As Introduced

127th General Assembly
Regular Session
2007-2008
H. B. No. 372


Representative McGregor, R. 


A BILL
To amend sections 2101.16, 5747.01, 5903.10, and 1
5903.12 and to enact section 2101.164 of the 2
Revised Code to exempt estates of armed forces 3
members who died while serving in a combat zone 4
from probate fees, to exempt military retirement 5
pay from the income tax, to provide that 6
reservists and National Guard members may renew 7
their professional licenses within six months 8
after active duty service, and to extend 9
continuing education reporting periods for 10
National Guard members ordered to duty by the 11
Governor.12


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

       Section 1. That sections 2101.16, 5747.01, 5903.10, and 13
5903.12 be amended and that section 2101.164 of the Revised Code 14
be enacted to read as follows:15

       Sec. 2101.16.  (A) TheExcept as provided in section 2101.164 16
of the Revised Code, the fees enumerated in this division shall be 17
charged and collected, if possible, by the probate judge and shall 18
be in full for all services rendered in the respective19
proceedings:20

 (1) Account, in addition to advertising charges .......... $12.00 21
Waivers and proof of notice of hearing on account, per 22
page, minimum one dollar ............................. $ 1.00 23
 (2) Account of distribution, in addition to 24
advertising charges .................................. $ 7.00 25
 (3) Adoption of child, petition for ...................... $50.00 26
 (4) Alter or cancel contract for sale or purchase of 27
real estate, petition to ............................. $20.00 28
 (5) Application and order not otherwise provided 29
for in this section or by rule adopted pursuant to 30
division (E) of this section ......................... $ 5.00 31
 (6) Appropriation suit, per day, hearing in .............. $20.00 32
 (7) Birth, application for registration of ............... $ 7.00 33
 (8) Birth record, application to correct ................. $ 5.00 34
 (9) Bond, application for new or additional .............. $ 5.00 35
(10) Bond, application for release of surety or 36
reduction of ......................................... $ 5.00 37
(11) Bond, receipt for securities deposited in lieu of .... $ 5.00 38
(12) Certified copy of journal entry, record, or proceeding, 39
per page, minimum fee one dollar ..................... $ 1.00 40
(13) Citation and issuing citation, application for ....... $ 5.00 41
(14) Change of name, petition for ......................... $20.00 42
(15) Claim, application of administrator or executor for 43
allowance of administrator's or executor's own ....... $10.00 44
(16) Claim, application to compromise or settle ........... $10.00 45
(17) Claim, authority to present .......................... $10.00 46
(18) Commissioner, appointment of ......................... $ 5.00 47
(19) Compensation for extraordinary services and attorney's 48
fees for fiduciary, application for .................. $ 5.00 49
(20) Competency, application to procure adjudication of ... $20.00 50
(21) Complete contract, application to .................... $10.00 51
(22) Concealment of assets, citation for .................. $10.00 52
(23) Construction of will, petition for ................... $20.00 53
(24) Continue decedent's business, application to ......... $10.00 54
Monthly reports of operation ......................... $ 5.00 55
(25) Declaratory judgment, petition for ................... $20.00 56
(26) Deposit of will ...................................... $ 5.00 57
(27) Designation of heir .................................. $20.00 58
(28) Distribution in kind, application, assent, and 59
order for ............................................ $ 5.00 60
(29) Distribution under section 2109.36 of the Revised 61
Code, application for an order of .................... $ 7.00 62
(30) Docketing and indexing proceedings, including the 63
filing and noting of all necessary documents, maximum 64
fee, fifteen dollars ................................. $15.00 65
(31) Exceptions to any proceeding named in this section, 66
contest of appointment or ............................ $10.00 67
(32) Election of surviving partner to purchase assets of 68
partnership, proceedings relating to ................. $10.00 69
(33) Election of surviving spouse under will .............. $ 5.00 70
(34) Fiduciary, including an assignee or trustee of an 71
insolvent debtor or any guardian or conservator 72
accountable to the probate court, appointment of ..... $35.00 73
(35) Foreign will, application to record .................. $10.00 74
Record of foreign will, additional, per page ......... $ 1.00 75
(36) Forms when supplied by the probate court, not to 76
exceed ............................................... $10.00 77
(37) Heirship, petition to determine ...................... $20.00 78
(38) Injunction proceedings ............................... $20.00 79
(39) Improve real estate, petition to ..................... $20.00 80
(40) Inventory with appraisement .......................... $10.00 81
(41) Inventory without appraisement ....................... $ 7.00 82
(42) Investment or expenditure of funds, application for .. $10.00 83
(43) Invest in real estate, application to ................ $10.00 84
(44) Lease for oil, gas, coal, or other mineral, petition 85
to ................................................... $20.00 86
(45) Lease or lease and improve real estate, petition to .. $20.00 87
(46) Marriage license ..................................... $10.00 88
Certified abstract of each marriage .................. $ 2.00 89
(47) Minor or mentally ill person, etc., disposal of estate 90
under ten thousand dollars of ........................ $10.00 91
(48) Mortgage or mortgage and repair or improve real 92
estate, petition to .................................. $20.00 93
(49) Newly discovered assets, report of ................... $ 7.00 94
(50) Nonresident executor or administrator to bar 95
creditors' claims, proceedings by .................... $20.00 96
(51) Power of attorney or revocation of power, 97
bonding company ...................................... $10.00 98
(52) Presumption of death, petition to establish .......... $20.00 99
(53) Probating will ....................................... $15.00 100
Proof of notice to beneficiaries ..................... $ 5.00 101
(54) Purchase personal property, application of surviving 102
spouse to ............................................ $10.00 103
(55) Purchase real estate at appraised value, petition of 104
surviving spouse to .................................. $20.00 105
(56) Receipts in addition to advertising charges, 106
application and order to record ...................... $ 5.00 107
Record of those receipts, additional, per page ....... $ 1.00 108
(57) Record in excess of fifteen hundred words in any 109
proceeding in the probate court, per page ............ $ 1.00 110
(58) Release of estate by mortgagee or other lienholder ... $ 5.00 111
(59) Relieving an estate from administration under section 112
2113.03 of the Revised Code or granting an order for a 113
summary release from administration under section 114
2113.031 of the Revised Code ......................... $60.00 115
(60) Removal of fiduciary, application for ................ $10.00 116
(61) Requalification of executor or administrator ......... $10.00 117
(62) Resignation of fiduciary ............................. $ 5.00 118
(63) Sale bill, public sale of personal property .......... $10.00 119
(64) Sale of personal property and report, application 120
for .................................................. $10.00 121
(65) Sale of real estate, petition for .................... $25.00 122
(66) Terminate guardianship, petition to .................. $10.00 123
(67) Transfer of real estate, application, entry, and 124
certificate for ...................................... $ 7.00 125
(68) Unclaimed money, application to invest ............... $ 7.00 126
(69) Vacate approval of account or order of distribution, 127
motion to ............................................ $10.00 128
(70) Writ of execution .................................... $ 5.00 129
(71) Writ of possession ................................... $ 5.00 130
(72) Wrongful death, application and settlement of claim 131
for .................................................. $20.00 132
(73) Year's allowance, petition to review ................. $ 7.00 133
(74) Guardian's report, filing and review of .............. $ 5.00 134

