As Passed by the Senate

126th General Assembly Regular Session 2005-2006

Sub. H. B. No. 149

Representatives Calvert, Raga, McGregor, J., Evans, C., Latta, Aslanides, Hartnett, Chandler, Oelslager, Gibbs, Seitz, Gilb, Collier, Schaffer, Kilbane, Hagan, Barrett, Blessing, Buehrer, Cassell, Combs, Core, DeBose, DeGeeter, Dolan, Evans, D., Faber, Fende, Flowers, Garrison, Healy, Hughes, Law, Martin, Mason, McGregor, R., Patton, T., Peterson, Reidelbach, Reinhard, Sayre, Schlichter, Schneider, Seaver, Setzer, Smith, G., Stewart, J., Trakas, Wagoner, Widener, Wolpert, Woodard, Yates, Yuko 

Senators Amstutz, Austria, Cates, Clancy, Coughlin, Fingerhut, Gardner, Grendell, Harris, Kearney, Miller, D., Mumper, Niehaus, Padgett, Roberts, Schuring, Stivers, Zurz, Hagan, Prentiss, Wilson, Fedor 

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A BILL

To amend sections 5725.24, 5733.01, 5733.98,

1

5739.011, and 5747.98 and to enact sections

2

149.311, 5725.151, 5733.47, and 5747.76 of the

3

Revised Code to authorize refundable tax credits

4

for rehabilitating historic buildings and to

5

exempt from the sales and use taxes property used

6

to clean manufacturing equipment that produces

7

dairy products.

8

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

Section 1. That sections 5725.24, 5733.01, 5733.98, 5739.011,	9
and 5747.98 be amended and sections 149.311, 5725.151, 5733.47,	10
and 5747.76 of the Revised Code be enacted to read as follows:	11

Sec. 149.311.  (A) As used in this section:

12

(1) "Historic building" means a building, including its	13
structural components, that is located in this state and that is	14
either individually listed on the national register of historic	15
places under 16 U.S.C. 470a, located in a registered historic	16
district, and certified by the state historic preservation officer	17
as being of historic significance to the district, or is	18
individually listed as a historic landmark designated by a local	19
government certified under 16 U.S.C. 470a(c).	20

(2) "Qualified rehabilitation expenditures" means	21
expenditures paid or incurred during the rehabilitation period,	22
and before and after that period as determined under 26 U.S.C. 47,	23
by an owner of a historic building to rehabilitate the building.	24
"Qualified rehabilitation expenditures" includes architectural or	25
engineering fees paid or incurred in connection with the	26
rehabilitation, and expenses incurred in the preparation of	27
nomination forms for listing on the national register of historic	28
places. "Qualified rehabilitation expenditures" does not include	29
any of the following:	30

(a) The cost of acquiring, expanding, or enlarging a historic	31
building;	32

(b) Expenditures attributable to work done to facilities	33
related to the building, such as parking lots, sidewalks, and	34
landscaping;	35

(c) New building construction costs.

36

(3) "Owner" of a historic building means a person holding the	37
fee simple interest in the building.	38

(4) "Certificate owner" means the owner of a historic	39
building to which a rehabilitation tax credit certificate was	40
issued under this section.	41

(5) "Registered historic district" means a historic district	42
listed in the national register of historic places under 16 U.S.C.	43
470a, a historic district designated by a local government	44
certified under 16 U.S.C. 470a(c), or a local historic district	45
certified under 36 C.F.R. 67.8 and 67.9.	46

(6) "Rehabilitation" means the process of repairing or	47
altering a historic building or buildings, making possible an	48
efficient use while preserving those portions and features of the	49
building and its site and environment that are significant to its	50
historic, architectural, and cultural values.	51

(7) "Rehabilitation period" means one of the following:

52

(a) If the rehabilitation initially was not planned to be	53
completed in stages, a period chosen by the owner not to exceed	54
twenty-four months during which rehabilitation occurs;	55

(b) If the rehabilitation initially was planned to be	56
completed in stages, a period chosen by the owner not to exceed	57
sixty months during which rehabilitation occurs.	58

(8) "State historic preservation officer" or "officer" means	59
the state historic preservation officer appointed by the governor	60
under 16 U.S.C. 470a.	61

(9) "Application period" means either of the following time	62
periods during which an application for a rehabilitation tax	63
credit certificate may be filed under this section:	64

(a) July 1, 2007, through June 30, 2008;

65

(b) July 1, 2008, through June 30, 2009.

