As Reported by the Senate Ways and 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-PETERSON-BUEHRER-GOODMAN- 16
WINKLER-CLANCY-TIBERI-DePIERO-D.MILLER-HARRIS-SCHURING- 17
SUTTON-STAPLETON-HOOPS-THOMAS-WILSON-OGG- SENATOR BLESSING 19
_________________________________________________________________ 21
A B I L L
To amend sections 5733.26 and 5747.08 and to enact 23
sections 5733.261 and 5747.132 of the Revised 24
Code to eliminate the payment of interest by a 25
taxpayer on repayment of certain excess refunds 26
of state income or corporation franchise taxes. 28
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 30
Section 1. That sections 5733.26 and 5747.08 be amended 32
and sections 5733.261 and 5747.132 of the Revised Code be enacted 34
to read as follows:
Sec. 5733.26. (A) If EXCEPT AS PROVIDED IN SECTION 43
5733.261 OF THE REVISED CODE, IF the tax imposed by section 45
5733.06 of the Revised Code, or any portion of that tax, whether 46
determined by the tax commissioner or the taxpayer, is not paid 47
on or before the date prescribed for its payment, interest shall 48
be assessed, collected, and paid, in the same manner as the tax, 49
upon such unpaid amount at the rate per annum prescribed by 50
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section 5703.47 of the Revised Code from the date prescribed for 51
its payment until it is paid or until the day an assessment is 52
issued under section 5733.11 of the Revised Code, whichever 53
occurs first.
(B) Interest shall be allowed and paid at the rate per 55
annum prescribed by section 5703.47 of the Revised Code upon 56
amounts refunded with respect to the tax imposed by section 58
5733.06 of the Revised Code. The interest shall run from
whichever of the following dates is the latest until the date the 60
refund is paid: the date of the illegal, erroneous, or excessive 61
payment; the ninetieth day after the final date the annual report 62
under section 5733.02 of the Revised Code was required to be 63
filed; or the ninetieth day after the date that report was filed. 64
If the overpayment results from the carryback of a net 66
capital loss to a previous taxable year, the overpayment is 67
deemed not to have been made prior to the filing date, including 68
any extension thereof, for the taxable year in which the net 69
capital loss arises. 70
Sec. 5733.261. (A) AS USED IN THIS SECTION, "QUALIFYING 73
REFUND OVERPAYMENT" MEANS AN AMOUNT RECEIVED BY A TAXPAYER IN 74
EXCESS OF A REFUND OR REQUEST FOR PAYMENT CLAIMED OR MADE BY OR 75
ON BEHALF OF THE TAXPAYER ON A RETURN, REPORT, OR OTHER DOCUMENT 76
FILED WITH THE TAX COMMISSIONER. 77
(B) A TAXPAYER IS NOT LIABLE FOR ANY INTEREST OR PENALTY 80
WITH RESPECT TO THE REPAYMENT OF A QUALIFYING REFUND OVERPAYMENT 81
IF THE TAXPAYER PAYS THE ENTIRE AMOUNT OF THE OVERPAYMENT TO THE 82
TAX COMMISSIONER NOT LATER THAN THIRTY DAYS AFTER THE TAXPAYER 83
RECEIVES AN ASSESSMENT FOR IT. IF THE TAXPAYER DOES NOT PAY THE 84
ENTIRE AMOUNT OF THE OVERPAYMENT TO THE COMMISSIONER WITHIN THE 85
TIME PRESCRIBED BY THIS SECTION, INTEREST SHALL ACCRUE ON THE 86
AMOUNT OF THE DEFICIENCY PURSUANT TO SECTION 5733.11 OF THE 88
REVISED CODE FROM THE DAY THE COMMISSIONER ISSUES THE ASSESSMENT 89
UNTIL THE DEFICIENCY IS PAID. 90
Sec. 5747.08. An annual return with respect to the tax 99
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imposed by section 5747.02 of the Revised Code and each tax 100
imposed under Chapter 5748. of the Revised Code shall be made by 101
every taxpayer for any taxable year for which the taxpayer is 102
liable for the tax imposed by that section or under that chapter, 103
unless the total credits allowed under divisions (E), (F), and 104
(G) of section 5747.05 of the Revised Code for the year are equal 105
to or exceed the tax imposed by section 5747.02 of the Revised 106
Code, in which case no return shall be required unless the 107
taxpayer is liable for a tax imposed pursuant to Chapter 5748. of 108
the Revised Code. 109
(A) If an individual is deceased, any return or notice 111
required of that individual under this chapter shall be made and 112
filed by that decedent's executor, administrator, or other person 114
charged with the property of that decedent.
