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To amend sections 3770.07, 3770.072, 5733.051, | 1 |
5733.98, 5747.062, 5747.20, and 5747.98 and to | 2 |
enact sections 3770.10 to 3770.14 of the Revised | 3 |
Code to permit the transfer of a lottery prize | 4 |
award upon the prior approval of a court and to | 5 |
establish procedures for application for such | 6 |
approval. | 7 |
Section 1. That sections 3770.07, 3770.072, 5733.051, | 8 |
5733.98, 5747.062, 5747.20, and 5747.98 be amended and sections | 9 |
3770.10, 3770.11, 3770.12, 3770.13, and 3770.14 of the Revised | 10 |
Code be enacted to read as follows: | 11 |
Sec. 3770.07. (A)(1) Lottery prize awards shall be claimed | 12 |
by the holder of the winning lottery ticket, or by the executor or | 13 |
administrator, or the trustee of a trust, of the estate of a | 14 |
deceased holder of a winning ticket, in a manner to be determined | 15 |
by the state lottery commission, within one hundred eighty days | 16 |
after the date on which such prize award was announced if the | 17 |
lottery game is an on-line game, and within one hundred eighty | 18 |
days after the close of the game if the lottery game is an instant | 19 |
game. Except as otherwise provided in division (B) of this | 20 |
section, if no valid claim to the prize award is made within the | 21 |
prescribed period, the prize money or the cost of goods and | 22 |
services awarded as prizes, or if such goods or services are | 23 |
resold by the commission, the proceeds from such sale, shall be | 24 |
returned to the state lottery fund and distributed in accordance | 25 |
with section 3770.06 of the Revised Code. | 26 |
(2) If a
| 27 |
defined in section 3770.10 of the Revised Code, is under eighteen | 28 |
years of age, or is under some other legal disability, and the | 29 |
prize money or the cost of goods or services awarded as a prize | 30 |
exceeds one thousand dollars, the director shall order that | 31 |
payment be made to the order of the legal guardian of
| 32 |
33 | |
or the cost of goods or services awarded as a prize is one | 34 |
thousand dollars or less, the director may order that payment be | 35 |
made to
the order of
the adult member, if any, of
| 36 |
37 | |
the care of
| 38 |
(3) No right of any
| 39 |
section 3770.10 of the Revised Code, to a prize award shall be the | 40 |
subject of a security interest or used as collateral. | 41 |
(4)(a) No right of any
| 42 |
section 3770.10 of the Revised Code, to a prize award shall be | 43 |
assignable, or subject to garnishment, attachment, execution, | 44 |
withholding, or deduction, except as follows: as provided in | 45 |
sections 3119.80, 3119.81, 3121.02, 3121.03, and 3123.06 of the | 46 |
Revised Code; when the payment is to be made to the executor or | 47 |
administrator or the trustee of a trust of the estate of a winning | 48 |
ticket holder; when the award of a prize is disputed, any person | 49 |
may be awarded a prize award to which another has claimed title, | 50 |
pursuant to the
order of a court of competent jurisdiction;
| 51 |
when the director is to make a payment pursuant to section | 52 |
3770.071 of the Revised Code; or as provided in sections 3770.10 | 53 |
to 3770.14 of the Revised Code. | 54 |
(b) The commission shall adopt rules pursuant to section | 55 |
3770.03 of the Revised Code concerning the payment of prize awards | 56 |
upon the death of a prize winner. Upon the death of a prize | 57 |
winner, as defined in section 3770.10 of the Revised Code, the | 58 |
remainder of the prize winner's prize award, to the extent it is | 59 |
not subject to a transfer agreement under sections 3770.10 to | 60 |
3770.14 of the Revised Code, may be paid to the executor, | 61 |
administrator, or trustee in the form of a discounted lump sum | 62 |
cash settlement. | 63 |
(5) No lottery prize award shall be awarded to or for any | 64 |
officer or employee of the state lottery commission, any officer | 65 |
or employee of the auditor of state actively coordinating and | 66 |
certifying commission drawings, or any blood relative or spouse of | 67 |
such officer or employee of the commission or auditor of state | 68 |
living as a member of such officer's or employee's household, nor | 69 |
shall any such employee, blood relative, or spouse attempt to | 70 |
claim a lottery prize award. | 71 |
(6) The director may prohibit vendors to the commission and | 72 |
their employees from being awarded a lottery prize award. | 73 |
(7) Upon the payment of prize awards pursuant to this | 74 |
section, the director and the commission are discharged from all | 75 |
further liability therefor. | 76 |
(B) The commission may adopt rules governing the | 77 |
disbursement of unclaimed prize awards as all or part of the prize | 78 |
award in a lottery and may, pursuant to those rules, conduct the | 79 |
lottery and disburse any such unclaimed prize awards. Any lottery | 80 |
in which all or any part of the prize award is paid from unclaimed | 81 |
prize awards shall be conducted in accordance with all of the | 82 |
other requirements of this chapter, including, but not limited to, | 83 |
the time and proof requirements for claiming awards and the | 84 |
disposition of unclaimed prize awards when the prescribed period | 85 |
for claiming the award has passed. A prize award or any part of a | 86 |
prize award that is paid from an unclaimed prize award shall not | 87 |
be reapplied toward the satisfaction of the requirement of | 88 |
division (A) of section 3770.06 of the Revised Code that at least | 89 |
fifty per cent of the total revenues from ticket sales be | 90 |
disbursed for monetary prize awards, if such unclaimed prize award | 91 |
was previously applied toward the satisfaction of that | 92 |
requirement. On or before the last day of January and July each | 93 |
year, the commission shall report to the general assembly the | 94 |
gross sales and net profits the commission obtained from the | 95 |
unclaimed prize awards in lotteries conducted pursuant to this | 96 |
division during the preceding two calendar quarters, including the | 97 |
amount of money produced by the games funded by the unclaimed | 98 |
prize awards and the total revenue accruing to the state from the | 99 |