       (B)(1) In relation to an application for the appointment of a135
guardian or the review of a report of a guardian under section136
2111.49 of the Revised Code, the probate court, pursuant to court137
order or in accordance with a court rule, may direct that the138
applicant or the estate pay any or all of the expenses of an139
investigation conducted pursuant to section 2111.041 or division140
(A)(2) of section 2111.49 of the Revised Code. If the141
investigation is conducted by a public employee or investigator142
who is paid by the county, the fees for the investigation shall be 143
paid into the county treasury. If the court finds that an alleged 144
incompetent or a ward is indigent, the court may waive the costs, 145
fees, and expenses of an investigation.146

       (2) In relation to the appointment or functioning of a 147
guardian for a minor or the guardianship of a minor, the probate 148
court may direct that the applicant or the estate pay any or all 149
of the expenses of an investigation conducted pursuant to section 150
2111.042 of the Revised Code. If the investigation is conducted by 151
a public employee or investigator who is paid by the county, the152
fees for the investigation shall be paid into the county treasury. 153
If the court finds that the guardian or applicant is indigent, the 154
court may waive the costs, fees, and expenses of an investigation.155

       (C) Thirty dollars of the thirty-five-dollar fee collected156
pursuant to division (A)(34) of this section and twenty dollars of 157
the sixty-dollar fee collected pursuant to division (A)(59) of 158
this section shall be deposited by the county treasurer in the 159
indigent guardianship fund created pursuant to section 2111.51 of 160
the Revised Code.161

       (D) The fees of witnesses, jurors, sheriffs, coroners, and162
constables for services rendered in the probate court or by order163
of the probate judge shall be the same as provided for like164
services in the court of common pleas.165

       (E) The probate court, by rule, may require an advance166
deposit for costs, not to exceed one hundred twenty-five dollars,167
at the time application is made for an appointment as executor or168
administrator or at the time a will is presented for probate.169

       (F) The probate court, by rule, shall establish a reasonable 170
fee, not to exceed fifty dollars, for the filing of a petition for 171
the release of information regarding an adopted person's name by 172
birth and the identity of the adopted person's biological parents 173
and biological siblings pursuant to section 3107.41 of the Revised 174
Code, all proceedings relative to the petition, the entry of an 175
order relative to the petition, and all services required to be 176
performed in connection with the petition. The probate court may 177
use a reasonable portion of a fee charged under authority of this 178
division to reimburse any agency, as defined in section 3107.39 of 179
the Revised Code, for any services it renders in performing a task 180
described in section 3107.41 of the Revised Code relative to or in 181
connection with the petition for which the fee was charged.182

       (G)(1) Thirty dollars of the fifty-dollar fee collected 183
pursuant to division (A)(3) of this section shall be deposited 184
into the "putative father registry fund," which is hereby created 185
in the state treasury. The department of job and family services 186
shall use the money in the fund to fund the department's costs of187
performing its duties related to the putative father registry 188
established under section 3107.062 of the Revised Code.189

       (2) If the department determines that money in the putative 190
father registry fund is more than is needed for its duties related 191
to the putative father registry, the department may use the 192
surplus moneys in the fund as permitted in division (C) of section 193
2151.3529, division (B) of section 2151.3530, or section 5103.155 194
of the Revised Code.195

       Sec. 2101.164. (A) As used in this section, "combat zone" 196
means an area that the president of the United States by executive 197
order designates for purposes of 26 U.S.C. 112 as an area in which 198
armed forces of the United States or the national guard are 199
engaging or have engaged in combat.200

       (B) A probate judge shall not charge, or collect from, the 201
estate of a decedent who died while in active service as a member 202
of the armed forces of the United States or the national guard any 203
of the following fees if the death occurred while the decedent 204
was serving in a combat zone or as a result of wounds, disease, 205
or injury incurred while serving in a combat zone:206

       (1) Any fee for or associated with the filing of the 207
decedent's will for probate;208

       (2) Any fee for any service rendered by the probate court 209
that is associated with the administration of the decedent's 210
estate;211

       (3) Any fee for relieving the decedent's estate from 212
administration under section 2113.03 of the Revised Code or 213
granting an order for a summary release from administration under 214
section 2113.031 of the Revised Code.215

       (C) In determining whether a decedent died in a place or 216
manner that exempts the estate of the decedent from fees under 217
division (B) of this section, a probate judge may consider a 218
casualty report issued pursuant to Army Regulation 600-8-1 or the 219
regulations of any of the armed services of the United States or 220
the national guard, the list of combat zones set forth in 221
Publication 3, "The Armed Forces' Tax Guide," of the Internal 222
Revenue Service, or any other form of documentation satisfactory 223
to the probate judge.224

       Sec. 5747.01.  Except as otherwise expressly provided or225
clearly appearing from the context, any term used in this chapter 226
that is not otherwise defined in this section has the same meaning 227
as when used in a comparable context in the laws of the United228
States relating to federal income taxes or if not used in a 229
comparable context in those laws, has the same meaning as in 230
section 5733.40 of the Revised Code. Any reference in this chapter 231
to the Internal Revenue Code includes other laws of the United 232
States relating to federal income taxes.233

       As used in this chapter:234

       (A) "Adjusted gross income" or "Ohio adjusted gross income"235
means federal adjusted gross income, as defined and used in the236
Internal Revenue Code, adjusted as provided in this section:237

       (1) Add interest or dividends on obligations or securities of 238
any state or of any political subdivision or authority of any239
state, other than this state and its subdivisions and authorities.240

       (2) Add interest or dividends on obligations of any241
authority, commission, instrumentality, territory, or possession242
of the United States to the extent that the interest or dividends243
are exempt from federal income taxes but not from state income244
taxes.245

       (3) Deduct interest or dividends on obligations of the United 246
States and its territories and possessions or of any authority, 247
commission, or instrumentality of the United States to the extent248
that the interest or dividends are included in federal adjusted 249
gross income but exempt from state income taxes under the laws of 250
the United States.251

       (4) Deduct disability and survivor's benefits to the extent252
included in federal adjusted gross income.253

       (5) Deduct benefits under Title II of the Social Security Act 254
and tier 1 railroad retirement benefits to the extent included in 255
federal adjusted gross income under section 86 of the Internal256
Revenue Code.257

       (6) In the case of a taxpayer who is a beneficiary of a trust 258
that makes an accumulation distribution as defined in section 665 259
of the Internal Revenue Code, add, for the beneficiary's taxable 260
years beginning before 2002, the portion, if any, of such 261
distribution that does not exceed the undistributed net income of 262
the trust for the three taxable years preceding the taxable year 263
in which the distribution is made to the extent that the portion 264
was not included in the trust's taxable income for any of the 265
trust's taxable years beginning in 2002 or thereafter.266
"Undistributed net income of a trust" means the taxable income of267
the trust increased by (a)(i) the additions to adjusted gross268
income required under division (A) of this section and (ii) the269
personal exemptions allowed to the trust pursuant to section270
642(b) of the Internal Revenue Code, and decreased by (b)(i) the271
deductions to adjusted gross income required under division (A) of272
this section, (ii) the amount of federal income taxes attributable273
to such income, and (iii) the amount of taxable income that has274
been included in the adjusted gross income of a beneficiary by275
reason of a prior accumulation distribution. Any undistributed net276
income included in the adjusted gross income of a beneficiary277
shall reduce the undistributed net income of the trust commencing278
with the earliest years of the accumulation period.279

