Revised Code;
(d)(c) The lump sum distribution credit under division (D) 205
of section 5747.05 of the Revised Code; 207
(e)(d) The dependent care credit under section 5747.054 of 210
the Revised Code; 211
(f)(e) The lump sum retirement income credit under 214
division (C) of section 5747.055 of the Revised Code; 216
(g)(f) The lump sum retirement income credit under 219
division (D) of section 5747.055 of the Revised Code; 221
(h)(g) The lump sum retirement income credit under 224
division (E) of section 5747.055 of the Revised Code; 226
(i)(h) The credit for displaced workers who pay for job 229
training under section 5747.27 of the Revised Code; 231
(j)(i) The twenty-dollar personal exemption credit under 234
section 5747.022 of the Revised Code; 236
(k)(j) The joint filing credit under division (G) of 239
section 5747.05 of the Revised Code; 241
(l)(k) The nonresident credit under division (A) of 244
section 5747.05 of the Revised Code; 246
(m)(l) The credit for a resident's out-of-state income 249
under division (B) of section 5747.05 of the Revised Code. 252
(3) The election provided for under division (D) of this 255
section applies only to the taxable year for which the election 256
is made by the pass-through entity. Unless the tax commissioner 257
provides otherwise, this election, once made, is binding and 258
irrevocable for the taxable year for which the election is made. 259
Nothing in this division shall be construed to provide for any 260
deduction or credit that would not be allowable if a nonresident 261
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pass-through entity investor were to file an annual return. 262
(4) If a pass-through entity makes the election provided 264
for under division (D) of this section, the pass-through entity 266
shall be liable for any additional taxes, interest, interest 267
penalty, or penalties imposed by this chapter if the tax 269
commissioner determines that the single return does not reflect 270
the correct tax due by nonresident pass-through entity investors 271
covered by that return. Nothing in this division shall be 272
construed to limit or alter the liability, if any, imposed on 273
pass-through entity investors for unpaid or underpaid taxes, 274
interest, interest penalty, or penalties as a result of the
pass-through entity's making the election provided for under 275
division (D) of this section. For the purposes of division (D) 278
of this section, "correct tax due" means the tax that would have 279
been paid by the pass-through entity had the single return been 280
filed in a manner reflecting and including the findings and 281
determinations made by the tax commissioner. Nothing in division 283
(D) of this section shall be construed to make or hold a 284
pass-through entity liable for tax attributable to a pass-through 285
entity investor's income from a source other than the 286
pass-through entity electing to file the single return. 287
(E) If a husband and wife file a joint federal income tax 289
return for a taxable year, they shall file a joint return under 290
this section for that taxable year, and their liabilities are 291
joint and several, but, if the federal income tax liability of 292
either spouse is determined on a separate federal income tax 293
return, they shall file separate returns under this section. 294
If either spouse is not required to file a federal income 296
tax return and either or both are required to file a return 297
pursuant to this chapter, they may elect to file separate or 298
joint returns, and, pursuant to that election, their liabilities 299
are separate or joint and several. If a husband and wife file 300
separate returns pursuant to this chapter, each must claim the 301
taxpayer's own exemption, but not both, as authorized under 302
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section 5747.02 of the Revised Code on the taxpayer's own return. 305
(F) Each return or notice required to be filed under this 307
section shall contain the signature of the taxpayer or the 309
taxpayer's duly authorized agent and of the person who prepared 310
the return for the taxpayer, and shall include the taxpayer's 311
social security number. Each return shall be verified by a 312
declaration under the penalties of perjury. The tax commissioner 313
shall prescribe the form that the signature and declaration shall 314
take.