prize award lotteries conducted pursuant to this division. | 100 |
There is hereby established in the state treasury the | 101 |
unclaimed lottery prizes fund, to which all unclaimed prize awards | 102 |
shall be transferred. Any interest
| 103 |
amounts in the fund shall become a part of the fund and shall be | 104 |
subject to any rules adopted by the commission governing the | 105 |
disbursement of unclaimed prize awards. | 106 |
Sec. 3770.072. (A) As used in this section, "prize winner," | 107 |
"transferee," and "transferor" have the same meanings as in | 108 |
section 3770.10 of the Revised Code. | 109 |
(B) The state lottery commission shall deduct amounts from | 110 |
lottery prize awards and file returns in accordance with section | 111 |
5747.062 of the Revised Code and any rules adopted by the tax | 112 |
commissioner pursuant to that section. This division also applies | 113 |
to lottery prize award payments the commission remits to | 114 |
transferees. | 115 |
(C)(1) Each transferee shall deduct and withhold from each | 116 |
gross amount payable to each prize winner three and one-half per | 117 |
cent of the gross amount payable prior to making any other | 118 |
reduction required by this chapter. | 119 |
(2) With respect to amounts deducted and withheld pursuant to | 120 |
division (C)(1) of this section, each transferee shall comply with | 121 |
divisions (A)(2) to (4) of section 5747.062 of the Revised Code. | 122 |
(3) An employee of a corporation, limited liability company, | 123 |
or business trust having control or supervision of or charged with | 124 |
the responsibility of filing the report and making the payment | 125 |
required by division (C) of this section and section 5747.062 of | 126 |
the Revised Code, or an officer, member, manager, or trustee of a | 127 |
corporation, limited liability company, or business trust who is | 128 |
responsible for the execution of the corporation's, limited | 129 |
liability company's, or business trust's fiscal responsibilities, | 130 |
shall be personally liable for failure to file the report or pay | 131 |
the amount due as required by division (C) of this section and | 132 |
section 5747.062 of the Revised Code. The dissolution, | 133 |
termination, or bankruptcy of a corporation, limited liability | 134 |
company, or business trust does not discharge a responsible | 135 |
officer's, member's, manager's, employee's, or trustee's liability | 136 |
for a failure of the corporation, limited liability company, or | 137 |
business trust to file returns or pay the amount due. | 138 |
(4)(a) The tax commissioner may make an assessment against | 139 |
any person listed in division (C)(1) or (3) of this section for | 140 |
any deficiency for any period. Section 5747.13 of the Revised Code | 141 |
shall apply with respect to issuing assessments, filing petitions | 142 |
for reassessments, conducting hearings, issuing final | 143 |
determinations, making the assessment final, and filing the entry | 144 |
that makes the assessment final. Section 5717.02 of the Revised | 145 |
Code shall apply to appeals of the commissioner's final decision | 146 |
in connection with assessments issued pursuant to division (C)(4) | 147 |
of this section. | 148 |
(b) An assessment issued against any person listed in | 149 |
division (C)(1) or (3) of this section shall not be considered an | 150 |
election of remedies or a bar to an assessment against any other | 151 |
person for the failure to comply with division (C)(1) of this | 152 |
section. No assessment shall be issued against any person who is | 153 |
so listed if the amount required to be withheld has been paid by | 154 |
another. | 155 |
(c) The assessment shall include interest at the rate per | 156 |
annum prescribed by section 5703.47 of the Revised Code on | 157 |
liability from the time the payment is due until the date of | 158 |
assessment. Interest shall continue to accrue from the date of | 159 |
assessment until the date the assessment is paid in full. Any | 160 |
interest accruing subsequent to the date of the issuance of the | 161 |
assessment shall be considered to be an additional deficiency for | 162 |
which the tax commissioner may issue subsequent assessments. The | 163 |
initial assessment and any subsequent assessments may include a | 164 |
penalty in an amount not to exceed twice the applicable interest | 165 |
charged under this division. | 166 |
Sec. 3770.10. As used in sections 3770.07 and 3770.10 to | 167 |
3770.14 of the Revised Code: | 168 |
(A) "Court of competent jurisdiction" means the probate | 169 |
court of the county in which the prize winner resides, or, if the | 170 |
prize winner is not a resident of this state, the probate court of | 171 |
Franklin county or a federal court having jurisdiction over the | 172 |
lottery prize award. | 173 |
(B) "Discounted present value" means the present value of | 174 |
the future payments of a lottery prize award that is determined by | 175 |
discounting those payments to the present, using the most recently | 176 |
published applicable federal rate for determining the present | 177 |
value of an annuity as issued by the United States internal | 178 |
revenue service and assuming daily compounding. | 179 |
(C) "Independent professional advice" means the advice of an | 180 |
attorney, a certified public accountant, an actuary, or any other | 181 |
licensed professional adviser if all of the following apply: | 182 |
(1) The prize winner has engaged the services of the | 183 |
licensed professional adviser to render advice concerning the | 184 |
legal and other implications of a transfer of the lottery prize | 185 |
award. | 186 |
(2) The licensed professional adviser is not affiliated in | 187 |
any manner with or compensated in any manner by the transferee of | 188 |
the lottery prize award. | 189 |
(3) The compensation of the licensed professional adviser is | 190 |
not affected by whether or not a transfer of a lottery prize award | 191 |
occurs. | 192 |
(D) "Prize winner" means any person that holds the right to | 193 |
receive all or any part of a lottery prize award as a result of | 194 |
being any of the following: | 195 |
(1) A person who is a claimant under division (A)(1) of | 196 |