       (7) Deduct the amount of wages and salaries, if any, not280
otherwise allowable as a deduction but that would have been281
allowable as a deduction in computing federal adjusted gross282
income for the taxable year, had the targeted jobs credit allowed283
and determined under sections 38, 51, and 52 of the Internal284
Revenue Code not been in effect.285

       (8) Deduct any interest or interest equivalent on public286
obligations and purchase obligations to the extent that the287
interest or interest equivalent is included in federal adjusted288
gross income.289

       (9) Add any loss or deduct any gain resulting from the sale,290
exchange, or other disposition of public obligations to the extent291
that the loss has been deducted or the gain has been included in292
computing federal adjusted gross income.293

       (10) Deduct or add amounts, as provided under section294
5747.70 of the Revised Code, related to contributions to variable295
college savings program accounts made or tuition units purchased296
pursuant to Chapter 3334. of the Revised Code.297

       (11)(a) Deduct, to the extent not otherwise allowable as a298
deduction or exclusion in computing federal or Ohio adjusted gross299
income for the taxable year, the amount the taxpayer paid during300
the taxable year for medical care insurance and qualified301
long-term care insurance for the taxpayer, the taxpayer's spouse,302
and dependents. No deduction for medical care insurance under303
division (A)(11) of this section shall be allowed either to any304
taxpayer who is eligible to participate in any subsidized health305
plan maintained by any employer of the taxpayer or of the306
taxpayer's spouse, or to any taxpayer who is entitled to, or on307
application would be entitled to, benefits under part A of Title308
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.309
301, as amended. For the purposes of division (A)(11)(a) of this310
section, "subsidized health plan" means a health plan for which311
the employer pays any portion of the plan's cost. The deduction312
allowed under division (A)(11)(a) of this section shall be the net313
of any related premium refunds, related premium reimbursements, or314
related insurance premium dividends received during the taxable315
year.316

       (b) Deduct, to the extent not otherwise deducted or excluded317
in computing federal or Ohio adjusted gross income during the318
taxable year, the amount the taxpayer paid during the taxable319
year, not compensated for by any insurance or otherwise, for320
medical care of the taxpayer, the taxpayer's spouse, and321
dependents, to the extent the expenses exceed seven and one-half322
per cent of the taxpayer's federal adjusted gross income.323

       (c) For purposes of division (A)(11) of this section,324
"medical care" has the meaning given in section 213 of the325
Internal Revenue Code, subject to the special rules, limitations,326
and exclusions set forth therein, and "qualified long-term care"327
has the same meaning given in section 7702B(c) of the Internal328
Revenue Code.329

       (12)(a) Deduct any amount included in federal adjusted gross330
income solely because the amount represents a reimbursement or331
refund of expenses that in any year the taxpayer had deducted as332
an itemized deduction pursuant to section 63 of the Internal333
Revenue Code and applicable United States department of the334
treasury regulations. The deduction otherwise allowed under335
division (A)(12)(a) of this section shall be reduced to the extent336
the reimbursement is attributable to an amount the taxpayer337
deducted under this section in any taxable year.338

       (b) Add any amount not otherwise included in Ohio adjusted339
gross income for any taxable year to the extent that the amount is340
attributable to the recovery during the taxable year of any amount341
deducted or excluded in computing federal or Ohio adjusted gross342
income in any taxable year.343

       (13) Deduct any portion of the deduction described in section 344
1341(a)(2) of the Internal Revenue Code, for repaying previously 345
reported income received under a claim of right, that meets both 346
of the following requirements:347

       (a) It is allowable for repayment of an item that was348
included in the taxpayer's adjusted gross income for a prior349
taxable year and did not qualify for a credit under division (A)350
or (B) of section 5747.05 of the Revised Code for that year;351

       (b) It does not otherwise reduce the taxpayer's adjusted352
gross income for the current or any other taxable year.353

       (14) Deduct an amount equal to the deposits made to, and net354
investment earnings of, a medical savings account during the355
taxable year, in accordance with section 3924.66 of the Revised356
Code. The deduction allowed by division (A)(14) of this section357
does not apply to medical savings account deposits and earnings358
otherwise deducted or excluded for the current or any other359
taxable year from the taxpayer's federal adjusted gross income.360

       (15)(a) Add an amount equal to the funds withdrawn from a361
medical savings account during the taxable year, and the net362
investment earnings on those funds, when the funds withdrawn were363
used for any purpose other than to reimburse an account holder364
for, or to pay, eligible medical expenses, in accordance with365
section 3924.66 of the Revised Code;366

       (b) Add the amounts distributed from a medical savings367
account under division (A)(2) of section 3924.68 of the Revised368
Code during the taxable year.369

       (16) Add any amount claimed as a credit under section370
5747.059 of the Revised Code to the extent that such amount371
satisfies either of the following:372

       (a) The amount was deducted or excluded from the computation373
of the taxpayer's federal adjusted gross income as required to be374
reported for the taxpayer's taxable year under the Internal375
Revenue Code;376

       (b) The amount resulted in a reduction of the taxpayer's377
federal adjusted gross income as required to be reported for any378
of the taxpayer's taxable years under the Internal Revenue Code.379

       (17) Deduct the amount contributed by the taxpayer to an380
individual development account program established by a county381
department of job and family services pursuant to sections 329.11382
to 329.14 of the Revised Code for the purpose of matching funds383
deposited by program participants. On request of the tax384
commissioner, the taxpayer shall provide any information that, in385
the tax commissioner's opinion, is necessary to establish the386
amount deducted under division (A)(17) of this section.387

       (18) Beginning in taxable year 2001 but not for any taxable 388
year beginning after December 31, 2005, if the taxpayer is married389
and files a joint return and the combined federal adjusted gross 390
income of the taxpayer and the taxpayer's spouse for the taxable 391
year does not exceed one hundred thousand dollars, or if the 392
taxpayer is single and has a federal adjusted gross income for the393
taxable year not exceeding fifty thousand dollars, deduct amounts 394
paid during the taxable year for qualified tuition and fees paid 395
to an eligible institution for the taxpayer, the taxpayer's 396
spouse, or any dependent of the taxpayer, who is a resident of 397
this state and is enrolled in or attending a program that398
culminates in a degree or diploma at an eligible institution. The 399
deduction may be claimed only to the extent that qualified tuition 400
and fees are not otherwise deducted or excluded for any taxable 401
year from federal or Ohio adjusted gross income. The deduction may 402
not be claimed for educational expenses for which the taxpayer 403
claims a credit under section 5747.27 of the Revised Code.404

       (19) Add any reimbursement received during the taxable year405
of any amount the taxpayer deducted under division (A)(18) of this406
section in any previous taxable year to the extent the amount is407
not otherwise included in Ohio adjusted gross income.408

       (20)(a)(i) Add five-sixths of the amount of depreciation409
expense allowed by subsection (k) of section 168 of the Internal410
Revenue Code, including the taxpayer's proportionate or411
distributive share of the amount of depreciation expense allowed412
by that subsection to a pass-through entity in which the taxpayer413
has a direct or indirect ownership interest.414

       (ii) Add five-sixths of the amount of qualifying section 179 415
depreciation expense, including a person's proportionate or 416
distributive share of the amount of qualifying section 179 417
depreciation expense allowed to any pass-through entity in which 418
the person has a direct or indirect ownership. For the purposes of 419
this division, "qualifying section 179 depreciation expense" means 420
the difference between (I) the amount of depreciation expense 421
directly or indirectly allowed to the taxpayer under section 179 422
of the Internal Revenue Code, and (II) the amount of depreciation 423
expense directly or indirectly allowed to the taxpayer under 424
section 179 of the Internal Revenue Code as that section existed 425
on December 31, 2002.426

