As Passed by the House 1
123rd General Assembly 4
Regular Session Am. Sub. S. B. No. 287 5
1999-2000 6
SENATORS BLESSING-HERINGTON-JOHNSON 7
REPRESENTATIVES MOTTLEY-BRITTON-AMSTUTZ-HARTNETT-HOLLISTER- 9
PERRY-DISTEL-JOLIVETTE-BARNES-MEAD-VERICH-TERWILLEGER-ASLANIDES 10
_________________________________________________________________ 12
A B I L L
To amend sections 9.66, 718.011, 718.09, 718.10, 14
718.14, 3318.035, 3709.28, 4141.21, 4933.33, 15
5703.052, 5717.02, 5727.11, 5727.111, 5727.33,
5727.80 to 5727.95, 5733.053, 5733.06, 5733.40, 16
5733.42, 5745.01, 5745.02, 5745.03, 5745.04, 17
5745.05, 5745.07, 5745.08, 5745.09, 5745.11,
5745.13, 5747.15, 5747.24, and 5747.98 and to 18
enact sections 5725.31, 5727.811, 5729.07,
5747.221, and 5747.39 of the Revised Code, and to 19
amend Sections 3, 4, and 16 of Am. Sub. S.B. 3 of 21
the 123rd General Assembly, Section 174 of H.B.
283 of the 123rd General Assembly, and Sections 22
3, 4, and 5 of H.B. 483 of the 123rd General 23
Assembly to levy an excise tax on the
distribution of natural gas and to modify laws 24
governing taxation, including the law governing
the kilowatt-hour tax, corporation franchise tax, 25
personal income tax, the taxation of individuals, 26
corporations, and electric companies by municipal
corporations, the computation of taxable value 27
under the school facilities assistance program, 28
and to declare an emergency.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 30
2
Section 1. That sections 9.66, 718.011, 718.09, 718.10, 32
718.14, 3318.053, 3709.28, 4141.21, 4933.33, 5703.052, 5717.02, 33
5727.11, 5727.111, 5727.33, 5727.80, 5727.81, 5727.82, 5727.83, 34
5727.84, 5727.85, 5727.86, 5727.87, 5727.88, 5727.89, 5727.90, 35
5727.91, 5727.92, 5727.93, 5727.94, 5727.95, 5733.053, 5733.06, 36
5733.40, 5733.42, 5745.01, 5745.02, 5745.03, 5745.04, 5745.05, 37
5745.07, 5745.08, 5745.09, 5745.11, 5745.13, 5747.15, 5747.24, 38
and 5747.98 be amended and sections 5725.31, 5727.811, 5729.07, 39
5747.221, and 5745.39 of the Revised Code be enacted to read as 40
follows:
Sec. 9.66. (A) As used in this section: 49
(1) "Economic development assistance" means all of the 51
following: 52
(a) The programs and assistance provided or administered 54
by the department of development under Chapters 122. and 166. of 56
the Revised Code and any other section of the Revised Code under 57
which the department provides or administers economic development 58
assistance;
(b) The programs and assistance provided or administered 60
by a political subdivision under Chapters 725. and 1728. and 61
sections 3735.67 to 3735.70, 5709.40 to 5709.43, 5709.61 to 62
5709.69, 5709.73 to 5709.75, and 5709.77 to 5709.81 of the 63
Revised Code and any other section of the Revised Code under
which a political subdivision provides economic development 64
assistance;
(c) Assistance provided under any other section of the 67
Revised Code under which the state or a state agency provides or 68
administers economic development assistance; 69
(d) THE TAX CREDIT AUTHORIZED BY SECTION 5725.31, 5729.07, 71
5733.42, OR 5747.39 OF THE REVISED CODE. 72
(2) "Liability" means any of the following: 74
(a) Any delinquent tax owed the state or a political 76
subdivision of the state; 77
(b) Any moneys owed the state or a state agency for the 79
3
administration or enforcement of the environmental laws of the 80
state;
(c) Any other moneys owed the state, a state agency, or a 82
political subdivision of the state that are past due. 84
"Liability" includes any item described in division (A)(2) 86
of this section that is being contested in a court of law. 87
(3) "Political subdivision" means any county, municipal 89
corporation, or township of the state. 90
(4) "State agency" means every organized body, office, or 92
agency established by the laws of the state for the exercise of 93
any function of state government. 94
(B) A person who applies to the state, a state agency, or 97
a political subdivision for economic development assistance shall 98
indicate on the application for assistance whether the person has 99
any outstanding liabilities owed to the state, a state agency, or 100
a political subdivision. Such a person also shall authorize the 101
state, state agency, or political subdivision to inspect the 102
personal OR CORPORATE financial statements of the applicant, 103
including tax records and other similar information not open to 104
public inspection. 105
(C)(1) Whoever knowingly makes a false statement under 107
division (B) of this section concerning an application for 108
economic development assistance or who fails to provide any 109
information required by that division is ineligible for the 110
assistance applied for and is ineligible for any future economic
development assistance from the state, a state agency, or a 111
political subdivision. 112
(2) Whoever knowingly makes a false statement under 114
division (B) of this section concerning an application for 115
economic development assistance or who fails to provide any 116
information required by that division shall return any moneys 117
received from the state, a state agency, or a political
subdivision in connection with that application. 118
Sec. 718.011. On and after January 1, 2001, a municipal 127
4
corporation shall not tax the compensation of an PAID TO A 128
NONRESIDENT individual if all FOR PERSONAL SERVICES PERFORMED BY 129
THE INDIVIDUAL IN THE MUNICIPAL CORPORATION ON TWELVE OR FEWER 130
DAYS IN A CALENDAR YEAR UNLESS ONE of the following apply 132
APPLIES:
(A) The individual does not reside in that municipal 134
corporation. 135
(B) The compensation is paid for personal services 137
performed by the individual in that municipal corporation on 138
twelve or fewer days in the calendar year. 139
(C) In the case of an individual who is an employee, OF 142
ANOTHER PERSON; the principal place of business of the 143
individual's employer is located outside that IN ANOTHER 144
municipal corporation IN THIS STATE THAT IMPOSES A TAX APPLYING 145
TO COMPENSATION PAID TO THE INDIVIDUAL FOR SERVICES PERFORMED ON 146
THOSE DAYS; and the individual pays IS NOT LIABLE TO THAT OTHER 147
MUNICIPAL CORPORATION FOR tax on THE compensation described in 149
division (B) of this section to the municipal corporation, if 150
any, in which the employer's principal place of business is 151
located, and no portion of that tax is refunded to the individual 152
PAID FOR SUCH SERVICES. 153
(D)(B) The individual is not a professional entertainer or 156
professional athlete, the promoter of a professional 157
entertainment or sports event, or an employee of such a promoter, 158
all as may be reasonably defined by the municipal corporation. 159
Sec. 718.09. (A) This section applies to either of the 168
following:
(1) A municipal corporation that shares the same territory 170
as a city, local, or exempted village school district, to the 171
extent that not more than five per cent of the territory of the 172
municipal corporation is located outside the school district and 173
not more than five per cent of the territory of the school 174
district is located outside the municipal corporation; 175
(2) A municipal corporation that shares the same territory 177
5
as a city, local, or exempted village school district, to the 179
extent that not more than five per cent of the territory of the 180
municipal corporation is located outside the school district, 181
more than five per cent but not more than ten per cent of the 182
territory of the school district is located outside the municipal
corporation, and that portion of the territory of the school 183
district that is located outside the municipal corporation is 184
located entirely within another municipal corporation having a 185
population of four hundred thousand or more according to the 186
federal decennial census most recently completed before the 187
agreement is entered into under division (B) of this section. 189
(B) The BEFORE JANUARY 1, 2001, THE legislative authority 192
of a municipal corporation to which this section applies may 193
propose to the electors an income tax, one of the purposes of 194
which shall be to provide financial assistance to the school 195
district through payment to the district of not less than 196
twenty-five per cent of the revenue generated by the tax. Prior 197
to proposing the tax, the legislative authority shall negotiate 198
and enter into a written agreement with the board of education of 199
the school district specifying the tax rate, the percentage of 200
tax revenue to be paid to the school district, the purpose for 201
which the school district will use the money, the first year the 202
tax will be levied, the date of the special election on the 203
question of the tax, and the method and schedule by which the 204
municipal corporation will make payments to the school district. 205
The special election shall be held BEFORE JANUARY 1, 2001, on a 206
day specified in division (D) of section 3501.01 of the Revised 208
Code, except that the special election may not be held on the day 209
for holding a primary election as authorized by the municipal 210
corporation's charter unless the municipal corporation is to have 211
a primary election on that day.
After the legislative authority and board of education have 213
entered into the agreement, the legislative authority shall 214
provide for levying the tax by ordinance. The ordinance shall 215
6
state the tax rate, the percentage of tax revenue to be paid to 216
the school district, the purpose for which the municipal 217
corporation will use its share of the tax revenue, the first year 218
the tax will be levied, and that the question of the income tax 219
will be submitted to the electors of the municipal corporation. 220
The legislative authority also shall adopt a resolution 221
specifying the regular or special election date the election will 222
be held and directing the board of elections to conduct the 223
election. At least seventy-five days before the date of the 224
election, the legislative authority shall file certified copies 225
of the ordinance and resolution with the board of elections. 226
(C) The board of elections shall make the necessary 228
arrangements for the submission of the question to the electors 229
of the municipal corporation, and shall conduct the election in 230
the same manner as any other municipal income tax election. 231
Notice of the election shall be published in a newspaper of 232
general circulation in the municipal corporation once a week for 233
four consecutive weeks prior to the election, and shall include 234
statements of the rate and municipal corporation and school 235
district purposes of the income tax, the percentage of tax 236
revenue that will be paid to the school district, and the first 237
year the tax will be levied. The ballot shall be in the 238
following form: 239
"Shall the ordinance providing for a ..... per cent levy on 241
income for (brief description of the municipal corporation and 242
school district purposes of the levy, including a statement of 243
the percentage of tax revenue that will be paid to the school 244
district) be passed? 245
247
For the income tax 248
249
Against the income tax 250
" 251
(D) If the question is approved by a majority of the 254
7
electors, the municipal corporation shall impose the income tax 255
beginning in the year specified in the ordinance. The proceeds 256
of the levy may be used only for the specified purposes, 257
including payment of the specified percentage to the school 258
district. 259
Sec. 718.10. (A) This section applies to a group of two 268
or more municipal corporations that, taken together, share the 269
same territory as a single city, local, or exempted village 270
school district, to the extent that not more than five per cent 271
of the territory of the municipal corporations as a group is 272
located outside the school district and not more than five per 273
cent of the territory of the school district is located outside 274
the municipal corporations as a group. 275
(B) The BEFORE JANUARY 1, 2001, THE legislative 277
authorities of the municipal corporations in a group of municipal 279
corporations to which this section applies each may propose to 280
the electors an income tax, to be levied in concert with income 281
taxes in the other municipal corporations of the group. One of 282
the purposes of such a tax shall be to provide financial 283
assistance to the school district through payment to the district 284
of not less than twenty-five per cent of the revenue generated by 285
the tax. Prior to proposing the taxes, the legislative 286
authorities shall negotiate and enter into a written agreement 287
with each other and with the board of education of the school 288
district specifying the tax rate, the percentage of the tax 289
revenue to be paid to the school district, the first year the tax 290
will be levied, and the date of the election on the question of 291
the tax, all of which shall be the same for each municipal 292
corporation. The agreement also shall state the purpose for 293
which the school district will use the money, and specify the 294
method and schedule by which each municipal corporation will make 295
payments to the school district. The special election shall be 296
held BEFORE JANUARY 1, 2001, on a day specified in division (D) 298
of section 3501.01 of the Revised Code, including a day on which 299
8
all of the municipal corporations are to have a primary election. 300
After the legislative authorities and board of education 302
have entered into the agreement, each legislative authority shall 303
provide for levying its tax by ordinance. Each ordinance shall 304
state the rate of the tax, the percentage of tax revenue to be 305
paid to the school district, the purpose for which the municipal 306
corporation will use its share of the tax revenue, and the first 307
year the tax will be levied. Each ordinance also shall state 308
that the question of the income tax will be submitted to the 309
electors of the municipal corporation on the same date as the 310
submission of questions of an identical tax to the electors of 311
each of the other municipal corporations in the group, and that 312
unless the electors of all of the municipal corporations in the 313
group approve the tax in their respective municipal corporations, 314
none of the municipal corporations in the group shall levy the 315
tax. Each legislative authority also shall adopt a resolution 316
specifying the regular or special election date the election will 317
be held and directing the board of elections to conduct the 318
election. At least seventy-five days before the date of the 319
election, each legislative authority shall file certified copies 320
of the ordinance and resolution with the board of elections. 321
(C) For each of the municipal corporations, the board of 323
elections shall make the necessary arrangements for the 324
submission of the question to the electors, and shall conduct the 325
election in the same manner as any other municipal income tax 326
election. For each of the municipal corporations, notice of the 327
election shall be published in a newspaper of general circulation 328
in the municipal corporation once a week for four consecutive 329
weeks prior to the election. The notice shall include a 330
statement of the rate and municipal corporation and school 331
district purposes of the income tax, the percentage of tax 332
revenue that will be paid to the school district, and the first 333
year the tax will be levied, and an explanation that the tax will 334
not be levied unless an identical tax is approved by the electors 335
9
of each of the other municipal corporations in the group. The 336
ballot shall be in the following form: 337
"Shall the ordinance providing for a ... per cent levy on 339
income for (brief description of the municipal corporation and 340
school district purposes of the levy, including a statement of 341
the percentage of income tax revenue that will be paid to the 342
school district) be passed? In order for the income tax to be 343
levied, the voters of (the other municipal corporations in the 344
group), which are also in the (name of the school district) 345
school district, must approve an identical income tax and agree 346
to pay the same percentage of the tax revenue to the school 347
district. 348
________________________________ 350
For the income tax 352
________________________________ 354
Against the income tax 356
________________________________ " 358
(D) If the question is approved by a majority of the 361
electors and identical taxes are approved by a majority of the 362
electors in each of the other municipal corporations in the 363
group, the municipal corporation shall impose the tax beginning 364
in the year specified in the ordinance. The proceeds of the levy 366
may be used only for the specified purposes, including payment of 367
the specified percentage to the school district.
Sec. 718.14. (A) As used in this section: 376
(1) "S corporation" means a corporation that has made an 378
election under subchapter S of Chapter 1 of Subtitle A of the 380
Internal Revenue Code for its taxable year. 381
(2) "Limited liability company" means a limited liability 383
company formed under Chapter 1705. of the Revised Code or under 384
the laws of another state. 385
(3) "Pass-through entity" means a partnership, S 387
corporation, limited liability company, or any other class of 388
entity the income or profits from which are given pass-through 390
10
treatment under the Internal Revenue Code. 391
(4) "Income from a pass-through entity" means partnership 393
income of partners, distributive shares of shareholders of an s 394
corporation, membership interests of members of a limited 395
liability company, or other distributive or proportionate 396
ownership shares of other pass-through entities. 397
(5) "Owner" means a partner of a partnership, a 399
shareholder of an S corporation, a member of a limited liability 400
company, or other person with an ownership interest in a 401
pass-through entity.
(6) "OWNER'S PROPORTIONATE SHARE," WITH RESPECT TO EACH 403
OWNER OF A PASS-THROUGH ENTITY, MEANS THE RATIO OF (a) THE 405
OWNER'S INCOME FROM THE PASS-THROUGH ENTITY THAT IS SUBJECT TO 406
TAXATION BY THE MUNICIPAL CORPORATION, TO (b) THE TOTAL INCOME 407
FROM THAT ENTITY OF ALL OWNERS WHOSE INCOME FROM THE ENTITY IS 408
SUBJECT TO TAXATION BY THAT MUNICIPAL CORPORATION. 409
(B) On and after January 1, 2003, any municipal 411
corporation that imposes IMPOSING a tax that applies to income 413
from a pass-through entity shall grant a credit to taxpayers that 415
are EACH OWNER WHO IS domiciled in the municipal corporation for 417
taxes paid to another municipal corporation by a pass-through 418
entity that does not conduct business in the municipal 420
corporation. The amount of the credit shall equal the lesser of 421
the following amounts, subject to division (C) of this section: 422
(1) The OWNER'S PROPORTIONATE SHARE OF THE amount, if any, 424
of tax paid by the pass-through entity to another municipal 426
corporation in this state, apportioned ratably according to the 427
ownership interest of the taxpayer in proportion to the ownership 428
interest of all owners of the entity;
(2) The OWNER'S PROPORTIONATE SHARE OF THE amount of tax 430
that would be imposed on the pass-through entity by the municipal 432
corporation in which the taxpayer is domiciled if the 433
pass-through entity conducted business in the municipal
corporation, apportioned ratably according to the ownership 434
11
interest of the taxpayer in proportion to the ownership interest 435
of all owners of the entity. 436
(C) If a municipal corporation grants a credit for a 438
percentage, less than one hundred per cent, of the amount of 439
income taxes paid on compensation by an individual who resides or 441
is domiciled in the municipal corporation to another municipal 442
corporation, the amount of credit otherwise required by division 443
(B) of this section shall be multiplied by that percentage. 444
(D) On and after January 1, 2003, any municipal 446
corporation that imposes a tax on income of or from a 448
pass-through entity shall specify by ordinance or rule whether 450
the tax applies to income of the pass-through entity in the hands 451
of the entity or to income from the pass-through entity in the 452
hands of the owners of the entity. A municipal corporation may 453
specify a different ordinance or rule under this division for 454
each of the classes of pass-through entity enumerated in division 455
(A)(3) of this section. 456
Sec. 3318.035. (A) This section applies only if there is 465
a change in the assessment rates on gas pipelines imposed under 466
state law. 467
(B) If at any time division (A) of this section applies 469
and if the change in assessment rates described in that division 470
affects a school district's valuation as determined under 471
division (P) of section 3318.01 of the Revised Code by greater 473
than ten per cent and if the Ohio school facilities commission 474
had determined the state and school district portion of the basic 475
project cost of such a district's project under section 3318.36 476
OR 3318.37 of the Revised Code prior to that change in valuation, 478
the commission shall adjust the state and school district 479
portions of the basic project cost of the school district's
project using the valuation altered by the change in assessment 480
rates described in division (A) of this section. 481
Sec. 3709.28. The board of health of a general health 490
district shall, annually, on or before the first Monday of April, 491
12
adopt an itemized appropriation measure. Such appropriation 492
measure shall set forth the amounts for the current expenses of 493
such district for the fiscal year beginning on the first day of 494
January next ensuing. The appropriation measure, together with 495
an estimate in itemized form, of the several sources of revenue 496
available to the district, including the amount due from the 497
state for the next fiscal year as provided in section 3709.32 of 498
the Revised Code and the amount which the board anticipates will 499
be collected in fees during the next ensuing fiscal year, shall 500
be certified to the county auditor and by him THE COUNTY AUDITOR 501
submitted to the county budget commission which may reduce any 502
item in such appropriation measure but may not increase any item 503
or the aggregate of all items. 504
The aggregate appropriation, as fixed by the commission, 506
less the amounts available to the general health district from 507
the several sources of revenue, including the estimated balance 508
from the previous appropriation, shall be apportioned, by the 509
auditor among the townships and municipal corporations composing 510
the health district on the basis of taxable valuations in such 511
townships and municipal corporations. The auditor, when making 512
his THE AUDITOR'S semiannual apportionment of funds, shall retain 514
at each semiannual apportionment one-half of the amount 515
apportioned to each township and municipal corporation. Such 516
moneys and all other sources of revenue shall be placed in a 517
separate fund, to be known as the "district health fund." When a 518
general health district is composed of townships and municipal 519
corporations in two or more counties, the auditor making the 520
original apportionment shall certify to the auditor of each 521
county concerned the amount apportioned to each township and 522
municipal corporation in such county. Each auditor shall 523
withhold from the semiannual apportionment to each such township 524
or municipal corporation the amount certified, and shall pay the 525
amounts withheld to the custodian of the funds of the health 526
district concerned, to be credited to the district health fund. 527
13
IN MAKING THE APPORTIONMENT UNDER THIS PARAGRAPH FOR EACH YEAR 528
FROM 2002 THROUGH 2016, THE COUNTY AUDITOR SHALL ADD TO THE 529
TAXABLE VALUATION OF EACH TOWNSHIP AND MUNICIPAL CORPORATION THE 530
TAX VALUE LOSS DETERMINED FOR EACH TOWNSHIP AND MUNICIPAL 531
CORPORATION UNDER DIVISIONS (D) AND (E) OF SECTION 5727.84 OF THE 532
REVISED CODE MULTIPLIED BY THE PERCENTAGE USED FOR THAT YEAR IN 533
DETERMINING REPLACEMENT PAYMENTS UNDER DIVISION (A)(1) OF SECTION 534
5727.86 OF THE REVISED CODE. THE TAX COMMISSIONER SHALL CERTIFY 535
TO THE COUNTY AUDITOR THE TAX VALUE LOSS FOR EACH TOWNSHIP AND 536
MUNICIPAL CORPORATION FOR WHICH THE AUDITOR MUST MAKE AN 537
APPORTIONMENT.
Subject to the aggregate amount as has been apportioned 539
among the townships and municipalities and as may become 540
available from the several sources of revenue, the board of 541
health may, by resolution, transfer funds from one item in their 542
appropriation to another item, reduce or increase any item, 543
create new items, and make additional appropriations or reduce 544
the total appropriation. Any such action shall forthwith be 545
certified by the secretary of the board of health to the auditor 546
for submission to and approval by the budget commission. 547
When any general health district has been united with or 549
has contracted with a city health district located therein, the 550
chief executive of the city shall, annually, on or before the 551
first day of June, certify to the county auditor the total amount 552
due for the ensuing fiscal year from the municipal corporations 553
and townships in the district as provided in the contract between 554
such city and the district advisory council of the original 555
general health district. After approval by the county budget 556
commission, the county auditor shall thereupon apportion the 557
amount certified to the townships and municipal corporations, and 558
shall withhold the sums apportioned as provided in this section. 559
Sec. 4141.21. Except as provided in section 4141.162 of 568
the Revised Code, and subject to section 4141.43 of the Revised 571
Code, the information maintained by the director of job and 573
14
family services or furnished to the director by employers or 575
employees pursuant to this chapter is for the exclusive use and 577
information of the department of job and family services in the 579
discharge of its duties and shall not be open to the public or be 581
used in any court in any action or proceeding pending therein, or 582
be admissible in evidence in any action, other than one arising 583
under this chapter OR SECTION 5733.42 OF THE REVISED CODE. All 584
of the information and records necessary or useful in the 585
determination of any particular claim for benefits or necessary 586
in verifying any charge to an employer's account under sections 587
4141.23 to 4141.26 of the Revised Code shall be available for 588
examination and use by the employer and the employee involved or 589
their authorized representatives in the hearing of such cases, 590
and that information may be tabulated and published in 591
statistical form for the use and information of the state 592
departments and the public. 593
Sec. 4933.33. (A) Annually, each electric distribution 602
company, as defined in section 5727.80 of the Revised Code, shall 604
cause to appear STATE on each customer bill, or shall distribute 605
to each of its customers, the following statement: 607
"Under state law, the amount you are being billed includes: 609
(1) Kilowatt-hour taxes that have been in effect since 612
2001 and are currently at $......... (The current dollar figure 613
of the kilowatt-hour taxes levied by section 5727.81 of the 614
Revised Code shall be placed in the blank); and 616
(2) Assessments to assist in the support of the operations 618
of the PUCO and the office of the consumers' counsel that have 619
been in effect since 1912 and 1977, respectively." 620
(B) ANNUALLY, EACH NATURAL GAS DISTRIBUTION COMPANY, AS 622
DEFINED IN SECTION 5727.80 OF THE REVISED CODE, SHALL STATE ON 623
EACH CUSTOMER BILL, OR SHALL DISTRIBUTE TO EACH OF ITS CUSTOMERS, 624
THE FOLLOWING STATEMENT: 625
"UNDER STATE LAW, THE AMOUNT YOU ARE BEING BILLED INCLUDES: 627
(1) NATURAL GAS DISTRIBUTION TAXES THAT HAVE BEEN IN 628
15
EFFECT SINCE 2001 AND ARE CURRENTLY AT $ ......... (THE CURRENT 629
DOLLAR FIGURE OF THE NATURAL GAS DISTRIBUTION EXCISE TAXES LEVIED 630
BY SECTION 5727.811 OF THE REVISED CODE SHALL BE PLACED IN THE 631
BLANK); AND
(2) ASSESSMENTS TO ASSIST IN THE SUPPORT OF THE OPERATIONS 633
OF THE PUCO AND THE OFFICE OF THE CONSUMERS' COUNSEL THAT HAVE 634
BEEN IN EFFECT SINCE 1912 AND 1977, RESPECTIVELY." 635
(C) THE NOTICE REQUIRED UNDER DIVISION (A) OR (B) OF THIS 639
SECTION DOES NOT APPLY TO AN ELECTRIC DISTRIBUTION COMPANY OR A 641
NATURAL GAS DISTRIBUTION COMPANY THAT IS NOT SUBJECT TO 642
ASSESSMENTS TO SUPPORT THE OPERATIONS OF THE PUCO OR THE OFFICE 643
OF THE CONSUMERS' COUNSEL.