(G) Each return or notice required to be filed under this 316
section shall be made and filed as required by section 5747.04 of 317
the Revised Code, on or before the fifteenth day of April of each 318
year, on forms that the tax commissioner shall prescribe, 319
together with remittance made payable to the treasurer of state 320
in the combined amount of the state and all school district 321
income taxes shown to be due on the form, unless the combined 322
amount shown to be due is one dollar or less, in which case that 323
amount need not be remitted. 324
Upon good cause shown, the commissioner may extend the 326
period for filing any notice or return required to be filed under 327
this section and may adopt rules relating to extensions. If the 328
extension results in an extension of time for the payment of any 329
state or school district income tax liability with respect to 330
which the return is filed, the taxpayer shall pay at the time the 331
tax liability is paid an amount of interest computed at the rate 332
per annum prescribed by section 5703.47 of the Revised Code on 333
that liability from the time that payment is due without 334
extension to the time of actual payment. In EXCEPT AS PROVIDED 336
IN SECTION 5747.132 OF THE REVISED CODE, IN addition to all other 338
interest charges and penalties, all taxes imposed under this
chapter or Chapter 5748. of the Revised Code and remaining unpaid 342
after they become due, except combined amounts due of one dollar 343
or less, bear interest at the rate per annum prescribed by
section 5703.47 of the Revised Code until paid or until the day 344
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an assessment is issued under section 5747.13 of the Revised 345
Code, whichever occurs first. If 346
IF the commissioner considers it necessary in order to 349
ensure the payment of the tax imposed by section 5747.02 of the 350
Revised Code or any tax imposed under Chapter 5748. of the 351
Revised Code, the commissioner may require returns and payments 352
to be made otherwise than as provided in this section. 353
(H) If any report, claim, statement, or other document 355
required to be filed, or any payment required to be made, within 356
a prescribed period or on or before a prescribed date under this 357
chapter is delivered after that period or that date by United 358
States mail to the agency, officer, or office with which the 359
report, claim, statement, or other document is required to be 360
filed, or to which the payment is required to be made, the date 361
of the postmark stamped on the cover in which the report, claim, 362
statement, or other document, or payment is mailed shall be 363
deemed to be the date of delivery or the date of payment. 364
If a payment is required to be made by electronic funds 366
transfer pursuant to section 5747.072 of the Revised Code, the 367
payment is considered to be made when the payment is received by 368
the treasurer of state or credited to an account designated by 369
the treasurer of state for the receipt of tax payments. 370
"The date of the postmark" means, in the event there is 373
more than one date on the cover, the earliest date imprinted on 374
the cover by the United States postal service.
(I) The amounts withheld by the employer pursuant to 376
section 5747.06 of the Revised Code shall be allowed to the 377
recipient of the compensation as credits against payment of the 378
appropriate taxes imposed on the recipient by section 5747.02 and 380
under Chapter 5748. of the Revised Code.
(J) If, in accordance with division (D) of this section, a 384
pass-through entity elects to file a single return and if any 385
investor is required to file the return and make the payment of 386
taxes required by this chapter on account of the investor's other 387
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income that is not included in a single return filed by a 388
pass-through entity, the investor is entitled to a refundable 389
credit equal to the investor's proportionate share of the tax 390
paid by the pass-through entity on behalf of the investor. The 391
investor shall claim the credit for the investor's taxable year 392
in which or with which ends the taxable year of the pass-through 393
entity. Nothing in this chapter shall be construed to allow any 394
credit provided in this chapter to be claimed more than once. 395
For the purposes of computing any interest, penalty, or interest 396
penalty, the investor shall be deemed to have paid the refundable 397
credit provided by this division on the day that the pass-through 398
entity paid the estimated tax or the tax giving rise to the 399
credit.
Sec. 5747.132. (A) AS USED IN THIS SECTION: 401
(1) "QUALIFYING TAXPAYER" MEANS A TAXPAYER, EMPLOYER, OR 403
QUALIFYING ENTITY. 404
(2) "QUALIFYING REFUND OVERPAYMENT" MEANS AN AMOUNT 406
RECEIVED BY A QUALIFYING TAXPAYER IN EXCESS OF A REFUND OR 407
REQUEST FOR PAYMENT CLAIMED OR MADE BY OR ON BEHALF OF THE 408
QUALIFYING TAXPAYER ON A RETURN, REPORT, OR OTHER DOCUMENT FILED 410
WITH THE TAX COMMISSIONER.
(B) A QUALIFYING TAXPAYER IS NOT LIABLE FOR ANY INTEREST 413
OR PENALTY WITH RESPECT TO THE REPAYMENT OF A QUALIFYING REFUND 414
OVERPAYMENT IF THE TAXPAYER PAYS THE ENTIRE AMOUNT OF THE 415
OVERPAYMENT TO THE TAX COMMISSIONER NOT LATER THAN THIRTY DAYS 416
AFTER THE TAXPAYER RECEIVES AN ASSESSMENT FOR IT. IF THE 417
TAXPAYER DOES NOT PAY THE ENTIRE AMOUNT OF THE OVERPAYMENT TO THE 418
COMMISSIONER WITHIN THE TIME PRESCRIBED BY THIS SECTION, INTEREST 419
SHALL ACCRUE ON THE AMOUNT OF THE DEFICIENCY PURSUANT TO SECTION 420
5747.13 OF THE REVISED CODE FROM THE DAY THE COMMISSIONER ISSUES 422
THE ASSESSMENT UNTIL THE DEFICIENCY IS PAID. 423
Section 2. That existing sections 5733.26 and 5747.08 of 425
the Revised Code are hereby repealed. 426
Section 3. The amendment or enactment by this act of 428
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sections 5733.26, 5733.261, 5747.08, and 5747.132 of the Revised 430
Code shall be applied to prohibit the accrual of interest or 431
penalty with respect to tax refund overpayment assessments 432
received by taxpayers after the effective date of this act, 434
regardless of the time of claim for the refund. 435