(B) If an individual is unable to make a return or notice 116
required by this chapter, the return or notice required of that 117
individual shall be made and filed by the individual's duly 118
authorized agent, guardian, conservator, fiduciary, or other 119
person charged with the care of the person or property of that 120
individual.
(C) Returns or notices required of an estate or a trust 122
shall be made and filed by the fiduciary of the estate or trust. 123
(D)(1)(a) Except as otherwise provided in division 126
(D)(1)(b) of this section, any pass-through entity may file a 128
single return on behalf of one or more of the entity's investors 129
other than an investor that is a person subject to the tax 131
imposed under section 5733.06 of the Revised Code. The single
return shall set forth the name, address, and social security 132
number of each of those pass-through entity investors and shall 135
indicate the distributive share of each of those pass-through 136
entity investor's income taxable in this state in accordance with 137
sections 5747.20 to 5747.231 of the Revised Code. Such 140
pass-through entity investors for whom the pass-through entity 141
elects to file a single return are not entitled to the exemption 142
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or credit provided for by sections 5747.02 and 5747.022 of the 143
Revised Code; shall calculate the tax before business credits at 146
the highest rate of tax set forth in section 5747.02 of the 147
Revised Code for the taxable year for which the return is filed; 149
and are entitled to only their distributive share of the business 150
credits as defined in division (D)(2) of this section. A single 152
check drawn by the pass-through entity shall accompany the return 154
in full payment of the tax due for such investors other than 155
investors who are persons subject to the tax imposed under 156
section 5733.06 of the Revised Code. 157
(b)(i) A pass-through entity shall not include in such a 160
single return any investor that is a trust to the extent that any 161
direct or indirect current, future, or contingent beneficiary of 162
the trust is a person subject to the tax imposed under section 163
5733.06 of the Revised Code. 164
(ii) A pass-through entity shall not include in such a 167
single return any investor that is itself a pass-through entity 168
to the extent that any direct or indirect investor in the second 169
pass-through entity is a person subject to the tax imposed under 170
section 5733.06 of the Revised Code. 171
(c) Nothing in division (D) of this section precludes the 175
tax commissioner from requiring such investors to file the return 176
and make the payment of taxes and related interest, penalty, and 177
interest penalty required by this section or section 5747.02, 178
5747.09, or 5747.15 of the Revised Code. Nothing in division (D) 180
of this section shall be construed to provide to such an investor 181
or pass-through entity any additional deduction or credit, other 182
than the credit provided by division (J) of this section, solely 184
on account of the entity's filing a return in accordance with 185
this section. Such a pass-through entity also shall make the 186
filing and payment of estimated taxes on behalf of the 187
pass-through entity investors other than an investor that is a 189
person subject to the tax imposed under section 5733.06 of the 190
Revised Code.
