As Introduced

129th General Assembly Regular Session 2011-2012

H. B. No. 510

Representative Amstutz 

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A BILL

To amend sections 122.17, 122.171, 122.85, 145.114,

1

145.116, 149.311, 150.01, 150.07, 150.10, 715.013,

2

742.114, 742.116, 3307.152, 3307.154, 3309.157,

3

3309.159, 5505.068, 5505.0610, 5703.052, 5703.053,

4

5703.70, 5707.03, 5709.76, 5711.22, 5725.02,

5

5725.14, 5725.16, 5725.26, 5725.33, 5733.01,

6

5733.02, 5733.021, 5733.06, 5747.01, 5747.98,

7

5751.01, 5751.011, 5751.012, and 5751.98 and to

8

enact sections 5701.12, 5726.01 to 5726.08,

9

5726.10, 5726.20, 5726.21, 5726.30 to 5726.33,

10

5726.36, 5726.40 to 5726.43, 5726.50 to 5726.55,

11

5726.98, 5726.99, 5747.65, and 5751.54 of the

12

Revised Code to impose a new tax on financial

13

institutions, effective January 1, 2014, and to

14

provide that such institutions are no longer

15

subject to the corporation franchise tax or

16

dealers in intangibles tax after 2013.

17

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

Section 1. That sections 122.17, 122.171, 122.85, 145.114,	18
145.116, 149.311, 150.01, 150.07, 150.10, 715.013, 742.114,	19
742.116, 3307.152, 3307.154, 3309.157, 3309.159, 5505.068,	20
5505.0610, 5703.052, 5703.053, 5703.70, 5707.03, 5709.76, 5711.22,	21
5725.02, 5725.14, 5725.16, 5725.26, 5725.33, 5733.01, 5733.02,	22
5733.021, 5733.06, 5747.01, 5747.98, 5751.01, 5751.011, 5751.012,	23
and 5751.98 be amended and sections 5701.12, 5726.01, 5726.02,	24
5726.03, 5726.04, 5726.05, 5726.06, 5726.07, 5726.08, 5726.10,	25
5726.20, 5726.21, 5726.30, 5726.31, 5726.32, 5726.33, 5726.36,	26
5726.40, 5726.41, 5726.42, 5726.43, 5726.50, 5726.51, 5726.52,	27
5726.53, 5726.54, 5726.55, 5726.98, 5726.99, 5747.65, and 5751.54	28
of the Revised Code be enacted to read as follows:	29

Sec. 122.17.  (A) As used in this section:

30

(1) "Income tax revenue" means the total amount withheld	31
under section 5747.06 of the Revised Code by the taxpayer during	32
the taxable year, or during the calendar year that includes the	33
tax period, from the compensation of each employee employed in the	34
project to the extent the employee's withholdings are not used to	35
determine the credit under section 122.171 of the Revised Code.	36
"Income tax revenue" excludes amounts withheld before the day the	37
taxpayer becomes eligible for the credit.	38

(2) "Baseline income tax revenue" means income tax revenue	39
except that the applicable withholding period is the twelve months	40
immediately preceding the date the tax credit authority approves	41
the taxpayer's application multiplied by the sum of one plus an	42
annual pay increase factor to be determined by the tax credit	43
authority. If the taxpayer becomes eligible for the credit after	44
the first day of the taxpayer's taxable year or after the first	45
day of the calendar year that includes the tax period, the	46
taxpayer's baseline income tax revenue for the first such taxable	47
or calendar year of credit eligibility shall be reduced in	48
proportion to the number of days during the taxable or calendar	49
year for which the taxpayer was not eligible for the credit. For	50
subsequent taxable or calendar years, "baseline income tax	51
revenue" equals the unreduced baseline income tax revenue for the	52
preceding taxable or calendar year multiplied by the sum of one	53
plus the pay increase factor.	54

(3) "Excess income tax revenue" means income tax revenue	55
minus baseline income tax revenue.	56

