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To amend sections 718.01, 718.02, 3318.05, 3318.052, | 1 |
3318.08, 3318.44, 3770.07, 3770.10, 3770.12, | 2 |
5705.192, 5705.21, 5733.04, 5733.42, and 5747.01 | 3 |
and to enact section 3770.121 of the Revised Code | 4 |
to permit school district permanent improvements | 5 |
levies imposed for a limited period of time to be | 6 |
renewed for a continuing period of time; to allow | 7 |
certain single member limited liability companies | 8 |
to elect to be separate taxpayers from their | 9 |
single members for purposes of municipal income | 10 |
taxation; to require under the municipal income | 11 |
tax law that a business add-back tax exempt stock | 12 |
options in the apportionment of its net profit | 13 |
among municipal corporations; to create an amnesty | 14 |
period for re-filing applications for exemption of | 15 |
real property that were dismissed due to case law; | 16 |
to change references regarding federal income tax | 17 |
law in the corporation franchise tax and income | 18 |
tax laws; to require the State Lottery Commission | 19 |
to allow a lottery prize winner who is being paid | 20 |
the prize award in installments to transfer, | 21 |
subject to certain restrictions, all or portions | 22 |
of the prize winner's outstanding prize award and | 23 |
to make other changes in the Lottery Law and the | 24 |
Lottery Prize Award Transfer Law; and to make | 25 |
changes to the distribution of the job training | 26 |
tax credit. | 27 |
Section 1. That sections 718.01, 718.02, 3318.05, 3318.052, | 28 |
3318.08, 3318.44, 3770.07, 3770.10, 3770.12, 5705.192, 5705.21, | 29 |
5733.04, 5733.42, and 5747.01 be amended and section 3770.121 of | 30 |
the Revised Code be enacted to read as follows: | 31 |
Sec. 718.01. (A) As used in this chapter: | 32 |
(1) "Adjusted federal taxable income" means a C corporation's | 33 |
federal taxable income before net operating losses and special | 34 |
deductions as determined under the Internal Revenue Code, adjusted | 35 |
as follows: | 36 |
(a) Deduct intangible income to the extent included in | 37 |
federal taxable income. The deduction shall be allowed regardless | 38 |
of whether the intangible income relates to assets used in a trade | 39 |
or business or assets held for the production of income. | 40 |
(b) Add an amount equal to five per cent of intangible income | 41 |
deducted under division (A)(1)(a) of this section, but excluding | 42 |
that portion of intangible income directly related to the sale, | 43 |
exchange, or other disposition of property described in section | 44 |
1221 of the Internal Revenue Code; | 45 |
(c) Add any losses allowed as a deduction in the computation | 46 |
of federal taxable income if the losses directly relate to the | 47 |
sale, exchange, or other disposition of an asset described in | 48 |
section 1221 or 1231 of the Internal Revenue Code; | 49 |
(d)(i) Except as provided in division (A)(1)(d)(ii) of this | 50 |
section, deduct income and gain included in federal taxable income | 51 |
to the extent the income and gain directly relate to the sale, | 52 |
exchange, or other disposition of an asset described in section | 53 |
1221 or 1231 of the Internal Revenue Code; | 54 |
(ii) Division (A)(1)(d)(i) of this section does not apply to | 55 |
the extent the income or gain is income or gain described in | 56 |
section 1245 or 1250 of the Internal Revenue Code. | 57 |
(e) Add taxes on or measured by net income allowed as a | 58 |
deduction in the computation of federal taxable income; | 59 |
(f) In the case of a real estate investment trust and | 60 |
regulated investment company, add all amounts with respect to | 61 |
dividends to, distributions to, or amounts set aside for or | 62 |
credited to the benefit of investors and allowed as a deduction in | 63 |
the computation of federal taxable income; | 64 |
(g) If the taxpayer is not a C corporation and is not an | 65 |
individual, the taxpayer shall compute adjusted federal taxable | 66 |
income as if the taxpayer were a C corporation, except: | 67 |
(i) Guaranteed payments and other similar amounts paid or | 68 |
accrued to a partner, former partner, member, or former member | 69 |
shall not be allowed as a deductible expense; and | 70 |
(ii) Amounts paid or accrued to a qualified self-employed | 71 |
retirement plan with respect to an owner or owner-employee of the | 72 |
taxpayer, amounts paid or accrued to or for health insurance for | 73 |
an owner or owner-employee, and amounts paid or accrued to or for | 74 |
life insurance for an owner or owner-employee shall not be allowed | 75 |
as a deduction. | 76 |
Nothing in division (A)(1) of this section shall be construed | 77 |
as allowing the taxpayer to add or deduct any amount more than | 78 |
once or shall be construed as allowing any taxpayer to deduct any | 79 |
amount paid to or accrued for purposes of federal self-employment | 80 |
tax. | 81 |
Nothing in this chapter shall be construed as limiting or | 82 |
removing the ability of any municipal corporation to administer, | 83 |
audit, and enforce the provisions of its municipal income tax. | 84 |
(2) "Internal Revenue Code" means the Internal Revenue Code | 85 |
of 1986, 100 Stat. 2085, 26 U.S.C. 1, as amended. | 86 |
(3) "Schedule C" means internal revenue service schedule C | 87 |
filed by a taxpayer pursuant to the Internal Revenue Code. | 88 |
(4) "Form 2106" means internal revenue service form 2106 | 89 |
filed by a taxpayer pursuant to the Internal Revenue Code. | 90 |
(5) "Intangible income" means income of any of the following | 91 |
types: income yield, interest, capital gains, dividends, or other | 92 |
income arising from the ownership, sale, exchange, or other | 93 |
disposition of intangible property including, but not limited to, | 94 |
investments, deposits, money, or credits as those terms are | 95 |
defined in Chapter 5701. of the Revised Code, and patents, | 96 |
copyrights, trademarks, tradenames, investments in real estate | 97 |
investment trusts, investments in regulated investment companies, | 98 |
and appreciation on deferred compensation. "Intangible income" | 99 |
does not include prizes, awards, or other income associated with | 100 |
any lottery winnings or other similar games of chance. | 101 |
(6) "S corporation" means a corporation that has made an | 102 |
election under subchapter S of Chapter 1 of Subtitle A of the | 103 |
Internal Revenue Code for its taxable year. | 104 |
(7) For taxable years beginning on or after January 1, 2004, | 105 |
"net profit" for a taxpayer other than an individual means | 106 |
adjusted federal taxable income and "net profit" for a taxpayer | 107 |
who is an individual means the individual's profit, other than | 108 |
amounts described in division (F) of this section, required to be | 109 |
reported on schedule C, schedule E, or schedule F. | 110 |
(8) "Taxpayer" means a person subject to a tax on income | 111 |
levied by a municipal corporation. | 112 |
division (J) of this section, "taxpayer" does not include any | 113 |
person that is a disregarded entity or a qualifying subchapter S | 114 |
subsidiary for federal income tax purposes, but "taxpayer" | 115 |
includes any other person who owns the disregarded entity or | 116 |
qualifying subchapter S subsidiary. | 117 |
(9) "Taxable year" means the corresponding tax reporting | 118 |
period as prescribed for the taxpayer under the Internal Revenue | 119 |
Code. | 120 |
(10) "Tax administrator" means the individual charged with | 121 |
direct responsibility for administration of a tax on income levied | 122 |
by a municipal corporation and includes: | 123 |
(a) The central collection agency and the regional income tax | 124 |
agency and their successors in interest, and other entities | 125 |
organized to perform functions similar to those performed by the | 126 |
central collection agency and the regional income tax agency; | 127 |
(b) A municipal corporation acting as the agent of another | 128 |
municipal corporation; and | 129 |
(c) Persons retained by a municipal corporation to administer | 130 |
a tax levied by the municipal corporation, but only if the | 131 |
municipal corporation does not compensate the person in whole or | 132 |
in part on a contingency basis. | 133 |
(11) "Person" includes individuals, firms, companies, | 134 |
business trusts, estates, trusts, partnerships, limited liability | 135 |
companies, associations, corporations, governmental entities, and | 136 |
any other entity. | 137 |
(12) "Schedule E" means internal revenue service schedule E | 138 |
filed by a taxpayer pursuant to the Internal Revenue Code. | 139 |
(13) "Schedule F" means internal revenue service schedule F | 140 |
filed by a taxpayer pursuant to the Internal Revenue Code. | 141 |
(B) No municipal corporation shall tax income at other than a | 142 |
uniform rate. | 143 |
(C) No municipal corporation shall levy a tax on income at a | 144 |
rate in excess of one per cent without having obtained the | 145 |
approval of the excess by a majority of the electors of the | 146 |
municipality voting on the question at a general, primary, or | 147 |
special election. The legislative authority of the municipal | 148 |
corporation shall file with the board of elections at least | 149 |
seventy-five days before the day of the election a copy of the | 150 |
ordinance together with a resolution specifying the date the | 151 |
election is to be held and directing the board of elections to | 152 |
conduct the election. The ballot shall be in the following form: | 153 |
"Shall the Ordinance providing for a ... per cent levy on income | 154 |
for (Brief description of the purpose of the proposed levy) be | 155 |
passed? | 156 |
157 |
FOR THE INCOME TAX | 158 | ||||
AGAINST THE INCOME TAX | " | 159 |
160 |
In the event of an affirmative vote, the proceeds of the levy | 161 |
may be used only for the specified purpose. | 162 |
(D)(1) Except as provided in division (E) or (F) of this | 163 |
section, no municipal corporation shall exempt from a tax on | 164 |
income compensation for personal services of individuals over | 165 |
eighteen years of age or the net profit from a business or | 166 |
profession. | 167 |
(2)(a) For taxable years beginning on or after January 1, | 168 |
2004, no municipal corporation shall tax the net profit from a | 169 |
business or profession using any base other than the taxpayer's | 170 |
adjusted federal taxable income. | 171 |
(b) Division (D)(2)(a) of this section does not apply to any | 172 |
taxpayer required to file a return under section 5745.03 of the | 173 |
Revised Code or to the net profit from a sole proprietorship. | 174 |
(E) The legislative authority of a municipal corporation may, | 175 |
by ordinance or resolution, exempt from withholding and from a tax | 176 |
on income the following: | 177 |
(1) Compensation arising from the sale, exchange, or other | 178 |
disposition of a stock option, the exercise of a stock option, or | 179 |
the sale, exchange, or other disposition of stock purchased under | 180 |
a stock option; or | 181 |
(2) Compensation attributable to a nonqualified deferred | 182 |
compensation plan or program described in section 3121(v)(2)(C) of | 183 |
the Internal Revenue Code. | 184 |
If an individual's taxable income includes income against | 185 |
which the taxpayer has taken a deduction for federal income tax | 186 |
purposes as reportable on the taxpayer's form 2106, and against | 187 |
which a like deduction has not been allowed by the municipal | 188 |
corporation, the municipal corporation shall deduct from the | 189 |
taxpayer's taxable income an amount equal to the deduction shown | 190 |
on such form allowable against such income, to the extent not | 191 |
otherwise so allowed as a deduction by the municipal corporation. | 192 |
In the case of a taxpayer who has a net profit from a | 193 |
business or profession that is operated as a sole proprietorship, | 194 |
no municipal corporation may tax or use as the base for | 195 |
determining the amount of the net profit that shall be considered | 196 |
as having a taxable situs in the municipal corporation, an amount | 197 |
other than the net profit required to be reported by the taxpayer | 198 |
on schedule C or F from such sole proprietorship for the taxable | 199 |
year. | 200 |
In the case of a taxpayer who has a net profit from rental | 201 |
activity required to be reported on schedule E, no municipal | 202 |
corporation may tax or use as the base for determining the amount | 203 |
of the net profit that shall be considered as having a taxable | 204 |
situs in the municipal corporation, an amount other than the net | 205 |
profit from rental activities required to be reported by the | 206 |
taxpayer on schedule E for the taxable year. | 207 |
(F) A municipal corporation shall not tax any of the | 208 |
following: | 209 |
(1) The military pay or allowances of members of the armed | 210 |
forces of the United States and of members of their reserve | 211 |
components, including the Ohio national guard; | 212 |
(2) The income of religious, fraternal, charitable, | 213 |
scientific, literary, or educational institutions to the extent | 214 |
that such income is derived from tax-exempt real estate, | 215 |
tax-exempt tangible or intangible property, or tax-exempt | 216 |
activities; | 217 |
(3) Except as otherwise provided in division (G) of this | 218 |
section, intangible income; | 219 |
(4) Compensation paid under section 3501.28 or 3501.36 of the | 220 |
Revised Code to a person serving as a precinct election official, | 221 |
to the extent that such compensation does not exceed one thousand | 222 |
dollars annually. Such compensation in excess of one thousand | 223 |
dollars may be subjected to taxation by a municipal corporation. A | 224 |
municipal corporation shall not require the payer of such | 225 |
compensation to withhold any tax from that compensation. | 226 |
(5) Compensation paid to an employee of a transit authority, | 227 |
regional transit authority, or regional transit commission created | 228 |
under Chapter 306. of the Revised Code for operating a transit bus | 229 |
or other motor vehicle for the authority or commission in or | 230 |
through the municipal corporation, unless the bus or vehicle is | 231 |
operated on a regularly scheduled route, the operator is subject | 232 |
to such a tax by reason of residence or domicile in the municipal | 233 |
corporation, or the headquarters of the authority or commission is | 234 |
located within the municipal corporation; | 235 |
(6) The income of a public utility, when that public utility | 236 |
is subject to the tax levied under section 5727.24 or 5727.30 of | 237 |
the Revised Code, except a municipal corporation may tax the | 238 |
following, subject to Chapter 5745. of the Revised Code: | 239 |
(a) Beginning January 1, 2002, the income of an electric | 240 |
company or combined company; | 241 |
(b) Beginning January 1, 2004, the income of a telephone | 242 |
company. | 243 |
As used in division (F)(6) of this section, "combined | 244 |
company," "electric company," and "telephone company" have the | 245 |
same meanings as in section 5727.01 of the Revised Code. | 246 |
(7) On and after January 1, 2003, items excluded from federal | 247 |
gross income pursuant to section 107 of the Internal Revenue Code; | 248 |
(8) On and after January 1, 2001, compensation paid to a | 249 |
nonresident individual to the extent prohibited under section | 250 |
718.011 of the Revised Code; | 251 |
(9)(a) Except as provided in division (F)(9)(b) and (c) of | 252 |
this section, an S corporation shareholder's distributive share of | 253 |
net profits of the S corporation, other than any part of the | 254 |
distributive share of net profits that represents wages as defined | 255 |
in section 3121(a) of the Internal Revenue Code or net earnings | 256 |
from self-employment as defined in section 1402(a) of the Internal | 257 |
Revenue Code. | 258 |
(b) If, pursuant to division (H) of former section 718.01 of | 259 |
the Revised Code as it existed before | 260 |
261 | |
262 | |
corporation voted in favor of the question at an election held on | 263 |
November 4, 2003, the municipal corporation may continue after | 264 |
2002 to tax an S corporation shareholder's distributive share of | 265 |
net profits of an S corporation. | 266 |
(c) If, on December 6, 2002, a municipal corporation was | 267 |
imposing, assessing, and collecting a tax on an S corporation | 268 |
shareholder's distributive share of net profits of the S | 269 |
corporation to the extent the distributive share would be | 270 |
allocated or apportioned to this state under divisions (B)(1) and | 271 |
(2) of section 5733.05 of the Revised Code if the S corporation | 272 |
were a corporation subject to taxes imposed under Chapter 5733. of | 273 |
the Revised Code, the municipal corporation may continue to impose | 274 |
the tax on such distributive shares to the extent such shares | 275 |
would be so allocated or apportioned to this state only until | 276 |
December 31, 2004, unless a majority of the electors of the | 277 |
municipal corporation voting on the question of continuing to tax | 278 |
such shares after that date vote in favor of that question at an | 279 |
election held November 2, 2004. If a majority of those electors | 280 |
vote in favor of the question, the municipal corporation may | 281 |
continue after December 31, 2004, to impose the tax on such | 282 |
distributive shares only to the extent such shares would be so | 283 |
allocated or apportioned to this state. | 284 |
(d) For the purposes of division (D) of section 718.14 of the | 285 |
Revised Code, a municipal corporation shall be deemed to have | 286 |
elected to tax S corporation shareholders' distributive shares of | 287 |
net profits of the S corporation in the hands of the shareholders | 288 |
if a majority of the electors of a municipal corporation vote in | 289 |
favor of a question at an election held under division (F)(9)(b) | 290 |
or (c) of this section. The municipal corporation shall specify by | 291 |
ordinance or rule that the tax applies to the distributive share | 292 |
of a shareholder of an S corporation in the hands of the | 293 |
shareholder of the S corporation. | 294 |
(10) Employee compensation that is not "qualifying wages" as | 295 |
defined in section 718.03 of the Revised Code. | 296 |
(G) Any municipal corporation that taxes any type of | 297 |
intangible income on March 29, 1988, pursuant to Section 3 of | 298 |
Amended Substitute Senate Bill No. 238 of the 116th general | 299 |
assembly, may continue to tax that type of income after 1988 if a | 300 |
majority of the electors of the municipal corporation voting on | 301 |
the question of whether to permit the taxation of that type of | 302 |
intangible income after 1988 vote in favor thereof at an election | 303 |
held on November 8, 1988. | 304 |
(H) Nothing in this section or section 718.02 of the Revised | 305 |
Code shall authorize the levy of any tax on income that a | 306 |
municipal corporation is not authorized to levy under existing | 307 |
laws or shall require a municipal corporation to allow a deduction | 308 |
from taxable income for losses incurred from a sole proprietorship | 309 |
or partnership. | 310 |
(I)(1) Nothing in this chapter prohibits a municipal | 311 |
corporation from allowing, by resolution or ordinance, a net | 312 |
operating loss carryforward. | 313 |
(2) Nothing in this chapter requires a municipal corporation | 314 |
to allow a net operating loss carryforward. | 315 |
(J)(1) A single member limited liability company that is a | 316 |
disregarded entity for federal tax purposes may elect to be a | 317 |
separate taxpayer from its single member in all Ohio municipal | 318 |
corporations in which it either filed as a separate taxpayer or | 319 |
did not file for its taxable year ending in 2003, if all of the | 320 |
following conditions are met: | 321 |
(a) The limited liability company's single member is also a | 322 |
limited liability company; | 323 |
(b) The limited liability company and its single member were | 324 |
formed and doing business in one or more Ohio municipal | 325 |
corporations for at least five years before January 1, 2004; | 326 |
(c) Not later than December 31, 2004, the limited liability | 327 |
company and its single member each make an election to be treated | 328 |
as a separate taxpayer under division (J) of this section; | 329 |
(d) The limited liability company was not formed for the | 330 |
purpose of evading or reducing Ohio municipal corporation income | 331 |
tax liability of the limited liability company or its single | 332 |
member; | 333 |
(e) The Ohio municipal corporation that is the primary place | 334 |
of business of the sole member of the limited liability company | 335 |
consents to the election. | 336 |
(2) For purposes of division (J)(1)(e) of this section, a | 337 |
municipal corporation is the primary place of business of a | 338 |
limited liability company if, for the limited liability company's | 339 |
taxable year ending in 2003, its income tax liability is greater | 340 |
in that municipal corporation than in any other municipal | 341 |
corporation in Ohio, and that tax liability to that municipal | 342 |
corporation for its taxable year ending in 2003 is at least four | 343 |
hundred thousand dollars. | 344 |
Sec. 718.02. This section does not apply to taxpayers that | 345 |
are subject to and required to file reports under Chapter 5745. of | 346 |
the Revised Code. | 347 |
(A) Except as otherwise provided in division (D) of this | 348 |
section, net profit from a business or profession conducted both | 349 |
within and without the boundaries of a municipal corporation shall | 350 |
be considered as having a taxable situs in such municipal | 351 |
corporation for purposes of municipal income taxation in the same | 352 |
proportion as the average ratio of the following: | 353 |
(1) The average original cost of the real and tangible | 354 |
personal property owned or used by the taxpayer in the business or | 355 |
profession in such municipal corporation during the taxable period | 356 |
to the average original cost of all of the real and tangible | 357 |
personal property owned or used by the taxpayer in the business or | 358 |
profession during the same period, wherever situated. | 359 |
As used in the preceding paragraph, real property shall | 360 |
include property rented or leased by the taxpayer and the value of | 361 |
such property shall be determined by multiplying the annual rental | 362 |
thereon by eight; | 363 |
(2) Wages, salaries, and other compensation paid during the | 364 |
taxable period to persons employed in the business or profession | 365 |
for services performed in such municipal corporation to wages, | 366 |
salaries, and other compensation paid during the same period to | 367 |
persons employed in the business or profession, wherever their | 368 |
services are performed, excluding compensation that is not taxable | 369 |
by the municipal corporation under section 718.011 of the Revised | 370 |
Code; | 371 |
(3) Gross receipts of the business or profession from sales | 372 |
made and services performed during the taxable period in such | 373 |
municipal corporation to gross receipts of the business or | 374 |
profession during the same period from sales and services, | 375 |
wherever made or performed. | 376 |
If the foregoing apportionment formula does not produce an | 377 |
equitable result, another basis may be substituted, under uniform | 378 |
regulations, so as to produce an equitable result. | 379 |
(B) As used in division (A) of this section, "sales made in a | 380 |
municipal corporation" mean: | 381 |
(1) All sales of tangible personal property delivered within | 382 |
such municipal corporation regardless of where title passes if | 383 |
shipped or delivered from a stock of goods within such municipal | 384 |
corporation; | 385 |
(2) All sales of tangible personal property delivered within | 386 |
such municipal corporation regardless of where title passes even | 387 |
though transported from a point outside such municipal corporation | 388 |
if the taxpayer is regularly engaged through its own employees in | 389 |
the solicitation or promotion of sales within such municipal | 390 |