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(2) For the purposes of this section, "business credits" 193
means the credits listed in section 5747.98 of the Revised Code 196
excluding the following credits: 197
(b)(a) The retirement credit under division (B) of section 199
5747.055 of the Revised Code; 201
(c)(b) The senior citizen credit under division (C) of 204
section 5747.05 of the Revised Code;
(d)(c) The lump sum distribution credit under division (D) 207
of section 5747.05 of the Revised Code; 209
(e)(d) The dependent care credit under section 5747.054 of 212
the Revised Code; 213
(f)(e) The lump sum retirement income credit under 216
division (C) of section 5747.055 of the Revised Code; 218
(g)(f) The lump sum retirement income credit under 221
division (D) of section 5747.055 of the Revised Code; 223
(h)(g) The lump sum retirement income credit under 226
division (E) of section 5747.055 of the Revised Code; 228
(i)(h) The credit for displaced workers who pay for job 231
training under section 5747.27 of the Revised Code; 233
(j)(i) The twenty-dollar personal exemption credit under 236
section 5747.022 of the Revised Code; 238
(k)(j) The joint filing credit under division (G) of 241
section 5747.05 of the Revised Code; 243
(l)(k) The nonresident credit under division (A) of 246
section 5747.05 of the Revised Code; 248
(m)(l) The credit for a resident's out-of-state income 251
under division (B) of section 5747.05 of the Revised Code. 254
(3) The election provided for under division (D) of this 257
section applies only to the taxable year for which the election 258
is made by the pass-through entity. Unless the tax commissioner 259
provides otherwise, this election, once made, is binding and 260
irrevocable for the taxable year for which the election is made. 261
Nothing in this division shall be construed to provide for any 262
deduction or credit that would not be allowable if a nonresident 263
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pass-through entity investor were to file an annual return. 264
(4) If a pass-through entity makes the election provided 266
for under division (D) of this section, the pass-through entity 268
shall be liable for any additional taxes, interest, interest 269
penalty, or penalties imposed by this chapter if the tax 271
commissioner determines that the single return does not reflect 272
the correct tax due by nonresident pass-through entity investors 273
covered by that return. Nothing in this division shall be 274
construed to limit or alter the liability, if any, imposed on 275
pass-through entity investors for unpaid or underpaid taxes, 276
interest, interest penalty, or penalties as a result of the
pass-through entity's making the election provided for under 277
division (D) of this section. For the purposes of division (D) 280
of this section, "correct tax due" means the tax that would have 281
been paid by the pass-through entity had the single return been 282
filed in a manner reflecting and including the findings and 283
determinations made by the tax commissioner. Nothing in division 285
(D) of this section shall be construed to make or hold a 286
pass-through entity liable for tax attributable to a pass-through 287
entity investor's income from a source other than the 288
pass-through entity electing to file the single return. 289
(E) If a husband and wife file a joint federal income tax 291
return for a taxable year, they shall file a joint return under 292
this section for that taxable year, and their liabilities are 293
joint and several, but, if the federal income tax liability of 294
either spouse is determined on a separate federal income tax 295
return, they shall file separate returns under this section. 296
If either spouse is not required to file a federal income 298
tax return and either or both are required to file a return 299
pursuant to this chapter, they may elect to file separate or 300
joint returns, and, pursuant to that election, their liabilities 301
are separate or joint and several. If a husband and wife file 302
separate returns pursuant to this chapter, each must claim the 303
taxpayer's own exemption, but not both, as authorized under 304
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section 5747.02 of the Revised Code on the taxpayer's own return. 307
(F) Each return or notice required to be filed under this 309
section shall contain the signature of the taxpayer or the 311
taxpayer's duly authorized agent and of the person who prepared 312
the return for the taxpayer, and shall include the taxpayer's 313
social security number. Each return shall be verified by a 314
declaration under the penalties of perjury. The tax commissioner 315
shall prescribe the form that the signature and declaration shall 316
take.
(G) Each return or notice required to be filed under this 318
section shall be made and filed as required by section 5747.04 of 319
the Revised Code, on or before the fifteenth day of April of each 320
year, on forms that the tax commissioner shall prescribe, 321
together with remittance made payable to the treasurer of state 322
in the combined amount of the state and all school district 323
income taxes shown to be due on the form, unless the combined 324
amount shown to be due is one dollar or less, in which case that 325
amount need not be remitted. 326
Upon good cause shown, the commissioner may extend the 328
period for filing any notice or return required to be filed under 329
this section and may adopt rules relating to extensions. If the 330
extension results in an extension of time for the payment of any 331
state or school district income tax liability with respect to 332
which the return is filed, the taxpayer shall pay at the time the 333
tax liability is paid an amount of interest computed at the rate 334
per annum prescribed by section 5703.47 of the Revised Code on 335
that liability from the time that payment is due without 336
extension to the time of actual payment. In EXCEPT AS PROVIDED 338
IN SECTION 5747.132 OF THE REVISED CODE, IN addition to all other 340
interest charges and penalties, all taxes imposed under this
chapter or Chapter 5748. of the Revised Code and remaining unpaid 344
after they become due, except combined amounts due of one dollar 345
or less, bear interest at the rate per annum prescribed by
section 5703.47 of the Revised Code until paid or until the day 346
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an assessment is issued under section 5747.13 of the Revised 347
Code, whichever occurs first. If 348
IF the commissioner considers it necessary in order to 351
ensure the payment of the tax imposed by section 5747.02 of the 352
Revised Code or any tax imposed under Chapter 5748. of the 353
Revised Code, the commissioner may require returns and payments 354
to be made otherwise than as provided in this section. 355
(H) If any report, claim, statement, or other document 357
required to be filed, or any payment required to be made, within 358
a prescribed period or on or before a prescribed date under this 359
chapter is delivered after that period or that date by United 360
States mail to the agency, officer, or office with which the 361
report, claim, statement, or other document is required to be 362
filed, or to which the payment is required to be made, the date 363
of the postmark stamped on the cover in which the report, claim, 364
statement, or other document, or payment is mailed shall be 365
deemed to be the date of delivery or the date of payment. 366
If a payment is required to be made by electronic funds 368
transfer pursuant to section 5747.072 of the Revised Code, the 369
payment is considered to be made when the payment is received by 370
the treasurer of state or credited to an account designated by 371
the treasurer of state for the receipt of tax payments. 372
"The date of the postmark" means, in the event there is 375
more than one date on the cover, the earliest date imprinted on 376
the cover by the United States postal service.