       The tax commissioner, under procedures established by the 427
commissioner, may waive the add-backs related to a pass-through 428
entity if the taxpayer owns, directly or indirectly, less than 429
five per cent of the pass-through entity.430

       (b) Nothing in division (A)(20) of this section shall be431
construed to adjust or modify the adjusted basis of any asset.432

       (c) To the extent the add-back required under division433
(A)(20)(a) of this section is attributable to property generating434
nonbusiness income or loss allocated under section 5747.20 of the435
Revised Code, the add-back shall be sitused to the same location436
as the nonbusiness income or loss generated by the property for437
the purpose of determining the credit under division (A) of438
section 5747.05 of the Revised Code. Otherwise, the add-back shall 439
be apportioned, subject to one or more of the four alternative 440
methods of apportionment enumerated in section 5747.21 of the 441
Revised Code.442

       (d) For the purposes of division (A) of this section, net 443
operating loss carryback and carryforward shall not include 444
five-sixths of the allowance of any net operating loss deduction 445
carryback or carryforward to the taxable year to the extent such 446
loss resulted from depreciation allowed by section 168(k) of the 447
Internal Revenue Code and by the qualifying section 179 448
depreciation expense amount.449

       (21)(a) If the taxpayer was required to add an amount under450
division (A)(20)(a) of this section for a taxable year, deduct451
one-fifth of the amount so added for each of the five succeeding452
taxable years.453

       (b) If the amount deducted under division (A)(21)(a) of this454
section is attributable to an add-back allocated under division455
(A)(20)(c) of this section, the amount deducted shall be sitused456
to the same location. Otherwise, the add-back shall be apportioned 457
using the apportionment factors for the taxable year in which the 458
deduction is taken, subject to one or more of the four alternative 459
methods of apportionment enumerated in section 5747.21 of the 460
Revised Code.461

       (c) No deduction is available under division (A)(21)(a) of 462
this section with regard to any depreciation allowed by section 463
168(k) of the Internal Revenue Code and by the qualifying section 464
179 depreciation expense amount to the extent that such 465
depreciation resulted in or increased a federal net operating loss 466
carryback or carryforward to a taxable year to which division 467
(A)(20)(d) of this section does not apply.468

       (22) Deduct, to the extent not otherwise deducted or excluded 469
in computing federal or Ohio adjusted gross income for the taxable 470
year, the amount the taxpayer received during the taxable year as 471
reimbursement for life insurance premiums under section 5919.31 of 472
the Revised Code.473

        (23) Deduct, to the extent not otherwise deducted or excluded 474
in computing federal or Ohio adjusted gross income for the taxable 475
year, the amount the taxpayer received during the taxable year as 476
a death benefit paid by the adjutant general under section 5919.33 477
of the Revised Code.478

       (24) Deduct, to the extent included in federal adjusted gross 479
income and not otherwise allowable as a deduction or exclusion in 480
computing federal or Ohio adjusted gross income for the taxable 481
year, military pay and allowances received by the taxpayer during 482
the taxable year for active duty service in the United States 483
army, air force, navy, marine corps, or coast guard or reserve 484
components thereof or the national guard. The deduction may not be 485
claimed for military pay and allowances received by the taxpayer 486
while the taxpayer is stationed in this state.487

       (25) Deduct, to the extent not otherwise allowable as a 488
deduction or exclusion in computing federal or Ohio adjusted gross 489
income for the taxable year and not otherwise compensated for by 490
any other source, the amount of qualified organ donation expenses 491
incurred by the taxpayer during the taxable year, not to exceed 492
ten thousand dollars. A taxpayer may deduct qualified organ 493
donation expenses only once for all taxable years beginning with 494
taxable years beginning in 2007.495

       For the purposes of division (A)(25) of this section:496

        (a) "Human organ" means all or any portion of a human liver, 497
pancreas, kidney, intestine, or lung, and any portion of human 498
bone marrow.499

        (b) "Qualified organ donation expenses" means travel 500
expenses, lodging expenses, and wages and salary forgone by a 501
taxpayer in connection with the taxpayer's donation, while living, 502
of one or more of the taxpayer's human organs to another human 503
being.504

       (26) Deduct, to the extent not otherwise deducted or excluded 505
in computing federal or Ohio adjusted gross income for the taxable 506
year, amounts received by the taxpayer as retired military 507
personnel pay for service in the United States army, navy, air 508
force, coast guard, or marine corps or reserve components thereof 509
or the national guard. Any amount deducted under division (A)(26) 510
of this section is not included in the taxpayer's adjusted gross 511
income for the purposes of section 5747.055 of the Revised Code. 512
No amount may be deducted under division (A)(26) of this section 513
on the basis of which a credit was claimed under section 5747.055 514
of the Revised Code.515

       (B) "Business income" means income, including gain or loss,516
arising from transactions, activities, and sources in the regular517
course of a trade or business and includes income, gain, or loss518
from real property, tangible property, and intangible property if519
the acquisition, rental, management, and disposition of the520
property constitute integral parts of the regular course of a521
trade or business operation. "Business income" includes income,522
including gain or loss, from a partial or complete liquidation of523
a business, including, but not limited to, gain or loss from the524
sale or other disposition of goodwill.525

       (C) "Nonbusiness income" means all income other than business 526
income and may include, but is not limited to, compensation, rents 527
and royalties from real or tangible personal property, capital 528
gains, interest, dividends and distributions, patent or copyright 529
royalties, or lottery winnings, prizes, and awards.530

       (D) "Compensation" means any form of remuneration paid to an531
employee for personal services.532

       (E) "Fiduciary" means a guardian, trustee, executor,533
administrator, receiver, conservator, or any other person acting534
in any fiduciary capacity for any individual, trust, or estate.535

       (F) "Fiscal year" means an accounting period of twelve months 536
ending on the last day of any month other than December.537

       (G) "Individual" means any natural person.538

       (H) "Internal Revenue Code" means the "Internal Revenue Code539
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.540

       (I) "Resident" means any of the following, provided that541
division (I)(3) of this section applies only to taxable years of a542
trust beginning in 2002 or thereafter:543

       (1) An individual who is domiciled in this state, subject to544
section 5747.24 of the Revised Code;545

       (2) The estate of a decedent who at the time of death was546
domiciled in this state. The domicile tests of section 5747.24 of547
the Revised Code are not controlling for purposes of division 548
(I)(2) of this section.549

       (3) A trust that, in whole or part, resides in this state. If550
only part of a trust resides in this state, the trust is a551
resident only with respect to that part.552

       For the purposes of division (I)(3) of this section:553

       (a) A trust resides in this state for the trust's current554
taxable year to the extent, as described in division (I)(3)(d) of555
this section, that the trust consists directly or indirectly, in 556
whole or in part, of assets, net of any related liabilities, that 557
were transferred, or caused to be transferred, directly or 558
indirectly, to the trust by any of the following:559

        (i) A person, a court, or a governmental entity or 560
instrumentality on account of the death of a decedent, but only if 561
the trust is described in division (I)(3)(e)(i) or (ii) of this 562
section;563

