As Introduced

128th General Assembly Regular Session 2009-2010

S. B. No. 193

Senators Gibbs, Schuring 

Cosponsors: Senators Jones, Schaffer, Cates, Buehrer 

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A BILL

To amend sections 5747.07 and 5747.15 and to enact

1

section 5747.073 of the Revised Code to authorize

2

a $2,400 income tax withholding credit for an

3

employer that hires and employs a previously

4

unemployed individual.

5

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

Section 1.  That sections 5747.07 and 5747.15 be amended and	6
section 5747.073 of the Revised Code be enacted to read as	7
follows:	8

Sec. 5747.07.  (A) As used in this section:

9

(1) "Partial weekly withholding period" means a period during	10
which an employer directly, indirectly, or constructively pays	11
compensation to, or credits compensation to the benefit of, an	12
employee, and that consists of a consecutive Saturday, Sunday,	13
Monday, and Tuesday or a consecutive Wednesday, Thursday, and	14
Friday. There are two partial weekly withholding periods each	15
week, except that a partial weekly withholding period cannot	16
extend from one calendar year into the next calendar year; if the	17
first day of January falls on a day other than Saturday or	18
Wednesday, the partial weekly withholding period ends on the	19
thirty-first day of December and there are three partial weekly	20
withholding periods during that week.	21

(2) "Undeposited taxes" means the taxes an employer is	22
required to deduct and withhold from an employee's compensation	23
pursuant to section 5747.06 of the Revised Code that have not been	24
remitted to the tax commissioner pursuant to this section or to	25
the treasurer of state pursuant to section 5747.072 of the Revised	26
Code.	27

(3) A "week" begins on Saturday and concludes at the end of	28
the following Friday.	29

(B) Except as provided in divisions (C) and (D) of this	30
section and in, division (A) of section 5747.072 of the Revised	31
Code, and section 5747.073 of the Revised Code, every employer	32
required to deduct and withhold any amount under section 5747.06	33
of the Revised Code shall file a return and shall pay the amount	34
required by law as follows:	35

(1) An employer who accumulates or is required to accumulate	36
undeposited taxes of one hundred thousand dollars or more during a	37
partial weekly withholding period shall make the payment of the	38
undeposited taxes by the close of the first banking day after the	39
day on which the accumulation reaches one hundred thousand	40
dollars. If required under division (I) of this section, the	41
payment shall be made by electronic funds transfer under section	42
5747.072 of the Revised Code.	43

(2)(a) Except as required by division (B)(1) of this section,	44
an employer described in division (B)(2)(b) of this section shall	45
make the payment of undeposited taxes within three banking days	46
after the close of a partial weekly withholding period during	47
which the employer was required to deduct and withhold any amount	48
under this chapter. If required under division (I) of this	49
section, the payment shall be made by electronic funds transfer	50
under section 5747.072 of the Revised Code.	51

(b) For amounts required to be deducted and withheld during	52
1994, an employer described in division (B)(2)(b) of this section	53
is one whose actual or required payments under this section	54
exceeded one hundred eighty thousand dollars during the	55
twelve-month period ending June 30, 1993. For amounts required to	56
be deducted and withheld during 1995 and each year thereafter, an	57
employer described in division (B)(2)(b) of this section is one	58
whose actual or required payments under this section were at least	59
eighty-four thousand dollars during the twelve-month period ending	60
on the thirtieth day of June of the preceding calendar year.	61

(3) Except as required by divisions (B)(1) and (2) of this	62
section, if an employer's actual or required payments were more	63
than two thousand dollars during the twelve-month period ending on	64
the thirtieth day of June of the preceding calendar year, the	65
employer shall make the payment of undeposited taxes for each	66
month during which they were required to be withheld no later than	67
fifteen days following the last day of that month. The employer	68
shall file the return prescribed by the tax commissioner with the	69
payment.	70

(4) Except as required by divisions (B)(1), (2), and (3) of	71
this section, an employer shall make the payment of undeposited	72
taxes for each calendar quarter during which they were required to	73
be withheld no later than the last day of the month following the	74
last day of March, June, September, and December each year. The	75
employer shall file the return prescribed by the tax commissioner	76
with the payment.	77

