As Introduced                            1            

123rd General Assembly                                             4            

   Regular Session                                  S. B. No. 108  5            

      1999-2000                                                    6            


      SENATORS LATTA-OELSLAGER-WATTS-BLESSING-MUMPER-WHITE-        8            

      NEIN-WACHTMANN-CUPP-HOTTINGER-CARNES-ARMBRUSTER-SPADA        9            


_________________________________________________________________   11           

                          A   B I L L                                           

             To amend sections 5731.02, 5731.18, 5731.181,         13           

                5731.47, and 5731.48 of the Revised Code to        14           

                reduce the estate tax by thirty-six per cent over               

                five years and to phase out the share of the       15           

                estate tax paid to the state.                                   




BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:        17           

      Section 1.  That sections 5731.02, 5731.18, 5731.181,        19           

5731.47, and 5731.48 of the Revised Code be amended to read as     20           

follows:                                                                        

      Sec. 5731.02.  (A)  A tax is hereby levied on the transfer   29           

of the taxable estate, determined as provided in section 5731.14   30           

of the Revised Code, of every person dying on or after July 1,     31           

1968, who at the time of his death was a resident of this state,   32           

as follows:                                                        33           

      (1)  FOR PERSONS DYING ON OR BEFORE DECEMBER 31, 1999:       36           

If the taxable estate is:          The tax shall be:               38           

Not over $40,000                   2% of the taxable estate        39           

Over $ 40,000 but not over         $800 plus 3% of the excess      40           

$100,000                           over $40,000                    41           

Over $100,000 but not over         $2,600 plus 4% of the excess    42           

$200,000                           over $100,000                   43           

Over $200,000 but not over         $6,600 plus 5% of the excess    45           

$300,000                           over $200,000                                

Over $300,000 but not over         $11,600 plus 6% of the excess   47           

$500,000                           over $300,000                                

                                                          2      


                                                                 
Over $500,000                      $23,600 plus 7% of the excess   49           

                                   over $500,000.                               