       (ii) A person who was domiciled in this state for the 564
purposes of this chapter when the person directly or indirectly 565
transferred assets to an irrevocable trust, but only if at least 566
one of the trust's qualifying beneficiaries is domiciled in this 567
state for the purposes of this chapter during all or some portion 568
of the trust's current taxable year;569

       (iii) A person who was domiciled in this state for the570
purposes of this chapter when the trust document or instrument or571
part of the trust document or instrument became irrevocable, but572
only if at least one of the trust's qualifying beneficiaries is a 573
resident domiciled in this state for the purposes of this chapter574
during all or some portion of the trust's current taxable year. If 575
a trust document or instrument became irrevocable upon the death 576
of a person who at the time of death was domiciled in this state 577
for purposes of this chapter, that person is a person described in 578
division (I)(3)(a)(iii) of this section.579

        (b) A trust is irrevocable to the extent that the transferor 580
is not considered to be the owner of the net assets of the trust 581
under sections 671 to 678 of the Internal Revenue Code.582

       (c) With respect to a trust other than a charitable lead583
trust, "qualifying beneficiary" has the same meaning as "potential584
current beneficiary" as defined in section 1361(e)(2) of the585
Internal Revenue Code, and with respect to a charitable lead trust586
"qualifying beneficiary" is any current, future, or contingent587
beneficiary, but with respect to any trust "qualifying588
beneficiary" excludes a person or a governmental entity or589
instrumentality to any of which a contribution would qualify for590
the charitable deduction under section 170 of the Internal Revenue591
Code.592

        (d) For the purposes of division (I)(3)(a) of this section,593
the extent to which a trust consists directly or indirectly, in594
whole or in part, of assets, net of any related liabilities, that595
were transferred directly or indirectly, in whole or part, to the596
trust by any of the sources enumerated in that division shall be597
ascertained by multiplying the fair market value of the trust's598
assets, net of related liabilities, by the qualifying ratio, which599
shall be computed as follows:600

        (i) The first time the trust receives assets, the numerator601
of the qualifying ratio is the fair market value of those assets602
at that time, net of any related liabilities, from sources603
enumerated in division (I)(3)(a) of this section. The denominator604
of the qualifying ratio is the fair market value of all the605
trust's assets at that time, net of any related liabilities.606

        (ii) Each subsequent time the trust receives assets, a607
revised qualifying ratio shall be computed. The numerator of the608
revised qualifying ratio is the sum of (1) the fair market value609
of the trust's assets immediately prior to the subsequent610
transfer, net of any related liabilities, multiplied by the611
qualifying ratio last computed without regard to the subsequent612
transfer, and (2) the fair market value of the subsequently613
transferred assets at the time transferred, net of any related614
liabilities, from sources enumerated in division (I)(3)(a) of this615
section. The denominator of the revised qualifying ratio is the616
fair market value of all the trust's assets immediately after the617
subsequent transfer, net of any related liabilities.618

       (iii) Whether a transfer to the trust is by or from any of 619
the sources enumerated in division (I)(3)(a) of this section shall 620
be ascertained without regard to the domicile of the trust's 621
beneficiaries.622

        (e) For the purposes of division (I)(3)(a)(i) of this623
section:624

        (i) A trust is described in division (I)(3)(e)(i) of this625
section if the trust is a testamentary trust and the testator of626
that testamentary trust was domiciled in this state at the time of627
the testator's death for purposes of the taxes levied under628
Chapter 5731. of the Revised Code.629

        (ii) A trust is described in division (I)(3)(e)(ii) of this630
section if the transfer is a qualifying transfer described in any631
of divisions (I)(3)(f)(i) to (vi) of this section, the trust is an632
irrevocable inter vivos trust, and at least one of the trust's633
qualifying beneficiaries is domiciled in this state for purposes634
of this chapter during all or some portion of the trust's current635
taxable year.636

        (f) For the purposes of division (I)(3)(e)(ii) of this637
section, a "qualifying transfer" is a transfer of assets, net of638
any related liabilities, directly or indirectly to a trust, if the639
transfer is described in any of the following:640

        (i) The transfer is made to a trust, created by the decedent 641
before the decedent's death and while the decedent was domiciled 642
in this state for the purposes of this chapter, and, prior to the 643
death of the decedent, the trust became irrevocable while the 644
decedent was domiciled in this state for the purposes of this 645
chapter.646

        (ii) The transfer is made to a trust to which the decedent,647
prior to the decedent's death, had directly or indirectly648
transferred assets, net of any related liabilities, while the649
decedent was domiciled in this state for the purposes of this650
chapter, and prior to the death of the decedent the trust became651
irrevocable while the decedent was domiciled in this state for the652
purposes of this chapter.653

        (iii) The transfer is made on account of a contractual654
relationship existing directly or indirectly between the655
transferor and either the decedent or the estate of the decedent656
at any time prior to the date of the decedent's death, and the657
decedent was domiciled in this state at the time of death for658
purposes of the taxes levied under Chapter 5731. of the Revised659
Code.660

        (iv) The transfer is made to a trust on account of a661
contractual relationship existing directly or indirectly between662
the transferor and another person who at the time of the663
decedent's death was domiciled in this state for purposes of this664
chapter.665

        (v) The transfer is made to a trust on account of the will of 666
a testator.667

        (vi) The transfer is made to a trust created by or caused to 668
be created by a court, and the trust was directly or indirectly669
created in connection with or as a result of the death of an670
individual who, for purposes of the taxes levied under Chapter671
5731. of the Revised Code, was domiciled in this state at the time672
of the individual's death.673

       (g) The tax commissioner may adopt rules to ascertain the674
part of a trust residing in this state.675

       (J) "Nonresident" means an individual or estate that is not a 676
resident. An individual who is a resident for only part of a677
taxable year is a nonresident for the remainder of that taxable678
year.679

       (K) "Pass-through entity" has the same meaning as in section680
5733.04 of the Revised Code.681

       (L) "Return" means the notifications and reports required to682
be filed pursuant to this chapter for the purpose of reporting the683
tax due and includes declarations of estimated tax when so684
required.685

       (M) "Taxable year" means the calendar year or the taxpayer's686
fiscal year ending during the calendar year, or fractional part687
thereof, upon which the adjusted gross income is calculated688
pursuant to this chapter.689

       (N) "Taxpayer" means any person subject to the tax imposed by 690
section 5747.02 of the Revised Code or any pass-through entity691
that makes the election under division (D) of section 5747.08 of692
the Revised Code.693

       (O) "Dependents" means dependents as defined in the Internal694
Revenue Code and as claimed in the taxpayer's federal income tax695
return for the taxable year or which the taxpayer would have been696
permitted to claim had the taxpayer filed a federal income tax697
return.698

       (P) "Principal county of employment" means, in the case of a699
nonresident, the county within the state in which a taxpayer700
performs services for an employer or, if those services are701
performed in more than one county, the county in which the major702
portion of the services are performed.703

       (Q) As used in sections 5747.50 to 5747.55 of the Revised704
Code:705

       (1) "Subdivision" means any county, municipal corporation,706
park district, or township.707

       (2) "Essential local government purposes" includes all708
functions that any subdivision is required by general law to709
exercise, including like functions that are exercised under a710
charter adopted pursuant to the Ohio Constitution.711

       (R) "Overpayment" means any amount already paid that exceeds712
the figure determined to be the correct amount of the tax.713