66

(B) On or after July 1, 2007, but before July 1, 2009, the	67
owner of a historic building may apply to the state historic	68
preservation officer for a rehabilitation tax credit certificate	69
for qualified rehabilitation expenditures paid or incurred after	70
the effective date of this section for rehabilitation of a	71
historic building. The form and manner of filing such applications	72
shall be prescribed by rule of the director of development, and	73
applications expire at the end of each application period. Before	74
July 1, 2007, the director, after consultation with the tax	75
commissioner and in accordance with Chapter 119. of the Revised	76
Code, shall adopt rules that establish all of the following:	77

(1) Forms and procedures by which applicants may apply for	78
rehabilitation tax credit certificates;	79

(2) Criteria for reviewing, evaluating, and approving	80
applications for certificates within the limitation on the number	81
of applications that may be approved in an application period	82
under division (D) of this section, criteria for assuring that the	83
certificates issued encompass a mixture of high and low qualified	84
rehabilitation expenditures, and criteria for issuing certificates	85
under division (C)(3)(b) of this section;	86

(3) Eligibility requirements for obtaining a certificate	87
under this section;	88

(4) The form of rehabilitation tax credit certificates;

89

(5) Reporting requirements and monitoring procedures;

90

(6) Any other rules necessary to implement and administer	91
this section.	92

(C) The state historic preservation officer shall accept	93
applications in the order in which they are filed. Within seven	94
days after an application is filed, the officer shall forward it	95
to the director of development who shall review the application	96
and determine whether all of the following criteria are met:	97

(1) That the building that is the subject of the application	98
is a historic building and the applicant is the owner of the	99
building;	100

(2) That the rehabilitation will satisfy standards prescribed	101
by the United States secretary of the interior under 16 U.S.C.	102
470, et seq., as amended, and 36 C.F.R. 67.7 or a successor to	103
that section;	104

(3) That receiving a rehabilitation tax credit certificate	105
under this section is a major factor in:	106

(a) The applicant's decision to rehabilitate the historic	107
building; or	108

(b) To increase the level of investment in such	109
rehabilitation.	110

An applicant shall demonstrate to the satisfaction of the	111
state historic preservation officer and director of development	112
that the rehabilitation will satisfy the standards described in	113
division (C)(2) of this section before the applicant begins the	114
physical rehabilitation of the historic building.	115

(D) If the director of development determines that the	116
criteria in divisions (C)(1), (2), and (3) of this section are	117
met, the director, in conjunction with the tax commissioner, shall	118
conduct a cost and benefit analysis for the historic building that	119
is the subject of an application filed under this section to	120
determine whether rehabilitation of the historic building will	121
result in a net revenue gain in state and local taxes once the	122
building is used. The director shall not approve an application	123
and issue a rehabilitation tax credit certificate to an applicant	124
unless the cost and benefit analysis of the historic building	125
determines that there will be a net revenue gain in state and	126
local taxes once the building is used. A rehabilitation tax credit	127
certificate shall not be issued before rehabilitation of a	128
historic building is completed. The director shall not approve	129
more than one hundred applications in an application period.	130

(E) Issuance of a certificate represents a finding by the	131
director of development of the matters described in divisions	132
(C)(1), (2), and (3) of this section only; issuance of a	133
certificate does not represent a verification or certification by	134
the director of the amount of qualified rehabilitation	135
expenditures for which a tax credit may be claimed under section	136
5725.151, 5733.47, or 5747.76 of the Revised Code. The amount of	137
qualified rehabilitation expenditures for which a tax credit may	138
be claimed is subject to inspection and examination by the tax	139
commissioner or employees of the commissioner under section	140
5703.19 of the Revised Code and any other applicable law. Upon the	141
issuance of a certificate, the director shall certify to the tax	142
commissioner, in the form and manner requested by the tax	143
commissioner, the name of the applicant, the amount of qualified	144
rehabilitation expenditures shown on the certificate, and any	145
other information required by the rules adopted under this	146
section.	147

(F)(1) On or before the first day of December in 2007, 2008,	148
and 2009, the director of development and tax commissioner jointly	149
shall submit to the president of the senate and the speaker of the	150
house of representatives a report on the tax credit program	151
established under this section and sections 5725.151, 5733.47, and	152
5747.76 of the Revised Code. The report shall present an overview	153
of the program and shall include information on the number of	154
rehabilitation tax credit certificates issued under this section	155
during an application period, an update on the status of each	156
historic building for which an application was approved under this	157
section, the dollar amount of the tax credits granted under	158
sections 5725.151, 5733.47, and 5747.76 of the Revised Code, and	159
any other information the director and commissioner consider	160
relevant to the topics addressed in the report.	161

(2) On or before December 1, 2010, the director of	162
development and tax commissioner jointly shall submit to the	163
president of the senate and the speaker of the house of	164
representatives a comprehensive report that includes the	165
information required by division (F)(1) of this section and a	166
detailed analysis of the effectiveness of issuing tax credits for	167
rehabilitating historic buildings. The report shall be prepared	168
with the assistance of an economic research organization jointly	169
chosen by the director and commissioner.	170

Sec. 5725.151.  (A) As used in this section, "certificate	171
owner" has the same meaning as in section 149.311 of the Revised	172
Code.	173

