As Introduced

128th General Assembly
Regular Session
2009-2010
H. B. No. 437


Representatives Baker, Balderson 

Cosponsors: Representatives Adams, J., Adams, R., Bacon, Beck, Blair, Blessing, Boose, Bubp, Combs, Derickson, Evans, Grossman, Hackett, Hall, Huffman, Lehner, McGregor, Morgan, Stebelton, Wachtmann, Wagner, Zehringer 

A BILL
To amend sections 5747.98 and 5751.98 and to enact 1
sections 5747.81 and 5751.55 of the Revised Code 2
to authorize a nonrefundable tax credit for a 3
business that increases payroll and expands into a 4
vacant facility.5


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

       Section 1. That sections 5747.98 and 5751.98 be amended and 6
sections 5747.81 and 5751.55 of the Revised Code be enacted to 7
read as follows:8

       Sec. 5747.81.  As used in this section, "payroll inflation 9
factor" for a taxable year means one plus the per cent change in 10
the employment cost index for total compensation of all workers in 11
private industry as published by the United States bureau of labor 12
statistics for the twelve-month period ending with the calendar 13
quarter that includes the last day of the taxpayer's taxable year 14
for which the credit is claimed.15

       A credit is allowed against the tax imposed by section 16
5747.02 of the Revised Code for a taxpayer that, on or after the 17
effective date of this section as enacted by . . . . . of the 18
128th general assembly, leases or purchases commercial space in 19
this state that, for the six months immediately preceding the 20
lease or purchase date, was unoccupied, and at which the taxpayer 21
employs at least fifty per cent of its employees who are employed 22
in this state. A taxpayer may qualify for a credit under this 23
section only once. Except as otherwise provided in this section, 24
the credit may be claimed for the taxpayer's taxable year that 25
includes the lease or purchase date and for the four ensuing 26
taxable years. The credit for a taxable year equals the taxpayer's 27
income tax withholdings under section 5747.06 of the Revised Code 28
for the taxable year less the product of such withholdings for the 29
immediately preceding taxable year multiplied by the payroll 30
inflation factor. The taxpayer may not claim a credit for a 31
taxable year or for any subsequent taxable year if, during the 32
taxable year, the taxpayer fails to employ at least fifty per cent 33
of its employees who are employed in this state at the commercial 34
space, unless the taxpayer relocates such employees to other 35
commercial space in this state that, for the six months 36
immediately preceding the date of the lease or purchase, was 37
unoccupied.38

       The credit shall be claimed in the order required under 39
section 5747.98 of the Revised Code. The amount of credit claimed 40
may not exceed the tax otherwise due after allowing for all 41
preceding credits in that order, but the excess may be carried 42
forward to the next ensuing three taxable years.43

       The tax commissioner shall publish on the department of 44
taxation's web site the payroll inflation factor for each quarter.45

       Nothing in this section limits or disallows pass-through 46
treatment of the credit. An owner of a pass-through entity that 47
claims the credit under section 5751.55 of the Revised Code may 48
not claim the credit under this section.49

       Sec. 5747.98.  (A) To provide a uniform procedure for50
calculating the amount of tax due under section 5747.02 of the51
Revised Code, a taxpayer shall claim any credits to which the52
taxpayer is entitled in the following order:53

       (1) The retirement income credit under division (B) of54
section 5747.055 of the Revised Code;55

       (2) The senior citizen credit under division (C) of section56
5747.05 of the Revised Code;57

       (3) The lump sum distribution credit under division (D) of58
section 5747.05 of the Revised Code;59

       (4) The dependent care credit under section 5747.054 of the60
Revised Code;61

       (5) The lump sum retirement income credit under division (C)62
of section 5747.055 of the Revised Code;63

       (6) The lump sum retirement income credit under division (D)64
of section 5747.055 of the Revised Code;65

       (7) The lump sum retirement income credit under division (E)66
of section 5747.055 of the Revised Code;67

       (8) The low-income credit under section 5747.056 of the 68
Revised Code;69

       (9) The credit for displaced workers who pay for job training 70
under section 5747.27 of the Revised Code;71

       (10) The campaign contribution credit under section 5747.2972
of the Revised Code;73

       (11) The twenty-dollar personal exemption credit under74
section 5747.022 of the Revised Code;75

       (12) The joint filing credit under division (G) of section76
5747.05 of the Revised Code;77

       (13) The nonresident credit under division (A) of section78
5747.05 of the Revised Code;79

       (14) The credit for a resident's out-of-state income under80
division (B) of section 5747.05 of the Revised Code;81

       (15) The credit for employers that enter into agreements with 82
child day-care centers under section 5747.34 of the Revised Code;83

       (16) The credit for employers that reimburse employee child 84
care expenses under section 5747.36 of the Revised Code;85

       (17) The credit for adoption of a minor child under section86
5747.37 of the Revised Code;87

       (18) The credit for purchases of lights and reflectors under88
section 5747.38 of the Revised Code;89

       (19) The job retention credit under division (B) of section90
5747.058 of the Revised Code;91

       (20) The credit for selling alternative fuel under section 92
5747.77 of the Revised Code;93

       (21) The second credit for purchases of new manufacturing94
machinery and equipment and the credit for using Ohio coal under95
section 5747.31 of the Revised Code;96

       (22) The job training credit under section 5747.39 of the97
Revised Code;98

       (23) The enterprise zone credit under section 5709.66 of the99
Revised Code;100

       (24) The credit for the eligible costs associated with a101
voluntary action under section 5747.32 of the Revised Code;102

       (25) The credit for expanding into a vacant facility under 103
section 5747.81 of the Revised Code;104