(D) Nothing in this section shall be construed to mean 645
that an electric distribution company OR A NATURAL GAS 646
DISTRIBUTION COMPANY subject to this section may not cause such 648
appearance or distribute such statement on a more frequent basis. 649
Sec. 5703.052. There is hereby created in the state 658
treasury the tax refund fund, from which refunds shall be paid 659
for taxes illegally or erroneously assessed or collected, or for 660
any other reason overpaid, that are levied by Chapter 4301., 661
4305., 5728., 5729., 5733., 5735., 5739., 5741., 5743., 5747., 662
5748., 5749., or 5753., and sections 3737.71, 3905.35, 3905.36, 663
4303.33, 5707.03, 5725.18, 5727.28, and 5727.38, and 5727.81, AND 665
5727.811 of the Revised Code. Refunds for fees illegally or 667
erroneously assessed or collected, or for any other reason 668
overpaid, that are levied by sections 3734.90 to 3734.9014 of the 669
Revised Code also shall be paid from the fund. However, refunds 670
for taxes levied under section 5739.101 of the Revised Code shall 671
not be paid from the tax refund fund, but shall be paid as 672
provided in section 5739.104 of the Revised Code. 673
Upon certification by the tax commissioner to the treasurer 675
of state of a tax refund, fee refund, or tax credit due, or by 676
the superintendent of insurance of a domestic or foreign 677
insurance tax refund, the treasurer of state may place the amount 678
16
certified to the credit of the fund. The certified amount 679
transferred shall be derived from current receipts of the same 680
tax or the fee for which the refund arose or, in the case of a 681
tax credit refund, from the current receipts of the taxes levied 682
by sections 5739.02 and 5741.02 of the Revised Code. 683
If the tax refund arises from a tax payable to the general 685
revenue fund, and current receipts from that source are 686
inadequate to make the transfer of the amount so certified, the 687
treasurer of state may transfer such certified amount from 688
current receipts of the sales tax levied by section 5739.02 of 689
the Revised Code. 690
Sec. 5717.02. Except as otherwise provided by law, appeals 699
from final determinations by the tax commissioner of any 700
preliminary, amended, or final tax assessments, reassessments, 701
valuations, determinations, findings, computations, or orders 702
made by the commissioner may be taken to the board of tax appeals 703
by the taxpayer, by the person to whom notice of the tax 704
assessment, reassessment, valuation, determination, finding, 705
computation, or order by the commissioner is required by law to 706
be given, by the director of budget and management if the 707
revenues affected by such decision would accrue primarily to the 708
state treasury, or by the county auditors of the counties to the 709
undivided general tax funds of which the revenues affected by 710
such decision would primarily accrue. Appeals from the 711
redetermination by the director of development under division (B) 712
of section 5709.64 or division (A) of section 5709.66 of the 713
Revised Code may be taken to the board of tax appeals by the 715
enterprise to which notice of the redetermination is required by 716
law to be given. Appeals from a decision of the tax commissioner 717
concerning an application for a property tax exemption may be 718
taken to the board of tax appeals by a school district that filed 719
a statement concerning such application under division (C) of 720
section 5715.27 of the Revised Code. APPEALS FROM A 721
REDETERMINATION BY THE DIRECTOR OF JOB AND FAMILY SERVICES UNDER 722
17
SECTION 5733.42 OF THE REVISED CODE MAY BE TAKEN BY THE PERSON TO
WHICH THE NOTICE OF THE REDETERMINATION IS REQUIRED BY LAW TO BE 723
GIVEN UNDER THAT SECTION. 724
Such appeals shall be taken by the filing of a notice of 726
appeal with the board, and with the tax commissioner if the tax 727
commissioner's action is the subject of the appeal or, with the 728
director of development if the THAT director's action is the 730
subject of the appeal, OR WITH THE DIRECTOR OF JOB AND FAMILY 731
SERVICES IF THAT DIRECTOR'S ACTION IS THE SUBJECT OF THE APPEAL. 732
THE NOTICE OF APPEAL SHALL BE FILED within sixty days after 733
service of the notice of the tax assessment, reassessment, 735
valuation, determination, finding, computation, or order by the 736
commissioner or redetermination by the director has been given as 737
provided in section 5703.37, 5709.64, 5709.66, OR 5733.42 of the 739
Revised Code. The notice of such appeal is filed by MAY BE filed 740
in person or by certified mail, express mail, or authorized 741
delivery service. If the notice of such appeal is filed by 742
certified mail, express mail, or authorized delivery service as 743
provided in section 5703.056 of the Revised Code, the date of the 744
United States postmark placed on the sender's receipt by the 745
postal service of the date of receipt recorded by the authorized
delivery service shall be treated as the date of filing. The 746
notice of appeal shall have attached thereto and incorporated 747
therein by reference a true copy of the notice sent by the 748
commissioner or director to the taxpayer or, enterprise, OR OTHER 749
PERSON of the final determination or redetermination complained 750
of, and shall also specify the errors therein complained of, but 751
failure to attach a copy of such notice and incorporate it by 752
reference in the notice of appeal does not invalidate the appeal. 753
Upon the filing of a notice of appeal, the tax commissioner 755
or the director, as appropriate, shall certify to the board a 756
transcript of the record of the proceedings before the 757
commissioner or director, together with all evidence considered 758
by the commissioner or director in connection therewith. Such 759
18
appeals or applications may be heard by the board at its office 760
in Columbus or in the county where the appellant resides, or it 761
may cause its examiners to conduct such hearings and to report to 763
it their findings for affirmation or rejection. The board may 764
order the appeal to be heard upon the record and the evidence 765
certified to it by the commissioner or director, but upon the 766
application of any interested party the board shall order the 767
hearing of additional evidence, and it may make such
investigation concerning the appeal as it considers proper. 768
Sec. 5725.31. (A) AS USED IN THIS SECTION: 770
(1) "ELIGIBLE EMPLOYEE" AND "ELIGIBLE TRAINING COSTS" HAVE 772
THE SAME MEANINGS AS IN SECTION 5733.42 OF THE REVISED CODE. 773
(2) "TAX ASSESSED UNDER THIS CHAPTER" MEANS, IN THE CASE 776
OF A DEALER IN INTANGIBLES, THE TAX ASSESSED UNDER SECTIONS 777
5725.13 TO 5725.17 OF THE REVISED CODE AND, IN THE CASE OF A 778
DOMESTIC INSURANCE COMPANY, THE TAXES ASSESSED UNDER SECTIONS 779
5725.18 TO 5725.26 OF THE REVISED CODE.
(3) "TAXPAYER" MEANS A DEALER IN INTANGIBLES OR A DOMESTIC 782
INSURANCE COMPANY SUBJECT TO A TAX ASSESSED UNDER THIS CHAPTER. 783
(4) "CREDIT PERIOD" MEANS, IN THE CASE OF A DEALER IN 787
INTANGIBLES, THE CALENDAR YEAR ENDING ON THE THIRTY-FIRST DAY OF 788
DECEMBER NEXT PRECEDING THE DAY THE REPORT IS REQUIRED TO BE 789
RETURNED UNDER SECTION 5725.14 OF THE REVISED CODE AND, IN THE 790
CASE OF A DOMESTIC INSURANCE COMPANY, THE CALENDAR YEAR ENDING ON
THE THIRTY-FIRST DAY OF DECEMBER NEXT PRECEDING THE DAY THE 791
ANNUAL STATEMENT IS REQUIRED TO BE RETURNED UNDER SECTION 5725.18 792
OR 5725.181 OF THE REVISED CODE. 793
(B) THERE IS HEREBY ALLOWED A NONREFUNDABLE CREDIT AGAINST 795
THE TAX IMPOSED UNDER THIS CHAPTER FOR A TAXPAYER FOR WHICH A TAX 796
CREDIT CERTIFICATE IS ISSUED UNDER SECTION 5733.42 OF THE REVISED 797
CODE. THE CREDIT MAY BE CLAIMED FOR CREDIT PERIODS BEGINNING ON 800
OR AFTER JANUARY 1, 2001, AND ENDING ON OR BEFORE DECEMBER 31, 801
2003. THE AMOUNT OF THE CREDIT SHALL EQUAL ONE-HALF OF THE 802
AVERAGE OF THE ELIGIBLE TRAINING COSTS PAID OR INCURRED BY THE 804
19
TAXPAYER DURING THE THREE CALENDAR YEARS IMMEDIATELY PRECEDING 805
THE CREDIT PERIOD FOR WHICH THE CREDIT IS CLAIMED, NOT TO EXCEED 806
ONE THOUSAND DOLLARS FOR EACH ELIGIBLE EMPLOYEE ON ACCOUNT OF
WHOM ELIGIBLE TRAINING COSTS WERE PAID OR INCURRED BY THE 808
TAXPAYER. THE CREDIT CLAIMED BY A TAXPAYER EACH CREDIT PERIOD 809
SHALL NOT EXCEED ONE HUNDRED THOUSAND DOLLARS. 810
A TAXPAYER SHALL APPLY TO THE DIRECTOR OF JOB AND FAMILY 812
SERVICES FOR A TAX CREDIT CERTIFICATE IN THE MANNER PRESCRIBED BY 813
DIVISION (C) OF SECTION 5733.42 OF THE REVISED CODE. DIVISIONS 814
(C) TO (H) OF THAT SECTION GOVERN THE TAX CREDIT ALLOWED BY THIS 815
SECTION, EXCEPT THAT "CREDIT PERIOD" SHALL BE SUBSTITUTED FOR 816
"TAX YEAR WITH RESPECT TO A CALENDAR YEAR" WHEREVER THAT PHRASE 818
APPEARS IN THOSE DIVISIONS AND THAT A TAXPAYER UNDER THIS SECTION 819
SHALL BE CONSIDERED A TAXPAYER FOR THE PURPOSES OF THAT SECTION. 820
A TAXPAYER MAY CARRY FORWARD THE CREDIT ALLOWED UNDER THIS 822
SECTION TO THE EXTENT THAT THE CREDIT EXCEEDS THE TAXPAYER'S TAX 823
DUE FOR THE CREDIT PERIOD. THE TAXPAYER MAY CARRY THE EXCESS 824
CREDIT FORWARD FOR THREE CREDIT PERIODS FOLLOWING THE CREDIT 825
PERIOD FOR WHICH THE CREDIT IS FIRST CLAIMED UNDER THIS SECTION. 826
THE CREDIT ALLOWED BY THIS SECTION IS IN ADDITION TO ANY CREDIT 827
ALLOWED UNDER SECTION 5729.031 OF THE REVISED CODE. 828
Sec. 5727.11. (A) Except as otherwise provided in this 837
section, the true value of all taxable property required by 839
division (A)(2) or (3) of section 5727.06 of the Revised Code to
be assessed by the tax commissioner shall be determined by a 840
method of valuation using cost as capitalized on the public 841
utility's books and records less composite annual allowances as 842
prescribed by the commissioner. If the commissioner finds that 843
application of this method will not result in the determination 844
of true value of the public utility's taxable property, the 845
commissioner may use another method of valuation. 846
(B) The (1) EXCEPT AS PROVIDED IN DIVISION (B)(2) OF THIS 850
SECTION, THE true value of current gas stored underground is the 851
cost of that gas shown on the books and records of the public
20
utility on the thirty-first day of December of the preceding 852
year. 853
(2) FOR TAX YEAR 2001 AND THEREAFTER, THE TRUE VALUE OF 855
CURRENT GAS STORED UNDERGROUND IS THE QUOTIENT OBTAINED BY 859
DIVIDING (a) THE AVERAGE VALUE OF THE CURRENT GAS STORED 861
UNDERGROUND, WHICH SHALL BE DETERMINED BY ADDING THE VALUE OF THE
GAS ON HAND AT THE END OF EACH CALENDAR MONTH IN THE CALENDAR 863
YEAR PRECEDING THE TAX YEAR, OR, IF APPLICABLE, THE LAST DAY OF 864
BUSINESS OF EACH MONTH FOR A PARTIAL MONTH, DIVIDED BY (b) THE 865
TOTAL NUMBER OF MONTHS THE NATURAL GAS COMPANY WAS IN BUSINESS 867
DURING THE CALENDAR YEAR PRIOR TO THE BEGINNING OF THE TAX YEAR. 869
WITH THE APPROVAL OF THE TAX COMMISSIONER, A NATURAL GAS COMPANY
MAY USE A DATE OTHER THAN THE END OF A CALENDAR MONTH TO VALUE 871
ITS CURRENT GAS STORED UNDERGROUND. 872
(C) The true value of noncurrent gas stored underground is 874
thirty-five per cent of the cost of that gas shown on the books 875
and records of the public utility on the thirty-first day of 876
December of the preceding year. 877
(D)(1) Except as provided in division (D)(2) of this 880
section, the true value of the production equipment of an 881
electric company and the true value of all taxable property of a 882
rural electric company is the equipment's or property's cost as 883
capitalized on the company's books and records less fifty per 884
cent of that cost as an allowance for depreciation and 885
obsolescence. 886
(2) The true value of the production equipment of an 888
electric company or rural electric company purchased, 889
transferred, or placed into service after the effective date of 891
this amendment is the purchase price of the equipment as 892
capitalized on the company's books and records less composite 893
annual allowances as prescribed by the tax commissioner. 894
(E) The true value of taxable property described in 896
division (A)(2) or (3) of section 5727.06 of the Revised Code 897
shall not include the allowance for funds used during 898
21
construction or interest during construction that has been 899
capitalized on the public utility's books and records as part of 901
the total cost of the taxable property. This division shall not 902
apply to the taxable property of an electric company or a rural 903
electric company, excluding transmission and distribution 904
property, first placed into service after December 31, 2000, or 905
to the taxable property a person purchases, which includes 906
transfers, if that property was used in business by the seller
prior to the purchase. 907
(F) The true value of watercraft owned or operated by a 909
water transportation company shall be determined by multiplying 911
the true value of the watercraft as determined under division (A) 912
of this section by a fraction, the numerator of which is the 914
number of revenue-earning miles traveled by the watercraft in the
waters of this state and the denominator of which is the number 915
of revenue-earning miles traveled by the watercraft in all 916
waters.
(G) The cost of property subject to a sale and leaseback 918
transaction is the cost of the property as capitalized on the 919
books and records of the public utility owning the property 921
immediately prior to the sale and leaseback transaction.
(H) The cost as capitalized on the books and records of a 923
public utility includes amounts capitalized that represent 924
regulatory assets, if such amounts previously were included on 925
the company's books and records as capitalized costs of taxable 926
personal property.
(I) Any change in the composite annual allowances as 928
prescribed by the commissioner on a prospective basis shall not 929
be admissible in any judicial or administrative action or 930
proceeding as evidence of value with regard to prior years' 931
taxes. Information about the business, property, or transactions 932
of any taxpayer obtained by the commissioner for the purpose of
adopting or modifying the composite annual allowances shall not 933
be subject to discovery or disclosure. 934
22
Sec. 5727.111. The taxable property of each public 943
utility, except a railroad company, and of each interexchange 944
telecommunications company shall be assessed at the following 945
percentages of true value: 946
(A)(1) Except as provided in division (A)(2) of this 949
section, fifty per cent in the case of a rural electric company; 950
(2) For tax year 2001 and thereafter, fifty per cent in 952
the case of the taxable transmission and distribution property of 954
a rural electric company, and twenty-five per cent for all its 955
other taxable property; 956
(B) In the case of a telephone or telegraph company, 958
twenty-five per cent for taxable property first subject to 959
taxation in this state for tax year 1995 or thereafter, and 960
eighty-eight per cent for all other taxable property; 961
(C) Eighty-eight (1) EXCEPT AS PROVIDED IN DIVISION 964
(C)(2) OF THIS SECTION, EIGHTY-EIGHT per cent in the case of a
natural gas or pipe-line company; 965
(2) FOR TAX YEAR 2001 AND THEREAFTER, TWENTY-FIVE PER CENT 967
IN THE CASE OF A NATURAL GAS COMPANY. 968
(D) Eighty-eight per cent in the case of a PIPE-LINE, 970
water-works, or heating company; 971
(E)(1) Except as provided in division (E)(2) or (3) of 974
this section, one hundred per cent in the case of the taxable 975
production equipment of an electric company and eighty-eight per 976
cent for all its other taxable property;
(2) For tax year 2001 and thereafter, eighty-eight per 978
cent in the case of the taxable transmission and distribution 981
property of an electric company, and twenty-five per cent for all 982
its other taxable property; 984
(3) Property listed and assessed under divisions (B)(1) 986
and (2) of section 5711.22 of the Revised Code and leased to an 987
electric company shall continue to be assessed at one hundred per 989
cent for production equipment and eighty-eight per cent for all 990
such other taxable property until January 1, 2002. 991
23
(F) Twenty-five per cent in the case of an interexchange 994
telecommunications company;
(G) Twenty-five per cent in the case of a water 996
transportation company. 997
Sec. 5727.33. (A) For the purpose of computing the excise 1,006
tax imposed by section 5727.24 or 5727.30 of the Revised Code, 1,007
the entire gross receipts actually received from all sources for 1,009
business done within this state are taxable gross receipts,
excluding the receipts described in divisions (B), (C), (D), and 1,011
(E) of this section. The gross receipts for the tax year of each 1,013
telegraph and telephone company shall be computed for the period 1,014
of the first day of July prior to the tax year to the thirtieth 1,016
day of June of the tax year. The gross receipts of each natural 1,017
gas company, including a combined company's taxable gross 1,019
receipts attributed to a natural gas company activity, shall be
computed in the manner required by section 5727.25 of the Revised 1,021
Code. The gross receipts for the tax year of any other public 1,023
utility subject to section 5727.30 of the Revised Code shall be 1,025
computed for the period of the first day of May prior to the tax 1,026
year to the thirtieth day of April of the tax year. 1,028
(B) In ascertaining and determining the gross receipts of 1,030
each public utility subject to this section, the following gross 1,032
receipts are excluded:
(1) All receipts derived wholly from interstate business; 1,034
(2) All receipts derived wholly from business done for or 1,036
with the federal government; 1,037
(3) All receipts derived wholly from the transmission or 1,040
delivery of electricity to or for a rural electric company, 1,041
provided that the electricity that has been so transmitted or 1,042
delivered is for resale by the rural electric company. This 1,043
division does not apply to tax years 2002 and thereafter. 1,044
(4) All receipts from the sale of merchandise; 1,046
(5) All receipts from sales to other public utilities, 1,048
except railroad, telegraph, and telephone companies, for resale, 1,049
24
provided the other public utility is subject to the tax levied by 1,050
section 5727.24 or 5727.30 of the Revised Code. 1,052
(C) In ascertaining and determining the gross receipts of 1,054
a telephone company, the following gross receipts are excluded: 1,055
(1) Receipts of amounts billed on behalf of other 1,057
entities; 1,058
(2) Receipts from sales to other telephone companies for 1,060
resale, as defined in division (A)(7) of section 5727.32 of the 1,062
Revised Code; 1,063
(3) Receipts from incoming or outgoing wide area 1,065
transmission service or wide area transmission type service, 1,067
including eight hundred or eight-hundred-type service; 1,068
(4) Receipts from private communications service as 1,070
described in division (AA)(2) of section 5739.01 of the Revised 1,072
Code;
(5) Receipts from sales to providers of telecommunications 1,075
service for resale, as defined in division (A)(7) of section 1,077
5727.32 of the Revised Code. 1,078
(D) In ascertaining and determining the gross receipts of 1,080
an electric company, receipts derived from the provision of 1,081
electricity and other services to a qualified former owner of the 1,082
production facilities that generated the electricity from which 1,083
those receipts were derived are excluded. This division does not 1,084
apply to tax years 2002 and thereafter. As used in this 1,085
division, a "qualified former owner" means a person who meets 1,086
both of the following conditions: 1,087
(1) On or before October 11, 1991, the person had sold to 1,089
an electric company part of the production facility at which the 1,090
electricity is generated, and, for at least twenty years prior to 1,091
that sale, the facility was used to generate electricity, but it 1,092
was not owned in whole or part during that period by an electric 1,093
company. 1,094
(2) At the time the electric company provided the 1,096
electricity or other services for which the exclusion is claimed, 1,097
25
the person, or a successor or assign of the person, owned not 1,098
less than a twenty per cent ownership of the production facility 1,099
and the rights to not less than twenty per cent of the production 1,100
of that facility.
(E) In ascertaining and determining the gross receipts of 1,102
a natural gas company, receipts of amounts billed on behalf of 1,104
other entities are excluded. Transportation THE TAX IMPOSED BY 1,106
SECTION 5729.811 OF THE REVISED CODE, ALONG WITH TRANSPORTATION
and billing and collection fees charged to other entities, shall 1,108
be included in the gross receipts of a natural gas company.
(F) In ascertaining and determining the gross receipts of 1,110
a combined company subject to the tax imposed by section 5727.30 1,113
of the Revised Code, all receipts derived from operating as a 1,114
natural gas company that are subject to the tax imposed by 1,115
section 5727.24 of the Revised Code are excluded. 1,116
(G) Except as provided in division (H) of this section, 1,119
the amount ascertained by the commissioner under this section, 1,120
less a deduction of twenty-five thousand dollars, shall be the 1,121
taxable gross receipts of such companies for business done within 1,122
this state for that year. 1,123
(H) The amount ascertained under this section, less the 1,126
following deduction, shall be the taxable gross receipts of a 1,127
natural gas company or combined company subject to the tax 1,128
imposed by section 5727.24 of the Revised Code for business done 1,130
within this state:
(1) For a natural gas company that files quarterly returns 1,132
of the tax imposed by section 5727.24 of the Revised Code, six 1,133
thousand two hundred fifty dollars for each quarterly return; 1,135
(2) For a natural gas company that files an annual return 1,137
of the tax imposed by section 5727.24 of the Revised Code, 1,138
twenty-five thousand dollars for each annual return; 1,140
(3) For a combined company, twenty-five thousand dollars 1,143
on the annual statement filed under section 5727.31 of the
Revised Code. A combined company shall not be entitled to a 1,145
26
deduction in computing gross receipts subject to the tax imposed 1,146
by section 5727.24 of the Revised Code.
Sec. 5727.80. As used in sections 5727.80 to 5727.95 of 1,155
the Revised Code: 1,157
(A) "Electric distribution company" means either of the 1,160
following:
(1) A person who distributes electricity through a meter 1,162
of an end user in this state OR TO AN UNMETERED LOCATION IN THIS 1,163
STATE;
(2) The end user of electricity in this state, if the end 1,166
user obtains electricity that is not distributed or transmitted 1,167
to the end user by an electric distribution company that is 1,168
required to remit the tax imposed by section 5727.81 of the 1,169
Revised Code. "Electric distribution company" does not include 1,171
the end user of electricity in this state who self-generates 1,172
electricity that is used directly by that end user on the same 1,173
site that the electricity is generated. 1,174
(B) "Kilowatt hour" means one thousand watt hours of 1,176
electricity. 1,177
(C) "Meter FOR AN ELECTRIC DISTRIBUTION COMPANY, "METER of 1,179
an end user in this state" means the last meter used to measure 1,181
the kilowatt hours distributed by an electric distribution 1,182
company to a location in this state, OR the last meter located 1,183
outside of this state that is used to measure the kilowatt hours 1,185
consumed at a location in this state, or, if no meter is used, 1,186
the estimated kilowatt hours distributed to an unmetered location 1,187
in this state.
(D) "Person" has the same meaning as in section 5701.01 of 1,189
the Revised Code, but also includes a political subdivision of 1,190
the state. 1,191
(E) "Municipal electric utility" means a municipal 1,194
corporation that owns or operates a system for the distribution 1,195
of electricity.
(F) "Qualified end user" means an end user of electricity 1,197
27
that uses more than three million kilowatt hours of electricity 1,199
at one manufacturing location in this state for a calendar day 1,200
for use in a QUALIFYING manufacturing process that features. 1,201
(G) "QUALIFIED REGENERATION" MEANS A PROCESS TO CONVERT 1,203
ELECTRICITY TO A FORM OF STORED ENERGY BY MEANS SUCH AS USING 1,204
ELECTRICITY TO COMPRESS AIR FOR STORAGE OR TO PUMP WATER TO AN 1,205
ELEVATED STORAGE RESERVOIR, IF SUCH STORED ENERGY IS SUBSEQUENTLY 1,206
USED TO GENERATE ELECTRICITY FOR SALE TO OTHERS PRIMARILY DURING 1,207
PERIODS WHEN THERE IS PEAK DEMAND FOR ELECTRICITY. 1,208
(H) "QUALIFIED REGENERATION METER" MEANS THE LAST METER 1,210
USED TO MEASURE ELECTRICITY USED IN A QUALIFIED REGENERATION 1,211
PROCESS.
(I) "QUALIFYING MANUFACTURING PROCESS" MEANS THE 1,213
PERFORMANCE OF an electrochemical reaction in which electrons 1,215
from direct current electricity remain a part of the product 1,216
being manufactured.
(G)(J) "Self-assessing purchaser" means a purchaser that 1,218
meets all the requirements of, and pays the excise tax in 1,220
accordance with, division (C) of section 5727.81 of the Revised 1,221
Code.
(H) "Six month revenue differential for self-assessing 1,223
purchasers" means thirty-one million six hundred fifty thousand 1,224
dollars less the amount paid under division (C)(1)(a) of section 1,225
5727.81 of the Revised Code by all self-assessing purchasers for 1,226
the six-month period ending in the month prior to the date of the 1,227
calculations required under divisions (C)(1)(b) and (c) of 1,228
section 5727.81 of the Revised Code. 1,229
(I) "Twelve month revenue differential for self-assessing 1,231
purchasers" means sixty-three million three hundred thousand 1,232
dollars less the amount paid under division (C)(1)(a) of section 1,233
5727.81 of the Revised Code by all self-assessing purchasers for 1,234
the twelve-month period ending in the month prior to the date of 1,235
the calculation required under division (C)(1)(d) of section 1,236
5727.81 of the Revised Code. 1,237
28
(K) "NATURAL GAS DISTRIBUTION COMPANY" MEANS A NATURAL GAS 1,240
COMPANY OR A COMBINED COMPANY, AS DEFINED IN SECTION 5727.01 OF
THE REVISED CODE, THAT IS SUBJECT TO THE EXCISE TAX IMPOSED BY 1,242
SECTION 5727.24 OF THE REVISED CODE AND THAT DISTRIBUTES NATURAL 1,243
GAS THROUGH A METER OF AN END USER IN THIS STATE OR TO AN
UNMETERED LOCATION IN THIS STATE. 1,244
(L) "MCF" MEANS ONE THOUSAND CUBIC FEET. 1,246
(M) FOR A NATURAL GAS DISTRIBUTION COMPANY, "METER OF AN 1,248
END USER IN THIS STATE" MEANS THE LAST METER USED TO MEASURE THE 1,249
MCF OF NATURAL GAS DISTRIBUTED BY A NATURAL GAS DISTRIBUTION 1,250
COMPANY TO A LOCATION IN THIS STATE, OR THE LAST METER LOCATED 1,252
OUTSIDE OF THIS STATE THAT IS USED TO MEASURE THE NATURAL GAS 1,253
CONSUMED AT A LOCATION IN THIS STATE.
(N) "FLEX CUSTOMER" MEANS AN INDUSTRIAL OR A COMMERCIAL 1,255
FACILITY THAT HAS CONSUMED MORE THAN ONE BILLION CUBIC FEET OF 1,256
NATURAL GAS A YEAR AT A SINGLE LOCATION DURING ANY OF THE 1,257
PREVIOUS FIVE YEARS, OR AN INDUSTRIAL OR A COMMERCIAL END USER OF 1,258
NATURAL GAS THAT PURCHASES NATURAL GAS DISTRIBUTION SERVICES FROM 1,259
A NATURAL GAS DISTRIBUTION COMPANY AT DISCOUNTED RATES OR CHARGES 1,261
ESTABLISHED IN ANY OF THE FOLLOWING:
(1) A SPECIAL ARRANGEMENT SUBJECT TO REVIEW AND REGULATION 1,263
BY THE PUBLIC UTILITIES COMMISSION UNDER SECTION 4905.31 OF THE 1,264
REVISED CODE; 1,265
(2) A SPECIAL ARRANGEMENT WITH A NATURAL GAS DISTRIBUTION 1,267
COMPANY PURSUANT TO A MUNICIPAL ORDINANCE; 1,268
(3) A VARIABLE RATE SCHEDULE THAT PERMITS RATES TO VARY 1,270
BETWEEN DEFINED AMOUNTS, PROVIDED THAT THE SCHEDULE IS ON FILE 1,271
WITH THE PUBLIC UTILITIES COMMISSION. 1,272
AN END USER THAT MEETS THIS DEFINITION ON JANUARY 1, 2000, 1,274
OR THEREAFTER IS A "FLEX CUSTOMER" FOR PURPOSES OF DETERMINING 1,275
THE RATE OF TAXATION UNDER DIVISION (D) OF SECTION 5727.811 OF 1,276
THE REVISED CODE. 1,277
Sec. 5727.81. (A) For the purpose of raising revenue for 1,287
public education and state and local government operations, an 1,288
29
excise tax is hereby levied and imposed on an electric 1,289
distribution company for all electricity distributed by such 1,290
company BEGINNING WITH THE MEASUREMENT PERIOD that has INCLUDES 1,291
May 1, 2001, as part of its measurement period, at the following 1,292
rates per kilowatt hour of electricity distributed in a 1,293
thirty-day period by the company through a meter of an end user 1,294
in this state:
KILOWATT HOURS DISTRIBUTED TO RATE PER 1,297
AN END USER KILOWATT HOUR 1,298
For the first 2,000 $.00465 1,299
For the next 2,001 to 15,000 $.00419 1,300
For 15,001 and above $.00363 1,301
IF NO METER IS USED TO MEASURE THE KILOWATT HOURS OF 1,304
ELECTRICITY DISTRIBUTED BY THE COMPANY, THE RATES SHALL APPLY TO 1,305
THE ESTIMATED KILOWATT HOURS OF ELECTRICITY DISTRIBUTED TO AN 1,306
UNMETERED LOCATION IN THIS STATE.
The electric distribution company shall base the monthly 1,308
tax on the kilowatt hours of electricity distributed to an end 1,309
user through the meter of the end user that is not measured for a 1,310
thirty-day period by dividing the days in the measurement period 1,312
into the total kilowatt hours measured during the measurement 1,313
period to obtain a daily average usage. The tax shall be 1,314
determined by obtaining the sum of divisions (A)(1), (2), and (3) 1,315
of this section and multiplying that amount by the number of days
in the measurement period: 1,316
(1) Multiplying $0.00465 per kilowatt hour for the first 1,318
sixty-seven kilowatt hours distributed using a daily average; 1,319
(2) Multiplying $0.00419 for the next sixty-eight to five 1,321
hundred kilowatt hours distributed using a daily average; 1,322
(3) Multiplying $0.00363 for the remaining kilowatt hours 1,324
distributed using a daily average. 1,325
Except as provided in division (C) of this section, the 1,327
electric distribution company shall pay the tax to the treasurer 1,328
of state in accordance with section 5727.82 of the Revised Code. 1,330
30
Only the distribution of electricity through a meter of an 1,333
end user in this state shall be used by the electric distribution 1,334
company to compute the amount or estimated amount of tax due. In 1,335
the event a meter is not actually read for a measurement period, 1,336
the estimated kilowatt hours distributed by an electric 1,337
distribution company to collect BILL FOR its distribution charges 1,338
may SHALL be used.
(B) Except as provided in division (C) of this section, 1,340
each electric distribution company shall pay the tax imposed by 1,341
this section in all of the following circumstances: 1,342
(1) The electricity is distributed by the company through 1,344
a meter of an end user in this state; 1,345
(2) The company is distributing electricity through a 1,347
meter located in another state, but the electricity is consumed 1,348
in this state in the manner prescribed by the tax commissioner; 1,350
(3) The company is distributing electricity in this state 1,352
without the use of a meter, but the electricity is consumed in 1,353
this state as estimated and in the manner prescribed by the tax 1,355
commissioner.
(C)(1)(a) A AS USED IN DIVISION (C) OF THIS SECTION: 1,357
(a) "TOTAL PRICE OF ELECTRICITY" MEANS THE AGGREGATE VALUE 1,359
IN MONEY OF ANYTHING PAID OR TRANSFERRED, OR PROMISED TO BE PAID 1,360
OR TRANSFERRED, TO OBTAIN ELECTRICITY OR ELECTRIC SERVICE, 1,362
INCLUDING BUT NOT LIMITED TO THE VALUE PAID OR PROMISED TO BE 1,363
PAID FOR THE TRANSMISSION OR DISTRIBUTION OF ELECTRICITY AND FOR 1,364
TRANSITION COSTS AS DESCRIBED IN CHAPTER 4928. OF THE REVISED
CODE.
(b) "PACKAGE" MEANS THE PROVISION OR THE ACQUISITION, AT A 1,366
COMBINED PRICE, OF ELECTRICITY WITH OTHER SERVICES OR PRODUCTS, 1,367
OR ANY COMBINATION THEREOF, SUCH AS NATURAL GAS OR OTHER FUELS; 1,368
ENERGY MANAGEMENT PRODUCTS, SOFTWARE, AND SERVICES; MACHINERY AND 1,369
EQUIPMENT ACQUISITION; AND FINANCING AGREEMENTS. 1,370
(c) "SINGLE LOCATION" MEANS A FACILITY LOCATED ON 1,372
CONTIGUOUS PROPERTY SEPARATED ONLY BY A ROADWAY, RAILWAY, OR 1,373
31
WATERWAY.
(2) DIVISION (C) OF THIS SECTION APPLIES TO ANY 1,374
commercial or industrial purchaser that receives PURCHASER'S 1,376
RECEIPT OF electricity through a meter of an end user in this 1,377
state and consumes, over the course of the previous calendar 1,378
year, more than one hundred twenty OR THROUGH MORE THAN ONE METER 1,380
AT A SINGLE LOCATION IN THIS STATE IN A QUANTITY THAT EXCEEDS 1,381
FORTY-FIVE million kilowatt hours of electricity OVER THE COURSE 1,383
OF THE PRECEDING CALENDAR YEAR, OR ANY COMMERCIAL OR INDUSTRIAL 1,384
PURCHASER WILL CONSUME MORE THAN FORTY-FIVE MILLION KILOWATT 1,386
HOURS OF ELECTRICITY OVER THE COURSE OF THE SUCCEEDING TWELVE 1,387
MONTHS AS ESTIMATED BY THE TAX COMMISSIONER. THE TAX 1,388
COMMISSIONER SHALL MAKE SUCH AN ESTIMATE UPON THE WRITTEN REQUEST 1,389
BY AN APPLICANT FOR REGISTRATION AS A SELF-ASSESSING PURCHASER 1,390
UNDER THIS DIVISION. SUCH A PURCHASER may elect to self-assess 1,391
the excise tax imposed by this section at the rate of $.00075 per 1,392
kilowatt hour ON NOT MORE THAN FIVE HUNDRED FOUR MILLION KILOWATT 1,393
HOURS, and four per cent of the total price of electricity 1,394
delivered DISTRIBUTED TO THAT METER OR LOCATION. A QUALIFIED END 1,395
USER THAT RECEIVES ELECTRICITY through a meter of an end user in 1,396
this state OR THROUGH MORE THAN ONE METER AT A SINGLE LOCATION IN 1,398
THIS STATE AND THAT CONSUMES, OVER THE COURSE OF THE PREVIOUS 1,399
CALENDAR YEAR, MORE THAN FORTY-FIVE MILLION KILOWATT HOURS IN 1,400
OTHER THAN ITS QUALIFYING MANUFACTURING PROCESS, MAY ELECT TO 1,401
SELF-ASSESS THE TAX AS ALLOWED BY THIS DIVISION WITH RESPECT TO 1,402
THE ELECTRICITY USED IN OTHER THAN ITS QUALIFYING MANUFACTURING 1,403
PROCESS. Payment of the tax shall be made directly to the 1,404
treasurer of state in accordance with divisions (A)(3)(4) and 1,405
(4)(5) of section 5727.82 of the Revised Code or, if. IF the 1,407
electric distribution company serving the self-assessing 1,408
purchaser is a municipal electric utility and the purchaser is 1,409
within the municipal corporation's corporate limits, PAYMENT 1,410
SHALL BE MADE to such municipal corporation's general fund AND 1,412
REPORTS SHALL BE FILED in accordance with division DIVISIONS 1,414
32
(A)(2)(4) AND (5) of section 5727.82 of the Revised Code, and 1,415
upon paying in this manner, the EXCEPT THAT "MUNICIPAL 1,417
CORPORATION" SHALL BE SUBSTITUTED FOR "TREASURER OF STATE" AND 1,418
"TAX COMMISSIONER." A self-assessing purchaser THAT PAYS THE 1,419
EXCISE TAX AS PROVIDED IN THIS DIVISION shall not be required to 1,420
pay the excise tax to the electric distribution company from 1,421
which its electricity is delivered DISTRIBUTED. IF A 1,423
SELF-ASSESSING PURCHASER'S RECEIPT OF ELECTRICITY IS NOT SUBJECT
TO THE TAX AS MEASURED UNDER THIS DIVISION, THE TAX ON THE 1,424
RECEIPT OF SUCH ELECTRICITY SHALL BE MEASURED AND PAID AS 1,425
PROVIDED IN DIVISION (A) OF THIS SECTION. 1,426
(b) On or before December 10, 2001, the tax commissioner 1,428
shall calculate the six month revenue differential for 1,429
self-assessing purchasers. If the six month revenue differential 1,430
is greater than five hundred thousand dollars, the tax 1,431
commissioner shall increase the percentage of total price tax 1,432
rate to be charged for the six-month period beginning in the 1,433
month following that in which the calculation is done. The new 1,434
tax rate shall be the rate in effect during the current period 1,435
multiplied by the sum of one plus the product of (i) a fraction, 1,436
the numerator of which is the six month revenue differential 1,437
multiplied by two and the denominator of which is the amount paid 1,438
during the period by all self-assessing purchasers on the 1,439
percentage of total price basis and (ii) a fraction, the 1,440
numerator of which is total kilowatt hours consumed during the 1,441
period by self-assessing purchasers and the denominator of which 1,442
is eleven billion twenty-five million.
If the six month revenue differential is less than negative 1,444
five hundred thousand dollars, the tax commissioner shall 1,445
decrease the percentage of total price tax rate to be charged for 1,446
the six month period beginning in the month following that in 1,447
which the calculation is made. The new tax rate shall be the 1,448
rate in effect during the current period multiplied by the sum of 1,449
one plus the product of (i) a fraction, the numerator of which is 1,450
33
the six month revenue differential multiplied by two and the 1,451
denominator of which is the amount paid during the period by all 1,452
self-assessing purchasers on the percentage of total price basis 1,453
and (ii) a fraction, the numerator of which is eleven billion 1,454
twenty-five million and the denominator of which is total 1,455
kilowatt hours consumed during the period by self-assessing 1,456
purchasers.
(c) On or before June 10, 2002, the tax commissioner shall 1,458
calculate the six month revenue differential for self-assessing 1,459
purchasers. If the six month revenue differential is greater 1,460
than five hundred thousand dollars, the tax commissioner shall 1,461
increase the percentage of total price tax rate to be charged for 1,462
the twelve month period beginning in the month following that in 1,463
which the calculation is made. The new tax rate shall be the 1,464
rate in effect during the current period multiplied by the sum of 1,465
one plus the product of (i) a fraction, the numerator of which is 1,466
the six month revenue differential and the denominator of which 1,467
is the amount paid during the period by all self-assessing 1,468
purchasers on the percentage of total price basis and (ii) a 1,469
fraction, the numerator of which is total kilowatt hours consumed 1,470
during the period by self-assessing purchasers and the 1,471
denominator of which is eleven billion twenty-five million. 1,472
If the six month revenue deferential is less than negative 1,474
five hundred thousand dollars, the tax commissioner shall 1,475
decrease the percentage of total price tax rate to be charged for 1,476
the twelve month period beginning in the month following that in 1,477
which the calculation is made. The new tax rate shall be the 1,478
rate in effect during the current period multiplied by the sum of 1,479
one plus the product of (i) a fraction, the numerator of which is 1,480
the six month revenue differential and the denominator of which 1,481
is the amount paid during the period by all self-assessing 1,482
purchasers on the percentage of total price basis and (ii) a 1,483
fraction, the numerator of which is eleven billion twenty-five 1,484
million and the denominator of which is total kilowatt hours 1,485
34
consumed during the period by self-assessing purchasers. 1,486
(d) On or before June 10, 2003, 2004, 2005, 2006, and 1,488
2007, the tax commissioner shall calculate the twelve month 1,489
revenue differential for self-assessing purchasers. If the 1,490
twelve month revenue differential is greater than one million 1,491
dollars, the tax commissioner shall increase the percentage of 1,492
total price tax rate to be charged for the twelve month period 1,493
beginning in the month following that in which the calculation is 1,494
made, except that the rate calculated in 2007 shall become the 1,495
permanent tax rate. In each year, the new tax rate shall be the 1,496
rate in effect during the current period multiplied by the sum of 1,497
one plus a fraction, the numerator of which is the twelve month 1,498
revenue differential and the denominator of which is the amount 1,499
paid during the period by all self-assessing purchasers on the 1,500
percentage of total price basis. 1,501
If the revenue differential is less than negative one 1,503
million dollars, the tax commissioner shall decrease the 1,504
percentage of total price tax rate to be charged for the twelve 1,505
month period beginning in the month following that in which the 1,506
calculation is made, except that the rate calculated in 2007 1,507
shall become the permanent tax rate. In each year, the new tax 1,508
rate shall be the rate in effect during the current period 1,509
multiplied by the sum of one plus a fraction, the numerator of 1,510
which is the twelve month revenue differential and the 1,511
denominator of which is the amount paid during the period by all 1,512
self-assessing purchasers on the percentage of price basis. 1,513
(2)(3) IN THE CASE OF THE ACQUISITION OF A PACKAGE, UNLESS 1,516
THE ELEMENTS OF THE PACKAGE ARE SEPARATELY STATED ISOLATING THE 1,518
TOTAL PRICE OF ELECTRICITY FROM THE PRICE OF THE REMAINING 1,519
ELEMENTS OF THE PACKAGE, THE TAX IMPOSED UNDER THIS SECTION 1,520
APPLIES TO THE ENTIRE PRICE OF THE PACKAGE. IF THE ELEMENTS OF 1,521
THE PACKAGE ARE SEPARATELY STATED, THE TAX IMPOSED UNDER THIS 1,522
SECTION APPLIES TO THE TOTAL PRICE OF THE ELECTRICITY. 1,523
(4) ANY ELECTRIC SUPPLIER THAT SELLS ELECTRICITY AS PART 1,525
35
OF A PACKAGE SHALL SEPARATELY STATE TO THE PURCHASER THE TOTAL 1,526
PRICE OF THE ELECTRICITY AND, UPON REQUEST BY THE TAX 1,527
COMMISSIONER, THE TOTAL PRICE OF EACH OF THE OTHER ELEMENTS OF 1,528
THE PACKAGE.