(B) There is allowed a refundable credit against the tax	174
imposed by section 5707.03 and assessed under section 5725.15 of	175
the Revised Code for a dealer in intangibles subject to that tax	176
that is a certificate owner of a rehabilitation tax credit	177
certificate issued under section 149.311 of the Revised Code. The	178
credit shall equal twenty-five per cent of the dollar amount	179
indicated on the certificate. The credit shall be claimed in the	180
calendar year specified in the certificate.	181

(C) A dealer in intangibles claiming a credit under this	182
section shall retain the rehabilitation tax credit certificate for	183
four years following the end of the year in which the credit was	184
claimed, and shall make the certificate available for inspection	185
by the tax commissioner upon the request of the tax commissioner	186
during that period.	187

(D) For the purpose of division (C) of section 5725.24 of the	188
Revised Code, reductions in the amount of taxes collected on	189
account of credits allowed under this section shall be applied to	190
reduce the amount credited to the general revenue fund and shall	191
not be applied to reduce the amount to be credited to the	192
undivided local government funds of the counties in which such	193
taxes originate.	194

Sec. 5725.24. (A) As used in this section, "qualifying	195
dealer" means a dealer in intangibles that is a qualifying dealer	196
in intangibles as defined in section 5733.45 of the Revised Code	197
or a member of a qualifying controlled group, as defined in	198
section 5733.04 of the Revised Code, of which an insurance company	199
also is a member on the first day of January of the year in and	200
for which the tax imposed by section 5707.03 of the Revised Code	201
is required to be paid by the dealer.	202

(B) The taxes levied by section 5725.18 of the Revised Code	203
and collected pursuant to this chapter shall be paid into the	204
state treasury to the credit of the general revenue fund.	205

(C) The taxes levied by section 5707.03 of the Revised Code	206
on the value of shares in and capital employed by dealers in	207
intangibles other than those that are qualifying dealers shall be	208
for the use of the general revenue fund of the state and the local	209
government funds of the several counties in which the taxes	210
originate as provided in this division.	211

On or before the first day of each month on which there is	212
money in the state treasury for disbursement under this division,	213
the tax commissioner shall provide for payment to the county	214
treasurer of each county of five-eighths of the amount of the	215
taxes collected on account of shares in and capital employed by	216
dealers in intangibles other than those that are qualifying	217
dealers, representing capital employed in the county. The balance	218
of the money received and credited on account of taxes assessed on	219
shares in and capital employed by such dealers in intangibles	220
shall be credited to the general revenue fund.	221

Reductions in the amount of taxes collected on account of	222
credits allowed under section 5725.151 of the Revised Code shall	223
be applied to reduce the amount credited to the general revenue	224
fund and shall not be applied to reduce the amount to be credited	225
to the undivided local government funds of the counties in which	226
such taxes originate.	227

For the purpose of this division, such taxes are deemed to	228
originate in the counties in which such dealers in intangibles	229
have their offices.	230

Money received into the treasury of a county pursuant to this	231
section shall be credited to the undivided local government fund	232
of the county and shall be distributed by the budget commission as	233
provided by law.	234

(D) All of the taxes levied under section 5707.03 of the	235
Revised Code on the value of the shares in and capital employed by	236
dealers in intangibles that are qualifying dealers shall be paid	237
into the state treasury to the credit of the general revenue fund.	238

Sec. 5733.01.  (A) The tax provided by this chapter for	239
domestic corporations shall be the amount charged against each	240
corporation organized for profit under the laws of this state and	241
each nonprofit corporation organized pursuant to Chapter 1729. of	242
the Revised Code, except as provided in sections 5733.09 and	243
5733.10 of the Revised Code, for the privilege of exercising its	244
franchise during the calendar year in which that amount is	245
payable, and the tax provided by this chapter for foreign	246
corporations shall be the amount charged against each corporation	247
organized for profit and each nonprofit corporation organized or	248
operating in the same or similar manner as nonprofit corporations	249
organized under Chapter 1729. of the Revised Code, under the laws	250
of any state or country other than this state, except as provided	251
in sections 5733.09 and 5733.10 of the Revised Code, for the	252
privilege of doing business in this state, owning or using a part	253
or all of its capital or property in this state, holding a	254
certificate of compliance with the laws of this state authorizing	255
it to do business in this state, or otherwise having nexus in or	256
with this state under the Constitution of the United States,	257
during the calendar year in which that amount is payable.	258

(B) A corporation is subject to the tax imposed by section	259
5733.06 of the Revised Code for each calendar year that it is so	260
organized, doing business, owning or using a part or all of its	261
capital or property, holding a certificate of compliance, or	262
otherwise having nexus in or with this state under the	263
Constitution of the United States, on the first day of January of	264
that calendar year.	265

(C) Any corporation subject to this chapter that is not	266
subject to the federal income tax shall file its returns and	267
compute its tax liability as required by this chapter in the same	268
manner as if that corporation were subject to the federal income	269
tax.	270

