As Passed by the Senate

CORRECTED VERSION

126th General Assembly Regular Session 2005-2006

Sub. H. B. No. 73

Representatives Trakas, Kilbane, Latta, Gibbs, Blessing, Collier, Schaffer, Blasdel, Hagan, Brinkman, Gilb, Ujvagi, Taylor, Chandler, Combs, Domenick, Evans, C., Evans, D., Hartnett, Koziura, Oelslager, Patton, T., Peterson, Redfern, Reidelbach, Setzer, Smith, G. 

Senators Fingerhut, Goodman, Schuler, Austria, Amstutz, Dann, Cates, Clancy, Coughlin, Grendell, Hottinger, Jacobson, Jordan, Mumper, Niehaus, Prentiss, Spada, Stivers, Harris, Armbruster, Kearney, Schuring 

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A BILL

To amend sections 5747.01, 5747.24, and 5748.01, and

1

to repeal sections 5747.25 and 5748.011 of the

2

Revised Code to increase the amount of time an

3

individual may spend in Ohio before being presumed

4

to be a resident for income tax purposes and to

5

exempt from taxation military pay and allowances.

6

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

Section 1. That sections 5747.01, 5747.24, and 5748.01 of the	7
Revised Code be amended to read as follows:	8

Sec. 5747.01.  Except as otherwise expressly provided or	9
clearly appearing from the context, any term used in this chapter	10
that is not otherwise defined in this section has the same meaning	11
as when used in a comparable context in the laws of the United	12
States relating to federal income taxes or if not used in a	13
comparable context in those laws, has the same meaning as in	14
section 5733.40 of the Revised Code. Any reference in this chapter	15
to the Internal Revenue Code includes other laws of the United	16
States relating to federal income taxes.	17

As used in this chapter:

18

(A) "Adjusted gross income" or "Ohio adjusted gross income"	19
means federal adjusted gross income, as defined and used in the	20
Internal Revenue Code, adjusted as provided in this section:	21

(1) Add interest or dividends on obligations or securities of	22
any state or of any political subdivision or authority of any	23
state, other than this state and its subdivisions and authorities.	24

(2) Add interest or dividends on obligations of any	25
authority, commission, instrumentality, territory, or possession	26
of the United States to the extent that the interest or dividends	27
are exempt from federal income taxes but not from state income	28
taxes.	29

(3) Deduct interest or dividends on obligations of the United	30
States and its territories and possessions or of any authority,	31
commission, or instrumentality of the United States to the extent	32
that the interest or dividends are included in federal adjusted	33
gross income but exempt from state income taxes under the laws of	34
the United States.	35

(4) Deduct disability and survivor's benefits to the extent	36
included in federal adjusted gross income.	37

(5) Deduct benefits under Title II of the Social Security Act	38
and tier 1 railroad retirement benefits to the extent included in	39
federal adjusted gross income under section 86 of the Internal	40
Revenue Code.	41

(6) In the case of a taxpayer who is a beneficiary of a trust	42
that makes an accumulation distribution as defined in section 665	43
of the Internal Revenue Code, add, for the beneficiary's taxable	44
years beginning before 2002, the portion, if any, of such	45
distribution that does not exceed the undistributed net income of	46
the trust for the three taxable years preceding the taxable year	47
in which the distribution is made to the extent that the portion	48
was not included in the trust's taxable income for any of the	49
trust's taxable years beginning in 2002 or thereafter.	50
"Undistributed net income of a trust" means the taxable income of	51
the trust increased by (a)(i) the additions to adjusted gross	52
income required under division (A) of this section and (ii) the	53
personal exemptions allowed to the trust pursuant to section	54
642(b) of the Internal Revenue Code, and decreased by (b)(i) the	55
deductions to adjusted gross income required under division (A) of	56
this section, (ii) the amount of federal income taxes attributable	57
to such income, and (iii) the amount of taxable income that has	58
been included in the adjusted gross income of a beneficiary by	59
reason of a prior accumulation distribution. Any undistributed net	60
income included in the adjusted gross income of a beneficiary	61
shall reduce the undistributed net income of the trust commencing	62
with the earliest years of the accumulation period.	63

(7) Deduct the amount of wages and salaries, if any, not	64
otherwise allowable as a deduction but that would have been	65
allowable as a deduction in computing federal adjusted gross	66
income for the taxable year, had the targeted jobs credit allowed	67
and determined under sections 38, 51, and 52 of the Internal	68
Revenue Code not been in effect.	69

(8) Deduct any interest or interest equivalent on public	70
obligations and purchase obligations to the extent that the	71
interest or interest equivalent is included in federal adjusted	72
gross income.	73

(9) Add any loss or deduct any gain resulting from the sale,	74
exchange, or other disposition of public obligations to the extent	75
that the loss has been deducted or the gain has been included in	76
computing federal adjusted gross income.	77

(10) Deduct or add amounts, as provided under section	78
5747.70 of the Revised Code, related to contributions to variable	79
college savings program accounts made or tuition units purchased	80
pursuant to Chapter 3334. of the Revised Code.	81

(11)(a) Deduct, to the extent not otherwise allowable as a	82
deduction or exclusion in computing federal or Ohio adjusted gross	83
income for the taxable year, the amount the taxpayer paid during	84
the taxable year for medical care insurance and qualified	85
long-term care insurance for the taxpayer, the taxpayer's spouse,	86
and dependents. No deduction for medical care insurance under	87
division (A)(11) of this section shall be allowed either to any	88
taxpayer who is eligible to participate in any subsidized health	89
plan maintained by any employer of the taxpayer or of the	90
taxpayer's spouse, or to any taxpayer who is entitled to, or on	91
application would be entitled to, benefits under part A of Title	92
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.	93
301, as amended. For the purposes of division (A)(11)(a) of this	94
section, "subsidized health plan" means a health plan for which	95
the employer pays any portion of the plan's cost. The deduction	96
allowed under division (A)(11)(a) of this section shall be the net	97
of any related premium refunds, related premium reimbursements, or	98
related insurance premium dividends received during the taxable	99
year.	100

(b) Deduct, to the extent not otherwise deducted or excluded	101
in computing federal or Ohio adjusted gross income during the	102
taxable year, the amount the taxpayer paid during the taxable	103
year, not compensated for by any insurance or otherwise, for	104
medical care of the taxpayer, the taxpayer's spouse, and	105
dependents, to the extent the expenses exceed seven and one-half	106
per cent of the taxpayer's federal adjusted gross income.	107

(c) For purposes of division (A)(11) of this section,	108
"medical care" has the meaning given in section 213 of the	109
Internal Revenue Code, subject to the special rules, limitations,	110
and exclusions set forth therein, and "qualified long-term care"	111
has the same meaning given in section 7702B(c) of the Internal	112
Revenue Code.	113