(5) THE TAX COMMISSIONER MAY ADOPT RULES RELATING TO THE 1,530
COMPUTATION OF THE TOTAL PRICE OF ELECTRICITY WITH RESPECT TO 1,531
SELF-ASSESSING PURCHASERS, WHICH MAY INCLUDE RULES TO ESTABLISH 1,532
THE TOTAL PRICE OF ELECTRICITY PURCHASED AS PART OF A PACKAGE. 1,533
(6) Application for registration as a self-assessing 1,535
purchaser shall be made FOR EACH QUALIFYING METER OR LOCATION, on 1,536
a form prescribed by the tax commissioner. IN THE CASE OF AN 1,538
APPLICANT APPLYING ON THE BASIS OF AN ESTIMATED CONSUMPTION OF 1,539
FORTY-FIVE MILLION KILOWATT HOURS OVER THE COURSE OF THE 1,540
SUCCEEDING TWELVE MONTHS, THE APPLICANT SHALL PROVIDE SUCH 1,541
INFORMATION AS THE TAX COMMISSIONER CONSIDERS TO BE NECESSARY TO 1,542
ESTIMATE SUCH CONSUMPTION. At the time of making the application 1,544
and by the first day of May of each year, excluding May 1, 2000, 1,545
a self-assessing purchaser shall pay a fee of five hundred 1,546
dollars to the treasurer of state for EACH QUALIFYING METER OR
LOCATION. THE TREASURER OF STATE SHALL deposit to SUCH FEES INTO 1,548
the kilowatt hour excise tax administration fund, which is hereby 1,549
created in the state treasury. Money in the fund shall be used 1,550
to defray the tax commissioner's cost in administering the tax 1,551
owed under section 5727.81 of the Revised Code by self-assessing 1,552
purchasers. After the application is approved by the tax 1,553
commissioner, the registration shall remain in effect until 1,555
canceled by the registrant upon written notification to the 1,556
commissioner of the election to pay the tax in accordance with 1,557
division (A) of this section, or by the tax commissioner for not 1,558
paying the tax or fee under division (C) of this section, or 1,559
meeting the qualifications in division (C)(1)(2) of this section. 1,560
The tax commissioner shall give written notice to the electric 1,562
distribution company from which electricity is delivered to a 1,564
self-assessing purchaser of the purchaser's self-assessing 1,565
36
status, and the electric distribution company is relieved of the 1,566
obligation to pay the tax imposed by division (A) of this section 1,567
for electricity distributed to that self-assessing purchaser 1,568
until it is notified by the tax commissioner that the 1,570
self-assessing purchaser's registration is canceled. Within 1,571
fifteen days of notification of the canceled registration, the 1,572
electric distribution company shall be responsible for payment of 1,573
the tax imposed by division (A) of this section on electricity 1,574
distributed to a purchaser that is no longer registered as a 1,575
self-assessing purchaser. A self-assessing purchaser with a 1,576
canceled registration must file a report and remit the tax 1,578
imposed by division (A) of this section on all electricity it 1,579
receives for any measurement period prior to the tax being 1,580
reported and paid by the electric distribution company. A 1,581
self-assessing purchaser whose registration is canceled by the 1,582
tax commissioner is not eligible to register as a self-assessing 1,583
purchaser for two years after the registration is canceled. 1,584
(7) IF THE TAX COMMISSIONER CANCELS THE SELF-ASSESSING 1,586
REGISTRATION OF A PURCHASER REGISTERED ON THE BASIS OF ITS 1,587
ESTIMATED CONSUMPTION BECAUSE THE PURCHASER DOES NOT CONSUME AT 1,588
LEAST FORTY-FIVE MILLION KILOWATT HOURS OF ELECTRICITY OVER THE 1,589
COURSE OF THE TWELVE-MONTH PERIOD FOR WHICH THE ESTIMATE WAS 1,590
MADE, THE TAX COMMISSIONER SHALL ASSESS AND COLLECT FROM THE 1,591
PURCHASER THE DIFFERENCE BETWEEN (a) THE AMOUNT OF TAX THAT WOULD 1,592
HAVE BEEN PAYABLE UNDER DIVISION (A) OF THIS SECTION ON THE 1,594
ELECTRICITY DISTRIBUTED TO THE PURCHASER DURING THAT PERIOD AND 1,595
(b) THE AMOUNT OF TAX PAID BY THE PURCHASER ON SUCH ELECTRICITY 1,597
PURSUANT TO DIVISION (C)(2)(a) OF THIS SECTION. THE ASSESSMENT 1,598
SHALL BE PAID WITHIN SIXTY DAYS AFTER THE TAX COMMISSIONER ISSUES 1,600
IT, REGARDLESS OF WHETHER THE PURCHASER FILES A PETITION FOR 1,601
REASSESSMENT UNDER SECTION 5727.89 OF THE REVISED CODE COVERING 1,602
THAT PERIOD. IF THE PURCHASER DOES NOT PAY THE ASSESSMENT WITHIN 1,603
THE TIME PRESCRIBED, THE AMOUNT ASSESSED IS SUBJECT TO THE 1,604
ADDITIONAL CHARGE AND THE INTEREST PRESCRIBED BY DIVISIONS (B) 1,605
37
AND (C) OF SECTION 5727.82 OF THE REVISED CODE, AND IS SUBJECT TO 1,606
ASSESSMENT UNDER SECTION 5727.89 OF THE REVISED CODE. IF THE 1,607
PURCHASER IS A QUALIFIED END USER, DIVISION (C)(7) OF THIS 1,608
SECTION APPLIES ONLY TO ELECTRICITY IT CONSUMES IN OTHER THAN ITS 1,609
QUALIFYING MANUFACTURING PROCESS.
(D) The tax imposed by this section does not apply to the 1,612
distribution of any kilowatt hours of electricity to the federal 1,613
government, to an end user located at a federal facility that 1,614
uses electricity for the enrichment of uranium, TO A QUALIFIED 1,615
REGENERATION METER, or to an end user for any day the end user is 1,617
a qualified end user. The exemption under this division for a
qualified end user only applies to the manufacturing location 1,618
where the qualified end user uses more than three million 1,619
kilowatt hours per day IN A QUALIFYING MANUFACTURING PROCESS. 1,620
Sec. 5727.811. (A) FOR THE PURPOSE OF RAISING REVENUE FOR 1,622
PUBLIC EDUCATION AND STATE AND LOCAL GOVERNMENT OPERATIONS, AN 1,623
EXCISE TAX IS HEREBY LEVIED ON EVERY NATURAL GAS DISTRIBUTION 1,625
COMPANY FOR ALL NATURAL GAS VOLUMES BILLED BY, OR ON BEHALF OF, 1,626
THE COMPANY ON AND AFTER JULY 1, 2001. EXCEPT AS PROVIDED IN
DIVISIONS (C) OR (D) OF THIS SECTION, THE TAX SHALL BE LEVIED AT 1,628
THE FOLLOWING RATES PER MCF OF NATURAL GAS DISTRIBUTED BY THE 1,630
COMPANY THROUGH A METER OF AN END USER IN THIS STATE: 1,631
MCF DISTRIBUTED TO AN END USER RATE PER MCF 1,635
FOR THE FIRST 100 MCF PER MONTH $.1593 1,636
FOR THE NEXT 101 TO 2000 MCF PER MONTH $.0877 1,638
FOR 2001 AND ABOVE MCF PER MONTH $.0411 1,639
IF NO METER IS USED TO MEASURE THE MCF OF NATURAL GAS 1,642
DISTRIBUTED BY THE COMPANY, THE RATES SHALL APPLY TO THE 1,644
ESTIMATED MCF OF NATURAL GAS DISTRIBUTED TO AN UNMETERED LOCATION 1,645
IN THIS STATE.
(B) A NATURAL GAS DISTRIBUTION COMPANY SHALL BASE THE TAX 1,647
ON THE MCF OF NATURAL GAS DISTRIBUTED TO AN END USER THROUGH THE 1,648
METER OF THE END USER IN THIS STATE THAT IS ESTIMATED TO BE 1,649
CONSUMED BY THE END USER AS REFLECTED ON THE END USER'S CUSTOMER 1,651
38
STATEMENT FROM THE NATURAL GAS DISTRIBUTION COMPANY. THE NATURAL 1,652
GAS DISTRIBUTION COMPANY SHALL PAY THE TAX LEVIED BY THIS SECTION 1,653
TO THE TREASURER OF STATE IN ACCORDANCE WITH SECTION 5727.82 OF 1,654
THE REVISED CODE.
(C) A NATURAL GAS DISTRIBUTION COMPANY WITH FIFTY THOUSAND 1,657
CUSTOMERS OR LESS MAY ELECT TO APPLY THE RATES SPECIFIED IN 1,658
DIVISION (A) OF THIS SECTION TO THE AGGREGATE OF THE NATURAL GAS 1,659
DISTRIBUTED BY THE COMPANY THROUGH THE METER OF ALL ITS CUSTOMERS 1,660
IN THIS STATE, AND UPON SUCH ELECTION, THIS METHOD SHALL BE USED 1,661
TO DETERMINE THE AMOUNT OF TAX TO BE PAID BY SUCH COMPANY. 1,662
(D) A NATURAL GAS DISTRIBUTION COMPANY SHALL PAY THE TAX 1,665
IMPOSED BY THIS SECTION AT THE RATE OF $.02 PER MCF OF NATURAL 1,666
GAS DISTRIBUTED BY THE COMPANY THROUGH THE METER OF A FLEX 1,668
CUSTOMER. THE NATURAL GAS DISTRIBUTION COMPANY CORRESPONDINGLY
SHALL REDUCE THE PER MCF RATE THAT IT CHARGES THE FLEX CUSTOMER 1,669
FOR NATURAL GAS DISTRIBUTION SERVICES BY $.02 PER MCF OF NATURAL 1,670
GAS DISTRIBUTED TO THE FLEX CUSTOMER. 1,671
(E) EXCEPT AS PROVIDED IN DIVISION (F) OF THIS SECTION, 1,673
EACH NATURAL GAS DISTRIBUTION COMPANY SHALL PAY THE TAX IMPOSED 1,674
BY THIS SECTION IN ALL OF THE FOLLOWING CIRCUMSTANCES: 1,675
(1) THE NATURAL GAS IS DISTRIBUTED BY THE COMPANY THROUGH 1,677
A METER OF AN END USER IN THIS STATE; 1,678
(2) THE NATURAL GAS DISTRIBUTION COMPANY IS DISTRIBUTING 1,680
NATURAL GAS THROUGH A METER LOCATED IN ANOTHER STATE, BUT THE 1,681
NATURAL GAS IS CONSUMED IN THIS STATE IN THE MANNER PRESCRIBED BY 1,682
THE TAX COMMISSIONER; 1,683
(3) THE NATURAL GAS DISTRIBUTION COMPANY IS DISTRIBUTING 1,685
NATURAL GAS IN THIS STATE WITHOUT THE USE OF A METER, BUT THE 1,686
NATURAL GAS IS CONSUMED IN THIS STATE AS ESTIMATED AND IN THE 1,687
MANNER PRESCRIBED BY THE TAX COMMISSIONER. 1,688
(F) THE TAX LEVIED BY THIS SECTION DOES NOT APPLY TO THE 1,690
DISTRIBUTION OF NATURAL GAS TO THE FEDERAL GOVERNMENT, OR NATURAL 1,692
GAS PRODUCED BY AN END USER IN THIS STATE THAT IS CONSUMED BY 1,693
THAT END USER OR ITS AFFILIATES AND IS NOT DISTRIBUTED THROUGH
39
THE FACILITIES OF A NATURAL GAS COMPANY. 1,694
Sec. 5727.82. (A)(1) Except as provided in divisions 1,704
(A)(2)(3) and (D) of this section, by the twentieth day of each 1,705
month, each electric distribution company required to pay the tax 1,706
imposed by section 5727.81 of the Revised Code shall file with 1,708
the treasurer of state a return as prescribed by the tax 1,709
commissioner and shall make payment of the full amount of tax due 1,711
for the preceding month. The first payment of this tax shall be
made on or before June 20, 2001. 1,712
(2) BY THE TWENTIETH DAY OF MAY, AUGUST, NOVEMBER, AND 1,715
FEBRUARY, EACH NATURAL GAS DISTRIBUTION COMPANY REQUIRED TO PAY 1,716
THE TAX IMPOSED BY SECTION 5727.811 OF THE REVISED CODE SHALL 1,717
FILE WITH THE TREASURER OF STATE A RETURN AS PRESCRIBED BY THE 1,718
TAX COMMISSIONER AND SHALL MAKE PAYMENT OF THE FULL AMOUNT OF TAX 1,719
DUE FOR THE PRECEDING QUARTER. THE FIRST PAYMENT OF THIS TAX
SHALL BE MADE ON OR BEFORE NOVEMBER 20, 2001, FOR THE QUARTER 1,720
ENDING SEPTEMBER 30, 2001. 1,721
(3) If the electric distribution company required to pay 1,723
the tax imposed by section 5727.81 of the Revised Code is a 1,726
municipal electric utility, it may retain in its general fund 1,727
that portion of the tax on the kilowatt hours distributed to end 1,728
users located within the boundaries of the municipal corporation. 1,729
However, the municipal electric utility shall make payment in 1,730
accordance with division (A)(1) of this section of the tax due on 1,732
the kilowatt hours distributed to end users located outside the 1,733
boundaries of the municipal corporation. 1,734
(3)(4) By the twentieth day of each month, each 1,737
self-assessing purchaser that under division (C) of section 1,738
5727.81 of the Revised Code pays directly to the treasurer of 1,740
state the tax imposed by section 5727.81 of the Revised Code 1,741
shall file with the treasurer of state a return as prescribed by 1,742
the tax commissioner and shall make payment of the full amount of 1,743
the tax due for the preceding month. 1,744
(4)(5) As prescribed by the tax commissioner, the A return 1,747
40
shall be signed by the company or self-assessing purchaser 1,748
required to file it, or an authorized employee, officer, or agent 1,749
of the company or purchaser. The treasurer of state shall mark 1,750
on the return the date it was received and indicate payment or 1,751
nonpayment of the tax shown to be due on the return. The 1,752
treasurer of state immediately shall transmit all returns to the 1,753
tax commissioner. The return shall be deemed filed when received 1,754
by the treasurer of state.
(B) Any NATURAL GAS DISTRIBUTION COMPANY, electric 1,756
distribution company, or self-assessing purchaser required by 1,758
this section to file a return who fails to file it and pay the 1,759
tax within the period prescribed shall pay an additional charge 1,760
of fifty dollars or ten per cent of the tax required to be paid 1,761
for the reporting period, whichever is greater. The tax 1,762
commissioner may collect the additional charge by assessment 1,763
pursuant to section 5727.89 of the Revised Code. The 1,765
commissioner may abate all or a portion of the additional charge 1,766
and may adopt rules governing such abatements. 1,767
(C) If any tax due is not paid timely in accordance with 1,770
this section, the NATURAL GAS DISTRIBUTION COMPANY, electric 1,771
distribution company, or self-assessing purchaser liable for the 1,772
tax shall pay interest, calculated at the rate per annum 1,774
prescribed by section 5703.47 of the Revised Code, from the date 1,776
the tax payment was due to the date of payment or to the date an 1,777
assessment is issued, whichever occurs first. Interest shall be 1,778
paid in the same manner as the tax, and the commissioner may 1,779
collect the interest by assessment pursuant to section 5727.89 of 1,781
the Revised Code.
(D) Not later than the tenth day of each month, a 1,783
qualified end user NOT MAKING THE ELECTION TO SELF-ASSESS UNDER 1,785
DIVISION (C) OF SECTION 5727.81 OF THE REVISED CODE shall report 1,786
in writing to the electric distribution company that distributes 1,787
electricity to the end user the kilowatt hours that were consumed 1,788
as a qualified end user IN A QUALIFYING MANUFACTURING PROCESS for 1,789
41
the prior month and the number of days, if any, on which the end 1,790
user was not a qualified end user. FOR EACH CALENDAR DAY DURING 1,792
THAT MONTH, A QUALIFIED END USER SHALL REPORT THE KILOWATT HOURS 1,793
THAT WERE NOT USED IN A QUALIFYING MANUFACTURING PROCESS. For 1,795
each calendar day the end user was not a qualified end user, the 1,796
end user shall report in writing to the electric distribution 1,797
company the TOTAL number of kilowatt hours used on that day, and 1,799
the electric distribution company shall pay the tax imposed under 1,800
section 5727.81 of the Revised Code on each kilowatt hour that 1,801
was not distributed to a qualified end user IN A QUALIFYING 1,802
MANUFACTURING PROCESS. The electric distribution company may 1,803
rely in good faith on a qualified end user's report filed under 1,804
this division. If it is determined that the end user was not a 1,805
qualified end user for any calendar day or the quantity of 1,806
electricity used by the qualified end user IN A QUALIFYING 1,807
MANUFACTURING PROCESS was overstated, the tax commissioner shall 1,808
assess and collect any tax imposed under section 5727.81 of the 1,809
Revised Code directly from the qualified end user. As requested 1,811
by the commissioner, each end user reporting to an electric 1,812
distribution company that it is a qualified end user shall 1,813
provide documentation to the commissioner that establishes the 1,815
volume of electricity consumed daily by the qualified end user 1,816
AND THE TOTAL NUMBER OF KILOWATT HOURS CONSUMED IN A QUALIFYING
MANUFACTURING PROCESS. 1,817
Sec. 5727.83. (A) An A NATURAL GAS DISTRIBUTION COMPANY, 1,826
AN electric distribution company, or A self-assessing purchaser 1,828
shall remit each monthly tax payment by electronic funds transfer 1,830
as prescribed by divisions (B) and (C) of this section. 1,831
The tax commissioner shall notify each NATURAL GAS 1,833
DISTRIBUTION COMPANY, electric distribution company, and 1,835
self-assessing purchaser of the obligation to remit taxes by 1,836
electronic funds transfer, shall maintain an updated list of 1,837
those companies and purchasers, and shall timely certify to the 1,839
treasurer of state the list and any additions thereto or 1,840
42
deletions therefrom. Failure by the tax commissioner to notify a 1,841
company or self-assessing purchaser subject to this section to 1,842
remit taxes by electronic funds transfer does not relieve the 1,843
company or self-assessing purchaser of its obligation to remit
taxes in that manner. 1,844
(B) An A NATURAL GAS DISTRIBUTION COMPANY, AN electric 1,846
distribution company, or A self-assessing purchaser required by 1,848
this section to remit payments by electronic funds transfer shall 1,850
remit such payments to the treasurer of state in the manner 1,851
prescribed by rules adopted by the treasurer of state under 1,852
section 113.061 of the Revised Code, and on or before the dates 1,853
specified under section 5727.82 of the Revised Code. The payment
of taxes by electronic funds transfer does not affect a company's 1,855
or self-assessing purchaser's obligation to file the monthly A 1,856
return as required under section 5727.82 of the Revised Code. 1,857
(C) An A NATURAL GAS DISTRIBUTION COMPANY, AN electric 1,859
distribution company, or A self-assessing purchaser required by 1,861
this section to remit taxes by electronic funds transfer may
apply to the treasurer of state in the manner prescribed by the 1,863
treasurer of state to be excused from that requirement. The 1,864
treasurer of state may excuse the company or self-assessing
purchaser from remittance by electronic funds transfer for good 1,866
cause shown for the period of time requested by the company or 1,867
self-assessing purchaser or for a portion of that period. The 1,868
treasurer of state shall notify the tax commissioner and the 1,870
company or self-assessing purchaser of the treasurer of state's
decision as soon as is practicable. 1,871
(D) If an A NATURAL GAS DISTRIBUTION COMPANY, AN electric 1,873
distribution company, or A self-assessing purchaser required by 1,875
this section to remit taxes by electronic funds transfer remits 1,877
those taxes by some means other than by electronic funds transfer 1,878
as prescribed by this section and the rules adopted by the 1,879
treasurer of state, and the treasurer of state determines that 1,880
such failure was not due to reasonable cause or was due to 1,881
43
willful neglect, the treasurer of state shall notify the tax 1,882
commissioner of the failure to remit by electronic funds transfer 1,883
and shall provide the commissioner with any information used in 1,884
making that determination. The tax commissioner may collect an 1,885
additional charge by assessment in the manner prescribed by 1,886
section 5727.89 of the Revised Code. The additional charge shall 1,887
equal five per cent of the amount of the taxes required to be 1,888
paid by electronic funds transfer, but shall not exceed five 1,889
thousand dollars. Any additional charge assessed under this 1,890
section is in addition to any other penalty or charge imposed 1,891
under this chapter, and shall be considered as revenue arising 1,892
from the tax imposed under this chapter. The tax commissioner 1,893
may abate all or a portion of such a charge and may adopt rules 1,894
governing such abatements.
No additional charge shall be assessed under this division 1,896
against A NATURAL GAS DISTRIBUTION COMPANY, an electric 1,897
distribution company, or A self-assessing purchaser that has been 1,899
notified of its obligation to remit taxes under this section and 1,901
that remits its first two tax payments after such notification by 1,902
some means other than electronic funds transfer. The additional 1,903
charge may be assessed upon the remittance of any subsequent tax 1,904
payment that the company or purchaser remits by dome means other 1,906
than electronic funds transfer.
Sec. 5727.84. (A) As used in this section and sections 1,915
5727.85, 5727.86, and 5727.87 of the Revised Code: 1,917
(1) "School district" means a city, local, or exempted 1,919
village school district. 1,920
(2) "Joint vocational school district" means a joint 1,922
vocational school district created under section 3311.16 of the 1,923
Revised Code, and includes a cooperative education school 1,925
district created under section 3311.52 or 3311.521 of the Revised 1,926
Code and a county school financing district created under section 1,927
3311.50 of the Revised Code. 1,928
(3) "Local taxing unit" means a subdivision or taxing 1,930
44
unit, as defined in section 5705.01 of the Revised Code, a park 1,931
district created under Chapter 1545. of the Revised Code, or a 1,933
township park district established under section 511.23 of the
Revised Code, but excludes school districts and joint vocational 1,936
school districts.
(4) "State education aid" means the sum of the state basic 1,938
aid and state special education aid amounts computed for a school 1,939
district under divisions (A) and (C) of section 3317.022 of the 1,940
Revised Code. 1,942
(5) "State education aid offset" means the amount 1,944
certified for each school district under division (A)(1) of 1,945
section 5727.85 of the Revised Code. 1,946
(6) "Adjusted total taxable value" has the same meaning as 1,948
in section 3317.02 of the Revised Code. 1,949
(7) "ELECTRIC COMPANY TAX VALUE LOSS" MEANS THE AMOUNT 1,951
DETERMINED UNDER DIVISION (D) OF THIS SECTION. 1,952
(8) "NATURAL GAS COMPANY TAX VALUE LOSS" MEANS THE AMOUNT 1,954
DETERMINED UNDER DIVISION (E) OF THIS SECTION. 1,955
(9) "Tax value loss" means the amount determined under 1,957
division (C) of this section SUM OF THE ELECTRIC COMPANY TAX 1,958
VALUE LOSS AND THE NATURAL GAS COMPANY TAX VALUE LOSS. 1,959
(8)(10) "Fixed-rate levy" means any tax levied on property 1,961
other than a fixed-sum levy. 1,963
(9)(11) "Fixed-rate levy loss" means the amount determined 1,965
under division (D)(G) of this section. 1,967
(10)(12) "Fixed-sum levy" means a tax levied on property 1,969
at whatever rate is required to produce a specified amount of tax 1,971
money or to pay debt charges, and includes school district 1,972
emergency levies imposed pursuant to section 5705.194 of the 1,973
Revised Code.
(11)(13) "Fixed-sum levy loss" means the amount determined 1,975
under division (E)(H) of this section. 1,977
(12)(14) "Consumer price index" means the consumer price 1,979
index (all items, all urban consumers) prepared by the bureau of 1,981
45
labor statistics of the United States department of labor. 1,982
(B) All money arising from the tax imposed by section 1,984
5727.81 of the Revised Code shall be credited as follows: 1,985
(1) Fifty-nine and nine hundred seventy-six 1,987
one-thousandths per cent, plus an amount equal to SEVENTY PER 1,988
CENT OF the TOTAL state education aid offset, shall be credited 1,990
to the general revenue fund.
(2) Two and six hundred forty-six one-thousandths per cent 1,992
shall be credited to the local government fund, for distribution 1,993
in accordance with section 5747.50 of the Revised Code. 1,994
(3) Three hundred seventy-eight one-thousandths per cent 1,996
shall be credited to the local government revenue assistance 1,997
fund, for distribution in accordance with section 5747.61 of the 1,998
Revised Code. 1,999
(4) Twenty-five and nine-tenths per cent, less an amount 2,001
equal to SEVENTY PER CENT OF the TOTAL state education aid 2,002
offset, shall be credited to the school district property tax 2,004
replacement fund, which is hereby created in the state treasury 2,005
for the purpose of making the payments described in section 2,006
5727.85 of the Revised Code.
(5) Eleven and one-tenth per cent shall be credited to the 2,008
local government property tax replacement fund, which is hereby 2,009
created in the state treasury for the purpose of making the 2,010
payments described in section 5727.86 of the Revised Code. 2,011
(6) Beginning in the fiscal year in which payments are 2,013
required to be made under sections 5727.85 and 5727.86 of the 2,014
Revised Code, if the revenue arising from the tax levied by 2,015
section 5727.81 of the Revised Code is less than five hundred 2,017
fifty-two million dollars, the amount credited to the general 2,018
revenue fund under division (B)(1) of this section shall be 2,019
reduced by the amount necessary to credit to each of the funds in 2,020
divisions (B)(2), (3), (4), and (5) of this section the amount it 2,021
would have received if the tax did raise five hundred fifty-two 2,022
million dollars for that fiscal year. The tax commissioner shall 2,023
46
certify to the director of budget and management the amounts that 2,024
shall be credited under this division.
(C) ALL MONEY ARISING FROM THE TAX IMPOSED BY SECTION 2,027
5727.811 OF THE REVISED CODE SHALL BE CREDITED AS FOLLOWS: 2,028
(1) SEVENTY PER CENT, LESS AN AMOUNT EQUAL TO THIRTY PER 2,030
CENT OF THE TOTAL STATE EDUCATION AID OFFSET, SHALL BE CREDITED 2,031
TO THE SCHOOL DISTRICT PROPERTY TAX REPLACEMENT FUND FOR THE 2,032
PURPOSE OF MAKING THE PAYMENTS DESCRIBED IN SECTION 5727.85 OF 2,033
THE REVISED CODE. 2,034
(2) THIRTY PER CENT SHALL BE CREDITED TO THE LOCAL 2,036
GOVERNMENT PROPERTY TAX REPLACEMENT FUND FOR THE PURPOSE OF 2,037
MAKING THE PAYMENTS DESCRIBED IN SECTION 5727.86 OF THE REVISED 2,038
CODE.
(3) AN AMOUNT EQUAL TO THIRTY PER CENT OF THE TOTAL STATE 2,040
EDUCATION AID OFFSET SHALL BE CREDITED TO THE GENERAL REVENUE 2,041
FUND.
(4) BEGINNING IN THE FISCAL YEAR IN WHICH PAYMENTS ARE 2,043
REQUIRED TO BE MADE UNDER SECTIONS 5727.85 AND 5727.86 OF THE 2,044
REVISED CODE, IF THE REVENUE ARISING FROM THE TAX LEVIED BY 2,046
SECTION 5727.811 OF THE REVISED CODE IS LESS THAN NINETY MILLION 2,047
DOLLARS, THE AMOUNT CREDITED TO THE GENERAL REVENUE FUND UNDER 2,048
DIVISION (C)(3) OF THIS SECTION SHALL BE REDUCED BY THE AMOUNT 2,049
NECESSARY TO CREDIT TO EACH OF THE FUNDS IN DIVISIONS (C)(1) AND 2,051
(2) OF THIS SECTION THE AMOUNT THAT IT WOULD HAVE RECEIVED IF THE 2,052
TAX DID RAISE NINETY MILLION DOLLARS FOR THAT FISCAL YEAR. THE 2,053
TAX COMMISSIONER SHALL CERTIFY TO THE DIRECTOR OF BUDGET AND 2,054
MANAGEMENT THE AMOUNTS THAT SHALL BE CREDITED UNDER THIS 2,055
DIVISION.
(D) Not later than January 1, 2002, the tax commissioner 2,058
shall determine for each taxing district its ELECTRIC COMPANY tax 2,059
value loss, which is the sum of the amounts described in 2,061
divisions (C)(D)(1) and (2) of this section: 2,062
(1) The difference obtained by subtracting the amount 2,064
described in division (C)(D)(1)(b) from the amount described in 2,065
47
division (C)(D)(1)(a) of this section. 2,066
(a) The value of electric company and rural electric 2,068
company tangible personal property as assessed by the tax 2,069
commissioner for tax year 1998 on a preliminary assessment, or an 2,071
amended preliminary assessment if issued prior to March 1, 1999, 2,072
and as apportioned to the taxing district for tax year 1998; 2,073
(b) The value of electric company and rural electric 2,075
company tangible personal property as assessed by the tax 2,076
commissioner for tax year 1998 had the property been apportioned 2,077
to the taxing district for tax year 2001, and assessed at the 2,078
rates in effect for tax year 2001. 2,079
(2) The difference obtained by subtracting the amount 2,081
described in division (C)(D)(2)(b) from the amount described in 2,082
division (C)(D)(2)(a) of this section. 2,083
(a) The three-year average for tax years 1996, 1997, and 2,085
1998 of the assessed value from nuclear fuel materials and 2,086
assemblies assessed against a person under Chapter 5711. of the 2,087
Revised Code from the leasing of them to an electric company for 2,088
those respective tax years, as reflected in the preliminary 2,089
assessments;
(b) The three-year average assessed value from nuclear 2,091
fuel materials and assemblies assessed under division 2,092
(C)(D)(2)(a) of this section for tax years 1996, 1997, and 1998, 2,094
as reflected in the preliminary assessments, using an assessment 2,095
rate of twenty-five per cent. 2,096
(E) NOT LATER THAN JANUARY 1, 2002, THE TAX COMMISSIONER 2,098
SHALL DETERMINE FOR EACH TAXING DISTRICT ITS NATURAL GAS COMPANY 2,099
TAX VALUE LOSS, WHICH IS THE SUM OF THE AMOUNTS DESCRIBED IN 2,101
DIVISIONS (E)(1) AND (2) OF THIS SECTION: 2,102
(1) THE DIFFERENCE OBTAINED BY SUBTRACTING THE AMOUNT 2,104
DESCRIBED IN DIVISION (E)(1)(b) FROM THE AMOUNT DESCRIBED IN 2,105
DIVISION (E)(1)(a) OF THIS SECTION. 2,107
(a) THE VALUE OF ALL NATURAL GAS COMPANY TANGIBLE PERSONAL 2,109
PROPERTY, OTHER THAN PROPERTY DESCRIBED IN DIVISION (E)(2) OF 2,110
48
THIS SECTION, AS ASSESSED BY THE TAX COMMISSIONER FOR TAX YEAR 2,111
1999 ON A PRELIMINARY ASSESSMENT, OR AN AMENDED PRELIMINARY 2,113
ASSESSMENT IF ISSUED PRIOR TO MARCH 1, 2000, AND APPORTIONED TO 2,114
THE TAXING DISTRICT FOR TAX YEAR 1999;
(b) THE VALUE OF ALL NATURAL GAS COMPANY TANGIBLE PERSONAL 2,116
PROPERTY, OTHER THAN PROPERTY DESCRIBED IN DIVISION (E)(2) OF 2,117
THIS SECTION, AS ASSESSED BY THE TAX COMMISSIONER FOR TAX YEAR 2,118
1999 HAD THE PROPERTY BEEN APPORTIONED TO THE TAXING DISTRICT FOR 2,119
TAX YEAR 2001, AND ASSESSED AT THE RATES IN EFFECT FOR TAX YEAR 2,120
2001.