      (2)  FOR PERSONS DYING IN CALENDAR YEAR 2000:                51           

IF THE TAXABLE ESTATE IS:          THE TAX SHALL BE:               53           

NOT OVER $40,000                   1.856% OF THE TAXABLE ESTATE    54           

OVER $40,000 BUT NOT OVER          $742.40 PLUS 2.784% OF THE      56           

$100,000                           EXCESS OVER $40,000                          

OVER $100,000 BUT NOT OVER         $2,412.80 PLUS 3.712% OF THE    58           

$200,000                           EXCESS OVER $100,000                         

OVER $200,000 BUT NOT OVER         $6,124.80 PLUS 4.64% OF THE     60           

$300,000                           EXCESS OVER $300,000                         

OVER $300,000 BUT NOT OVER         $10,764.80 PLUS 5.568% OF THE   62           

$500,000                           EXCESS OVER $300,000                         

OVER $500,000                      $21,900.80 PLUS 6.496% OF THE   64           

                                   EXCESS OVER $500,000                         

      (3)  FOR PERSONS DYING IN CALENDAR YEAR 2001:                67           

IF THE TAXABLE ESTATE IS:          THE TAX SHALL BE:               69           

NOT OVER $40,000                   1.712% OF THE TAXABLE ESTATE    71           

OVER $40,000 BUT NOT OVER          $684.80 PLUS 2.568% OF THE      73           

$100,000                           EXCESS OVER $40,000                          

OVER $100,000 BUT NOT OVER         $2,225.60 PLUS 3.424% OF THE    75           

$200,000                           EXCESS OVER $100,000                         

OVER $200,000 BUT NOT OVER         $5,649.60 PLUS 4.28% OF THE     77           

$300,000                           EXCESS OVER $200,000                         

OVER $300,000 BUT NOT OVER         $9,929.60 PLUS 5.136% OF THE    79           

$500,000                           EXCESS OVER $300,000                         

OVER $500,000                      $20,201.60 PLUS 5.992% OF THE   81           

                                   EXCESS OVER $500,000                         

      (4)  FOR PERSONS DYING IN CALENDAR YEAR 2002:                84           

IF THE TAXABLE ESTATE IS:          THE TAX SHALL BE:               87           

NOT OVER $40,000                   1.568% OF THE TAXABLE ESTATE    89           

OVER $40,000 BUT NOT OVER          $627.20 PLUS 2.352% OF THE      91           

$100,000                           EXCESS OVER $40,000                          

                                                          3      


                                                                 
OVER $100,000 BUT NOT OVER         $2,038.40 PLUS 3.136% OF THE    93           

$200,000                           EXCESS OVER $100,000                         

OVER $200,000 BUT NOT OVER         $5,174.40 PLUS 3.92% OF THE     95           

$300,000                           EXCESS OVER $200,000                         

OVER $300,000 BUT NOT OVER         $9,094.40 PLUS 4.704% OF THE    97           

$500,000                           EXCESS OVER $300,000                         

OVER $500,000                      $18,502.40 PLUS 5.488% OF THE   99           

                                   EXCESS OVER $500,000                         

      (5)  FOR PERSONS DYING IN CALENDAR YEAR 2003:                102          

IF THE TAXABLE ESTATE IS:          THE TAX SHALL BE:               105          

NOT OVER $40,000                   1.424% OF THE TAXABLE ESTATE    107          

OVER $40,000 BUT NOT OVER          $569.60 PLUS 2.136% OF THE      109          

$100,000                           EXCESS OVER $40,000                          

OVER $100,000 BUT NOT OVER         $1,851.20 PLUS 2.848% OF THE    111          

$200,000                           EXCESS OVER $100,000                         

OVER $200,000 BUT NOT OVER         $4,699.20 PLUS 3.56% OF THE     113          

$300,000                           EXCESS OVER $200,000                         

OVER $300,000 BUT NOT OVER         $8,259.20 PLUS 4.272% OF THE    115          

$500,000                           EXCESS OVER $300,000                         

OVER $500,000                      $16,803.20 PLUS 4.984% OF THE   117          

                                   EXCESS OVER $500,000                         

      (6)  FOR PERSONS DYING ON OR AFTER JANUARY 1, 2004:          120          

IF THE TAXABLE ESTATE IS:          THE TAX SHALL BE:               123          

NOT OVER $40,000                   1.28% OF THE TAXABLE ESTATE     125          

OVER $40,000 BUT NOT OVER          $512 PLUS 1.92% OF THE EXCESS   127          