section 3770.07 of the Revised Code; | 197 |
(2) A person who is entitled to a prize award and who is | 198 |
under a legal disability as described in division (A)(2) of | 199 |
section 3770.07 of the Revised Code; | 200 |
(3) A person who was awarded a prize award to which another | 201 |
has claimed title by a court order under division (A)(4)(a) of | 202 |
section 3770.07 of the Revised Code; | 203 |
(4) A person who is receiving payments upon the death of a | 204 |
prize winner as provided in division (A)(4)(b) of section 3770.07 | 205 |
of the Revised Code. | 206 |
(E) "Transfer" means any form of sale, assignment, or | 207 |
redirection of payment of all or any part of a lottery prize award | 208 |
for consideration. | 209 |
(F) "Transfer agreement" means an agreement that is complete | 210 |
and valid, and that provides for the transfer of all or any part | 211 |
of a lottery prize award from a transferor to a transferee. A | 212 |
transfer agreement is incomplete and invalid unless the agreement | 213 |
contains both of the following: | 214 |
(1) A statement, signed by the transferor under penalties of | 215 |
perjury, that the transferor irrevocably agrees that the | 216 |
transferor is subject to the tax imposed by Chapter 5733. or 5747. | 217 |
of the Revised Code with respect to gain or income which the | 218 |
transferor will recognize in connection with the transfer. If the | 219 |
transferor is a pass-through entity, as defined in section 5733.04 | 220 |
of the Revised Code, each investor in the pass-through entity | 221 |
shall also sign under penalties of perjury a statement that the | 222 |
investor irrevocably agrees that the investor is subject to the | 223 |
tax imposed by Chapter 5733. or 5747. of the Revised Code with | 224 |
respect to gain or income which the transferor and the investor | 225 |
will recognize in connection with the transfer. | 226 |
(2) A statement, signed by the transferee, that the | 227 |
transferee irrevocably agrees that the transferee is subject to | 228 |
the withholding requirements imposed by division (C) of section | 229 |
3770.072 of the Revised Code and is subject to the tax imposed by | 230 |
Chapter 5733. or 5747. of the Revised Code with respect to gain or | 231 |
income which the transferee will recognize in connection with | 232 |
lottery prize awards to be received as a result of the transfer. | 233 |
If the transferee is a pass-through entity, as defined in section | 234 |
5733.04 of the Revised Code, each investor in the pass-through | 235 |
entity shall also sign under penalties of perjury a statement | 236 |
setting forth that the investor irrevocably agrees that the | 237 |
investor is subject to the withholding requirements imposed by | 238 |
division (C) of section 3770.072 of the Revised Code and is | 239 |
subject to the tax imposed by Chapter 5733. or 5747. of the | 240 |
Revised Code with respect to gain or income which the transferee | 241 |
and the investor will recognize in connection with lottery prize | 242 |
awards to be received as a result of the transfer. | 243 |
(G) "Transferee" means a party acquiring or proposing to | 244 |
acquire all or any part of a lottery prize award through a | 245 |
transfer. | 246 |
(H) "Transferor" means either a prize winner or a transferee | 247 |
in an earlier transfer whose interest is acquired by or is sought | 248 |
to be acquired by a transferee or a new transferee through a | 249 |
transfer. | 250 |
Sec. 3770.11. Prior to the date on which a prize winner | 252 |
becomes obligated under a transfer agreement, the transferee shall | 253 |
provide to the prize winner a disclosure statement, in boldface | 254 |
type of the minimum size of fourteen points, setting forth all of | 255 |
the following: | 256 |
(A) The amounts and due dates of the lottery prize award | 257 |
payments that would be transferred under the transfer agreement; | 258 |
(B) The aggregate amount of the lottery prize award payments | 259 |
described in division (A) of this section; | 260 |
(C) The discounted present value of the lottery prize award | 261 |
payments described in division (A) of this section, calculated as | 262 |
of the date the disclosure statement is provided to the prize | 263 |
winner, and the amount of the applicable federal rate used in | 264 |
determining the discounted present value; | 265 |
(D) The gross amount payable to the prize winner in exchange | 266 |
for or as consideration for the transfer of the lottery prize | 267 |
award payments described in division (A) of this section, | 268 |
including the annual rate of discount to present value used to | 269 |
determine the gross amount payable to the prize winner, assuming | 270 |
daily compounding and funding on the date of the transfer | 271 |
agreement; | 272 |
(E) An itemized listing of all brokers' commissions, service | 273 |
charges, application fees, processing fees, closing costs, filing | 274 |
fees, administrative fees, legal fees, notary fees, and other | 275 |
commissions, fees, costs, expenses, and charges payable by the | 276 |
prize winner or deductible from the gross amount otherwise payable | 277 |
to the prize winner as described in division (D) of this section; | 278 |
(F) The net amount payable to the prize winner after | 279 |
deduction from the gross amount payable to the prize winner as | 280 |
described in division (D) of this section of all commissions, | 281 |
fees, costs, expenses, and charges described in division (E) of | 282 |
this section; | 283 |
(G)(1) The quotient, expressed as a percentage, obtained by | 284 |
dividing the net amount payable to the prize winner as described | 285 |
in division (F) of this section by the discounted present value of | 286 |
the payments described in division (C) of this section. | 287 |
(2) Solely for purposes of division (G)(1) of this section, | 288 |
"net amount payable" does not include taxes required to be | 289 |
withheld under division (C)(1) of section 3770.072 of the Revised | 290 |
Code. | 291 |
Sec. 3770.12. A court of competent jurisdiction may approve | 293 |
a transfer of a lottery prize award only in a final order that is | 294 |
based on the express findings of the court, and the express | 295 |