(2) THE DIFFERENCE IN THE VALUE OF CURRENT GAS OBTAINED BY 2,122
SUBTRACTING THE AMOUNT DESCRIBED IN DIVISION (E)(2)(b) FROM THE 2,124
AMOUNT DESCRIBED IN DIVISION (E)(2)(a) OF THIS SECTION. 2,126
(a) THE THREE-YEAR AVERAGE ASSESSED VALUE OF CURRENT GAS 2,128
AS ASSESSED BY THE TAX COMMISSIONER FOR TAX YEARS 1997, 1998, AND 2,129
1999 ON A PRELIMINARY ASSESSMENT, OR AN AMENDED PRELIMINARY 2,131
ASSESSMENT IF ISSUED PRIOR TO MARCH 1, 2001, AND AS APPORTIONED 2,132
IN THE TAXING DISTRICT FOR THOSE RESPECTIVE YEARS;
(b) THE THREE-YEAR AVERAGE ASSESSED VALUE FROM CURRENT GAS 2,134
UNDER DIVISION (E)(2)(a) OF THIS SECTION FOR TAX YEARS 1997, 2,136
1998, AND 1999, AS REFLECTED IN THE PRELIMINARY ASSESSMENT, USING 2,137
AN ASSESSMENT RATE OF TWENTY-FIVE PER CENT. 2,138
(F) The tax commissioner may request that NATURAL GAS 2,141
COMPANIES, electric companies, and rural electric companies file 2,143
a report to help determine the tax value loss under division (C) 2,144
DIVISIONS (D) AND (E) of this section. The report shall be filed 2,145
within thirty days of the commissioner's request. A company that 2,146
fails to file the report or does not timely file the report is 2,148
subject to the penalty in section 5727.60 of the Revised Code. 2,149
The tax commissioner shall certify to the department of 2,151
education the tax value loss determined under this division for 2,152
each school district and joint vocational school district. 2,153
(D)(G) Not later than January 1, 2002, the tax 2,155
commissioner shall determine for each school district, joint 2,157
49
vocational school district, and local taxing unit its fixed-rate 2,158
levy loss, which is THE SUM OF its ELECTRIC COMPANY tax value 2,159
loss multiplied by the tax rate in effect in tax year 1998 for 2,161
fixed-rate levies AND ITS NATURAL GAS COMPANY TAX VALUE LOSS 2,162
MULTIPLIED BY THE TAX RATE IN EFFECT IN TAX YEAR 1999 FOR 2,163
FIXED-RATE LEVIES.
(E)(H) Not later than January 1, 2002, the tax 2,165
commissioner shall determine for each school district, joint 2,167
vocational school district, and local taxing unit its fixed-sum 2,168
levy loss, which is the amount obtained by subtracting the amount 2,169
described in division (E)(H)(2) of this section from the amount 2,170
described in division (E)(H)(1) of this section: 2,172
(1) The SUM OF THE ELECTRIC COMPANY tax value loss 2,174
multiplied by the tax rate in effect in tax year 1998, AND THE 2,176
NATURAL GAS COMPANY TAX VALUE LOSS MULTIPLIED BY THE TAX RATE IN 2,177
EFFECT IN TAX YEAR 1999, for fixed-sum levies for all taxing 2,178
districts within each school district, joint vocational school 2,179
district, and local taxing unit. For the years 2002 through 2,180
2006, this computation shall include school district emergency 2,181
levies that existed in 1998 IN THE CASE OF THE ELECTRIC COMPANY 2,183
TAX VALUE LOSS, AND 1999 IN THE CASE OF THE NATURAL GAS COMPANY 2,184
TAX VALUE LOSS, and all other fixed-sum levies that existed in 2,185
1998 IN THE CASE OF THE ELECTRIC COMPANY TAX VALUE LOSS AND 1999 2,186
IN THE CASE OF THE NATURAL GAS COMPANY TAX VALUE LOSS and 2,188
continue to be charged in the tax year preceding the distribution 2,189
year. For the years 2007 through 2016 in the case of school 2,190
district emergency levies, and for all years after 2006 in the 2,191
case of all other fixed-sum levies, this computation shall 2,192
exclude all fixed-sum levies that existed in 1998 IN THE CASE OF 2,194
THE ELECTRIC COMPANY TAX VALUE LOSS AND 1999 IN THE CASE OF THE 2,195
NATURAL GAS COMPANY TAX VALUE LOSS, but are no longer in effect 2,196
in the tax year preceding the distribution year. For the 2,197
purposes of this section, an emergency levy that existed in 1998 2,198
IN THE CASE OF THE ELECTRIC COMPANY TAX VALUE LOSS, AND 1999 IN 2,199
50
THE CASE OF THE NATURAL GAS COMPANY TAX VALUE LOSS, continues to 2,200
exist in a year beginning on or after January 1, 2007, but before 2,201
January 1, 2017, if, in that year, the board of education levies 2,202
a school district emergency levy for an annual sum at least equal 2,203
to the annual sum levied by the board in tax year 1998 OR 1999, 2,204
RESPECTIVELY, less the amount of the payment certified under this 2,206
division for 2002.
(2) The total taxable value in tax year 1998 IN THE CASE 2,208
OF THE ELECTRIC COMPANY TAX VALUE LOSS AND 1999 IN THE CASE OF 2,209
THE NATURAL GAS COMPANY TAX VALUE LOSS in each school district, 2,211
joint vocational school district, and local taxing unit
multiplied by one-fourth of one mill. 2,212
If the computation AMOUNT COMPUTED under division (E)(H) of 2,215
this section for any school district, joint vocational school 2,216
district, or local taxing unit is greater than zero, the 2,217
one-fourth of one mill that is subtracted AMOUNT SHALL EQUAL THE 2,218
FIXED-SUM LEVY LOSS REIMBURSED pursuant to division (E) of 2,219
section 5727.85 of the Revised Code or division (A)(2) of section 2,221
5727.86 of the Revised Code, AND THE ONE-FOURTH OF ONE MILL THAT 2,222
IS SUBTRACTED UNDER DIVISION (H)(2) OF THIS SECTION shall be 2,223
apportioned among all contributing fixed-sum levies in the 2,225
proportion of each levy to the sum of all fixed-sum levies within 2,226
each school district, joint vocational school district, or local 2,227
taxing unit.
(F)(I) Notwithstanding divisions (C), (D), and (E), (G), 2,230
AND (H) of this section, in computing the tax value loss, 2,231
fixed-rate levy loss, and fixed-sum levy loss, the tax 2,232
commissioner shall use the greater of the 1998 tax rate or the 2,233
1999 tax rate IN THE CASE OF LEVY LOSSES ASSOCIATED WITH THE 2,234
ELECTRIC COMPANY TAX VALUE LOSS, but the 1999 tax rate shall not 2,235
include for this purpose any tax levy approved by the voters 2,236
after June 30, 1999, AND THE TAX COMMISSIONER SHALL USE THE 2,237
GREATER OF THE 1999 OR THE 2000 TAX RATE IN THE CASE OF LEVY 2,238
LOSSES ASSOCIATED WITH THE NATURAL GAS COMPANY TAX VALUE LOSS, 2,239
51
BUT THE 2000 TAX RATE SHALL NOT INCLUDE FOR THIS PURPOSE ANY TAX 2,240
LEVY APPROVED BY THE VOTERS AFTER NOVEMBER 7, 2000. 2,242
(J) NOT LATER THAN JANUARY 1, 2002, THE TAX COMMISSIONER 2,244
SHALL CERTIFY TO THE DEPARTMENT OF EDUCATION THE TAX VALUE LOSS 2,245
DETERMINED UNDER DIVISIONS (D) AND (E) OF THIS SECTION FOR EACH 2,246
TAXING DISTRICT. 2,247
Sec. 5727.85. (A) By the thirty-first day of July of each 2,257
year, beginning in 2002 and ending in 2016, the department of 2,258
education shall determine the following for each school district 2,259
eligible for payment under division (C) of this section: 2,260
(1) The state education aid offset, which is the 2,262
difference obtained by subtracting the amount described in 2,263
division (A)(1)(b) of this section from the amount described in 2,265
division (A)(1)(a) of this section: 2,267
(a) The state education aid computed for the school 2,269
district for the current fiscal year on the basis of the adjusted 2,270
total taxable value; 2,271
(b) The state education aid that would be computed for the 2,273
school district for the current fiscal year if the district's 2,274
adjusted total taxable value included the tax value loss for all 2,275
taxing districts in the school district.
(2) The difference obtained by subtracting the state 2,277
education aid offset determined under division (A)(1) of this 2,278
section from the fixed-rate levy loss determined under division 2,279
(D)(G) of section 5727.84 of the Revised Code for all taxing 2,281
districts in each school district. The department of education 2,282
shall certify the amount so determined to the director of budget 2,283
and management.
(B) Not later than the thirty-first day of October of the 2,286
years 2006 through 2016, the department of education shall 2,287
determine all of the following for each school district: 2,288
(1) The amount obtained by subtracting the district's 2,290
state education aid computed for fiscal year 2002 from the 2,291
district's state education aid computed for the current fiscal 2,292
52
year;
(2) The inflation-adjusted property tax loss. The 2,294
inflation-adjusted property tax loss equals the fixed-rate levy 2,295
loss determined under division (D)(G) of section 5727.84 of the 2,297
Revised Code for all taxing districts in each school district 2,298
plus the product obtained by multiplying that loss by the 2,299
cumulative percentage increase in the consumer price index from 2,300
January 1, 2002, to the thirtieth day of June of the current 2,301
year.
(3) The difference obtained by subtracting the amount 2,303
computed under division (B)(1) from the amount of the 2,304
inflation-adjusted property tax loss. If this difference is zero 2,305
or a negative number, no further payments shall be made under 2,306
division (C) of this section to the school district from the 2,307
school district property tax replacement fund. If the difference 2,309
is greater than zero, the department of education shall certify
the amount calculated in division (A)(2) of this section to the 2,311
director of budget and management not later than the thirty-first 2,312
day of December of each year, beginning in 2006 and ending in 2,314
2016.
(C) For all taxing districts in each school district, the 2,316
director of budget and management shall pay from the school 2,317
district property tax replacement fund to the county undivided 2,318
income tax fund in the proper county treasury all of the 2,319
following: 2,320
(1) In February 2002, one-half of the fixed-rate levy loss 2,322
certified under division (D)(G) of section 5727.84 of the Revised 2,324
Code on or before the day prescribed for the settlement under 2,326
division (A) of section 321.24 of the Revised Code. 2,327
(2) From August 2002 through August 2006, one-half of the 2,330
amount certified for that fiscal year under division (A)(2) of 2,331
this section on or before each of the days prescribed for the 2,332
settlements under divisions (A) and (C) of section 321.24 of the 2,333
Revised Code. 2,334
53
(3) From February 2007 through August 2016, one-half of 2,336
the amount certified for that calendar year under division (B)(3) 2,338
of this section on or before each of the days prescribed for the 2,339
settlements under divisions (A) and (C) of section 321.24 of the 2,340
Revised Code. 2,341
The county treasurer shall distribute amounts paid under 2,343
divisions (C)(1), (2), and (3) of this section to the proper 2,344
school district as if they had been levied and collected as 2,345
taxes, and the school district shall apportion the amounts so 2,346
received among its funds in the same proportions as if those 2,347
amounts had been levied and collected as taxes. 2,348
(D) Not later than January 1, 2002, for all taxing 2,350
districts in each joint vocational school district, the tax 2,352
commissioner shall certify to the director of budget and 2,353
management the fixed-rate levy loss determined under division 2,355
(D)(G) of section 5727.84 of the Revised Code. From February 2,357
2002 to August 2016, the director shall pay from the school 2,358
district property tax replacement fund to the county undivided 2,359
income tax fund in the proper county treasury, one-half of the 2,360
fixed-rate levy loss so certified for each year on or before each 2,361
of the days prescribed for the settlements under divisions (A) 2,362
and (C) of section 321.24 of the Revised Code. The county 2,364
treasurer shall distribute such amounts to the proper joint
vocational school district as if they had been levied and
collected as taxes, and the joint vocational school district
shall apportion the amounts so received among its funds in the 2,365
same proportions as if those amounts had been levied and 2,366
collected as taxes. 2,367
(E)(1) Not later than January 1, 2002, for each fixed-sum 2,369
levy levied by each school district or joint vocational school 2,371
district and for each year for which a certification 2,372
DETERMINATION is made under division (E)(H) of section 5727.84 of 2,374
the Revised Code THAT A FIXED-SUM LEVY LOSS IS TO BE REIMBURSED,
the tax commissioner shall certify to the director of budget and 2,376
54
management the fixed-sum levy loss determined under that 2,378
division. The certification shall cover a time period sufficient 2,379
to include all fixed-sum levies in effect in 1998 to June 30, 2,380
1999, for which the tax commissioner made such a determination. 2,382
The director shall pay from the school district property tax 2,383
replacement fund to the county undivided income tax fund in the 2,384
proper county treasury one-half of the fixed-sum levy loss so 2,385
certified for each year on or before each of the days prescribed 2,386
for the settlements under divisions (A) and (C) of section 321.24 2,387
of the Revised Code. The county treasurer shall distribute the 2,388
amounts to the proper school district or joint vocational school 2,389
district as if they had been levied and collected as taxes, and 2,390
the district shall apportion the amounts so received among its 2,391
funds in the same proportions as if those amounts had been levied 2,392
and collected as taxes. No payments shall be made under this 2,393
division once all fixed-sum levies in effect in 1998 to June 30, 2,394
1999, are no longer in effect. 2,395
(2) Beginning in 2003, by the thirty-first day of January 2,398
of each year, the tax commissioner shall review the certification 2,399
originally made under division (E)(1) of this section. If the 2,400
commissioner determines that a fixed-sum levy that had been 2,401
scheduled to be reimbursed in the current year has expired, a 2,403
revised certification for that and all subsequent years shall be 2,404
made to the director of budget and management. 2,405
(F) By August 5, 2002, the tax commissioner shall estimate 2,408
the amount of money in the school district property tax 2,409
replacement fund in excess of the amount necessary to make 2,410
payments in that month under divisions (C), (D), and (E) of this 2,411
section. Notwithstanding division (C) of this section, the 2,412
department of education, in consultation with the tax 2,413
commissioner and from those excess funds, may pay any school 2,415
district four and one-half times the amount certified under
division (A)(2) of this section. Payments shall be made in order 2,416
from the smallest annual loss to the largest annual loss. A 2,417
55
payment made under this division shall be in lieu of the payment 2,419
to be made in August 2002 under division (C)(2) of this section. 2,420
No payments shall be made in the manner established in this 2,421
division to any school district with annual losses from permanent 2,422
improvement fixed-rate levies in excess of twenty thousand 2,423
dollars, or annual losses from any other fixed-rate levies in 2,424
excess of twenty thousand dollars. A school district receiving a 2,425
payment under this division is no longer entitled to any further 2,426
payments under division (C) of this section. 2,427
(G) On the thirty-first day of July of 2003, 2004, 2005, 2,429
and 2006, and on the thirty-first day of January and July of 2007 2,431
and each year thereafter, if the amount credited to the school 2,432
district property tax replacement fund exceeds the amount needed 2,433
to make payments from the fund under divisions (C), (D), and (E) 2,434
of this section in the following month, the director of budget 2,436
and management shall distribute the excess among school districts 2,438
and joint vocational school districts. The amount distributed to 2,441
each district shall bear the same proportion to the excess 2,442
remaining in the fund as the ADM of the district bears to the ADM 2,443
of all of the districts. For the purpose of this division, "ADM" 2,444
means the formula ADM in the case of a school district, and the 2,446
average daily membership reported under section 3317.03 of the 2,448
Revised Code in the case of a joint vocational school district. 2,449
If, in the opinion of the director of budget and 2,451
management, the excess remaining in the school district property 2,452
tax replacement fund in any year is not sufficient to warrant 2,453
distribution under this division, the excess shall remain to the 2,454
credit of the fund.
Amounts received by a school district or joint vocational 2,456
school district under this division shall be used exclusively for 2,457
capital improvements. 2,458
(H) If the total amount in the school district property 2,460
tax replacement fund is insufficient to make all payments under 2,461
divisions (C), (D), and (E) of this section, the payments 2,462
56
required under division (E) of this section shall be made first 2,463
in their entirety. After all payments are made under division 2,464
(E) of this section, payments under divisions (C) and (D) of this 2,465
section shall be made from the balance of money available in the 2,466
proportion of each school district's or joint vocational school 2,467
district's payment amount to the total amount of payments under 2,468
divisions (C) and (D) of this section. 2,469
(I) If all or a part of the territory of a school district 2,471
or joint vocational school district is merged with or transferred 2,472
to another district, the tax commissioner shall adjust the 2,473
payments made under this section to each of the districts in 2,474
proportion to the tax value loss apportioned to the merged or 2,475
transferred territory. 2,476
(J) There is hereby created the electric PUBLIC UTILITY 2,478
property tax study committee, effective January 1, 2011. The 2,480
committee shall consist of the following seven members: the tax 2,481
commissioner, three members of the senate appointed by the 2,482
president of the senate, and three members of the house of 2,483
representatives appointed by the speaker of the house of 2,484
representatives. The appointments shall be made not later than 2,485
January 31, 2011. The tax commissioner shall be the chairperson 2,486
of the committee.
The committee shall study the extent to which each school 2,488
district or joint vocational school district has been 2,489
compensated, under sections 5727.84 and 5727.85 of the Revised 2,490
Code as enacted by Substitute Senate Bill No. 3 of the 123rd 2,491
general assembly and any subsequent acts, for the property tax 2,492
loss caused by the reduction in the assessment rates for NATURAL 2,493
GAS, electric, and rural electric company tangible personal 2,495
property. Not later than June 30, 2011, the committee shall 2,496
issue a report of its findings, including any recommendations for 2,497
providing additional compensation for the property tax loss or 2,498
regarding remedial legislation, to the president of the senate 2,499
and the speaker of the house of representatives, at which time 2,500
57
the committee shall cease to exist.
The department of taxation and department of education 2,502
shall provide such information and assistance as is required for 2,503
the committee to carry out its duties. 2,504
Sec. 5727.86. (A) Not later than January 1, 2002, the tax 2,513
commissioner shall certify to the director of budget and 2,514
management, for all taxing districts in each local taxing unit, 2,515
the fixed-rate levy loss determined under division (D)(G), and 2,516
the fixed-sum levy loss determined under division (E)(H), of 2,518
section 5727.84 of the Revised Code. Based on that 2,520
certification, the director shall compute the payments to be made 2,521
to each local taxing unit for each year according to divisions 2,522
(A)(1), (2), and (3) and division (E) of this section, and shall 2,523
distribute the payments in the manner prescribed by division (C) 2,524
of this section. The certification of the fixed-sum levy loss 2,525
shall cover a period of time PERIOD sufficient to include all 2,526
fixed-sum levies in effect in 1998 to June 30, 1999, until they 2,528
are no longer in effect FOR WHICH THE TAX COMMISSIONER 2,529
DETERMINED, PURSUANT TO DIVISION (H) OF SECTION 5727.84 OF THE 2,530
REVISED CODE, THAT A FIXED-SUM LEVY LOSS IS TO BE REIMBURSED. 2,531
(1) Except as provided in division (A)(3) of this section, 2,533
for fixed-rate levy losses determined under division (D)(G) of 2,534
section 5727.84 of the Revised Code, payments shall be made in 2,536
each of the following years at the following percentage of the 2,537
fixed-rate levy loss certified under division (A) of this 2,538
section:
YEAR PERCENTAGE 2,540
2002 100% 2,542
2003 100% 2,543
2004 100% 2,544
2005 100% 2,545
2006 100% 2,546
2007 80% 2,547
2008 80% 2,548
58
2009 80% 2,549
2010 80% 2,550
2011 80% 2,551
2012 66.7% 2,552
2013 53.4% 2,553
2014 40.1% 2,554
2015 26.8% 2,555
2016 13.5% 2,556
2017 and thereafter 0% 2,557
(2) For fixed-sum levy losses determined under division 2,560
(E)(H) of section 5727.84 of the Revised Code, PAYMENTS SHALL BE 2,562
MADE IN THE AMOUNT OF one hundred per cent of the fixed-sum levy 2,564
loss certified under division (A) of this section for payments 2,565
required to be made in 2002 and thereafter.
(3) A local taxing unit in a county of less than two 2,567
hundred fifty square miles that receives eighty per cent or more 2,568
of its combined general fund and bond retirement fund revenues 2,569
from property taxes and rollbacks based on 1997 actual revenues 2,570
as presented in its 1999 tax budget, and in which electric 2,571
companies and rural electric companies comprise over twenty per 2,572
cent of its property valuation, shall receive one hundred per 2,573
cent of its fixed-rate levy losses FROM ELECTRIC COMPANY TAX 2,574
VALUE LOSSES certified under division (A) of this section in 2,576
years 2002 to 2016.
(B) Beginning in 2003, by the thirty-first day of January 2,578
of each year, the tax commissioner shall review the certification 2,579
originally made under division (A) of this section of the 2,580
fixed-sum levy loss determined under division (E)(H) of section 2,582
5727.84 of the Revised Code. If the commissioner determines that 2,583
a fixed-sum levy that had been scheduled to be reimbursed in the 2,584
current year has expired, a revised certification for that and 2,585
all subsequent years shall be made. 2,586
(C) Payments to local taxing units required to be made 2,588
under divisions (A) and (E) of this section shall be paid from 2,589
59
the local government property tax replacement fund to the county 2,590
undivided income tax fund in the proper county treasury. 2,591
One-half of the amount certified under those divisions shall be 2,592
paid on or before each of the days prescribed for the settlements 2,593
under divisions (A) and (C) of section 321.24 of the Revised 2,594
Code. The county treasurer shall distribute amounts paid under 2,595
division (A) of this section to the proper local taxing unit as 2,596
if they had been levied and collected as taxes, and the local 2,597
taxing unit shall apportion the amounts so received among its 2,598
funds in the same proportions as if those amounts had been levied 2,599
and collected as taxes. Amounts distributed under division (E) 2,600
of this section shall be credited to the general fund of the 2,601
local taxing unit that receives them.
(D) By February 5, 2002, the tax commissioner shall 2,603
estimate the amount of money in the local government property tax 2,604
replacement fund in excess of the amount necessary to make 2,605
payments in that month under division (C) of this section. 2,606
Notwithstanding division (A) of this section, the tax 2,607
commissioner may pay any local taxing unit, from those excess 2,608
funds, nine and four-tenths times the amount computed for 2002 2,609
under division (A)(1) of this section. A payment made under this 2,610
division shall be in lieu of the payment to be made in February 2,611
2002 under division (A)(1) of this section. A local taxing unit 2,612
receiving a payment under this division will no longer be 2,613
entitled to any further payments under division (A)(1) of this 2,614
section. A PAYMENT MADE UNDER THIS DIVISION SHALL BE PAID FROM 2,615
THE LOCAL GOVERNMENT PROPERTY TAX REPLACEMENT FUND TO THE COUNTY 2,616
UNDIVIDED INCOME TAX FUND IN THE PROPER COUNTY TREASURY. THE 2,617
COUNTY TREASURER SHALL DISTRIBUTE THE PAYMENT TO THE PROPER LOCAL 2,618
TAXING UNIT AS IF IT HAD BEEN LEVIED AND COLLECTED AS TAXES, AND 2,619
THE LOCAL TAXING UNIT SHALL APPORTION THE AMOUNTS SO RECEIVED 2,620
AMONG ITS FUNDS IN THE SAME PROPORTIONS AS IF THOSE AMOUNTS HAD 2,621
BEEN LEVIED AND COLLECTED AS TAXES. 2,622
(E) On the thirty-first day of July of 2002, 2003, 2004, 2,624
60
2005, and 2006, and on the thirty-first day of January and July 2,625
of 2007 and each year thereafter, if the amount credited to the 2,626
local government property tax replacement fund exceeds the amount 2,627
needed to be distributed from the fund under division (A) of this 2,628
section in the following month, the director of budget and 2,629
management shall distribute the excess to each county as follows: 2,630
(1) One-half shall be distributed to each county in 2,632
proportion to each county's population. 2,633
(2) One-half shall be distributed to each county in the 2,635
proportion that the amounts determined under divisions (D)(G) and 2,637
(E)(H) of section 5727.84 of the Revised Code for all LOCAL 2,638
taxing districts UNITS in the county is of the total amounts so 2,640
determined for all LOCAL taxing districts UNITS in the state. 2,641
The amounts distributed to each county under this division 2,643
shall be distributed by the county budget commission to each 2,644
local taxing unit in the county in the proportion that the unit's 2,645
current taxes charged and payable are of the total current taxes 2,646
charged and payable of all the local taxing units in the county. 2,647
As used in this division, "current taxes charged and payable" 2,648
means the taxes charged and payable as most recently determined 2,649
for local taxing units in the county. 2,650
If, in the opinion of the director of budget and 2,652
management, the excess remaining in the local government property 2,653
tax replacement fund in any year is not sufficient to warrant 2,654
distribution under this division, the excess shall remain to the 2,655
credit of the fund.
(F) If the total amount in the local government property 2,657
tax replacement fund is insufficient to make all payments under 2,658
division (C) of this section, the payments required under 2,659
division (A)(2) of this section shall be made first in their 2,660
entirety. After all such payments are made, payments under 2,661
divisions (A)(1) and (3) of this section shall be made from the 2,662
balance of money available in the proportion of each local taxing 2,663
unit's payment amount to the total amount of all payments to be 2,664
61
made under divisions (A)(1) and (3) of this section. 2,665
(G) If all or a part of the territories of two or more 2,667
local taxing units are merged, or unincorporated territory of a 2,668
township is annexed by a municipal corporation, the tax 2,669
commissioner shall adjust the payments made under this section to 2,670
each of the local taxing units in proportion to the tax value 2,671
loss apportioned to the merged or annexed territory, or as 2,672
otherwise provided by a written agreement between the legislative 2,673
authorities of the local taxing units certified to the tax 2,674
commissioner not later than the first day of June of the calendar 2,675
year in which the payment is to be made. 2,676
Sec. 5727.87. (A) As used in this section: 2,685
(1) "Administrative fees" means the dollar percentages 2,687
allowed by the county auditor for services or by the county 2,688
treasurer as fees, or paid to the credit of the real estate 2,689
assessment fund, under divisions (A) and (B) of section 319.54 2,690
and division (A) of section 321.26 of the Revised Code. 2,691
(2) "Administrative fee loss" means a county's loss of 2,693
administrative fees due to its tax value loss, determined as 2,694
follows: 2,695
(a) For purposes of the determination made under division 2,697
(B) of this section in the years 2002 through 2006, the 2,698
administrative fee loss shall be computed by multiplying the 2,699
amounts determined for all taxing districts in the county under 2,700
divisions (D)(G) and (E)(H) of section 5727.84 of the Revised 2,702
Code by nine thousand six hundred fifty-nine ten-thousandths of a 2,703
per cent, if total taxes collected in the county in tax year 1998 2,704
exceeded one hundred fifty million dollars, or one and one 2,705
thousand one hundred fifty-nine ten-thousandths of a per cent, if 2,706
total taxes collected in the county in tax year 1998 were one 2,707
hundred fifty million dollars or less; 2,708
(b) For purposes of the determination under division (B) 2,710
of this section in the years 2007 through 2011, the 2,711
administrative fee loss shall be determined by subtracting from 2,712
62
the dollar amount of administrative fees collected in the county 2,713
in tax year 1998, the dollar amount of administrative fees 2,714
collected in the county in the current calendar year. 2,715
(B) Not later than the first day of June of 2002 through 2,717
2011, the county auditor shall determine the administrative fee 2,718
loss for the county and certify it to the county budget 2,719
commission. Notwithstanding divisions (C), (D), and (E) of 2,720
section 5727.85 and division (C) of section 5727.86 of the 2,721
Revised Code, prior to distribution by the county treasurer of 2,722
the payments provided under those divisions, the county budget 2,723
commission shall deduct from those payments the amount of the 2,724
administrative fee loss certified by the county auditor, as 2,725
follows:
(1) Seventy per cent of the administrative fee loss shall 2,727
be deducted from the payments provided under divisions (C), (D), 2,728
and (E) of section 5727.85 of the Revised Code. 2,729
(2) Thirty per cent of the administrative fee loss shall 2,731
be deducted from the payments provided under division (C) of 2,732
section 5727.86 of the Revised Code. 2,733
(C) On or before each of the days prescribed for the 2,735
settlements under divisions (A) and (C) of section 321.24 of the 2,736
Revised Code in the years 2002 through 2011, the county budget 2,737
commission shall pay one-half of the amount of the administrative 2,738
fee loss to the county auditor, county treasurer, or real estate 2,739
assessment fund as if the amount had been allowed as 2,740
administrative fees, and shall deposit the amount in the same 2,741
funds as if allowed as administrative fees. 2,742
After payment of the administrative fee loss on or before 2,744
August 10, 2011, all payments under this section shall cease. 2,745
Sec. 5727.88. The tax commissioner shall administer 2,754
sections 5727.80 to 5727.95 of the Revised Code and may adopt 2,757
such rules as are necessary to administer those sections. Upon 2,759
request of the tax commissioner, the public utilities commission
shall assist the tax commissioner by providing information 2,760
63
regarding any NATURAL GAS DISTRIBUTION COMPANY OR electric 2,761
distribution company that is subject to regulation by the 2,763
commission.
Sec. 5727.89. (A) The tax commissioner may make an 2,773
assessment, based on any information in the commissioner's
possession, against any NATURAL GAS DISTRIBUTION COMPANY, 2,774
electric distribution company, self-assessing purchaser, or 2,776
qualified end user that fails to file a return or pay any tax, 2,778
interest, or additional charge as required by sections 5727.80 to 2,779
5727.95 of the Revised Code. 2,780
When information in the possession of the tax commissioner 2,782
indicates that a person liable for the tax imposed by section 2,784
5727.81 OR 5727.811 of the Revised Code has not paid the full 2,785
amount of tax due, the commissioner may audit a representative 2,786
sample of the person's business and may issue an assessment based 2,788
on the audit. The commissioner shall give the person assessed 2,789
written notice of the assessment by personal service or certified 2,790
mail.
The tax commissioner may issue an assessment for which the 2,792
tax imposed by section 5727.81 OR 5727.811 of the Revised Code 2,793
was due and unpaid on the date the person was informed by an 2,794
agent of the tax commissioner of an investigation or audit of the 2,795
person. Any payment of the tax for the period covered by the 2,796
assessment, after the person is so informed, shall be credited 2,797
against the assessment. 2,798
A penalty of fifteen per cent may be added to all amounts 2,801
assessed under this section. The commissioner may adopt rules 2,802
providing for the imposition and remission of penalties.
(B) Unless the party assessed files with the tax 2,805
commissioner within sixty days after service of the notice of 2,807
assessment, either personally or by certified mail, a written 2,808
petition for reassessment signed by the party assessed or the 2,809
party's authorized agent having knowledge of the facts, the 2,810
assessment is final and the amount of the assessment is due and 2,811
64
payable from the party assessed to the treasurer of state. The 2,812
petition shall indicate the objections of the party assessed, but 2,813
additional objections may be raised in writing prior to the date 2,814
shown on the final determination of the tax commissioner. The 2,815
commissioner shall grant the petitioner a hearing on the 2,816
petition, unless waived by the petitioner. 2,817
(C) The commissioner may make any correction to the 2,820
assessment that the commissioner finds proper and shall issue a 2,821
final determination thereon. The commissioner shall serve a copy 2,822
of the final determination on the petitioner either by personal 2,823
service or by certified mail as provided in section 5703.37 of 2,824
the Revised Code, and the commissioner's decision in the matter 2,825
is final, subject to appeal under section 5717.02 of the Revised 2,827
Code.
(D) After an assessment becomes final, if any portion of 2,830
the assessment, including accrued interest, remains unpaid, a 2,831
certified copy of the commissioner's entry making the assessment 2,832
final may be filed in the office of the clerk of the court of 2,833
common pleas in the county in which the party assessed resides or 2,834
in which the party's business is conducted. If the party 2,835
assessed maintains no place of business in this state and is not 2,836
a resident of this state, the certified copy of the entry may be 2,838
filed in the office of the clerk of the court of common pleas of 2,839
Franklin county. 2,840
The clerk, immediately upon the filing of the entry, shall 2,842
enter a judgment for the state against the person assessed in the 2,844
amount shown on the entry. The judgment may be filed by the
clerk in a loose-leaf book entitled "special judgments for the 2,845
kilowatt-hour tax DISTRIBUTION EXCISE TAXES," and shall have the 2,846
same effect as other judgments. Execution shall issue upon the 2,848
judgment at the request of the tax commissioner, and all laws 2,849
applicable to sales on execution shall apply to sales made under 2,850
the judgment.