(B) The tax credit authority may make grants under this	57
section to foster job creation in this state. Such a grant shall	58
take the form of a refundable credit allowed against the tax	59
imposed by section 5725.18, 5726.02, 5729.03, 5733.06, or 5747.02	60
or levied under Chapter 5751. of the Revised Code. The credit	61
shall be claimed for the taxable years or tax periods specified in	62
the taxpayer's agreement with the tax credit authority under	63
division (D) of this section. With respect to taxes imposed under	64
section 5726.02, 5733.06, or 5747.02 or Chapter 5751. of the	65
Revised Code, the credit shall be claimed in the order required	66
under section 5726.98, 5733.98, 5747.98, or 5751.98 of the	67
Revised Code. The amount of the credit available for a taxable	68
year or for a calendar year that includes a tax period equals the	69
excess income tax revenue for that year multiplied by the	70
percentage specified in the agreement with the tax credit	71
authority. Any credit granted under this section against the tax	72
imposed by section 5733.06 or 5747.02 of the Revised Code, to the	73
extent not fully utilized against such tax for taxable years	74
ending prior to 2008, shall automatically be converted without any	75
action taken by the tax credit authority to a credit against the	76
tax levied under Chapter 5751. of the Revised Code for tax periods	77
beginning on or after July 1, 2008, provided that the person to	78
whom the credit was granted is subject to such tax. The converted	79
credit shall apply to those calendar years in which the remaining	80
taxable years specified in the agreement end.	81

(C) A taxpayer or potential taxpayer who proposes a project	82
to create new jobs in this state may apply to the tax credit	83
authority to enter into an agreement for a tax credit under this	84
section. The director of development services shall prescribe the	85
form of the application. After receipt of an application, the	86
authority may enter into an agreement with the taxpayer for a	87
credit under this section if it determines all of the following:	88

(1) The taxpayer's project will increase payroll and income	89
tax revenue;	90

(2) The taxpayer's project is economically sound and will	91
benefit the people of this state by increasing opportunities for	92
employment and strengthening the economy of this state;	93

(3) Receiving the tax credit is a major factor in the	94
taxpayer's decision to go forward with the project.	95

(D) An agreement under this section shall include all of the	96
following:	97

(1) A detailed description of the project that is the subject	98
of the agreement;	99

(2) The term of the tax credit, which shall not exceed	100
fifteen years, and the first taxable year, or first calendar year	101
that includes a tax period, for which the credit may be claimed;	102

(3) A requirement that the taxpayer shall maintain operations	103
at the project location for at least the greater of seven years or	104
the term of the credit plus three years;	105

(4) The percentage, as determined by the tax credit	106
authority, of excess income tax revenue that will be allowed as	107
the amount of the credit for each taxable year or for each	108
calendar year that includes a tax period;	109

(5) The pay increase factor to be applied to the taxpayer's	110
baseline income tax revenue;	111

(6) A requirement that the taxpayer annually shall report to	112
the director of development services employment, tax withholding,	113
investment, and other information the director needs to perform	114
the director's duties under this section;	115

(7) A requirement that the director of development services	116
annually review the information reported under division (D)(6) of	117
this section and verify compliance with the agreement; if the	118
taxpayer is in compliance, a requirement that the director issue a	119
certificate to the taxpayer stating that the information has been	120
verified and identifying the amount of the credit that may be	121
claimed for the taxable or calendar year;	122

(8) A provision providing that the taxpayer may not relocate	123
a substantial number of employment positions from elsewhere in	124
this state to the project location unless the director of	125
development services determines that the legislative authority of	126
the county, township, or municipal corporation from which the	127
employment positions would be relocated has been notified by the	128
taxpayer of the relocation.	129

For purposes of this section, the movement of an employment	130
position from one political subdivision to another political	131
subdivision shall be considered a relocation of an employment	132
position unless the employment position in the first political	133
subdivision is replaced.	134

(E) If a taxpayer fails to meet or comply with any condition	135
or requirement set forth in a tax credit agreement, the tax credit	136
authority may amend the agreement to reduce the percentage or term	137
of the tax credit. The reduction of the percentage or term may	138
take effect in the current taxable or calendar year.	139

(F) Projects that consist solely of point-of-final-purchase	140
retail facilities are not eligible for a tax credit under this	141
section. If a project consists of both point-of-final-purchase	142
retail facilities and nonretail facilities, only the portion of	143
the project consisting of the nonretail facilities is eligible for	144
a tax credit and only the excess income tax revenue from the	145
nonretail facilities shall be considered when computing the amount	146
of the tax credit. If a warehouse facility is part of a	147
point-of-final-purchase retail facility and supplies only that	148
facility, the warehouse facility is not eligible for a tax credit.	149
Catalog distribution centers are not considered	150
point-of-final-purchase retail facilities for the purposes of this	151
division, and are eligible for tax credits under this section.	152