corporation and the sales result from such solicitation or | 391 |
promotion; | 392 |
(3) All sales of tangible personal property shipped from a | 393 |
place within such municipal corporation to purchasers outside such | 394 |
municipal corporation regardless of where title passes if the | 395 |
taxpayer is not, through its own employees, regularly engaged in | 396 |
the solicitation or promotion of sales at the place where delivery | 397 |
is made. | 398 |
(C) Except as otherwise provided in division (D) of this | 399 |
section, net profit from rental activity not constituting a | 400 |
business or profession shall be subject to tax only by the | 401 |
municipal corporation in which the property generating the net | 402 |
profit is located. | 403 |
(D) This section does not apply to individuals who are | 404 |
residents of the municipal corporation and, except as otherwise | 405 |
provided in section 718.01 of the Revised Code, a municipal | 406 |
corporation may impose a tax on all income earned by residents of | 407 |
the municipal corporation to the extent allowed by the United | 408 |
States Constitution. | 409 |
(E) If, in computing the taxpayer's adjusted federal taxable | 410 |
income, the taxpayer deducted any amount with respect to a stock | 411 |
option granted to an employee, and if the employee is not required | 412 |
to include in income any amount or any portion thereof because it | 413 |
is exempted from taxation under division (F)(10) of section 718.01 | 414 |
of the Revised Code and division (A)(2)(d) of section 718.03 of | 415 |
the Revised Code by a municipal corporation to which the taxpayer | 416 |
has apportioned a portion of its net profit, the taxpayer shall | 417 |
add the amount that is exempt from taxation to the taxpayer's net | 418 |
profit that was apportioned to that municipal corporation. In no | 419 |
case shall a taxpayer be required to add to its net profit that | 420 |
was apportioned to that municipal corporation any amount other | 421 |
than the amount upon which the employee would be required to pay | 422 |
tax were the amount related to the stock option not exempted from | 423 |
taxation. | 424 |
This division applies solely for the purpose of making an | 425 |
adjustment to the amount of a taxpayer's net profit that was | 426 |
apportioned to a municipal corporation under divisions (A) and (B) | 427 |
of this section. | 428 |
Sec. 3318.05. The conditional approval of the Ohio school | 429 |
facilities commission for a project shall lapse and the amount | 430 |
reserved and encumbered for such project shall be released unless | 431 |
the school district board accepts such conditional approval within | 432 |
one hundred twenty days following the date of certification of the | 433 |
conditional approval to the school district board and the electors | 434 |
of the school district vote favorably on both of the propositions | 435 |
described in divisions (A) and (B) of this section within one year | 436 |
of the date of such certification, except that a school district | 437 |
described in division (C) of this section does not need to submit | 438 |
the proposition described in division (B) of this section. The | 439 |
propositions described in divisions (A) and (B) of this section | 440 |
shall be combined in a single proposal. If the district board or | 441 |
the district's electors fail to meet such requirements and the | 442 |
amount reserved and encumbered for the district's project is | 443 |
released, the district shall be given first priority for project | 444 |
funding as such funds become available. | 445 |
(A) On the question of issuing bonds of the school district | 446 |
board, for the school district's portion of the basic project | 447 |
cost, in an amount equal to the school district's portion of the | 448 |
basic project cost less the amount of the proceeds of any | 449 |
securities authorized or to be authorized under division (J) of | 450 |
section 133.06 of the Revised Code and dedicated by the school | 451 |
district board to payment of the district's portion of the basic | 452 |
project cost; and | 453 |
(B) On the question of levying a tax the proceeds of which | 454 |
shall be used to pay the cost of maintaining the classroom | 455 |
facilities included in the project. Such tax shall be at the rate | 456 |
of not less than one-half mill for each dollar of valuation for a | 457 |
period of twenty-three years, subject to any extension approved | 458 |
under section 3318.061 of the Revised Code. | 459 |
(C) If a school district has in place a tax levied under | 460 |
section
5705.21 of the Revised Code for general | 461 |
improvements for a continuing period of time and the proceeds of | 462 |
such tax can be used for maintenance, the school district need not | 463 |
levy the additional tax required under division (B) of this | 464 |
section, provided the school district board includes in the | 465 |
agreement entered into under section 3318.08 of the Revised Code | 466 |
provisions earmarking an amount from the proceeds of that | 467 |
permanent improvement tax for maintenance of classroom facilities | 468 |
equivalent to the amount of the additional tax and for the | 469 |
equivalent number of years otherwise required under this section. | 470 |
(D) Proceeds of the tax to be used for maintenance of the | 471 |
classroom facilities under either division (B) or (C) of this | 472 |
section shall be deposited into a separate fund established by the | 473 |
school district for such purpose. | 474 |
Sec. 3318.052. At any time after the electors of a school | 475 |
district have approved either or both a property tax levied under | 476 |
section 5705.21 or 5705.218 of the Revised Code for the purpose of | 477 |
permanent improvements, including
general | 478 |
improvements, or a school district income tax levied under Chapter | 479 |
5748. of the Revised Code, the proceeds of either of which, | 480 |
pursuant to the ballot measures approved by the electors, are not | 481 |
so restricted that they cannot be used to pay the costs of a | 482 |
project or maintaining classroom facilities, the school district | 483 |
board may: | 484 |
(A) Within one year following the date of the certification | 485 |
of the conditional approval of the school district's classroom | 486 |
facilities project by the Ohio school facilities commission, enter | 487 |
into a written agreement with the commission, which may be part of | 488 |
an agreement entered into under section 3318.08 of the Revised | 489 |
Code, and in which the school district board covenants and agrees | 490 |
to do one or both of the following: | 491 |
(1) Apply a specified amount of available proceeds of that | 492 |
property tax levy, of that school district income tax, or of | 493 |
securities issued under this section, or of proceeds from any two | 494 |
or more of those sources, to pay all or part of the district's | 495 |
portion of the basic project cost of its classroom facilities | 496 |
project; | 497 |
(2) Apply available proceeds of either or both a property tax | 498 |
levied under section 5705.21 or 5705.218 of the Revised Code in | 499 |
effect for a continuing period of time, or of a school district | 500 |
income tax levied under Chapter 5748. of the Revised Code in | 501 |
effect for a continuing period of time to the payment of costs of | 502 |
maintaining the classroom facilities. | 503 |
(B) Receive, as a credit against the amount of bonds required | 504 |
under sections 3318.05 and 3318.06 of the Revised Code, to be | 505 |
approved by the electors of the district and issued by the | 506 |
district board for the district's portion of the basic project | 507 |
cost of its classroom facilities project in order for the district | 508 |
to receive state assistance for the project, an amount equal to | 509 |
the specified amount that the district board covenants and agrees | 510 |
with the commission to apply as set forth in division (A)(1) of | 511 |
this section; | 512 |
(C) Receive, as a credit against the amount of the tax levy | 513 |
required under sections 3318.05 and 3318.06 of the Revised Code, | 514 |
to be approved by the electors of the district to pay the costs of | 515 |
maintaining the classroom facilities in order to receive state | 516 |
assistance for the classroom facilities project, an amount | 517 |
equivalent to the specified amount of proceeds the school district | 518 |
board covenants and agrees with the commission to apply as | 519 |
referred to in division (A)(2) of this section; | 520 |
(D) Apply proceeds of either or both a school district income | 521 |
tax levied under Chapter 5748. of the Revised Code that may | 522 |
lawfully be used to pay the costs of a classroom facilities | 523 |
project or of a tax levied under section 5705.21 or 5705.218 of | 524 |
the Revised Code to the payment of debt charges on and financing | 525 |
costs related to securities issued under this section; | 526 |
(E) Issue securities to provide moneys to pay all or part of | 527 |
the district's portion of the basic project cost of its classroom | 528 |
facilities project in accordance with an agreement entered into | 529 |
under division (A) of this section. Securities issued under this | 530 |
section shall be Chapter 133. securities and may be issued as | 531 |
general obligation securities or issued in anticipation of a | 532 |
school district income tax or as property tax anticipation notes | 533 |
under section 133.24 of the Revised Code. The district board's | 534 |
resolution authorizing the issuance and sale of general obligation | 535 |
securities under this section shall conform to the applicable | 536 |
requirements of section 133.22 or 133.23 of the Revised Code. | 537 |
Securities issued under this section shall have principal payments | 538 |
during each year after the year of issuance over a period of not | 539 |
more than twenty-three years and, if so determined by the district | 540 |
board, during the year of issuance. Securities issued under this | 541 |
section shall not be included in the calculation of net | 542 |
indebtedness of the district under section 133.06 of the Revised | 543 |
Code, if the resolution of the district board authorizing their | 544 |
issuance and sale includes covenants to appropriate annually from | 545 |
lawfully available proceeds of a property tax levied under section | 546 |
5705.21 or 5705.218 of the Revised Code or of a school district | 547 |
income tax levied under Chapter 5748. of the Revised Code and to | 548 |
continue to levy and collect the tax in amounts necessary to pay | 549 |
the debt charges on and financing costs related to the securities | 550 |
as they become due. No property tax levied under section 5705.21 | 551 |
or 5705.218 of the Revised Code and no school district income tax | 552 |
levied under Chapter 5748. of the Revised Code that is pledged, or | 553 |
that the school district board has covenanted to levy, collect, | 554 |
and appropriate annually, to pay the debt charges on and financing | 555 |
costs related to securities issued under this section shall be | 556 |
repealed while those securities are outstanding. If such a tax is | 557 |
reduced by the electors of the district or by the district board | 558 |
while those securities are outstanding, the school district board | 559 |
shall continue to levy and collect the tax under the authority of | 560 |
the original election authorizing the tax at a rate in each year | 561 |
that the board reasonably estimates will produce an amount in that | 562 |
year equal to the debt charges on the securities in that year, | 563 |
except that in the case of a school district income tax that | 564 |
amount shall be rounded up to the nearest one-fourth of one per | 565 |
cent. | 566 |
No state moneys shall be released for a project to which this | 567 |
section applies until the proceeds of the tax securities issued | 568 |
under this section that are dedicated for the payment of the | 569 |
district portion of the basic project cost of its classroom | 570 |
facilities project are first deposited into the district's project | 571 |
construction fund. | 572 |
Sec. 3318.08. Except in the case of a joint vocational | 573 |
school district that receives assistance under sections 3318.40 to | 574 |
3318.45 of the Revised Code, if the requisite favorable vote on | 575 |
the election is obtained, or if the school district board has | 576 |
resolved to apply the proceeds of a property tax levy or the | 577 |
proceeds of an income tax, or a combination of proceeds from such | 578 |
taxes, as authorized in section 3318.052 of the Revised Code, the | 579 |
Ohio school facilities commission, upon certification to it of | 580 |
either the results of the election or the resolution under section | 581 |
3318.052 of the Revised Code, shall enter into a written agreement | 582 |
with the school district board for the construction and sale of | 583 |
the project. In the case of a joint vocational school district | 584 |
that receives assistance under sections 3318.40 to 3318.45 of the | 585 |
Revised Code, if the school district board of education and the | 586 |
school district electors have satisfied the conditions prescribed | 587 |
in division (D)(1) of section 3318.41 of the Revised Code, the | 588 |
commission shall enter into an agreement with the school district | 589 |
board for the construction and sale of the project. In either | 590 |
case, the agreement shall include, but need not be limited to, the | 591 |
following provisions: | 592 |
(A) The sale and issuance of bonds or notes in anticipation | 593 |
thereof, as soon as practicable after the execution of the | 594 |
agreement, in an amount equal to the school district's portion of | 595 |
the basic project cost, including any securities authorized under | 596 |
division (J) of section 133.06 of the Revised Code and dedicated | 597 |
by the school district board to payment of the district's portion | 598 |
of the basic project cost of the project; provided, that if at | 599 |
that time the county treasurer of each county in which the school | 600 |
district is located has not commenced the collection of taxes on | 601 |
the general duplicate of real and public utility property for the | 602 |
year in which the controlling board approved the project, the | 603 |
school district board shall authorize the issuance of a first | 604 |
installment of bond anticipation notes in an amount specified by | 605 |
the agreement, which amount shall not exceed an amount necessary | 606 |
to raise the net bonded indebtedness of the school district as of | 607 |
the date of the controlling board's approval to within five | 608 |
thousand dollars of the required level of indebtedness for the | 609 |
preceding year. In the event that a first installment of bond | 610 |
anticipation notes is issued, the school district board shall, as | 611 |
soon as practicable after the county treasurer of each county in | 612 |
which the school district is located has commenced the collection | 613 |
of taxes on the general duplicate of real and public utility | 614 |
property for the year in which the controlling board approved the | 615 |
project, authorize the issuance of a second and final installment | 616 |
of bond anticipation notes or a first and final issue of bonds. | 617 |
The combined value of the first and second installment of | 618 |
bond anticipation notes or the value of the first and final issue | 619 |
of bonds shall be equal to the school district's portion of the | 620 |
basic project cost. The proceeds of any such bonds shall be used | 621 |
first to retire any bond anticipation notes. Otherwise, the | 622 |
proceeds of such bonds and of any bond anticipation notes, except | 623 |
the premium and accrued interest thereon, shall be deposited in | 624 |
the school district's project construction fund. In determining | 625 |
the amount of net bonded indebtedness for the purpose of fixing | 626 |
the amount of an issue of either bonds or bond anticipation notes, | 627 |
gross indebtedness shall be reduced by moneys in the bond | 628 |
retirement fund only to the extent of the moneys therein on the | 629 |
first day of the year preceding the year in which the controlling | 630 |
board approved the project. Should there be a decrease in the tax | 631 |
valuation of the school district so that the amount of | 632 |
indebtedness that can be incurred on the tax duplicates for the | 633 |
year in which the controlling board approved the project is less | 634 |
than the amount of the first installment of bond anticipation | 635 |
notes, there shall be paid from the school district's project | 636 |
construction fund to the school district's bond retirement fund to | 637 |
be applied against such notes an amount sufficient to cause the | 638 |
net bonded indebtedness of the school district, as of the first | 639 |
day of the year following the year in which the controlling board | 640 |
approved the project, to be within five thousand dollars of the | 641 |
required level of indebtedness for the year in which the | 642 |
controlling board approved the project. The maximum amount of | 643 |
indebtedness to be incurred by any school district board as its | 644 |
share of the cost of the project is either an amount that will | 645 |
cause its net bonded indebtedness, as of the first day of the year | 646 |
following the year in which the controlling board approved the | 647 |
project, to be within five thousand dollars of the required level | 648 |
of indebtedness, or an amount equal to the required percentage of | 649 |
the basic project costs, whichever is greater. All bonds and bond | 650 |
anticipation notes shall be issued in accordance with Chapter 133. | 651 |
of the Revised Code, and notes may be renewed as provided in | 652 |
section 133.22 of the Revised Code. | 653 |
(B) The transfer of such funds of the school district board | 654 |
available for the project, together with the proceeds of the sale | 655 |
of the bonds or notes, except premium, accrued interest, and | 656 |
interest included in the amount of the issue, to the school | 657 |
district's project construction fund; | 658 |
(C) For all school districts except joint vocational school | 659 |
districts that receive assistance under sections 3318.40 to | 660 |
3318.45 of the Revised Code, the following provisions as | 661 |
applicable: | 662 |
(1) If section 3318.052 of the Revised Code applies, the | 663 |
earmarking of the proceeds of a tax levied under section 5705.21 | 664 |
of the Revised Code for general | 665 |
under section 5705.218 of the Revised Code for the purpose of | 666 |
permanent improvements, or the proceeds of a school district | 667 |
income tax levied under Chapter 5748. of the Revised Code, or the | 668 |
proceeds from a combination of those two taxes, in an amount to | 669 |
pay all or part of the service charges on bonds issued to pay the | 670 |
school district portion of the project and an amount equivalent to | 671 |
all or part of the tax required under division (B) of section | 672 |
3318.05 of the Revised Code; | 673 |
(2) If section 3318.052 of the Revised Code does not apply, | 674 |
either of the following: | 675 |
(a) The levy of the tax authorized at the election for the | 676 |
payment of maintenance costs, as specified in division (B) of | 677 |
section 3318.05 of the Revised Code; | 678 |
(b) If the school district electors have approved a | 679 |
continuing
tax
for general | 680 |
section 5705.21 of the Revised Code and that tax can be used for | 681 |
maintenance, the earmarking of an amount of the proceeds from such | 682 |
tax for maintenance of classroom facilities as specified in | 683 |
division (B) of section 3318.05 of the Revised Code. | 684 |
(D) For joint vocational school districts that receive | 685 |
assistance under sections 3318.40 to 3318.45 of the Revised Code, | 686 |
provision for deposit of school district moneys dedicated to | 687 |
maintenance of the classroom facilities acquired under those | 688 |
sections as prescribed in section 3318.43 of the Revised Code; | 689 |
(E) Dedication of any local donated contribution as provided | 690 |
for under section 3318.084 of the Revised Code, including a | 691 |
schedule for depositing such moneys applied as an offset of the | 692 |
district's obligation to levy the tax described in division (B) of | 693 |
section 3318.05 of the Revised Code as required under division | 694 |
(D)(2) of section 3318.084 of the Revised Code; | 695 |
(F) Ownership of or interest in the project during the period | 696 |
of construction, which shall be divided between the commission and | 697 |
the school district board in proportion to their respective | 698 |
contributions to the school district's project construction fund; | 699 |
(G) Maintenance of the state's interest in the project until | 700 |
any obligations issued for the project under section 3318.26 of | 701 |
the Revised Code are no longer outstanding; | 702 |
(H) The insurance of the project by the school district from | 703 |
the time there is an insurable interest therein and so long as the | 704 |
state retains any ownership or interest in the project pursuant to | 705 |
division (F) of this section, in such amounts and against such | 706 |
risks as the commission shall require; provided, that the cost of | 707 |
any required insurance until the project is completed shall be a | 708 |
part of the basic project cost; | 709 |
(I) The certification by the director of budget and | 710 |
management that funds are available and have been set aside to | 711 |
meet the state's share of the basic project cost as approved by | 712 |
the controlling board pursuant to either section 3318.04 or | 713 |
division (B)(1) of section 3318.41 of the Revised Code; | 714 |
(J) Authorization of the school district board to advertise | 715 |
for and receive construction bids for the project, for and on | 716 |
behalf of the commission, and to award contracts in the name of | 717 |
the state subject to approval by the commission; | 718 |
(K) Provisions for the disbursement of moneys from the school | 719 |
district's project account upon issuance by the commission or the | 720 |
commission's designated representative of vouchers for work done | 721 |
to be certified to the commission by the treasurer of the school | 722 |
district board; | 723 |
(L) Disposal of any balance left in the school district's | 724 |
project construction fund upon completion of the project; | 725 |
(M) Limitations upon use of the project or any part of it so | 726 |
long as any obligations issued to finance the project under | 727 |
section 3318.26 of the Revised Code are outstanding; | 728 |
(N) Provision for vesting the state's interest in the project | 729 |
to the school district board when the obligations issued to | 730 |
finance the project under section 3318.26 of the Revised Code are | 731 |
outstanding; | 732 |
(O) Provision for deposit of an executed copy of the | 733 |
agreement in the office of the commission; | 734 |
(P) Provision for termination of the contract and release of | 735 |
the funds encumbered at the time of the conditional approval, if | 736 |
the proceeds of the sale of the bonds of the school district board | 737 |
are not paid into the school district's project construction fund | 738 |
and if bids for the construction of the project have not been | 739 |
taken within such period after the execution of the agreement as | 740 |
may be fixed by the commission; | 741 |
(Q) Provision for the school district to maintain the project | 742 |
in accordance with a plan approved by the commission; | 743 |
(R)(1) For all school districts except a district undertaking | 744 |
a project under section 3318.38 of the Revised Code or a joint | 745 |
vocational school district undertaking a project under sections | 746 |
3318.40 to 3318.45 of the Revised Code, provision that all state | 747 |
funds reserved and encumbered to pay the state share of the cost | 748 |
of the project pursuant to section 3318.03 of the Revised Code be | 749 |
spent on the construction or acquisition of the project prior to | 750 |
the expenditure of any funds provided by the school district to | 751 |
pay for its share of the project cost, unless the school district | 752 |
certifies to the commission that expenditure by the school | 753 |