(D) For purposes of this chapter, a federally chartered	271
financial institution shall be deemed to be organized under the	272
laws of the state within which its principal office is located.	273

(E) For purposes of this chapter, any person, as defined in	274
section 5701.01 of the Revised Code, shall be treated as a	275
corporation if the person is classified for federal income tax	276
purposes as an association taxable as a corporation, and an equity	277
interest in the person shall be treated as capital stock of the	278
person.	279

(F) For the purposes of this chapter, "disregarded entity"	280
has the same meaning as in division (D) of section 5745.01 of the	281
Revised Code.	282

(1) A person's interest in a disregarded entity, whether held	283
directly or indirectly, shall be treated as the person's ownership	284
of the assets and liabilities of the disregarded entity, and the	285
income, including gain or loss, shall be included in the person's	286
net income under this chapter.	287

(2) Any sale, exchange, or other disposition of the person's	288
interest in the disregarded entity, whether held directly or	289
indirectly, shall be treated as a sale, exchange, or other	290
disposition of the person's share of the disregarded entity's	291
underlying assets or liabilities, and the gain or loss from such	292
sale, exchange, or disposition shall be included in the person's	293
net income under this chapter.	294

(3) The disregarded entity's payroll, property, and sales	295
factors shall be included in the person's factors.	296

(G) The tax a corporation is required to pay under this	297
chapter shall be as follows:	298

(1)(a) For financial institutions, the greater of the minimum	299
payment required under division (E) of section 5733.06 of the	300
Revised Code or the difference between all taxes charged the	301
financial institution under this chapter, without regard to	302
division (G)(2) of this section, less any credits allowable	303
against such tax.	304

(b) A corporation satisfying the description in division	305
(E)(5), (6), (7), (8), or (10) of section 5751.01 of the Revised	306
Code that is not a financial institution, insurance company, or	307
dealer in intangibles is subject to the taxes imposed under this	308
chapter as a corporation and not subject to tax as a financial	309
institution, and shall pay the greater of the minimum payment	310
required under division (E) of section 5733.06 of the Revised Code	311
or the difference between all the taxes charged under this	312
chapter, without regard to division (G)(2) of this section, less	313
any credits allowable against such tax.	314

(2) For all corporations other than those persons described	315
in division (G)(1)(a) or (b) of this section, the amount under	316
division (G)(2)(a) of this section applicable to the tax year	317
specified less the amount under division (G)(2)(b) of this	318
section:	319

(a)(i) For tax year 2005, the greater of the minimum payment	320
required under division (E) of section 5733.06 of the Revised Code	321
or the difference between all taxes charged the corporation under	322
this chapter and any credits allowable against such tax;	323

(ii) For tax year 2006, the greater of the minimum payment	324
required under division (E) of section 5733.06 of the Revised Code	325
or four-fifths of the difference between all taxes charged the	326
corporation under this chapter and any credits allowable against	327
such tax, except the qualifying pass-through entity tax credit	328
described in division (A)(29) and the refundable credits described	329
in divisions (A)(30), (31), (32), and (33)to (34) of section	330
5733.98 of the Revised Code;	331

(iii) For tax year 2007, the greater of the minimum payment	332
required under division (E) of section 5733.06 of the Revised Code	333
or three-fifths of the difference between all taxes charged the	334
corporation under this chapter and any credits allowable against	335
such tax, except the qualifying pass-through entity tax credit	336
described in division (A)(29) and the refundable credits described	337
in divisions (A)(30), (31), (32), and (33)to (34) of section	338
5733.98 of the Revised Code;	339

(iv) For tax year 2008, the greater of the minimum payment	340
required under division (E) of section 5733.06 of the Revised Code	341
or two-fifths of the difference between all taxes charged the	342
corporation under this chapter and any credits allowable against	343
such tax, except the qualifying pass-through entity tax credit	344
described in division (A)(29) and the refundable credits described	345
in divisions (A)(30), (31), (32), and (33)to (34) of section	346
5733.98 of the Revised Code;	347

(v) For tax year 2009, the greater of the minimum payment	348
required under division (E) of section 5733.06 of the Revised Code	349
or one-fifth of the difference between all taxes charged the	350
corporation under this chapter and any credits allowable against	351
such tax, except the qualifying pass-through entity tax credit	352
described in division (A)(29) and the refundable credits described	353
in divisions (A)(30), (31), and (32), and (33) of section 5733.98	354
of the Revised Code;	355

(vi) For tax year 2010 and each tax year thereafter, no tax.