       (S) "Taxable income" or "Ohio taxable income" applies only to 714
estates and trusts, and means federal taxable income, as defined 715
and used in the Internal Revenue Code, adjusted as follows:716

       (1) Add interest or dividends, net of ordinary, necessary,717
and reasonable expenses not deducted in computing federal taxable718
income, on obligations or securities of any state or of any719
political subdivision or authority of any state, other than this720
state and its subdivisions and authorities, but only to the extent 721
that such net amount is not otherwise includible in Ohio taxable 722
income and is described in either division (S)(1)(a) or (b) of 723
this section:724

        (a) The net amount is not attributable to the S portion of an 725
electing small business trust and has not been distributed to726
beneficiaries for the taxable year;727

        (b) The net amount is attributable to the S portion of an728
electing small business trust for the taxable year.729

       (2) Add interest or dividends, net of ordinary, necessary,730
and reasonable expenses not deducted in computing federal taxable731
income, on obligations of any authority, commission,732
instrumentality, territory, or possession of the United States to733
the extent that the interest or dividends are exempt from federal734
income taxes but not from state income taxes, but only to the735
extent that such net amount is not otherwise includible in Ohio736
taxable income and is described in either division (S)(1)(a) or737
(b) of this section;738

       (3) Add the amount of personal exemption allowed to the739
estate pursuant to section 642(b) of the Internal Revenue Code;740

       (4) Deduct interest or dividends, net of related expenses741
deducted in computing federal taxable income, on obligations of742
the United States and its territories and possessions or of any743
authority, commission, or instrumentality of the United States to744
the extent that the interest or dividends are exempt from state745
taxes under the laws of the United States, but only to the extent746
that such amount is included in federal taxable income and is747
described in either division (S)(1)(a) or (b) of this section;748

       (5) Deduct the amount of wages and salaries, if any, not749
otherwise allowable as a deduction but that would have been750
allowable as a deduction in computing federal taxable income for751
the taxable year, had the targeted jobs credit allowed under752
sections 38, 51, and 52 of the Internal Revenue Code not been in753
effect, but only to the extent such amount relates either to754
income included in federal taxable income for the taxable year or755
to income of the S portion of an electing small business trust for756
the taxable year;757

       (6) Deduct any interest or interest equivalent, net of758
related expenses deducted in computing federal taxable income, on759
public obligations and purchase obligations, but only to the760
extent that such net amount relates either to income included in761
federal taxable income for the taxable year or to income of the S762
portion of an electing small business trust for the taxable year;763

       (7) Add any loss or deduct any gain resulting from sale,764
exchange, or other disposition of public obligations to the extent765
that such loss has been deducted or such gain has been included in766
computing either federal taxable income or income of the S portion767
of an electing small business trust for the taxable year;768

       (8) Except in the case of the final return of an estate, add769
any amount deducted by the taxpayer on both its Ohio estate tax770
return pursuant to section 5731.14 of the Revised Code, and on its771
federal income tax return in determining federal taxable income;772

       (9)(a) Deduct any amount included in federal taxable income773
solely because the amount represents a reimbursement or refund of774
expenses that in a previous year the decedent had deducted as an775
itemized deduction pursuant to section 63 of the Internal Revenue776
Code and applicable treasury regulations. The deduction otherwise777
allowed under division (S)(9)(a) of this section shall be reduced778
to the extent the reimbursement is attributable to an amount the779
taxpayer or decedent deducted under this section in any taxable780
year.781

       (b) Add any amount not otherwise included in Ohio taxable782
income for any taxable year to the extent that the amount is783
attributable to the recovery during the taxable year of any amount784
deducted or excluded in computing federal or Ohio taxable income785
in any taxable year, but only to the extent such amount has not786
been distributed to beneficiaries for the taxable year.787

       (10) Deduct any portion of the deduction described in section 788
1341(a)(2) of the Internal Revenue Code, for repaying previously 789
reported income received under a claim of right, that meets both 790
of the following requirements:791

       (a) It is allowable for repayment of an item that was792
included in the taxpayer's taxable income or the decedent's793
adjusted gross income for a prior taxable year and did not qualify794
for a credit under division (A) or (B) of section 5747.05 of the795
Revised Code for that year.796

       (b) It does not otherwise reduce the taxpayer's taxable797
income or the decedent's adjusted gross income for the current or798
any other taxable year.799

       (11) Add any amount claimed as a credit under section800
5747.059 of the Revised Code to the extent that the amount801
satisfies either of the following:802

       (a) The amount was deducted or excluded from the computation803
of the taxpayer's federal taxable income as required to be804
reported for the taxpayer's taxable year under the Internal805
Revenue Code;806

       (b) The amount resulted in a reduction in the taxpayer's807
federal taxable income as required to be reported for any of the808
taxpayer's taxable years under the Internal Revenue Code.809

       (12) Deduct any amount, net of related expenses deducted in810
computing federal taxable income, that a trust is required to811
report as farm income on its federal income tax return, but only812
if the assets of the trust include at least ten acres of land813
satisfying the definition of "land devoted exclusively to814
agricultural use" under section 5713.30 of the Revised Code,815
regardless of whether the land is valued for tax purposes as such816
land under sections 5713.30 to 5713.38 of the Revised Code. If the817
trust is a pass-through entity investor, section 5747.231 of the818
Revised Code applies in ascertaining if the trust is eligible to819
claim the deduction provided by division (S)(12) of this section820
in connection with the pass-through entity's farm income.821

        Except for farm income attributable to the S portion of an822
electing small business trust, the deduction provided by division823
(S)(12) of this section is allowed only to the extent that the824
trust has not distributed such farm income. Division (S)(12) of825
this section applies only to taxable years of a trust beginning in826
2002 or thereafter.827

       (13) Add the net amount of income described in section 641(c)828
of the Internal Revenue Code to the extent that amount is not829
included in federal taxable income.830

       (14) Add or deduct the amount the taxpayer would be required831
to add or deduct under division (A)(20) or (21) of this section if832
the taxpayer's Ohio taxable income were computed in the same833
manner as an individual's Ohio adjusted gross income is computed834
under this section. In the case of a trust, division (S)(14) of835
this section applies only to any of the trust's taxable years836
beginning in 2002 or thereafter.837

       (T) "School district income" and "school district income tax" 838
have the same meanings as in section 5748.01 of the Revised Code.839

       (U) As used in divisions (A)(8), (A)(9), (S)(6), and (S)(7)840
of this section, "public obligations," "purchase obligations," and841
"interest or interest equivalent" have the same meanings as in842
section 5709.76 of the Revised Code.843

       (V) "Limited liability company" means any limited liability844
company formed under Chapter 1705. of the Revised Code or under845
the laws of any other state.846

       (W) "Pass-through entity investor" means any person who,847
during any portion of a taxable year of a pass-through entity, is848
a partner, member, shareholder, or equity investor in that849
pass-through entity.850

       (X) "Banking day" has the same meaning as in section 1304.01851
of the Revised Code.852

       (Y) "Month" means a calendar month.853

       (Z) "Quarter" means the first three months, the second three854
months, the third three months, or the last three months of the855
taxpayer's taxable year.856

