As Passed by the Senate 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- 19
SENATORS BLESSING-BRADY-WATTS-PRENTISS-ESPY-OELSLAGER-
WACHTMANN-NEIN-JOHNSON-RAY-SPADA-DiDONATO 20
_________________________________________________________________ 22
A B I L L
To amend sections 5733.26 and 5747.08 and to enact 24
sections 5733.261 and 5747.132 of the Revised 25
Code to eliminate the payment of interest by a 26
taxpayer on repayment of certain excess refunds 27
of state income or corporation franchise taxes. 29
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 31
Section 1. That sections 5733.26 and 5747.08 be amended 33
and sections 5733.261 and 5747.132 of the Revised Code be enacted 35
to read as follows:
Sec. 5733.26. (A) If EXCEPT AS PROVIDED IN SECTION 44
5733.261 OF THE REVISED CODE, IF the tax imposed by section 46
5733.06 of the Revised Code, or any portion of that tax, whether 47
determined by the tax commissioner or the taxpayer, is not paid 48
on or before the date prescribed for its payment, interest shall 49
2
be assessed, collected, and paid, in the same manner as the tax, 50
upon such unpaid amount at the rate per annum prescribed by 51
section 5703.47 of the Revised Code from the date prescribed for 52
its payment until it is paid or until the day an assessment is 53
issued under section 5733.11 of the Revised Code, whichever 54
occurs first.
(B) Interest shall be allowed and paid at the rate per 56
annum prescribed by section 5703.47 of the Revised Code upon 57
amounts refunded with respect to the tax imposed by section 59
5733.06 of the Revised Code. The interest shall run from
whichever of the following dates is the latest until the date the 61
refund is paid: the date of the illegal, erroneous, or excessive 62
payment; the ninetieth day after the final date the annual report 63
under section 5733.02 of the Revised Code was required to be 64
filed; or the ninetieth day after the date that report was filed. 65
If the overpayment results from the carryback of a net 67
capital loss to a previous taxable year, the overpayment is 68
deemed not to have been made prior to the filing date, including 69
any extension thereof, for the taxable year in which the net 70
capital loss arises. 71
Sec. 5733.261. (A) AS USED IN THIS SECTION, "QUALIFYING 74
REFUND OVERPAYMENT" MEANS AN AMOUNT RECEIVED BY A TAXPAYER IN 75
EXCESS OF A REFUND OR REQUEST FOR PAYMENT CLAIMED OR MADE BY OR 76
ON BEHALF OF THE TAXPAYER ON A RETURN, REPORT, OR OTHER DOCUMENT 77
FILED WITH THE TAX COMMISSIONER. 78
(B) A TAXPAYER IS NOT LIABLE FOR ANY INTEREST OR PENALTY 81
WITH RESPECT TO THE REPAYMENT OF A QUALIFYING REFUND OVERPAYMENT 82
IF THE TAXPAYER PAYS THE ENTIRE AMOUNT OF THE OVERPAYMENT TO THE 83
TAX COMMISSIONER NOT LATER THAN THIRTY DAYS AFTER THE TAXPAYER 84
RECEIVES AN ASSESSMENT FOR IT. IF THE TAXPAYER DOES NOT PAY THE 85
ENTIRE AMOUNT OF THE OVERPAYMENT TO THE COMMISSIONER WITHIN THE 86
TIME PRESCRIBED BY THIS SECTION, INTEREST SHALL ACCRUE ON THE 87
AMOUNT OF THE DEFICIENCY PURSUANT TO SECTION 5733.11 OF THE 89
REVISED CODE FROM THE DAY THE COMMISSIONER ISSUES THE ASSESSMENT 90
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UNTIL THE DEFICIENCY IS PAID. 91
Sec. 5747.08. An annual return with respect to the tax 100
imposed by section 5747.02 of the Revised Code and each tax 101
imposed under Chapter 5748. of the Revised Code shall be made by 102
every taxpayer for any taxable year for which the taxpayer is 103
liable for the tax imposed by that section or under that chapter, 104
unless the total credits allowed under divisions (E), (F), and 105
(G) of section 5747.05 of the Revised Code for the year are equal 106
to or exceed the tax imposed by section 5747.02 of the Revised 107
Code, in which case no return shall be required unless the 108
taxpayer is liable for a tax imposed pursuant to Chapter 5748. of 109
the Revised Code. 110
(A) If an individual is deceased, any return or notice 112
required of that individual under this chapter shall be made and 113
filed by that decedent's executor, administrator, or other person 115
charged with the property of that decedent.