356

(b) A corporation shall subtract from the amount calculated	357
under division (G)(2)(a)(ii), (iii), (iv), or (v) of this section	358
any qualifying pass-through entity tax credit described in	359
division (A)(29) and any refundable credits described in divisions	360
(A)(30), (31), (32), and (33)to (34) of section 5733.98 of the	361
Revised Code to which the corporation is entitled. Any unused	362
qualifying pass-through entity tax credit is not refundable.	363

(c) For the purposes of computing the amount of a credit that	364
may be carried forward to a subsequent tax year under division	365
(G)(2) of this section, a credit is utilized against the tax for a	366
tax year to the extent the credit applies against the tax for that	367
tax year, even if the difference is then multiplied by the	368
applicable fraction under division (G)(2)(a) of this section.	369

(3) Nothing in division (G) of this section eliminates or	370
reduces the tax imposed by section 5733.41 of the Revised Code on	371
a qualifying pass-through entity.	372

Sec. 5733.47. (A) As used in this section, "certificate	373
owner" has the same meaning as in section 149.311 of the Revised	374
Code.	375

(B) There is allowed a refundable credit against the tax	376
imposed under section 5733.06 of the Revised Code for a taxpayer	377
that is a certificate owner of a rehabilitation tax credit	378
certificate issued under section 149.311 of the Revised Code. The	379
credit shall equal twenty-five per cent of the dollar amount	380
indicated on the certificate. The credit shall be claimed for the	381
tax year specified in the certificate and in the order required	382
under section 5733.98 of the Revised Code. For purposes of making	383
tax payments under this chapter, taxes equal to the amount of the	384
refundable credit shall be considered to be paid to the state on	385
the first day of the tax year.	386

(C) A taxpayer claiming a credit under this section shall	387
retain the rehabilitation tax credit certificate for four years	388
following the end of the tax year to which the credit was applied,	389
and shall make the certificate available for inspection by the tax	390
commissioner upon the request of the tax commissioner during that	391
period.	392

(D) If, pursuant to division (G) of section 5733.01 of the	393
Revised Code, a taxpayer no longer pays a tax under this chapter,	394
the taxpayer may nonetheless file an annual report under section	395
5733.02 of the Revised Code and claim the refundable credit	396
authorized by this section. Nothing in this division allows a	397
taxpayer to claim the credit under this section more than once.	398

Sec. 5733.98.  (A) To provide a uniform procedure for	399
calculating the amount of tax imposed by section 5733.06 of the	400
Revised Code that is due under this chapter, a taxpayer shall	401
claim any credits to which it is entitled in the following order,	402
except as otherwise provided in section 5733.058 of the Revised	403
Code:	404

(1) For tax year 2005, the credit for taxes paid by a	405
qualifying pass-through entity allowed under section 5733.0611 of	406
the Revised Code;	407

(2) The credit allowed for financial institutions under	408
section 5733.45 of the Revised Code;	409

(3) The credit for qualifying affiliated groups under section	410
5733.068 of the Revised Code;	411

(4) The subsidiary corporation credit under section 5733.067	412
of the Revised Code;	413

(5) The savings and loan assessment credit under section	414
5733.063 of the Revised Code;	415

(6) The credit for recycling and litter prevention donations	416
under section 5733.064 of the Revised Code;	417

(7) The credit for employers that enter into agreements with	418
child day-care centers under section 5733.36 of the Revised Code;	419

(8) The credit for employers that reimburse employee child	420
care expenses under section 5733.38 of the Revised Code;	421

(9) The credit for maintaining railroad active grade crossing	422
warning devices under section 5733.43 of the Revised Code;	423

(10) The credit for purchases of lights and reflectors under	424
section 5733.44 of the Revised Code;	425

(11) The job retention credit under division (B) of section	426
5733.0610 of the Revised Code;	427

(12) The credit for purchases of new manufacturing machinery	428
and equipment under section 5733.31 or section 5733.311 of the	429
Revised Code;	430

(13) The second credit for purchases of new manufacturing	431
machinery and equipment under section 5733.33 of the Revised Code;	432

(14) The job training credit under section 5733.42 of the	433
Revised Code;	434

(15) The credit for qualified research expenses under section	435
5733.351 of the Revised Code;	436

(16) The enterprise zone credit under section 5709.66 of the	437
Revised Code;	438

(17) The credit for the eligible costs associated with a	439
voluntary action under section 5733.34 of the Revised Code;	440

(18) The credit for employers that establish on-site child	441
day-care centers under section 5733.37 of the Revised Code;	442

(19) The ethanol plant investment credit under section	443
5733.46 of the Revised Code;	444

(20) The credit for purchases of qualifying grape production	445
property under section 5733.32 of the Revised Code;	446

(21) The export sales credit under section 5733.069 of the	447
Revised Code;	448

(22) The credit for research and development and technology	449
transfer investors under section 5733.35 of the Revised Code;	450

(23) The enterprise zone credits under section 5709.65 of the	451
Revised Code;	452

(24) The credit for using Ohio coal under section 5733.39 of	453
the Revised Code;	454

(25) The credit for small telephone companies under section	455
5733.57 of the Revised Code;	456