(12)(a) Deduct any amount included in federal adjusted gross	114
income solely because the amount represents a reimbursement or	115
refund of expenses that in any year the taxpayer had deducted as	116
an itemized deduction pursuant to section 63 of the Internal	117
Revenue Code and applicable United States department of the	118
treasury regulations. The deduction otherwise allowed under	119
division (A)(12)(a) of this section shall be reduced to the extent	120
the reimbursement is attributable to an amount the taxpayer	121
deducted under this section in any taxable year.	122

(b) Add any amount not otherwise included in Ohio adjusted	123
gross income for any taxable year to the extent that the amount is	124
attributable to the recovery during the taxable year of any amount	125
deducted or excluded in computing federal or Ohio adjusted gross	126
income in any taxable year.	127

(13) Deduct any portion of the deduction described in section	128
1341(a)(2) of the Internal Revenue Code, for repaying previously	129
reported income received under a claim of right, that meets both	130
of the following requirements:	131

(a) It is allowable for repayment of an item that was	132
included in the taxpayer's adjusted gross income for a prior	133
taxable year and did not qualify for a credit under division (A)	134
or (B) of section 5747.05 of the Revised Code for that year;	135

(b) It does not otherwise reduce the taxpayer's adjusted	136
gross income for the current or any other taxable year.	137

(14) Deduct an amount equal to the deposits made to, and net	138
investment earnings of, a medical savings account during the	139
taxable year, in accordance with section 3924.66 of the Revised	140
Code. The deduction allowed by division (A)(14) of this section	141
does not apply to medical savings account deposits and earnings	142
otherwise deducted or excluded for the current or any other	143
taxable year from the taxpayer's federal adjusted gross income.	144

(15)(a) Add an amount equal to the funds withdrawn from a	145
medical savings account during the taxable year, and the net	146
investment earnings on those funds, when the funds withdrawn were	147
used for any purpose other than to reimburse an account holder	148
for, or to pay, eligible medical expenses, in accordance with	149
section 3924.66 of the Revised Code;	150

(b) Add the amounts distributed from a medical savings	151
account under division (A)(2) of section 3924.68 of the Revised	152
Code during the taxable year.	153

(16) Add any amount claimed as a credit under section	154
5747.059 of the Revised Code to the extent that such amount	155
satisfies either of the following:	156

(a) The amount was deducted or excluded from the computation	157
of the taxpayer's federal adjusted gross income as required to be	158
reported for the taxpayer's taxable year under the Internal	159
Revenue Code;	160

(b) The amount resulted in a reduction of the taxpayer's	161
federal adjusted gross income as required to be reported for any	162
of the taxpayer's taxable years under the Internal Revenue Code.	163

(17) Deduct the amount contributed by the taxpayer to an	164
individual development account program established by a county	165
department of job and family services pursuant to sections 329.11	166
to 329.14 of the Revised Code for the purpose of matching funds	167
deposited by program participants. On request of the tax	168
commissioner, the taxpayer shall provide any information that, in	169
the tax commissioner's opinion, is necessary to establish the	170
amount deducted under division (A)(17) of this section.	171

(18) Beginning in taxable year 2001 but not for any taxable	172
year beginning after December 31, 2005, if the taxpayer is married	173
and files a joint return and the combined federal adjusted gross	174
income of the taxpayer and the taxpayer's spouse for the taxable	175
year does not exceed one hundred thousand dollars, or if the	176
taxpayer is single and has a federal adjusted gross income for the	177
taxable year not exceeding fifty thousand dollars, deduct amounts	178
paid during the taxable year for qualified tuition and fees paid	179
to an eligible institution for the taxpayer, the taxpayer's	180
spouse, or any dependent of the taxpayer, who is a resident of	181
this state and is enrolled in or attending a program that	182
culminates in a degree or diploma at an eligible institution. The	183
deduction may be claimed only to the extent that qualified tuition	184
and fees are not otherwise deducted or excluded for any taxable	185
year from federal or Ohio adjusted gross income. The deduction may	186
not be claimed for educational expenses for which the taxpayer	187
claims a credit under section 5747.27 of the Revised Code.	188

(19) Add any reimbursement received during the taxable year	189
of any amount the taxpayer deducted under division (A)(18) of this	190
section in any previous taxable year to the extent the amount is	191
not otherwise included in Ohio adjusted gross income.	192

(20)(a)(i) Add five-sixths of the amount of depreciation	193
expense allowed by subsection (k) of section 168 of the Internal	194
Revenue Code, including the taxpayer's proportionate or	195
distributive share of the amount of depreciation expense allowed	196
by that subsection to a pass-through entity in which the taxpayer	197
has a direct or indirect ownership interest.	198

(ii) Add five-sixths of the amount of qualifying section 179	199
depreciation expense, including a person's proportionate or	200
distributive share of the amount of qualifying section 179	201
depreciation expense allowed to any pass-through entity in which	202
the person has a direct or indirect ownership. For the purposes of	203
this division, "qualifying section 179 depreciation expense" means	204
the difference between (I) the amount of depreciation expense	205
directly or indirectly allowed to the taxpayer under section 179	206
of the Internal Revenue Code, and (II) the amount of depreciation	207
expense directly or indirectly allowed to the taxpayer under	208
section 179 of the Internal Revenue Code as that section existed	209
on December 31, 2002.	210

The tax commissioner, under procedures established by the	211
commissioner, may waive the add-backs related to a pass-through	212
entity if the taxpayer owns, directly or indirectly, less than	213
five per cent of the pass-through entity.	214

(b) Nothing in division (A)(20) of this section shall be	215
construed to adjust or modify the adjusted basis of any asset.	216

(c) To the extent the add-back required under division	217
(A)(20)(a) of this section is attributable to property generating	218
nonbusiness income or loss allocated under section 5747.20 of the	219
Revised Code, the add-back shall be sitused to the same location	220
as the nonbusiness income or loss generated by the property for	221
the purpose of determining the credit under division (A) of	222
section 5747.05 of the Revised Code. Otherwise, the add-back shall	223
be apportioned, subject to one or more of the four alternative	224
methods of apportionment enumerated in section 5747.21 of the	225
Revised Code.	226

(d) For the purposes of division (A) of this section, net	227
operating loss carryback and carryforward shall not include	228
five-sixths of the allowance of any net operating loss deduction	229
carryback or carryforward to the taxable year to the extent such	230
loss resulted from depreciation allowed by section 168(k) of the	231
Internal Revenue Code and by the qualifying section 179	232
depreciation expense amount.	233

(21)(a) If the taxpayer was required to add an amount under	234
division (A)(20)(a) of this section for a taxable year, deduct	235
one-fifth of the amount so added for each of the five succeeding	236
taxable years.	237