findings shall include all of the following: | 296 |
(A) If the transferor is a prize winner, the transferee has | 297 |
provided to the prize winner a disclosure statement that complies | 298 |
with section 3770.11 of the Revised Code, and the prize winner has | 299 |
confirmed the prize winner's receipt of the disclosure statement, | 300 |
as evidenced by the prize winner's notarized signature on a copy | 301 |
of the disclosure statement. | 302 |
(B) If the transferor is a prize winner, the prize winner has | 303 |
established that the transfer is fair and reasonable and in the | 304 |
best interests of the prize winner. | 305 |
(C) If the transferor is a prize winner, the prize winner | 306 |
has received independent professional advice regarding the legal | 307 |
and other implications of the transfer. | 308 |
(D) The transferee has given written notice of the | 309 |
transferee's name, address, and taxpayer identification number to | 310 |
the state lottery commission and has filed a copy of that notice | 311 |
with the court in which the application for approval of the | 312 |
transfer was filed. | 313 |
(E) The transferee is a trust, limited partnership, general | 314 |
partnership, corporation, professional association, limited | 315 |
liability company, or other entity that is qualified to do | 316 |
business in this state and meets the registration requirements for | 317 |
that type of entity under Title XVII of the Revised Code. | 318 |
(F) The transfer complies with all applicable requirements | 319 |
of the Revised Code and does not contravene any applicable law. | 320 |
(G) The transfer does not include or cover the amounts of | 321 |
the lottery prize award that are required to be withheld or | 322 |
deducted pursuant to section 3119.80, 3119.81, 3121.02, 3121.03, | 323 |
3123.06, 3770.071, or 3770.072 of the Revised Code. | 324 |
(H) Any amounts described in division (G) of this section | 325 |
that are required to be withheld or deducted, as of the date of | 326 |
the court order, will be offset by the commission first against | 327 |
remaining payments due the transferor and then against payments | 328 |
due the transferee. | 329 |
(I) Except as provided in divisions (G) and (H) of this | 330 |
section, that the transferor's interest in each and all of the | 331 |
future payments from a particular lottery prize award is to be | 332 |
paid to a single transferee, or, if the payments from the lottery | 333 |
prize award are to be directed from the state lottery commission | 334 |
to multiple transferees, the commission has promulgated rules | 335 |
under section 3770.03 of the Revised Code permitting transfers to | 336 |
multiple transferees, and the transfer is consistent with those | 337 |
rules. | 338 |
(J) If the lottery prize award has been transferred within | 339 |
twelve months immediately preceding the effective date of the | 340 |
proposed transfer, the state lottery commission has not objected | 341 |
to the proposed transfer. The court shall presume that the | 342 |
requirements of this division are met unless the commission | 343 |
notifies the court in writing before the hearing on the | 344 |
application for transfer, or through counsel at that hearing, that | 345 |
a transfer of the same lottery prize award has been made within | 346 |
that twelve-month period and that the commission objects to a | 347 |
subsequent transfer within that twelve-month period. The court | 348 |
shall find that the requirements of this division are not met if | 349 |
the commission provides notice of a prior transfer of the same | 350 |
lottery prize award within that twelve-month period and its | 351 |
objection to the proposed transfer, unless the transferor or | 352 |
transferee shows by clear and convincing evidence that no previous | 353 |
transfer of the same lottery prize award occurred within that | 354 |
twelve-month period. | 355 |
Sec. 3770.13. (A) A transferee shall file an application | 357 |
under sections 3770.10 to 3770.14 of the Revised Code for the | 358 |
approval in advance of a transfer of a lottery prize award in a | 359 |
court of competent jurisdiction. | 360 |
(B) The following procedures shall apply to an application | 361 |
for the approval in advance by a court of a transfer of a lottery | 362 |
prize award under division (A) of this section: | 363 |
(1) Upon the filing of the application, the court shall set | 364 |
a date, time, and place for a hearing on the application and shall | 365 |
notify the transferee and transferor of the date, time, and place | 366 |
of the hearing. | 367 |
(2) Not less than thirty days prior to the date set by the | 368 |
court for the hearing on an application filed pursuant to this | 369 |
section, the transferee shall file with the court and shall serve | 370 |
on the state lottery commission, in the manner prescribed in the | 371 |
Rules of Civil Procedure for the service of process, a notice of | 372 |
the proposed transfer and the application for its approval in | 373 |
advance. The notice shall include all of the following: | 374 |
(a) A copy of the application; | 375 |
(b) A copy of the transfer agreement or, if the transferor | 376 |
is not a prize winner, a redacted copy of the transfer agreement | 377 |
that discloses sufficient information to allow the commission and | 378 |
the court to determine the validity of the transfer agreement; | 379 |
(c) If the transferor is a prize winner, a copy of the | 380 |
disclosure statement provided by the transferee pursuant to | 381 |
section 3770.11 of the Revised Code and signed by the prize winner | 382 |
pursuant to division (A) of section 3770.12 of the Revised Code; | 383 |
(d) The amounts and due dates of the lottery prize award | 384 |
payments that will be transferred under the transfer agreement; | 385 |
(e) Notification of the date, time, and place of the hearing | 386 |
on the application; | 387 |
(f) The complete name, address, and taxpayer identification | 388 |
number of the transferee. | 389 |
(3) The commission shall not be required to appear in or be | 390 |
named as a party to a hearing on the application, but may | 391 |
intervene as of right in the proceeding. | 392 |