(26) The credit for eligible nonrecurring 9-1-1 charges under	457
section 5733.55 of the Revised Code;	458

(27) For tax year 2005, the credit for providing programs to	459
aid the communicatively impaired under division (A) of section	460
5733.56 of the Revised Code;	461

(28) The research and development credit under section	462
5733.352 of the Revised Code;	463

(29) For tax years 2006 and subsequent tax years, the credit	464
for taxes paid by a qualifying pass-through entity allowed under	465
section 5733.0611 of the Revised Code;	466

(30) The refundable credit for rehabilitating a historic	467
building under section 5733.47 of the Revised Code;	468

(31) The refundable jobs creation credit under division (A)	469
of section 5733.0610 of the Revised Code;	470

(31)(32) The refundable credit for tax withheld under	471
division (B)(2) of section 5747.062 of the Revised Code;	472

(32)(33) The refundable credit under section 5733.49 of the	473
Revised Code for losses on loans made to the Ohio venture capital	474
program under sections 150.01 to 150.10 of the Revised Code;	475

(33)(34) For tax years 2006, 2007, and 2008, the refundable	476
credit allowable under division (B) of section 5733.56 of the	477
Revised Code.	478

(B) For any credit except the credits enumerated in divisions	479
(A)(30), (31), (32), and (33)to (34) of this section, the amount	480
of the credit for a tax year shall not exceed the tax due after	481
allowing for any other credit that precedes it in the order	482
required under this section. Any excess amount of a particular	483
credit may be carried forward if authorized under the section	484
creating that credit.	485

Sec. 5739.011.  (A) As used in this section:

486

(1) "Manufacturer" means a person who is engaged in	487
manufacturing, processing, assembling, or refining a product for	488
sale and, solely for the purposes of division (B)(12) of this	489
section, a person who meets all the qualifications of that	490
division.	491

(2) "Manufacturing facility" means a single location where a	492
manufacturing operation is conducted, including locations	493
consisting of one or more buildings or structures in a contiguous	494
area owned or controlled by the manufacturer.	495

(3) "Materials handling" means the movement of the product	496
being or to be manufactured, during which movement the product is	497
not undergoing any substantial change or alteration in its state	498
or form.	499

(4) "Testing" means a process or procedure to identify the	500
properties or assure the quality of a material or product.	501

(5) "Completed product" means a manufactured item that is in	502
the form and condition as it will be sold by the manufacturer. An	503
item is completed when all processes that change or alter its	504
state or form or enhance its value are finished, even though the	505
item subsequently will be tested to ensure its quality or be	506
packaged for storage or shipment.	507

(6) "Continuous manufacturing operation" means the process in	508
which raw materials or components are moved through the steps	509
whereby manufacturing occurs. Materials handling of raw materials	510
or parts from the point of receipt or preproduction storage or of	511
a completed product, to or from storage, to or from packaging, or	512
to the place from which the completed product will be shipped, is	513
not a part of a continuous manufacturing operation.	514

(B) For purposes of division (B)(42)(g) of section 5739.02 of	515
the Revised Code, the "thing transferred" includes, but is not	516
limited to, any of the following:	517

(1) Production machinery and equipment that act upon the	518
product or machinery and equipment that treat the materials or	519
parts in preparation for the manufacturing operation;	520

(2) Materials handling equipment that moves the product	521
through a continuous manufacturing operation; equipment that	522
temporarily stores the product during the manufacturing operation;	523
or, excluding motor vehicles licensed to operate on public	524
highways, equipment used in intraplant or interplant transfers of	525
work in process where the plant or plants between which such	526
transfers occur are manufacturing facilities operated by the same	527
person;	528

(3) Catalysts, solvents, water, acids, oil, and similar	529
consumables that interact with the product and that are an	530
integral part of the manufacturing operation;	531

(4) Machinery, equipment, and other tangible personal	532
property used during the manufacturing operation that control,	533
physically support, produce power for, lubricate, or are otherwise	534
necessary for the functioning of production machinery and	535
equipment and the continuation of the manufacturing operation;	536

(5) Machinery, equipment, fuel, power, material, parts, and	537
other tangible personal property used to manufacture machinery,	538
equipment, or other tangible personal property used in	539
manufacturing a product for sale;	540

(6) Machinery, equipment, and other tangible personal	541
property used by a manufacturer to test raw materials, the product	542
being manufactured, or the completed product;	543

(7) Machinery and equipment used to handle or temporarily	544
store scrap that is intended to be reused in the manufacturing	545
operation at the same manufacturing facility;	546

(8) Coke, gas, water, steam, and similar substances used in	547
the manufacturing operation; machinery and equipment used for, and	548
fuel consumed in, producing or extracting those substances;	549
machinery, equipment, and other tangible personal property used to	550
treat, filter, pump, or otherwise make the substance suitable for	551
use in the manufacturing operation; and machinery and equipment	552
used for, and fuel consumed in, producing electricity for use in	553
the manufacturing operation;	554