The portion of the assessment not paid within sixty days 2,852
65
after the day the assessment was issued shall bear interest at 2,853
the rate per annum prescribed by section 5703.47 of the Revised 2,855
Code from the day the tax commissioner issues the assessment 2,857
until the day the assessment is paid. Interest shall be paid in 2,858
the same manner as the tax and may be collected by the issuance 2,859
of an assessment under this section. 2,860
(E) If the tax commissioner believes that collection of 2,863
the tax imposed by section 5727.81 OR 5727.811 of the Revised 2,864
Code will be jeopardized unless proceedings to collect or secure 2,866
collection of the tax are instituted without delay, the 2,867
commissioner may issue a jeopardy assessment against the electric 2,868
distribution company, self-assessing purchaser, or qualified end 2,869
user PERSON liable for the tax. Upon issuance of the jeopardy 2,871
assessment, the commissioner immediately shall file an entry with 2,872
the clerk of the court of common pleas in the manner prescribed 2,873
by division (D) of this section. Notice of the jeopardy 2,875
assessment shall be served on the party assessed or the party's 2,876
legal representative within five days of the filing of the entry 2,877
with the clerk. The total amount assessed is immediately due and 2,878
payable, unless the party assessed files a petition for 2,879
reassessment in accordance with division (B) of this section and 2,880
provides security in a form satisfactory to the commissioner and 2,881
in an amount sufficient to satisfy the unpaid balance of the 2,882
assessment. Full or partial payment of the assessment does not 2,883
prejudice the commissioner's consideration of the petition for 2,884
reassessment. 2,885
(F) All money collected by the tax commissioner under this 2,888
section shall be paid to the treasurer of state, and when paid 2,889
shall be considered as revenue arising from the tax TAXES imposed 2,890
by section SECTIONS 5727.81 AND 5727.811 of the Revised Code. 2,891
Sec. 5727.90. No assessment of the tax imposed by section 2,900
5727.81 OR 5727.811 of the Revised Code shall be made by the tax 2,902
commissioner more than four years after the date on which the 2,903
return for the period assessed was due or filed, whichever date 2,904
66
is later. This section does not bar an assessment when any of 2,905
the following occur: 2,906
(A) The party assessed failed to file a return as required 2,909
by section 5727.82 of the Revised Code; 2,910
(B) The party assessed knowingly filed a false or 2,913
fraudulent return;
(C) The party assessed and the tax commissioner waived in 2,916
writing the time limitation. 2,917
Sec. 5727.91. (A) The treasurer of state shall refund the 2,927
amount of tax paid under section 5727.81 OR 5727.811 of the 2,928
Revised Code that was paid illegally or erroneously, or paid on 2,930
an illegal or erroneous assessment. An A NATURAL GAS 2,931
DISTRIBUTION COMPANY, AN electric distribution company, or A 2,933
self-assessing purchaser shall file an application for a refund 2,934
with the tax commissioner on a form prescribed by the
commissioner, within four years of the illegal or erroneous 2,935
payment of the tax. 2,936
Upon the filing of the application, the commissioner shall 2,938
determine the amount of refund due and certify that amount to the 2,940
director of budget and management and the treasurer of state for 2,941
payment from the tax refund fund under section 5703.052 of the 2,942
Revised Code. If the application for refund is for taxes paid on 2,943
an illegal or erroneous assessment, the tax commissioner shall 2,944
include in the certified amount interest calculated at the rate 2,945
per annum under section 5703.47 of the Revised Code from the date 2,946
of overpayment to the date of the commissioner's certification. 2,948
(B) If A NATURAL GAS DISTRIBUTION COMPANY OR an electric 2,950
distribution company entitled to a refund of taxes under this 2,951
section is indebted to the state for any tax or fee administered 2,952
by the tax commissioner that is paid to the state or any charge, 2,954
penalty, or interest arising from such a tax or fee, the amount 2,955
refundable may be applied in satisfaction of the debt. If the 2,956
amount refundable is less than the amount of the debt, it may be 2,957
applied in partial satisfaction of the debt. If the amount 2,958
67
refundable is greater than the amount of the debt, the amount 2,959
remaining after satisfaction of the debt shall be refunded. If 2,960
the NATURAL GAS DISTRIBUTION COMPANY OR electric distribution 2,961
company has more than one such debt, any debt subject to section 2,963
5739.33 or division (G) of section 5747.07 of the Revised Code 2,965
shall be satisfied first. This section applies only to debts 2,966
that have become final. 2,967
(C)(1) Any electric distribution company that can 2,970
substantiate to the tax commissioner that the tax imposed by 2,971
section 5727.81 of the Revised Code was paid on electricity 2,972
distributed via wires and consumed at a location outside of this 2,973
state may claim a refund in the manner and within the time period 2,974
prescribed in division (A) of this section. 2,976
(2) ANY NATURAL GAS DISTRIBUTION COMPANY THAT CAN 2,978
SUBSTANTIATE TO THE TAX COMMISSIONER THAT THE TAX IMPOSED BY 2,979
SECTION 5727.811 OF THE REVISED CODE WAS PAID ON NATURAL GAS 2,980
DISTRIBUTED VIA ITS FACILITIES AND CONSUMED AT A LOCATION OUTSIDE
OF THIS STATE MAY CLAIM A REFUND IN THE MANNER AND WITHIN THE 2,981
TIME PERIOD PRESCRIBED IN DIVISION (A) OF THIS SECTION. 2,982
(D) Before a refund is issued under this section, A 2,984
NATURAL GAS COMPANY OR an electric distribution company shall 2,986
certify, as prescribed by the tax commissioner, that it either 2,987
did not include the tax imposed by section 5727.81 of the Revised 2,988
Code IN THE CASE OF AN ELECTRIC DISTRIBUTION COMPANY, OR THE TAX
IMPOSED BY SECTION 5727.811 OF THE REVISED CODE IN THE CASE OF A 2,989
NATURAL GAS DISTRIBUTION COMPANY, in its distribution charge to 2,990
an electric ITS customer upon which a refund of the tax is 2,991
claimed, or it has refunded or credited to the electric customer 2,993
the excess distribution charge related to the tax that was 2,995
erroneously included in the electric customer's distribution 2,996
charge. 2,997
Sec. 5727.92. Every person liable for the tax imposed by 3,007
section 5727.81 OR 5727.811 of the Revised Code shall keep 3,009
complete and accurate records of all electric AND NATURAL GAS 3,010
68
distributions and other records as required by the tax 3,011
commissioner. The records shall be preserved for four years 3,012
after the return for the taxes to which the records pertain is 3,013
due or filed, whichever is later. The records shall be available 3,014
for inspection by the tax commissioner or the commissioner's 3,015
authorized agent, upon request of the commissioner or such agent. 3,016
Sec. 5727.93. (A) No person shall distribute electricity 3,026
OR NATURAL GAS to a meter of an end user in this state who OR TO 3,028
AN UNMETERED LOCATION IN THIS STATE IF THAT PERSON is not 3,029
registered with the tax commissioner as an electric distribution 3,030
company OR A NATURAL GAS DISTRIBUTION COMPANY.
(B) Each person required to register under division (A) of 3,034
this section shall register prior to distributing electricity OR
NATURAL GAS to a meter of an end user in this state OR TO AN 3,036
UNMETERED LOCATION IN THIS STATE. The tax commissioner shall 3,038
prescribe the form of the registration application. The
commissioner shall assign an identification number to each 3,039
registration and notify the registrant of that number. The 3,040
registration shall remain in effect until canceled in writing by 3,041
the registrant upon the cessation of distributing electricity OR 3,042
NATURAL GAS to a meter of an end user in this state OR TO AN 3,044
UNMETERED LOCATION IN THIS STATE, or until such registration is 3,046
denied, revoked, or canceled by the commissioner. A registration 3,047
may be revoked or canceled by the tax commissioner as provided by 3,048
Chapter 119. of the Revised Code, for failure of an electric 3,051
distribution company to pay the tax imposed by section 5727.81 of 3,052
the Revised Code, FAILURE OF A NATURAL GAS DISTRIBUTION COMPANY 3,053
TO PAY THE TAX IMPOSED BY SECTION 5727.811 OF THE REVISED CODE,
or FAILURE OF AN ELECTRIC DISTRIBUTION COMPANY OR A NATURAL GAS 3,054
DISTRIBUTION COMPANY to comply with sections 5727.80 AND 5727.82 3,057
to 5727.95 of the Revised Code. An electric distribution A 3,058
company whose registration is denied may petition for a hearing, 3,059
in accordance with the procedures set forth in divisions (B) and 3,061
(C) of section 5727.89 of the Revised Code, not later than thirty 3,062
69
days after receiving the denial, and the final determination is 3,063
subject to appeal under section 5717.02 of the Revised Code. 3,065
(C) The tax commissioner shall maintain a list of the 3,068
electric distribution companies registered under this section. 3,069
The list shall contain the name and address of each company 3,070
registered by the commissioner. The list and subsequent updates 3,071
of it shall be open to public inspection.
Sec. 5727.94. Each electric distribution company required 3,080
to pay the tax imposed by section 5727.81 of the Revised Code AND 3,082
EACH NATURAL GAS DISTRIBUTION COMPANY REQUIRED TO PAY THE TAX
IMPOSED BY SECTION 5727.811 OF THE REVISED CODE shall provide to 3,083
its customers in this state the statement required by section 3,084
4933.33 of the Revised Code. 3,086
Sec. 5727.95. (A) No NATURAL GAS DISTRIBUTION COMPANY, 3,095
electric distribution company, or self-assessing purchaser shall 3,097
fail to file any return or report required to be filed pursuant 3,098
to section 5727.82 of the Revised Code, or file or cause to be 3,100
filed any incomplete, false, or fraudulent return, report, or 3,101
statement, or aid or abet another in the filing of any false or 3,102
fraudulent return, report, or statement. 3,103
(B) No person shall distribute NATURAL GAS OR electricity 3,106
to a meter of an end user in this state OR TO AN UNMETERED 3,107
LOCATION IN THIS STATE without holding a valid registration 3,108
issued under section 5727.93 of the Revised Code. 3,109
Sec. 5729.07. AS USED IN THIS SECTION: 3,111
(A) "ELIGIBLE EMPLOYEE" AND "ELIGIBLE TRAINING COSTS" HAVE 3,113
THE SAME MEANINGS AS IN SECTION 5733.42 OF THE REVISED CODE. 3,114
(B) "CREDIT PERIOD" MEANS THE CALENDAR YEAR ENDING ON THE 3,116
THIRTY-FIRST DAY OF DECEMBER NEXT PRECEDING THE DAY THE ANNUAL 3,117
STATEMENT IS REQUIRED TO BE RETURNED UNDER SECTION 5729.02 OF THE 3,118
REVISED CODE.
THERE IS HEREBY ALLOWED A NONREFUNDABLE CREDIT AGAINST THE 3,120
TAX IMPOSED UNDER THIS CHAPTER FOR A FOREIGN INSURANCE COMPANY 3,121
FOR WHICH A TAX CREDIT CERTIFICATE IS ISSUED UNDER SECTION 3,122
70
5733.42 OF THE REVISED CODE. THE CREDIT MAY BE CLAIMED FOR 3,124
CREDIT PERIODS BEGINNING ON OR AFTER JANUARY 1, 2001, AND ENDING 3,125
ON OR BEFORE DECEMBER 31, 2003. THE AMOUNT OF THE CREDIT SHALL 3,126
EQUAL ONE-HALF OF THE AVERAGE OF THE ELIGIBLE TRAINING COSTS PAID
OR INCURRED BY THE COMPANY DURING THE THREE CALENDAR YEARS 3,128
IMMEDIATELY PRECEDING THE CREDIT PERIOD FOR WHICH THE CREDIT IS 3,129
CLAIMED, NOT TO EXCEED ONE THOUSAND DOLLARS FOR EACH ELIGIBLE 3,131
EMPLOYEE ON ACCOUNT OF WHOM ELIGIBLE TRAINING COSTS WERE PAID OR 3,132
INCURRED BY THE COMPANY. THE CREDIT CLAIMED BY A COMPANY FOR 3,133
EACH CREDIT PERIOD SHALL NOT EXCEED ONE HUNDRED THOUSAND DOLLARS. 3,134
A FOREIGN INSURANCE COMPANY SHALL APPLY TO THE DIRECTOR OF 3,136
JOB AND FAMILY SERVICES FOR A TAX CREDIT CERTIFICATE IN THE 3,137
MANNER PRESCRIBED BY DIVISION (C) OF SECTION 5733.42 OF THE 3,138
REVISED CODE. DIVISIONS (C) TO (H) OF THAT SECTION GOVERN THE 3,140
TAX CREDIT ALLOWED BY THIS SECTION, EXCEPT THAT "CREDIT PERIOD"
SHALL BE SUBSTITUTED FOR "TAX YEAR WITH RESPECT TO A CALENDAR 3,142
YEAR" WHEREVER THAT PHRASE APPEARS IN THOSE DIVISIONS AND THAT 3,143
THE COMPANY SHALL BE CONSIDERED A TAXPAYER FOR THE PURPOSES OF 3,144
THOSE DIVISIONS.
A FOREIGN INSURANCE COMPANY MAY CARRY FORWARD THE CREDIT 3,146
ALLOWED UNDER THIS SECTION TO THE EXTENT THAT THE CREDIT EXCEEDS 3,147
THE COMPANY'S TAX DUE FOR THE CREDIT PERIOD. THE COMPANY MAY 3,148
CARRY THE EXCESS CREDIT FORWARD FOR THREE CREDIT PERIODS 3,149
FOLLOWING THE CREDIT PERIOD FOR WHICH THE CREDIT IS FIRST CLAIMED 3,150
UNDER THIS SECTION. THE CREDIT ALLOWED BY THIS SECTION IS IN 3,151
ADDITION TO ANY CREDIT ALLOWED UNDER SECTION 5729.031 OF THE 3,152
REVISED CODE.
THE REDUCTION IN THE TAX DUE UNDER THIS CHAPTER TO THE 3,154
EXTENT OF THE CREDIT ALLOWED BY THIS SECTION DOES NOT INCREASE 3,155
THE AMOUNT OF THE TAX OTHERWISE DUE UNDER SECTION 5729.06 OF THE 3,156
REVISED CODE.
Sec. 5733.053. (A) As used in this section: 3,165
(1) "Transfer" means a transaction or series of related 3,167
transactions in which a corporation directly or indirectly 3,168
71
transfers or distributes SUBSTANTIALLY ALL OF its assets or 3,169
equity to another corporation. 3,171
(2) "Transferor" means a corporation that has made a 3,173
transfer if on the completion of the transfer the corporation no 3,174
longer does business in this state or owns or uses any capital or 3,175
property in this state. 3,176
(3) "TRANSFEREE" MEANS A CORPORATION THAT RECEIVED 3,178
SUBSTANTIALLY ALL OF THE ASSETS OR EQUITY OF A TRANSFEROR IN A 3,179
TRANSFER.
(B) A taxpayer is subject to this section only if all of 3,181
the following apply: 3,182
(1) It received the assets or equity of a transferor in a 3,184
transfer; 3,185
(2) The transferor is not subject to the tax imposed by 3,187
section 5733.06 of the Revised Code for the tax year; 3,188
(3) The taxpayer would have met the ownership or control 3,190
requirements of division (A) of section 5733.052 of the Revised 3,191
Code for a combined report with the transferor if both had been 3,192
in existence on the first day of January immediately before and 3,193
after the transfer and if the transfer had not been made. 3,194
(C) For purposes of valuing its issued and outstanding 3,196
shares of stock under division (B) of section 5733.05 of the 3,197
Revised Code, a taxpayer subject to this section TRANSFEREE shall 3,199
add to its net income allocated or apportioned to this state, its 3,200
transferor's net income allocated or apportioned to this state. 3,201
The taxpayer TRANSFEREE shall add such income in computing its 3,202
tax for the same tax year or years that such income would have 3,204
been reported by the transferor if the transfer had not been made 3,205
and the transferor had remained subject to the tax imposed by 3,206
section 5733.06 of the Revised Code on the first day of January 3,207
of the tax year. THE TRANSFEREE SHALL ADD SUCH INCOME ONLY TO 3,208
THE EXTENT THE INCOME IS NOT REQUIRED TO BE REPORTED BY THE 3,210
TRANSFEROR FOR THE PURPOSES OF THE TAX IMPOSED BY DIVISIONS (A) 3,211
AND (B) OF SECTION 5733.06 OF THE REVISED CODE.
72
(D)(C) The following shall be determined in the same 3,213
manner as if the transfer had not been made and the transferor 3,214
remained subject to the tax imposed by section 5733.06 of the 3,215
Revised Code on the first day of January of the tax year: 3,216
(1) The transferor's net income allocated or apportioned 3,218
to this state for the tax year under divisions (B)(1) and (2) of 3,219
section 5733.05 of the Revised Code; 3,220
(2) The transferor's requirements for the combination of 3,222
net income under section 5733.052 of the Revised Code; 3,223
(3) Any other determination regarding the transferor that 3,225
is necessary to avoid an absurd or unreasonable result in the 3,226
application of this chapter. 3,227
(E)(D) A taxpayer TRANSFEREE shall be allowed the 3,230
following credits and deductions SHALL MAKE THE FOLLOWING 3,231
ADJUSTMENTS in the same manner that they would have been 3,232
available to its THE transferor: 3,233
(1) The credit allowed by CREDITS ENUMERATED IN section 3,235
5733.061 5733.98 of the Revised Code with regard to property 3,237
acquired from its transferor;
(2) The deduction under division (I)(1) of section 5733.04 3,239
of the Revised Code for net operating losses incurred by its 3,240
transferor, subject to the limitations set forth in sections 381 3,241
and 382 of the Internal Revenue Code concerning net operating 3,242
loss carryovers; 3,243
(3) The deductions allowed by divisions (C)(2), (D)(2), 3,245
(E)(2), (F)(2), (G)(2), and (H) of section 5733.041 of the 3,246
Revised Code for prior depreciation addbacks of its transferor; 3,247
(4) The credit allowed under section 5733.069 of the 3,249
Revised Code, and any ANY other deduction FROM or credit ADDITION 3,251
TO NET INCOME under this chapter involving the transferor the 3,252
disallowance of which would be absurd or unreasonable. The 3,253
allowance of such a deduction or credit SUCH ADJUSTMENTS TO NET 3,254
INCOME AND ALLOWANCE OF CREDITS shall be subject to the 3,255
limitations set forth in sections 381 and 382 of the Internal 3,256
73
Revenue Code and regulations prescribed thereunder concerning an 3,257
acquiring corporation's taking into account the credits of a 3,258
transferor corporation.
(F)(E) If a taxpayer TRANSFEREE subject to this section 3,261
subsequently becomes a transferor, any net income that the 3,262
taxpayer TRANSFEREE would have been required to add under 3,264
division (C)(B) of this section shall be included in its income 3,266
as a transferor and any credits or deductions that ADJUSTMENTS TO 3,267
WHICH the taxpayer TRANSFEREE would have been entitled to under 3,268
division (E)(D) of this section shall be available to it as a 3,269
transferor. 3,270
Sec. 5733.06. The tax hereby charged each corporation 3,279
subject to this chapter shall be the greater of the sum of 3,280
divisions (A) and (B) of this section, after the reduction, if 3,281
any, provided by division (J) of this section, or division (C) of 3,283
this section, after the reduction, if any, provided by division 3,284
(J) of this section, except that the tax hereby charged each 3,286
financial institution subject to this chapter shall be the amount 3,287
computed under division (D) of this section: 3,288
(A) Except as set forth in division (F) of this section, 3,290
five and one-tenth per cent upon the first fifty thousand dollars 3,291
of the value of the taxpayer's issued and outstanding shares of 3,292
stock as determined under division (B) of section 5733.05 of the 3,293
Revised Code; 3,294
(B) Except as set forth in division (F) of this section, 3,296
eight and one-half per cent upon the value so determined in 3,298
excess of fifty thousand dollars; or 3,299
(C) Except as otherwise provided under division (G) of 3,302
this section, four mills times that portion of the value of the 3,303
issued and outstanding shares of stock as determined under
division (C) of section 5733.05 of the Revised Code. For the 3,304
purposes of division (C) of this section, division (C)(2) of 3,306
section 5733.065, and division (C) of section 5733.066 of the
Revised Code, the value of the issued and outstanding shares of 3,307
74
stock of a qualified holding company is zero. 3,308
(D) The tax charged each financial institution subject to 3,310
this chapter shall be that portion of the value of the issued and 3,311
outstanding shares of stock as determined under division (A) of 3,312
section 5733.05 of the Revised Code, multiplied by the following 3,314
amounts:
(1) For tax years prior to the 1999 tax year, fifteen 3,316
mills; 3,317
(2) For the 1999 tax year, fourteen mills; 3,319
(3) For tax year 2000 and thereafter, thirteen mills. 3,321
(E) No tax shall be charged from any corporation that has 3,323
been adjudicated bankrupt, or for which a receiver has been 3,324
appointed, or that has made a general assignment for the benefit 3,326
of creditors, except for the portion of the then current tax year 3,327
during which the tax commissioner finds such corporation had the 3,328
power to exercise its corporate franchise unimpaired by such 3,329
proceedings or act. The minimum payment for all corporations 3,330
shall be fifty dollars. 3,331
The tax charged to corporations under this chapter for the 3,333
privilege of engaging in business in this state, which is an 3,334
excise tax levied on the value of the issued and outstanding 3,335
shares of stock, shall in no manner be construed as prohibiting 3,336
or otherwise limiting the powers of municipal corporations, joint 3,337
economic development zones created under section 715.691 of the 3,338
Revised Code, and joint economic development districts created 3,339
under section 715.70 or 715.71 or sections 715.72 to 715.81 of 3,340
the Revised Code in this state to impose an income tax on the 3,341
income of such corporations.
(F) If two or more taxpayers satisfy the ownership or 3,343
control requirements of division (A) of section 5733.052 of the 3,344
Revised Code, each such taxpayer shall substitute "the taxpayer's 3,345
pro-rata amount" for "fifty thousand dollars" in divisions (A) 3,346
and (B) of this section. For purposes of this division, "the
taxpayer's pro-rata amount" is an amount that, when added to the 3,347
75
other such taxpayers' pro-rata amounts, does not exceed fifty 3,348
thousand dollars. For the purpose of making that computation, 3,349
the taxpayer's pro-rata amount shall not be less than zero. 3,350
Nothing in this division derogates from or eliminates the
requirement to make the alternative computation of tax under 3,351
division (C) of this section. 3,352
(G) The tax liability of any corporation under division 3,354
(C) of this section shall not exceed one hundred fifty thousand 3,355
dollars.
(H)(1) For the purposes of division (H) of this section, 3,357
"exiting corporation" means a corporation that satisfies all of 3,358
the following conditions: 3,359
(a) The corporation had nexus with or in this state under 3,361
the Constitution of the United States during any portion of a 3,362
calendar year;
(b) The corporation was not a taxpayer CORPORATION 3,364
DESCRIBED IN DIVISION (A) OF SECTION 5733.01 OF THE REVISED CODE 3,365
on the first day of January immediately following that calendar 3,366
year;
(c) The corporation was not a financial institution on the 3,368
first day of January immediately following that calendar year; 3,369
(d) The IF THE corporation was not a transferor as defined 3,372
in section 5733.053 of the Revised Code during any portion of 3,373
that calendar year, THE CORPORATION'S TRANSFEREE WAS NOT REQUIRED 3,374
TO ADD TO THE TRANSFEREE'S NET INCOME THE INCOME OF THE 3,375
TRANSFEROR PURSUANT TO DIVISION (B) OF THAT SECTION; 3,376
(e) During any portion of that calendar year, or any 3,378
portion of the immediately preceding calendar year, the 3,379
corporation had net income that was not included in a report 3,380
filed BY THE CORPORATION OR ITS TRANSFEREE pursuant to section 3,381
5733.02, 5733.021, 5733.03, or 5733.031, OR 5733.053 of the 3,382
Revised Code;
(f) The corporation would have been subject to the tax 3,384
computed under divisions (A), (B), (C), (F), and (G) of this 3,385
76
section if the corporation is assumed to have had nexus with or 3,386
in this state under the Constitution of the United States BE A 3,388
CORPORATION DESCRIBED IN DIVISION (A) OF SECTION 5733.01 OF THE 3,389
REVISED CODE on the first day of January immediately following
the calendar year referred to in WHICH division (H)(1)(a) of this 3,391
section REFERS. 3,392
(2) For the purposes of division (H) of this section, 3,394
"unreported net income" means net income that was not previously 3,395
included in a report filed pursuant to section 5733.02, 5733.021, 3,396
5733.03, or 5733.031, OR 5733.053 of the Revised Code and that 3,398
was realized or recognized during the calendar year referred to
in WHICH division (H)(1) of this section REFERS or the 3,400
immediately preceding calendar year. 3,401
(3) Each exiting corporation shall pay a tax computed by 3,403
first allocating and apportioning the unreported net income 3,404
pursuant to division (B) of section 5733.05 and section 5733.051 3,405
and, if applicable, section 5733.052 of the Revised Code. The 3,407
exiting corporation then shall compute the tax due on its
unreported net income allocated and apportioned to this state by 3,408
applying divisions (A), (B), and (F) of this section to that 3,409
income.
(4) Divisions (C) and (G) of this section, division (D)(2) 3,411
of section 5733.065, and division (C) of section 5733.066 of the 3,412
Revised Code do not apply to an exiting corporation, but exiting 3,413
corporations are subject to every other provision of this 3,414
chapter.
(5) Notwithstanding DIVISION (B) OF SECTION 5733.01 OR 3,416
sections 5733.02, 5733.021, and 5733.03 of the Revised Code to 3,418
the contrary, each exiting corporation shall report and pay the
tax due under division (H) of this section on or before the 3,419
thirty-first day of May immediately following the calendar year 3,420
referred to in WHICH division (H)(1)(a) of this section REFERS. 3,422
The exiting corporation shall file that report on the form most 3,424
recently prescribed by the tax commissioner for the purposes of 3,425
77
complying with sections 5733.02 and 5733.03 of the Revised Code.
Upon request by the corporation, the tax commissioner may extend 3,426
the date for filing the report. 3,427
(6) IF, ON ACCOUNT OF THE APPLICATION OF SECTION 5733.053 3,429
OF THE REVISED CODE, NET INCOME IS SUBJECT TO THE TAX IMPOSED BY 3,430
DIVISIONS (A) AND (B) OF THIS SECTION, SUCH INCOME SHALL NOT BE 3,431
SUBJECT TO THE TAX IMPOSED BY DIVISION (H)(3) OF THIS SECTION. 3,432
(7) The tax commissioner may adopt rules governing 3,434
division (H) of this section. 3,436
(I) Any reference in the Revised Code to "the tax imposed 3,438
by section 5733.06 of the Revised Code" or "the tax due under 3,439
section 5733.06 of the Revised Code" includes the taxes imposed 3,440
under sections 5733.065 and 5733.066 of the Revised Code. 3,441
(J)(1) Division (J) of this section applies solely to a 3,444
combined company. Section 5733.057 of the Revised Code shall 3,445
apply when calculating the adjustments required by division (J) 3,447
of this section. 3,448
(2) Subject to division (J)(4) of this section, the total 3,452
tax calculated in divisions (A) and (B) of this section shall be 3,453
reduced by an amount calculated by multiplying such tax by a 3,455
fraction, the numerator of which is the total taxable gross 3,456
receipts attributed to providing public utility activity other 3,457
than as an electric company under section 5727.03 of the Revised 3,458
Code for the year upon which the taxable gross receipts are 3,459
measured immediately preceding the tax year, and the denominator
of which is the total gross receipts from all sources for the 3,460
year upon which the taxable gross receipts are measured 3,461
immediately preceding the tax year. Nothing herein shall be 3,462
construed to exclude from the denominator any item of income 3,463
described in section 5733.051 of the Revised Code. 3,466
(3) Subject to division (J)(4) of this section, the total 3,470
tax calculated in division (C) of this section shall be reduced 3,472
by an amount calculated by multiplying such tax by the fraction 3,473
described in division (J)(2) of this section. 3,474
78
(4) In no event shall the reduction provided by division 3,477
(J)(2) or (J)(3) of this section exceed the amount of the excise 3,478
tax paid in accordance with section 5727.38 of the Revised Code, 3,479
for the year upon which the taxable gross receipts are measured 3,480
immediately preceding the tax year. 3,481
Sec. 5733.40. As used in sections 5733.40 and 5733.41 and 3,490
Chapter 5747. of the Revised Code: 3,491
(A)(1) "Adjusted qualifying amount" means either of the 3,493
following:
(a) The net sum of a qualifying investor's distributive 3,495
share of the income, gain, expense, or loss of a qualifying 3,496
pass-through entity for the qualifying taxable year of the 3,497
qualifying pass-through entity multiplied by the apportionment 3,498
fraction defined in division (B) of this section, subject to 3,499
section 5733.401 of the Revised Code and divisions (A)(2) to (6) 3,501
of this section; 3,502
(b) The sum of a qualifying beneficiary's share of the 3,504
qualifying net income and qualifying net gain distributed by a 3,505
qualifying trust for the qualifying taxable year of the 3,506
qualifying trust multiplied by the apportionment fraction defined 3,507
in division (B) of this section, subject to section 5733.401 of 3,508
the Revised Code and divisions (A)(2) to (5) of this section. 3,509
(2) The sum shall exclude any amount which, pursuant to 3,511
the Constitution of the United States, the Constitution of Ohio, 3,512
or any federal law is not subject to a tax on or measured by net 3,513
income.
(3) The sum shall be increased by all amounts representing 3,515
expenses other than amounts described in division (A)(6) of this 3,517
section that the taxpayer paid to or incurred with respect to 3,518
direct or indirect transactions with one or more related members, 3,519
excluding the cost of goods sold calculated in accordance with 3,520
section 263A of the Internal Revenue Code and United States 3,521
department of the treasury regulations issued thereunder.
Nothing in division (A)(3) of this section shall be construed to 3,522
79
limit solely to this chapter the application of section 263A of 3,523
the Internal Revenue Code and United States department of the 3,524
treasury regulations issued thereunder.
(4) The sum shall be increased by all recognized losses, 3,526
other than losses from sales of inventory the cost of which is 3,527
calculated in accordance with section 263A of the Internal 3,528
Revenue Code and United States department of the treasury 3,529
regulations issued thereunder, with respect to all direct or 3,530
indirect transactions with one or more related members. Losses
from the sales of such inventory shall be calculated in 3,531
accordance with section 482 of the Internal Revenue Code and 3,532
United States department of the treasury regulations issued 3,533
thereunder. Nothing in division (A)(4) of this section shall be 3,534
construed to limit solely to this section the application of
section 236A 263A and section 482 of the Internal Revenue Code 3,535
and United States department of the treasury regulations issued 3,537
thereunder.
(5) The sum shall be computed without regard to section 3,539
5733.051 or division (D) of section 5733.052 of the Revised Code. 3,540
(6) For the purposes of Chapters 5733. and 5747. of the 3,542
Revised Code, guaranteed payments made by a partnership or by a 3,543
limited liability company that is not subject to the tax imposed 3,544
by section 5733.06 of the Revised Code, and compensation paid by 3,545
an S corporation to its shareholders, shall be considered a 3,546
distributive share of income of the partnership, limited 3,547
liability company, or S corporation. Division (A)(6) of this 3,548
section applies only to such payments or such compensation made
or paid to a qualifying AN investor who is a related member to or 3,550
AT ANY TIME DURING THE QUALIFYING ENTITY'S TAXABLE YEAR HOLDS AT
LEAST A TWENTY PER CENT DIRECT OR INDIRECT INTEREST IN THE 3,551
PROFITS OR CAPITAL of the qualifying entity. 3,553
(B) "Apportionment fraction" means: 3,555
(1) With respect to a qualifying pass-through entity other 3,558
than a financial institution, the fraction calculated pursuant to 3,559
80
division (B)(2) of section 5733.05 of the Revised Code as if the 3,560
qualifying pass-through entity were a corporation subject to the 3,561
tax imposed by section 5733.06 of the Revised Code;
(2) With respect to a qualifying pass-through entity that 3,563
is a financial institution, the fraction calculated pursuant to 3,564
division (C) of section 5733.056 of the Revised Code as if the 3,566
qualifying pass-through entity were a financial institution 3,567
subject to the tax imposed by section 5733.06 of the Revised
Code.
(3) With respect to a qualifying trust, the fraction 3,569
calculated pursuant to division (B)(2) of section 5733.05 of the 3,570
Revised Code as if the qualifying trust were a corporation 3,571
subject to the tax imposed by section 5733.06 of the Revised 3,572
Code, except that the property, payroll, and sales fractions 3,573
shall be calculated by including in the numerator and denominator 3,574
of the fractions only the property, payroll, and sales, 3,575
respectively, directly related to the production of income or 3,576
gain from acquisition, ownership, use, maintenance, management, 3,577
or disposition of tangible personal property located in this 3,578
state at any time during the qualifying trust's qualifying 3,579
taxable year or of real property located in this state. 3,580
(C) "Qualifying beneficiary" means any individual that, 3,582
during the qualifying taxable year of a qualifying trust, is a 3,583
beneficiary of that trust, but does not include an individual who 3,584
is a resident taxpayer for the purposes of Chapter 5747. of the 3,585
Revised Code for the entire qualifying taxable year of the 3,586
qualifying trust.
(D) "Fiscal year" means an accounting period ending on any 3,588
day other than the thirty-first day of December. 3,589
(E) "Individual" means a natural person. 3,591
(F) "Month" means a calendar month. 3,593
(G) "Partnership" has the same meaning as in section 3,595
5747.01 of the Revised Code. 3,596
(H) "Investor" means any person that, during any portion 3,598
81
of a taxable year of a qualifying pass-through entity, is a 3,599
partner, member, shareholder, or investor in that qualifying 3,600
pass-through entity.
(I) Except as otherwise provided in section 5733.402 or 3,602
5747.401 of the Revised Code, "qualifying investor" means any 3,603
investor except those described in divisions (I)(1) to (9) of 3,604
this section.
(1) An investor satisfying one of the descriptions under 3,606
section 501(a) or (c) of the Internal Revenue Code, an electing 3,608
small business trust, a partnership with equity securities 3,609
registered with the United States securities and exchange 3,610
commission under section 12 of the "Securities Exchange Act of 3,611
1934," as amended, or an investor described in division (F) of 3,612
section 3334.01, or division (A) or (C) of section 5733.09 of the 3,613
Revised Code for the entire qualifying taxable year of the 3,615
qualifying pass-through entity.
(2) An investor who is either an individual or an estate 3,617
and is a resident taxpayer for the purposes of section 5747.01 of 3,619
the Revised Code for the entire qualifying taxable year of the 3,620
qualifying pass-through entity.