(C) The return and payment schedules prescribed by divisions	78
(B)(1) and (2) of this section do not apply to the return and	79
payment of undeposited school district income taxes arising from	80
taxes levied pursuant to Chapter 5748. of the Revised Code.	81
Undeposited school district income taxes shall be returned and	82
paid pursuant to divisions (B)(3) and (4) of this section, as	83
applicable.	84

(D)(1) The requirements of division (B) of this section are	85
met if the amount paid is not less than ninety-five per cent of	86
the actual tax withheld or required to be withheld for the prior	87
quarterly, monthly, or partial weekly withholding period, and the	88
underpayment is not due to willful neglect. Any underpayment of	89
withheld tax shall be paid within thirty days of the date on which	90
the withheld tax was due without regard to division (D)(1) of this	91
section. An employer described in division (B)(1) or (2) of this	92
section shall make the payment by electronic funds transfer under	93
section 5747.072 of the Revised Code.	94

(2) If the tax commissioner believes that quarterly or	95
monthly payments would result in a delay that might jeopardize the	96
remittance of withholding payments, the commissioner may order	97
that the payments be made weekly, or more frequently if necessary,	98
and the payments shall be made no later than three banking days	99
following the close of the period for which the jeopardy order is	100
made. An order requiring weekly or more frequent payments shall be	101
delivered to the employer personally or by certified mail and	102
remains in effect until the commissioner notifies the employer to	103
the contrary.	104

(3) If compelling circumstances exist concerning the	105
remittance of undeposited taxes, the commissioner may order the	106
employer to make payments under any of the payment schedules under	107
division (B) of this section. The order shall be delivered to the	108
employer personally or by certified mail and shall remain in	109
effect until the commissioner notifies the employer to the	110
contrary. For purposes of division (D)(3) of this section,	111
"compelling circumstances" exist if either or both of the	112
following are true:	113

(a) Based upon annualization of payments made or required to	114
be made during the preceding calendar year and during the current	115
calendar year, the employer would be required for the next	116
calendar year to make payments under division (B)(2) of this	117
section.	118

(b) Based upon annualization of payments made or required to	119
be made during the current calendar year, the employer would be	120
required for the next calendar year to make payments under	121
division (B)(2) of this section.	122

(E)(1) An employer described in division (B)(1) or (2) of	123
this section shall file, not later than the last day of the month	124
following the end of each calendar quarter, a return covering, but	125
not limited to, both the actual amount deducted and withheld and	126
the amount required to be deducted and withheld for the tax	127
imposed under section 5747.02 of the Revised Code during each	128
partial weekly withholding period or portion of a partial weekly	129
withholding period during that quarter. The employer shall file	130
the quarterly return even if the aggregate amount required to be	131
deducted and withheld for the quarter is zero dollars. At the time	132
of filing the return, the employer shall pay any amounts of	133
undeposited taxes for the quarter, whether actually deducted and	134
withheld or required to be deducted and withheld, that have not	135
been previously paid. If required under division (I) of this	136
section, the payment shall be made by electronic funds transfer.	137
The tax commissioner shall prescribe the form and other	138
requirements of the quarterly return.	139

(2) In addition to other returns required to be filed and	140
payments required to be made under this section, every employer	141
required to deduct and withhold taxes shall file, not later than	142
the thirty-first day of January of each year, an annual return	143
covering, but not limited to, both the aggregate amount deducted	144
and withheld and the aggregate amount required to be deducted and	145
withheld during the entire preceding year for the tax imposed	146
under section 5747.02 of the Revised Code and for each tax imposed	147
under Chapter 5748. of the Revised Code. At the time of filing	148
that return, the employer shall pay over any amounts of	149
undeposited taxes for the preceding year, whether actually	150
deducted and withheld or required to be deducted and withheld,	151
that have not been previously paid. The employer shall make the	152
annual report, to each employee and to the tax commissioner, of	153
the compensation paid and each tax withheld, as the commissioner	154
by rule may prescribe.	155