district is necessary to maintain the tax-exempt status of notes | 754 |
or bonds issued by the school district to pay for its share of the | 755 |
project cost or to comply with applicable temporary investment | 756 |
periods or spending exceptions to rebate as provided for under | 757 |
federal law in regard to those notes or bonds, in which cases, the | 758 |
school district may commit to spend, or spend, a portion of the | 759 |
funds it provides; | 760 |
(2) For a school district undertaking a project under section | 761 |
3318.38 of the Revised Code or a joint vocational school district | 762 |
undertaking a project under sections 3318.40 to 3318.45 of the | 763 |
Revised Code, provision that the state funds reserved and | 764 |
encumbered and the funds provided by the school district to pay | 765 |
the basic project cost of any segment of the project, or of the | 766 |
entire project if it is not divided into segments, be spent on the | 767 |
construction and acquisition of the project simultaneously in | 768 |
proportion to the state's and the school district's respective | 769 |
shares of that basic project cost as determined under section | 770 |
3318.032 of the Revised Code or, if the district is a joint | 771 |
vocational school district, under section 3318.42 of the Revised | 772 |
Code. | 773 |
(S) A provision stipulating that the commission may prohibit | 774 |
the district from proceeding with any project if the commission | 775 |
determines that the site is not suitable for construction | 776 |
purposes. The commission may perform soil tests in its | 777 |
determination of whether a site is appropriate for construction | 778 |
purposes. | 779 |
(T) A provision stipulating that, unless otherwise authorized | 780 |
by the commission, any contingency reserve portion of the | 781 |
construction budget prescribed by the commission shall be used | 782 |
only to pay costs resulting from unforeseen job conditions, to | 783 |
comply with rulings regarding building and other codes, to pay | 784 |
costs related to design clarifications or corrections to contract | 785 |
documents, and to pay the costs of settlements or judgments | 786 |
related to the project as provided under section 3318.086 of the | 787 |
Revised Code; | 788 |
(U) Provision stipulating that for continued release of | 789 |
project funds the school district board shall comply with section | 790 |
3313.41 of the Revised Code throughout the project and shall | 791 |
notify the department of education and the Ohio community school | 792 |
association when the board plans to dispose of facilities by sale | 793 |
under that section; | 794 |
(V) Provision that the commission shall not approve a | 795 |
contract for demolition of a facility until the school district | 796 |
board has complied with section 3313.41 of the Revised Code | 797 |
relative to that facility, unless demolition of that facility is | 798 |
to clear a site for construction of a replacement facility | 799 |
included in the district's project. | 800 |
Sec. 3318.44. (A) A joint vocational school district board of | 801 |
education may generate the school district's portion of the basic | 802 |
project cost of its project under sections 3318.40 to 3318.45 of | 803 |
the Revised Code using any combination of the following means if | 804 |
lawfully employed for the acquisition of classroom facilities: | 805 |
(1) The issuance of securities in accordance with Chapter | 806 |
133. and section 3311.20 of the Revised Code; | 807 |
(2) Local donated contributions as authorized under section | 808 |
3318.084 of the Revised Code; | 809 |
(3) A levy for permanent improvements under section 3311.21 | 810 |
or 5705.21 of the Revised Code; | 811 |
(4) Bonds issued pursuant to division (B) of this section. | 812 |
(B) By resolution adopted by a majority of all its members, a | 813 |
school district board in order to pay all or part of the school | 814 |
district's portion of its basic project cost may apply the | 815 |
proceeds of a tax levied under section 5705.21 of the Revised Code | 816 |
817 | |
that levy lawfully may be used for general construction, | 818 |
renovation, repair, or maintenance of classroom facilities to | 819 |
leverage bonds adequate to pay all or part of the school district | 820 |
portion of the basic project cost of the school district's project | 821 |
under sections 3318.40 to 3318.45 of the Revised Code or to | 822 |
generate an amount equivalent to all or part of the amount | 823 |
required under section 3318.43 of the Revised Code to be used for | 824 |
maintenance of classroom facilities acquired under the project. | 825 |
Bonds issued under this division shall be Chapter 133. securities, | 826 |
but the issuance of the bonds shall not be subject to a vote of | 827 |
the electors of the school district as long as the tax proceeds | 828 |
earmarked for payment of the service charges on the bonds may | 829 |
lawfully be used for that purpose. | 830 |
No state moneys shall be released for a project to which this | 831 |
division applies until the proceeds of any bonds issued under this | 832 |
division that are dedicated for payment of the school district's | 833 |
portion of the basic project cost are first deposited into the | 834 |
school district's project construction fund. | 835 |
(C) A school district board of education may adopt a | 836 |
resolution proposing that any of the following questions be | 837 |
combined with a question specified in section 3318.45 of the | 838 |
Revised Code: | 839 |
(1) A bond issue question under section 133.18 of the Revised | 840 |
Code; | 841 |
(2) A tax levy question under section 3311.21 of the Revised | 842 |
Code; | 843 |
(3) A tax levy question under section 5705.21 of the Revised | 844 |
Code. | 845 |
Any question described in divisions (C)(1) to (3) of this | 846 |
section that is combined with a question proposed under section | 847 |
3318.45 of the Revised Code shall be for the purpose of either | 848 |
paying for any permanent improvement, as defined in section 133.01 | 849 |
of the Revised Code, or generating operating revenue specifically | 850 |
for the facilities acquired under the school district's project | 851 |
under Chapter 3318. of the Revised Code or for both to the extent | 852 |
such purposes are permitted by the sections of law under which | 853 |
each is proposed. | 854 |
(D) The board of education of a joint vocational school | 855 |
district that receives assistance under this section may enter | 856 |
into an agreement for joint issuance of bonds as provided for in | 857 |
section 3318.085 of the Revised Code. | 858 |
Sec. 3770.07. (A)(1) Except as provided in division (A)(2) | 859 |
of this section, lottery prize awards shall be claimed by the | 860 |
holder of the winning lottery ticket, or by the executor or | 861 |
administrator, or the trustee of a trust, of the estate of a | 862 |
deceased holder of a winning lottery ticket, in a manner to be | 863 |
determined by the state lottery commission, within one hundred | 864 |
eighty days after the date on which the prize award was announced | 865 |
if the lottery game is an on-line game, and within one hundred | 866 |
eighty days after the close of the game if the lottery game is an | 867 |
instant game. | 868 |
(2) An eligible person serving on active military duty in any | 869 |
branch of the United States armed forces during a war or national | 870 |
emergency declared in accordance with federal law may submit a | 871 |
delayed claim for a lottery prize award. The eligible person shall | 872 |
do so by notifying the commission about the claim not later than | 873 |
the five hundred fortieth day after the date on which the prize | 874 |
award was announced if the lottery game is an on-line game or the | 875 |
date on which the lottery game closed if the lottery game is an | 876 |
instant game. | 877 |
(3) If no valid claim to a lottery prize award is made within | 878 |
the prescribed period, the prize money, the cost of goods and | 879 |
services awarded as prizes, or, if goods or services awarded as | 880 |
prizes are resold by the commission, the proceeds from their sale | 881 |
shall be returned to the state lottery fund and distributed in | 882 |
accordance with section 3770.06 of the Revised Code. | 883 |
(4) As used in this division: | 884 |
(a) "Eligible person" means a person who is entitled to a | 885 |
lottery prize award and who falls into either of the following | 886 |
categories: | 887 |
(i) While on active military duty in this state, the person, | 888 |
as the result of a war or national emergency declared in | 889 |
accordance with federal law, is transferred out of this state | 890 |
before the one hundred eightieth day after the date on which the | 891 |
winner of the lottery prize award is selected. | 892 |
(ii) While serving in the reserve forces in this state, the | 893 |
person, as the result of a war or national emergency declared in | 894 |
accordance with federal law, is placed on active military duty and | 895 |
is transferred out of this state before the expiration of the one | 896 |
hundred eightieth day after the date on which the prize drawing | 897 |
occurs for an on-line game or before the expiration of the one | 898 |
hundred eightieth day following the close of an instant game as | 899 |
determined by the commission. | 900 |
(b) "Active military duty" means that a person is covered by | 901 |
the "Servicemembers Civil Relief Act," 117 Stat. 2835 (2003), 50 | 902 |
U.S.C. 501 et | 903 |
Employment and Reemployment Rights Act of 1994," 108 Stat. 3149, | 904 |
38 U.S.C. 4301 et | 905 |
(B) If a prize winner, as defined in section 3770.10 of the | 906 |
Revised Code, is under eighteen years of age, or is under some | 907 |
other legal disability, and the prize money or the cost of goods | 908 |
or services awarded as a prize exceeds one thousand dollars, the | 909 |
director of the state lottery commission shall order that payment | 910 |
be made to the order of the legal guardian of that prize winner. | 911 |
If the amount of the prize money or the cost of goods or services | 912 |
awarded as a prize is one thousand dollars or less, the director | 913 |
may order that payment be made to the order of the adult member, | 914 |
if any, of that prize winner's family legally responsible for the | 915 |
care of that prize winner. | 916 |
(C) No right of any prize winner, as defined in section | 917 |
3770.10 of the Revised Code, to a prize award shall be the subject | 918 |
of a security interest or used as collateral. | 919 |
(D)(1) No right of any prize winner, as defined in section | 920 |
3770.10 of the Revised Code, to a prize award shall be assignable, | 921 |
or subject to garnishment, attachment, execution, withholding, or | 922 |
deduction, except as follows: as provided in sections 3119.80, | 923 |
3119.81, 3121.02, 3121.03, and 3123.06 of the Revised Code; when | 924 |
the payment is to be made to the executor or administrator, or the | 925 |
trustee of a trust, of the estate of a winning ticket holder; when | 926 |
the award of a prize is disputed, any person may be awarded a | 927 |
prize award to which another has claimed title, pursuant to the | 928 |
order of a court of competent jurisdiction; when a person is | 929 |
awarded a prize award to which another has claimed title, pursuant | 930 |
to the order of a federal bankruptcy court under Title 11 of the | 931 |
United States Code; when the director is to make a payment | 932 |
pursuant to section 3770.071 or 3770.073 of the Revised Code; or | 933 |
as provided in sections 3770.10 to 3770.14 of the Revised Code. | 934 |
(2) The commission shall adopt rules pursuant to section | 935 |
3770.03 of the Revised Code concerning the payment of prize awards | 936 |
upon the death of a prize winner, as defined in section 3770.10 of | 937 |
the Revised Code. Upon the death of a prize winner, the remainder | 938 |
of the prize winner's prize award, to the extent it is not subject | 939 |
to a transfer agreement under sections 3770.10 to 3770.14 of the | 940 |
Revised Code, may be paid to the executor, administrator, or | 941 |
trustee in the form of a discounted lump sum cash settlement. | 942 |
(E) No lottery prize award shall be awarded to or for any | 943 |
officer or employee of the state lottery commission, any officer | 944 |
or employee of the auditor of state actively coordinating and | 945 |
certifying commission drawings, or any blood relative or spouse of | 946 |
such an officer or employee of the commission or auditor of state | 947 |
living as a member of the officer's or employee's household, nor | 948 |
shall any such officer, employee, blood relative, or spouse | 949 |
attempt to claim a lottery prize award. | 950 |
(F) The director may prohibit vendors to the commission and | 951 |
their employees from being awarded a lottery prize award. | 952 |
(G) Upon the payment of prize awards pursuant to this | 953 |
section, the director and the commission are discharged from all | 954 |
further liability for their payment. | 955 |
Sec. 3770.10. As used in sections 3770.07 and 3770.10 to | 956 |
3770.14 of the Revised Code: | 957 |
(A) "Court of competent jurisdiction" means either the | 958 |
general division or the probate division of the court of common | 959 |
pleas of the county in which the prize winner or transferor | 960 |
resides, or, if the prize winner or transferor is not a resident | 961 |
of this state, either the general division or the probate division | 962 |
of the court of common pleas of Franklin county or a federal court | 963 |
having jurisdiction over the lottery prize award. | 964 |
(B) "Discounted present value" means the present value of the | 965 |
future payments of a lottery prize award that is determined by | 966 |
discounting those payments to the present, using the most recently | 967 |
published applicable federal rate for determining the present | 968 |
value of an annuity as issued by the United States internal | 969 |
revenue service and assuming daily compounding. | 970 |
(C) "Independent professional advice" means the advice of an | 971 |
attorney, a certified public accountant, an actuary, or any other | 972 |
licensed professional adviser if all of the following apply: | 973 |
(1) The prize winner has engaged the services of the licensed | 974 |
professional adviser to render advice concerning the legal and | 975 |
other implications of a transfer of the lottery prize award. | 976 |
(2) The licensed professional adviser is not affiliated in | 977 |
any manner with or compensated in any manner by the transferee of | 978 |
the lottery prize award. | 979 |
(3) The compensation of the licensed professional adviser is | 980 |
not affected by whether or not a transfer of a lottery prize award | 981 |
occurs. | 982 |
(D) "Prize winner" means any person that holds the right to | 983 |
receive all or any part of a lottery prize award as a result of | 984 |
being any of the following: | 985 |
(1) A person who is a claimant under division (A) of section | 986 |
3770.07 of the Revised Code; | 987 |
(2) A person who is entitled to a prize award and who is | 988 |
under a legal disability as described in division (B) of section | 989 |
3770.07 of the Revised Code; | 990 |
(3) A person who was awarded a prize award to which another | 991 |
has claimed title by a federal bankruptcy court order or other | 992 |
court order | 993 |
3770.07 of the Revised Code; | 994 |
(4) A person who is receiving payments upon the death of a | 995 |
prize winner as provided in division (D)(2) of section 3770.07 of | 996 |
the Revised Code. | 997 |
(E) "Transfer" means any form of sale, assignment, or | 998 |
redirection of payment of all or any part of a lottery prize award | 999 |
for consideration. | 1000 |
(F) "Transfer agreement" means an agreement that is complete | 1001 |
and valid, and that provides for the transfer of all or any part | 1002 |
of a lottery prize award from a transferor to a transferee. A | 1003 |
transfer agreement is incomplete and invalid unless the agreement | 1004 |
contains both of the following: | 1005 |
(1) A statement, signed by the transferor under penalties of | 1006 |
perjury, that the transferor irrevocably agrees that the | 1007 |
transferor is subject to the tax imposed by Chapter 5733. or 5747. | 1008 |
of the Revised Code with respect to gain or income which the | 1009 |
transferor will recognize in connection with the transfer. If the | 1010 |
transferor is a pass-through entity, as defined in section 5733.04 | 1011 |
of the Revised Code, each investor in the pass-through entity | 1012 |
shall also sign under penalties of perjury a statement that the | 1013 |
investor irrevocably agrees that the investor is subject to the | 1014 |
tax imposed by Chapter 5733. or 5747. of the Revised Code with | 1015 |
respect to gain or income which the transferor and the investor | 1016 |
will recognize in connection with the transfer. | 1017 |
(2) A statement, signed by the transferee, that the | 1018 |
transferee irrevocably agrees that the transferee is subject to | 1019 |
the withholding requirements imposed by division (C) of section | 1020 |
3770.072 of the Revised Code and that the transferee is subject to | 1021 |
the tax imposed by Chapter 5733. or 5747. of the Revised Code with | 1022 |
respect to gain or income which the transferee will recognize in | 1023 |
connection with lottery prize awards to be received as a result of | 1024 |
the transfer. If the transferee is a pass-through entity, as | 1025 |
defined in section 5733.04 of the Revised Code, each investor in | 1026 |
the pass-through entity shall also sign under penalties of perjury | 1027 |
a statement setting forth that the investor irrevocably agrees | 1028 |
that the investor is subject to the withholding requirements | 1029 |
imposed by division (C) of section 3770.072 of the Revised Code | 1030 |
and is subject to the tax imposed by Chapter 5733. or 5747. of the | 1031 |
Revised Code with respect to gain or income which the transferee | 1032 |
and the investor will recognize in connection with lottery prize | 1033 |
awards to be received as a result of the transfer. | 1034 |
(G) "Transferee" means a party acquiring or proposing to | 1035 |
acquire all or any part of a lottery prize award through a | 1036 |
transfer. | 1037 |
(H) "Transferor" means either a prize winner or a transferee | 1038 |
in an earlier transfer whose interest is acquired by or is sought | 1039 |
to be acquired by a transferee or a new transferee through a | 1040 |
transfer. | 1041 |
Sec. 3770.12. A court of competent jurisdiction shall | 1042 |
approve a transfer of a lottery prize award only in a final order | 1043 |
that is based on express findings of the court. The court shall | 1044 |
approve the transfer | 1045 |
applies is met and is included in the court's express findings: | 1046 |
(A) If the transferor is a prize winner, the transferee has | 1047 |
provided to the prize winner a disclosure statement that complies | 1048 |
with section 3770.11 of the Revised Code, and the prize winner has | 1049 |
confirmed the prize winner's receipt of the disclosure statement, | 1050 |
as evidenced by the prize winner's notarized signature on a copy | 1051 |
of the disclosure statement. | 1052 |
(B) If the transferor is a prize winner, the prize winner has | 1053 |
received independent professional advice regarding the legal and | 1054 |
other implications of the transfer. | 1055 |
(C) The transferee has given written notice of the | 1056 |
transferee's name, address, and taxpayer identification number to | 1057 |
the state lottery commission and has filed a copy of that notice | 1058 |
with the court in which the application for approval of the | 1059 |
transfer was filed. | 1060 |
(D) The transferee is a trust, limited partnership, general | 1061 |
partnership, corporation, professional association, limited | 1062 |
liability company, or other entity that is qualified to do | 1063 |
business in this state and meets the registration requirements for | 1064 |
that type of entity under Title XVII of the Revised Code. | 1065 |
(E) The transfer complies with all applicable requirements of | 1066 |
the Revised Code and does not
contravene any applicable | 1067 |
statute or court order. | 1068 |
(F) The transfer does not include or cover the amounts of the | 1069 |
lottery prize award that are required to be withheld or deducted | 1070 |
pursuant to section 3119.80, 3119.81, 3121.02, 3121.03, 3123.06, | 1071 |
3770.071, or 3770.072 of the Revised Code. | 1072 |
(G) Any amounts described in division (F) of this section | 1073 |
that are required to be withheld or deducted, as of the date of | 1074 |
the court order, will be offset by the commission first against | 1075 |
remaining payments due the transferor and then against payments | 1076 |
due the transferee. | 1077 |
(H) Except as provided in divisions (F) and (G) of this | 1078 |
section, that the transferor's interest in each and all of the | 1079 |
future payments from a particular lottery prize award is to be | 1080 |
paid to a single transferee, or, if the payments from the lottery | 1081 |
prize award are to be directed from the state lottery commission | 1082 |
to multiple transferees, the commission has promulgated rules | 1083 |
under section 3770.03 of the Revised Code permitting transfers to | 1084 |
multiple transferees, and the transfer is consistent with those | 1085 |
rules. | 1086 |
(I) If the lottery prize award has been transferred within | 1087 |
twelve months immediately preceding the effective date of the | 1088 |
proposed transfer, the state lottery commission has not objected | 1089 |
to the proposed transfer. The court shall presume that the | 1090 |
requirements of this division are met unless the commission | 1091 |
notifies the court in writing before the hearing on the | 1092 |
application for transfer, or through counsel at that hearing, that | 1093 |
a transfer of the same lottery prize award has been made within | 1094 |
that twelve-month period and that the commission objects to a | 1095 |
subsequent transfer within that twelve-month period. The court | 1096 |
shall find that the requirements of this division are not met if | 1097 |
the commission provides notice of a prior transfer of the same | 1098 |
lottery prize award within that twelve-month period and its | 1099 |
objection to the proposed transfer, unless the transferor or | 1100 |
transferee shows by clear and convincing evidence that no previous | 1101 |
transfer of the same lottery prize award occurred within that | 1102 |
twelve-month period. For purposes of this division, any of a | 1103 |
series of transfers of a lottery prize award that occur | 1104 |
simultaneously as part of a single transaction shall not be | 1105 |
considered to be a prior transfer of the lottery prize award | 1106 |
within the twelve-month period immediately preceding the effective | 1107 |
date of the proposed transfer, provided that the condition set | 1108 |
forth in division (C) of this section is met. | 1109 |
If the court determines that all of the conditions in | 1110 |
divisions (A) to (I) of this section that apply are met, the | 1111 |
transfer of the lottery prize award shall be presumed to be fair | 1112 |
and reasonable and in the best interests of the prize winner. | 1113 |
Sec. 3770.121. Any state lottery commission rules allowing | 1114 |
lottery prize awards to be paid in installments also shall allow a | 1115 |
prize winner who is being paid a prize award in that manner to | 1116 |
transfer all or a portion of the remainder of the prize award, | 1117 |
subject to each of the following conditions: | 1118 |
(A) If each transfer is for less than one hundred per cent of | 1119 |
the remainder of the prize award, the remainder of the prize award | 1120 |
for each transfer must be five hundred thousand dollars or greater | 1121 |
at the time of the transfer. If the lottery prize award is a | 1122 |
lifetime prize, for each transfer the remainder of the minimum | 1123 |
guaranteed prize to which the prize winner is entitled must be | 1124 |
five hundred thousand dollars or greater at the time of the | 1125 |
transfer. | 1126 |
(B) Payments of the prize award transferred shall be subject | 1127 |
to the withholding or deduction of any amounts that are required | 1128 |