(G) Financial statements and other information submitted to	153
the department of development services or the tax credit authority	154
by an applicant or recipient of a tax credit under this section,	155
and any information taken for any purpose from such statements or	156
information, are not public records subject to section 149.43 of	157
the Revised Code. However, the chairperson of the authority may	158
make use of the statements and other information for purposes of	159
issuing public reports or in connection with court proceedings	160
concerning tax credit agreements under this section. Upon the	161
request of the tax commissioner or, if the applicant or recipient	162
is an insurance company, upon the request of the superintendent of	163
insurance, the chairperson of the authority shall provide to the	164
commissioner or superintendent any statement or information	165
submitted by an applicant or recipient of a tax credit in	166
connection with the credit. The commissioner or superintendent	167
shall preserve the confidentiality of the statement or	168
information.	169

(H) A taxpayer claiming a credit under this section shall	170
submit to the tax commissioner or, if the taxpayer is an insurance	171
company, to the superintendent of insurance, a copy of the	172
director of development'sdevelopment services' certificate of	173
verification under division (D)(7) of this section with the	174
taxpayer's tax report or return for the taxable year or for the	175
calendar year that includes the tax period. Failure to submit a	176
copy of the certificate with the report or return does not	177
invalidate a claim for a credit if the taxpayer submits a copy of	178
the certificate to the commissioner or superintendent within sixty	179
days after the commissioner or superintendent requests it.	180

(I) The director of development services, after consultation	181
with the tax commissioner and the superintendent of insurance and	182
in accordance with Chapter 119. of the Revised Code, shall adopt	183
rules necessary to implement this section. The rules may provide	184
for recipients of tax credits under this section to be charged	185
fees to cover administrative costs of the tax credit program. The	186
fees collected shall be credited to the tax incentive programs	187
operating fund created in section 122.174 of the Revised Code. At	188
the time the director gives public notice under division (A) of	189
section 119.03 of the Revised Code of the adoption of the rules,	190
the director shall submit copies of the proposed rules to the	191
chairpersons of the standing committees on economic development in	192
the senate and the house of representatives.	193

(J) For the purposes of this section, a taxpayer may include	194
a partnership, a corporation that has made an election under	195
subchapter S of chapter one of subtitle A of the Internal Revenue	196
Code, or any other business entity through which income flows as a	197
distributive share to its owners. A partnership, S-corporation, or	198
other such business entity may elect to pass the credit received	199
under this section through to the persons to whom the income or	200
profit of the partnership, S-corporation, or other entity is	201
distributed. The election shall be made on the annual report	202
required under division (D)(6) of this section. The election	203
applies to and is irrevocable for the credit for which the report	204
is submitted. If the election is made, the credit shall be	205
apportioned among those persons in the same proportions as those	206
in which the income or profit is distributed.	207

(K) If the director of development services determines that a	208
taxpayer who has received a credit under this section is not	209
complying with the requirement under division (D)(3) of this	210
section, the director shall notify the tax credit authority of the	211
noncompliance. After receiving such a notice, and after giving the	212
taxpayer an opportunity to explain the noncompliance, the tax	213
credit authority may require the taxpayer to refund to this state	214
a portion of the credit in accordance with the following:	215

(1) If the taxpayer maintained operations at the project	216
location for a period less than or equal to the term of the	217
credit, an amount not exceeding one hundred per cent of the sum of	218
any credits allowed and received under this section;	219

(2) If the taxpayer maintained operations at the project	220
location for a period longer than the term of the credit, but less	221
than the greater of seven years or the term of the credit plus	222
three years, an amount not exceeding seventy-five per cent of the	223
sum of any credits allowed and received under this section.	224