(b) If the amount deducted under division (A)(21)(a) of this	238
section is attributable to an add-back allocated under division	239
(A)(20)(c) of this section, the amount deducted shall be sitused	240
to the same location. Otherwise, the add-back shall be apportioned	241
using the apportionment factors for the taxable year in which the	242
deduction is taken, subject to one or more of the four alternative	243
methods of apportionment enumerated in section 5747.21 of the	244
Revised Code.	245

(c) No deduction is available under division (A)(21)(a) of	246
this section with regard to any depreciation allowed by section	247
168(k) of the Internal Revenue Code and by the qualifying section	248
179 depreciation expense amount to the extent that such	249
depreciation resulted in or increased a federal net operating loss	250
carryback or carryforward to a taxable year to which division	251
(A)(20)(d) of this section does not apply.	252

(22) Deduct, to the extent not otherwise deducted or excluded	253
in computing federal or Ohio adjusted gross income for the taxable	254
year, the amount the taxpayer received during the taxable year as	255
reimbursement for life insurance premiums under section 5919.31 of	256
the Revised Code.	257

(23) Deduct, to the extent not otherwise deducted or excluded	258
in computing federal or Ohio adjusted gross income for the taxable	259
year, the amount the taxpayer received during the taxable year as	260
a death benefit paid by the adjutant general under section 5919.33	261
of the Revised Code.	262

(24) Deduct, to the extent included in federal adjusted gross	263
income and not otherwise allowable as a deduction or exclusion in	264
computing federal or Ohio adjusted gross income for the taxable	265
year, military pay and allowances received by the taxpayer during	266
the taxable year for active duty service in the United States	267
army, air force, navy, marine corps, or coast guard or reserve	268
components thereof or the national guard. The deduction may not be	269
claimed for military pay and allowances received by the taxpayer	270
while the taxpayer is stationed in this state.	271

(B) "Business income" means income, including gain or loss,	272
arising from transactions, activities, and sources in the regular	273
course of a trade or business and includes income, gain, or loss	274
from real property, tangible property, and intangible property if	275
the acquisition, rental, management, and disposition of the	276
property constitute integral parts of the regular course of a	277
trade or business operation. "Business income" includes income,	278
including gain or loss, from a partial or complete liquidation of	279
a business, including, but not limited to, gain or loss from the	280
sale or other disposition of goodwill.	281

(C) "Nonbusiness income" means all income other than business	282
income and may include, but is not limited to, compensation, rents	283
and royalties from real or tangible personal property, capital	284
gains, interest, dividends and distributions, patent or copyright	285
royalties, or lottery winnings, prizes, and awards.	286

(D) "Compensation" means any form of remuneration paid to an	287
employee for personal services.	288

(E) "Fiduciary" means a guardian, trustee, executor,	289
administrator, receiver, conservator, or any other person acting	290
in any fiduciary capacity for any individual, trust, or estate.	291

(F) "Fiscal year" means an accounting period of twelve months	292
ending on the last day of any month other than December.	293

(G) "Individual" means any natural person.

294

(H) "Internal Revenue Code" means the "Internal Revenue Code	295
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.	296

(I) "Resident" means any of the following, provided that	297
division (I)(3) of this section applies only to taxable years of a	298
trust beginning in 2002 or thereafter:	299

(1) An individual who is domiciled in this state, subject to	300
section 5747.24 of the Revised Code;	301

(2) The estate of a decedent who at the time of death was	302
domiciled in this state. The domicile tests of section 5747.24 of	303
the Revised Code and any election under section 5747.25 of the	304
Revised Code are not controlling for purposes of division (I)(2)	305
of this section.	306

(3) A trust that, in whole or part, resides in this state. If	307
only part of a trust resides in this state, the trust is a	308
resident only with respect to that part.	309

For the purposes of division (I)(3) of this section:

310

(a) A trust resides in this state for the trust's current	311
taxable year to the extent, as described in division (I)(3)(d) of	312
this section, that the trust consists directly or indirectly, in	313
whole or in part, of assets, net of any related liabilities, that	314
were transferred, or caused to be transferred, directly or	315
indirectly, to the trust by any of the following:	316

(i) A person, a court, or a governmental entity or	317
instrumentality on account of the death of a decedent, but only if	318
the trust is described in division (I)(3)(e)(i) or (ii) of this	319
section;	320

(ii) A person who was domiciled in this state for the	321
purposes of this chapter when the person directly or indirectly	322
transferred assets to an irrevocable trust, but only if at least	323
one of the trust's qualifying beneficiaries is domiciled in this	324
state for the purposes of this chapter during all or some portion	325
of the trust's current taxable year;	326

(iii) A person who was domiciled in this state for the	327
purposes of this chapter when the trust document or instrument or	328
part of the trust document or instrument became irrevocable, but	329
only if at least one of the trust's qualifying beneficiaries is a	330
resident domiciled in this state for the purposes of this chapter	331
during all or some portion of the trust's current taxable year. If	332
a trust document or instrument became irrevocable upon the death	333
of a person who at the time of death was domiciled in this state	334
for purposes of this chapter, that person is a person described in	335
division (I)(3)(a)(iii) of this section.	336

(b) A trust is irrevocable to the extent that the transferor	337
is not considered to be the owner of the net assets of the trust	338
under sections 671 to 678 of the Internal Revenue Code.	339

(c) With respect to a trust other than a charitable lead	340
trust, "qualifying beneficiary" has the same meaning as "potential	341
current beneficiary" as defined in section 1361(e)(2) of the	342
Internal Revenue Code, and with respect to a charitable lead trust	343
"qualifying beneficiary" is any current, future, or contingent	344
beneficiary, but with respect to any trust "qualifying	345
beneficiary" excludes a person or a governmental entity or	346
instrumentality to any of which a contribution would qualify for	347
the charitable deduction under section 170 of the Internal Revenue	348
Code.	349

(d) For the purposes of division (I)(3)(a) of this section,	350
the extent to which a trust consists directly or indirectly, in	351
whole or in part, of assets, net of any related liabilities, that	352
were transferred directly or indirectly, in whole or part, to the	353
trust by any of the sources enumerated in that division shall be	354
ascertained by multiplying the fair market value of the trust's	355
assets, net of related liabilities, by the qualifying ratio, which	356
shall be computed as follows:	357

(i) The first time the trust receives assets, the numerator	358
of the qualifying ratio is the fair market value of those assets	359
at that time, net of any related liabilities, from sources	360
enumerated in division (I)(3)(a) of this section. The denominator	361
of the qualifying ratio is the fair market value of all the	362
trust's assets at that time, net of any related liabilities.	363