to be withheld or deducted under section 3119.80, 3119.81, | 1129 |
3121.02, 3121.03, 3123.06, 3770.071, or 5747.062 of the Revised | 1130 |
Code. | 1131 |
(C) The maximum number of transfers under this section with | 1132 |
respect to any single prize award shall not exceed three unless a | 1133 |
greater number has been specified by the commission in the rules. | 1134 |
Sec. 5705.192. (A) For the purposes of this section only, | 1135 |
"taxing authority" includes a township board of park commissioners | 1136 |
appointed under section 511.18 of the Revised Code. | 1137 |
(B) A taxing authority may propose to replace an existing | 1138 |
levy that the taxing authority is authorized to levy, regardless | 1139 |
of the section of the Revised Code under which the authority is | 1140 |
granted, except a school district emergency levy proposed pursuant | 1141 |
to sections 5705.194 to 5705.197 of the Revised Code. The taxing | 1142 |
authority may propose to replace the existing levy in its entirety | 1143 |
at the rate at which it is authorized to be levied; may propose to | 1144 |
replace a portion of the existing levy at a lesser rate; or may | 1145 |
propose to replace the existing levy in its entirety and increase | 1146 |
the rate at which it is levied. If the taxing authority proposes | 1147 |
to replace an existing levy, the proposed levy shall be called a | 1148 |
replacement
levy and shall be so designated on the ballot. | 1149 |
Except as otherwise provided in this division, a replacement levy | 1150 |
shall be limited to the purpose of the existing levy, and shall | 1151 |
appear separately on the ballot from, and shall not be conjoined | 1152 |
with, the renewal of any other existing levy. | 1153 |
an existing school district levy imposed under section 5705.21 of | 1154 |
the Revised Code for the purpose specified in division (F) of | 1155 |
section 5705.19 of the Revised Code, the replacement for that | 1156 |
existing levy may be for the same purpose or for the purpose of | 1157 |
general permanent improvements as defined in section 5705.21 of | 1158 |
the Revised Code. | 1159 |
The resolution proposing a replacement levy shall specify the | 1160 |
purpose of the levy; its proposed rate expressed in mills; whether | 1161 |
the proposed rate is the same as the rate of the existing levy, a | 1162 |
reduction, or an increase; the extent of any reduction or increase | 1163 |
expressed in mills; the first calendar year in which the levy will | 1164 |
be due; and the term of the levy, expressed in years or, if | 1165 |
applicable, that it will be levied for a continuing period of | 1166 |
time. | 1167 |
The sections of the Revised Code governing the maximum rate | 1168 |
and term of the existing levy, the contents of the resolution that | 1169 |
proposed the levy, the adoption of the resolution, the | 1170 |
arrangements for the submission of the question of the levy, and | 1171 |
notice of the election also govern the respective provisions of | 1172 |
the proposal to replace the existing levy, except | 1173 |
provided in division (B)(1) or (2) of this section: | 1174 |
(1) In the case of an existing school district levy imposed | 1175 |
under section 5705.21 of the Revised Code for the purpose | 1176 |
specified in division (F) of section 5705.19 of the Revised Code | 1177 |
that is to be replaced by a levy for general permanent | 1178 |
improvements, the maximum term of the replacement levy is not | 1179 |
limited to the term of the existing levy and may be for a | 1180 |
continuing period of time. | 1181 |
(2) The date on which the election is held shall be as | 1182 |
follows: | 1183 |
| 1184 |
years, the date of the general election held during the last year | 1185 |
the existing levy may be extended on the real and public utility | 1186 |
property tax list and duplicate, or the date of any election held | 1187 |
in the ensuing year; | 1188 |
| 1189 |
period of time, the date of any election held in any year after | 1190 |
the year the levy to be replaced is first approved by the | 1191 |
electors, except that only one election on the question of | 1192 |
replacing the levy may be held during any calendar year. | 1193 |
The failure by the electors to approve a proposal to replace | 1194 |
a levy imposed for a continuing period of time does not terminate | 1195 |
the existing continuing levy. | 1196 |
| 1197 |
of a replacement levy shall be as follows: | 1198 |
"A replacement of a tax for the benefit of .......... (name | 1199 |
of subdivision or public library) for the purpose of .......... | 1200 |
(the purpose stated in the resolution) at a rate not exceeding | 1201 |
.......... mills for each one dollar of valuation, which amounts | 1202 |
to .......... (rate expressed in dollars and cents) for each one | 1203 |
hundred dollars in valuation, for .......... (number of years levy | 1204 |
is to run, or that it will be levied for a continuous period of | 1205 |
time) | 1206 |
1207 |
FOR THE TAX LEVY | 1208 | ||||
AGAINST THE TAX LEVY | " | 1209 |
1210 |
If the proposal is to replace an existing levy and increase | 1211 |
the rate of the existing levy, the form of the ballot shall be | 1212 |
changed by adding the words ".......... mills of an existing levy | 1213 |
and an increase of .......... mills, to constitute" after the | 1214 |
words "a replacement of." If the proposal is to replace only a | 1215 |
portion of an existing levy, the form of the ballot shall be | 1216 |
changed by adding the words "a portion of an existing levy, being | 1217 |
a reduction of .......... mills, to constitute" after the words "a | 1218 |
replacement of." | 1219 |
If the tax is to be placed on the tax list of the current tax | 1220 |
year, the form of the ballot shall be modified by adding at the | 1221 |
end of the form the phrase ", commencing in .......... (first year | 1222 |
the replacement tax is to be levied), first due in calendar year | 1223 |
.......... (first calendar year in which the tax shall be due)." | 1224 |
The question covered by the resolution shall be submitted as | 1225 |
a separate proposition, but may be printed on the same ballot with | 1226 |
any other proposition submitted at the same election, other than | 1227 |
the election of officers. More than one such question may be | 1228 |
submitted at the same election. | 1229 |
| 1230 |
may be combined into one replacement levy, so long as both of the | 1231 |
existing levies are for the same purpose and either both are due | 1232 |
to expire the same year or both are for a continuing period of | 1233 |
time. The question of combining all or portions of the two | 1234 |
existing levies into the replacement levy shall appear as one | 1235 |
ballot proposition before the electors. If the electors approve | 1236 |
the ballot proposition, all or the stated portions of the two | 1237 |
existing levies are replaced by one replacement levy. | 1238 |
| 1239 |
under this section shall be certified to the tax commissioner. In | 1240 |
the first year of a levy approved under this section, the levy | 1241 |
shall be extended on the tax lists after the February settlement | 1242 |
succeeding the election at which the levy was approved. If the | 1243 |
levy is to be placed on the tax lists of the current year, as | 1244 |
specified in the resolution providing for its submission, the | 1245 |
result of the election shall be certified immediately after the | 1246 |
canvass by the board of elections to the taxing authority, which | 1247 |
shall forthwith make the necessary levy and certify it to the | 1248 |
county auditor, who shall extend it on the tax lists for | 1249 |
collection. After the first year, the levy shall be included in | 1250 |
the annual tax budget that is certified to the county budget | 1251 |
commission. | 1252 |
If notes are authorized to be issued in anticipation of the | 1253 |
proceeds of the existing levy, notes may be issued in anticipation | 1254 |
of the proceeds of the replacement levy, and such issuance is | 1255 |
subject to the terms and limitations governing the issuance of | 1256 |
notes in anticipation of the proceeds of the existing levy. | 1257 |
This section does not authorize a tax to be levied in any | 1258 |
year after the year in which revenue is not needed for the purpose | 1259 |
for which the tax is levied. | 1260 |
Sec. 5705.21. (A) At any time, the board of education of any | 1261 |
city, local, exempted village, cooperative education, or joint | 1262 |
vocational school district, by a vote of two-thirds of all its | 1263 |
members, may declare by resolution that the amount of taxes which | 1264 |
may be raised within the ten-mill limitation by levies on the | 1265 |
current tax duplicate will be insufficient to provide an adequate | 1266 |
amount for the necessary requirements of the school district, that | 1267 |
it is necessary to levy a tax in excess of such limitation for one | 1268 |
of the purposes specified in division (A), (D), (F), (H), or (DD) | 1269 |
of section 5705.19 of the Revised Code,
for general | 1270 |
permanent improvements, for the purpose of operating a cultural | 1271 |
center, or for the purpose of providing education technology, and | 1272 |
that the question of such additional tax levy shall be submitted | 1273 |
to the electors of the school district at a special election on a | 1274 |
day to be specified in the resolution. | 1275 |
As used in this section, "cultural center" means a | 1276 |
freestanding building, separate from a public school building, | 1277 |
that is open to the public for educational, musical, artistic, and | 1278 |
cultural purposes | 1279 |
| 1280 |
is not limited to, computer hardware, equipment, materials, and | 1281 |
accessories, equipment used for two-way audio or video, and | 1282 |
software; and "general permanent improvements" means permanent | 1283 |
improvements without regard to the limitation of division (F) of | 1284 |
section 5705.19 of the Revised Code that the improvements be a | 1285 |
specific improvement or a class of improvements that may be | 1286 |
included in a single bond issue. | 1287 |
The submission of questions to the electors under this | 1288 |
section is subject to the limitation on the number of election | 1289 |
dates established by section 5705.214 of the Revised Code. | 1290 |
(B) Such resolution shall be confined to a single purpose and | 1291 |
shall specify the amount of the increase in rate that it is | 1292 |
necessary to levy, the purpose of the levy, and the number of | 1293 |
years during which the increase in rate shall be in effect. The | 1294 |
number of years may be any number not exceeding five or, if the | 1295 |
levy is
for current expenses of the district or for general | 1296 |
1297 | |
The resolution shall specify the date of holding such election, | 1298 |
which shall not be earlier than seventy-five days after the | 1299 |
adoption and certification of the resolution and which shall be | 1300 |
consistent with the requirements of section 3501.01 of the Revised | 1301 |
Code. | 1302 |
The resolution may propose to renew one or more existing | 1303 |
levies imposed under this section or to increase or decrease a | 1304 |
single levy imposed under this section. If the board of education | 1305 |
imposes one or more existing levies for the purpose specified in | 1306 |
division (F) of section 5705.19 of the Revised Code, the | 1307 |
resolution may propose to renew one or more of those existing | 1308 |
levies, or to increase or decrease a single such existing levy, | 1309 |
for the purpose of general permanent improvements. If | 1310 |
| 1311 |
levies, the levies shall be levied for the same purpose. The | 1312 |
resolution shall identify those levies and the rates at which they | 1313 |
are levied. The resolution also shall specify that the existing | 1314 |
levies shall not be extended on the tax lists after the year | 1315 |
preceding the year in which the renewal levy is first imposed, | 1316 |
regardless of the years for which those levies originally were | 1317 |
authorized to be levied. | 1318 |
The resolution shall go into immediate effect upon its | 1319 |
passage, and no publication of the resolution shall be necessary | 1320 |
other than that provided for in the notice of election. A copy of | 1321 |
the resolution shall immediately after its passing be certified to | 1322 |
the board of elections of the proper county in the manner provided | 1323 |
by section 5705.25 of the Revised Code, and that section shall | 1324 |
govern the arrangements for the submission of such question and | 1325 |
other matters concerning such election, to which that section | 1326 |
refers, except that such election shall be held on the date | 1327 |
specified in the resolution. Publication of notice of such | 1328 |
election shall be made in one or more newspapers of general | 1329 |
circulation in the county once a week for four consecutive weeks. | 1330 |
If a majority of the electors voting on the question so submitted | 1331 |
in an election vote in favor of the levy, the board of education | 1332 |
may make the necessary levy within the school district at the | 1333 |
additional rate, or at any lesser rate in excess of the ten-mill | 1334 |
limitation on the tax list, for the purpose stated in the | 1335 |
resolution. A levy for a continuing period of time may be reduced | 1336 |
pursuant to section 5705.261 of the Revised Code. The tax levy | 1337 |
shall be included in the next tax budget that is certified to the | 1338 |
county budget commission. | 1339 |
(C)(1) After the approval of a levy on the current tax list | 1340 |
and duplicate for current expenses, for recreational purposes, for | 1341 |
community centers provided for in section 755.16 of the Revised | 1342 |
Code, or for a public library of the district and prior to the | 1343 |
time when the first tax collection from the levy can be made, the | 1344 |
board of education may anticipate a fraction of the proceeds of | 1345 |
the levy and issue anticipation notes in a principal amount not | 1346 |
exceeding fifty per cent of the total estimated proceeds of the | 1347 |
levy to be collected during the first year of the levy. | 1348 |
(2) After the approval of a levy for general permanent | 1349 |
improvements for a specified number of years, or for permanent | 1350 |
improvements having the purpose specified in division (F) of | 1351 |
section 5705.19 of the Revised Code, the board of education may | 1352 |
anticipate a fraction of the proceeds of the levy and issue | 1353 |
anticipation notes in a principal amount not exceeding fifty per | 1354 |
cent of the total estimated proceeds of the levy remaining to be | 1355 |
collected in each year over a period of five years after the | 1356 |
issuance of the notes. | 1357 |
The notes shall be issued as provided in section 133.24 of | 1358 |
the Revised Code, shall have principal payments during each year | 1359 |
after the year of their issuance over a period not to exceed five | 1360 |
years, and may have a principal payment in the year of their | 1361 |
issuance. | 1362 |
(3) After approval of a levy for general | 1363 |
improvements for a continuing period of time, the board of | 1364 |
education may anticipate a fraction of the proceeds of the levy | 1365 |
and issue anticipation notes in a principal amount not exceeding | 1366 |
fifty per cent of the total estimated proceeds of the levy to be | 1367 |
collected in each year over a specified period of years, not | 1368 |
exceeding ten, after the issuance of the notes. | 1369 |
The notes shall be issued as provided in section 133.24 of | 1370 |
the Revised Code, shall have principal payments during each year | 1371 |
after the year of their issuance over a period not to exceed ten | 1372 |
years, and may have a principal payment in the year of their | 1373 |
issuance. | 1374 |
Sec. 5733.04. As used in this chapter: | 1375 |
(A) "Issued and outstanding shares of stock" applies to | 1376 |
nonprofit corporations, as provided in section 5733.01 of the | 1377 |
Revised Code, and includes, but is not limited to, membership | 1378 |
certificates and other instruments evidencing ownership of an | 1379 |
interest in such nonprofit corporations, and with respect to a | 1380 |
financial institution that does not have capital stock, "issued | 1381 |
and outstanding shares of stock" includes, but is not limited to, | 1382 |
ownership interests of depositors in the capital employed in such | 1383 |
an institution. | 1384 |
(B) "Taxpayer" means a corporation subject to the tax imposed | 1385 |
by section 5733.06 of the Revised Code. | 1386 |
(C) "Resident" means a corporation organized under the laws | 1387 |
of this state. | 1388 |
(D) "Commercial domicile" means the principal place from | 1389 |
which the trade or business of the taxpayer is directed or | 1390 |
managed. | 1391 |
(E) "Taxable year" means the period prescribed by division | 1392 |
(A) of section 5733.031 of the Revised Code upon the net income of | 1393 |
which the value of the taxpayer's issued and outstanding shares of | 1394 |
stock is determined under division (B) of section 5733.05 of the | 1395 |
Revised Code or the period prescribed by division (A) of section | 1396 |
5733.031 of the Revised Code that immediately precedes the date as | 1397 |
of which the total value of the corporation is determined under | 1398 |
division (A) or (C) of section 5733.05 of the Revised Code. | 1399 |
(F) "Tax year" means the calendar year in and for which the | 1400 |
tax imposed by section 5733.06 of the Revised Code is required to | 1401 |
be paid. | 1402 |
(G) "Internal Revenue Code" means the "Internal Revenue Code | 1403 |
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended. | 1404 |
(H) "Federal income tax" means the income tax imposed by the | 1405 |
Internal Revenue Code. | 1406 |
(I) Except as provided in section 5733.058 of the Revised | 1407 |
Code, "net income" means the taxpayer's taxable income before | 1408 |
operating loss deduction and special deductions, as required to be | 1409 |
reported for the taxpayer's taxable year under the Internal | 1410 |
Revenue Code, subject to the following adjustments: | 1411 |
(1)(a) Deduct any net operating loss incurred in any taxable | 1412 |
years ending in 1971 or thereafter, but exclusive of any net | 1413 |
operating loss incurred in taxable years ending prior to January | 1414 |
1, 1971. This deduction shall not be allowed in any tax year | 1415 |
commencing before December 31, 1973, but shall be carried over and | 1416 |
allowed in tax years commencing after December 31, 1973, until | 1417 |
fully utilized in the next succeeding taxable year or years in | 1418 |
which the taxpayer has net income, but in no case for more than | 1419 |
the designated carryover period as described in division (I)(1)(b) | 1420 |
of this section. The amount of such net operating loss, as | 1421 |
determined under the allocation and apportionment provisions of | 1422 |
section 5733.051 and division (B) of section 5733.05 of the | 1423 |
Revised Code for the year in which the net operating loss occurs, | 1424 |
shall be deducted from net income, as determined under the | 1425 |
allocation and apportionment provisions of section 5733.051 and | 1426 |
division (B) of section 5733.05 of the Revised Code, to the extent | 1427 |
necessary to reduce net income to zero with the remaining unused | 1428 |
portion of the deduction, if any, carried forward to the remaining | 1429 |
years of the designated carryover period as described in division | 1430 |
(I)(1)(b) of this section, or until fully utilized, whichever | 1431 |
occurs first. | 1432 |
(b) For losses incurred in taxable years ending on or before | 1433 |
December 31, 1981, the designated carryover period shall be the | 1434 |
five consecutive taxable years after the taxable year in which the | 1435 |
net operating loss occurred. For losses incurred in taxable years | 1436 |
ending on or after January 1, 1982, and beginning before August 6, | 1437 |
1997, the designated carryover period shall be the fifteen | 1438 |
consecutive taxable years after the taxable year in which the net | 1439 |
operating loss occurs. For losses incurred in taxable years | 1440 |
beginning on or after August 6, 1997, the designated carryover | 1441 |
period shall be the twenty consecutive taxable years after the | 1442 |
taxable year in which the net operating loss occurs. | 1443 |
(c) The tax commissioner may require a taxpayer to furnish | 1444 |
any information necessary to support a claim for deduction under | 1445 |
division (I)(1)(a) of this section and no deduction shall be | 1446 |
allowed unless the information is furnished. | 1447 |
(2) Deduct any amount included in net income by application | 1448 |
of section 78 or 951 of the Internal Revenue Code, amounts | 1449 |
received for royalties, technical or other services derived from | 1450 |
sources outside the United States, and dividends received from a | 1451 |
subsidiary, associate, or affiliated corporation that neither | 1452 |
transacts any substantial portion of its business nor regularly | 1453 |
maintains any substantial portion of its assets within the United | 1454 |
States. For purposes of determining net foreign source income | 1455 |
deductible under division (I)(2) of this section, the amount of | 1456 |
gross income from all such sources other than dividend income and | 1457 |
income derived by application of section 78 or 951 of the Internal | 1458 |
Revenue Code shall be reduced by: | 1459 |
(a) The amount of any reimbursed expenses for personal | 1460 |
services performed by employees of the taxpayer for the | 1461 |
subsidiary, associate, or affiliated corporation; | 1462 |
(b) Ten per cent of the amount of royalty income and | 1463 |
technical assistance fees; | 1464 |
(c) Fifteen per cent of the amount of all other income. | 1465 |
The amounts described in divisions (I)(2)(a) to (c) of this | 1466 |
section are deemed to be the expenses attributable to the | 1467 |
production of deductible foreign source income unless the taxpayer | 1468 |
shows, by clear and convincing evidence, less actual expenses, or | 1469 |
the tax commissioner shows, by clear and convincing evidence, more | 1470 |
actual expenses. | 1471 |
(3) Add any loss or deduct any gain resulting from the sale, | 1472 |
exchange, or other disposition of a capital asset, or an asset | 1473 |
described in section 1231 of the Internal Revenue Code, to the | 1474 |
extent that such loss or gain occurred prior to the first taxable | 1475 |
year on which the tax provided for in section 5733.06 of the | 1476 |
Revised Code is computed on the corporation's net income. For | 1477 |
purposes of division (I)(3) of this section, the amount of the | 1478 |
prior loss or gain shall be measured by the difference between the | 1479 |
original cost or other basis of the asset and the fair market | 1480 |
value as of the beginning of the first taxable year on which the | 1481 |
tax provided for in section 5733.06 of the Revised Code is | 1482 |
computed on the corporation's net income. At the option of the | 1483 |
taxpayer, the amount of the prior loss or gain may be a percentage | 1484 |
of the gain or loss, which percentage shall be determined by | 1485 |
multiplying the gain or loss by a fraction, the numerator of which | 1486 |
is the number of months from the acquisition of the asset to the | 1487 |
beginning of the first taxable year on which the fee provided in | 1488 |
section 5733.06 of the Revised Code is computed on the | 1489 |
corporation's net income, and the denominator of which is the | 1490 |
number of months from the acquisition of the asset to the sale, | 1491 |
exchange, or other disposition of the asset. The adjustments | 1492 |
described in this division do not apply to any gain or loss where | 1493 |
the gain or loss is recognized by a qualifying taxpayer, as | 1494 |
defined in section 5733.0510 of the Revised Code, with respect to | 1495 |
a qualifying taxable event, as defined in that section. | 1496 |
(4) Deduct the dividend received deduction provided by | 1497 |
section 243 of the Internal Revenue Code. | 1498 |
(5) Deduct any interest or interest equivalent on public | 1499 |
obligations and purchase obligations to the extent included in | 1500 |
federal taxable income. As used in divisions (I)(5) and (6) of | 1501 |