In determining the portion of the tax credit to be refunded	225
to this state, the tax credit authority shall consider the effect	226
of market conditions on the taxpayer's project and whether the	227
taxpayer continues to maintain other operations in this state.	228
After making the determination, the authority shall certify the	229
amount to be refunded to the tax commissioner or superintendent of	230
insurance, as appropriate. If the amount is certified to the	231
commissioner, the commissioner shall make an assessment for that	232
amount against the taxpayer under Chapter 5726., 5733., 5747., or	233
5751. of the Revised Code. If the amount is certified to the	234
superintendent, the superintendent shall make an assessment for	235
that amount against the taxpayer under Chapter 5725. or 5729. of	236
the Revised Code. The time limitations on assessments under those	237
chapters do not apply to an assessment under this division, but	238
the commissioner or superintendent, as appropriate, shall make the	239
assessment within one year after the date the authority certifies	240
to the commissioner or superintendent the amount to be refunded.	241

(L) On or before the first day of August each year, the	242
director of development services shall submit a report to the	243
governor, the president of the senate, and the speaker of the	244
house of representatives on the tax credit program under this	245
section. The report shall include information on the number of	246
agreements that were entered into under this section during the	247
preceding calendar year, a description of the project that is the	248
subject of each such agreement, and an update on the status of	249
projects under agreements entered into before the preceding	250
calendar year.	251

(M) There is hereby created the tax credit authority, which	252
consists of the director of development services and four other	253
members appointed as follows: the governor, the president of the	254
senate, and the speaker of the house of representatives each shall	255
appoint one member who shall be a specialist in economic	256
development; the governor also shall appoint a member who is a	257
specialist in taxation. Of the initial appointees, the members	258
appointed by the governor shall serve a term of two years; the	259
members appointed by the president of the senate and the speaker	260
of the house of representatives shall serve a term of four years.	261
Thereafter, terms of office shall be for four years. Initial	262
appointments to the authority shall be made within thirty days	263
after January 13, 1993. Each member shall serve on the authority	264
until the end of the term for which the member was appointed.	265
Vacancies shall be filled in the same manner provided for original	266
appointments. Any member appointed to fill a vacancy occurring	267
prior to the expiration of the term for which the member's	268
predecessor was appointed shall hold office for the remainder of	269
that term. Members may be reappointed to the authority. Members of	270
the authority shall receive their necessary and actual expenses	271
while engaged in the business of the authority. The director of	272
development services shall serve as chairperson of the authority,	273
and the members annually shall elect a vice-chairperson from among	274
themselves. Three members of the authority constitute a quorum to	275
transact and vote on the business of the authority. The majority	276
vote of the membership of the authority is necessary to approve	277
any such business, including the election of the vice-chairperson.	278

The director of development services may appoint a	279
professional employee of the department of development services to	280
serve as the director's substitute at a meeting of the authority.	281
The director shall make the appointment in writing. In the absence	282
of the director from a meeting of the authority, the appointed	283
substitute shall serve as chairperson. In the absence of both the	284
director and the director's substitute from a meeting, the	285
vice-chairperson shall serve as chairperson.	286

(N) For purposes of the credits granted by this section	287
against the taxes imposed under sections 5725.18 and 5729.03 of	288
the Revised Code, "taxable year" means the period covered by the	289
taxpayer's annual statement to the superintendent of insurance.	290

Sec. 122.171. (A) As used in this section:

291

(1) "Capital investment project" means a plan of investment	292
at a project site for the acquisition, construction, renovation,	293
or repair of buildings, machinery, or equipment, or for	294
capitalized costs of basic research and new product development	295
determined in accordance with generally accepted accounting	296
principles, but does not include any of the following:	297

(a) Payments made for the acquisition of personal property	298
through operating leases;	299

(b) Project costs paid before January 1, 2002;

300

(c) Payments made to a related member as defined in section	301
5733.042 of the Revised Code or to a consolidated elected taxpayer	302
or a combined taxpayer as defined in section 5751.01 of the	303
Revised Code.	304

(2) "Eligible business" means a taxpayer and its related	305
members with Ohio operations satisfying all of the following:	306

(a) The taxpayer employs at least five hundred full-time	307
equivalent employees or has an annual payroll of at least	308
thirty-five million dollars at the time the tax credit authority	309
grants the tax credit under this section;	310

(b) The taxpayer makes or causes to be made payments for the	311
capital investment project of one of the following:	312

(i) If the taxpayer is engaged at the project site primarily	313
as a manufacturer, at least fifty million dollars in the aggregate	314
at the project site during a period of three consecutive calendar	315
years, including the calendar year that includes a day of the	316
taxpayer's taxable year or tax period with respect to which the	317
credit is granted;	318