(ii) Each subsequent time the trust receives assets, a	364
revised qualifying ratio shall be computed. The numerator of the	365
revised qualifying ratio is the sum of (1) the fair market value	366
of the trust's assets immediately prior to the subsequent	367
transfer, net of any related liabilities, multiplied by the	368
qualifying ratio last computed without regard to the subsequent	369
transfer, and (2) the fair market value of the subsequently	370
transferred assets at the time transferred, net of any related	371
liabilities, from sources enumerated in division (I)(3)(a) of this	372
section. The denominator of the revised qualifying ratio is the	373
fair market value of all the trust's assets immediately after the	374
subsequent transfer, net of any related liabilities.	375

(iii) Whether a transfer to the trust is by or from any of	376
the sources enumerated in division (I)(3)(a) of this section shall	377
be ascertained without regard to the domicile of the trust's	378
beneficiaries.	379

(e) For the purposes of division (I)(3)(a)(i) of this	380
section:	381

(i) A trust is described in division (I)(3)(e)(i) of this	382
section if the trust is a testamentary trust and the testator of	383
that testamentary trust was domiciled in this state at the time of	384
the testator's death for purposes of the taxes levied under	385
Chapter 5731. of the Revised Code.	386

(ii) A trust is described in division (I)(3)(e)(ii) of this	387
section if the transfer is a qualifying transfer described in any	388
of divisions (I)(3)(f)(i) to (vi) of this section, the trust is an	389
irrevocable inter vivos trust, and at least one of the trust's	390
qualifying beneficiaries is domiciled in this state for purposes	391
of this chapter during all or some portion of the trust's current	392
taxable year.	393

(f) For the purposes of division (I)(3)(e)(ii) of this	394
section, a "qualifying transfer" is a transfer of assets, net of	395
any related liabilities, directly or indirectly to a trust, if the	396
transfer is described in any of the following:	397

(i) The transfer is made to a trust, created by the decedent	398
before the decedent's death and while the decedent was domiciled	399
in this state for the purposes of this chapter, and, prior to the	400
death of the decedent, the trust became irrevocable while the	401
decedent was domiciled in this state for the purposes of this	402
chapter.	403

(ii) The transfer is made to a trust to which the decedent,	404
prior to the decedent's death, had directly or indirectly	405
transferred assets, net of any related liabilities, while the	406
decedent was domiciled in this state for the purposes of this	407
chapter, and prior to the death of the decedent the trust became	408
irrevocable while the decedent was domiciled in this state for the	409
purposes of this chapter.	410

(iii) The transfer is made on account of a contractual	411
relationship existing directly or indirectly between the	412
transferor and either the decedent or the estate of the decedent	413
at any time prior to the date of the decedent's death, and the	414
decedent was domiciled in this state at the time of death for	415
purposes of the taxes levied under Chapter 5731. of the Revised	416
Code.	417

(iv) The transfer is made to a trust on account of a	418
contractual relationship existing directly or indirectly between	419
the transferor and another person who at the time of the	420
decedent's death was domiciled in this state for purposes of this	421
chapter.	422

(v) The transfer is made to a trust on account of the will of	423
a testator.	424

(vi) The transfer is made to a trust created by or caused to	425
be created by a court, and the trust was directly or indirectly	426
created in connection with or as a result of the death of an	427
individual who, for purposes of the taxes levied under Chapter	428
5731. of the Revised Code, was domiciled in this state at the time	429
of the individual's death.	430

(g) The tax commissioner may adopt rules to ascertain the	431
part of a trust residing in this state.	432

(J) "Nonresident" means an individual or estate that is not a	433
resident. An individual who is a resident for only part of a	434
taxable year is a nonresident for the remainder of that taxable	435
year.	436

(K) "Pass-through entity" has the same meaning as in section	437
5733.04 of the Revised Code.	438

(L) "Return" means the notifications and reports required to	439
be filed pursuant to this chapter for the purpose of reporting the	440
tax due and includes declarations of estimated tax when so	441
required.	442

(M) "Taxable year" means the calendar year or the taxpayer's	443
fiscal year ending during the calendar year, or fractional part	444
thereof, upon which the adjusted gross income is calculated	445
pursuant to this chapter.	446

(N) "Taxpayer" means any person subject to the tax imposed by	447
section 5747.02 of the Revised Code or any pass-through entity	448
that makes the election under division (D) of section 5747.08 of	449
the Revised Code.	450

(O) "Dependents" means dependents as defined in the Internal	451
Revenue Code and as claimed in the taxpayer's federal income tax	452
return for the taxable year or which the taxpayer would have been	453
permitted to claim had the taxpayer filed a federal income tax	454
return.	455

(P) "Principal county of employment" means, in the case of a	456
nonresident, the county within the state in which a taxpayer	457
performs services for an employer or, if those services are	458
performed in more than one county, the county in which the major	459
portion of the services are performed.	460

(Q) As used in sections 5747.50 to 5747.55 of the Revised	461
Code:	462

(1) "Subdivision" means any county, municipal corporation,	463
park district, or township.	464

(2) "Essential local government purposes" includes all	465
functions that any subdivision is required by general law to	466
exercise, including like functions that are exercised under a	467
charter adopted pursuant to the Ohio Constitution.	468

(R) "Overpayment" means any amount already paid that exceeds	469
the figure determined to be the correct amount of the tax.	470

(S) "Taxable income" or "Ohio taxable income" applies only to	471
estates and trusts, and means federal taxable income, as defined	472
and used in the Internal Revenue Code, adjusted as follows:	473

(1) Add interest or dividends, net of ordinary, necessary,	474
and reasonable expenses not deducted in computing federal taxable	475
income, on obligations or securities of any state or of any	476
political subdivision or authority of any state, other than this	477
state and its subdivisions and authorities, but only to the extent	478
that such net amount is not otherwise includible in Ohio taxable	479
income and is described in either division (S)(1)(a) or (b) of	480
this section:	481

(a) The net amount is not attributable to the S portion of an	482
electing small business trust and has not been distributed to	483
beneficiaries for the taxable year;	484

(b) The net amount is attributable to the S portion of an	485
electing small business trust for the taxable year.	486

(2) Add interest or dividends, net of ordinary, necessary,	487
and reasonable expenses not deducted in computing federal taxable	488
income, on obligations of any authority, commission,	489
instrumentality, territory, or possession of the United States to	490
the extent that the interest or dividends are exempt from federal	491
income taxes but not from state income taxes, but only to the	492
extent that such net amount is not otherwise includible in Ohio	493
taxable income and is described in either division (S)(1)(a) or	494
(b) of this section;	495

(3) Add the amount of personal exemption allowed to the	496
estate pursuant to section 642(b) of the Internal Revenue Code;	497

(4) Deduct interest or dividends, net of related expenses	498
deducted in computing federal taxable income, on obligations of	499
the United States and its territories and possessions or of any	500
authority, commission, or instrumentality of the United States to	501
the extent that the interest or dividends are exempt from state	502
taxes under the laws of the United States, but only to the extent	503
that such amount is included in federal taxable income and is	504
described in either division (S)(1)(a) or (b) of this section;	505