this section, "public obligations," "purchase obligations," and | 1502 |
"interest or interest equivalent" have the same meanings as in | 1503 |
section 5709.76 of the Revised Code. | 1504 |
(6) Add any loss or deduct any gain resulting from the sale, | 1505 |
exchange, or other disposition of public obligations to the extent | 1506 |
included in federal taxable income. | 1507 |
(7) To the extent not otherwise allowed, deduct any dividends | 1508 |
or distributions received by a taxpayer from a public utility, | 1509 |
excluding an electric company and a combined company, and, for tax | 1510 |
years 2005 and thereafter, a telephone company, if the taxpayer | 1511 |
owns at least eighty per cent of the issued and outstanding common | 1512 |
stock of the public utility. As used in division (I)(7) of this | 1513 |
section, "public utility" means a public utility as defined in | 1514 |
Chapter 5727. of the Revised Code, whether or not the public | 1515 |
utility is doing business in the state. | 1516 |
(8) To the extent not otherwise allowed, deduct any dividends | 1517 |
received by a taxpayer from an insurance company, if the taxpayer | 1518 |
owns at least eighty per cent of the issued and outstanding common | 1519 |
stock of the insurance company. As used in division (I)(8) of this | 1520 |
section, "insurance company" means an insurance company that is | 1521 |
taxable under Chapter 5725. or 5729. of the Revised Code. | 1522 |
(9) Deduct expenditures for modifying existing buildings or | 1523 |
structures to meet American national standards institute standard | 1524 |
A-117.1-1961 (R-1971), as amended; provided, that no deduction | 1525 |
shall be allowed to the extent that such deduction is not | 1526 |
permitted under federal law or under rules of the tax | 1527 |
commissioner. Those deductions as are allowed may be taken over a | 1528 |
period of five years. The tax commissioner shall adopt rules under | 1529 |
Chapter 119. of the Revised Code establishing reasonable | 1530 |
limitations on the extent that expenditures for modifying existing | 1531 |
buildings or structures are attributable to the purpose of making | 1532 |
the buildings or structures accessible to and usable by physically | 1533 |
handicapped persons. | 1534 |
(10) Deduct the amount of wages and salaries, if any, not | 1535 |
otherwise allowable as a deduction but that would have been | 1536 |
allowable as a deduction in computing federal taxable income | 1537 |
before operating loss deduction and special deductions for the | 1538 |
taxable year, had the targeted jobs credit allowed and determined | 1539 |
under sections 38, 51, and 52 of the Internal Revenue Code not | 1540 |
been in effect. | 1541 |
(11) Deduct net interest income on obligations of the United | 1542 |
States and its territories and possessions or of any authority, | 1543 |
commission, or instrumentality of the United States to the extent | 1544 |
the laws of the United States prohibit inclusion of the net | 1545 |
interest for purposes of determining the value of the taxpayer's | 1546 |
issued and outstanding shares of stock under division (B) of | 1547 |
section 5733.05 of the Revised Code. As used in division (I)(11) | 1548 |
of this section, "net interest" means interest net of any expenses | 1549 |
taken on the federal income tax return that would not have been | 1550 |
allowed under section 265 of the Internal Revenue Code if the | 1551 |
interest were exempt from federal income tax. | 1552 |
(12)(a) Except as set forth in division (I)(12)(d) of this | 1553 |
section, to the extent not included in computing the taxpayer's | 1554 |
federal taxable income before operating loss deduction and special | 1555 |
deductions, add gains and deduct losses from direct or indirect | 1556 |
sales, exchanges, or other dispositions, made by a related entity | 1557 |
who is not a taxpayer, of the taxpayer's indirect, beneficial, or | 1558 |
constructive investment in the stock or debt of another entity, | 1559 |
unless the gain or loss has been included in computing the federal | 1560 |
taxable income before operating loss deduction and special | 1561 |
deductions of another taxpayer with a more closely related | 1562 |
investment in the stock or debt of the other entity. The amount of | 1563 |
gain added or loss deducted shall not exceed the product obtained | 1564 |
by multiplying such gain or loss by the taxpayer's proportionate | 1565 |
share, directly, indirectly, beneficially, or constructively, of | 1566 |
the outstanding stock of the related entity immediately prior to | 1567 |
the direct or indirect sale, exchange, or other disposition. | 1568 |
(b) Except as set forth in division (I)(12)(e) of this | 1569 |
section, to the extent not included in computing the taxpayer's | 1570 |
federal taxable income before operating loss deduction and special | 1571 |
deductions, add gains and deduct losses from direct or indirect | 1572 |
sales, exchanges, or other dispositions made by a related entity | 1573 |
who is not a taxpayer, of intangible property other than stock, | 1574 |
securities, and debt, if such property was owned, or used in whole | 1575 |
or in part, at any time prior to or at the time of the sale, | 1576 |
exchange, or disposition by either the taxpayer or by a related | 1577 |
entity that was a taxpayer at any time during the related entity's | 1578 |
ownership or use of such property, unless the gain or loss has | 1579 |
been included in computing the federal taxable income before | 1580 |
operating loss deduction and special deductions of another | 1581 |
taxpayer with a more closely related ownership or use of such | 1582 |
intangible property. The amount of gain added or loss deducted | 1583 |
shall not exceed the product obtained by multiplying such gain or | 1584 |
loss by the taxpayer's proportionate share, directly, indirectly, | 1585 |
beneficially, or constructively, of the outstanding stock of the | 1586 |
related entity immediately prior to the direct or indirect sale, | 1587 |
exchange, or other disposition. | 1588 |
(c) As used in division (I)(12) of this section, "related | 1589 |
entity" means those entities described in divisions (I)(12)(c)(i) | 1590 |
to (iii) of this section: | 1591 |
(i) An individual stockholder, or a member of the | 1592 |
stockholder's family enumerated in section 318 of the Internal | 1593 |
Revenue Code, if the stockholder and the members of the | 1594 |
stockholder's family own, directly, indirectly, beneficially, or | 1595 |
constructively, in the aggregate, at least fifty per cent of the | 1596 |
value of the taxpayer's outstanding stock; | 1597 |
(ii) A stockholder, or a stockholder's partnership, estate, | 1598 |
trust, or corporation, if the stockholder and the stockholder's | 1599 |
partnerships, estates, trusts, and corporations own directly, | 1600 |
indirectly, beneficially, or constructively, in the aggregate, at | 1601 |
least fifty per cent of the value of the taxpayer's outstanding | 1602 |
stock; | 1603 |
(iii) A corporation, or a party related to the corporation in | 1604 |
a manner that would require an attribution of stock from the | 1605 |
corporation to the party or from the party to the corporation | 1606 |
under division (I)(12)(c)(iv) of this section, if the taxpayer | 1607 |
owns, directly, indirectly, beneficially, or constructively, at | 1608 |
least fifty per cent of the value of the corporation's outstanding | 1609 |
stock. | 1610 |
(iv) The attribution rules of section 318 of the Internal | 1611 |
Revenue Code apply for purposes of determining whether the | 1612 |
ownership requirements in divisions (I)(12)(c)(i) to (iii) of this | 1613 |
section have been met. | 1614 |
(d) For purposes of the adjustments required by division | 1615 |
(I)(12)(a) of this section, the term "investment in the stock or | 1616 |
debt of another entity" means only those investments where the | 1617 |
taxpayer and the taxpayer's related entities directly, indirectly, | 1618 |
beneficially, or constructively own, in the aggregate, at any time | 1619 |
during the twenty-four month period commencing one year prior to | 1620 |
the direct or indirect sale, exchange, or other disposition of | 1621 |
such investment at least fifty per cent or more of the value of | 1622 |
either the outstanding stock or such debt of such other entity. | 1623 |
(e) For purposes of the adjustments required by division | 1624 |
(I)(12)(b) of this section, the term "related entity" excludes all | 1625 |
of the following: | 1626 |
(i) Foreign corporations as defined in section 7701 of the | 1627 |
Internal Revenue Code; | 1628 |
(ii) Foreign partnerships as defined in section 7701 of the | 1629 |
Internal Revenue Code; | 1630 |
(iii) Corporations, partnerships, estates, and trusts created | 1631 |
or organized in or under the laws of the Commonwealth of Puerto | 1632 |
Rico or any possession of the United States; | 1633 |
(iv) Foreign estates and foreign trusts as defined in section | 1634 |
7701 of the Internal Revenue Code. | 1635 |
The exclusions described in divisions (I)(12)(e)(i) to (iv) | 1636 |
of this section do not apply if the corporation, partnership, | 1637 |
estate, or trust is described in any one of divisions (C)(1) to | 1638 |
(5) of section 5733.042 of the Revised Code. | 1639 |
(f) Nothing in division (I)(12) of this section shall require | 1640 |
or permit a taxpayer to add any gains or deduct any losses | 1641 |
described in divisions (I)(12)(f)(i) and (ii) of this section: | 1642 |
(i) Gains or losses recognized for federal income tax | 1643 |
purposes by an individual, estate, or trust without regard to the | 1644 |
attribution rules described in division (I)(12)(c) of this | 1645 |
section; | 1646 |
(ii) A related entity's gains or losses described in division | 1647 |
(I)(12)(b) of this section if the taxpayer's ownership of or use | 1648 |
of such intangible property was limited to a period not exceeding | 1649 |
nine months and was attributable to a transaction or a series of | 1650 |
transactions executed in accordance with the election or elections | 1651 |
made by the taxpayer or a related entity pursuant to section 338 | 1652 |
of the Internal Revenue Code. | 1653 |
(13) Any adjustment required by section 5733.042 of the | 1654 |
Revised Code. | 1655 |
(14) Add any amount claimed as a credit under section | 1656 |
5733.0611 of the Revised Code to the extent that such amount | 1657 |
satisfies either of the following: | 1658 |
(a) It was deducted or excluded from the computation of the | 1659 |
corporation's taxable income before operating loss deduction and | 1660 |
special deductions as required to be reported for the | 1661 |
corporation's taxable year under the Internal Revenue Code; | 1662 |
(b) It resulted in a reduction of the corporation's taxable | 1663 |
income before operating loss deduction and special deductions as | 1664 |
required to be reported for any of the corporation's taxable years | 1665 |
under the Internal Revenue Code. | 1666 |
(15) Deduct the amount contributed by the taxpayer to an | 1667 |
individual development account program established by a county | 1668 |
department of job and family services pursuant to sections 329.11 | 1669 |
to 329.14 of the Revised Code for the purpose of matching funds | 1670 |
deposited by program participants. On request of the tax | 1671 |
commissioner, the taxpayer shall provide any information that, in | 1672 |
the tax commissioner's opinion, is necessary to establish the | 1673 |
amount deducted under division (I)(15) of this section. | 1674 |
(16) Any adjustment required by section 5733.0510 or | 1675 |
5733.0511 of the Revised Code. | 1676 |
(17)(a)(i) Add five-sixths of the amount of depreciation | 1677 |
expense allowed under subsection (k) of section 168 of the | 1678 |
Internal Revenue Code, including a person's proportionate or | 1679 |
distributive share of the amount of depreciation expense allowed | 1680 |
by that subsection to any pass-through entity in which the person | 1681 |
has direct or indirect ownership. | 1682 |
(ii) Add five-sixths of the amount of qualifying section 179 | 1683 |
depreciation expense, including a person's proportionate or | 1684 |
distributive share of the amount of qualifying section 179 | 1685 |
depreciation expense allowed to any pass-through entity in which | 1686 |
the person has a direct or indirect ownership. For the purposes of | 1687 |
this division, "qualifying section 179 depreciation expense" means | 1688 |
the difference between (I) the amount of depreciation expense | 1689 |
directly or indirectly allowed to the taxpayer under section 179 | 1690 |
of the Internal Revenue Code, and (II) the amount of depreciation | 1691 |
expense directly or indirectly allowed to the taxpayer under | 1692 |
section 179 of the Internal Revenue Code as that section existed | 1693 |
on December 31, 2002. | 1694 |
The tax commissioner, under procedures established by the | 1695 |
commissioner, may waive the add-backs related to a pass-through | 1696 |
entity if the person owns, directly or indirectly, less than five | 1697 |
per cent of the pass-through entity. | 1698 |
(b) Nothing in division (I)(17) of this section shall be | 1699 |
construed to adjust or modify the adjusted basis of any asset. | 1700 |
(c) To the extent the add-back is attributable to property | 1701 |
generating income or loss allocable under section 5733.051 of the | 1702 |
Revised Code, the add-back shall be allocated to the same location | 1703 |
as the income or loss generated by that property. Otherwise, the | 1704 |
add-back shall be apportioned, subject to division (B)(2)(d) of | 1705 |
section 5733.05 of the Revised Code. | 1706 |
(18)(a) If a person is required to make the add-back under | 1707 |
division (I)(17)(a) of this section for a tax year, the person | 1708 |
shall deduct one-fifth of the amount added back for each of the | 1709 |
succeeding five tax years. | 1710 |
(b) If the amount deducted under division (I)(18)(a) of this | 1711 |
section is attributable to an add-back allocated under division | 1712 |
(I)(17)(c) of this section, the amount deducted shall be allocated | 1713 |
to the same location. Otherwise, the amount shall be apportioned | 1714 |
using the apportionment factors for the taxable year in which the | 1715 |
deduction is taken, subject to division (B)(2)(d) of section | 1716 |
5733.05 of the Revised Code. | 1717 |
(J) | 1718 |
appearing from the context, any term used in this chapter has the | 1719 |
same meaning as when used in a comparable context in the laws of | 1720 |
the United States
relating to federal income taxes | 1721 |
1722 | |
chapter to the Internal Revenue Code includes other laws of the | 1723 |
United States relating to federal income taxes. | 1724 |
(K) "Financial institution" has the meaning given by section | 1725 |
5725.01 of the Revised Code but does not include a production | 1726 |
credit association as described in 85 Stat. 597, 12 U.S.C.A. 2091. | 1727 |
(L)(1) A "qualifying holding company" is any corporation | 1728 |
satisfying all of the following requirements: | 1729 |
(a) Subject to divisions (L)(2) and (3) of this section, the | 1730 |
net book value of the corporation's intangible assets is greater | 1731 |
than or equal to ninety per cent of the net book value of all of | 1732 |
its assets and at least fifty per cent of the net book value of | 1733 |
all of its assets represents direct or indirect investments in the | 1734 |
equity of, loans and advances to, and accounts receivable due from | 1735 |
related members; | 1736 |
(b) At least ninety per cent of the corporation's gross | 1737 |
income for the taxable year is attributable to the following: | 1738 |
(i) The maintenance, management, ownership, acquisition, use, | 1739 |
and disposition of its intangible property, its aircraft the use | 1740 |
of which is not subject to regulation under 14 C.F.R. part 121 or | 1741 |
part 135, and any real property described in division (L)(2)(c) of | 1742 |
this section; | 1743 |
(ii) The collection and distribution of income from such | 1744 |
property. | 1745 |
(c) The corporation is not a financial institution on the | 1746 |
last day of the taxable year ending prior to the first day of the | 1747 |
tax year; | 1748 |
(d) The corporation's related members make a good faith and | 1749 |
reasonable effort to make timely and fully the adjustments | 1750 |
required by division (C)(2) of section 5733.05 of the Revised Code | 1751 |
and to pay timely and fully all uncontested taxes, interest, | 1752 |
penalties, and other fees and charges imposed under this chapter; | 1753 |
(e) Subject to division (L)(4) of this section, the | 1754 |
corporation elects to be treated as a qualifying holding company | 1755 |
for the tax year. | 1756 |
A corporation otherwise satisfying divisions (L)(1)(a) to (e) | 1757 |
of this section that does not elect to be a qualifying holding | 1758 |
company is not a qualifying holding company for the purposes of | 1759 |
this chapter. | 1760 |
(2)(a)(i) For purposes of making the ninety per cent | 1761 |
computation under division (L)(1)(a) of this section, the net book | 1762 |
value of the corporation's assets shall not include the net book | 1763 |
value of aircraft or real property described in division | 1764 |
(L)(1)(b)(i) of this section. | 1765 |
(ii) For purposes of making the fifty per cent computation | 1766 |
under division (L)(1)(a) of this section, the net book value of | 1767 |
assets shall include the net book value of aircraft or real | 1768 |
property described in division (L)(1)(b)(i) of this section. | 1769 |
(b)(i) As used in division (L) of this section, "intangible | 1770 |
asset" includes, but is not limited to, the corporation's direct | 1771 |
interest in each pass-through entity only if at all times during | 1772 |
the corporation's taxable year ending prior to the first day of | 1773 |
the tax year the corporation's and the corporation's related | 1774 |
members' combined direct and indirect interests in the capital or | 1775 |
profits of such pass-through entity do not exceed fifty per cent. | 1776 |
If the corporation's interest in the pass-through entity is an | 1777 |
intangible asset for that taxable year, then the distributive | 1778 |
share of any income from the pass-through entity shall be income | 1779 |
from an intangible asset for that taxable year. | 1780 |
(ii) If a corporation's and the corporation's related | 1781 |
members' combined direct and indirect interests in the capital or | 1782 |
profits of a pass-through entity exceed fifty per cent at any time | 1783 |
during the corporation's taxable year ending prior to the first | 1784 |
day of the tax year, "intangible asset" does not include the | 1785 |
corporation's direct interest in the pass-through entity, and the | 1786 |
corporation shall include in its assets its proportionate share of | 1787 |
the assets of any such pass-through entity and shall include in | 1788 |
its gross income its distributive share of the gross income of | 1789 |
such pass-through entity in the same form as was earned by the | 1790 |
pass-through entity. | 1791 |
(iii) A pass-through entity's direct or indirect | 1792 |
proportionate share of any other pass-through entity's assets | 1793 |
shall be included for the purpose of computing the corporation's | 1794 |
proportionate share of the pass-through entity's assets under | 1795 |
division (L)(2)(b)(ii) of this section, and such pass-through | 1796 |
entity's distributive share of any other pass-through entity's | 1797 |
gross income shall be included for purposes of computing the | 1798 |
corporation's distributive share of the pass-through entity's | 1799 |
gross income under division (L)(2)(b)(ii) of this section. | 1800 |
(c) For the purposes of divisions (L)(1)(b)(i), (1)(b)(ii), | 1801 |
(2)(a)(i), and (2)(a)(ii) of this section, real property is | 1802 |
described in division (L)(2)(c) of this section only if all of the | 1803 |
following conditions are present at all times during the taxable | 1804 |
year ending prior to the first day of the tax year: | 1805 |
(i) The real property serves as the headquarters of the | 1806 |
corporation's trade or business, or is the place from which the | 1807 |
corporation's trade or business is principally managed or | 1808 |
directed; | 1809 |
(ii) Not more than ten per cent of the value of the real | 1810 |
property and not more than ten per cent of the square footage of | 1811 |
the building or buildings that are part of the real property is | 1812 |
used, made available, or occupied for the purpose of providing, | 1813 |
acquiring, transferring, selling, or disposing of tangible | 1814 |
property or services in the normal course of business to persons | 1815 |
other than related members, the corporation's employees and their | 1816 |
families, and such related members' employees and their families. | 1817 |
(d) As used in division (L) of this section, "related member" | 1818 |
has the same meaning as in division (A)(6) of section 5733.042 of | 1819 |
the Revised Code without regard to division (B) of that section. | 1820 |
(3) The percentages described in division (L)(1)(a) of this | 1821 |
section shall be equal to the quarterly average of those | 1822 |
percentages as calculated during the corporation's taxable year | 1823 |
ending prior to the first day of the tax year. | 1824 |
(4) With respect to the election described in division | 1825 |
(L)(1)(e) of this section: | 1826 |
(a) The election need not accompany a timely filed report; | 1827 |
(b) The election need not accompany the report; rather, the | 1828 |
election may accompany a subsequently filed but timely application | 1829 |
for refund and timely amended report, or a subsequently filed but | 1830 |
timely petition for reassessment; | 1831 |
(c) The election is not irrevocable; | 1832 |
(d) The election applies only to the tax year specified by | 1833 |
the corporation; | 1834 |
(e) The corporation's related members comply with division | 1835 |
(L)(1)(d) of this section. | 1836 |
Nothing in division (L)(4) of this section shall be construed | 1837 |
to extend any statute of limitations set forth in this chapter. | 1838 |
(M) "Qualifying controlled group" means two or more | 1839 |
corporations that satisfy the ownership and control requirements | 1840 |
of division (A) of section 5733.052 of the Revised Code. | 1841 |
(N) "Limited liability company" means any limited liability | 1842 |
company formed under Chapter 1705. of the Revised Code or under | 1843 |
the laws of any other state. | 1844 |
(O) "Pass-through entity" means a corporation that has made | 1845 |
an election under subchapter S of Chapter 1 of Subtitle A of the | 1846 |
Internal Revenue Code for its taxable year under that code, or a | 1847 |
partnership, limited liability company, or any other person, other | 1848 |
than an individual, trust, or estate, if the partnership, limited | 1849 |
liability company, or other person is not classified for federal | 1850 |
income tax purposes as an association taxed as a corporation. | 1851 |
(P) "Electric company," "combined company," and "telephone | 1852 |
company" have the same meanings as in section 5727.01 of the | 1853 |
Revised Code. | 1854 |
(Q) "Business income" means income arising from transactions, | 1855 |
activities, and sources in the regular course of a trade or | 1856 |
business and includes income from real property, tangible personal | 1857 |
property, and intangible personal property if the acquisition, | 1858 |
rental, management, and disposition of the property constitute | 1859 |
integral parts of the regular course of a trade or business | 1860 |
operation. "Business income" includes income, including gain or | 1861 |
loss, from a partial or complete liquidation of a business, | 1862 |
including, but not limited to, gain or loss from the sale or other | 1863 |
disposition of goodwill. | 1864 |
(R) "Nonbusiness income" means all income other than business | 1865 |
income. | 1866 |
Sec. 5733.42. (A) As used in this section: | 1867 |
(1) "Eligible training program" means a program to provide | 1868 |
job skills to eligible employees who are unable effectively to | 1869 |
function on the job due to skill deficiencies or who would | 1870 |
otherwise be displaced because of their skill deficiencies or | 1871 |
inability to use new technology, or to provide job skills to | 1872 |