(4) At the conclusion of the hearing on an application under | 393 |
this section, the court may grant or deny the approval of the | 394 |
transfer. The court shall enter its order accordingly. If the | 395 |
court grants the approval of the transfer, it shall include in its | 396 |
order all of the express findings specified in section 3770.12 of | 397 |
the Revised Code. If the court denies the approval of the | 398 |
transfer, it shall include in its order the reasons for the | 399 |
denial. | 400 |
(5) An order of the court made under division (B)(4) of this | 401 |
section is a final and appealable order. | 402 |
Sec. 3770.14. (A) Upon receipt of a court order issued under | 404 |
section 3770.13 of the Revised Code, the transferee shall provide | 405 |
a certified copy of the court order to the director of the state | 406 |
lottery commission. Not later than ten days after receipt of the | 407 |
certified copy of the court order, the director shall acknowledge | 408 |
to the transferee in writing the commission's intent to comply | 409 |
with the court order in making future payments. | 410 |
(B) The director shall make payments of the lottery prize | 411 |
award to the transferee designated in the certified copy of the | 412 |
court order and in accordance with the prize payment schedule | 413 |
established when the prize was claimed. The director may charge a | 414 |
processing fee, in an amount determined by the commission by rule | 415 |
pursuant to section 3770.03 of the Revised Code, to cover any | 416 |
direct or indirect costs associated with making the prize award | 417 |
payments in accordance with that prize payment schedule. | 418 |
(C) Upon payment of the lottery prize award pursuant to | 419 |
this section, the director and the commission are discharged from | 420 |
all further liability therefor. | 421 |
Sec. 5733.051. Subject to section 5733.0510 of the Revised | 422 |
Code, net income of a corporation subject to the tax imposed by | 423 |
section 5733.06 of the Revised Code shall be allocated and | 424 |
apportioned to this state as follows: | 425 |
(A) Net rents and royalties from real property located in | 426 |
this state are allocable to this state | 427 |
(B) Net rents and royalties from tangible personal property, | 428 |
to the extent such property is utilized in this state, are | 429 |
allocable to this state if the taxpayer is otherwise subject to | 430 |
the tax imposed by section
5733.06 of the Revised Code | 431 |
(C) Capital gains and losses from the sale or other | 432 |
disposition of real property located in this state are allocable | 433 |
to this state | 434 |
(D) Capital gains and losses from the sale or other | 435 |
disposition of tangible personal property are allocable to this | 436 |
state if the property had a situs in this state at the time of | 437 |
sale and the taxpayer is otherwise subject to the tax imposed by | 438 |
section 5733.06 of the Revised Code | 439 |
(E) Capital gains and losses from the sale or other | 440 |
disposition of intangible property which may produce income | 441 |
enumerated in division (F) of this section are allocable on the | 442 |
same basis as set forth in
| 443 |
losses from the sale or other disposition of all other intangible | 444 |
property are apportionable under division
| 445 |
(F) Dividends or distributions which are not otherwise | 446 |
deducted or excluded from net income, other than dividends or | 447 |
distributions from a domestic international sales corporation, are | 448 |
allocable to this state in accordance with the ratio of the book | 449 |
value of the physical assets of the payor of the dividends or | 450 |
distributions located in this state divided by the book value of | 451 |
the total physical assets of the payor located everywhere. | 452 |
Dividends or distributions received from a domestic international | 453 |
sales corporation, or from a payor the location of whose physical | 454 |
assets is unavailable to the taxpayer, are apportionable under | 455 |
division
| 456 |
(G) Patent and copyright royalties and technical assistance | 457 |
fees, not representing the principal source of gross receipts of | 458 |
the taxpayer, are allocable to this state to the extent that the | 459 |
activity of the payor thereof giving rise to the payment takes | 460 |
place in this state. If the location of the payor's activity is | 461 |
unavailable to the taxpayer, such royalties and fees are | 462 |
apportionable under division
| 463 |
(H) The amounts described in division (B)(5) of section | 464 |
5747.20 of the Revised Code are allocable to this state. | 465 |
(I) Any other net income, from sources other than those | 466 |
enumerated in divisions (A) to
| 467 |
apportionable to this state on the basis of the mechanism provided | 468 |
in division (B)(2) of section 5733.05 of the Revised Code. | 469 |
Sec. 5733.98. (A) To provide a uniform procedure for | 470 |
calculating the amount of tax imposed by section 5733.06 of the | 471 |
Revised Code that is due under this chapter, a taxpayer shall | 472 |
claim any credits to which it is entitled in the following order, | 473 |
except as otherwise provided in section 5733.058 of the Revised | 474 |
Code: | 475 |
(1) The credit for taxes paid by a qualifying pass-through | 476 |
entity allowed under section 5733.0611 of the Revised Code; | 477 |
(2) The credit allowed for financial institutions under | 478 |
section 5733.45 of the Revised Code; | 479 |
(3) The credit for qualifying affiliated groups under section | 480 |
5733.068 of the Revised Code; | 481 |
(4) The subsidiary corporation credit under section 5733.067 | 482 |
of the Revised Code; | 483 |
(5) The savings and loan assessment credit under section | 484 |
5733.063 of the Revised Code; | 485 |
(6) The credit for recycling and litter prevention donations | 486 |
under section 5733.064 of the Revised Code; | 487 |
(7) The credit for employers that enter into agreements with | 488 |
child day-care centers under section 5733.36 of the Revised Code; | 489 |
(8) The credit for employers that reimburse employee child | 490 |
day-care expenses under section 5733.38 of the Revised Code; | 491 |
(9) The credit for maintaining railroad active grade crossing | 492 |