(5) Deduct the amount of wages and salaries, if any, not	506
otherwise allowable as a deduction but that would have been	507
allowable as a deduction in computing federal taxable income for	508
the taxable year, had the targeted jobs credit allowed under	509
sections 38, 51, and 52 of the Internal Revenue Code not been in	510
effect, but only to the extent such amount relates either to	511
income included in federal taxable income for the taxable year or	512
to income of the S portion of an electing small business trust for	513
the taxable year;	514

(6) Deduct any interest or interest equivalent, net of	515
related expenses deducted in computing federal taxable income, on	516
public obligations and purchase obligations, but only to the	517
extent that such net amount relates either to income included in	518
federal taxable income for the taxable year or to income of the S	519
portion of an electing small business trust for the taxable year;	520

(7) Add any loss or deduct any gain resulting from sale,	521
exchange, or other disposition of public obligations to the extent	522
that such loss has been deducted or such gain has been included in	523
computing either federal taxable income or income of the S portion	524
of an electing small business trust for the taxable year;	525

(8) Except in the case of the final return of an estate, add	526
any amount deducted by the taxpayer on both its Ohio estate tax	527
return pursuant to section 5731.14 of the Revised Code, and on its	528
federal income tax return in determining federal taxable income;	529

(9)(a) Deduct any amount included in federal taxable income	530
solely because the amount represents a reimbursement or refund of	531
expenses that in a previous year the decedent had deducted as an	532
itemized deduction pursuant to section 63 of the Internal Revenue	533
Code and applicable treasury regulations. The deduction otherwise	534
allowed under division (S)(9)(a) of this section shall be reduced	535
to the extent the reimbursement is attributable to an amount the	536
taxpayer or decedent deducted under this section in any taxable	537
year.	538

(b) Add any amount not otherwise included in Ohio taxable	539
income for any taxable year to the extent that the amount is	540
attributable to the recovery during the taxable year of any amount	541
deducted or excluded in computing federal or Ohio taxable income	542
in any taxable year, but only to the extent such amount has not	543
been distributed to beneficiaries for the taxable year.	544

(10) Deduct any portion of the deduction described in section	545
1341(a)(2) of the Internal Revenue Code, for repaying previously	546
reported income received under a claim of right, that meets both	547
of the following requirements:	548

(a) It is allowable for repayment of an item that was	549
included in the taxpayer's taxable income or the decedent's	550
adjusted gross income for a prior taxable year and did not qualify	551
for a credit under division (A) or (B) of section 5747.05 of the	552
Revised Code for that year.	553

(b) It does not otherwise reduce the taxpayer's taxable	554
income or the decedent's adjusted gross income for the current or	555
any other taxable year.	556

(11) Add any amount claimed as a credit under section	557
5747.059 of the Revised Code to the extent that the amount	558
satisfies either of the following:	559

(a) The amount was deducted or excluded from the computation	560
of the taxpayer's federal taxable income as required to be	561
reported for the taxpayer's taxable year under the Internal	562
Revenue Code;	563

(b) The amount resulted in a reduction in the taxpayer's	564
federal taxable income as required to be reported for any of the	565
taxpayer's taxable years under the Internal Revenue Code.	566

(12) Deduct any amount, net of related expenses deducted in	567
computing federal taxable income, that a trust is required to	568
report as farm income on its federal income tax return, but only	569
if the assets of the trust include at least ten acres of land	570
satisfying the definition of "land devoted exclusively to	571
agricultural use" under section 5713.30 of the Revised Code,	572
regardless of whether the land is valued for tax purposes as such	573
land under sections 5713.30 to 5713.38 of the Revised Code. If the	574
trust is a pass-through entity investor, section 5747.231 of the	575
Revised Code applies in ascertaining if the trust is eligible to	576
claim the deduction provided by division (S)(12) of this section	577
in connection with the pass-through entity's farm income.	578

Except for farm income attributable to the S portion of an	579
electing small business trust, the deduction provided by division	580
(S)(12) of this section is allowed only to the extent that the	581
trust has not distributed such farm income. Division (S)(12) of	582
this section applies only to taxable years of a trust beginning in	583
2002 or thereafter.	584

(13) Add the net amount of income described in section 641(c)	585
of the Internal Revenue Code to the extent that amount is not	586
included in federal taxable income.	587

(14) Add or deduct the amount the taxpayer would be required	588
to add or deduct under division (A)(20) or (21) of this section if	589
the taxpayer's Ohio taxable income were computed in the same	590
manner as an individual's Ohio adjusted gross income is computed	591
under this section. In the case of a trust, division (S)(14) of	592
this section applies only to any of the trust's taxable years	593
beginning in 2002 or thereafter.	594

(T) "School district income" and "school district income tax"	595
have the same meanings as in section 5748.01 of the Revised Code.	596

(U) As used in divisions (A)(8), (A)(9), (S)(6), and (S)(7)	597
of this section, "public obligations," "purchase obligations," and	598
"interest or interest equivalent" have the same meanings as in	599
section 5709.76 of the Revised Code.	600

(V) "Limited liability company" means any limited liability	601
company formed under Chapter 1705. of the Revised Code or under	602
the laws of any other state.	603

(W) "Pass-through entity investor" means any person who,	604
during any portion of a taxable year of a pass-through entity, is	605
a partner, member, shareholder, or equity investor in that	606
pass-through entity.	607

(X) "Banking day" has the same meaning as in section 1304.01	608
of the Revised Code.	609

(Y) "Month" means a calendar month.

610

(Z) "Quarter" means the first three months, the second three	611
months, the third three months, or the last three months of the	612
taxpayer's taxable year.	613

(AA)(1) "Eligible institution" means a state university or	614
state institution of higher education as defined in section	615
3345.011 of the Revised Code, or a private, nonprofit college,	616
university, or other post-secondary institution located in this	617
state that possesses a certificate of authorization issued by the	618
Ohio board of regents pursuant to Chapter 1713. of the Revised	619
Code or a certificate of registration issued by the state board of	620
career colleges and schools under Chapter 3332. of the Revised	621
Code.	622

(2) "Qualified tuition and fees" means tuition and fees	623
imposed by an eligible institution as a condition of enrollment or	624
attendance, not exceeding two thousand five hundred dollars in	625
each of the individual's first two years of post-secondary	626
education. If the individual is a part-time student, "qualified	627
tuition and fees" includes tuition and fees paid for the academic	628
equivalent of the first two years of post-secondary education	629
during a maximum of five taxable years, not exceeding a total of	630
five thousand dollars. "Qualified tuition and fees" does not	631
include:	632

(a) Expenses for any course or activity involving sports,	633
games, or hobbies unless the course or activity is part of the	634
individual's degree or diploma program;	635