$100,000                           OVER $40,000                                 

OVER $100,000 BUT NOT OVER         $1,664 PLUS 2.56% OF THE        129          

$200,000                           EXCESS OVER $100,000                         

OVER $200,000 BUT NOT OVER         $4,224 PLUS 3.2% OF THE EXCESS  131          

$300,000                           OVER $200,000                                

OVER $300,000 BUT NOT OVER         $7,424 PLUS 3.84% OF THE        133          

$500,000                           EXCESS OVER $300,000                         

OVER $500,000                      $15,104 PLUS 4.48% OF THE       135          

                                   EXCESS OVER $500,000                         

                                                          4      


                                                                 
      (B)  A credit shall be allowed against the tax imposed by    138          

division (A) of this section equal to the lesser of five hundred   139          

dollars or the amount of the tax.                                  140          

      Sec. 5731.18.  (A)(1)  In addition to the tax levied by      149          

section 5731.02 of the Revised Code, AND SUBJECT TO DIVISION       151          

(A)(2) OF THIS SECTION, a tax is hereby levied upon the transfer   152          

of the estate of every person dying on or after July 1, 1968,      153          

who, at the time of his death was a resident of this state, in an  154          

amount equal to the maximum credit allowable by subtitle B,        155          

chapter CHAPTER 11 of the Internal Revenue Code of 1954, 26        156          

U.S.C. 2011, as amended, for any taxes paid to any state.          157          

      (2)  IN ORDER TO REDUCE THE TAX LEVIED BY DIVISION (A)(1)    159          

OF THIS SECTION BY THIRTY-SIX PER CENT OVER FIVE YEARS, THE TAX    160          

CALCULATED UNDER THAT DIVISION SHALL BE MULITIPLIED BY THE         161          

APPLICABLE FACTOR, AS FOLLOWS, TO DETERMINE THE TAX DUE:           162          

IF THE PERSON DIED:                     THE FACTOR SHALL BE:       164          

IN CALENDAR YEAR 2000                           .928               165          

IN CALENDAR YEAR 2001                           .856               166          

IN CALENDAR YEAR 2002                           .784               167          

IN CALENDAR YEAR 2003                           .712               168          

ON OR AFTER JANUARY 1, 2004                     .640               169          

      (B)  The tax levied on any estate under this section shall   172          

be credited with the amount of the tax levied under section        173          

5731.02 of the Revised Code and with the amount of any estate,     174          

inheritance, legacy, or succession taxes actually paid to any      175          

state or territory of the United States or to the District of      176          

Columbia on any property included in the decedent's gross estate   177          

for federal estate tax purposes.                                   178          

      (C)  The additional tax levied under this section shall be   180          

administered, collected, and paid as provided in section 5731.24   181          

of the Revised Code.                                               182          

      Sec. 5731.181.  (A)  For purposes of this section,           191          

"generation-skipping transfer," "taxable distribution," and        192          

"taxable termination" have the same meaning as in Chapter 13 of    193          

                                                          5      


                                                                 
subtitle B of the Internal Revenue Code of 1986, 100 Stat. 2718,   194          

26 U.S.C. 2601-2624, as amended.                                   195          

      (B)(1)(a)  A tax is hereby levied upon every                 197          

generation-skipping transfer of property having a situs in this    198          

state, that occurs at the same time as, and as a result of, the    199          

death of an individual, in an amount equal to the credit allowed   200          

by Chapter 13 of subtitle B of the Internal Revenue Code of 1986,  201          

100 Stat. 2718, 26 U.S.C. 2601-2624, as amended, MULITPLIED BY     202          

THE FACTOR SPECIFIED IN DIVISION (B)(1)(b) OF THIS SECTION, for    203          

any taxes paid to any state in respect of any property included    205          

in the generation-skipping transfer.                                            