(9) Machinery, equipment, and other tangible personal	555
property used to transport or transmit electricity, coke, gas,	556
water, steam, or similar substances used in the manufacturing	557
operation from the point of generation, if produced by the	558
manufacturer, or from the point where the substance enters the	559
manufacturing facility, if purchased by the manufacturer, to the	560
manufacturing operation;	561

(10) Machinery, equipment, and other tangible personal	562
property that treats, filters, cools, refines, or otherwise	563
renders water, steam, acid, oil, solvents, or similar substances	564
used in the manufacturing operation reusable, provided that the	565
substances are intended for reuse and not for disposal, sale, or	566
transportation from the manufacturing facility;	567

(11) Parts, components, and repair and installation services	568
for items described in division (B) of this section;	569

(12) Machinery and equipment, detergents, supplies, solvents,	570
and any other tangible personal property located at a	571
manufacturing facility that are used in the process of removing	572
soil, dirt, or other contaminants from, or otherwise preparing in	573
a suitable condition for use, towels, linens, articles of	574
clothing, floor mats, mop heads, or other similar items, to be	575
supplied to a consumer as part of laundry and dry cleaning	576
services as defined in division (BB) of section 5739.01 of the	577
Revised Code, only when the towels, linens, articles of clothing,	578
floor mats, mop heads, or other similar items belong to the	579
provider of the services;	580

(13) Equipment and supplies used to clean processing	581
equipment that is part of a continuous manufacturing operation to	582
produce milk, ice cream, yogurt, cheese, and similar dairy	583
products for human consumption.	584

(C) For purposes of division (B)(42)(g) of section 5739.02 of	585
the Revised Code, the "thing transferred" does not include any of	586
the following:	587

(1) Tangible personal property used in administrative,	588
personnel, security, inventory control, record-keeping, ordering,	589
billing, or similar functions;	590

(2) Tangible personal property used in storing raw materials	591
or parts prior to the commencement of the manufacturing operation	592
or used to handle or store a completed product, including storage	593
that actively maintains a completed product in a marketable state	594
or form;	595

(3) Tangible personal property used to handle or store scrap	596
or waste intended for disposal, sale, or other disposition, other	597
than reuse in the manufacturing operation at the same	598
manufacturing facility;	599

(4) Tangible personal property that is or is to be	600
incorporated into realty;	601

(5) Machinery, equipment, and other tangible personal	602
property used for ventilation, dust or gas collection, humidity or	603
temperature regulation, or similar environmental control, except	604
machinery, equipment, and other tangible personal property that	605
totally regulates the environment in a special and limited area of	606
the manufacturing facility where the regulation is essential for	607
production to occur;	608

(6) Tangible personal property used for the protection and	609
safety of workers, unless the property is attached to or	610
incorporated into machinery and equipment used in a continuous	611
manufacturing operation;	612

(7) Tangible personal property used to store fuel, water,	613
solvents, acid, oil, or similar items consumed in the	614
manufacturing operation;	615

(8) MachineryExcept as provided in division (B)(13) of this	616
section, machinery, equipment, and other tangible personal	617
property used to clean, repair, or maintain real or personal	618
property in the manufacturing facility;	619

(9) Motor vehicles registered for operation on public	620
highways.	621

(D) For purposes of division (B)(42)(g) of section 5739.02 of	622
the Revised Code, if the "thing transferred" is a machine used by	623
a manufacturer in both a taxable and an exempt manner, it shall be	624
totally taxable or totally exempt from taxation based upon its	625
quantified primary use. If the "things transferred" are fungibles,	626
they shall be taxed based upon the proportion of the fungibles	627
used in a taxable manner.	628

Sec. 5747.76. (A) As used in this section, "certificate	629
owner" has the same meaning as in section 149.311 of the Revised	630
Code.	631

(B) There is allowed a refundable credit against the tax	632
imposed under section 5747.02 of the Revised Code for a taxpayer	633
that is the certificate owner of a rehabilitation tax credit	634
certificate issued under section 149.311 of the Revised Code. The	635
credit shall equal twenty-five per cent of the dollar amount	636
indicated on the certificate. The credit shall be claimed for the	637
taxable year specified in the certificate and in the order	638
required under section 5747.98 of the Revised Code. For purposes	639
of making tax payments under this chapter, taxes equal to the	640
amount of the refundable credit shall be considered to be paid to	641
the state on the first day of the taxable year.	642

(C) Nothing in this section limits or disallows pass-through	643
treatment of the credit if the certificate owner is a pass-through	644
entity.	645

(D) A taxpayer claiming a credit under this section shall	646
retain the rehabilitation tax credit certificate for four years	647
following the end of the taxable year to which the credit was	648
applied, and shall make the certificate available for inspection	649
by the tax commissioner upon the request of the tax commissioner	650
during that period.	651