Each employer required to deduct and withhold any tax is	156
liable for the payment of that amount required to be deducted and	157
withheld, whether or not the tax has in fact been withheld, unless	158
the failure to withhold was based upon the employer's good faith	159
in reliance upon the statement of the employee as to liability,	160
and the amount shall be deemed to be a special fund in trust for	161
the general revenue fund.	162

(F) Each employer shall file with the employer's annual	163
return the following items of information on employees for whom	164
withholding is required under section 5747.06 of the Revised Code:	165

(1) The full name of each employee, the employee's address,	166
the employee's school district of residence, and in the case of a	167
nonresident employee, the employee's principal county of	168
employment;	169

(2) The social security number of each employee;

170

(3) The total amount of compensation paid before any	171
deductions to each employee for the period for which the annual	172
return is made;	173

(4) The amount of the tax imposed by section 5747.02 of the	174
Revised Code and the amount of each tax imposed under Chapter	175
5748. of the Revised Code withheld from the compensation of the	176
employee for the period for which the annual return is made. The	177
commissioner may extend upon good cause the period for filing any	178
notice or return required to be filed under this section and may	179
adopt rules relating to extensions of time. If the extension	180
results in an extension of time for the payment of the amounts	181
withheld with respect to which the return is filed, the employer	182
shall pay, at the time the amount withheld is paid, an amount of	183
interest computed at the rate per annum prescribed by section	184
5703.47 of the Revised Code on that amount withheld, from the day	185
that amount was originally required to be paid to the day of	186
actual payment or to the day an assessment is issued under section	187
5747.13 of the Revised Code, whichever occurs first.	188

(5) The full name and social security number of any employee	189
who satisfied the conditions set forth in section 5747.073 of the	190
Revised Code during the reporting year or the year immediately	191
preceding the reporting year and for whom the employer claimed a	192
credit under that section. The employer shall state the date the	193
employee satisfied the conditions and the amount of any credit	194
carried forward from the preceding reporting year.	195

(6) In addition to all other interest charges and penalties	196
imposed, all amounts of taxes withheld or required to be withheld	197
and remaining unpaid after the day the amounts are required to be	198
paid shall bear interest from the date prescribed for payment at	199
the rate per annum prescribed by section 5703.47 of the Revised	200
Code on the amount unpaid, in addition to the amount withheld,	201
until paid or until the day an assessment is issued under section	202
5747.13 of the Revised Code, whichever occurs first.	203

(G) An employee of a corporation, limited liability company,	204
or business trust having control or supervision of or charged with	205
the responsibility of filing the report and making payment, or an	206
officer, member, manager, or trustee of a corporation, limited	207
liability company, or business trust who is responsible for the	208
execution of the corporation's, limited liability company's, or	209
business trust's fiscal responsibilities, shall be personally	210
liable for failure to file the report or pay the tax due as	211
required by this section. The dissolution, termination, or	212
bankruptcy of a corporation, limited liability company, or	213
business trust does not discharge a responsible officer's,	214
member's, manager's, employee's, or trustee's liability for a	215
failure of the corporation, limited liability company, or business	216
trust to file returns or pay tax due.	217

(H) If an employer required to deduct and withhold income tax	218
from compensation and to pay that tax to the state under sections	219
5747.06 and 5747.07 of the Revised Code sells the employer's	220
business or stock of merchandise or quits the employer's business,	221
the taxes required to be deducted and withheld and paid to the	222
state pursuant to those sections prior to that time, together with	223
any interest and penalties imposed on those taxes, become due and	224
payable immediately, and that person shall make a final return	225
within fifteen days after the date of selling or quitting	226
business. The employer's successor shall withhold a sufficient	227
amount of the purchase money to cover the amount of the taxes,	228
interest, and penalties due and unpaid, until the former owner	229
produces a receipt from the tax commissioner showing that the	230
taxes, interest, and penalties have been paid or a certificate	231
indicating that no such taxes are due. If the purchaser of the	232
business or stock of merchandise fails to withhold purchase money,	233
the purchaser shall be personally liable for the payment of the	234
taxes, interest, and penalties accrued and unpaid during the	235
operation of the business by the former owner. If the amount of	236
taxes, interest, and penalties outstanding at the time of the	237
purchase exceeds the total purchase money, the tax commissioner in	238
the commissioner's discretion may adjust the liability of the	239
seller or the responsibility of the purchaser to pay that	240
liability to maximize the collection of withholding tax revenue.	241