(3) An investor who is an individual for whom the 3,622
qualifying pass-through entity makes a good faith and reasonable 3,623
effort to comply fully and timely with the filing and payment 3,624
requirements set forth in division (D) of section 5747.08 of the 3,625
Revised Code and section 5747.09 of the Revised Code with respect 3,626
to the individual's adjusted qualifying amount for the entire 3,627
qualifying taxable year of the qualifying pass-through entity. 3,628
(4) An investor that is another qualifying pass-through 3,630
entity having only investors described in division (I)(1), (2), 3,632
(3), or (6) of this section during the three-year period
beginning twelve months prior to the first day of the qualifying 3,633
taxable year of the qualifying pass-through entity. 3,634
(5) An investor that is another pass-through entity having 3,637
no investors other than individuals and estates during the 3,638
82
qualifying taxable year of the qualifying pass-through entity in 3,639
which it is an investor, and that makes a good faith and 3,640
reasonable effort to comply fully and timely with the filing and 3,641
payment requirements set forth in division (D) of section 5747.08 3,642
of the Revised Code and section 5747.09 of the Revised Code with 3,644
respect to investors that are not resident taxpayers of this
state for the purposes of Chapter 5747. of the Revised Code for 3,646
the entire qualifying taxable year of the qualifying pass-through 3,647
entity in which it is an investor. 3,648
(6) An investor that is a financial institution required 3,650
to calculate the tax in accordance with division (D) of section 3,651
5733.06 of the Revised Code on the first day of January of the 3,652
calendar year immediately following the last day of the financial 3,654
institution's calendar or fiscal year in which ends the
taxpayer's taxable year. 3,655
(7) An investor other than an individual that satisfies 3,657
all the following: 3,658
(a) The investor submits a written statement to the 3,660
qualifying pass-through entity stating that the investor 3,661
irrevocably agrees that the investor has nexus with this state 3,662
under the Constitution of the United States and is subject to and 3,664
liable for the tax calculated under division (B) of section 3,665
5733.06 of the Revised Code with respect to the investor's 3,666
adjusted qualifying amount for the entire qualifying taxable year 3,667
of the qualifying pass-through entity. The statement is subject 3,668
to the penalties of perjury, shall be retained by the qualifying 3,669
pass-through entity for no fewer than seven years, and shall be 3,670
delivered to the tax commissioner upon request. 3,671
(b) The investor makes a good faith and reasonable effort 3,673
to comply timely and fully with all the reporting and payment 3,674
requirements set forth in Chapter 5733. of the Revised Code with 3,675
respect to the investor's adjusted qualifying amount for the 3,676
entire qualifying taxable year of the qualifying pass-through 3,677
entity.
83
(c) Neither the investor nor the qualifying pass-through 3,679
entity in which it is an investor, before, during, or after the 3,680
qualifying pass-through entity's qualifying taxable year, carries 3,682
out any transaction or transactions with one or more related
members of the investor or the qualifying pass-through entity 3,683
resulting in a reduction or deferral of tax imposed by Chapter 3,684
5733. of the Revised Code with respect to all or any portion of 3,685
the investor's adjusted qualifying amount for the qualifying 3,686
pass-through entity's taxable year, or that constitute a sham, 3,688
lack economic reality, or are part of a series of transactions 3,689
the form of which constitutes a step transaction or transactions 3,690
or does not reflect the substance of those transactions.
(8) Any other investor that the tax commissioner may 3,692
designate by rule. The tax commissioner may adopt rules 3,693
including a rule defining "qualifying investor" or "qualifying 3,694
beneficiary" and governing the imposition of the withholding tax 3,696
imposed by section 5747.41 of the Revised Code with respect to an 3,697
individual who is a resident taxpayer for the purposes of Chapter 3,698
5747. of the Revised Code for only a portion of the qualifying 3,699
taxable year of the qualifying entity. 3,700
(9) An investor that is a trust or fund the beneficiaries 3,702
of which, during the qualifying taxable year of the qualifying 3,703
pass-through entity, are limited to the following: 3,704
(a) A person that is or may be the beneficiary of a trust 3,706
subject to Subchapter D of Chapter 1 of Subtitle A of the 3,707
Internal Revenue Code.
(b) A person that is or may be the beneficiary of or the 3,710
recipient of payments from a trust or fund that is a nuclear 3,711
decommissioning reserve fund, a designated settlement fund, or 3,712
any other trust or fund established to resolve and satisfy claims 3,713
that may otherwise be asserted by the beneficiary or a member of 3,714
the beneficiary's family. Sections 267(c)(4), 468A(e), and 3,715
468B(d)(2) of the Internal Revenue Code apply to the
determination of whether such a person satisfies division (I)(9) 3,716
84
of this section. 3,717
(c) A person who is or may be the beneficiary of a trust 3,719
that, under its governing instrument, is not required to 3,720
distribute all of its income currently. Division (I)(9)(c) of 3,721
this section applies only if the trust, prior to the due date for 3,722
filing the qualifying pass-through entity's return for taxes 3,723
imposed by section 5733.41 and sections 5747.41 to 5747.453 of
the Revised Code, irrevocably agrees in writing that for the 3,724
taxable year during or for which the trust distributes any of its 3,725
income to any of its beneficiaries, the trust is a qualifying 3,726
trust and will pay the estimated tax, and will withhold and pay 3,727
the withheld tax, as required under sections 5747.40 to 5747.453 3,728
of the Revised Code.
For the purposes of division (I)(9) of this section, a 3,731
trust or fund shall be considered to have a beneficiary other 3,732
than persons described under divisions (I)(9)(a) to (c) of this 3,733
section if a beneficiary would not qualify under those divisions 3,734
under the doctrines of "economic reality," "sham transaction," 3,735
"step doctrine," or "substance over form." A trust or fund 3,736
described in division (I)(9) of this section bears the burden of 3,737
establishing by a preponderance of the evidence that any 3,738
transaction giving rise to the tax benefits provided under 3,739
division (I)(9) of this section does not have as a principal
purpose a claim of those tax benefits. Nothing in this section 3,740
shall be construed to limit solely to this section the 3,741
application of the doctrines referred to in this paragraph. 3,742
(J) "Qualifying net gain" means any recognized net gain 3,744
with respect to the acquisition, ownership, use, maintenance, 3,745
management, or disposition of tangible personal property located 3,746
in this state at any time during a trust's qualifying taxable 3,747
year or real property located in this state. 3,748
(K) "Qualifying net income" means any recognized income, 3,750
net of related deductible expenses, other than distributions 3,751
deductions with respect to the acquisition, ownership, use, 3,753
85
maintenance, management, or disposition of tangible personal
property located in this state at any time during the trust's 3,755
qualifying taxable year or real property located in this state. 3,756
(L) "Qualifying entity" means a qualifying pass-through 3,758
entity or a qualifying trust. 3,759
(M) "Qualifying trust" means a trust subject to subchapter 3,761
J of the Internal Revenue Code that, during any portion of the 3,763
trust's qualifying taxable year, has income or gain from the 3,764
acquisition, management, ownership, use, or disposition of 3,765
tangible personal property located in this state at any time 3,766
during the trust's qualifying taxable year or real property 3,767
located in this state. "Qualifying trust" does not include a 3,768
person described in section 501(c) of the Internal Revenue Code
or a person described in division (C) of section 5733.09 of the 3,769
Revised Code.
(N) "Qualifying pass-through entity" means a pass-through 3,771
entity as defined in section 5733.04 of the Revised Code, 3,772
excluding a person described in section 501(c) of the Internal 3,774
Revenue Code, a partnership with equity securities registered
with the United States securities and exchange commission under 3,775
section 12 of the Securities Exchange Act of 1934, as amended, or 3,776
a person described in division (C) of section 5733.09 of the 3,777
Revised Code.
(O) "Quarter" means the first three months, the second 3,779
three months, the third three months, or the last three months of 3,780
a qualifying entity's qualifying taxable year. 3,781
(P) "Related member" has the same meaning as in division 3,783
(A)(6) of section 5733.042 of the Revised Code without regard to 3,784
division (B) of that section. However, for the purposes of 3,785
divisions (A)(3) and (4) of this section only, "related member" 3,786
has the same meaning as in division (A)(6) of section 5733.042 of 3,787
the Revised Code without regard to division (B) of that section, 3,788
but shall be applied by substituting "forty per cent" for "twenty 3,789
per cent" wherever "twenty per cent" appears in division (A) of 3,790
86
that section.
(Q) "Return" or "report" means the notifications and 3,792
reports required to be filed pursuant to sections 5747.42 to 3,793
5747.45 of the Revised Code for the purpose of reporting the tax 3,794
imposed under section 5733.41 or 5747.41 of the Revised Code, and 3,795
included declarations of estimated tax when so required. 3,796
(R) "Qualifying taxable year" means the calendar year or 3,798
the qualifying entity's fiscal year ending during the calendar 3,799
year, or fractional part thereof, for which the adjusted 3,800
qualifying amount is calculated pursuant to sections 5733.40 and 3,801
5733.41 or sections 5747.40 to 5747.453 of the Revised Code. 3,802
Sec. 5733.42. (A) As used in this section: 3,811
(1) "Eligible training program" means a program to provide 3,813
job skills to eligible employees who are unable effectively to 3,814
function on the job due to skill deficiencies or who would 3,815
otherwise be displaced because of their skill deficiencies or 3,816
inability to use new technology, OR TO PROVIDE JOB SKILLS TO 3,817
ELIGIBLE EMPLOYEES THAT ENABLE THEM TO PERFORM OTHER JOB DUTIES 3,818
FOR THE TAXPAYER. Eligible training programs do not include 3,820
executive, management, career development, or personal enrichment 3,821
training programs, OR TRAINING PROGRAMS INTENDED EXCLUSIVELY FOR 3,822
PERSONAL CAREER DEVELOPMENT.
(2) "Eligible employee" means an individual who is 3,824
employed in this state by a taxpayer and has been so employed by 3,825
the same taxpayer for at least one hundred eighty consecutive 3,827
days and on the same job for at least ninety consecutive days 3,828
working at least twenty-four hours per week BEFORE THE DAY AN 3,829
APPLICATION FOR THE CREDIT IS FILED UNDER THIS SECTION. 3,830
"Eligible employee" does not include any employee for which a 3,831
credit is claimed pursuant to division (A)(5) of section 5709.65 3,833
of the Revised Code for all or any part of the same year, AN
EMPLOYEE WHO IS NOT A FULL-TIME EMPLOYEE, or executive or 3,834
managerial personnel except for the immediate supervisors of 3,835
nonexecutive, nonmanagerial personnel. 3,836
87
(3) "Eligible training costs" means: 3,838
(a) Direct instructional costs, such as instructor 3,840
salaries, materials and supplies, textbooks and manuals, 3,842
videotapes, and other instructional media and training equipment 3,843
used exclusively for the purpose of training eligible employees; 3,844
(b) Wages paid to eligible employees for time devoted 3,846
exclusively to an eligible training program during normal paid 3,848
working hours.
(4) "FULL-TIME EMPLOYEE" MEANS AN INDIVIDUAL WHO IS 3,850
EMPLOYED FOR CONSIDERATION FOR AT LEAST THIRTY-FIVE HOURS PER 3,851
WEEK, OR WHO RENDERS ANY OTHER STANDARD OF SERVICE GENERALLY 3,852
ACCEPTED BY CUSTOM OR SPECIFIED BY CONTRACT AS FULL-TIME 3,853
EMPLOYMENT.
(5) "PARTNERSHIP" INCLUDES A LIMITED LIABILITY COMPANY 3,855
FORMED UNDER CHAPTER 1705. OF THE REVISED CODE OR UNDER THE LAWS 3,856
OF ANOTHER STATE, PROVIDED THAT THE COMPANY IS NOT CLASSIFIED FOR 3,857
FEDERAL INCOME TAX PURPOSES AS AN ASSOCIATION TAXABLE AS A 3,858
CORPORATION.
(B) There is hereby allowed a nonrefundable credit against 3,861
the tax imposed by section 5733.06 of the Revised Code for 3,863
taxpayers for which a tax credit certificate is issued under
division (C) of this section. The credit shall be claimed for 3,865
the tax year immediately following the calendar year in which the 3,866
taxpayer pays or incurs the eligible training costs for which the 3,867
credit is being claimed. THE CREDIT MAY NOT BE CLAIMED FOR ANY 3,868
TAX YEAR AFTER TAX YEAR 2004, EXCEPT FOR AMOUNTS CARRIED FORWARD 3,869
TO SUBSEQUENT TAX YEARS TO THE EXTENT ALLOWED UNDER DIVISION (J) 3,870
OF THIS SECTION . The amount of the credit for each tax year 3,871
shall equal one-half of THE AVERAGE OF the excess of (1) eligible 3,874
training costs paid or incurred BY THE TAXPAYER during the THREE 3,875
calendar year YEARS immediately preceding the tax year for which 3,878
the credit is claimed, over (2) the taxpayer's average annual
eligible training costs for the three preceding calendar years. 3,879
The credit allowed shall not TO exceed five hundred ONE THOUSAND 3,881
88
dollars times the number of FOR EACH eligible employees EMPLOYEE 3,883
on account of whom eligible training costs were paid or incurred 3,885
BY THE TAXPAYER during the THOSE calendar year immediately 3,887
preceding the tax year for which the credit is claimed, and shall 3,889
not exceed the lesser of one hundred thousand dollars or one-half 3,890
of the taxpayer's tax liability under section 5733.06 of the 3,891
Revised Code for the preceding tax year YEARS. THE CREDIT 3,892
CLAIMED BY A TAXPAYER EACH TAX YEAR SHALL NOT EXCEED ONE HUNDRED 3,895
THOUSAND DOLLARS.
(C) A taxpayer who proposes to conduct an eligible 3,897
training program may apply to the director of job and family 3,898
services for a tax credit certificate under this section. The 3,900
taxpayer may apply for such a certificate for each tax year with 3,901
respect to a calendar year in which the taxpayer paid or incurred
eligible training costs, subject to division (L) of this section. 3,902
The director shall prescribe the form of the application, which 3,904
shall require a detailed description of the proposed training 3,905
program. The director may require applicants to remit an 3,906
application fee with each application filed with the director. 3,907
The fee shall not exceed the reasonable and necessary expenses 3,908
incurred by the director in receiving, reviewing, and approving 3,909
such applications and issuing tax credit certificates. Proceeds 3,910
from fees shall be used solely for the purpose of receiving, 3,911
reviewing, and approving such applications and issuing such 3,912
certificates.
After receipt of an application, the director shall 3,915
authorize a credit under this section by issuing a tax credit 3,916
certificate, in the form prescribed by the director, if the 3,918
director determines all of the following:
(1) The taxpayer's primary business activity falls within 3,920
one of the following classifications in the standard industrial 3,922
classification manual (1987) published by the United States 3,923
office of management and budget in the executive office of the 3,924
president: (a) Division D Manufacturing 3,927
(b) Division H Finance, insurance, and real 3,929
estate
(c) Major group 73 Business services 3,931
(d) Major group 81 Legal services 3,933
(e) Major group 87 Engineering, accounting, 3,935
research, management, and 3,936
related services
(2) The proposed training program is an eligible training 3,939
program under this section; 3,940
(3)(2) The proposed training program is economically sound 3,942
and will benefit the people of this state by improving workforce 3,944
skills and strengthening the economy of this state; 3,945
(4)(3) Receiving the tax credit is a major factor in the 3,947
taxpayer's decision to go forward with the training program; 3,949
(5)(4) Authorization of the credit is consistent with 3,951
division (H) of this section. 3,953
THE CREDIT ALSO IS ALLOWED FOR A TAXPAYER THAT IS A PARTNER 3,955
IN A PARTNERSHIP THAT PAYS OR INCURS ELIGIBLE TRAINING COSTS. 3,956
SUCH A TAXPAYER SHALL DETERMINE THE TAXPAYER'S CREDIT AMOUNT IN 3,957
THE MANNER PRESCRIBED BY DIVISION (K) OF THIS SECTION. 3,958
(D) If the director of job and family services DENIES AN 3,960
APPLICATION FOR A TAX CREDIT CERTIFICATE, THE DIRECTOR SHALL SEND 3,961
NOTICE OF THE DENIAL AND THE REASON FOR DENIAL TO THE APPLICANT 3,962
BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED. IF THE DIRECTOR 3,963
determines that an authorized training program, as actually 3,965
conducted, fails to meet the requirements of this section or to 3,966
comply with any condition set forth in the authorization, the 3,967
director may reduce the amount of the tax credit previously 3,968
granted. If the director reduces a tax credit, the director 3,970
shall SEND NOTICE OF THE REDUCTION AND THE REASON FOR THE 3,971
REDUCTION TO THE TAXPAYER BY CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, AND SHALL certify the reduction to the tax 3,972
commissioner, and the OR, IN THE CASE OF THE REDUCTION OF A 3,973
90
CREDIT CLAIMED BY AN INSURANCE COMPANY, THE SUPERINTENDENT OF 3,974
INSURANCE. THE tax commissioner OR SUPERINTENDENT OF INSURANCE 3,975
shall reduce the credit that may be claimed by the taxpayer 3,976
accordingly. WITHIN SIXTY DAYS AFTER RECEIVING A NOTICE OF 3,977
DENIAL OR NOTICE OF REDUCTION OF THE TAX CREDIT, AN APPLICANT OR 3,978
TAXPAYER MAY REQUEST, IN WRITING, A HEARING BEFORE THE DIRECTOR
TO REVIEW THE DENIAL OR REDUCTION. WITHIN SIXTY DAYS AFTER 3,979
RECEIVING A REQUEST THAT IS FILED WITHIN THE PRESCRIBED TIME, THE 3,980
DIRECTOR SHALL HOLD SUCH A HEARING AT A LOCATION TO BE DETERMINED 3,981
BY THE DIRECTOR. WITHIN THIRTY DAYS AFTER THE HEARING IS 3,982
ADJOURNED, THE DIRECTOR SHALL ISSUE A REDETERMINATION AFFIRMING, 3,983
REVERSING, OR MODIFYING THE DENIAL OR REDUCTION OF THE TAX CREDIT
AND SEND NOTICE OF THE REDETERMINATION TO THE APPLICANT OR 3,984
TAXPAYER BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AND SHALL 3,985
ISSUE A NOTICE OF THE REDETERMINATION TO THE TAX COMMISSIONER OR 3,986
SUPERINTENDENT OF INSURANCE. IF AN APPLICANT OR TAXPAYER IS 3,987
AGGRIEVED BY THE DIRECTOR'S REDETERMINATION, THE APPLICANT OR 3,988
TAXPAYER MAY APPEAL THE REDETERMINATION TO THE BOARD OF TAX
APPEALS IN THE MANNER PRESCRIBED BY SECTION 5717.02 OF THE 3,989
REVISED CODE.
(E) Financial A TAXPAYER TO WHICH A TAX CREDIT CERTIFICATE 3,991
IS ISSUED SHALL RETAIN RECORDS INDICATING THE ELIGIBLE TRAINING 3,992
COSTS IT PAYS OR INCURS FOR THE ELIGIBLE TRAINING PROGRAM FOR 3,993
WHICH THE CERTIFICATE IS ISSUED FOR FOUR YEARS FOLLOWING THE END 3,994
OF THE TAX YEAR FOR WHICH THE CREDIT IS CLAIMED. SUCH RECORDS 3,995
SHALL BE OPEN TO INSPECTION BY THE DIRECTOR OF JOB AND FAMILY 3,998
SERVICES UPON THE DIRECTOR'S REQUEST DURING BUSINESS HOURS.
FINANCIAL statements and other information submitted by an 4,001
applicant to the director of job and family services for a tax 4,002
credit under this section, and any information taken for any 4,003
purpose from such statements or information, are not public 4,004
records subject to section 149.43 of the Revised Code. However, 4,005
the director of job and family services or, the tax commissioner, 4,007
OR SUPERINTENDENT OF INSURANCE may make use of the statements and 4,008
91
other information for purposes of issuing public reports or in 4,009
connection with court proceedings concerning tax credits allowed 4,010
under this section AND SECTIONS 5725.31, 5729.07, AND 5747.39 OF 4,011
THE REVISED CODE.
(F) The director of job and family services, in accordance 4,014
with Chapter 119. of the Revised Code, shall adopt rules 4,015
necessary to implement this section AND SECTIONS 5725.31, 4,017
5729.07, AND 5747.39 OF THE REVISED CODE. THE RULES SHALL BE 4,018
ADOPTED AFTER CONSULTATION WITH THE TAX COMMISSIONER AND THE 4,019
SUPERINTENDENT OF INSURANCE. At the time the director gives 4,020
public notice under division (A) of section 119.03 of the Revised 4,022
Code of the adoption of the rules, the director shall submit 4,023
copies of the proposed rules to the chairpersons and ranking 4,024
minority members of the standing committees in the senate and the 4,025
house of representatives to which legislation on economic
development matters are customarily referred. 4,026
(G) On or before the thirtieth day of September of 2001, 4,028
2002, 2003, and 2004, the director of job and family services 4,029
shall submit a report to the governor, the president of the 4,031
senate, and the speaker of the house of representatives on the 4,032
tax credit program under this section AND SECTIONS 5725.31,
5729.07, AND 5747.39 OF THE REVISED CODE. The report shall 4,033
include information on the number of training programs that were 4,034
authorized under this section THOSE SECTIONS during the preceding 4,036
calendar year, a description of each authorized training program, 4,037
the dollar amounts of the credits granted, and an estimate of the 4,038
impact of the credits on the economy of this state. 4,039
(H) The aggregate amount of credits authorized under the 4,041
THIS section AND SECTIONS 5725.31, 5729.07, AND 5747.39 OF THE 4,042
REVISED CODE shall not exceed twenty million dollars per calendar 4,043
year. No more than ten million dollars in credits per calendar 4,044
year shall be authorized for corporations PERSONS engaged 4,045
primarily in manufacturing. No less than five million dollars in 4,047
credits per calendar year shall be set aside for corporations 4,048
92
PERSONS engaged primarily in activities other than manufacturing 4,050
and having fewer than five hundred employees. Subject to such 4,051
limits, credits shall be authorized for applicants meeting the 4,052
requirements of this section in the order in which they submit 4,053
complete and accurate applications. 4,054
(I) A nonrefundable credit allowed under this section 4,057
shall be claimed in the order required under section 5733.98 of 4,058
the Revised Code.
(J) The taxpayer may carry forward any credit amount in 4,060
excess of its tax due after allowing for any other credits that 4,061
precede the credit under this section in the order required under 4,062
section 5733.98 of the Revised Code. The excess credit may be 4,064
carried forward for three years following the tax year for which 4,065
it is FIRST claimed under this section. 4,066
(K) In the case of a qualifying controlled group, the 4,068
credit allowed under this section to taxpayers in the qualifying 4,069
controlled group shall be computed as if all corporations in the 4,070
qualifying controlled group were a consolidated, single taxpayer. 4,071
The credit shall be allocated to such taxpayers in any amount 4,072
elected for the taxable year by the qualifying controlled group. 4,073
The election shall be revocable and amendable during the period 4,074
prescribed by division (B) of section 5733.12 of the Revised 4,075
Code. A TAXPAYER THAT IS A PARTNER IN A PARTNERSHIP ON THE LAST 4,076
DAY OF THE THIRD CALENDAR YEAR OF THE THREE-YEAR PERIOD DURING 4,077
WHICH THE PARTNERSHIP PAYS OR INCURS ELIGIBLE TRAINING COSTS MAY 4,078
CLAIM A CREDIT UNDER THIS SECTION FOR THE TAX YEAR IMMEDIATELY 4,079
FOLLOWING THAT CALENDAR YEAR. THE AMOUNT OF A PARTNER'S CREDIT 4,080
EQUALS THE PARTNER'S INTEREST IN THE PARTNERSHIP ON THE LAST DAY 4,081
OF SUCH CALENDAR YEAR MULTIPLIED BY THE CREDIT AVAILABLE TO THE 4,082
PARTNERSHIP AS COMPUTED BY THE PARTNERSHIP. 4,083
(L) The director of job and family services shall not 4,086
authorize any credits under this section AND SECTIONS 5725.31, 4,087
5729.07, AND 5747.39 OF THE REVISED CODE for eligible training 4,088
costs paid or incurred after December 31, 2003. 4,089
93
Sec. 5745.01. As used in this chapter: 4,098
(A) "Electric company" and "combined company" have the 4,100
same meanings as in section 5727.01 of the Revised Code. 4,101
(B) "Electric light company" has the same meaning as in 4,103
section 4928.01 of the Revised Code, and includes the activities 4,104
of a combined company as an electric company, but excludes 4,105
nonprofit companies and municipal corporations. 4,106
(C) "Taxpayer" means an electric light company subject to 4,108
taxation by a municipal corporation in this state for a taxable 4,109
year, excluding an electric light company that is not an electric 4,111
company or a combined company and for which an election made 4,112
under section 5745.031 of the Revised Code is not in effect with 4,113
respect to the taxable year. If such a company is a qualified 4,114
subchapter S subsidiary as defined in section 1361 of the 4,115
Internal Revenue Code or a disregarded entity, the company's 4,117
parent S corporation or owner is the taxpayer for the purposes of 4,118
this chapter and is hereby deemed to have nexus with this state 4,119
under the Constitution of the United States for the purposes of 4,120
this chapter.
(D) "Disregarded entity" means an entity that, for its 4,122
taxable year, is by default, or has elected to be, disregarded as 4,123
an entity separate from its owner pursuant to 26 C.F.R. 4,124
301.7701-3. 4,125
(E) "Taxable year" of a taxpayer is the taxpayer's taxable 4,127
year for federal income tax purposes. 4,128
(F) "Federal taxable income" means taxable income, before 4,130
operating loss deduction and special deductions, as required to 4,131
be reported for the taxpayer's taxable year under the Internal 4,132
Revenue Code. 4,133
(G) "Adjusted federal taxable income" means federal 4,135
taxable income adjusted as follows: 4,136
(1) Deduct intangible income as defined in section 718.01 4,138
of the Revised Code to the extent included in federal taxable 4,140
income;
94
(2) Add expenses incurred in the production of such 4,142
intangible income; 4,143
(3) If the taxpayer is a, WITH RESPECT TO A QUALIFYING 4,145
TAXPAYER AND A QUALIFYING ASSET THERE OCCURS A QUALIFYING TAXABLE 4,147
EVENT, THE qualifying taxpayer under section 5733.0510 of the 4,149
Revised Code, deduct the amount by which the taxpayer reduced its 4,150
net income to the extent that amount is included in federal 4,151
taxable income, or add the amount by which the taxpayer increased 4,152
its net income, for the taxable year under division (B)(1) of 4,153
that section, SHALL REDUCE ITS FEDERAL TAXABLE INCOME BY THE 4,154
AMOUNT OF THE BOOK-TAX DIFFERENTIAL FOR THAT QUALIFYING ASSET IF 4,155
THE BOOK-TAX DIFFERENTIAL IS GREATER THAN ZERO, AND SHALL 4,156
INCREASE ITS FEDERAL TAXABLE INCOME BY THE ABSOLUTE VALUE OF THE 4,157
AMOUNT OF THE BOOK-TAX DIFFERENTIAL FOR THAT QUALIFYING ASSET IF 4,158
THE BOOK-TAX DIFFERENTIAL IS LESS THAN ZERO. THE ADJUSTMENTS 4,159
PROVIDED IN DIVISION (G)(3) OF THIS SECTION ARE subject to 4,161
divisions (B)(3), (4), and (5) of that section 5733.0510 OF THE 4,162
REVISED CODE to the extent those divisions apply to the 4,163
adjustments in division (B)(1) of that section for the taxable 4,165
year. A taxpayer shall not deduct or add any amount under
division (G)(3) of this section WITH RESPECT TO A QUALIFYING 4,167
ASSET THE SALE, EXCHANGE, OR OTHER DISPOSITION OF WHICH RESULTED 4,168
IN THE RECOGNITION OF A GAIN OR LOSS that the taxpayer deducted 4,169
or added, RESPECTIVELY, under division (G)(1) or (2) of this 4,170
section.
For the purposes of division (G)(3) of this section, "net 4,172
income" has the same meaning as in section 5733.04 of the Revised 4,173
Code, AND "BOOK-TAX DIFFERENTIAL," "QUALIFYING TAXPAYER," 4,174
"QUALIFYING ASSET," AND "QUALIFYING TAXABLE EVENT" HAVE THE SAME 4,176
MEANINGS AS IN SECTION 5733.0510 OF THE REVISED CODE. 4,177
(H) "Internal Revenue Code" means the "Internal Revenue 4,180
Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended. 4,181
(I) "Ohio net income" means the amount determined under 4,183
division (B) of section 5745.02 of the Revised Code. 4,184
95
Sec. 5745.02. (A) The annual report filed under section 4,193
5745.03 of the Revised Code determines a taxpayer's Ohio net 4,194
income and the portion of Ohio net income to be apportioned to a 4,195
municipal corporation. 4,196
(B) A taxpayer's Ohio net income is determined by 4,198
multiplying the taxpayer's adjusted federal taxable income by the 4,201
sum of the property factor multiplied by one-third, the payroll 4,202
factor multiplied by one-third, and the sales factor multiplied 4,203
by one-third. If the denominator of one of the factors is zero, 4,204
the remaining two factors each shall be multiplied by one-half 4,205
instead of one-third; if the denominator of two of the factors is 4,206
zero, the remaining factor shall be multiplied by one. The 4,208
property, payroll, and sales factors shall be determined in the
manner prescribed by divisions (B)(1), (2), and (3) of this 4,209
section.
(1) The property factor is a fraction the numerator of 4,211
which is the average value of the taxpayer's real and tangible 4,212
personal property owned or rented, and used in business in this 4,214
state during the taxable year, and the denominator of which is 4,215
the average value of all the taxpayer's real and tangible 4,216
personal property owned or rented, and used in business 4,217
everywhere during such year. Property owned by the taxpayer is 4,219
valued at its original cost. Property rented by the taxpayer is 4,220
valued at eight times the net annual rental rate. "Net annual 4,221
rental rate" means the annual rental rate paid by the taxpayer 4,222
less any annual rental rate received by the taxpayer from 4,223
subrentals. The average value of property shall be determined by 4,224
averaging the values at the beginning and the end of the taxable 4,225
year, but the tax commissioner may require the averaging of 4,226
monthly values during the taxable year, if reasonably required to 4,227
reflect properly the average value of the taxpayer's property. 4,228
(2) The payroll factor is a fraction the numerator of 4,230
which is the total amount paid in this state during the taxable 4,231
year by the taxpayer for compensation, and the denominator of 4,232
96
which is the total compensation paid everywhere by the taxpayer 4,234
during such year. Compensation means any form of remuneration
paid to an employee for personal services. Compensation is paid 4,236
in this state if: (a) the recipient's service is performed 4,238
entirely within this state, (b) the recipient's service is 4,239
performed both within and without this state, but the service 4,240
performed without this state is incidental to the recipient's 4,241
service within this state, OR (c) some of the service is 4,242
performed within this state and either the base of operations, or 4,243
if there is no base of operations, the place from which the 4,244
service is directed or controlled is within this state, or the 4,245
base of operations or the place from which the service is
directed or controlled is not in any state in which some part of 4,246
the service is performed, but the recipient's residence is in 4,247
this state. 4,248
(3)(a) Sales of electricity shall be sitused in this state 4,250
as provided in section 5733.059 of the Revised Code. 4,251
(b) For all other sales, the THE sales factor is a 4,253
fraction the numerator of which is the total sales in this state 4,255
by the taxpayer during the taxable year, and the denominator of 4,256
which is the total sales by the taxpayer everywhere during such 4,257
year. SALES OF ELECTRICITY SHALL BE SITUSED TO THIS STATE IN THE 4,258
MANNER PROVIDED UNDER SECTION 5733.059 OF THE REVISED CODE. In 4,260
determining the numerator and denominator of the sales factor, 4,261
receipts from the sale or other disposal of a capital asset or an 4,262
asset described in section 1231 of the Internal Revenue Code 4,263
shall be eliminated. Also, in determining the numerator and 4,265
denominator of the sales factor, in the case of a reporting 4,266
taxpayer owning at least eighty per cent of the issued and 4,267
outstanding common stock of one or more insurance companies or 4,268
public utilities, except an electric company, or owning at least 4,270
twenty-five per cent of the issued and outstanding common stock 4,271
of one or more financial institutions, receipts received by the 4,272
reporting taxpayer from such utilities, insurance companies, and 4,273
97
financial institutions shall be eliminated.
For the purpose of division (B)(3)(b) of this section, 4,276
sales of tangible personal property are in this state where such 4,277
property is received in this state by the purchaser. In the case 4,278
of delivery of tangible personal property by common carrier or by 4,279
other means of transportation, the place at which such property 4,280
is ultimately received after all transportation has been 4,281
completed shall be considered as the place at which such property 4,282
is received by the purchaser. Direct delivery in this state, 4,283
other than for purposes of transportation, to a person or firm 4,284
designated by a purchaser constitutes delivery to the purchaser 4,285
in this state, and direct delivery outside this state to a person 4,286
or firm designated by a purchaser does not constitute delivery to 4,287
the purchaser in this state, regardless of where title passes or 4,288
other conditions of sale. 4,289
Sales other than sales of electricity or tangible personal 4,291
property are in this state if either the income-producing 4,293
activity is performed solely in this state, or the 4,295
income-producing activity is performed both within and without 4,296
this state and a greater proportion of the income-producing 4,297
activity is performed within this state than in any other state, 4,299
based on costs of performance.
(C) The portion of a taxpayer's Ohio net income taxable by 4,302
each municipal corporation imposing an income tax shall be 4,303
determined by multiplying the taxpayer's Ohio net income by the 4,304
sum of the municipal property factor multiplied by one-third, the 4,306
municipal payroll factor multiplied by one-third, and the 4,308
municipal sales factor multiplied by one-third, and subtracting 4,309
from the product so obtained any "municipal net operating loss 4,310
carryforward from prior taxable years." If the denominator of 4,311
one of the factors is zero, the remaining two factors each shall 4,312
be multiplied by one-half instead of one-third; if the
denominator of two of the factors is zero, the remaining factor 4,313
shall be multiplied by one. In calculating the "municipal net 4,314
98
operating loss carryforward from prior taxable years" for each 4,315
municipal corporation, net operating losses are apportioned in 4,316
and out of a municipal corporation for the taxable year in which
the net operating loss occurs in the same manner that positive 4,317
net income would have been so apportioned. Any net operating 4,318
loss for a municipal corporation may be applied to subsequent net 4,319
income in that municipal corporation to reduce that income to 4,320
zero or until the net operating loss has been fully used as a
deduction. The unused portion of net operating losses for each 4,321
taxable year apportioned to a municipal corporation may only be 4,322
applied against the income apportioned to that municipal 4,323
corporation for five subsequent taxable years. Net operating 4,324
losses occurring in taxable years ending before 2002 may not be
subtracted under this section. 4,325
A taxpayer's municipal property, municipal payroll, and 4,327
municipal sales factors for a municipal corporation shall be 4,328
determined as provided in divisions (C)(1), (2), and (3) of this 4,329
section.