eligible employees that enable them to perform other job duties | 1873 |
for the taxpayer. Eligible training programs do not include | 1874 |
executive, management, or personal enrichment training programs, | 1875 |
or training programs intended exclusively for personal career | 1876 |
development. | 1877 |
(2) "Eligible employee" means an individual who is employed | 1878 |
in this state by a taxpayer and has been so employed by the same | 1879 |
taxpayer for at least one hundred eighty consecutive days before | 1880 |
the day an application for the credit is filed under this section. | 1881 |
"Eligible employee" does not include any employee for which a | 1882 |
credit is claimed pursuant to division (A)(5) of section 5709.65 | 1883 |
of the Revised Code for all or any part of the same year, an | 1884 |
employee who is not a full-time employee, or executive or | 1885 |
managerial personnel except for the immediate supervisors of | 1886 |
nonexecutive, nonmanagerial personnel. | 1887 |
(3) "Eligible training costs" means: | 1888 |
(a) Direct instructional costs, such as instructor salaries, | 1889 |
materials and supplies, textbooks and manuals, videotapes, and | 1890 |
other instructional media and training equipment used exclusively | 1891 |
for the purpose of training eligible employees; | 1892 |
(b) Wages paid to eligible employees for time devoted | 1893 |
exclusively to an eligible training program during normal paid | 1894 |
working hours. | 1895 |
(4) "Full-time employee" means an individual who is employed | 1896 |
for consideration for at least thirty-five hours per week, or who | 1897 |
renders any other standard of service generally accepted by custom | 1898 |
or specified by contract as full-time employment. | 1899 |
(5) "Partnership" includes a limited liability company formed | 1900 |
under Chapter 1705. of the Revised Code or under the laws of | 1901 |
another state, provided that the company is not classified for | 1902 |
federal income tax purposes as an association taxable as a | 1903 |
corporation. | 1904 |
(B) There is hereby allowed a nonrefundable credit against | 1905 |
the tax imposed by section 5733.06 of the Revised Code for | 1906 |
taxpayers for which a tax credit certificate is issued under | 1907 |
division (C) of this section. The credit may be claimed for tax | 1908 |
years 2004, 2005, and 2006. The amount of the credit for tax year | 1909 |
2004 shall equal one-half of the average of the eligible training | 1910 |
costs paid or incurred by the taxpayer during calendar years 1999, | 1911 |
2000, and 2001, not to exceed one thousand dollars for each | 1912 |
eligible employee on account of whom eligible training costs were | 1913 |
paid or incurred by the taxpayer during those calendar years. The | 1914 |
amount of the credit for tax year 2005 shall equal one-half of the | 1915 |
average of the eligible training costs paid or incurred by the | 1916 |
taxpayer during calendar years 2002, 2003, and 2004, not to exceed | 1917 |
one thousand dollars for each eligible employee on account of whom | 1918 |
eligible training costs were paid or incurred by the taxpayer | 1919 |
during those calendar years. The amount of the credit for tax year | 1920 |
2006 shall equal one-half of the average of the eligible training | 1921 |
costs paid or incurred by the taxpayer during calendar years 2003, | 1922 |
2004, and 2005, not to exceed one thousand dollars for each | 1923 |
eligible employee on account of whom eligible training costs were | 1924 |
paid or incurred by the taxpayer during those calendar years. The | 1925 |
credit claimed by a taxpayer each tax year shall not exceed one | 1926 |
hundred thousand dollars. | 1927 |
(C) A taxpayer who proposes to conduct an eligible training | 1928 |
program may apply to the director of job and family services for a | 1929 |
tax credit certificate under this section. The taxpayer may apply | 1930 |
for such a certificate for tax years 2004, 2005, and 2006, subject | 1931 |
to division (L) of this section. The director shall prescribe the | 1932 |
form of the application, which shall require a detailed | 1933 |
description of the proposed training program. The director may | 1934 |
require applicants to remit an application fee with each | 1935 |
application filed with the director. The fee shall not exceed the | 1936 |
reasonable and necessary expenses incurred by the director in | 1937 |
receiving, reviewing, and approving such applications and issuing | 1938 |
tax credit certificates. Proceeds from fees shall be used solely | 1939 |
for the purpose of receiving, reviewing, and approving such | 1940 |
applications and issuing such certificates. | 1941 |
After receipt of an application, the director shall authorize | 1942 |
a credit under this section by issuing a tax credit certificate, | 1943 |
in the form prescribed by the director, if the director determines | 1944 |
all of the following: | 1945 |
(1) The proposed training program is an eligible training | 1946 |
program under this section; | 1947 |
(2) The proposed training program is economically sound and | 1948 |
will benefit the people of this state by improving workforce | 1949 |
skills and strengthening the economy of this state; | 1950 |
(3) Receiving the tax credit is a major factor in the | 1951 |
taxpayer's decision to go forward with the training program; | 1952 |
(4) Authorization of the credit is consistent with division | 1953 |
(H) of this section. | 1954 |
The credit also is allowed for a taxpayer that is a partner | 1955 |
in a partnership that pays or incurs eligible training costs. Such | 1956 |
a taxpayer shall determine the taxpayer's credit amount in the | 1957 |
manner prescribed by division (K) of this section. | 1958 |
(D) If the director of job and family services denies an | 1959 |
application for a tax credit certificate, the director shall send | 1960 |
notice of the denial and the reason for denial to the applicant by | 1961 |
certified mail, return receipt requested. If the director | 1962 |
determines that an authorized training program, as actually | 1963 |
conducted, fails to meet the requirements of this section or to | 1964 |
comply with any condition set forth in the authorization, the | 1965 |
director may reduce the amount of the tax credit previously | 1966 |
granted. If the director reduces a tax credit, the director shall | 1967 |
send notice of the reduction and the reason for the reduction to | 1968 |
the taxpayer by certified mail, return receipt requested, and | 1969 |
shall certify the reduction to the tax commissioner or, in the | 1970 |
case of the reduction of a credit claimed by an insurance company, | 1971 |
the superintendent of insurance. The tax commissioner or | 1972 |
superintendent of insurance shall reduce the credit that may be | 1973 |
claimed by the taxpayer accordingly. Within sixty days after | 1974 |
receiving a notice of denial or notice of reduction of the tax | 1975 |
credit, an applicant or taxpayer may request, in writing, a | 1976 |
hearing before the director to review the denial or reduction. | 1977 |
Within sixty days after receiving a request that is filed within | 1978 |
the prescribed time, the director shall hold such a hearing at a | 1979 |
location to be determined by the director. Within thirty days | 1980 |
after the hearing is adjourned, the director shall issue a | 1981 |
redetermination affirming, reversing, or modifying the denial or | 1982 |
reduction of the tax credit and send notice of the redetermination | 1983 |
to the applicant or taxpayer by certified mail, return receipt | 1984 |
requested, and shall issue a notice of the redetermination to the | 1985 |
tax commissioner or superintendent of insurance. If an applicant | 1986 |
or taxpayer is aggrieved by the director's redetermination, the | 1987 |
applicant or taxpayer may appeal the redetermination to the board | 1988 |
of tax appeals in the manner prescribed by section 5717.02 of the | 1989 |
Revised Code. | 1990 |
(E) A taxpayer to which a tax credit certificate is issued | 1991 |
shall retain records indicating the eligible training costs it | 1992 |
pays or incurs for the eligible training program for which the | 1993 |
certificate is issued for four years following the end of the tax | 1994 |
year for which the credit is claimed. Such records shall be open | 1995 |
to inspection by the director of job and family services upon the | 1996 |
director's request during business hours. | 1997 |
Financial statements and other information submitted by an | 1998 |
applicant to the director of job and family services for a tax | 1999 |
credit under this section, and any information taken for any | 2000 |
purpose from such statements or information, are not public | 2001 |
records subject to section 149.43 of the Revised Code. However, | 2002 |
the director of job and family services, the tax commissioner, or | 2003 |
superintendent of insurance may make use of the statements and | 2004 |
other information for purposes of issuing public reports or in | 2005 |
connection with court proceedings concerning tax credits allowed | 2006 |
under this section and sections 5725.31, 5729.07, and 5747.39 of | 2007 |
the Revised Code. | 2008 |
(F) The director of job and family services, in accordance | 2009 |
with Chapter 119. of the Revised Code, shall adopt rules necessary | 2010 |
to implement this section and sections 5725.31, 5729.07, and | 2011 |
5747.39 of the Revised Code. The rules shall be adopted after | 2012 |
consultation with the tax commissioner and the superintendent of | 2013 |
insurance. At the time the director gives public notice under | 2014 |
division (A) of section 119.03 of the Revised Code of the adoption | 2015 |
of the rules, the director shall submit copies of the proposed | 2016 |
rules to the chairpersons and ranking minority members of the | 2017 |
standing committees in the senate and the house of representatives | 2018 |
to which legislation on economic development matters are | 2019 |
customarily referred. | 2020 |
(G) On or before the thirtieth day of September of 2001, | 2021 |
2003, 2004, 2005, and 2006, the director of job and family | 2022 |
services shall submit a report to the governor, the president of | 2023 |
the senate, and the speaker of the house of representatives on the | 2024 |
tax credit program under this section and sections 5725.31, | 2025 |
5729.07, and 5747.39 of the Revised Code. The report shall include | 2026 |
information on the number of training programs that were | 2027 |
authorized under those sections during the preceding calendar | 2028 |
year, a description of each authorized training program, the | 2029 |
dollar amounts of the credits granted, and an estimate of the | 2030 |
impact of the credits on the economy of this state. | 2031 |
(H) The aggregate amount of credits authorized under this | 2032 |
section and sections 5725.31, 5729.07, and 5747.39 of the Revised | 2033 |
Code shall not exceed twenty million dollars per calendar year. No | 2034 |
more than ten million dollars in credits per calendar year shall | 2035 |
be authorized for persons engaged primarily in manufacturing. No | 2036 |
less than five million dollars in credits per calendar year shall | 2037 |
be set aside for persons engaged primarily in activities other | 2038 |
than manufacturing and having fewer than five hundred employees. | 2039 |
Subject to such limits, the director of job and family services | 2040 |
shall adopt a rule under division (F) of this section that | 2041 |
establishes criteria and procedures for distribution of the | 2042 |
credits | 2043 |
2044 | |
2045 |
(I) A nonrefundable credit allowed under this section shall | 2046 |
be claimed in the order required under section 5733.98 of the | 2047 |
Revised Code. | 2048 |
(J) The taxpayer may carry forward any credit amount in | 2049 |
excess of its tax due after allowing for any other credits that | 2050 |
precede the credit under this section in the order required under | 2051 |
section 5733.98 of the Revised Code. The excess credit may be | 2052 |
carried forward for three years following the tax year for which | 2053 |
it is first claimed under this section. | 2054 |
(K) A taxpayer that is a partner in a partnership on the last | 2055 |
day of the third calendar year of the three-year period during | 2056 |
which the partnership pays or incurs eligible training costs may | 2057 |
claim a credit under this section for the tax year immediately | 2058 |
following that calendar year. The amount of a partner's credit | 2059 |
equals the partner's interest in the partnership on the last day | 2060 |
of such calendar year multiplied by the credit available to the | 2061 |
partnership as computed by the partnership. | 2062 |
(L) The director of job and family services shall not | 2063 |
authorize any credits under this section and sections 5725.31, | 2064 |
5729.07, and 5747.39 of the Revised Code for eligible training | 2065 |
costs paid or incurred after December 31, 2005. | 2066 |
Sec. 5747.01. Except as otherwise expressly provided or | 2067 |
clearly appearing from the context, any term used in this chapter | 2068 |
has the same meaning as when used in a comparable context in the | 2069 |
2070 | |
States relating to federal income taxes. Any reference in this | 2071 |
chapter to the Internal Revenue Code includes other laws of the | 2072 |
United States relating to federal income taxes. | 2073 |
As used in this chapter: | 2074 |
(A) "Adjusted gross income" or "Ohio adjusted gross income" | 2075 |
means federal adjusted gross income, as defined and used in the | 2076 |
Internal Revenue Code, adjusted as provided in this section: | 2077 |
(1) Add interest or dividends on obligations or securities of | 2078 |
any state or of any political subdivision or authority of any | 2079 |
state, other than this state and its subdivisions and authorities. | 2080 |
(2) Add interest or dividends on obligations of any | 2081 |
authority, commission, instrumentality, territory, or possession | 2082 |
of the United States to the extent that the interest or dividends | 2083 |
are exempt from federal income taxes but not from state income | 2084 |
taxes. | 2085 |
(3) Deduct interest or dividends on obligations of the United | 2086 |
States and its territories and possessions or of any authority, | 2087 |
commission, or instrumentality of the United States to the extent | 2088 |
that the interest or dividends are included in federal adjusted | 2089 |
gross income but exempt from state income taxes under the laws of | 2090 |
the United States. | 2091 |
(4) Deduct disability and survivor's benefits to the extent | 2092 |
included in federal adjusted gross income. | 2093 |
(5) Deduct benefits under Title II of the Social Security Act | 2094 |
and tier 1 railroad retirement benefits to the extent included in | 2095 |
federal adjusted gross income under section 86 of the Internal | 2096 |
Revenue Code. | 2097 |
(6) In the case of a taxpayer who is a beneficiary of a trust | 2098 |
that makes an accumulation distribution as defined in section 665 | 2099 |
of the Internal Revenue Code, add, for the beneficiary's taxable | 2100 |
years beginning before 2002 or after 2004, the portion, if any, of | 2101 |
such distribution that does not exceed the undistributed net | 2102 |
income of the trust for the three taxable years preceding the | 2103 |
taxable year in which the distribution is made to the extent that | 2104 |
the portion was not included in the trust's taxable income for any | 2105 |
of the trust's taxable years beginning in 2002, 2003, or 2004. | 2106 |
"Undistributed net income of a trust" means the taxable income of | 2107 |
the trust increased by (a)(i) the additions to adjusted gross | 2108 |
income required under division (A) of this section and (ii) the | 2109 |
personal exemptions allowed to the trust pursuant to section | 2110 |
642(b) of the Internal Revenue Code, and decreased by (b)(i) the | 2111 |
deductions to adjusted gross income required under division (A) of | 2112 |
this section, (ii) the amount of federal income taxes attributable | 2113 |
to such income, and (iii) the amount of taxable income that has | 2114 |
been included in the adjusted gross income of a beneficiary by | 2115 |
reason of a prior accumulation distribution. Any undistributed net | 2116 |
income included in the adjusted gross income of a beneficiary | 2117 |
shall reduce the undistributed net income of the trust commencing | 2118 |
with the earliest years of the accumulation period. | 2119 |
(7) Deduct the amount of wages and salaries, if any, not | 2120 |
otherwise allowable as a deduction but that would have been | 2121 |
allowable as a deduction in computing federal adjusted gross | 2122 |
income for the taxable year, had the targeted jobs credit allowed | 2123 |
and determined under sections 38, 51, and 52 of the Internal | 2124 |
Revenue Code not been in effect. | 2125 |
(8) Deduct any interest or interest equivalent on public | 2126 |
obligations and purchase obligations to the extent that the | 2127 |
interest or interest equivalent is included in federal adjusted | 2128 |
gross income. | 2129 |
(9) Add any loss or deduct any gain resulting from the sale, | 2130 |
exchange, or other disposition of public obligations to the extent | 2131 |
that the loss has been deducted or the gain has been included in | 2132 |
computing federal adjusted gross income. | 2133 |
(10) Deduct or add amounts, as provided under section 5747.70 | 2134 |
of the Revised Code, related to contributions to variable college | 2135 |
savings program accounts made or tuition credits purchased | 2136 |
pursuant to Chapter 3334. of the Revised Code. | 2137 |
(11)(a) Deduct, to the extent not otherwise allowable as a | 2138 |
deduction or exclusion in computing federal or Ohio adjusted gross | 2139 |
income for the taxable year, the amount the taxpayer paid during | 2140 |
the taxable year for medical care insurance and qualified | 2141 |
long-term care insurance for the taxpayer, the taxpayer's spouse, | 2142 |
and dependents. No deduction for medical care insurance under | 2143 |
division (A)(11) of this section shall be allowed either to any | 2144 |
taxpayer who is eligible to participate in any subsidized health | 2145 |
plan maintained by any employer of the taxpayer or of the | 2146 |
taxpayer's spouse, or to any taxpayer who is entitled to, or on | 2147 |
application would be entitled to, benefits under part A of Title | 2148 |
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C. | 2149 |
301, as amended. For the purposes of division (A)(11)(a) of this | 2150 |
section, "subsidized health plan" means a health plan for which | 2151 |
the employer pays any portion of the plan's cost. The deduction | 2152 |
allowed under division (A)(11)(a) of this section shall be the net | 2153 |
of any related premium refunds, related premium reimbursements, or | 2154 |
related insurance premium dividends received during the taxable | 2155 |
year. | 2156 |
(b) Deduct, to the extent not otherwise deducted or excluded | 2157 |
in computing federal or Ohio adjusted gross income during the | 2158 |
taxable year, the amount the taxpayer paid during the taxable | 2159 |
year, not compensated for by any insurance or otherwise, for | 2160 |
medical care of the taxpayer, the taxpayer's spouse, and | 2161 |
dependents, to the extent the expenses exceed seven and one-half | 2162 |
per cent of the taxpayer's federal adjusted gross income. | 2163 |
(c) For purposes of division (A)(11) of this section, | 2164 |
"medical care" has the meaning given in section 213 of the | 2165 |
Internal Revenue Code, subject to the special rules, limitations, | 2166 |
and exclusions set forth therein, and "qualified long-term care" | 2167 |
has the same meaning given in section 7702(B)(b) of the Internal | 2168 |
Revenue Code. | 2169 |
(12)(a) Deduct any amount included in federal adjusted gross | 2170 |
income solely because the amount represents a reimbursement or | 2171 |
refund of expenses that in any year the taxpayer had deducted as | 2172 |
an itemized deduction pursuant to section 63 of the Internal | 2173 |
Revenue Code and applicable United States department of the | 2174 |
treasury regulations. The deduction otherwise allowed under | 2175 |
division (A)(12)(a) of this section shall be reduced to the extent | 2176 |
the reimbursement is attributable to an amount the taxpayer | 2177 |
deducted under this section in any taxable year. | 2178 |
(b) Add any amount not otherwise included in Ohio adjusted | 2179 |
gross income for any taxable year to the extent that the amount is | 2180 |
attributable to the recovery during the taxable year of any amount | 2181 |
deducted or excluded in computing federal or Ohio adjusted gross | 2182 |
income in any taxable year. | 2183 |
(13) Deduct any portion of the deduction described in section | 2184 |
1341(a)(2) of the Internal Revenue Code, for repaying previously | 2185 |
reported income received under a claim of right, that meets both | 2186 |
of the following requirements: | 2187 |
(a) It is allowable for repayment of an item that was | 2188 |
included in the taxpayer's adjusted gross income for a prior | 2189 |
taxable year and did not qualify for a credit under division (A) | 2190 |
or (B) of section 5747.05 of the Revised Code for that year; | 2191 |
(b) It does not otherwise reduce the taxpayer's adjusted | 2192 |
gross income for the current or any other taxable year. | 2193 |
(14) Deduct an amount equal to the deposits made to, and net | 2194 |
investment earnings of, a medical savings account during the | 2195 |
taxable year, in accordance with section 3924.66 of the Revised | 2196 |
Code. The deduction allowed by division (A)(14) of this section | 2197 |
does not apply to medical savings account deposits and earnings | 2198 |
otherwise deducted or excluded for the current or any other | 2199 |
taxable year from the taxpayer's federal adjusted gross income. | 2200 |
(15)(a) Add an amount equal to the funds withdrawn from a | 2201 |
medical savings account during the taxable year, and the net | 2202 |
investment earnings on those funds, when the funds withdrawn were | 2203 |
used for any purpose other than to reimburse an account holder | 2204 |
for, or to pay, eligible medical expenses, in accordance with | 2205 |
section 3924.66 of the Revised Code; | 2206 |
(b) Add the amounts distributed from a medical savings | 2207 |
account under division (A)(2) of section 3924.68 of the Revised | 2208 |
Code during the taxable year. | 2209 |
(16) Add any amount claimed as a credit under section | 2210 |
5747.059 of the Revised Code to the extent that such amount | 2211 |
satisfies either of the following: | 2212 |
(a) The amount was deducted or excluded from the computation | 2213 |
of the taxpayer's federal adjusted gross income as required to be | 2214 |
reported for the taxpayer's taxable year under the Internal | 2215 |
Revenue Code; | 2216 |
(b) The amount resulted in a reduction of the taxpayer's | 2217 |
federal adjusted gross income as required to be reported for any | 2218 |
of the taxpayer's taxable years under the Internal Revenue Code. | 2219 |
(17) Deduct the amount contributed by the taxpayer to an | 2220 |
individual development account program established by a county | 2221 |
department of job and family services pursuant to sections 329.11 | 2222 |
to 329.14 of the Revised Code for the purpose of matching funds | 2223 |
deposited by program participants. On request of the tax | 2224 |
commissioner, the taxpayer shall provide any information that, in | 2225 |
the tax commissioner's opinion, is necessary to establish the | 2226 |
amount deducted under division (A)(17) of this section. | 2227 |
(18) Beginning in taxable year 2001, if the taxpayer is | 2228 |
married and files a joint return and the combined federal adjusted | 2229 |
gross income of the taxpayer and the taxpayer's spouse for the | 2230 |
taxable year does not exceed one hundred thousand dollars, or if | 2231 |
the taxpayer is single and has a federal adjusted gross income for | 2232 |
the taxable year not exceeding fifty thousand dollars, deduct | 2233 |
amounts paid during the taxable year for qualified tuition and | 2234 |
fees paid to an eligible institution for the taxpayer, the | 2235 |
taxpayer's spouse, or any dependent of the taxpayer, who is a | 2236 |