(b) The cost of books, room and board, student activity fees,	636
athletic fees, insurance expenses, or other expenses unrelated to	637
the individual's academic course of instruction;	638

(c) Tuition, fees, or other expenses paid or reimbursed	639
through an employer, scholarship, grant in aid, or other	640
educational benefit program.	641

(BB)(1) "Modified business income" means the business income	642
included in a trust's Ohio taxable income after such taxable	643
income is first reduced by the qualifying trust amount, if any.	644

(2) "Qualifying trust amount" of a trust means capital gains	645
and losses from the sale, exchange, or other disposition of equity	646
or ownership interests in, or debt obligations of, a qualifying	647
investee to the extent included in the trust's Ohio taxable	648
income, but only if the following requirements are satisfied:	649

(a) The book value of the qualifying investee's physical	650
assets in this state and everywhere, as of the last day of the	651
qualifying investee's fiscal or calendar year ending immediately	652
prior to the date on which the trust recognizes the gain or loss,	653
is available to the trust.	654

(b) The requirements of section 5747.011 of the Revised Code	655
are satisfied for the trust's taxable year in which the trust	656
recognizes the gain or loss.	657

Any gain or loss that is not a qualifying trust amount is	658
modified business income, qualifying investment income, or	659
modified nonbusiness income, as the case may be.	660

(3) "Modified nonbusiness income" means a trust's Ohio	661
taxable income other than modified business income, other than the	662
qualifying trust amount, and other than qualifying investment	663
income, as defined in section 5747.012 of the Revised Code, to the	664
extent such qualifying investment income is not otherwise part of	665
modified business income.	666

(4) "Modified Ohio taxable income" applies only to trusts,	667
and means the sum of the amounts described in divisions (BB)(4)(a)	668
to (c) of this section:	669

(a) The fraction, calculated under section 5747.013, and	670
applying section 5747.231 of the Revised Code, multiplied by the	671
sum of the following amounts:	672

(i) The trust's modified business income;

673

(ii) The trust's qualifying investment income, as defined in	674
section 5747.012 of the Revised Code, but only to the extent the	675
qualifying investment income does not otherwise constitute	676
modified business income and does not otherwise constitute a	677
qualifying trust amount.	678

(b) The qualifying trust amount multiplied by a fraction, the	679
numerator of which is the sum of the book value of the qualifying	680
investee's physical assets in this state on the last day of the	681
qualifying investee's fiscal or calendar year ending immediately	682
prior to the day on which the trust recognizes the qualifying	683
trust amount, and the denominator of which is the sum of the book	684
value of the qualifying investee's total physical assets	685
everywhere on the last day of the qualifying investee's fiscal or	686
calendar year ending immediately prior to the day on which the	687
trust recognizes the qualifying trust amount. If, for a taxable	688
year, the trust recognizes a qualifying trust amount with respect	689
to more than one qualifying investee, the amount described in	690
division (BB)(4)(b) of this section shall equal the sum of the	691
products so computed for each such qualifying investee.	692

(c)(i) With respect to a trust or portion of a trust that is	693
a resident as ascertained in accordance with division (I)(3)(d) of	694
this section, its modified nonbusiness income.	695

(ii) With respect to a trust or portion of a trust that is	696
not a resident as ascertained in accordance with division	697
(I)(3)(d) of this section, the amount of its modified nonbusiness	698
income satisfying the descriptions in divisions (B)(2) to (5) of	699
section 5747.20 of the Revised Code, except as otherwise provided	700
in division (BB)(4)(c)(ii) of this section. With respect to a	701
trust or portion of a trust that is not a resident as ascertained	702
in accordance with division (I)(3)(d) of this section, the trust's	703
portion of modified nonbusiness income recognized from the sale,	704
exchange, or other disposition of a debt interest in or equity	705
interest in a section 5747.212 entity, as defined in section	706
5747.212 of the Revised Code, without regard to division (A) of	707
that section, shall not be allocated to this state in accordance	708
with section 5747.20 of the Revised Code but shall be apportioned	709
to this state in accordance with division (B) of section 5747.212	710
of the Revised Code without regard to division (A) of that	711
section.	712

If the allocation and apportionment of a trust's income under	713
divisions (BB)(4)(a) and (c) of this section do not fairly	714
represent the modified Ohio taxable income of the trust in this	715
state, the alternative methods described in division (C) of	716
section 5747.21 of the Revised Code may be applied in the manner	717
and to the same extent provided in that section.	718

(5)(a) Except as set forth in division (BB)(5)(b) of this	719
section, "qualifying investee" means a person in which a trust has	720
an equity or ownership interest, or a person or unit of government	721
the debt obligations of either of which are owned by a trust. For	722
the purposes of division (BB)(2)(a) of this section and for the	723
purpose of computing the fraction described in division (BB)(4)(b)	724
of this section, all of the following apply:	725

(i) If the qualifying investee is a member of a qualifying	726
controlled group on the last day of the qualifying investee's	727
fiscal or calendar year ending immediately prior to the date on	728
which the trust recognizes the gain or loss, then "qualifying	729
investee" includes all persons in the qualifying controlled group	730
on such last day.	731

(ii) If the qualifying investee, or if the qualifying	732
investee and any members of the qualifying controlled group of	733
which the qualifying investee is a member on the last day of the	734
qualifying investee's fiscal or calendar year ending immediately	735
prior to the date on which the trust recognizes the gain or loss,	736
separately or cumulatively own, directly or indirectly, on the	737
last day of the qualifying investee's fiscal or calendar year	738
ending immediately prior to the date on which the trust recognizes	739
the qualifying trust amount, more than fifty per cent of the	740
equity of a pass-through entity, then the qualifying investee and	741
the other members are deemed to own the proportionate share of the	742
pass-through entity's physical assets which the pass-through	743
entity directly or indirectly owns on the last day of the	744
pass-through entity's calendar or fiscal year ending within or	745
with the last day of the qualifying investee's fiscal or calendar	746
year ending immediately prior to the date on which the trust	747
recognizes the qualifying trust amount.	748

(iii) For the purposes of division (BB)(5)(a)(iii) of this	749
section, "upper level pass-through entity" means a pass-through	750
entity directly or indirectly owning any equity of another	751
pass-through entity, and "lower level pass-through entity" means	752
that other pass-through entity.	753