(1) The municipal property factor is the quotient obtained 4,331
by dividing (a) the average value of real and tangible personal 4,332
property owned or rented by the taxpayer and used in business in 4,333
the municipal corporation during the taxable year by (b) the 4,335
average value of all of the taxpayer's real and tangible personal 4,337
property owned or rented and used in business during that taxable 4,338
year in this state. The value and average value of such property 4,340
shall be determined in the same manner provided in division 4,342
(B)(1) of this section.
(2) The municipal payroll factor is the quotient obtained 4,344
by dividing (a) the total amount of compensation paid EARNED IN 4,345
THE MUNICIPAL CORPORATION by the taxpayer to its TAXPAYER'S 4,347
employees during the taxable year FOR SERVICES PERFORMED FOR THE 4,348
TAXPAYER AND that is subject to income tax withholding by the 4,350
municipal corporation by (b) the total amount of compensation 4,352
paid in this state by the taxpayer to its employees IN THIS STATE 4,353
99
during the taxable year. Compensation has the same meaning as in 4,354
division (B)(2) of this section.
(3) The municipal sales factor is a fraction the numerator 4,357
of which is the taxpayer's total sales in a municipal corporation 4,358
during the taxable year, and the denominator of which is the 4,359
taxpayer's total sales in this state during such year. 4,360
For the purpose of division (C)(3) of this section, sales 4,362
of tangible personal property are in the municipal corporation 4,363
where such property is received in the municipal corporation by 4,364
the purchaser. Sales of electricity directly to the consumer, as 4,365
defined in section 5733.059 of the Revised Code, shall be 4,366
considered sales of tangible personal property. In the case of 4,367
the delivery of tangible personal property by common carrier or 4,368
by other means of transportation, the place at which such
property ultimately is received after all transportation has been 4,369
completed shall be considered as the place at which the property 4,370
is received by the purchaser. Direct delivery in the municipal 4,371
corporation, other than for purposes of transportation, to a 4,373
person or firm designated by a purchaser constitutes delivery to 4,374
the purchaser in that municipal corporation, and direct delivery 4,376
outside the municipal corporation to a person or firm designated
by a purchaser does not constitute delivery to the purchaser in 4,377
that municipal corporation, regardless of where title passes or 4,378
other conditions of sale. Sales, other than sales of tangible 4,379
personal property, are in the municipal corporation if either: 4,380
(a) The income-producing activity is performed solely in 4,382
the municipal corporation; 4,383
(b) The income-producing activity is performed both within 4,386
and without the municipal corporation and a greater proportion of
the income-producing activity is performed within that municipal 4,388
corporation than any other location in this state, based on costs 4,389
of performance.
(D) If a taxpayer is a combined company as defined in 4,391
section 5727.01 of the Revised Code, the municipal property, 4,392
100
payroll, and sales factors under division (C) of this section 4,394
shall be adjusted as follows:
(1) The numerator of the municipal property factor shall 4,396
include only the value, as determined under division (C)(1) of 4,397
this section, of the company's real and tangible property in the 4,398
municipal corporation attributed to the company's activity as an 4,400
electric company using the same methodology prescribed under 4,401
section 5727.03 of the Revised Code for taxable tangible personal 4,402
property.
(2) The numerator of the municipal payroll factor shall 4,404
include only compensation paid in the municipal corporation by 4,405
the company to its employees for personal services rendered in 4,407
the company's activity as an electric company. 4,408
(3) The numerator of the municipal sales factor shall 4,410
include only the sales of tangible personal property and 4,411
services, as determined under division (C)(3) of this section, 4,412
made in the municipal corporation in the course of the company's 4,413
activity as an electric company.
(E)(1) If the provisions for apportioning adjusted federal 4,415
taxable income or Ohio net income under division (B), (C), and 4,417
(D) of this section do not fairly represent business activity in 4,418
this state or among municipal corporations, the tax commissioner 4,419
may adopt rules for apportioning such income by an alternative
method that fairly represents business activity in this state or 4,420
among municipal corporations. 4,421
(2) If any of the factors determined under division (B), 4,423
(C), or (D) of this section does not fairly represent the extent 4,425
of a taxpayer's business activity in this state or among 4,426
municipal corporations, the taxpayer may request, or the tax 4,428
commissioner may require, that the taxpayer's adjusted federal 4,429
taxable income or Ohio net income be determined by an alternative 4,431
method, including any of the alternative methods enumerated in 4,432
division (B)(2)(d) of section 5733.05 of the Revised Code. A 4,434
taxpayer requesting an alternative method shall make the request 4,435
101
in writing to the tax commissioner either with the annual report, 4,436
a timely filed amended report, or a timely filed petition for 4,437
reassessment. When the tax commissioner requires or permits an 4,438
alternative method under division (E)(2) of this section, the tax 4,439
commissioner shall cause a written notice to that effect to be 4,441
delivered to any municipal corporation that would be affected by 4,442
application of the alternative method. Nothing in this division 4,443
shall be construed to extend any statute of limitations under 4,444
this chapter.
(F)(1) The tax commissioner may adopt rules providing for 4,446
the combination of adjusted federal taxable incomes of taxpayers 4,448
satisfying the ownership or control requirements of section 4,449
5733.052 of the Revised Code if the tax commissioner finds that 4,450
such combinations are necessary to properly reflect adjusted 4,451
federal taxable income, Ohio net income, or the portion of Ohio 4,453
net income to be taxable by municipal corporations. 4,454
(2) A taxpayer satisfying the ownership or control 4,456
requirements of section 5733.052 of the Revised Code with respect 4,457
to one or more other taxpayers may not combine their adjusted 4,458
federal taxable incomes for the purposes of this section unless 4,460
rules are adopted under division (F)(1) of this section allowing 4,461
such a combination or the tax commissioner finds that such a 4,462
combination is necessary to properly reflect the taxpayers' 4,463
adjusted federal taxable incomes, Ohio net incomes, or the 4,465
portion of Ohio net incomes to be subject to taxation within a 4,466
municipal corporation.
Sec. 5745.03. (A) For each taxable year, each taxpayer 4,475
shall file an annual report with the treasurer of state not later 4,477
than the fifteenth day of the fourth month after the end of the 4,478
taxpayer's taxable year, and shall remit with that report the 4,479
amount of tax due as shown on the report less the amount paid for 4,480
the year under section 5745.04 of the Revised Code. The 4,481
remittance shall be made in the form prescribed by the treasurer 4,482
of state, including electronic funds transfer if the amount 4,483
102
payable with the report exceeds one thousand dollars. The 4,484
treasurer of state shall credit ninety-eight and one-half per 4,485
cent of such remittances to the municipal income tax fund, which 4,486
is hereby created in the state treasury, and credit the remainder 4,487
to the municipal income tax administrative fund, which is hereby 4,488
created in the state treasury. The treasurer of state shall 4,489
indicate on the report the date it was filed and the amount 4,490
remitted, and immediately shall transmit the report to the tax 4,491
commissioner.
(B) Any taxpayer that has been granted an extension for 4,493
filing a federal income tax return may request an extension for 4,494
filing the return required under this section by filing with the 4,495
tax commissioner a copy of the taxpayer's request for the federal 4,496
filing extension. The request shall be filed not later than the 4,497
last day for filing the return as required under division (A) of 4,498
this section. If such a request is properly and timely filed, 4,499
the tax commissioner shall extend the last day for filing the 4,501
return required under this section for the same period for which 4,502
the federal filing extension was granted. The tax commissioner 4,503
may deny the filing extension request only if the taxpayer fails 4,504
to timely file the request, fails to file a copy of the federal 4,505
extension request, owes past due taxes, interest, or penalty 4,506
under this chapter, or has failed to file a required report or 4,507
other document for a prior taxable year. The granting of an 4,508
extension under this section does not extend the last day for 4,509
paying taxes without penalty pursuant to this chapter unless the 4,510
tax commissioner extends the payment date. 4,511
(C) The annual report shall include statements of the 4,514
following facts as of the last day of the taxpayer's taxable 4,515
year:
(1) The name of the taxpayer; 4,517
(2) The name of the state or country under the laws of 4,519
which it is incorporated; 4,520
(3) The location of its principal office in this state 4,522
103
and, in the case of a taxpayer organized under the laws of 4,524
another state, the principal place of business in this state and 4,525
the name and address of the officer or agent of the taxpayer in 4,526
charge of the business conducted in this state; 4,527
(4) The names of the president, secretary, treasurer, and 4,529
statutory agent in this state, with the post-office address of 4,530
each; 4,531
(5) The date on which the taxpayer's taxable year begins 4,533
and ends;
(6) The taxpayer's federal taxable income during the 4,535
taxpayer's taxable year; 4,536
(7) Any other information the tax commissioner requires 4,538
for the proper administration of this chapter. 4,539
(D) The tax commissioner may require any reports required 4,541
under this chapter to be filed in an electronic format. 4,543
(E) A municipal corporation may not require a taxpayer 4,545
required to file a report under this section to file a report of 4,546
the taxpayer's income, but a municipal corporation may require a 4,547
taxpayer to report to the municipal corporation the value of the 4,548
taxpayer's real and tangible personal property situated in the 4,549
municipal corporation, compensation paid BY THE TAXPAYER TO ITS 4,550
EMPLOYEES in the municipal corporation to employees by the 4,552
taxpayer, and sales made in the municipal corporation by the 4,553
taxpayer, to the extent necessary for the municipal corporation 4,554
to compute the taxpayer's municipal property, payroll, and sales 4,555
factors for the municipal corporation. 4,556
(F) On or before the thirty-first day of January each 4,559
year, each municipal corporation imposing a tax on income shall 4,560
certify to the tax commissioner the rate of the tax in effect on 4,561
the first day of January of that year. If any municipal 4,562
corporation fails to certify its income tax rate as required by 4,564
this division, the tax commissioner shall notify the director of 4,565
budget and management, who, upon receiving such notification, 4,566
shall withhold from each payment made to the municipal 4,567
104
corporation under section 5745.05 of the Revised Code fifty per
cent of the amount of the payment otherwise due the municipal 4,569
corporation under that section as computed on the basis of the 4,570
tax rate most recently certified until the municipal corporation 4,571
certifies the tax rate in effect on the first day of January of 4,572
that year.
The tax rate used to determine the tax payable to a 4,574
municipal corporation under this section for a taxpayer's taxable 4,575
year shall be the tax rate in effect in a municipal corporation 4,576
on the first day of January in that taxable year. If a 4,577
taxpayer's taxable year is for a period less than twelve months 4,578
that does not include the first day of January, the tax rate used 4,579
to determine the tax payable to a municipal corporation under
this section for the taxpayer's taxable year shall be the tax 4,580
rate in effect in a municipal corporation on the first day of 4,581
January in the preceding taxable year.
Sec. 5745.04. (A) As used in this section, "combined tax 4,590
liability" means the total of a taxpayer's income tax liabilities 4,591
to all municipal corporations in this state for a taxable year. 4,592
(B) Beginning WITH ITS TAXABLE YEAR BEGINNING in 2003, 4,594
each taxpayer shall file a declaration of estimated tax report 4,596
with, and remit estimated taxes to, the treasurer of state at the 4,597
times and in the amounts prescribed in divisions (B)(1) to (4) of 4,598
this section, except as provided in division (C) of this 4,599
section:. THIS DIVISION ALSO APPLIES TO A TAXPAYER HAVING A 4,600
TAXABLE YEAR CONSISTING OF FEWER THAN TWELVE MONTHS, AT LEAST ONE 4,601
OF WHICH IS IN 2002, THAT ENDS BEFORE JANUARY 1, 2003. 4,602
(1) Not less than twenty-five per cent of the combined tax 4,604
liability for the preceding taxable year or twenty per cent of 4,605
the combined tax liability for the current taxable year shall 4,606
have been remitted not later than the fifteenth day of the fourth 4,607
month after the end of the preceding taxable year;. 4,608
(2) Not less than fifty per cent of the combined tax 4,610
liability for the preceding taxable year or forty per cent of the 4,611
105
combined tax liability for the current taxable year shall have 4,612
been remitted not later than the fifteenth day of the sixth month 4,613
after the end of the preceding taxable year;. 4,614
(3) Not less than seventy-five per cent of the combined 4,616
tax liability for the preceding taxable year or sixty per cent of 4,617
the combined tax liability for the current taxable year shall 4,618
have been remitted not later than the fifteenth day of the ninth 4,619
month after the end of the preceding taxable year;. 4,620
(4) Not less than one hundred per cent of the combined tax 4,622
liability for the preceding taxable year or eighty per cent of 4,623
the combined tax liability for the current taxable year shall 4,624
have been remitted not later than the fifteenth day of the 4,625
twelfth month after the end of the preceding taxable year. 4,626
(C) Each taxpayer shall report on the declaration of 4,628
estimated tax report the portion of the remittance that the 4,629
taxpayer estimates that it owes to each municipal corporation for 4,630
the taxable year.
(D) Upon receiving a declaration of estimated tax report 4,632
and remittance of estimated taxes under this section, the 4,633
treasurer of state shall credit ninety-eight and one-half per 4,634
cent of the remittance to the municipal income tax fund and 4,635
credit the remainder to the municipal income tax administrative 4,636
fund, and shall transmit the report to the tax commissioner. 4,637
(E) If any remittance of estimated taxes is for one 4,639
thousand dollars or more, the taxpayer shall make the remittance 4,640
by electronic funds transfer as prescribed by section 5745.04 of 4,641
the Revised Code.
(F) Notwithstanding section 5745.08 or 5745.09 of the 4,643
Revised Code, no penalty or interest shall be imposed on a 4,645
taxpayer if the declaration of estimated tax report is properly 4,646
filed, and the estimated tax is remitted, within the time 4,647
prescribed by division (B) of this section. 4,648
Sec. 5745.05. (A) Prior to the first day of March, June, 4,658
September, and December, the tax commissioner shall certify to 4,660
106
the director of budget and management the amount to be paid to 4,661
each municipal corporation, as indicated on the declaration of 4,662
estimated tax reports and annual reports received under sections 4,663
5745.03 and 5745.04 of the Revised Code, less any amounts 4,664
previously distributed for the taxable year AND NET OF ANY AUDIT 4,665
ADJUSTMENTS MADE BY THE TAX COMMISSIONER. Not later than the 4,667
first day of March, June, September, and December, the director 4,669
of budget and management shall provide for payment of the amount
certified to each municipal corporation from the municipal income 4,670
tax fund, plus a pro rata share of any investment earnings 4,671
accruing to the fund since the previous payment under this 4,672
section apportioned among municipal corporations entitled to such 4,673
payments in proportion to the amount certified by the tax 4,674
commissioner.
(B) If the tax commissioner determines that the amount of 4,676
tax paid by a taxpayer and distributed to a municipal corporation 4,677
under this section for a taxable year exceeds the amount payable 4,678
to that municipal corporation under this chapter after accounting 4,679
for amounts remitted with the annual report and as estimated 4,680
taxes, the tax commissioner shall permit the taxpayer to credit 4,681
the excess against the taxpayer's payments to the municipal 4,683
corporation of estimated taxes remitted for an ensuing taxable
year under section 5745.04 of the Revised Code. If, upon the 4,685
written request of the taxpayer, the tax commissioner determines 4,686
that the excess to be so credited is likely to exceed the amount 4,687
of estimated taxes payable by the taxpayer to the municipal 4,689
corporation during the ensuing twelve months, the tax
commissioner shall so notify the municipal corporation and the 4,690
municipal corporation shall issue a refund of the excess to the 4,691
taxpayer within ninety days after receiving such a notice. 4,692
Interest shall accrue on the amount to be refunded and is payable 4,694
to the taxpayer at the rate per annum prescribed by section 4,695
5703.47 of the Revised Code from the ninety-first day after the 4,696
notice is received by the municipal corporation until the day the 4,697
107
refund is paid. 4,698
Sec. 5745.07. If the tax required to be paid under this 4,707
chapter, or any portion of that tax, whether determined by the 4,708
tax commissioner or the taxpayer, is not paid on or before the 4,709
date prescribed for its payment, interest shall be assessed, 4,710
collected, and paid, in the same manner as the tax, upon such 4,711
unpaid amount at the rate per annum prescribed by section 5703.47 4,712
of the Revised Code from the date prescribed for its payment 4,713
until it is paid or until the day an assessment is issued under 4,714
section 5745.12 of the Revised Code, whichever occurs first. 4,715
Sec. 5745.08. (A) The following penalties shall apply 4,725
under the circumstances indicated:
(1) If a taxpayer required to file a report or remit tax 4,728
as required by this chapter fails to make and file the report 4,730
within the time prescribed, including any extensions of time 4,731
granted by the tax commissioner, the tax commissioner may impose 4,732
a penalty not exceeding the greater of fifty dollars per month or 4,734
fraction of a month, not to exceed five hundred dollars, or five 4,735
per cent per month or fraction of a month, not to exceed fifty 4,736
per cent, of the tax required to be shown on the report, for each 4,737
month or fraction of a month elapsing between the due date, 4,738
including extensions of the due date, and the day on which the
report is filed. 4,739
(2) If a taxpayer fails to pay any amount of estimated tax 4,742
required to be paid under division (B) of section 5745.04 of the 4,744
Revised Code by the dates prescribed for payment, the tax 4,746
commissioner may impose a penalty not to exceed twice the 4,748
interest charged under section 5745.09 of the Revised Code for 4,749
the delinquent payment.
(3) If a taxpayer files what purports to be a report 4,751
required by this chapter that does not contain information upon 4,753
which the substantial correctness of the report may be judged or 4,754
contains information that on its face indicates that the report 4,755
is substantially incorrect, and the filing of the report in that 4,756
108
manner is due to a position that is frivolous or a desire that is 4,757
apparent from the report to delay or impede the administration of 4,758
this chapter, a penalty of up to five hundred dollars may be 4,760
imposed.
(4) If a taxpayer makes a fraudulent attempt to evade the 4,763
reporting or payment of the tax required to be shown on any 4,764
report required under this chapter, a penalty may be imposed not 4,767
exceeding the greater of one thousand dollars or one hundred per
cent of the tax required to be shown on the report. 4,768
(5) If any person makes a false or fraudulent claim for a 4,770
refund under section 5745.11 of the Revised Code, a penalty may 4,771
be imposed not exceeding the greater of one thousand dollars or 4,772
one hundred per cent of the claim. Any penalty imposed under 4,773
division (A)(5) of this section, any refund issued on the claim, 4,774
and interest on any refund from the date of the refund, may be 4,775
assessed under section 5745.12 of the Revised Code without regard 4,776
to any time limitation for the assessment imposed by division (A) 4,778
of that section.
(B) For the purposes of this section, the tax required to 4,780
be shown on the report shall be reduced by the amount of any part 4,781
of the tax paid on or before the date, including extensions of 4,782
the date, prescribed for filing the report. 4,783
(C) Each penalty imposed under this section shall be in 4,785
addition to any other penalty provided in this section. All or 4,786
part of any penalty imposed under this section may be abated by 4,787
the commissioner. The tax commissioner may adopt rules governing 4,788
the imposition and abatement of such penalties. 4,789
(D) All amounts collected under this section from a 4,791
taxpayer shall be considered as taxes collected under this 4,793
chapter and shall be credited and distributed to municipal 4,794
corporations IN THE SAME PROPORTIONS AS THE TAXPAYER'S TAXES ARE 4,795
DISTRIBUTED FOR THE REPORTING PERIOD UNDER SECTION 5745.05 OF THE 4,796
REVISED CODE OR, IF THE TAXPAYER HAS FILED THE ANNUAL REPORT FOR 4,797
THE YEAR UNDER SECTION 5745.03 OF THE REVISED CODE, in the 4,799
109
amounts found to be due such municipal corporations ON THE BASIS 4,800
OF THE ANNUAL REPORT.
Sec. 5745.09. (A) In case of any underpayment of the 4,809
estimated tax under section 5745.04 of the Revised Code, there 4,812
shall be added to the tax an amount determined at the rate per 4,813
annum prescribed by section 5703.47 of the Revised Code upon the 4,814
amount of underpayment for the period of underpayment. 4,816
(B) The amount of the underpayment shall be the excess of 4,818
division (B)(1) over division (B)(2) of this section: 4,819
(1) The amount of the estimated tax payment that would be 4,821
required to be paid for the taxable year if the total estimated 4,822
tax were equal to the total tax shown to be due on the annual 4,824
report, or if no report was filed, the tax for such year; 4,825
(2) The amount, if any, of the estimated tax paid on or 4,827
before the last day prescribed for such payment. 4,828
(C) The period of the underpayment shall run from the date 4,830
the estimated tax payment was required to be made to the date on 4,831
which such payment is made. For purposes of this section, a 4,832
payment of estimated tax on any payment date shall be considered 4,833
a payment of any previous underpayment only to the extent such 4,834
payment exceeds the amount of the payment presently due. 4,835
(D) All amounts collected under this section shall be 4,837
considered as taxes collected under this chapter and shall be 4,838
credited and distributed to municipal corporations in the same 4,839
proportions as the taxpayer's taxes are distributed for the 4,840
reporting period under section 5745.05 of the Revised Code OR, IF 4,842
THE TAXPAYER HAS FILED THE ANNUAL REPORT FOR THE YEAR UNDER 4,843
SECTION 5745.03 OF THE REVISED CODE, IN THE AMOUNTS FOUND TO BE 4,844
DUE TO SUCH MUNICIPAL CORPORATIONS ON THE BASIS OF THE ANNUAL
REPORT. 4,845
Sec. 5745.11. An application to refund to a taxpayer the 4,855
amount of taxes paid on any illegal, erroneous, or excessive 4,857
assessment, with interest on that amount as provided by section 4,858
5745.07 of the Revised Code PAYMENT OF TAX UNDER THIS CHAPTER, 4,860
110
INCLUDING ASSESSMENTS, shall be filed with the tax commissioner 4,862
within three years after the date of the illegal, erroneous, or 4,863
excessive payment of the tax, or within any additional period 4,864
allowed by division (A) of section 5745.12 of the Revised Code. 4,866
The application shall be filed in the form prescribed by the tax 4,867
commissioner.
Upon the filing of a refund application, the tax 4,869
commissioner shall determine the amount of refund due and certify 4,871
the amount of the refund to each municipal corporation to which 4,872
the overpayment was made. The municipal corporation shall issue 4,873
a refund to the taxpayer, or, upon the taxpayer's written 4,874
request, shall credit the amount of the refund against the 4,875
taxpayer's estimated tax payments to the municipal corporation 4,876
for an ensuing taxable year. Any portion of the refund not 4,877
issued within ninety days after the tax commissioner's notice is 4,878
received by the municipal corporation shall bear interest at the 4,879
rate per annum prescribed by section 5703.47 of the Revised Code 4,880
from the ninetieth day after such notice is received by the 4,882
municipal corporation until the day the refund is paid or
credited. ON AN ILLEGAL OR ERRONEOUS ASSESSMENT, INTEREST SHALL 4,884
BE PAID AT THAT RATE FROM THE DATE OF PAYMENT ON THE ILLEGAL OR 4,885
ERRONEOUS ASSESSMENT UNTIL THE DAY THE REFUND IS PAID OR 4,887
CREDITED.
Sec. 5745.13. If, upon examination of any books, records, 4,896
reports, or other documents of a taxpayer, the tax commissioner 4,897
determines that an adjustment shall be made in the portion of the 4,898
taxpayer's income that is to be apportioned to a municipal 4,899
corporation, the tax commissioner shall notify the taxpayer and, 4,900
IF THE ADJUSTMENT CAUSES AN ADJUSTMENT IN THE TAXPAYER'S TAX OF 4,901
MORE THAN FIVE HUNDRED DOLLARS, SHALL NOTIFY each AFFECTED 4,903
municipal corporation to THAT the taxpayer's income TAX has been 4,904
adjusted.
Any municipal corporation to which such a notice is issued 4,906
may request a review and redetermination of the taxpayer's 4,907
111
federal taxable income, Ohio net income, or the portion of Ohio 4,908
net income apportioned to the municipal corporation by filing a 4,909
petition with the tax commissioner not later than sixty days 4,910
after the tax commissioner issues the notice. The petition shall 4,911
be filed either personally or by certified mail, and shall 4,912
indicate the objections of the municipal corporation. 4,913
Upon receiving such a petition, if a hearing is requested 4,915
the tax commissioner shall assign a time and place for a hearing 4,917
on the petition and shall notify the petitioner of the time and 4,918
place of the hearing by ordinary mail. The tax commissioner may 4,919
continue the hearing from time to time as necessary. The tax 4,920
commissioner shall make any correction to the taxpayer's federal 4,921
taxable income, Ohio net income, or apportionment of Ohio net 4,922
income that the commissioner finds proper, and issue notice of 4,923
any correction by ordinary mail to the petitioner, to each other 4,925
municipal corporation affected by the correction of the 4,926
apportionment, and to the taxpayer. The tax commissioner's 4,927
decision on the matter is final, and is not subject to further
appeal. 4,928
Sec. 5747.15. (A) In addition to any other penalty 4,937
imposed by this chapter or Chapter 5703. of the Revised Code, the 4,938
following penalties shall apply: 4,939
(1) If a taxpayer, qualifying entity, or employer required 4,941
to file any report or return, including an informational notice, 4,942
report, or return, under this chapter fails to make and file the 4,944
report or return within the time prescribed, including any 4,945
extensions of time granted by the tax commissioner, a penalty may 4,946
be imposed not exceeding the greater of fifty dollars per month 4,948
or fraction of a month, not to exceed five hundred dollars, or 4,949
five per cent per month or fraction of a month, not to exceed 4,950
fifty per cent, of the sum of the taxes required to be shown on 4,951
the report or return, for each month or fraction of a month
elapsing between the due date, including extensions of the due 4,952
date, and the date on which filed. 4,953
112
(2) If a taxpayer fails to pay any amount of tax required 4,955
to be paid under section 5733.41 or 5747.41 or Chapter CHAPTERS 4,957
5747. OR 5748. of the Revised Code, except estimated tax under 4,958
section 5747.09 or 5747.43 of the Revised Code, by the dates 4,959
prescribed for payment, a penalty may be imposed not exceeding 4,961
twice the applicable interest charged under division (G) of 4,963
section 5747.08 of the Revised Code for the delinquent payment.
(3)(a) If an employer fails to pay any amount of tax 4,965
imposed by section 5747.02 of the Revised Code and required to be 4,966
paid under this chapter by the dates prescribed for payment, a 4,967
penalty may be imposed not exceeding the sum of ten per cent of 4,969
the delinquent payment plus twice the interest charged under 4,970
division (F)(5) of section 5747.07 of the Revised Code for the 4,971
delinquent payment.
(b) If a qualifying entity fails to pay any amount of tax 4,973
imposed by section 5733.41 or 5747.41 of the Revised Code and 4,975
required to be paid under this chapter by the dates prescribed 4,976
for payment, a penalty may be imposed not exceeding the sum of 4,978
ten per cent of the delinquent payment plus twice the applicable 4,979
interest charged under division (G) of section 5747.08 of the 4,980
Revised Code for the delinquent payment. 4,981
(4)(a) If an employer withholds from employees the tax 4,984
imposed by section 5747.02 of the Revised Code and fails to remit
the tax withheld to the state as required by this chapter on or 4,986
before the dates prescribed for payment, a penalty may be imposed 4,987
not exceeding fifty per cent of the delinquent payment. 4,989
(b) If a qualifying entity withholds any amount of tax 4,991
imposed under section 5747.41 of the Revised Code from an 4,993
individual's qualifying amount and fails to remit that amount to 4,994
the state as required by sections 5747.42 to 5747.453 of the 4,995
Revised Code on or before the dates prescribed for payment, a
penalty may be imposed not exceeding fifty per cent of the 4,997
delinquent payment.
(5) If a taxpayer, qualifying entity, or employer files 4,999
113
what purports to be a return required by this chapter that does 5,000
not contain information upon which the substantial correctness of 5,001
the return may be judged or contains information that on its face 5,002
indicates that the return is substantially incorrect, and the 5,003
filing of the return in that manner is due to a position that is 5,004
frivolous or a desire that is apparent from the return to delay 5,005
or impede the administration of the tax levied by section 5,006
5733.41, 5747.02, or 5747.41, or Chapter 5748. of the Revised 5,008
Code, a penalty of up to five hundred dollars may be imposed. 5,009
(6) If a taxpayer or qualifying entity makes a fraudulent 5,011
attempt to evade the reporting or payment of the tax required to 5,012
be shown on any return required under this chapter, a penalty may 5,013
be imposed not exceeding the greater of one thousand dollars or 5,015
one hundred per cent of the tax required to be shown on the 5,017
return.
(7) If any person makes a false or fraudulent claim for a 5,019
refund under this chapter, a penalty may be imposed not exceeding 5,021
the greater of one thousand dollars or one hundred per cent of 5,022
the claim. The penalty imposed under division (A)(7) of this 5,023
section, any refund issued on the claim, and interest on any 5,024
refund from the date of the refund, may be assessed under section 5,025
5747.13 of the Revised Code as tax, penalty, or interest imposed 5,026
under section 5733.41, 5747.02, or 5747.41 of the Revised Code, 5,027
without regard to whether the person making the claim is 5,029
otherwise subject to the provisions of this chapter or Chapter 5,030
5733. of the Revised Code, and without regard to any time 5,031
limitation for the assessment imposed by division (A) of section 5,032
5747.13 of the Revised Code.
(B) For purposes of this section, the taxes required to be 5,034
shown on the return shall be reduced by the amount of any part of 5,035
the taxes paid on or before the date, including any extensions of 5,036
the date, prescribed for filing the return. 5,037
(C) Any penalty imposed under this section shall be in 5,039
addition to all other penalties imposed under this section. All 5,040
114
or part of any penalty imposed under this section may be abated 5,041
by the commissioner. All or part of any penalty imposed under 5,042
this section may be abated by the commissioner if the taxpayer, 5,043
qualifying entity, or employer shows that the failure to comply 5,044
with the provisions of this chapter is due to reasonable cause 5,046
and not willful neglect.
Sec. 5747.221. FOR THE PURPOSES OF SECTIONS 5747.20, 5,048
5747.21, AND 5747.22 OF THE REVISED CODE, NO ITEM OF INCOME OR 5,049
DEDUCTION SHALL BE ALLOCATED OR APPORTIONED TO THIS STATE TO THE 5,050
EXTENT THAT SUCH ITEM REPRESENTS OR RELATES TO THE PORTION OF AN 5,051
ADJUSTED QUALIFYING AMOUNT FOR WHICH THE WITHHOLDING TAX IS NOT 5,053
IMPOSED UNDER SECTION 5747.41 OF THE REVISED CODE BY REASON OF
DIVISION (C) OF SECTION 5733.401 OF THE REVISED CODE. THIS 5,054
SECTION SHALL BE APPLIED WITHOUT REGARD TO DIVISION (I) OF 5,055
SECTION 5733.40 OF THE REVISED CODE. 5,056
Sec. 5747.24. This section is to be used solely for the 5,065
purposes of Chapters 5747. and 5748. of the Revised Code. 5,066
(A)(1) As used in this section and section 5747.25 of the 5,068
Revised Code: 5,069
(1) An (a) EXCEPT AS OTHERWISE PROVIDED IN DIVISION 5,072
(A)(2) OF THIS SECTION, AN individual "has one contact period in
this state" if the individual is away overnight from his THE 5,074
INDIVIDUAL'S abode located outside this state and while away 5,075
overnight from that abode spends at least some portion, however 5,076
minimal, of each of two consecutive days in this state. 5,077
(2)(b) An individual is considered to be "away overnight 5,079
from his THE INDIVIDUAL'S abode located outside this state" if 5,080
the individual is away from his THE INDIVIDUAL'S abode located 5,081
outside this state for a continuous period of time, however 5,083
minimal, beginning at any time on one day and ending at any time 5,084
on the next day.
(c) "MEDICAL HARDSHIP" INCLUDES CIRCUMSTANCES UNDER WHICH 5,086
THE INDIVIDUAL OR A MEMBER OF THE INDIVIDUAL'S IMMEDIATE OR 5,087
EXTENDED FAMILY IS ADMITTED AS A PATIENT INTO A HOSPITAL LOCATED 5,088
115
IN THIS STATE, EXAMINED IN THIS STATE BY A MEDICAL PROFESSIONAL, 5,089
ADMITTED INTO A NURSING HOME IN THIS STATE, RECEIVING NURSING 5,090
CARE IN THIS STATE WHILE STAYING IN A DWELLING LOCATED IN THIS 5,091
STATE, OR OTHERWISE RECEIVING ONGOING, NECESSARY MEDICAL CARE IN
THIS STATE. "MEDICAL HARDSHIP" INCLUDES RECEIVING TREATMENT OR 5,092
CARE FOR ACUTE OR CHRONIC ILLNESS OR OBSTETRIC TREATMENT OR CARE. 5,093
(d) "MEDICAL PROFESSIONAL" MEANS A PERSON LICENSED UNDER 5,096
CHAPTER 4715., 4723., 4725., 4729., 4730., 4731., 4732., 4734., 5,097
4753., 4755., 4757., 4759., 4760., 4761., 4762., OR 4773. OF THE 5,098
REVISED CODE.