      (b)  IN ORDER TO REDUCE THE TAX LEVIED BY DIVISION           208          

(B)(1)(a) OF THIS SECTION BY THRITY-SIX PER CENT OVER FIVE YEARS,  209          

THE TAX CALCULATED UNDER THAT DIVISION SHALL BE MULTIPLIED BY THE               

APPLICABLE FACTOR, AS FOLLOWS, TO DETERMINE THE TAX DUE:           210          

IF THE PERSON DIED:                     THE FACTOR SHALL BE:       212          

IN CALENDAR YEAR 2000                           .928               213          

IN CALENDAR YEAR 2001                           .856               214          

IN CALENDAR YEAR 2002                           .784               215          

IN CALENDAR YEAR 2003                           .712               216          

ON OR AFTER JANUARY 1, 2004                     .640               217          

      (2)  For purposes of this division, "property having a       220          

situs in this state" includes all the following:                   221          

      (1)(a)  Real property situated in this state;                223          

      (2)(b)  Tangible personal property having an actual situs    225          

in this state;                                                     226          

      (3)(c)  Intangible personal property employed in carrying    228          

on a business in this state;                                       229          

      (4)(d)  Intangible personal property owned by a trust, the   231          

trustee of which resides in or has its principal place of          232          

business in this state, or, if there is more than one trustee of   233          

the trust, the principal place of administration of which is in    234          

this state.                                                        235          

      (C)  The return with respect to the generation-skipping tax  237          

                                                          6      


                                                                 
levied by division (B) of this section shall be filed in the form  238          

that the tax commissioner shall prescribe, on or before the day    239          

prescribed by law, including extensions, for filing the            240          

generation-skipping transfer tax return under Chapter 13 of        241          

subtitle B of the Internal Revenue Code of 1986, 100 Stat. 2718,   242          

26 U.S.C. 2601-2624, as amended, for the same generation-skipping  243          

transfer.  The return shall be filed by the distributee in the     244          

case of a taxable distribution and by the trustee in the case of   245          

a taxable termination.                                             246          

      (D)  The generation-skipping tax levied by division (B) of   248          

this section shall be paid, without notice or demand by the tax    249          

commissioner, with the return, and shall be charged, collected,    250          

and administered in the same manner as estate taxes levied by      251          

this chapter.  This chapter is generally applicable to, except to  252          

the extent it is inconsistent with the nature of, the              253          

generation-skipping tax.                                           254          

      (E)  If another state levies a generation-skipping tax on a  256          

transfer described in division (B) of this section, the tax        257          

commissioner may enter into a compromise of the                    258          

generation-skipping tax levied by division (B) of this section in  259          

the manner provided in section 5731.35 of the Revised Code,        260          

except that no approval of any probate court is required.  If      261          

such a compromise agreement is made, no interest and penalties     262          

shall accrue for the period prior to the execution of the          263          

agreement and for sixty days after its execution.                  264          

      Sec. 5731.47.  The fees of the sheriff or other officers     273          

for services performed under Chapter 5731. of the Revised Code,    275          

and the expenses of the county auditor shall be certified by the   276          

county auditor by a report filed with the tax commissioner.  If    278          

the tax commissioner finds that such fees and expenses are                      

correct and reasonable in amount, he THE COMMISSIONER shall        279          

indicate his THE COMMISSIONER'S approval in writing to the county  281          

auditor.  The auditor shall pay such fees and expenses out of the               

state's share of the undivided inheritance taxes in the county     282          

                                                          7      


                                                                 
treasury and draw his warrants payable from such taxes, on the     283          

county treasurer in favor of the fee funds or officers personally  284          

entitled thereto.  IF SUCH FEES AND EXPENSES EXCEED THE STATE'S    285          

SHARE OF THE TAXES, THE EXCESS SHALL BE PAID OUT OF THE SHARES OF  286          

THE MUNICIPAL CORPORATIONS AND TOWNSHIPS IN WHICH THE TAXES        287          

ORIGINATED IN PROPORTION TO SUCH SHARES.                                        

      Sec. 5731.48.  If a decedent dies on or after July 1, 1989,  296          

sixty-four per cent A PERCENTAGE of the gross amount of taxes      297          

levied and paid under this chapter shall be for the use of the     299          

municipal corporation or township in which the tax originates,     300          

and.  THE PERCENTAGE SHALL BE DETERMINED AS FOLLOWS:               301          

IF THE DATE OF DEATH IS:              THE PERCENTAGE SHALL BE:     303          

BEFORE JANUARY 1, 2000                          64.0               304          

DURING CALENDAR YEAR 2000                       68.9               305          

DURING CALENDAR YEAR 2001                       74.8               306          

DURING CALENDAR YEAR 2002                       81.6               307          

DURING CALENDAR YEAR 2003                       89.9               308          

ON OR AFTER JANUARY 1, 2004                     100                309          

THE AMOUNT TO BE USED BY THE MUNICIPAL CORPORATION OR TOWNSHIP     313          

shall be credited as follows:                                      314          

      (A)  To the general revenue fund in the case of a city;      316          

      (B)  To the general revenue fund of a village or to the      318          

board of education of a village, for school purposes, as the       319          

village council by resolution may approve;                         320          

      (C)  To the general revenue fund or to the board of          322          

education of the school district of which the township is a part,  323          

for school purposes, as the board of township trustees by          324          

resolution may approve, in the case of a township.                 325          

      Where a municipal corporation is in default with respect to  327          

the principal or interest of any outstanding notes or bonds, one   328          

half of the taxes distributed under this section shall be          329          

credited to the sinking or bond retirement fund of the municipal   330          

corporation, and the residue shall be credited to the general      331          

revenue fund.                                                      332          

                                                          8      


                                                                 
      The council, board of trustees, or other legislative         334          

authority of a village or township may, by ordinance in the case   335          

of a village, or by resolution in the case of a township, provide  336          

that whenever there is money in the treasury of the village or     337          

township from taxes levied under this chapter, not required for    338          

immediate use, that money may be invested in federal, state,       339          

county, or municipal bonds, upon which there has been no default   340          

of the principal during the preceding five years.                  341          

      The remainder of the taxes levied and paid under this        343          

chapter, after deducting the fees and costs charged against the    344          

proceeds of the tax under this chapter, shall be for the use of    345          

the state, and shall be paid into the state treasury to the        346          

credit of the general revenue fund.                                347          

      THE FEES AND COSTS CHARGED AGAINST THE PROCEEDS OF THE       349          

TAXES UNDER THIS CHAPTER SHALL BE CHARGED FIRST TO THE STATE'S     350          

SHARE OF THE PROCEEDS.  IF THE COSTS AND FEES EXCEED THE STATE'S   351          

SHARE, THE EXCESS SHALL BE CHARGED TO THE SHARES OF THE MUNICIPAL  352          

CORPORATIONS AND TOWNSHIPS IN WHICH THE TAX ORIGINATED IN          353          

PROPORTION TO SUCH SHARES.                                                      

      Section 2.  That existing sections 5731.02, 5731.18,         355          

5731.181, 5731.47, and 5731.48 of the Revised Code are hereby      356          

repealed.