Sec. 5747.98.  (A) To provide a uniform procedure for	652
calculating the amount of tax due under section 5747.02 of the	653
Revised Code, a taxpayer shall claim any credits to which the	654
taxpayer is entitled in the following order:	655

(1) The retirement income credit under division (B) of	656
section 5747.055 of the Revised Code;	657

(2) The senior citizen credit under division (C) of section	658
5747.05 of the Revised Code;	659

(3) The lump sum distribution credit under division (D) of	660
section 5747.05 of the Revised Code;	661

(4) The dependent care credit under section 5747.054 of the	662
Revised Code;	663

(5) The lump sum retirement income credit under division (C)	664
of section 5747.055 of the Revised Code;	665

(6) The lump sum retirement income credit under division (D)	666
of section 5747.055 of the Revised Code;	667

(7) The lump sum retirement income credit under division (E)	668
of section 5747.055 of the Revised Code;	669

(8) The low-income credit under section 5747.056 of the	670
Revised Code;	671

(9) The credit for displaced workers who pay for job training	672
under section 5747.27 of the Revised Code;	673

(10) The campaign contribution credit under section 5747.29	674
of the Revised Code;	675

(11) The twenty-dollar personal exemption credit under	676
section 5747.022 of the Revised Code;	677

(12) The joint filing credit under division (G) of section	678
5747.05 of the Revised Code;	679

(13) The nonresident credit under division (A) of section	680
5747.05 of the Revised Code;	681

(14) The credit for a resident's out-of-state income under	682
division (B) of section 5747.05 of the Revised Code;	683

(15) The credit for employers that enter into agreements with	684
child day-care centers under section 5747.34 of the Revised Code;	685

(16) The credit for employers that reimburse employee child	686
care expenses under section 5747.36 of the Revised Code;	687

(17) The credit for adoption of a minor child under section	688
5747.37 of the Revised Code;	689

(18) The credit for purchases of lights and reflectors under	690
section 5747.38 of the Revised Code;	691

(19) The job retention credit under division (B) of section	692
5747.058 of the Revised Code;	693

(20) The credit for purchases of new manufacturing machinery	694
and equipment under section 5747.26 or section 5747.261 of the	695
Revised Code;	696

(21) The second credit for purchases of new manufacturing	697
machinery and equipment and the credit for using Ohio coal under	698
section 5747.31 of the Revised Code;	699

(22) The job training credit under section 5747.39 of the	700
Revised Code;	701

(23) The enterprise zone credit under section 5709.66 of the	702
Revised Code;	703

(24) The credit for the eligible costs associated with a	704
voluntary action under section 5747.32 of the Revised Code;	705

(25) The credit for employers that establish on-site child	706
day-care centers under section 5747.35 of the Revised Code;	707

(26) The ethanol plant investment credit under section	708
5747.75 of the Revised Code;	709

(27) The credit for purchases of qualifying grape production	710
property under section 5747.28 of the Revised Code;	711

(28) The export sales credit under section 5747.057 of the	712
Revised Code;	713

(29) The credit for research and development and technology	714
transfer investors under section 5747.33 of the Revised Code;	715

(30) The enterprise zone credits under section 5709.65 of the	716
Revised Code;	717

(31) The research and development credit under section	718
5747.331 of the Revised Code;	719

(32) The refundable credit for rehabilitating a historic	720
building under section 5747.76 of the Revised Code;	721

(33) The refundable jobs creation credit under division (A)	722
of section 5747.058 of the Revised Code;	723

(33)(34) The refundable credit for taxes paid by a qualifying	724
entity granted under section 5747.059 of the Revised Code;	725

(34)(35) The refundable credits for taxes paid by a	726
qualifying pass-through entity granted under division (J) of	727
section 5747.08 of the Revised Code;	728

(35)(36) The refundable credit for tax withheld under	729
division (B)(1) of section 5747.062 of the Revised Code;	730

(36)(37) The refundable credit under section 5747.80 of the	731
Revised Code for losses on loans made to the Ohio venture capital	732
program under sections 150.01 to 150.10 of the Revised Code.	733

(B) For any credit, except the credits enumerated in	734
divisions (A)(32) to (36)(37) of this section and the credit	735
granted under division (I) of section 5747.08 of the Revised Code,	736
the amount of the credit for a taxable year shall not exceed the	737
tax due after allowing for any other credit that precedes it in	738
the order required under this section. Any excess amount of a	739
particular credit may be carried forward if authorized under the	740
section creating that credit. Nothing in this chapter shall be	741
construed to allow a taxpayer to claim, directly or indirectly, a	742
credit more than once for a taxable year.	743

Section 2. That existing sections 5725.24, 5733.01, 5733.98,	744
5739.011, and 5747.98 of the Revised Code are hereby repealed.	745

Section 3.  The amendment by this act of section 5739.011 of	746
the Revised Code takes effect on the first day of the first month	747
following the effective date of this act.	748