An upper level pass-through entity, whether or not it is also	754
a qualifying investee, is deemed to own, on the last day of the	755
upper level pass-through entity's calendar or fiscal year, the	756
proportionate share of the lower level pass-through entity's	757
physical assets that the lower level pass-through entity directly	758
or indirectly owns on the last day of the lower level pass-through	759
entity's calendar or fiscal year ending within or with the last	760
day of the upper level pass-through entity's fiscal or calendar	761
year. If the upper level pass-through entity directly and	762
indirectly owns less than fifty per cent of the equity of the	763
lower level pass-through entity on each day of the upper level	764
pass-through entity's calendar or fiscal year in which or with	765
which ends the calendar or fiscal year of the lower level	766
pass-through entity and if, based upon clear and convincing	767
evidence, complete information about the location and cost of the	768
physical assets of the lower pass-through entity is not available	769
to the upper level pass-through entity, then solely for purposes	770
of ascertaining if a gain or loss constitutes a qualifying trust	771
amount, the upper level pass-through entity shall be deemed as	772
owning no equity of the lower level pass-through entity for each	773
day during the upper level pass-through entity's calendar or	774
fiscal year in which or with which ends the lower level	775
pass-through entity's calendar or fiscal year. Nothing in division	776
(BB)(5)(a)(iii) of this section shall be construed to provide for	777
any deduction or exclusion in computing any trust's Ohio taxable	778
income.	779

(b) With respect to a trust that is not a resident for the	780
taxable year and with respect to a part of a trust that is not a	781
resident for the taxable year, "qualifying investee" for that	782
taxable year does not include a C corporation if both of the	783
following apply:	784

(i) During the taxable year the trust or part of the trust	785
recognizes a gain or loss from the sale, exchange, or other	786
disposition of equity or ownership interests in, or debt	787
obligations of, the C corporation.	788

(ii) Such gain or loss constitutes nonbusiness income.

789

(6) "Available" means information is such that a person is	790
able to learn of the information by the due date plus extensions,	791
if any, for filing the return for the taxable year in which the	792
trust recognizes the gain or loss.	793

(CC) "Qualifying controlled group" has the same meaning as in	794
section 5733.04 of the Revised Code.	795

(DD) "Related member" has the same meaning as in section	796
5733.042 of the Revised Code.	797

(EE)(1) For the purposes of division (EE) of this section:

798

(a) "Qualifying person" means any person other than a	799
qualifying corporation.	800

(b) "Qualifying corporation" means any person classified for	801
federal income tax purposes as an association taxable as a	802
corporation, except either of the following:	803

(i) A corporation that has made an election under subchapter	804
S, chapter one, subtitle A, of the Internal Revenue Code for its	805
taxable year ending within, or on the last day of, the investor's	806
taxable year;	807

(ii) A subsidiary that is wholly owned by any corporation	808
that has made an election under subchapter S, chapter one,	809
subtitle A of the Internal Revenue Code for its taxable year	810
ending within, or on the last day of, the investor's taxable year.	811

(2) For the purposes of this chapter, unless expressly stated	812
otherwise, no qualifying person indirectly owns any asset directly	813
or indirectly owned by any qualifying corporation.	814

(FF) For purposes of this chapter and Chapter 5751. of the	815
Revised Code:	816

(1) "Trust" does not include a qualified pre-income tax	817
trust.	818

(2) A "qualified pre-income tax trust" is any pre-income tax	819
trust that makes a qualifying pre-income tax trust election as	820
described in division (FF)(3) of this section.	821

(3) A "qualifying pre-income tax trust election" is an	822
election by a pre-income tax trust to subject to the tax imposed	823
by section 5751.02 of the Revised Code the pre-income tax trust	824
and all pass-through entities of which the trust owns or controls,	825
directly, indirectly, or constructively through related interests,	826
five per cent or more of the ownership or equity interests. The	827
trustee shall notify the tax commissioner in writing of the	828
election on or before April 15, 2006. The election, if timely	829
made, shall be effective on and after January 1, 2006, and shall	830
apply for all tax periods and tax years until revoked by the	831
trustee of the trust.	832

(4) A "pre-income tax trust" is a trust that satisfies all of	833
the following requirements:	834

(a) The document or instrument creating the trust was	835
executed by the grantor before January 1, 1972;	836

(b) The trust became irrevocable upon the creation of the	837
trust; and	838

(c) The grantor was domiciled in this state at the time the	839
trust was created.	840

Sec. 5747.24.  This section is to be usedapplied solely for	841
the purposes of Chapters 5747. and 5748. of the Revised Code.	842

(A)(1) As used in this section and section 5747.25 of the	843
Revised Code:	844

(a) Except as otherwise provided in division (A)(2) of this	845
section, an(1) An individual "has one contact period in this	846
state" if the individual is away overnight from the individual's	847
abode located outside this state and while away overnight from	848
that abode spends at least some portion, however minimal, of each	849
of two consecutive days in this state.	850

(b)(2) An individual is considered to be "away overnight from	851
the individual's abode located outside this state" if the	852
individual is away from the individual's abode located outside	853
this state for a continuous period of time, however minimal,	854
beginning at any time on one day and ending at any time on the	855
next day.	856

(c) "Medical hardship" includes circumstances under which the	857
individual or a member of the individual's immediate or extended	858
family is admitted as a patient into a hospital located in this	859
state, examined in this state by a medical professional, admitted	860
into a nursing home in this state, receiving nursing care in this	861
state while staying in a dwelling located in this state, or	862
otherwise receiving ongoing, necessary medical care in this state.	863
"Medical hardship" includes receiving treatment or care for acute	864
or chronic illness or obstetric treatment or care.	865

(d) "Medical professional" means a person licensed under	866
Chapter 4715., 4723., 4725., 4729., 4730., 4731., 4732., 4734.,	867
4753., 4755., 4757., 4759., 4760., 4761., 4762., or 4773. of the	868
Revised Code.	869

(e) "Immediate or extended family" of an individual means the	870
individual's spouse, children, grandchildren, parents,	871
grandparents, siblings, in-laws, or any of the individual's	872
dependents.	873

(2) Up to thirty periods that would otherwise constitute	874
contact periods under division (A)(1)(a) of this section shall not	875
be considered contact periods during a taxable year if the	876
individual spends any portion of either day of each such contact	877
period for one or more of the following purposes:	878

(a) To provide services for no consideration or to raise	879
funds for an organization described in section 501(c)(3) of the	880
Internal Revenue Code. "Consideration" does not include any	881
reimbursement of the individual's actual expenses directly or	882
indirectly related to such activity.	883

(b) To attend to a medical hardship involving the individual	884
or a member of the individual's immediate or extended family or to	885
attend a funeral involving a member of the individual's immediate	886
or extended family.	887

(B) An(1) Except as provided in division (B)(2) of this	888
section, an individual who during a taxable year has no more than	889
one hundred twentyeighty-two contact periods in this state, which	890
need not be consecutive, and who during the entire taxable year	891
has at least one abode outside this state, is presumed to be not	892
domiciled in this state during the taxable year. Theif, on or	893
before the fifteenth day of the fourth month following the close	894
of the taxable year, the individual files with the tax	895
commissioner, in writing and by personal service or certified	896
mail, return receipt requested, may requeston the form prescribed	897
by the commissioner, a statement from anthe individual verifying	898
that the individual was not domiciled in this state under this	899
division during the taxable year. The commissioner shall not make	900
such a request after the expiration of the period, if any, within	901
which the commissioner may make an assessment under section	902
5747.13 of the Revised Code against the individual for the taxable	903
year. Within sixty days after receiving the commissioner's request	904
In the statement, the individual shall submit a written statement	905
to the commissioner statingverify both of the following:	906