(ii) If the taxpayer is engaged at the project site primarily	319
in significant corporate administrative functions, as defined by	320
the director of development services by rule, at least twenty	321
million dollars in the aggregate at the project site during a	322
period of three consecutive calendar years including the calendar	323
year that includes a day of the taxpayer's taxable year or tax	324
period with respect to which the credit is granted;	325

(iii) If the taxpayer is applying to enter into an agreement	326
for a tax credit authorized under division (B)(3) of this section,	327
at least five million dollars in the aggregate at the project site	328
during a period of three consecutive calendar years, including the	329
calendar year that includes a day of the taxpayer's taxable year	330
or tax period with respect to which the credit is granted.	331

(c) The taxpayer had a capital investment project reviewed	332
and approved by the tax credit authority as provided in divisions	333
(C), (D), and (E) of this section.	334

(3) "Full-time equivalent employees" means the quotient	335
obtained by dividing the total number of hours for which employees	336
were compensated for employment in the project by two thousand	337
eighty. "Full-time equivalent employees" shall exclude hours that	338
are counted for a credit under section 122.17 of the Revised Code.	339

(4) "Income tax revenue" means the total amount withheld	340
under section 5747.06 of the Revised Code by the taxpayer during	341
the taxable year, or during the calendar year that includes the	342
tax period, from the compensation of all employees employed in the	343
project whose hours of compensation are included in calculating	344
the number of full-time equivalent employees.	345

(5) "Manufacturer" has the same meaning as in section	346
5739.011 of the Revised Code.	347

(6) "Project site" means an integrated complex of facilities	348
in this state, as specified by the tax credit authority under this	349
section, within a fifteen-mile radius where a taxpayer is	350
primarily operating as an eligible business.	351

(7) "Related member" has the same meaning as in section	352
5733.042 of the Revised Code as that section existed on the	353
effective date of its amendment by Am. Sub. H.B. 215 of the 122nd	354
general assembly, September 29, 1997.	355

(8) "Taxable year" includes, in the case of a domestic or	356
foreign insurance company, the calendar year ending on the	357
thirty-first day of December preceding the day the superintendent	358
of insurance is required to certify to the treasurer of state	359
under section 5725.20 or 5729.05 of the Revised Code the amount of	360
taxes due from insurance companies.	361

(B) The tax credit authority created under section 122.17 of	362
the Revised Code may grant tax credits under this section for the	363
purpose of fostering job retention in this state. Upon application	364
by an eligible business and upon consideration of the	365
recommendation of the director of budget and management, tax	366
commissioner, the superintendent of insurance in the case of an	367
insurance company, and director of development services under	368
division (C) of this section, the tax credit authority may grant	369
the following credits against the tax imposed by section 5725.18,	370
5726.02, 5729.03, 5733.06, 5747.02, or 5751.02 of the Revised	371
Code:	372

(1) A nonrefundable credit to an eligible business;

373

(2) A refundable credit to an eligible business meeting the	374
following conditions, provided that the director of budget and	375
management, tax commissioner, superintendent of insurance in the	376
case of an insurance company, and director of development services	377
have recommended the granting of the credit to the tax credit	378
authority before July 1, 2011:	379

(a) The business retains at least one thousand full-time	380
equivalent employees at the project site.	381

(b) The business makes or causes to be made payments for a	382
capital investment project of at least twenty-five million dollars	383
in the aggregate at the project site during a period of three	384
consecutive calendar years, including the calendar year that	385
includes a day of the business' taxable year or tax period with	386
respect to which the credit is granted.	387

(c) In 2010, the business received a written offer of	388
financial incentives from another state of the United States that	389
the director determines to be sufficient inducement for the	390
business to relocate the business' operations from this state to	391
that state.	392

(3) A refundable credit to an eligible business with a total	393
annual payroll of at least twenty million dollars, provided that	394
the tax credit authority grants the tax credit on or after July 1,	395
2011, and before January 1, 2014.	396