       (AA)(1) "Eligible institution" means a state university or857
state institution of higher education as defined in section858
3345.011 of the Revised Code, or a private, nonprofit college,859
university, or other post-secondary institution located in this860
state that possesses a certificate of authorization issued by the861
Ohio board of regents pursuant to Chapter 1713. of the Revised862
Code or a certificate of registration issued by the state board of863
career colleges and schools under Chapter 3332. of the Revised864
Code.865

       (2) "Qualified tuition and fees" means tuition and fees866
imposed by an eligible institution as a condition of enrollment or867
attendance, not exceeding two thousand five hundred dollars in868
each of the individual's first two years of post-secondary869
education. If the individual is a part-time student, "qualified870
tuition and fees" includes tuition and fees paid for the academic871
equivalent of the first two years of post-secondary education872
during a maximum of five taxable years, not exceeding a total of873
five thousand dollars. "Qualified tuition and fees" does not874
include:875

       (a) Expenses for any course or activity involving sports,876
games, or hobbies unless the course or activity is part of the877
individual's degree or diploma program;878

       (b) The cost of books, room and board, student activity fees,879
athletic fees, insurance expenses, or other expenses unrelated to 880
the individual's academic course of instruction;881

       (c) Tuition, fees, or other expenses paid or reimbursed882
through an employer, scholarship, grant in aid, or other883
educational benefit program.884

       (BB)(1) "Modified business income" means the business income885
included in a trust's Ohio taxable income after such taxable886
income is first reduced by the qualifying trust amount, if any.887

       (2) "Qualifying trust amount" of a trust means capital gains888
and losses from the sale, exchange, or other disposition of equity889
or ownership interests in, or debt obligations of, a qualifying890
investee to the extent included in the trust's Ohio taxable 891
income, but only if the following requirements are satisfied:892

        (a) The book value of the qualifying investee's physical 893
assets in this state and everywhere, as of the last day of the 894
qualifying investee's fiscal or calendar year ending immediately 895
prior to the date on which the trust recognizes the gain or loss, 896
is available to the trust.897

       (b) The requirements of section 5747.011 of the Revised Code898
are satisfied for the trust's taxable year in which the trust899
recognizes the gain or loss.900

        Any gain or loss that is not a qualifying trust amount is901
modified business income, qualifying investment income, or902
modified nonbusiness income, as the case may be.903

       (3) "Modified nonbusiness income" means a trust's Ohio904
taxable income other than modified business income, other than the905
qualifying trust amount, and other than qualifying investment906
income, as defined in section 5747.012 of the Revised Code, to the907
extent such qualifying investment income is not otherwise part of908
modified business income.909

       (4) "Modified Ohio taxable income" applies only to trusts,910
and means the sum of the amounts described in divisions (BB)(4)(a) 911
to (c) of this section:912

       (a) The fraction, calculated under section 5747.013, and 913
applying section 5747.231 of the Revised Code, multiplied by the 914
sum of the following amounts:915

        (i) The trust's modified business income;916

        (ii) The trust's qualifying investment income, as defined in 917
section 5747.012 of the Revised Code, but only to the extent the 918
qualifying investment income does not otherwise constitute919
modified business income and does not otherwise constitute a920
qualifying trust amount.921

       (b) The qualifying trust amount multiplied by a fraction, the 922
numerator of which is the sum of the book value of the qualifying 923
investee's physical assets in this state on the last day of the 924
qualifying investee's fiscal or calendar year ending immediately 925
prior to the day on which the trust recognizes the qualifying 926
trust amount, and the denominator of which is the sum of the book 927
value of the qualifying investee's total physical assets 928
everywhere on the last day of the qualifying investee's fiscal or 929
calendar year ending immediately prior to the day on which the 930
trust recognizes the qualifying trust amount. If, for a taxable 931
year, the trust recognizes a qualifying trust amount with respect 932
to more than one qualifying investee, the amount described in 933
division (BB)(4)(b) of this section shall equal the sum of the934
products so computed for each such qualifying investee.935

       (c)(i) With respect to a trust or portion of a trust that is 936
a resident as ascertained in accordance with division (I)(3)(d) of 937
this section, its modified nonbusiness income.938

        (ii) With respect to a trust or portion of a trust that is939
not a resident as ascertained in accordance with division940
(I)(3)(d) of this section, the amount of its modified nonbusiness941
income satisfying the descriptions in divisions (B)(2) to (5) of942
section 5747.20 of the Revised Code, except as otherwise provided 943
in division (BB)(4)(c)(ii) of this section. With respect to a 944
trust or portion of a trust that is not a resident as ascertained 945
in accordance with division (I)(3)(d) of this section, the trust's 946
portion of modified nonbusiness income recognized from the sale, 947
exchange, or other disposition of a debt interest in or equity 948
interest in a section 5747.212 entity, as defined in section 949
5747.212 of the Revised Code, without regard to division (A) of 950
that section, shall not be allocated to this state in accordance 951
with section 5747.20 of the Revised Code but shall be apportioned 952
to this state in accordance with division (B) of section 5747.212 953
of the Revised Code without regard to division (A) of that 954
section.955

       If the allocation and apportionment of a trust's income under956
divisions (BB)(4)(a) and (c) of this section do not fairly957
represent the modified Ohio taxable income of the trust in this958
state, the alternative methods described in division (C) of959
section 5747.21 of the Revised Code may be applied in the manner960
and to the same extent provided in that section.961

       (5)(a) Except as set forth in division (BB)(5)(b) of this 962
section, "qualifying investee" means a person in which a trust has 963
an equity or ownership interest, or a person or unit of government 964
the debt obligations of either of which are owned by a trust. For 965
the purposes of division (BB)(2)(a) of this section and for the 966
purpose of computing the fraction described in division (BB)(4)(b) 967
of this section, all of the following apply:968

        (i) If the qualifying investee is a member of a qualifying969
controlled group on the last day of the qualifying investee's970
fiscal or calendar year ending immediately prior to the date on971
which the trust recognizes the gain or loss, then "qualifying972
investee" includes all persons in the qualifying controlled group973
on such last day.974

        (ii) If the qualifying investee, or if the qualifying975
investee and any members of the qualifying controlled group of976
which the qualifying investee is a member on the last day of the977
qualifying investee's fiscal or calendar year ending immediately978
prior to the date on which the trust recognizes the gain or loss,979
separately or cumulatively own, directly or indirectly, on the980
last day of the qualifying investee's fiscal or calendar year981
ending immediately prior to the date on which the trust recognizes982
the qualifying trust amount, more than fifty per cent of the983
equity of a pass-through entity, then the qualifying investee and984
the other members are deemed to own the proportionate share of the985
pass-through entity's physical assets which the pass-through986
entity directly or indirectly owns on the last day of the987
pass-through entity's calendar or fiscal year ending within or988
with the last day of the qualifying investee's fiscal or calendar989
year ending immediately prior to the date on which the trust990
recognizes the qualifying trust amount.991

        (iii) For the purposes of division (BB)(5)(a)(iii) of this992
section, "upper level pass-through entity" means a pass-through993
entity directly or indirectly owning any equity of another994
pass-through entity, and "lower level pass-through entity" means995
that other pass-through entity.996