       (26) The credit for employers that establish on-site child105
day-care centers under section 5747.35 of the Revised Code;106

       (26)(27) The ethanol plant investment credit under section107
5747.75 of the Revised Code;108

       (27)(28) The credit for purchases of qualifying grape109
production property under section 5747.28 of the Revised Code;110

       (28)(29) The export sales credit under section 5747.057 of111
the Revised Code;112

       (29)(30) The credit for research and development and113
technology transfer investors under section 5747.33 of the Revised114
Code;115

       (30)(31) The enterprise zone credits under section 5709.65 of116
the Revised Code;117

       (31)(32) The research and development credit under section 118
5747.331 of the Revised Code;119

       (32)(33) The credit for rehabilitating a historic building 120
under section 5747.76 of the Revised Code;121

       (33)(34) The refundable credit for rehabilitating a historic 122
building under section 5747.76 of the Revised Code;123

       (34)(35) The refundable jobs creation credit under division124
(A) of section 5747.058 of the Revised Code;125

       (35)(36) The refundable credit for taxes paid by a qualifying126
entity granted under section 5747.059 of the Revised Code;127

       (36)(37) The refundable credits for taxes paid by a128
qualifying pass-through entity granted under division (J) of129
section 5747.08 of the Revised Code;130

       (37)(38) The refundable credit for tax withheld under131
division (B)(1) of section 5747.062 of the Revised Code;132

       (38)(39) The refundable credit under section 5747.80 of the 133
Revised Code for losses on loans made to the Ohio venture capital 134
program under sections 150.01 to 150.10 of the Revised Code;135

       (39)(40) The refundable motion picture production credit 136
under section 5747.66 of the Revised Code.137

       (B) For any credit, except the refundable credits enumerated138
in this section and the credit granted under division (I) of139
section 5747.08 of the Revised Code, the amount of the credit140
for a taxable year shall not exceed the tax due after allowing 141
for any other credit that precedes it in the order required under 142
this section. Any excess amount of a particular credit may be 143
carried forward if authorized under the section creating that 144
credit. Nothing in this chapter shall be construed to allow a 145
taxpayer to claim, directly or indirectly, a credit more than 146
once for a taxable year.147

       Sec. 5751.55.  As used in this division, "payroll inflation 148
factor" for a calendar year means one plus the per cent change in 149
the employment cost index for total compensation of all workers in 150
private industry as published by the United States bureau of labor 151
statistics for the twelve-month period ending with the third 152
calendar quarter of the calendar year for which the credit is 153
claimed.154

       A credit is allowed against the tax imposed by section 155
5751.02 of the Revised Code for a taxpayer that, on or after the 156
effective date of this section as enacted by . . . . . of the 157
128th general assembly, leases or purchases commercial space in 158
this state that, for the six months immediately preceding the 159
lease or purchase date, was unoccupied, and at which the taxpayer 160
employs at least fifty per cent of its employees who are employed 161
in this state. A taxpayer may qualify for a credit under this 162
section only once. Except as otherwise provided in this section, 163
the credit may be claimed for the calendar year that includes the 164
lease or purchase date and for the four ensuing calendar years. 165
The credit for a calendar year equals the taxpayer's income tax 166
withholdings under section 5747.06 of the Revised Code for the 167
calendar year less the product of such withholdings for the 168
immediately preceding year multiplied by the payroll inflation 169
factor. The taxpayer may not claim a credit for a calendar year or 170
for any subsequent year if, during the year, the taxpayer fails to 171
employ at least fifty per cent of its employees who are employed 172
in this state at the commercial space, unless the taxpayer 173
relocates such employees to other commercial space in this state 174
that, for the six months immediately preceding the date of the 175
lease or purchase, was unoccupied.176

       The credit shall be claimed with the annual return required 177
under section 5751.051 of the Revised Code for the calendar year 178
for which the credit is being claimed. The credit shall be claimed 179
in the order required under section 5751.98 of the Revised Code. 180
The amount of credit claimed may not exceed the tax otherwise due 181
with the annual return after allowing for all preceding credits in 182
that order, but the excess may be carried forward to tax periods 183
in or coinciding with the next ensuing three calendar years.184

       Sec. 5751.98.  (A) To provide a uniform procedure for 185
calculating the amount of tax due under this chapter, a taxpayer 186
shall claim any credits to which it is entitled in the following 187
order:188

        (1) The credit for expanding into a vacant facility under 189
section 5751.55 of the Revised Code;190

       (2) The nonrefundable jobs retention credit under division 191
(B) of section 5751.50 of the Revised Code;192

       (2)(3) The nonrefundable credit for qualified research 193
expenses under division (B) of section 5751.51 of the Revised 194
Code;195

       (3)(4) The nonrefundable credit for a borrower's qualified 196
research and development loan payments under division (B) of 197
section 5751.52 of the Revised Code;198

       (4)(5) The nonrefundable credit for calendar years 2010 to 199
2029 for unused net operating losses under division (B) of section 200
5751.53 of the Revised Code;201

       (5)(6) The refundable credit for calendar year 2030 for 202
unused net operating losses under division (C) of section 5751.53 203
of the Revised Code;204

       (6)(7) The refundable jobs creation credit under division (A) 205
of section 5751.50 of the Revised Code.206

        (B) For any credit except the creditrefundable credits207
enumerated in division (A)(4) of this section, the amount of the 208
credit for a tax period shall not exceed the tax due after 209
allowing for any other credit that precedes it in the order 210
required under this section. Any excess amount of a particular 211
credit may be carried forward if authorized under the section 212
creating the credit.213

       Section 2. That existing sections 5747.98 and 5751.98 of the 214
Revised Code are hereby repealed.215