resident of this state and is enrolled in or attending a program | 2237 |
that culminates in a degree or diploma at an eligible institution. | 2238 |
The deduction may be claimed only to the extent that qualified | 2239 |
tuition and fees are not otherwise deducted or excluded for any | 2240 |
taxable year from federal or Ohio adjusted gross income. The | 2241 |
deduction may not be claimed for educational expenses for which | 2242 |
the taxpayer claims a credit under section 5747.27 of the Revised | 2243 |
Code. | 2244 |
(19) Add any reimbursement received during the taxable year | 2245 |
of any amount the taxpayer deducted under division (A)(18) of this | 2246 |
section in any previous taxable year to the extent the amount is | 2247 |
not otherwise included in Ohio adjusted gross income. | 2248 |
(20)(a)(i) Add five-sixths of the amount of depreciation | 2249 |
expense allowed by subsection (k) of section 168 of the Internal | 2250 |
Revenue Code, including the taxpayer's proportionate or | 2251 |
distributive share of the amount of depreciation expense allowed | 2252 |
by that subsection to a pass-through entity in which the taxpayer | 2253 |
has a direct or indirect ownership interest. | 2254 |
(ii) Add five-sixths of the amount of qualifying section 179 | 2255 |
depreciation expense, including a person's proportionate or | 2256 |
distributive share of the amount of qualifying section 179 | 2257 |
depreciation expense allowed to any pass-through entity in which | 2258 |
the person has a direct or indirect ownership. For the purposes of | 2259 |
this division, "qualifying section 179 depreciation expense" means | 2260 |
the difference between (I) the amount of depreciation expense | 2261 |
directly or indirectly allowed to the taxpayer under section 179 | 2262 |
of the Internal Revenue Code, and (II) the amount of depreciation | 2263 |
expense directly or indirectly allowed to the taxpayer under | 2264 |
section 179 of the Internal Revenue Code as that section existed | 2265 |
on December 31, 2002. | 2266 |
The tax commissioner, under procedures established by the | 2267 |
commissioner, may waive the add-backs related to a pass-through | 2268 |
entity if the taxpayer owns, directly or indirectly, less than | 2269 |
five per cent of the pass-through entity. | 2270 |
(b) Nothing in division (A)(20) of this section shall be | 2271 |
construed to adjust or modify the adjusted basis of any asset. | 2272 |
(c) To the extent the add-back required under division | 2273 |
(A)(20)(a) of this section is attributable to property generating | 2274 |
nonbusiness income or loss allocated under section 5747.20 of the | 2275 |
Revised Code, the add-back shall be sitused to the same location | 2276 |
as the nonbusiness income or loss generated by the property for | 2277 |
the purpose of determining the credit under division (A) of | 2278 |
section 5747.05 of the Revised Code. Otherwise, the add-back shall | 2279 |
be apportioned, subject to one or more of the four alternative | 2280 |
methods of apportionment enumerated in section 5747.21 of the | 2281 |
Revised Code. | 2282 |
(d) For the purposes of division (A) of this section, net | 2283 |
operating loss carryback and carryforward shall not include | 2284 |
five-sixths of the allowance of any net operating loss deduction | 2285 |
carryback or carryforward to the taxable year to the extent such | 2286 |
loss resulted from depreciation allowed by section 168(k) of the | 2287 |
Internal Revenue Code and by the qualifying section 179 | 2288 |
depreciation expense amount. | 2289 |
(21)(a) If the taxpayer was required to add an amount under | 2290 |
division (A)(20)(a) of this section for a taxable year, deduct | 2291 |
one-fifth of the amount so added for each of the five succeeding | 2292 |
taxable years. | 2293 |
(b) If the amount deducted under division (A)(21)(a) of this | 2294 |
section is attributable to an add-back allocated under division | 2295 |
(A)(20)(c) of this section, the amount deducted shall be sitused | 2296 |
to the same location. Otherwise, the add-back shall be apportioned | 2297 |
using the apportionment factors for the taxable year in which the | 2298 |
deduction is taken, subject to one or more of the four alternative | 2299 |
methods of apportionment enumerated in section 5747.21 of the | 2300 |
Revised Code. | 2301 |
(c) No deduction is available under division (A)(21)(a) of | 2302 |
this section with regard to any depreciation allowed by section | 2303 |
168(k) of the Internal Revenue Code and by the qualifying section | 2304 |
179 depreciation expense amount to the extent that such | 2305 |
depreciation resulted in or increased a federal net operating loss | 2306 |
carryback or carryforward to a taxable year to which division | 2307 |
(A)(20)(d) of this section does not apply. | 2308 |
(B) "Business income" means income, including gain or loss, | 2309 |
arising from transactions, activities, and sources in the regular | 2310 |
course of a trade or business and includes income, gain, or loss | 2311 |
from real property, tangible property, and intangible property if | 2312 |
the acquisition, rental, management, and disposition of the | 2313 |
property constitute integral parts of the regular course of a | 2314 |
trade or business operation. "Business income" includes income, | 2315 |
including gain or loss, from a partial or complete liquidation of | 2316 |
a business, including, but not limited to, gain or loss from the | 2317 |
sale or other disposition of goodwill. | 2318 |
(C) "Nonbusiness income" means all income other than business | 2319 |
income and may include, but is not limited to, compensation, rents | 2320 |
and royalties from real or tangible personal property, capital | 2321 |
gains, interest, dividends and distributions, patent or copyright | 2322 |
royalties, or lottery winnings, prizes, and awards. | 2323 |
(D) "Compensation" means any form of remuneration paid to an | 2324 |
employee for personal services. | 2325 |
(E) "Fiduciary" means a guardian, trustee, executor, | 2326 |
administrator, receiver, conservator, or any other person acting | 2327 |
in any fiduciary capacity for any individual, trust, or estate. | 2328 |
(F) "Fiscal year" means an accounting period of twelve months | 2329 |
ending on the last day of any month other than December. | 2330 |
(G) "Individual" means any natural person. | 2331 |
(H) "Internal Revenue Code" means the "Internal Revenue Code | 2332 |
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended. | 2333 |
(I) "Resident" means any of the following, provided that | 2334 |
division (I)(3) of this section applies only to taxable years of a | 2335 |
trust beginning in 2002, 2003, or 2004: | 2336 |
(1) An individual who is domiciled in this state, subject to | 2337 |
section 5747.24 of the Revised Code; | 2338 |
(2) The estate of a decedent who at the time of death was | 2339 |
domiciled in this state. The domicile tests of section 5747.24 of | 2340 |
the Revised Code and any election under section 5747.25 of the | 2341 |
Revised Code are not controlling for purposes of division (I)(2) | 2342 |
of this section. | 2343 |
(3) A trust that, in whole or part, resides in this state. If | 2344 |
only part of a trust resides in this state, the trust is a | 2345 |
resident only with respect to that part. | 2346 |
For the purposes of division (I)(3) of this section: | 2347 |
(a) A trust resides in this state for the trust's current | 2348 |
taxable year to the extent, as described in division (I)(3)(d) of | 2349 |
this section, that the trust consists directly or indirectly, in | 2350 |
whole or in part, of assets, net of any related liabilities, that | 2351 |
were transferred, or caused to be transferred, directly or | 2352 |
indirectly, to the trust by any of the following: | 2353 |
(i) A person, a court, or a governmental entity or | 2354 |
instrumentality on account of the death of a decedent, but only if | 2355 |
the trust is described in division (I)(3)(e)(i) or (ii) of this | 2356 |
section; | 2357 |
(ii) A person who was domiciled in this state for the | 2358 |
purposes of this chapter when the person directly or indirectly | 2359 |
transferred assets to an irrevocable trust, but only if at least | 2360 |
one of the trust's qualifying beneficiaries is domiciled in this | 2361 |
state for the purposes of this chapter during all or some portion | 2362 |
of the trust's current taxable year; | 2363 |
(iii) A person who was domiciled in this state for the | 2364 |
purposes of this chapter when the trust document or instrument or | 2365 |
part of the trust document or instrument became irrevocable, but | 2366 |
only if at least one of the trust's qualifying beneficiaries is a | 2367 |
resident domiciled in this state for the purposes of this chapter | 2368 |
during all or some portion of the trust's current taxable year. | 2369 |
(b) A trust is irrevocable to the extent that the transferor | 2370 |
is not considered to be the owner of the net assets of the trust | 2371 |
under sections 671 to 678 of the Internal Revenue Code. | 2372 |
(c) With respect to a trust other than a charitable lead | 2373 |
trust, "qualifying beneficiary" has the same meaning as "potential | 2374 |
current beneficiary" as defined in section 1361(e)(2) of the | 2375 |
Internal Revenue Code, and with respect to a charitable lead trust | 2376 |
"qualifying beneficiary" is any current, future, or contingent | 2377 |
beneficiary, but with respect to any trust "qualifying | 2378 |
beneficiary" excludes a person or a governmental entity or | 2379 |
instrumentality to any of which a contribution would qualify for | 2380 |
the charitable deduction under section 170 of the Internal Revenue | 2381 |
Code. | 2382 |
(d) For the purposes of division (I)(3)(a) of this section, | 2383 |
the extent to which a trust consists directly or indirectly, in | 2384 |
whole or in part, of assets, net of any related liabilities, that | 2385 |
were transferred directly or indirectly, in whole or part, to the | 2386 |
trust by any of the sources enumerated in that division shall be | 2387 |
ascertained by multiplying the fair market value of the trust's | 2388 |
assets, net of related liabilities, by the qualifying ratio, which | 2389 |
shall be computed as follows: | 2390 |
(i) The first time the trust receives assets, the numerator | 2391 |
of the qualifying ratio is the fair market value of those assets | 2392 |
at that time, net of any related liabilities, from sources | 2393 |
enumerated in division (I)(3)(a) of this section. The denominator | 2394 |
of the qualifying ratio is the fair market value of all the | 2395 |
trust's assets at that time, net of any related liabilities. | 2396 |
(ii) Each subsequent time the trust receives assets, a | 2397 |
revised qualifying ratio shall be computed. The numerator of the | 2398 |
revised qualifying ratio is the sum of (1) the fair market value | 2399 |
of the trust's assets immediately prior to the subsequent | 2400 |
transfer, net of any related liabilities, multiplied by the | 2401 |
qualifying ratio last computed without regard to the subsequent | 2402 |
transfer, and (2) the fair market value of the subsequently | 2403 |
transferred assets at the time transferred, net of any related | 2404 |
liabilities, from sources enumerated in division (I)(3)(a) of this | 2405 |
section. The denominator of the revised qualifying ratio is the | 2406 |
fair market value of all the trust's assets immediately after the | 2407 |
subsequent transfer, net of any related liabilities. | 2408 |
(e) For the purposes of division (I)(3)(a)(i) of this | 2409 |
section: | 2410 |
(i) A trust is described in division (I)(3)(e)(i) of this | 2411 |
section if the trust is a testamentary trust and the testator of | 2412 |
that testamentary trust was domiciled in this state at the time of | 2413 |
the testator's death for purposes of the taxes levied under | 2414 |
Chapter 5731. of the Revised Code. | 2415 |
(ii) A trust is described in division (I)(3)(e)(ii) of this | 2416 |
section if the transfer is a qualifying transfer described in any | 2417 |
of divisions (I)(3)(f)(i) to (vi) of this section, the trust is an | 2418 |
irrevocable inter vivos trust, and at least one of the trust's | 2419 |
qualifying beneficiaries is domiciled in this state for purposes | 2420 |
of this chapter during all or some portion of the trust's current | 2421 |
taxable year. | 2422 |
(f) For the purposes of division (I)(3)(e)(ii) of this | 2423 |
section, a "qualifying transfer" is a transfer of assets, net of | 2424 |
any related liabilities, directly or indirectly to a trust, if the | 2425 |
transfer is described in any of the following: | 2426 |
(i) The transfer is made to a trust, created by the decedent | 2427 |
before the decedent's death and while the decedent was domiciled | 2428 |
in this state for the purposes of this chapter, and, prior to the | 2429 |
death of the decedent, the trust became irrevocable while the | 2430 |
decedent was domiciled in this state for the purposes of this | 2431 |
chapter. | 2432 |
(ii) The transfer is made to a trust to which the decedent, | 2433 |
prior to the decedent's death, had directly or indirectly | 2434 |
transferred assets, net of any related liabilities, while the | 2435 |
decedent was domiciled in this state for the purposes of this | 2436 |
chapter, and prior to the death of the decedent the trust became | 2437 |
irrevocable while the decedent was domiciled in this state for the | 2438 |
purposes of this chapter. | 2439 |
(iii) The transfer is made on account of a contractual | 2440 |
relationship existing directly or indirectly between the | 2441 |
transferor and either the decedent or the estate of the decedent | 2442 |
at any time prior to the date of the decedent's death, and the | 2443 |
decedent was domiciled in this state at the time of death for | 2444 |
purposes of the taxes levied under Chapter 5731. of the Revised | 2445 |
Code. | 2446 |
(iv) The transfer is made to a trust on account of a | 2447 |
contractual relationship existing directly or indirectly between | 2448 |
the transferor and another person who at the time of the | 2449 |
decedent's death was domiciled in this state for purposes of this | 2450 |
chapter. | 2451 |
(v) The transfer is made to a trust on account of the will of | 2452 |
a testator. | 2453 |
(vi) The transfer is made to a trust created by or caused to | 2454 |
be created by a court, and the trust was directly or indirectly | 2455 |
created in connection with or as a result of the death of an | 2456 |
individual who, for purposes of the taxes levied under Chapter | 2457 |
5731. of the Revised Code, was domiciled in this state at the time | 2458 |
of the individual's death. | 2459 |
(g) The tax commissioner may adopt rules to ascertain the | 2460 |
part of a trust residing in this state. | 2461 |
(J) "Nonresident" means an individual or estate that is not a | 2462 |
resident. An individual who is a resident for only part of a | 2463 |
taxable year is a nonresident for the remainder of that taxable | 2464 |
year. | 2465 |
(K) "Pass-through entity" has the same meaning as in section | 2466 |
5733.04 of the Revised Code. | 2467 |
(L) "Return" means the notifications and reports required to | 2468 |
be filed pursuant to this chapter for the purpose of reporting the | 2469 |
tax due and includes declarations of estimated tax when so | 2470 |
required. | 2471 |
(M) "Taxable year" means the calendar year or the taxpayer's | 2472 |
fiscal year ending during the calendar year, or fractional part | 2473 |
thereof, upon which the adjusted gross income is calculated | 2474 |
pursuant to this chapter. | 2475 |
(N) "Taxpayer" means any person subject to the tax imposed by | 2476 |
section 5747.02 of the Revised Code or any pass-through entity | 2477 |
that makes the election under division (D) of section 5747.08 of | 2478 |
the Revised Code. | 2479 |
(O) "Dependents" means dependents as defined in the Internal | 2480 |
Revenue Code and as claimed in the taxpayer's federal income tax | 2481 |
return for the taxable year or which the taxpayer would have been | 2482 |
permitted to claim had the taxpayer filed a federal income tax | 2483 |
return. | 2484 |
(P) "Principal county of employment" means, in the case of a | 2485 |
nonresident, the county within the state in which a taxpayer | 2486 |
performs services for an employer or, if those services are | 2487 |
performed in more than one county, the county in which the major | 2488 |
portion of the services are performed. | 2489 |
(Q) As used in sections 5747.50 to 5747.55 of the Revised | 2490 |
Code: | 2491 |
(1) "Subdivision" means any county, municipal corporation, | 2492 |
park district, or township. | 2493 |
(2) "Essential local government purposes" includes all | 2494 |
functions that any subdivision is required by general law to | 2495 |
exercise, including like functions that are exercised under a | 2496 |
charter adopted pursuant to the Ohio Constitution. | 2497 |
(R) "Overpayment" means any amount already paid that exceeds | 2498 |
the figure determined to be the correct amount of the tax. | 2499 |
(S) "Taxable income" or "Ohio taxable income" applies only to | 2500 |
estates and trusts, and means federal taxable income, as defined | 2501 |
and used in the Internal Revenue Code, adjusted as follows: | 2502 |
(1) Add interest or dividends, net of ordinary, necessary, | 2503 |
and reasonable expenses not deducted in computing federal taxable | 2504 |
income, on obligations or securities of any state or of any | 2505 |
political subdivision or authority of any state, other than this | 2506 |
state and its subdivisions and authorities, but only to the extent | 2507 |
that such net amount is not otherwise includible in Ohio taxable | 2508 |
income and is described in either division (S)(1)(a) or (b) of | 2509 |
this section: | 2510 |
(a) The net amount is not attributable to the S portion of an | 2511 |
electing small business trust and has not been distributed to | 2512 |
beneficiaries for the taxable year; | 2513 |
(b) The net amount is attributable to the S portion of an | 2514 |
electing small business trust for the taxable year. | 2515 |
(2) Add interest or dividends, net of ordinary, necessary, | 2516 |
and reasonable expenses not deducted in computing federal taxable | 2517 |
income, on obligations of any authority, commission, | 2518 |
instrumentality, territory, or possession of the United States to | 2519 |
the extent that the interest or dividends are exempt from federal | 2520 |
income taxes but not from state income taxes, but only to the | 2521 |
extent that such net amount is not otherwise includible in Ohio | 2522 |
taxable income and is described in either division (S)(1)(a) or | 2523 |
(b) of this section; | 2524 |
(3) Add the amount of personal exemption allowed to the | 2525 |
estate pursuant to section 642(b) of the Internal Revenue Code; | 2526 |
(4) Deduct interest or dividends, net of related expenses | 2527 |
deducted in computing federal taxable income, on obligations of | 2528 |
the United States and its territories and possessions or of any | 2529 |
authority, commission, or instrumentality of the United States to | 2530 |
the extent that the interest or dividends are exempt from state | 2531 |
taxes under the laws of the United States, but only to the extent | 2532 |
that such amount is included in federal taxable income and is | 2533 |
described in either division (S)(1)(a) or (b) of this section; | 2534 |
(5) Deduct the amount of wages and salaries, if any, not | 2535 |
otherwise allowable as a deduction but that would have been | 2536 |
allowable as a deduction in computing federal taxable income for | 2537 |
the taxable year, had the targeted jobs credit allowed under | 2538 |
sections 38, 51, and 52 of the Internal Revenue Code not been in | 2539 |
effect, but only to the extent such amount relates either to | 2540 |
income included in federal taxable income for the taxable year or | 2541 |
to income of the S portion of an electing small business trust for | 2542 |
the taxable year; | 2543 |
(6) Deduct any interest or interest equivalent, net of | 2544 |
related expenses deducted in computing federal taxable income, on | 2545 |
public obligations and purchase obligations, but only to the | 2546 |
extent that such net amount relates either to income included in | 2547 |
federal taxable income for the taxable year or to income of the S | 2548 |
portion of an electing small business trust for the taxable year; | 2549 |
(7) Add any loss or deduct any gain resulting from sale, | 2550 |
exchange, or other disposition of public obligations to the extent | 2551 |
that such loss has been deducted or such gain has been included in | 2552 |
computing either federal taxable income or income of the S portion | 2553 |
of an electing small business trust for the taxable year; | 2554 |
(8) Except in the case of the final return of an estate, add | 2555 |
any amount deducted by the taxpayer on both its Ohio estate tax | 2556 |
return pursuant to section 5731.14 of the Revised Code, and on its | 2557 |
federal income tax return in determining federal taxable income; | 2558 |
(9)(a) Deduct any amount included in federal taxable income | 2559 |
solely because the amount represents a reimbursement or refund of | 2560 |
expenses that in a previous year the decedent had deducted as an | 2561 |
itemized deduction pursuant to section 63 of the Internal Revenue | 2562 |
Code and applicable treasury regulations. The deduction otherwise | 2563 |
allowed under division (S)(9)(a) of this section shall be reduced | 2564 |
to the extent the reimbursement is attributable to an amount the | 2565 |
taxpayer or decedent deducted under this section in any taxable | 2566 |
year. | 2567 |
(b) Add any amount not otherwise included in Ohio taxable | 2568 |
income for any taxable year to the extent that the amount is | 2569 |
attributable to the recovery during the taxable year of any amount | 2570 |
deducted or excluded in computing federal or Ohio taxable income | 2571 |
in any taxable year, but only to the extent such amount has not | 2572 |
been distributed to beneficiaries for the taxable year. | 2573 |
(10) Deduct any portion of the deduction described in section | 2574 |
1341(a)(2) of the Internal Revenue Code, for repaying previously | 2575 |
reported income received under a claim of right, that meets both | 2576 |
of the following requirements: | 2577 |
(a) It is allowable for repayment of an item that was | 2578 |
included in the taxpayer's taxable income or the decedent's | 2579 |
adjusted gross income for a prior taxable year and did not qualify | 2580 |
for a credit under division (A) or (B) of section 5747.05 of the | 2581 |
Revised Code for that year. | 2582 |
(b) It does not otherwise reduce the taxpayer's taxable | 2583 |
income or the decedent's adjusted gross income for the current or | 2584 |
any other taxable year. | 2585 |
(11) Add any amount claimed as a credit under section | 2586 |
5747.059 of the Revised Code to the extent that the amount | 2587 |
satisfies either of the following: | 2588 |
(a) The amount was deducted or excluded from the computation | 2589 |
of the taxpayer's federal taxable income as required to be | 2590 |
reported for the taxpayer's taxable year under the Internal | 2591 |
Revenue Code; | 2592 |
(b) The amount resulted in a reduction in the taxpayer's | 2593 |
federal taxable income as required to be reported for any of the | 2594 |
taxpayer's taxable years under the Internal Revenue Code. | 2595 |
(12) Deduct any amount, net of related expenses deducted in | 2596 |
computing federal taxable income, that a trust is required to | 2597 |
report as farm income on its federal income tax return, but only | 2598 |
if the assets of the trust include at least ten acres of land | 2599 |
satisfying the definition of "land devoted exclusively to | 2600 |
agricultural use" under section 5713.30 of the Revised Code, | 2601 |
regardless of whether the land is valued for tax purposes as such | 2602 |
land under sections 5713.30 to 5713.38 of the Revised Code. If the | 2603 |
trust is a pass-though entity investor, section 5747.231 of the | 2604 |
Revised Code applies in ascertaining if the trust is eligible to | 2605 |
claim the deduction provided by division (S)(12) of this section | 2606 |
in connection with the pass-through entity's farm income. | 2607 |