(1)(a) During the entire taxable year, the individual was not	907
domiciled in this state;	908

(2)(b) During the entire taxable year, the individual had at	909
least one abode outside this state. The individual shall specify	910
in the statement the location of each such abode outside this	911
state.	912

The presumption that the individual was not domiciled in this	913
state is irrebuttable unless the individual fails to submittimely	914
file the statement as required or makes a false statement. If the	915
individual fails to submitfile the statement as required or makes	916
a false statement, the individual is presumed under division (C)	917
of this section to have been domiciled in this state the entire	918
taxable year.	919

In the case of an individual who dies before the statement	920
would otherwise be due, the personal representative of the estate	921
of the deceased individual may comply with this division by making	922
to the best of the representative's knowledge and belief the	923
statement under this division (B)(1) of this section with respect	924
to the deceased individual, and submittingfiling the statement to	925
with the commissioner within the later of the date the statement	926
would otherwise be due or sixty days after receiving the	927
commissioner's request for itthe date of the individual's death.	928

An individual or personal representative of an estate who	929
knowingly makes a false statement under this division (B)(1) of	930
this section is guilty of perjury under section 2921.11 of the	931
Revised Code.	932

(2) Division (B) of this section does not apply to an	933
individual changing domicile from or to this state during the	934
taxable year. Such an individual is domiciled in this state for	935
that portion of the taxable year before or after the change, as	936
applicable.	937

(C) An individual who during a taxable year has lessfewer	938
than one hundred eighty-three contact periods in this state, which	939
need not be consecutive, and who is not irrebuttably presumed	940
under division (B) of this section to be not domiciled in this	941
state with respect to that taxable year, is presumed to be	942
domiciled in this state for the entire taxable year, except as	943
provided in division (B)(2) of this section. An individual can	944
rebut this presumption for any portion of the taxable year only	945
with a preponderance of the evidence to the contrary. An	946
individual who rebuts the presumption under this division for any	947
portion of the taxable year is presumed to be domiciled in this	948
state for the remainder of the taxable year for which the	949
individual does not provide a preponderance of the evidence to the	950
contrary.	951

(D) An individual who during a taxable year has at least one	952
hundred eighty-three contact periods in this state, which need not	953
be consecutive, is presumed to be domiciled in this state for the	954
entire taxable year, except as provided in division (B)(2) of this	955
section. An individual can rebut this presumption for any portion	956
of the taxable year only with clear and convincing evidence to the	957
contrary. An individual who rebuts the presumption under this	958
division for any portion of the taxable year is presumed to be	959
domiciled in this state for the remainder of the taxable year for	960
which the individual does not provide clear and convincing	961
evidence to the contrary.	962

(E) If the tax commissioner challenges the number of contact	963
periods an individual claims to have in this state during a	964
taxable year, the individual bears the burden of proof to verify	965
such number, by a preponderance of the evidence. An individual	966
challenged by the commissioner is presumed to have a contact	967
period in this state for any period for which hethe individual	968
does not prove by a preponderance of the evidence that the	969
individual had no such contact period.	970

Sec. 5748.01.  As used in this chapter:

971

(A) "School district income tax" means an income tax adopted	972
under one of the following:	973

(1) Former section 5748.03 of the Revised Code as it existed	974
prior to its repeal by Amended Substitute House Bill No. 291 of	975
the 115th general assembly;	976

(2) Section 5748.03 of the Revised Code as enacted in	977
Substitute Senate Bill No. 28 of the 118th general assembly;	978

(3) Section 5748.08 of the Revised Code as enacted in Amended	979
Substitute Senate Bill No. 17 of the 122nd general assembly.	980

(B) "Individual" means an individual subject to the tax	981
levied by section 5747.02 of the Revised Code.	982

(C) "Estate" means an estate subject to the tax levied by	983
section 5747.02 of the Revised Code.	984

(D) "Taxable year" means a taxable year as defined in	985
division (M) of section 5747.01 of the Revised Code.	986

(E) "Taxable income" means:

987

(1) In the case of an individual, one of the following, as	988
specified in the resolution imposing the tax:	989

(a) Ohio adjusted gross income for the taxable year as	990
defined in division (A) of section 5747.01 of the Revised Code,	991
less the exemptions provided by section 5747.02 of the Revised	992
Code, and less military pay and allowances the deduction of which	993
has been authorized pursuant to section 5748.011 of the Revised	994
Code;	995

(b) Wages, salaries, tips, and other employee compensation to	996
the extent included in Ohio adjusted gross income as defined in	997
section 5747.01 of the Revised Code, less military pay and	998
allowances the deduction of which has been authorized pursuant to	999
section 5748.011 of the Revised Code, and net earnings from	1000
self-employment, as defined in section 1402(a) of the Internal	1001
Revenue Code, to the extent included in Ohio adjusted gross	1002
income.	1003

(2) In the case of an estate, taxable income for the taxable	1004
year as defined in division (S) of section 5747.01 of the Revised	1005
Code.	1006

(F) Except as provided in section 5747.25 of the Revised	1007
Code, "resident""Resident" of the school district means:	1008

(1) An individual who is a resident of this state as defined	1009
in division (I) of section 5747.01 of the Revised Code during all	1010
or a portion of the taxable year and who, during all or a portion	1011
of such period of state residency, is domiciled in the school	1012
district or lives in and maintains a permanent place of abode in	1013
the school district;	1014

(2) An estate of a decedent who, at the time of death, was	1015
domiciled in the school district.	1016

(G) "School district income" means:

1017

(1) With respect to an individual, the portion of the taxable	1018
income of an individual that is received by the individual during	1019
the portion of the taxable year that the individual is a resident	1020
of the school district and the school district income tax is in	1021
effect in that school district. An individual may have school	1022
district income with respect to more than one school district.	1023

(2) With respect to an estate, the taxable income of the	1024
estate for the portion of the taxable year that the school	1025
district income tax is in effect in that school district.	1026

(H) "Taxpayer" means an individual or estate having school	1027
district income upon which a school district income tax is	1028
imposed.	1029

(I) "School district purposes" means any of the purposes for	1030
which a tax may be levied pursuant to section 5705.21 of the	1031
Revised Code.	1032

Section 2. That existing sections 5747.01, 5747.24, and	1033
5748.01, and sections 5747.25 and 5748.011 of the Revised Code are	1034
hereby repealed.	1035

Section 3. Sections 1 and 2 of this act apply to taxable	1036
years beginning on or after January 1, 2007.	1037