warning devices under section 5733.43 of the Revised Code; | 493 |
(10) The credit for purchases of lights and reflectors under | 494 |
section 5733.44 of the Revised Code; | 495 |
(11) The job retention credit under division (B) of section | 496 |
5733.0610 of the Revised Code; | 497 |
(12) The credit for manufacturing investments under section | 498 |
5733.061 of the Revised Code; | 499 |
(13) The credit for purchases of new manufacturing machinery | 500 |
and equipment under section 5733.31 or section 5733.311 of the | 501 |
Revised Code; | 502 |
(14) The second credit for purchases of new manufacturing | 503 |
machinery and equipment under section 5733.33 of the Revised Code; | 504 |
(15) The job training credit under section 5733.42 of the | 505 |
Revised Code; | 506 |
(16) The credit for qualified research expenses under | 507 |
section 5733.351 of the Revised Code; | 508 |
(17) The enterprise zone credit under section 5709.66 of the | 509 |
Revised Code; | 510 |
(18) The credit for the eligible costs associated with a | 511 |
voluntary action under section 5733.34 of the Revised Code; | 512 |
(19) The credit for employers that establish on-site child | 513 |
day-care under section 5733.37 of the Revised Code; | 514 |
(20) The ethanol plant investment credit under section | 515 |
5733.46 of the Revised Code; | 516 |
(21) The credit for purchases of qualifying grape production | 517 |
property under section 5733.32 of the Revised Code; | 518 |
(22) The export sales credit under section 5733.069 of the | 519 |
Revised Code; | 520 |
(23) The credit for research and development and technology | 521 |
transfer investors under section 5733.35 of the Revised Code; | 522 |
(24) The enterprise zone credits under section 5709.65 of the | 523 |
Revised Code; | 524 |
(25) The credit for using Ohio coal under section 5733.39 of | 525 |
the Revised Code; | 526 |
(26) The refundable jobs creation credit under division (A) | 527 |
of section 5733.0610 of the Revised Code; | 528 |
(27) The refundable credit for tax withheld under division | 529 |
(B)(2) of section 5747.062 of the Revised Code. | 530 |
(B) For any credit except the refundable
| 531 |
532 | |
credit for a tax year shall not exceed the tax due after allowing | 533 |
for any other credit that precedes it in the order required under | 534 |
this section. Any excess amount of a particular credit may be | 535 |
carried forward if authorized under the section creating that | 536 |
credit. | 537 |
Sec. 5747.062. As used in this section, "transferee" has the | 538 |
same meaning as in section 3770.10 of the Revised Code, and | 539 |
"recipient" includes a transferee. | 540 |
(A)(1) The state lottery commission shall | 541 |
| 542 |
payment that exceeds five thousand dollars an amount equal to | 543 |
three and one-half per cent of the payment, prior to making any | 544 |
other reduction required by Chapter 3770. of the Revised Code | 545 |
(2) On or before the tenth banking day of each month, the | 546 |
state lottery commission, and each transferee required to deduct | 547 |
and withhold amounts pursuant to section 3770.072 of the Revised | 548 |
Code, shall file a return and remit to the tax commissioner all | 549 |
amounts deducted and withheld pursuant to this section during the | 550 |
preceding month. | 551 |
(3) On or before the thirty-first day of January of each | 552 |
year, the state lottery commission, and each transferee required | 553 |
to deduct and withhold amounts pursuant to section 3770.072 of the | 554 |
Revised Code, shall file with the commissioner an annual return, | 555 |
in the form prescribed by the tax commissioner, indicating the | 556 |
total amount deducted and withheld pursuant to this section during | 557 |
the preceding calendar year. At the time of filing that return, | 558 |
the state lottery commission or transferee shall remit any amount | 559 |
deducted and withheld during the preceding calendar year that was | 560 |
not previously remitted. | 561 |
(4)
| 562 |
required to deduct and withhold amounts pursuant to section | 563 |
3770.072 of the Revised Code, shall issue to each
| 564 |
565 | |
to whom tax has
been deducted and withheld
| 566 |
or transferee pursuant to this section during the preceding | 567 |
calendar year, an information return in the form prescribed by | 568 |
569 |
(B)
| 570 |
apply to persons classified for federal income tax purposes as | 571 |
associations taxable as corporations. | 572 |
Amounts withheld pursuant to this section shall be treated as | 573 |
a credit against
| 574 |
575 | |
Code upon the lottery prize award recipient, upon a beneficiary of | 576 |
such a recipient, or upon any investor in such a recipient if the | 577 |
recipient is a pass-through entity or disregarded entity, and | 578 |
shall be treated as paid by the recipient, beneficiary, or | 579 |
investor on the date on which those amounts are deducted and | 580 |
withheld
| 581 |
credit | 582 |
583 | |
be claimed in the order required under section 5747.98 of the | 584 |
Revised Code. The credit is available to the recipient, | 585 |
beneficiary, or investor even if the commission or transferee does | 586 |
not remit to the tax commissioner the amount withheld. | 587 |
(2) Division (B)(2) of this section applies only to persons | 588 |
classified for federal income tax purposes as associations taxable | 589 |
as corporations. | 590 |
Amount withheld pursuant to this section shall be treated as | 591 |
a credit against the tax imposed pursuant to section 5733.06 of | 592 |
the Revised Code for the tax year immediately following the date | 593 |
on which those amounts are deducted and withheld, upon the lottery | 594 |
prize award recipient, upon a beneficiary of such a recipient, or | 595 |
upon an investor in such a recipient if the recipient is a | 596 |
pass-through entity or disregarded entity, and shall be treated as | 597 |
paid by the recipient, beneficiary, or investor on the date on | 598 |
which those amounts are deducted and withheld. The credit is a | 599 |
refundable credit and shall be claimed in the order required under | 600 |
section 5733.98 of the Revised Code. The credit is available to | 601 |
the recipient, beneficiary, or investor even if the commission or | 602 |