(I)(1) An employer described in division (I)(2) of this	242
section shall make all payments required by this section for the	243
year by electronic funds transfer under section 5747.072 of the	244
Revised Code.	245

(2)(a) For 1994, an employer described in division (I)(2) of	246
this section is one whose actual or required payments under this	247
section exceeded five hundred thousand dollars during the	248
twelve-month period ending June 30, 1993.	249

(b) For 1995, an employer described in division (I)(2) of	250
this section is one whose actual or required payments under this	251
section exceeded five hundred thousand dollars during the	252
twelve-month period ending June 30, 1994.	253

(c) For 1996, an employer described in division (I)(2) of	254
this section is one whose actual or required payments under this	255
section exceeded three hundred thousand dollars during the	256
twelve-month period ending June 30, 1995.	257

(d) For 1997 through 2000, an employer described in division	258
(I)(2) of this section is one whose actual or required payments	259
under this section exceeded one hundred eighty thousand dollars	260
during the twelve-month period ending on the thirtieth day of June	261
of the preceding calendar year.	262

(e) For 2001 and thereafter, an employer described in	263
division (I)(2) of this section is one whose actual or required	264
payments under this section exceeded eighty-four thousand dollars	265
during the twelve-month period ending on the thirtieth day of June	266
of the preceding calendar year.	267

Sec. 5747.073.  An employer required to deduct and withhold	268
income tax from an employee's compensation under section 5747.06	269
and remit such amounts under section 5747.07 of the Revised Code	270
is entitled to a credit against the amount required to be remitted	271
if the employer employs an employee meeting each of the following	272
conditions:	273

(A) The employee was unemployed for the four consecutive	274
weeks immediately preceding the date of hire.	275

(B) The employee was hired on or after January 1, 2010, but	276
before January 1, 2011.	277

(C) During employment the employee was lawfully employable in	278
the United States under federal law, as affirmed under this	279
section, and resided in this state.	280

(D) The employee has been employed by the taxpayer for	281
twenty-four consecutive months for compensation greater than or	282
equal to the average monthly employment compensation benefits paid	283
to persons receiving unemployment compensation pursuant to Chapter	284
4141. of the Revised Code.	285

The credit equals two thousand four hundred dollars for each	286
such employee. The credit shall be deducted from the remittance of	287
undeposited taxes due for the partial weekly withholding period	288
that includes the last day of the employee's twenty-fourth month	289
of employment. Excess credit may be deducted from remittances of	290
undeposited taxes for subsequent partial weekly withholding	291
periods until fully utilized.	292

The credit under this section shall not be allowed for a	293
taxpayer unless the taxpayer executes a notarized statement	294
affirming that the taxpayer used the federal government's	295
electronic employment verification system, currently known as	296
"E-verify," or a successor system to verify the lawful employment	297
eligibility of each employee on the basis of whom the credit is	298
claimed. The taxpayer shall make the statement available for	299
inspection by the tax commissioner upon the commissioner's	300
request.	301

Sec. 5747.15.  (A) In addition to any other penalty imposed	302
by this chapter or Chapter 5703. of the Revised Code, the	303
following penalties shall apply:	304

(1) If a taxpayer, qualifying entity, or employer required to	305
file any report or return, including an informational notice,	306
report, or return, under this chapter fails to make and file the	307
report or return within the time prescribed, including any	308
extensions of time granted by the tax commissioner, a penalty may	309
be imposed not exceeding the greater of fifty dollars per month or	310
fraction of a month, not to exceed five hundred dollars, or five	311
per cent per month or fraction of a month, not to exceed fifty per	312
cent, of the sum of the taxes required to be shown on the report	313
or return, for each month or fraction of a month elapsing between	314
the due date, including extensions of the due date, and the date	315
on which filed.	316