Except for farm income attributable to the S portion of an | 2608 |
electing small business trust, the deduction provided by division | 2609 |
(S)(12) of this section is allowed only to the extent that the | 2610 |
trust has not distributed such farm income. Division (S)(12) of | 2611 |
this section applies only to taxable years of a trust beginning in | 2612 |
2002, 2003, or 2004. | 2613 |
(13) Add the net amount of income described in section 641(c) | 2614 |
of the Internal Revenue Code to the extent that amount is not | 2615 |
included in federal taxable income. | 2616 |
(14) Add or deduct the amount the taxpayer would be required | 2617 |
to add or deduct under division (A)(20) or (21) of this section if | 2618 |
the taxpayer's Ohio taxable income were computed in the same | 2619 |
manner as an individual's Ohio adjusted gross income is computed | 2620 |
under this section. In the case of a trust, division (S)(14) of | 2621 |
this section applies only to any of the trust's taxable years | 2622 |
beginning in 2002, 2003, or 2004. | 2623 |
(T) "School district income" and "school district income tax" | 2624 |
have the same meanings as in section 5748.01 of the Revised Code. | 2625 |
(U) As used in divisions (A)(8), (A)(9), (S)(6), and (S)(7) | 2626 |
of this section, "public obligations," "purchase obligations," and | 2627 |
"interest or interest equivalent" have the same meanings as in | 2628 |
section 5709.76 of the Revised Code. | 2629 |
(V) "Limited liability company" means any limited liability | 2630 |
company formed under Chapter 1705. of the Revised Code or under | 2631 |
the laws of any other state. | 2632 |
(W) "Pass-through entity investor" means any person who, | 2633 |
during any portion of a taxable year of a pass-through entity, is | 2634 |
a partner, member, shareholder, or equity investor in that | 2635 |
pass-through entity. | 2636 |
(X) "Banking day" has the same meaning as in section 1304.01 | 2637 |
of the Revised Code. | 2638 |
(Y) "Month" means a calendar month. | 2639 |
(Z) "Quarter" means the first three months, the second three | 2640 |
months, the third three months, or the last three months of the | 2641 |
taxpayer's taxable year. | 2642 |
(AA)(1) "Eligible institution" means a state university or | 2643 |
state institution of higher education as defined in section | 2644 |
3345.011 of the Revised Code, or a private, nonprofit college, | 2645 |
university, or other post-secondary institution located in this | 2646 |
state that possesses a certificate of authorization issued by the | 2647 |
Ohio board of regents pursuant to Chapter 1713. of the Revised | 2648 |
Code or a certificate of registration issued by the state board of | 2649 |
career colleges and schools under Chapter 3332. of the Revised | 2650 |
Code. | 2651 |
(2) "Qualified tuition and fees" means tuition and fees | 2652 |
imposed by an eligible institution as a condition of enrollment or | 2653 |
attendance, not exceeding two thousand five hundred dollars in | 2654 |
each of the individual's first two years of post-secondary | 2655 |
education. If the individual is a part-time student, "qualified | 2656 |
tuition and fees" includes tuition and fees paid for the academic | 2657 |
equivalent of the first two years of post-secondary education | 2658 |
during a maximum of five taxable years, not exceeding a total of | 2659 |
five thousand dollars. "Qualified tuition and fees" does not | 2660 |
include: | 2661 |
(a) Expenses for any course or activity involving sports, | 2662 |
games, or hobbies unless the course or activity is part of the | 2663 |
individual's degree or diploma program; | 2664 |
(b) The cost of books, room and board, student activity fees, | 2665 |
athletic fees, insurance expenses, or other expenses unrelated to | 2666 |
the individual's academic course of instruction; | 2667 |
(c) Tuition, fees, or other expenses paid or reimbursed | 2668 |
through an employer, scholarship, grant in aid, or other | 2669 |
educational benefit program. | 2670 |
(BB)(1) "Modified business income" means the business income | 2671 |
included in a trust's Ohio taxable income after such taxable | 2672 |
income is first reduced by the qualifying trust amount, if any. | 2673 |
(2) "Qualifying trust amount" of a trust means capital gains | 2674 |
and losses from the sale, exchange, or other disposition of equity | 2675 |
or ownership interests in, or debt obligations of, a qualifying | 2676 |
investee to the extent included in the trust's Ohio taxable | 2677 |
income, but only if the following requirements are satisfied: | 2678 |
(a) The book value of the qualifying investee's physical | 2679 |
assets in this state and everywhere, as of the last day of the | 2680 |
qualifying investee's fiscal or calendar year ending immediately | 2681 |
prior to the date on which the trust recognizes the gain or loss, | 2682 |
is available to the trust. | 2683 |
(b) The requirements of section 5747.011 of the Revised Code | 2684 |
are satisfied for the trust's taxable year in which the trust | 2685 |
recognizes the gain or loss. | 2686 |
Any gain or loss that is not a qualifying trust amount is | 2687 |
modified business income, qualifying investment income, or | 2688 |
modified nonbusiness income, as the case may be. | 2689 |
(3) "Modified nonbusiness income" means a trust's Ohio | 2690 |
taxable income other than modified business income, other than the | 2691 |
qualifying trust amount, and other than qualifying investment | 2692 |
income, as defined in section 5747.012 of the Revised Code, to the | 2693 |
extent such qualifying investment income is not otherwise part of | 2694 |
modified business income. | 2695 |
(4) "Modified Ohio taxable income" applies only to trusts, | 2696 |
and means the sum of the amounts described in divisions (BB)(4)(a) | 2697 |
to (c) of this section: | 2698 |
(a) The fraction, calculated under section 5747.013, and | 2699 |
applying section 5747.231 of the Revised Code, multiplied by the | 2700 |
sum of the following amounts: | 2701 |
(i) The trust's modified business income; | 2702 |
(ii) The trust's qualifying investment income, as defined in | 2703 |
section 5747.012 of the Revised Code, but only to the extent the | 2704 |
qualifying investment income does not otherwise constitute | 2705 |
modified business income and does not otherwise constitute a | 2706 |
qualifying trust amount. | 2707 |
(b) The qualifying trust amount multiplied by a fraction, the | 2708 |
numerator of which is the sum of the book value of the qualifying | 2709 |
investee's physical assets in this state on the last day of the | 2710 |
qualifying investee's fiscal or calendar year ending immediately | 2711 |
prior to the day on which the trust recognizes the qualifying | 2712 |
trust amount, and the denominator of which is the sum of the book | 2713 |
value of the qualifying investee's total physical assets | 2714 |
everywhere on the last day of the qualifying investee's fiscal or | 2715 |
calendar year ending immediately prior to the day on which the | 2716 |
trust recognizes the qualifying trust amount. If, for a taxable | 2717 |
year, the trust recognizes a qualifying trust amount with respect | 2718 |
to more than one qualifying investee, the amount described in | 2719 |
division (BB)(4)(b) of this section shall equal the sum of the | 2720 |
products so computed for each such qualifying investee. | 2721 |
(c)(i) With respect to a trust or portion of a trust that is | 2722 |
a resident as ascertained in accordance with division (I)(3)(d) of | 2723 |
this section, its modified nonbusiness income. | 2724 |
(ii) With respect to a trust or portion of a trust that is | 2725 |
not a resident as ascertained in accordance with division | 2726 |
(I)(3)(d) of this section, the amount of its modified nonbusiness | 2727 |
income satisfying the descriptions in divisions (B)(2) to (5) of | 2728 |
section 5747.20 of the Revised Code. | 2729 |
If the allocation and apportionment of a trust's income under | 2730 |
divisions (BB)(4)(a) and (c) of this section do not fairly | 2731 |
represent the modified Ohio taxable income of the trust in this | 2732 |
state, the alternative methods described in division (C) of | 2733 |
section 5747.21 of the Revised Code may be applied in the manner | 2734 |
and to the same extent provided in that section. | 2735 |
(5)(a) Except as set forth in division (BB)(5)(b) of this | 2736 |
section, "qualifying investee" means a person in which a trust has | 2737 |
an equity or ownership interest, or a person or unit of government | 2738 |
the debt obligations of either of which are owned by a trust. For | 2739 |
the purposes of division (BB)(2)(a) of this section and for the | 2740 |
purpose of computing the fraction described in division (BB)(4)(b) | 2741 |
of this section, all of the following apply: | 2742 |
(i) If the qualifying investee is a member of a qualifying | 2743 |
controlled group on the last day of the qualifying investee's | 2744 |
fiscal or calendar year ending immediately prior to the date on | 2745 |
which the trust recognizes the gain or loss, then "qualifying | 2746 |
investee" includes all persons in the qualifying controlled group | 2747 |
on such last day. | 2748 |
(ii) If the qualifying investee, or if the qualifying | 2749 |
investee and any members of the qualifying controlled group of | 2750 |
which the qualifying investee is a member on the last day of the | 2751 |
qualifying investee's fiscal or calendar year ending immediately | 2752 |
prior to the date on which the trust recognizes the gain or loss, | 2753 |
separately or cumulatively own, directly or indirectly, on the | 2754 |
last day of the qualifying investee's fiscal or calendar year | 2755 |
ending immediately prior to the date on which the trust recognizes | 2756 |
the qualifying trust amount, more than fifty per cent of the | 2757 |
equity of a pass-through entity, then the qualifying investee and | 2758 |
the other members are deemed to own the proportionate share of the | 2759 |
pass-through entity's physical assets which the pass-through | 2760 |
entity directly or indirectly owns on the last day of the | 2761 |
pass-through entity's calendar or fiscal year ending within or | 2762 |
with the last day of the qualifying investee's fiscal or calendar | 2763 |
year ending immediately prior to the date on which the trust | 2764 |
recognizes the qualifying trust amount. | 2765 |
(iii) For the purposes of division (BB)(5)(a)(iii) of this | 2766 |
section, "upper level pass-through entity" means a pass-through | 2767 |
entity directly or indirectly owning any equity of another | 2768 |
pass-through entity, and "lower level pass-through entity" means | 2769 |
that other pass-through entity. | 2770 |
An upper level pass-through entity, whether or not it is also | 2771 |
a qualifying investee, is deemed to own, on the last day of the | 2772 |
upper level pass-through entity's calendar or fiscal year, the | 2773 |
proportionate share of the lower level pass-through entity's | 2774 |
physical assets that the lower level pass-through entity directly | 2775 |
or indirectly owns on the last day of the lower level pass-through | 2776 |
entity's calendar or fiscal year ending within or with the last | 2777 |
day of the upper level pass-through entity's fiscal or calendar | 2778 |
year. If the upper level pass-through entity directly and | 2779 |
indirectly owns less than fifty per cent of the equity of the | 2780 |
lower level pass-through entity on each day of the upper level | 2781 |
pass-through entity's calendar or fiscal year in which or with | 2782 |
which ends the calendar or fiscal year of the lower level | 2783 |
pass-through entity and if, based upon clear and convincing | 2784 |
evidence, complete information about the location and cost of the | 2785 |
physical assets of the lower pass-through entity is not available | 2786 |
to the upper level pass-through entity, then solely for purposes | 2787 |
of ascertaining if a gain or loss constitutes a qualifying trust | 2788 |
amount, the upper level pass-through entity shall be deemed as | 2789 |
owning no equity of the lower level pass-through entity for each | 2790 |
day during the upper level pass-through entity's calendar or | 2791 |
fiscal year in which or with which ends the lower level | 2792 |
pass-through entity's calendar or fiscal year. Nothing in division | 2793 |
(BB)(5)(a)(iii) of this section shall be construed to provide for | 2794 |
any deduction or exclusion in computing any trust's Ohio taxable | 2795 |
income. | 2796 |
(b) With respect to a trust that is not a resident for the | 2797 |
taxable year and with respect to a part of a trust that is not a | 2798 |
resident for the taxable year, "qualifying investee" for that | 2799 |
taxable year does not include a C corporation if both of the | 2800 |
following apply: | 2801 |
(i) During the taxable year the trust or part of the trust | 2802 |
recognizes a gain or loss from the sale, exchange, or other | 2803 |
disposition of equity or ownership interests in, or debt | 2804 |
obligations of, the C corporation. | 2805 |
(ii) Such gain or loss constitutes nonbusiness income. | 2806 |
(6) "Available" means information is such that a person is | 2807 |
able to learn of the information by the due date plus extensions, | 2808 |
if any, for filing the return for the taxable year in which the | 2809 |
trust recognizes the gain or loss. | 2810 |
(CC) "Qualifying controlled group" has the same meaning as in | 2811 |
section 5733.04 of the Revised Code. | 2812 |
(DD) "Related member" has the same meaning as in section | 2813 |
5733.042 of the Revised Code. | 2814 |
(EE) Any term used in this chapter that is not otherwise | 2815 |
defined in this section and that is not used in a comparable | 2816 |
context in the Internal Revenue Code and other statutes of the | 2817 |
United States relating to federal income taxes has the same | 2818 |
meaning as in section 5733.40 of the Revised Code. | 2819 |
Section 2. That existing sections 718.01, 718.02, 3318.05, | 2820 |
3318.052, 3318.08, 3318.44, 3770.07, 3770.10, 3770.12, 5705.192, | 2821 |
5705.21, 5733.04, 5733.42, and 5747.01 of the Revised Code are | 2822 |
hereby repealed. | 2823 |
Section 3. (A) This section is intended to mitigate the | 2824 |
unintended consequences of Cleveland Clinic Foundation v. Wilkins, | 2825 |
103 Ohio St.3d 382, 816 N.E. 2d 224 (2004), by providing remedial | 2826 |
legislation to address the large volume of applications for | 2827 |
exemption of property that the Tax Commissioner dismissed because | 2828 |
of the decision in that case. | 2829 |
(B) As used in this section: | 2830 |
(1) "Eligible years" means those tax years for which taxes, | 2831 |
penalties, and interest could have been properly remitted or | 2832 |
abated and the property placed on the tax exempt list under a | 2833 |
previous application for exemption of property that was dismissed | 2834 |
as explained in division (A) of this section. | 2835 |
(2) "Qualified property" means real property that satisfies | 2836 |
the qualifications for tax exemption under any section of the | 2837 |
Revised Code and for which an application for exemption of | 2838 |
property was dismissed by the Tax Commissioner as explained in | 2839 |
division (A) of this section. | 2840 |
(3) "Subdivision," "taxing authority," and "taxing unit" have | 2841 |
the same meanings as in section 5705.01 of the Revised Code. | 2842 |
(C) Notwithstanding section 5713.081 of the Revised Code, | 2843 |
when qualified property has not received a tax exemption, | 2844 |
remission, or abatement because of failure to comply with Chapter | 2845 |
5713. or section 5715.27 of the Revised Code, the current owner of | 2846 |
the qualified property at any time on or before July 1, 2005, may | 2847 |
file with the Tax Commissioner an application requesting that the | 2848 |
property be placed on the tax exempt list and that all paid or | 2849 |
unpaid taxes, penalties, and interest on the property be abated or | 2850 |
remitted for the eligible years. The application shall be filed on | 2851 |
the form prescribed by the Commissioner under section 5715.27 of | 2852 |
the Revised Code. The owner shall attach to the application a copy | 2853 |
of the Commissioner's final determination dismissing the previous | 2854 |
application for exemption of the qualified property, along with | 2855 |
the county treasurer's certificate required by division (E) of | 2856 |
this section. Failure to attach the Commissioner's final | 2857 |
determination dismissing the previous application for exemption of | 2858 |
the qualified property and the treasurer's certificate shall | 2859 |
result in dismissal of the application filed under this division. | 2860 |
(D) The county auditor shall notify the county treasurer to | 2861 |
hold any tax payments for eligible years in a special fund pending | 2862 |
a decision by the Commissioner on an application filed under this | 2863 |
section. While such application is pending, no subdivision or | 2864 |
other taxing unit is entitled to an advance payment of such moneys | 2865 |
under section 321.34 of the Revised Code. After the Commissioner | 2866 |
issues a decision, the county auditor shall either refund the | 2867 |
taxes, penalties, and interest to the applicant if remission is | 2868 |
granted, or distribute the taxes, penalties, and interest to the | 2869 |
proper taxing authorities if the remission is denied. | 2870 |
(E) An applicant under this section shall obtain a | 2871 |
certificate from the county treasurer that determines whether all | 2872 |
taxes, penalties, and interest that were levied for all tax years | 2873 |
that are not eligible years and all special assessments charged | 2874 |
against the property have been paid in full. If that is not so, | 2875 |
the county treasurer shall issue a certificate to that effect | 2876 |
listing the tax years for which taxes, penalties, interest, and | 2877 |
special assessments remain unpaid. | 2878 |
(F)(1) Upon receipt of an application under this section, the | 2879 |
Tax Commissioner shall determine if the applicant and the | 2880 |
applicant's qualified property meets the qualifications for tax | 2881 |
exemption and the qualifications set forth in this section. If | 2882 |
these qualifications are met, the Commissioner shall issue an | 2883 |
order directing that the property be placed on the tax exempt list | 2884 |
of the county and that all paid or unpaid taxes, penalties, and | 2885 |
interest for every year the property met the qualifications for | 2886 |
exemption be abated. If the Commissioner finds that the property | 2887 |
is not entitled to tax exemption and to the abatement of paid or | 2888 |
unpaid taxes, penalties, and interest for any of the years for | 2889 |
which the current owner claims an exemption or abatement, the | 2890 |
Commissioner shall order the county treasurer of the county in | 2891 |
which the property is located to collect all taxes, penalties, and | 2892 |
interest due on the property for those years in accordance with | 2893 |
law. If the Commissioner finds that the property is now being used | 2894 |
for a purpose that would foreclose its right to tax exemption, the | 2895 |
Commissioner shall issue an order denying the application. | 2896 |
(2)(a) If the Tax Commissioner determines the qualified | 2897 |
property satisfies the requirements for exemption, the | 2898 |
Commissioner shall remit such taxes, penalties, and interest for | 2899 |
the eligible years, but only with the consent of the taxing | 2900 |
authority of the subdivision or other taxing unit to which such | 2901 |
taxes, penalties, and interest are owed. For purposes of this | 2902 |
section, a taxing authority has given consent if the taxing | 2903 |
authority has not passed a resolution, on a form prescribed by the | 2904 |
Commissioner, and filed it with the county auditor on or before | 2905 |
February 15, 2005, stating its objection to the remission of such | 2906 |
taxes, penalties, and interest. On or before January 15, 2005, the | 2907 |
county auditor of each county shall notify each subdivision or | 2908 |
taxing unit in the county of the enactment of this section and of | 2909 |
the requirement that a taxing authority may file an objection to | 2910 |
the remission of taxes, penalties, and interest with the county | 2911 |
auditor on or before February 15, 2005. If the taxing authority of | 2912 |
a subdivision or taxing unit withholds its consent, the applicant | 2913 |
shall pay all the outstanding taxes, penalties, and interest owed | 2914 |
to that subdivision or taxing unit, except for those taxes, | 2915 |
penalties, and interest that are included in the three-year | 2916 |
remission period under division (A) of section 5713.081 of the | 2917 |
Revised Code. Tax payments for eligible years for which consent | 2918 |
has not been obtained shall not be considered unpaid taxes for | 2919 |
purposes of establishing jurisdiction to consider an application | 2920 |
under this section. | 2921 |
(b) Consent given under division (F)(2)(a) of this section | 2922 |
does not apply to the year an application is filed under this | 2923 |
section and to the three-year remission period under division (A) | 2924 |
of section 5713.081 of the Revised Code. The applicant retains the | 2925 |
right to apply for those years under that section with or without | 2926 |
the consent of the applicable subdivisions or taxing units. | 2927 |
(c) The county auditor shall maintain a record of all taxing | 2928 |
authorities that have withheld consent under this section. After | 2929 |
the Tax Commissioner's decision is issued for each of the eligible | 2930 |
years for which exemption and remission or abatement was | 2931 |
requested, the county auditor shall either refund, remit, or abate | 2932 |
taxes for which consent has been given, and shall distribute to | 2933 |
the appropriate subdivision or other taxing unit those taxes for | 2934 |
which consent was withheld. | 2935 |
Section 4. The amendments by this act of section 5705.21 of | 2936 |
the Revised Code changing the designation of levies for "general, | 2937 |
ongoing permanent improvements" to levies for "general permanent | 2938 |
improvements" and defining "general permanent improvements" do not | 2939 |
change the purpose for which such levies are imposed or may be | 2940 |
imposed. Those amendments are intended only to change the name by | 2941 |
which such levies shall be referred to in the Revised Code and in | 2942 |
resolutions, election notices, and ballot forms. | 2943 |
For the purposes of renewing or replacing an existing levy | 2944 |
for the purpose of "general, ongoing permanent improvements" that | 2945 |
is in effect on the effective date of this act, a renewal or | 2946 |
replacement levy for the purpose of "general permanent | 2947 |
improvements" shall be considered to be a levy for the same | 2948 |
purpose as the existing levy. | 2949 |
Section 5. (A) Except as provided in division (B) of this | 2950 |
section, the amendment by this act of sections 5733.04 and 5747.01 | 2951 |
of the Revised Code, which updates references to federal income | 2952 |
tax laws and thereby incorporates recent changes to those laws, | 2953 |
first applies to taxable years ending on or after the effective | 2954 |
date of those sections, as amended by this act. | 2955 |
(B) A taxpayer may irrevocably elect to apply section 5733.04 | 2956 |
or 5747.01 of the Revised Code, as amended by this act, to the | 2957 |
taxpayer's taxable year ending in 2004. The filing of a return or | 2958 |
report by the taxpayer for that taxable year that incorporates the | 2959 |
amendments to those sections by this act without adjustments to | 2960 |
reverse the effects of those amendments constitutes the making of | 2961 |
an irrevocable election under this section. | 2962 |
Section 6. The amendment by this act of sections 718.01, | 2963 |
718.02, 5733.04, and 5747.01 of the Revised Code and the enactment | 2964 |
of Sections 3, 5, and 6 of this act provide for or are essential | 2965 |
to implementation of a tax levy. Therefore, under Ohio | 2966 |
Constitution, Article II, Section 1d, those sections as amended or | 2967 |
enacted by this act are not subject to the referendum and go into | 2968 |
immediate effect when this act becomes law. | 2969 |