transferee does not remit to the tax commissioner the amount | 603 |
withheld. | 604 |
(3) Nothing in division (B)(1) or (2) of this section shall | 605 |
be construed to allow more than one person to claim the credit for | 606 |
any portion of each amount deducted and withheld. | 607 |
(C) Failure of the commission or any transferee to deduct | 608 |
and withhold the required amounts from lottery prize awards or to | 609 |
remit amounts withheld as required by this section and section | 610 |
3770.072 of the Revised Code shall not relieve a
| 611 |
612 | |
section from liability for the tax imposed by section 5733.06 or | 613 |
5747.02 of the Revised Code. | 614 |
Sec. 5747.20. This section applies solely for the purposes | 615 |
of computing the credit allowed under division (A) of section | 616 |
5747.05 of the Revised Code and computing income taxable in this | 617 |
state under division (D) of section 5747.08 of the Revised Code. | 618 |
All items of nonbusiness income or deduction shall be | 619 |
allocated in this state as follows: | 620 |
(A) All items of nonbusiness income or deduction taken into | 621 |
account in the computation of adjusted gross income for the | 622 |
taxable year by a resident shall be allocated to this state. | 623 |
(B) All items of nonbusiness income or deduction taken into | 624 |
account in the computation of adjusted gross income for the | 625 |
taxable year by a nonresident shall be allocated to this state as | 626 |
follows: | 627 |
(1) All items of compensation paid to an individual for | 628 |
personal services performed in this state who was a nonresident at | 629 |
the time of payment and all items of deduction directly allocated | 630 |
thereto shall be allocated to this state | 631 |
(2) All gains or losses from the sale of real property, | 632 |
tangible personal property, or intangible property shall be | 633 |
allocated as follows: | 634 |
(a) Capital gains or losses from the sale or other transfer | 635 |
of real property are allocable to this state if the property is | 636 |
located physically in this state. | 637 |
(b) Capital gains or losses from the sale or other transfer | 638 |
of tangible personal property are allocable to this state if, at | 639 |
the time of such sale or other transfer, the property had its | 640 |
physical location in this state. | 641 |
(c) Capital gains or losses from the sale or other transfer | 642 |
of intangible personal property are allocable to this state if the | 643 |
taxpayer's domicile was in this state at the time of such sale or | 644 |
other transfer. | 645 |
(3) All rents and royalties of real or tangible personal | 646 |
property shall be allocated to this state as follows: | 647 |
(a) Rents and royalties derived from real property are | 648 |
allocable to this state if the property is physically located in | 649 |
this state. | 650 |
(b) Rents and royalties derived from tangible personal | 651 |
property are allocable to this state to the extent that such | 652 |
property is utilized in this state. | 653 |
The extent of utilization of tangible personal property in a | 654 |
state is determined by multiplying the rents or royalties derived | 655 |
from such property by a fraction, the numerator of which is the | 656 |
number of days of physical location of the property in this state | 657 |
during the rental or royalty period in the taxable year and the | 658 |
denominator of which is the number of days of physical location of | 659 |
the property everywhere during all rental or royalty periods in | 660 |
the taxable year. If the physical location of the property during | 661 |
the rental or royalty period is unknown or unascertainable by the | 662 |
nonresident, tangible personal property is utilized in the state | 663 |
in which the property was located at the time the rental or | 664 |
royalty payor obtained possession. | 665 |
(4) All patent and copyright royalties shall be allocated to | 666 |
this state to the extent the patent or copyright was utilized by | 667 |
the payor in this state. | 668 |
A patent is utilized in a state to the extent that it is | 669 |
employed in production, fabrication, manufacturing, or other | 670 |
processing in the state, or to the extent that a patented product | 671 |
is produced in the state. If the basis of receipts from patent | 672 |
royalties does not permit allocation to states or if the | 673 |
accounting procedures do not reflect states of utilization, the | 674 |
patent is utilized in this state if the taxpayer's domicile was in | 675 |
this state at the time such royalties were paid or accrued. | 676 |
A copyright is utilized in a state to the extent that | 677 |
printing or other publication originates in the state. If the | 678 |
basis of receipts from copyright royalties does not permit | 679 |
allocation to states or if the accounting procedures do not | 680 |
reflect states of utilization, the copyright is utilized in this | 681 |
state if the taxpayer's domicile was in this state at the time | 682 |
such royalties were paid or accrued. | 683 |
(5)(a) All lottery prize awards paid by the state lottery | 684 |
commission pursuant to Chapter 3770. of the Revised Code shall be | 685 |
allocated to this state. | 686 |
(b) All earnings, profit, income, and gain from the sale, | 687 |
exchange, or other disposition of lottery prize awards paid or to | 688 |
be paid to any person by the state lottery commission pursuant to | 689 |
Chapter 3770. of the Revised Code shall be allocated to this | 690 |
state. | 691 |
(c) All earnings, profit, income, and gain from the direct or | 692 |
indirect ownership of lottery prize awards paid or to be paid to | 693 |
any person by the state lottery commission pursuant to Chapter | 694 |
3770. of the Revised Code shall be allocated to this state. | 695 |
(d) All earnings, profit, income, and gain from the direct or | 696 |
indirect interest in any right in or to any lottery prize awards | 697 |
paid or to be paid to any person by the state lottery commission | 698 |
pursuant to Chapter 3770. of the Revised Code shall be allocated | 699 |
to this state. | 700 |
(6) Any item of income or deduction which has been taken | 701 |