(B) If an individual is unable to make a return or notice 117
required by this chapter, the return or notice required of that 118
individual shall be made and filed by the individual's duly 119
authorized agent, guardian, conservator, fiduciary, or other 120
person charged with the care of the person or property of that 121
individual.
(C) Returns or notices required of an estate or a trust 123
shall be made and filed by the fiduciary of the estate or trust. 124
(D)(1)(a) Except as otherwise provided in division 127
(D)(1)(b) of this section, any pass-through entity may file a 129
single return on behalf of one or more of the entity's investors 130
other than an investor that is a person subject to the tax 132
imposed under section 5733.06 of the Revised Code. The single
return shall set forth the name, address, and social security 133
number of each of those pass-through entity investors and shall 136
indicate the distributive share of each of those pass-through 137
entity investor's income taxable in this state in accordance with 138
sections 5747.20 to 5747.231 of the Revised Code. Such 141
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pass-through entity investors for whom the pass-through entity 142
elects to file a single return are not entitled to the exemption 143
or credit provided for by sections 5747.02 and 5747.022 of the 144
Revised Code; shall calculate the tax before business credits at 147
the highest rate of tax set forth in section 5747.02 of the 148
Revised Code for the taxable year for which the return is filed; 150
and are entitled to only their distributive share of the business 151
credits as defined in division (D)(2) of this section. A single 153
check drawn by the pass-through entity shall accompany the return 155
in full payment of the tax due for such investors other than 156
investors who are persons subject to the tax imposed under 157
section 5733.06 of the Revised Code. 158
(b)(i) A pass-through entity shall not include in such a 161
single return any investor that is a trust to the extent that any 162
direct or indirect current, future, or contingent beneficiary of 163
the trust is a person subject to the tax imposed under section 164
5733.06 of the Revised Code. 165
(ii) A pass-through entity shall not include in such a 168
single return any investor that is itself a pass-through entity 169
to the extent that any direct or indirect investor in the second 170
pass-through entity is a person subject to the tax imposed under 171
section 5733.06 of the Revised Code. 172
(c) Nothing in division (D) of this section precludes the 176
tax commissioner from requiring such investors to file the return 177
and make the payment of taxes and related interest, penalty, and 178
interest penalty required by this section or section 5747.02, 179
5747.09, or 5747.15 of the Revised Code. Nothing in division (D) 181
of this section shall be construed to provide to such an investor 182
or pass-through entity any additional deduction or credit, other 183
than the credit provided by division (J) of this section, solely 185
on account of the entity's filing a return in accordance with 186
this section. Such a pass-through entity also shall make the 187
filing and payment of estimated taxes on behalf of the 188
pass-through entity investors other than an investor that is a 190
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person subject to the tax imposed under section 5733.06 of the 191
Revised Code.
(2) For the purposes of this section, "business credits" 194
means the credits listed in section 5747.98 of the Revised Code 197
excluding the following credits: 198
(b)(a) The retirement credit under division (B) of section 200
5747.055 of the Revised Code; 202
(c)(b) The senior citizen credit under division (C) of 205
section 5747.05 of the Revised Code;
(d)(c) The lump sum distribution credit under division (D) 208
of section 5747.05 of the Revised Code; 210
(e)(d) The dependent care credit under section 5747.054 of 213
the Revised Code; 214
(f)(e) The lump sum retirement income credit under 217
division (C) of section 5747.055 of the Revised Code; 219
(g)(f) The lump sum retirement income credit under 222
division (D) of section 5747.055 of the Revised Code; 224
(h)(g) The lump sum retirement income credit under 227
division (E) of section 5747.055 of the Revised Code; 229
(i)(h) The credit for displaced workers who pay for job 232
training under section 5747.27 of the Revised Code; 234
(j)(i) The twenty-dollar personal exemption credit under 237
section 5747.022 of the Revised Code; 239
(k)(j) The joint filing credit under division (G) of 242
section 5747.05 of the Revised Code; 244
(l)(k) The nonresident credit under division (A) of 247
section 5747.05 of the Revised Code; 249
(m)(l) The credit for a resident's out-of-state income 252
under division (B) of section 5747.05 of the Revised Code. 255
(3) The election provided for under division (D) of this 258
section applies only to the taxable year for which the election 259
is made by the pass-through entity. Unless the tax commissioner 260
provides otherwise, this election, once made, is binding and 261
irrevocable for the taxable year for which the election is made. 262
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Nothing in this division shall be construed to provide for any 263
deduction or credit that would not be allowable if a nonresident 264
pass-through entity investor were to file an annual return. 265
(4) If a pass-through entity makes the election provided 267
for under division (D) of this section, the pass-through entity 269
shall be liable for any additional taxes, interest, interest 270