(2) If a taxpayer fails to pay any amount of tax required to	317
be paid under section 5733.41 or Chapters 5747. or 5748. of the	318
Revised Code, except estimated tax under section 5747.09 or	319
5747.43 of the Revised Code, by the dates prescribed for payment,	320
a penalty may be imposed not exceeding twice the applicable	321
interest charged under division (G) of section 5747.08 of the	322
Revised Code for the delinquent payment.	323

(3)(a) If an employer fails to pay any amount of tax imposed	324
by section 5747.02 of the Revised Code and required to be paid	325
under this chapter by the dates prescribed for payment, a penalty	326
may be imposed not exceeding the sum of ten per cent of the	327
delinquent payment plus twice the interest charged under division	328
(F)(5)(6) of section 5747.07 of the Revised Code for the	329
delinquent payment.	330

(b) If a qualifying entity fails to pay any amount of tax	331
imposed by section 5733.41 or 5747.41 of the Revised Code and	332
required to be paid under this chapter by the dates prescribed for	333
payment, a penalty may be imposed not exceeding the sum of ten per	334
cent of the delinquent payment plus twice the applicable interest	335
charged under division (G) of section 5747.08 of the Revised Code	336
for the delinquent payment.	337

(4)(a) If an employer withholds from employees the tax	338
imposed by section 5747.02 of the Revised Code and fails to remit	339
the tax withheld to the state as required by this chapter on or	340
before the dates prescribed for payment, a penalty may be imposed	341
not exceeding fifty per cent of the delinquent payment.	342

(b) If a qualifying entity withholds any amount of tax	343
imposed under section 5747.41 of the Revised Code from an	344
individual's qualifying amount and fails to remit that amount to	345
the state as required by sections 5747.42 to 5747.453 of the	346
Revised Code on or before the dates prescribed for payment, a	347
penalty may be imposed not exceeding fifty per cent of the	348
delinquent payment.	349

(5) If a taxpayer, qualifying entity, or employer files what	350
purports to be a return required by this chapter that does not	351
contain information upon which the substantial correctness of the	352
return may be judged or contains information that on its face	353
indicates that the return is substantially incorrect, and the	354
filing of the return in that manner is due to a position that is	355
frivolous or a desire that is apparent from the return to delay or	356
impede the administration of the tax levied by section 5733.41,	357
5747.02, or 5747.41, or Chapter 5748. of the Revised Code, a	358
penalty of up to five hundred dollars may be imposed.	359

(6) If a taxpayer or qualifying entity makes a fraudulent	360
attempt to evade the reporting or payment of the tax required to	361
be shown on any return required under this chapter, a penalty may	362
be imposed not exceeding the greater of one thousand dollars or	363
one hundred per cent of the tax required to be shown on the	364
return.	365

(7) If any person makes a false or fraudulent claim for a	366
refund under this chapter, a penalty may be imposed not exceeding	367
the greater of one thousand dollars or one hundred per cent of the	368
claim. The penalty imposed under division (A)(7) of this section,	369
any refund issued on the claim, and interest on any refund from	370
the date of the refund, may be assessed under section 5747.13 of	371
the Revised Code as tax, penalty, or interest imposed under	372
section 5733.41, 5747.02, or 5747.41 of the Revised Code, without	373
regard to whether the person making the claim is otherwise subject	374
to the provisions of this chapter or Chapter 5733. of the Revised	375
Code, and without regard to any time limitation for the assessment	376
imposed by division (A) of section 5747.13 of the Revised Code.	377

(B) For purposes of this section, the taxes required to be	378
shown on the return shall be reduced by the amount of any part of	379
the taxes paid on or before the date, including any extensions of	380
the date, prescribed for filing the return.	381

(C) Any penalty imposed under this section shall be in	382
addition to all other penalties imposed under this section. All or	383
part of any penalty imposed under this section may be abated by	384
the commissioner. All or part of any penalty imposed under this	385
section may be abated by the commissioner if the taxpayer,	386
qualifying entity, or employer shows that the failure to comply	387
with the provisions of this chapter is due to reasonable cause and	388
not willful neglect.	389

Section 2. That existing sections 5747.07 and 5747.15 of the	390
Revised Code are hereby repealed.	391