(I) The amounts withheld by the employer pursuant to 378
section 5747.06 of the Revised Code shall be allowed to the 379
recipient of the compensation as credits against payment of the 380
appropriate taxes imposed on the recipient by section 5747.02 and 382
under Chapter 5748. of the Revised Code.
(J) If, in accordance with division (D) of this section, a 386
pass-through entity elects to file a single return and if any 387
investor is required to file the return and make the payment of 388
taxes required by this chapter on account of the investor's other 389
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income that is not included in a single return filed by a 390
pass-through entity, the investor is entitled to a refundable 391
credit equal to the investor's proportionate share of the tax 392
paid by the pass-through entity on behalf of the investor. The 393
investor shall claim the credit for the investor's taxable year 394
in which or with which ends the taxable year of the pass-through 395
entity. Nothing in this chapter shall be construed to allow any 396
credit provided in this chapter to be claimed more than once. 397
For the purposes of computing any interest, penalty, or interest 398
penalty, the investor shall be deemed to have paid the refundable 399
credit provided by this division on the day that the pass-through 400
entity paid the estimated tax or the tax giving rise to the 401
credit.
Sec. 5747.132. (A) AS USED IN THIS SECTION: 403
(1) "QUALIFYING TAXPAYER" MEANS A TAXPAYER, EMPLOYER, OR 405
QUALIFYING ENTITY. 406
(2) "QUALIFYING REFUND OVERPAYMENT" MEANS AN AMOUNT 408
RECEIVED BY A QUALIFYING TAXPAYER IN EXCESS OF A REFUND OR 409
REQUEST FOR PAYMENT CLAIMED OR MADE BY OR ON BEHALF OF THE 410
QUALIFYING TAXPAYER ON A RETURN, REPORT, OR OTHER DOCUMENT FILED 412
WITH THE TAX COMMISSIONER.
(B) A QUALIFYING TAXPAYER IS NOT LIABLE FOR ANY INTEREST 415
OR PENALTY WITH RESPECT TO THE REPAYMENT OF A QUALIFYING REFUND 416
OVERPAYMENT IF THE TAXPAYER PAYS THE ENTIRE AMOUNT OF THE 417
OVERPAYMENT TO THE TAX COMMISSIONER NOT LATER THAN THIRTY DAYS 418
AFTER THE TAXPAYER RECEIVES AN ASSESSMENT FOR IT. IF THE 419
TAXPAYER DOES NOT PAY THE ENTIRE AMOUNT OF THE OVERPAYMENT TO THE 420
COMMISSIONER WITHIN THE TIME PRESCRIBED BY THIS SECTION, INTEREST 421
SHALL ACCRUE ON THE AMOUNT OF THE DEFICIENCY PURSUANT TO SECTION 422
5747.13 OF THE REVISED CODE FROM THE DAY THE COMMISSIONER ISSUES 424
THE ASSESSMENT UNTIL THE DEFICIENCY IS PAID. 425
Section 2. That existing sections 5733.26 and 5747.08 of 427
the Revised Code are hereby repealed. 428
Section 3. The amendment or enactment by this act of 430
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sections 5733.26, 5733.261, 5747.08, and 5747.132 of the Revised 432
Code shall be applied to prohibit the accrual of interest or 433
penalty with respect to tax refund overpayment assessments 434
received by taxpayers after the effective date of this act, 436
regardless of the time of claim for the refund. 437