penalty, or penalties imposed by this chapter if the tax 272
commissioner determines that the single return does not reflect 273
the correct tax due by nonresident pass-through entity investors 274
covered by that return. Nothing in this division shall be 275
construed to limit or alter the liability, if any, imposed on 276
pass-through entity investors for unpaid or underpaid taxes, 277
interest, interest penalty, or penalties as a result of the
pass-through entity's making the election provided for under 278
division (D) of this section. For the purposes of division (D) 281
of this section, "correct tax due" means the tax that would have 282
been paid by the pass-through entity had the single return been 283
filed in a manner reflecting and including the findings and 284
determinations made by the tax commissioner. Nothing in division 286
(D) of this section shall be construed to make or hold a 287
pass-through entity liable for tax attributable to a pass-through 288
entity investor's income from a source other than the 289
pass-through entity electing to file the single return. 290
(E) If a husband and wife file a joint federal income tax 292
return for a taxable year, they shall file a joint return under 293
this section for that taxable year, and their liabilities are 294
joint and several, but, if the federal income tax liability of 295
either spouse is determined on a separate federal income tax 296
return, they shall file separate returns under this section. 297
If either spouse is not required to file a federal income 299
tax return and either or both are required to file a return 300
pursuant to this chapter, they may elect to file separate or 301
joint returns, and, pursuant to that election, their liabilities 302
are separate or joint and several. If a husband and wife file 303
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separate returns pursuant to this chapter, each must claim the 304
taxpayer's own exemption, but not both, as authorized under 305
section 5747.02 of the Revised Code on the taxpayer's own return. 308
(F) Each return or notice required to be filed under this 310
section shall contain the signature of the taxpayer or the 312
taxpayer's duly authorized agent and of the person who prepared 313
the return for the taxpayer, and shall include the taxpayer's 314
social security number. Each return shall be verified by a 315
declaration under the penalties of perjury. The tax commissioner 316
shall prescribe the form that the signature and declaration shall 317
take.
(G) Each return or notice required to be filed under this 319
section shall be made and filed as required by section 5747.04 of 320
the Revised Code, on or before the fifteenth day of April of each 321
year, on forms that the tax commissioner shall prescribe, 322
together with remittance made payable to the treasurer of state 323
in the combined amount of the state and all school district 324
income taxes shown to be due on the form, unless the combined 325
amount shown to be due is one dollar or less, in which case that 326
amount need not be remitted. 327
Upon good cause shown, the commissioner may extend the 329
period for filing any notice or return required to be filed under 330
this section and may adopt rules relating to extensions. If the 331
extension results in an extension of time for the payment of any 332
state or school district income tax liability with respect to 333
which the return is filed, the taxpayer shall pay at the time the 334
tax liability is paid an amount of interest computed at the rate 335
per annum prescribed by section 5703.47 of the Revised Code on 336
that liability from the time that payment is due without 337
extension to the time of actual payment. In EXCEPT AS PROVIDED 339
IN SECTION 5747.132 OF THE REVISED CODE, IN addition to all other 341
interest charges and penalties, all taxes imposed under this
chapter or Chapter 5748. of the Revised Code and remaining unpaid 345
after they become due, except combined amounts due of one dollar 346
8
or less, bear interest at the rate per annum prescribed by
section 5703.47 of the Revised Code until paid or until the day 347
an assessment is issued under section 5747.13 of the Revised 348
Code, whichever occurs first. If 349
IF the commissioner considers it necessary in order to 352
ensure the payment of the tax imposed by section 5747.02 of the 353
Revised Code or any tax imposed under Chapter 5748. of the 354
Revised Code, the commissioner may require returns and payments 355
to be made otherwise than as provided in this section. 356
(H) If any report, claim, statement, or other document 358
required to be filed, or any payment required to be made, within 359
a prescribed period or on or before a prescribed date under this 360
chapter is delivered after that period or that date by United 361
States mail to the agency, officer, or office with which the 362
report, claim, statement, or other document is required to be 363
filed, or to which the payment is required to be made, the date 364
of the postmark stamped on the cover in which the report, claim, 365
statement, or other document, or payment is mailed shall be 366
deemed to be the date of delivery or the date of payment. 367
If a payment is required to be made by electronic funds 369
transfer pursuant to section 5747.072 of the Revised Code, the 370
payment is considered to be made when the payment is received by 371
the treasurer of state or credited to an account designated by 372
the treasurer of state for the receipt of tax payments. 373
"The date of the postmark" means, in the event there is 376
more than one date on the cover, the earliest date imprinted on 377
the cover by the United States postal service.