        An upper level pass-through entity, whether or not it is also 997
a qualifying investee, is deemed to own, on the last day of the 998
upper level pass-through entity's calendar or fiscal year, the999
proportionate share of the lower level pass-through entity's1000
physical assets that the lower level pass-through entity directly1001
or indirectly owns on the last day of the lower level pass-through1002
entity's calendar or fiscal year ending within or with the last1003
day of the upper level pass-through entity's fiscal or calendar1004
year. If the upper level pass-through entity directly and1005
indirectly owns less than fifty per cent of the equity of the1006
lower level pass-through entity on each day of the upper level1007
pass-through entity's calendar or fiscal year in which or with1008
which ends the calendar or fiscal year of the lower level1009
pass-through entity and if, based upon clear and convincing1010
evidence, complete information about the location and cost of the1011
physical assets of the lower pass-through entity is not available1012
to the upper level pass-through entity, then solely for purposes1013
of ascertaining if a gain or loss constitutes a qualifying trust1014
amount, the upper level pass-through entity shall be deemed as1015
owning no equity of the lower level pass-through entity for each1016
day during the upper level pass-through entity's calendar or1017
fiscal year in which or with which ends the lower level1018
pass-through entity's calendar or fiscal year. Nothing in division 1019
(BB)(5)(a)(iii) of this section shall be construed to provide for 1020
any deduction or exclusion in computing any trust's Ohio taxable 1021
income.1022

       (b) With respect to a trust that is not a resident for the1023
taxable year and with respect to a part of a trust that is not a1024
resident for the taxable year, "qualifying investee" for that1025
taxable year does not include a C corporation if both of the1026
following apply:1027

       (i) During the taxable year the trust or part of the trust1028
recognizes a gain or loss from the sale, exchange, or other1029
disposition of equity or ownership interests in, or debt1030
obligations of, the C corporation.1031

       (ii) Such gain or loss constitutes nonbusiness income.1032

        (6) "Available" means information is such that a person is 1033
able to learn of the information by the due date plus extensions, 1034
if any, for filing the return for the taxable year in which the 1035
trust recognizes the gain or loss.1036

        (CC) "Qualifying controlled group" has the same meaning as in 1037
section 5733.04 of the Revised Code.1038

        (DD) "Related member" has the same meaning as in section1039
5733.042 of the Revised Code.1040

       (EE)(1) For the purposes of division (EE) of this section: 1041

       (a) "Qualifying person" means any person other than a 1042
qualifying corporation.1043

       (b) "Qualifying corporation" means any person classified for 1044
federal income tax purposes as an association taxable as a 1045
corporation, except either of the following:1046

       (i) A corporation that has made an election under subchapter 1047
S, chapter one, subtitle A, of the Internal Revenue Code for its 1048
taxable year ending within, or on the last day of, the investor's 1049
taxable year;1050

       (ii) A subsidiary that is wholly owned by any corporation 1051
that has made an election under subchapter S, chapter one, 1052
subtitle A of the Internal Revenue Code for its taxable year 1053
ending within, or on the last day of, the investor's taxable year.1054

       (2) For the purposes of this chapter, unless expressly stated 1055
otherwise, no qualifying person indirectly owns any asset directly 1056
or indirectly owned by any qualifying corporation.1057

       (FF) For purposes of this chapter and Chapter 5751. of the 1058
Revised Code:1059

       (1) "Trust" does not include a qualified pre-income tax 1060
trust.1061

       (2) A "qualified pre-income tax trust" is any pre-income tax 1062
trust that makes a qualifying pre-income tax trust election as 1063
described in division (FF)(3) of this section.1064

       (3) A "qualifying pre-income tax trust election" is an 1065
election by a pre-income tax trust to subject to the tax imposed 1066
by section 5751.02 of the Revised Code the pre-income tax trust 1067
and all pass-through entities of which the trust owns or controls, 1068
directly, indirectly, or constructively through related interests, 1069
five per cent or more of the ownership or equity interests. The 1070
trustee shall notify the tax commissioner in writing of the 1071
election on or before April 15, 2006. The election, if timely 1072
made, shall be effective on and after January 1, 2006, and shall 1073
apply for all tax periods and tax years until revoked by the 1074
trustee of the trust.1075

       (4) A "pre-income tax trust" is a trust that satisfies all of 1076
the following requirements:1077

       (a) The document or instrument creating the trust was 1078
executed by the grantor before January 1, 1972;1079

       (b) The trust became irrevocable upon the creation of the 1080
trust; and1081

       (c) The grantor was domiciled in this state at the time the 1082
trust was created.1083

       Sec. 5903.10.  Any holder of an expired license or 1084
certificate from this state or any political subdivision or agency 1085
of the state to practice a trade or profession, whose license or 1086
certificate was not renewed because of histhe holder's service in 1087
the armed forces of the United States, or in the national guard or 1088
in a reserve component, shall, upon presentation of satisfactory 1089
evidence of honorable discharge or separation under honorable1090
conditions therefrom within six months of such discharge or 1091
separation, be granted a renewal of said license or certificate by 1092
the issuing board or authority at the usual cost without penalty 1093
and without re-examination if not otherwise disqualified because 1094
of mental or physical disability.1095

       Sec. 5903.12.  (A) As used in this section:1096

       (1) "Continuing education" means continuing education1097
required of a licensee by law and includes, but is not limited to,1098
the continuing education required of licensees under sections1099
3737.881, 3781.10, 4701.11, 4715.141, 4715.25, 4717.09, 4723.24,1100
4725.16, 4725.51, 4730.14, 4730.49, 4731.281, 4734.25, 4735.141, 1101
4736.11, 4741.16, 4741.19, 4751.07, 4755.63, 4757.33, 4759.06, 1102
4761.06, and 4763.07 of the Revised Code.1103

       (2) "License" means a license, certificate, permit, or other1104
authorization issued or conferred by a licensing agency under1105
which a licensee may engage in a profession, occupation, or1106
occupational activity.1107

       (3) "Licensee" means a person to whom all of the following1108
apply:1109

       (a) The person has been issued a license by a licensing1110
agency.1111

       (b) The person is a member of the Ohio national guard, the1112
Ohio military reserve, the Ohio naval militia, or a reserve1113
component of the armed forces of the United States.1114

       (c) The person has been called to active duty, whether inside 1115
or outside the United States, because of an executive order issued1116
by the president of the United States or an act of congress, or 1117
upon the order of the governor, for a period in excess of 1118
thirty-one days.1119

       (4) "Licensing agency" means any state department, division,1120
board, commission, agency, or other state governmental unit1121
authorized by the Revised Code to issue a license.1122

       (5) "Reporting period" means the period of time during which1123
a licensee must complete the number of hours of continuing1124
education required of the licensee by law.1125

       (B) Each licensing agency, upon receiving an application from 1126
one of its licensees that is accompanied by proper documentation 1127
certifying that the licensee has been called to active duty as 1128
described in division (A)(3)(c) of this section during the current 1129
or a prior reporting period and certifying the length of that 1130
active duty, shall extend the current reporting period by an1131
amount of time equal to the total number of months that the1132
licensee spent on active duty during the current reporting period. 1133
For purposes of this division, any portion of a month served on 1134
active duty shall be considered one full month.1135

       Section 2. That existing sections 2101.16, 5747.01, 5903.10, 1136
and 5903.12 of the Revised Code are hereby repealed.1137

       Section 3. The amendment by this act of section 2101.16 of 1138
the Revised Code and the enactment of this act by section 2101.164 1139
of the Revised Code apply to the estates of decedents who die on 1140
or after the effective date of this act.1141

       Section 4. The amendment by this act of section 5747.01 of 1142
the Revised Code applies to taxable years beginning on or after 1143
January 1, 2008.1144