(e) "IMMEDIATE OR EXTENDED FAMILY" OF AN INDIVIDUAL MEANS 5,100
THE INDIVIDUAL'S SPOUSE, CHILDREN, GRANDCHILDREN, PARENTS, 5,102
GRANDPARENTS, SIBLINGS, IN-LAWS, OR ANY OF THE INDIVIDUAL'S 5,103
DEPENDENTS. 5,104
(2) UP TO THIRTY PERIODS THAT WOULD OTHERWISE CONSTITUTE 5,106
CONTACT PERIODS UNDER DIVISION (A)(1)(a) OF THIS SECTION SHALL 5,108
NOT BE CONSIDERED CONTACT PERIODS DURING A TAXABLE YEAR IF THE 5,109
INDIVIDUAL SPENDS ANY PORTION OF EITHER DAY OF EACH SUCH CONTACT 5,110
PERIOD FOR ONE OR MORE OF THE FOLLOWING PURPOSES: 5,111
(a) TO PROVIDE SERVICES FOR NO CONSIDERATION OR TO RAISE 5,113
FUNDS FOR AN ORGANIZATION DESCRIBED IN SECTION 501(c)(3) OF THE 5,115
INTERNAL REVENUE CODE. "CONSIDERATION" DOES NOT INCLUDE ANY 5,116
REIMBURSEMENT OF THE INDIVIDUAL'S ACTUAL EXPENSES DIRECTLY OR 5,118
INDIRECTLY RELATED TO SUCH ACTIVITY. 5,119
(b) TO ATTEND TO A MEDICAL HARDSHIP INVOLVING THE 5,121
INDIVIDUAL OR A MEMBER OF THE INDIVIDUAL'S IMMEDIATE OR EXTENDED 5,122
FAMILY OR TO ATTEND A FUNERAL INVOLVING A MEMBER OF THE 5,123
INDIVIDUAL'S IMMEDIATE OR EXTENDED FAMILY. 5,124
(B) An individual who during a taxable year has no more 5,126
than one hundred twenty contact periods in this state, which need 5,127
not be consecutive, and who during the entire taxable year has at 5,128
least one abode outside this state, is presumed to be not 5,129
domiciled in this state during the taxable year. The tax 5,130
commissioner, in writing and by personal service or certified 5,131
116
mail, return receipt requested, may request a statement from an 5,132
individual verifying that the individual was not domiciled in 5,133
this state under this division during the taxable year. The 5,134
commissioner shall not make such a request after the expiration 5,135
of the period, if any, within which the commissioner may make an 5,136
assessment under section 5747.13 of the Revised Code against the 5,137
individual for the taxable year. Within sixty days after 5,138
receiving the commissioner's request, the individual shall submit 5,139
a written statement to the commissioner stating both of the 5,140
following: 5,141
(1) During the entire taxable year, the individual was not 5,143
domiciled in this state; 5,144
(2) During the entire taxable year, the individual had at 5,146
least one abode outside this state. 5,147
The presumption that the individual was not domiciled in 5,149
this state is irrebuttable unless the individual fails to submit 5,150
the statement as required. If the individual fails to submit the 5,151
statement as required, he THE INDIVIDUAL is presumed under 5,152
division (C) of this section to have been domiciled in this state 5,154
the entire taxable year. 5,155
In the case of an individual who dies, the personal 5,157
representative of the estate of the deceased individual may 5,158
comply with this division by making to the best of the 5,159
representative's knowledge and belief the statement under this 5,160
division with respect to the deceased individual, and submitting 5,161
the statement to the commissioner within sixty days after 5,162
receiving the commissioner's request for it. 5,163
An individual or personal representative of an estate who 5,165
knowingly makes a false statement under this division is guilty 5,166
of perjury under section 2921.11 of the Revised Code. 5,167
(C) An individual who during a taxable year has less than 5,169
one hundred eighty-three contact periods in this state, which 5,170
need not be consecutive, and who is not irrebuttably presumed 5,171
under division (B) of this section to be not domiciled in this 5,172
117
state with respect to that taxable year, is presumed to be 5,173
domiciled in this state for the entire taxable year. An 5,174
individual can rebut this presumption for any portion of the 5,175
taxable year only with a preponderance of the evidence to the 5,176
contrary. An individual who rebuts the presumption under this 5,177
division for any portion of the taxable year is presumed to be 5,178
domiciled in this state for the remainder of the taxable year for 5,179
which he THE INDIVIDUAL does not provide a preponderance of the 5,180
evidence to the contrary. 5,181
(D) An individual who during a taxable year has at least 5,183
one hundred eighty-three contact periods in this state, which 5,184
need not be consecutive, is presumed to be domiciled in this 5,185
state for the entire taxable year. An individual can rebut this 5,186
presumption for any portion of the taxable year only with clear 5,187
and convincing evidence to the contrary. An individual who 5,188
rebuts the presumption under this division for any portion of the 5,189
taxable year is presumed to be domiciled in this state for the 5,190
remainder of the taxable year for which he THE INDIVIDUAL does 5,191
not provide clear and convincing evidence to the contrary. 5,192
(E) If the tax commissioner challenges the number of 5,194
contact periods an individual claims to have in this state during 5,195
a taxable year, the individual bears the burden of proof to 5,196
verify such number, by a preponderance of the evidence. An 5,197
individual challenged by the commissioner is presumed to have a 5,198
contact period in this state for any period for which he does not 5,199
prove by a preponderance of the evidence that he THE INDIVIDUAL 5,200
had no such contact period. 5,201
Sec. 5747.39. AS USED IN THIS SECTION, "ELIGIBLE EMPLOYEE" 5,203
AND "ELIGIBLE TRAINING COSTS" HAVE THE SAME MEANINGS AS IN 5,204
SECTION 5733.42 OF THE REVISED CODE, AND "PASS-THROUGH ENTITY" 5,205
INCLUDES A SOLE PROPRIETORSHIP. 5,206
FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 2000 THERE 5,208
IS HEREBY ALLOWED A NONREFUNDABLE CREDIT AGAINST THE TAX IMPOSED 5,210
BY SECTION 5747.02 OF THE REVISED CODE FOR A TAXPAYER THAT IS AN
118
INVESTOR IN A PASS-THROUGH ENTITY FOR WHICH A TAX CREDIT 5,212
CERTIFICATE IS ISSUED UNDER SECTION 5733.42 OF THE REVISED CODE. 5,213
THE AMOUNT OF ELIGIBLE TRAINING COSTS FOR WHICH A CREDIT MAY BE 5,214
CLAIMED BY ALL TAXPAYERS THAT ARE INVESTORS IN AN ENTITY SHALL 5,215
EQUAL ONE-HALF OF THE AVERAGE OF THE ELIGIBLE TRAINING COSTS 5,216
INCURRED BY THE ENTITY DURING THE THREE CALENDAR YEARS THAT END 5,217
IN THE TAXABLE YEAR FOR WHICH THE CREDIT IS CLAIMED, BUT SHALL 5,218
NOT EXCEED ONE THOUSAND DOLLARS FOR EACH ELIGIBLE EMPLOYEE ON 5,220
ACCOUNT OF WHOM SUCH COSTS WERE PAID OR INCURRED BY THE ENTITY, 5,221
AND THE TOTAL AMOUNT OF CREDITS THAT MAY BE CLAIMED BY ALL SUCH
TAXPAYERS SHALL NOT EXCEED ONE HUNDRED THOUSAND DOLLARS EACH 5,222
YEAR. EACH TAXPAYER'S CREDIT SHALL BE CLAIMED FOR THE TAXPAYER'S 5,223
TAXABLE YEAR THAT INCLUDES THE LAST DAY OF THE THIRD CALENDAR 5,224
YEAR OF THE THREE-YEAR PERIOD DURING WHICH ELIGIBLE TRAINING 5,226
COSTS ARE PAID OR INCURRED BY THE ENTITY. THE CREDIT MAY BE 5,227
CLAIMED FOR ELIGIBLE TRAINING COSTS PAID OR INCURRED ON OR BEFORE 5,229
DECEMBER 31, 2003. THE AMOUNT OF A TAXPAYER'S CREDIT SHALL EQUAL 5,230
THE TAXPAYER'S INTEREST IN THE ENTITY ON THE LAST DAY OF THE
THIRD CALENDAR YEAR OF THE THREE-YEAR PERIOD ENDING IN OR WITH 5,232
THE LAST DAY OF THE TAXPAYER'S TAXABLE YEAR, MULTIPLIED BY THE 5,234
CREDIT AVAILABLE TO THE ENTITY AS COMPUTED BY THE ENTITY.
THE CREDIT SHALL BE CLAIMED IN THE ORDER PRESCRIBED BY 5,236
SECTION 5747.98 OF THE REVISED CODE. A TAXPAYER MAY CARRY 5,237
FORWARD THE CREDIT TO THE EXTENT THAT THE TAXPAYER'S CREDIT 5,238
EXCEEDS THE TAXPAYER'S TAX DUE AFTER ALLOWING FOR ANY OTHER 5,239
CREDITS THAT PRECEDE THE CREDIT ALLOWED BY THIS SECTION IN THE 5,240
ORDER PRESCRIBED BY SECTION 5747.98 OF THE REVISED CODE. THE 5,241
TAXPAYER MAY CARRY THE EXCESS CREDIT FORWARD FOR THREE TAXABLE 5,242
YEARS FOLLOWING THE TAXABLE YEAR FOR WHICH THE TAXPAYER FIRST 5,243
CLAIMS THE CREDIT UNDER THIS SECTION.
A PASS-THROUGH ENTITY SHALL APPLY TO THE DIRECTOR OF JOB 5,245
AND FAMILY SERVICES FOR A TAX CREDIT CERTIFICATE IN THE MANNER 5,247
PRESCRIBED BY DIVISION (C) OF SECTION 5733.42 OF THE REVISED 5,248
CODE. DIVISIONS (C) TO (H) OF THAT SECTION GOVERN THE TAX CREDIT 5,250
119
ALLOWED BY THIS SECTION, EXCEPT THAT "TAXABLE YEAR" SHALL BE 5,251
SUBSTITUTED FOR "TAX YEAR" WHEREVER THAT PHRASE APPEARS IN THOSE 5,253
DIVISIONS, AND THAT "PASS-THROUGH ENTITY" SHALL BE SUBSTITUTED 5,254
FOR "TAXPAYER" WHEREVER "TAXPAYER" APPEARS IN THOSE DIVISIONS. 5,255
Sec. 5747.98. (A) To provide a uniform procedure for 5,264
calculating the amount of tax due under section 5747.02 of the 5,265
Revised Code, a taxpayer shall claim any credits to which the 5,266
taxpayer is entitled in the following order: 5,268
(1) The retirement income credit under division (B) of 5,270
section 5747.055 of the Revised Code; 5,271
(2) The senior citizen credit under division (C) of 5,273
section 5747.05 of the Revised Code; 5,274
(3) The lump sum distribution credit under division (D) of 5,276
section 5747.05 of the Revised Code; 5,277
(4) The dependent care credit under section 5747.054 of 5,279
the Revised Code; 5,280
(5) The lump sum retirement income credit under division 5,282
(C) of section 5747.055 of the Revised Code; 5,283
(6) The lump sum retirement income credit under division 5,285
(D) of section 5747.055 of the Revised Code; 5,286
(7) The lump sum retirement income credit under division 5,288
(E) of section 5747.055 of the Revised Code; 5,289
(8) The credit for displaced workers who pay for job 5,291
training under section 5747.27 of the Revised Code; 5,292
(9) The campaign contribution credit under section 5747.29 5,295
of the Revised Code; 5,297
(10) The twenty-dollar personal exemption credit under 5,299
section 5747.022 of the Revised Code; 5,300
(11) The joint filing credit under division (G) of section 5,303
5747.05 of the Revised Code;
(12) The nonresident credit under division (A) of section 5,306
5747.05 of the Revised Code;
(13) The credit for a resident's out-of-state income under 5,309
division (B) of section 5747.05 of the Revised Code;
120
(14) The credit for employers that enter into agreements 5,312
with child day-care centers under section 5747.34 of the Revised 5,313
Code;
(15) The credit for employers that reimburse employee 5,315
child day-care expenses under section 5747.36 of the Revised 5,317
Code;
(16) The credit for adoption of a minor child under 5,319
section 5747.37 of the Revised Code; 5,320
(17) The credit for purchases of lights and reflectors 5,322
under section 5747.38 of the Revised Code; 5,323
(18) The credit for manufacturing investments under 5,325
section 5747.051 of the Revised Code; 5,326
(19) The credit for purchases of new manufacturing 5,328
machinery and equipment under section 5747.26 or section 5747.261 5,330
of the Revised Code;
(20) The second credit for purchases of new manufacturing 5,332
machinery and equipment and the credit for using Ohio coal under 5,334
section 5747.31 of the Revised Code; 5,335
(21) THE JOB TRAINING CREDIT UNDER SECTION 5747.39 OF THE 5,337
REVISED CODE;
(22) The enterprise zone credit under section 5709.66 of 5,339
the Revised Code; 5,340
(22)(23) The credit for the eligible costs associated with 5,342
a voluntary action under section 5747.32 of the Revised Code; 5,344
(23)(24) The credit for employers that establish on-site 5,347
child day-care centers under section 5747.35 of the Revised Code; 5,348
(24)(25) The credit for purchases of qualifying grape 5,350
production property under section 5747.28 of the Revised Code; 5,351
(25)(26) The export sales credit under section 5747.057 of 5,353
the Revised Code; 5,354
(26)(27) The credit for research and development and 5,356
technology transfer investors under section 5747.33 of the 5,357
Revised Code;
(27)(28) The enterprise zone credits under section 5709.65 5,360
121
of the Revised Code;
(28)(29) The refundable jobs creation credit under section 5,363
5747.058 of the Revised Code;
(29)(30) The refundable credit for taxes paid by a 5,365
qualifying entity granted under section 5747.059 of the Revised 5,366
Code;
(30)(31) The refundable credits for taxes paid by a 5,368
qualifying pass-through entity granted under division (J) of 5,371
section 5747.08 of the Revised Code.
(B) For any credit, except the refundable credits 5,373
enumerated in divisions (A)(28), (29), and (30), AND (31) of this 5,375
section and the credit granted under division (I) of section 5,377
5747.08 of the Revised Code, the amount of the credit for a 5,379
taxable year shall not exceed the tax due after allowing for any 5,380
other credit that precedes it in the order required under this 5,381
section. Any excess amount of a particular credit may be carried 5,382
forward if authorized under the section creating that credit. 5,383
Nothing in this chapter shall be construed to allow a taxpayer to 5,384
claim, directly or indirectly, a credit more than once for a 5,385
taxable year.
Section 2. That existing sections 9.66, 718.011, 718.09, 5,387
718.10, 718.14, 3318.035, 3709.28, 4141.21, 4933.33, 5703.052, 5,388
5727.11, 5727.111, 5727.33, 5727.80, 5727.81, 5727.82, 5727.83, 5,390
5727.84, 5727.85, 5727.86, 5727.87, 5727.88, 5727.89, 5727.90, 5,391
5727.91, 5727.92, 5727.93, 5727.94, 5727.95, 5733.053, 5733.06,
5733.40, 5733.42, 5745.01, 5745.02, 5745.03, 5745.04, 5745.05, 5,392
5745.07, 5745.08, 5745.09, 5745.11, 5745.13, 5747.15, 5747.24, 5,393
and 5747.98 of the Revised Code are hereby repealed. 5,394
Section 3. That Sections 3, 4, and 16 of Am. Sub. S.B. 3 5,396
of the 123rd General Assembly be amended to read as follows: 5,397
"Sec. 3. Sections 5727.111 and SECTION 5727.15 of the 5,399
Revised Code, as amended by this act AM. SUB. S.B. 3 OF THE 123rd 5,402
GENERAL ASSEMBLY, shall first apply to tax year 2001. 5,403
Sec. 4. Sections 4933.33, 5727.30, AND 5727.32, and 5,405
122
5727.33 of the Revised Code, as amended by this act AM. SUB. S.B. 5,408
3 OF THE 123rd GENERAL ASSEMBLY, shall first apply to the excise 5,409
tax assessed by the Tax Commissioner for tax year 2002. 5,410
Sec. 16. The Director of Development shall study and 5,413
report to the General Assembly concerning the desirability of 5,414
implementing a tax credit program for the creation of new jobs in 5,415
Ohio to manufacture or assemble generating equipment and 5,416
components for global use. The director shall determine and 5,417
recommend how the tax credit should be structured to encourage 5,418
investments in facilities, equipment, and services related to the 5,419
manufacture, assembly, shipping preparation, and transportation 5,420
of generation equipment or components for global use, and to 5,421
create new jobs as a result of such investments.
On or before December 31, 2000 JUNE 30, 2001, the Director 5,425
of Development shall issue a report of its findings to the Senate 5,426
and House of Representatives in accordance with division (B) of 5,427
section 101.68 of the Revised Code." 5,428
Section 4. That existing Sections 3, 4, and 16 of Am. Sub. 5,430
S.B. 3 of the 123rd General Assembly are hereby repealed. 5,431
Section 5. That Section 174 of Am. Sub. H.B. 283 of the 5,433
123rd General Assembly be amended to read as follows: 5,434
"Sec. 174. Sections 122.15, 122.152, 129.55, 129.63, 5,436
129.73, 718.01, 1555.12, 5528.36, 5703.052, 5703.053, 5727.01, 5,437
5727.30, 5727.31, 5727.311, 5727.32, 5727.33, 5727.38, 5727.42, 5,438
5727.48, 5727.50, 5727.60, and 5733.16 of the Revised Code, as 5,439
amended by this act AM. SUB. H.B. 283 OF THE 123rd GENERAL 5,441
ASSEMBLY, first apply to the excise tax year beginning May 1, 5,442
2000. Sections 5727.24, 5727.25, 5727.26, 5727.27, 5727.28, and 5,443
5727.29 of the Revised Code, as enacted by this act AM. SUB. H.B. 5,445
283 OF THE 123rd GENERAL ASSEMBLY, first apply to gross receipts 5,446
derived from taxable activities that occur after April 30, 2000. 5,447
Natural gas companies and combined electric and gas companies 5,449
must file an annual statement pursuant to section 5727.31 of the 5,450
Revised Code on or before August 1, 2000, and the Tax 5,451
123
Commissioner shall issue an assessment pursuant to section 5,452
5727.38 of the Revised Code on or before the first Monday in 5,453
November for the period ending April 30, 2000. Such companies 5,454
shall have made and shall make payments of the excise tax on
gross receipts imposed by section 5727.30 of the Revised Code on 5,456
or before October 15, 1999, March 1, 2000, and June 1, 2000, in 5,457
accordance with section 5727.31 of the Revised Code. Division 5,458
(D) of section 5727.42 of the Revised Code does not apply to the 5,459
portion of any assessment issued by the Tax Commissioner for the 5,460
period ending April 30, 2000, that reflects the excise tax owed 5,461
on those gross receipts from operating as a natural gas company 5,462
that would have been subject to the tax under section 5727.24 of
the Revised Code, as enacted by this act AM. SUB. H.B. 283 OF THE 5,464
123rd GENERAL ASSEMBLY." 5,465
Section 6. That existing Section 174 of Am. Sub. H.B. 283 5,467
of the 123rd General Assembly is hereby repealed. 5,468
Section 7. That Sections 3, 4, and 5 of Sub. H.B. 483 of 5,471
the 123rd General Assembly be amended to read as follows: 5,472
"Sec. 3. Sections 113.061, 718.01, 718.011, 718.02, 5,474
718.08, 5703.053, 5703.19, 5703.21, and 5745.01 to 5745.16 of the 5,476
Revised Code, as amended or enacted by this act SUB. H.B. 483 OF 5,477
THE 123rd GENERAL ASSEMBLY, take effect January 1, 2002 2001, OR 5,479
THE EARLIEST DATE THEREAFTER PERMITTED BY LAW. 5,480
Sec. 4. Notwithstanding division (B) of section 5745.04 of 5,482
the Revised Code as enacted by this act: ANY TERM USED IN THIS 5,484
SECTION HAS THE SAME MEANING AS IN SECTION 5745.01 OF THE REVISED 5,485
CODE.
(A) A TAXPAYER IS FIRST SUBJECT TO THE TAX REPORTING AND 5,487
PAYMENT REQUIREMENTS OF CHAPTER 5745. OF THE REVISED CODE FOR ITS 5,488
TAXABLE YEAR THAT INCLUDES JANUARY 1, 2002, SUBJECT TO DIVISION 5,489
(C) OF THIS SECTION IN THE CASE OF AN ELECTRIC LIGHT COMPANY THAT 5,491
IS NOT AN ELECTRIC COMPANY OR COMBINED COMPANY. AN ELECTRIC 5,493
COMPANY OR A COMBINED COMPANY HAVING A TAXABLE YEAR THAT INCLUDES 5,494
DAYS IN BOTH CALENDAR YEAR 2001 AND CALENDAR YEAR 2002 SHALL 5,495
124
ADJUST ITS ADJUSTED FEDERAL TAXABLE INCOME FOR THAT TAXABLE YEAR 5,496
TO INCLUDE ONLY THAT INCOME ATTRIBUTABLE TO CALENDAR YEAR 2002. 5,497
THE ADJUSTMENT SHALL BE EFFECTED BY MULTIPLYING THE COMPANY'S 5,498
ADJUSTED FEDERAL TAXABLE INCOME BY A FRACTION, THE NUMERATOR OF 5,499
WHICH IS THE NUMBER OF DAYS OF THE COMPANY'S TAXABLE YEAR THAT 5,500
ARE IN 2002, AND THE DENOMINATOR OF WHICH IS THE TOTAL NUMBER OF 5,501
DAYS IN THAT TAXABLE YEAR. 5,502
(A)(B) Each electric company and combined company, as 5,504
defined in section 5727.01 of the Revised Code, shall file a 5,506
declaration of estimated tax report and remit 20% of the combined 5,507
tax liability for its taxable year ending in 2002 on OR BEFORE 5,508
the fifteenth day of the fourth, sixth, ninth, and twelfth month 5,510
of that taxable year. The, UNLESS THE COMPANY'S TAXABLE YEAR 5,511
BEGINS BEFORE SEPTEMBER 1, 2001. IF THE COMPANY'S TAXABLE YEAR 5,512
BEGINS BEFORE THAT DATE, THE COMPANY'S FIRST REPORT AND 5,513
REMITTANCE SHALL BE MADE ON THE FIFTEENTH DAY OF THE FOURTH, 5,514
SIXTH, NINTH, OR TWELFTH MONTH OF ITS TAXABLE YEAR, WHICHEVER 5,515
SUCH DAY OCCURS FIRST ON OR AFTER JANUARY 15, 2002. THE FIRST 5,516
REMITTANCE SHALL EQUAL 20% OF THE COMBINED TAX LIABILITY 5,517
MULTIPLIED BY THE NUMBER OF SUCH ESTIMATED REPORTING AND PAYMENT 5,518
DAYS OCCURRING ON OR BEFORE JANUARY 15, 2002. 5,519
THE company shall indicate on the report the portion of the 5,522
remittance that is payable to each municipal corporation to which 5,523
the company estimates its Ohio net income will be apportioned for 5,524
that taxable year under section 5745.02 of the Revised Code as 5,525
enacted by this act SUB. H.B. 483 OF THE 123rd GENERAL ASSEMBLY. 5,526
No penalty or interest shall be imposed on such a company if the 5,527
estimated tax remitted under division (B) of this section is 5,528
remitted within the time prescribed by that THIS division and the 5,530
total of the estimated taxes remitted equals at least 80% of the
combined tax liability for the taxable year. 5,531
(B)(C)(1) Except as otherwise provided in division 5,534
(B)(C)(2) of this section, each electric light company that is
not an electric company or combined company as defined in section 5,535
125
5727.01 of the Revised Code and that paid a municipal 5,537
corporation's income tax in 2001 THE TAXABLE YEAR PRIOR TO THE 5,539
TAXABLE YEAR THAT BEGINS ON OR AFTER JANUARY 1, 2002, shall file 5,541
a declaration of estimated tax report and remit 25% of the 5,542
company's combined tax liability for 2001, in lieu of the 5,543
estimated combined tax liability for 2002, on THE PRIOR TAXABLE 5,544
YEAR ON OR BEFORE the fifteenth day of the fourth, sixth, ninth, 5,545
and twelfth month after the end of the company's PRIOR taxable 5,546
year ending in 2001. The company shall indicate on the report 5,548
the portion of the remittance that is payable to each municipal 5,549
corporation to which the company estimates its Ohio net income 5,550
will be apportioned for that taxable year under section 5745.02
of the Revised Code as enacted by this act SUB. H.B. 483 OF THE 5,553
123rd GENERAL ASSEMBLY. No penalty or interest shall be imposed 5,554
on such a company if the total of the estimated taxes remitted 5,555
equals at least 80% 100% of the combined tax liability for the 5,557
PRIOR taxable year ending in 2001 or 100% of the combined tax
liability for the taxable year ending in 2000. 5,559
(2) Division (B)(C)(1) of this section applies only to an 5,561
electric light company described in that division that makes an 5,563
election under section 5745.031 of the Revised Code that is in 5,564
effect for tax ITS TAXABLE year THAT INCLUDES DECEMBER 31, 2002, 5,566
OR ITS TAXABLE YEAR BEGINNING ON OR AFTER JANUARY 1, 2002, BUT 5,567
ENDING BEFORE DECEMBER 31, 2002, IF THE COMPANY'S TAXABLE YEAR IS 5,568
LESS THAN TWELVE MONTHS. AN ELECTRIC LIGHT COMPANY MAY NOT ELECT 5,570
TO BE A TAXPAYER UNDER THAT SECTION FOR ANY TAXABLE YEAR THAT 5,571
BEGINS BEFORE JANUARY 1, 2002.
Sec. 5. Notwithstanding sections 5745.03 and 5745.04 of 5,573
the Revised Code, as enacted by this act SUB. H.B. 483 OF THE 5,576
123rd GENERAL ASSEMBLY, the Treasurer of State shall credit to 5,578
the Municipal Income Tax Administrative Fund, from remittances
received under those sections for taxable years ending in 2002 5,580
and 2003, the amount certified by the Tax Commissioner as the 5,581
amount necessary to defray the Tax Commissioner's expenses of 5,582
126
administering Chapter 5745. of the Revised Code for 2002 and 5,584
2003, respectively. The amount shall not exceed 5% of the 5,585
remittances received for the respective year. The Tax
Commissioner shall certify that amount to the Treasurer of State 5,586
not later than January 31, 2002, and January 31, 2003, 5,587
respectively." 5,588
Section 8. That existing Sections 3, 4, and 5 of Sub. H.B. 5,590
483 of the 123rd General Assembly are hereby repealed. 5,591
Section 9. That sections 718.01, 718.011, 718.02, and 5,593
718.08 of the Revised Code as amended or enacted by Sub. H.B. 483 5,594
of the 123rd General Assembly shall take effect on the effective 5,595
date of this section.
This section is intended to accelerate the effective date 5,597
of sections 718.01, 718.011, 718.02, and 718.08 of the Revised 5,598
Code from January 1, 2002, to the earliest time permitted by law 5,599
upon the enactment of this act. The effective date of those 5,600
sections was delayed unintentionally to correspond with delayed 5,601
effective dates contained in Sub. S.B. 3 of the 123rd General
Assembly (January 1, 2002), but the delay inadvertently postpones 5,602
the effect of other amendments and enactments made by Sub. H.B. 5,604
477 of the 123rd General Assembly. 5,605
Section 10. The excise tax imposed by section 5727.811 of 5,607
the Revised Code shall first apply to natural gas distributed on 5,608
and after July 1, 2001. Before that date, a natural gas 5,609
distribution company shall register with the Tax Commissioner in 5,610
accordance with section 5727.93 of the Revised Code, as amended 5,611
by this act.
Section 11. (A) Not later than 90 days after the 5,613
effective date of this act, each natural gas distribution company 5,614
in this state having more than 50,000 customers, and each natural 5,615
gas distribution company in this state with 50,000 customers or 5,616
less that does not make an election under division (C) of section 5,617
5727.811 of the Revised Code, as enacted by this act, shall file
with the Public Utilities Commission revised schedules that do 5,618
127
both of the following: 5,619
(1) For all customers, reduce natural gas MCF rates, 5,621
effective April 1, 2001, in an amount equal to the amount 5,623
included in rates in each company's last base rate case for the 5,624
differential resulting from the reduction in the personal 5,625
property tax assessment rate to 25% of true value as provided by 5,626
section 5727.111 of the Revised Code, as amended by this act; 5,627
(2) Establish a rider that provides for the collection, 5,629
beginning July 1, 2001, of the excise tax imposed by section 5,631
5727.811 of the Revised Code, as enacted by this act. The 5,633
Commission shall approve a revised schedule filed under this
section within 60 days after it is filed. 5,634
(B) To the extent possible, the rate reduction provided by 5,636
division (A)(1) of this section and the tax rider provided by 5,637
division (A)(2) of this section shall be designed to avoid 5,638
revenue responsibility shifts among the natural gas distribution 5,639
company's customer rate schedules or between the natural gas 5,640
distribution company's commodity sales service and distribution 5,641
service.
Section 12. The Department of Taxation, in conjunction 5,643
with the Public Utilities Commission, shall study the effects, 5,644
fairness, and structure of the kilowatt-hour tax imposed by 5,645
section 5727.81 of the Revised Code, as amended by this act, with 5,646
respect to commercial and industrial purchasers of electricity. 5,647
Not later than September 30, 2007, the Department shall 5,649
issue a report of its findings to the President of the Senate, 5,650
the Speaker of the House of Representatives, the majority leaders 5,651
of the Senate and the House of Representatives, the minority 5,652
leaders of the Senate and the House of Representatives, and the 5,653
chairpersons of the standing committee of the House of 5,654
Representatives and the Senate that primarily considers tax 5,655
legislation.
Section 13. The amendment or enactment by this act of 5,657
sections 5733.053, 5733.06, 5733.40, 5747.221, and 5747.24 of the 5,658
128
Revised Code first applies to tax year 2002. 5,660
Section 14. As used in this section, "Appalachian region" 5,663
has the same meaning as in section 107.21 of the Revised Code. 5,664
There is hereby created the Appalachian Energy Grant 5,666
Authority. The purpose of the Authority is to make grants to 5,667
eligible applicants to enhance and maintain the economic welfare 5,668
of the Appalachian region through the support of manufacturing in 5,669
the region, which is hereby declared to be a public purpose. The 5,670
Authority shall consist of the Director of Development and the 5,671
Director of Budget and Management, or their respective designees, 5,672
and the Deputy Director of the Governor's Office of Appalachian 5,673
Ohio created under section 107.21 of the Revised Code. The 5,674
Authority shall conduct its first meeting not later than July 1, 5,675
2001, and shall designate a chairperson from among its members. 5,676
Thereafter, the Authority shall meet at the call of the 5,677
chairperson. 5,678
The Authority may make grants to any business enterprise 5,680
satisfying all of the following: 5,681
(A) The enterprise is engaged in manufacturing in the 5,683
Appalachian region. 5,684
(B) During 1999, the enterprise consumed at least 550 5,686
million kilowatt hours of electricity. 5,687
(C) The average cost per kilowatt hour of electricity 5,689
consumed by the enterprise during 1999 was less than $0.025. 5,690
(D) The imposition of the tax under section 5727.81 of the 5,692
Revised Code significantly increases the enterprise's 5,693
per-kilowatt-hour cost of electricity, including the tax, 5,694
compared to the enterprise's per-kilowatt-hour cost before the 5,695
tax was imposed. 5,696
(E) The awarding of the grant to the enterprise is likely, 5,698
in the opinion of the Authority, to enhance or maintain the 5,699
economic welfare of the Appalachian region. 5,700
To receive a grant under this section, an enterprise shall 5,702
apply to the Authority in the manner and within the time 5,703
129
prescribed by the Authority. The Authority may require the 5,704
applicant to provide such information as the Authority considers 5,705
necessary to determine the applicant's eligibility for the grant. 5,706
The employees of the Department of Development, Office of Budget 5,707
and Management, and the Governor's Office of Appalachian Ohio 5,708
shall provide any staff assistance necessary to carry out this 5,709
section, as directed by the Authority. 5,710
Grants may be made under this section beginning July 1, 5,712
2001, and before July 1, 2004, from money appropriated for that 5,713
purpose by the General Assembly. The Authority shall cease to 5,714
exist on July 1, 2004. The Authority is not an agency subject to 5,715
section 101.82 and 101.84 of the Revised Code. 5,716
This section is hereby repealed, effective July 1, 2004. 5,718
Section 15. The amendment by this act of section 5733.42 5,720
of the Revised Code first applies to credits claimed by a 5,721
taxpayer, as defined in section 5733.04 of the Revised Code, for 5,722
tax year 2002.
Section 16. Section 5703.052 of the Revised Code is 5,723
presented in this act as a composite of the section as amended by 5,725
both Am. Sub. H.B. 283 and Am. Sub. S.B. 3 of the 123rd General 5,726
Assembly, with the new language of neither of the acts shown in 5,727
capital letters. This is in recognition of the principle stated 5,728
in division (B) of section 1.52 of the Revised Code that such 5,729
amendments are to be harmonized where not substantively 5,730
irreconcilable and constitutes a legislative finding that such is 5,731
the resulting version in effect prior to the effective date of 5,732
this act.
Section 17. This act is hereby declared to be an emergency 5,734
measure necessary for the immediate preservation of the public 5,735
peace, health, and safety. The reason for such necessity is to 5,736
provide, at the earliest possible time, for equitable taxation of 5,737
participants in the natural gas markets. Therefore, this act 5,738
shall go into immediate effect. 5,739