(I) The amounts withheld by the employer pursuant to 379
section 5747.06 of the Revised Code shall be allowed to the 380
recipient of the compensation as credits against payment of the 381
appropriate taxes imposed on the recipient by section 5747.02 and 383
under Chapter 5748. of the Revised Code.
(J) If, in accordance with division (D) of this section, a 387
pass-through entity elects to file a single return and if any 388
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investor is required to file the return and make the payment of 389
taxes required by this chapter on account of the investor's other 390
income that is not included in a single return filed by a 391
pass-through entity, the investor is entitled to a refundable 392
credit equal to the investor's proportionate share of the tax 393
paid by the pass-through entity on behalf of the investor. The 394
investor shall claim the credit for the investor's taxable year 395
in which or with which ends the taxable year of the pass-through 396
entity. Nothing in this chapter shall be construed to allow any 397
credit provided in this chapter to be claimed more than once. 398
For the purposes of computing any interest, penalty, or interest 399
penalty, the investor shall be deemed to have paid the refundable 400
credit provided by this division on the day that the pass-through 401
entity paid the estimated tax or the tax giving rise to the 402
credit.
Sec. 5747.132. (A) AS USED IN THIS SECTION: 404
(1) "QUALIFYING TAXPAYER" MEANS A TAXPAYER, EMPLOYER, OR 406
QUALIFYING ENTITY. 407
(2) "QUALIFYING REFUND OVERPAYMENT" MEANS AN AMOUNT 409
RECEIVED BY A QUALIFYING TAXPAYER IN EXCESS OF A REFUND OR 410
REQUEST FOR PAYMENT CLAIMED OR MADE BY OR ON BEHALF OF THE 411
QUALIFYING TAXPAYER ON A RETURN, REPORT, OR OTHER DOCUMENT FILED 413
WITH THE TAX COMMISSIONER.
(B) A QUALIFYING TAXPAYER IS NOT LIABLE FOR ANY INTEREST 416
OR PENALTY WITH RESPECT TO THE REPAYMENT OF A QUALIFYING REFUND 417
OVERPAYMENT IF THE TAXPAYER PAYS THE ENTIRE AMOUNT OF THE 418
OVERPAYMENT TO THE TAX COMMISSIONER NOT LATER THAN THIRTY DAYS 419
AFTER THE TAXPAYER RECEIVES AN ASSESSMENT FOR IT. IF THE 420
TAXPAYER DOES NOT PAY THE ENTIRE AMOUNT OF THE OVERPAYMENT TO THE 421
COMMISSIONER WITHIN THE TIME PRESCRIBED BY THIS SECTION, INTEREST 422
SHALL ACCRUE ON THE AMOUNT OF THE DEFICIENCY PURSUANT TO SECTION 423
5747.13 OF THE REVISED CODE FROM THE DAY THE COMMISSIONER ISSUES 425
THE ASSESSMENT UNTIL THE DEFICIENCY IS PAID. 426
Section 2. That existing sections 5733.26 and 5747.08 of 428
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the Revised Code are hereby repealed. 429
Section 3. The amendment or enactment by this act of 431
sections 5733.26, 5733.261, 5747.08, and 5747.132 of the Revised 433
Code shall be applied to prohibit the accrual of interest or 434
penalty with respect to tax refund overpayment assessments 435
received by taxpayers after the effective date of this act, 437
regardless of the time of claim for the refund. 438