into account in the computation of adjusted gross income for the | 702 |
taxable year by a nonresident and which is not otherwise | 703 |
specifically allocated or apportioned pursuant to sections 5747.20 | 704 |
to 5747.23 of the Revised Code, including, without limitation, | 705 |
interest, dividends and distributions, items of income taken into | 706 |
account under the provisions of sections 401 to 425 of the | 707 |
Internal Revenue Code, and benefit payments received by a | 708 |
beneficiary of a supplemental unemployment trust which is referred | 709 |
to in section 501 | 710 |
not be allocated to this state unless the taxpayer's domicile was | 711 |
in this state at the time such income was paid or accrued. | 712 |
(C) If an individual is a resident for part of the taxable | 713 |
year and a nonresident for the remainder of the taxable year, all | 714 |
items of nonbusiness income or deduction shall be allocated under | 715 |
division (A) of this section for the part of the taxable year that | 716 |
the individual is a resident and under division (B) of this | 717 |
section for the part of the taxable year that the individual is a | 718 |
nonresident. | 719 |
Sec. 5747.98. (A) To provide a uniform procedure for | 720 |
calculating the amount of tax due under section 5747.02 of the | 721 |
Revised Code, a taxpayer shall claim any credits to which the | 722 |
taxpayer is entitled in the following order: | 723 |
(1) The retirement income credit under division (B) of | 724 |
section 5747.055 of the Revised Code; | 725 |
(2) The senior citizen credit under division (C) of section | 726 |
5747.05 of the Revised Code; | 727 |
(3) The lump sum distribution credit under division (D) of | 728 |
section 5747.05 of the Revised Code; | 729 |
(4) The dependent care credit under section 5747.054 of the | 730 |
Revised Code; | 731 |
(5) The lump sum retirement income credit under division (C) | 732 |
of section 5747.055 of the Revised Code; | 733 |
(6) The lump sum retirement income credit under division (D) | 734 |
of section 5747.055 of the Revised Code; | 735 |
(7) The lump sum retirement income credit under division (E) | 736 |
of section 5747.055 of the Revised Code; | 737 |
(8) The credit for displaced workers who pay for job | 738 |
training under section 5747.27 of the Revised Code; | 739 |
(9) The campaign contribution credit under section 5747.29 | 740 |
of the Revised Code; | 741 |
(10) The twenty-dollar personal exemption credit under | 742 |
section 5747.022 of the Revised Code; | 743 |
(11) The joint filing credit under division (G) of section | 744 |
5747.05 of the Revised Code; | 745 |
(12) The nonresident credit under division (A) of section | 746 |
5747.05 of the Revised Code; | 747 |
(13) The credit for a resident's out-of-state income under | 748 |
division (B) of section 5747.05 of the Revised Code; | 749 |
(14) The credit for employers that enter into agreements | 750 |
with child day-care centers under section 5747.34 of the Revised | 751 |
Code; | 752 |
(15) The credit for employers that reimburse employee child | 753 |
day-care expenses under section 5747.36 of the Revised Code; | 754 |
(16) The credit for adoption of a minor child under section | 755 |
5747.37 of the Revised Code; | 756 |
(17) The credit for purchases of lights and reflectors under | 757 |
section 5747.38 of the Revised Code; | 758 |
(18) The job retention credit under division (B) of section | 759 |
5747.058 of the Revised Code; | 760 |
(19) The credit for manufacturing investments under section | 761 |
5747.051 of the Revised Code; | 762 |
(20) The credit for purchases of new manufacturing machinery | 763 |
and equipment under section 5747.26 or section 5747.261 of the | 764 |
Revised Code; | 765 |
(21) The second credit for purchases of new manufacturing | 766 |
machinery and equipment and the credit for using Ohio coal under | 767 |
section 5747.31 of the Revised Code; | 768 |
(22) The job training credit under section 5747.39 of the | 769 |
Revised Code; | 770 |
(23) The enterprise zone credit under section 5709.66 of the | 771 |
Revised Code; | 772 |
(24) The credit for the eligible costs associated with a | 773 |
voluntary action under section 5747.32 of the Revised Code; | 774 |
(25) The credit for employers that establish on-site child | 775 |
day-care centers under section 5747.35 of the Revised Code; | 776 |
(26) The ethanol plant investment credit under section | 777 |
5747.75 of the Revised Code; | 778 |
(27) The credit for purchases of qualifying grape production | 779 |
property under section 5747.28 of the Revised Code; | 780 |
(28) The export sales credit under section 5747.057 of the | 781 |
Revised Code; | 782 |
(29) The credit for research and development and technology | 783 |
transfer investors under section 5747.33 of the Revised Code; | 784 |
(30) The enterprise zone credits under section 5709.65 of | 785 |
the Revised Code; | 786 |
(31) The refundable jobs creation credit under division (A) | 787 |
of section 5747.058 of the Revised Code; | 788 |
(32) The refundable credit for taxes paid by a qualifying | 789 |
entity granted under section 5747.059 of the Revised Code; | 790 |
(33) The refundable credits for taxes paid by a qualifying | 791 |
pass-through entity granted under division (J) of section 5747.08 | 792 |
of the Revised Code; | 793 |
(34) The refundable credit for tax withheld under division | 794 |
(B)(1) of section 5747.062 of the Revised Code. | 795 |
(B) For any credit, except the refundable credits enumerated | 796 |
in
| 797 |
credit granted under division (I) of section 5747.08 of the | 798 |
Revised Code, the amount of the credit for a taxable year shall | 799 |
not exceed the tax due after allowing for any other credit that | 800 |
precedes it in the order required under this section. Any excess | 801 |
amount of a particular credit may be carried forward if authorized | 802 |
under the section creating that credit. Nothing in this chapter | 803 |
shall be construed to allow a taxpayer to claim, directly or | 804 |
indirectly, a credit more than once for a taxable year. | 805 |
Section 2. That existing sections 3770.07, 3770.072, | 806 |
5733.051, 5733.98, 5747.062, 5747.20, and 5747.98 of the Revised | 807 |
Code are hereby repealed. | 808 |