The credits authorized in divisions (B)(1), (2), and (3) of	397
this section may be granted for a period up to fifteen taxable	398
years or, in the case of the tax levied by section 5751.02 of the	399
Revised Code, for a period of up to fifteen calendar years. The	400
credit amount for a taxable year or a calendar year that includes	401
the tax period for which a credit may be claimed equals the income	402
tax revenue for that year multiplied by the percentage specified	403
in the agreement with the tax credit authority. The percentage may	404
not exceed seventy-five per cent. The credit shall be claimed in	405
the order required under section 5725.98, 5726.98, 5729.98,	406
5733.98, 5747.98, or 5751.98 of the Revised Code. In determining	407
the percentage and term of the credit, the tax credit authority	408
shall consider both the number of full-time equivalent employees	409
and the value of the capital investment project. The credit amount	410
may not be based on the income tax revenue for a calendar year	411
before the calendar year in which the tax credit authority	412
specifies the tax credit is to begin, and the credit shall be	413
claimed only for the taxable years or tax periods specified in the	414
eligible business' agreement with the tax credit authority. In no	415
event shall the credit be claimed for a taxable year or tax period	416
terminating before the date specified in the agreement. Any credit	417
granted under this section against the tax imposed by section	418
5733.06 or 5747.02 of the Revised Code, to the extent not fully	419
utilized against such tax for taxable years ending prior to 2008,	420
shall automatically be converted without any action taken by the	421
tax credit authority to a credit against the tax levied under	422
Chapter 5751. of the Revised Code for tax periods beginning on or	423
after July 1, 2008, provided that the person to whom the credit	424
was granted is subject to such tax. The converted credit shall	425
apply to those calendar years in which the remaining taxable years	426
specified in the agreement end.	427

If a nonrefundable credit allowed under division (B)(1) of	428
this section for a taxable year or tax period exceeds the	429
taxpayer's tax liability for that year or period, the excess may	430
be carried forward for the three succeeding taxable or calendar	431
years, but the amount of any excess credit allowed in any taxable	432
year or tax period shall be deducted from the balance carried	433
forward to the succeeding year or period.	434

(C) A taxpayer that proposes a capital investment project to	435
retain jobs in this state may apply to the tax credit authority to	436
enter into an agreement for a tax credit under this section. The	437
director of development services shall prescribe the form of the	438
application. After receipt of an application, the authority shall	439
forward copies of the application to the director of budget and	440
management, the tax commissioner, the superintendent of insurance	441
in the case of an insurance company, and the director of	442
development services, each of whom shall review the application to	443
determine the economic impact the proposed project would have on	444
the state and the affected political subdivisions and shall submit	445
a summary of their determinations and recommendations to the	446
authority.	447

(D) Upon review and consideration of the determinations and	448
recommendations described in division (C) of this section, the tax	449
credit authority may enter into an agreement with the taxpayer for	450
a credit under this section if the authority determines all of the	451
following:	452

(1) The taxpayer's capital investment project will result in	453
the retention of employment in this state.	454

(2) The taxpayer is economically sound and has the ability to	455
complete the proposed capital investment project.	456

(3) The taxpayer intends to and has the ability to maintain	457
operations at the project site for at least the greater of (a) the	458
term of the credit plus three years, or (b) seven years.	459

(4) Receiving the credit is a major factor in the taxpayer's	460
decision to begin, continue with, or complete the project.	461

(5) If the taxpayer is applying to enter into an agreement	462
for a tax credit authorized under division (B)(3) of this section,	463
the taxpayer's capital investment project will be located in the	464
political subdivision in which the taxpayer maintains its	465
principal place of business.	466

(E) An agreement under this section shall include all of the	467
following:	468

(1) A detailed description of the project that is the subject	469
of the agreement, including the amount of the investment, the	470
period over which the investment has been or is being made, the	471
number of full-time equivalent employees at the project site, and	472
the anticipated income tax revenue to be generated.	473

(2) The term of the credit, the percentage of the tax credit,	474
the maximum annual value of tax credits that may be allowed each	475
year, and the first year for which the credit may be claimed.	476

(3) A requirement that the taxpayer maintain operations at	477
the project site for at least the greater of (a) the term of the	478
credit plus three years, or (b) seven years.	479

(4)(a) In the case of a credit granted under division (B)(1)	480
of this section, a requirement that the taxpayer retain at least	481
five hundred full-time equivalent employees at the project site	482
and within this state for the entire term of the credit, or a	483
requirement that the taxpayer maintain an annual payroll of at	484
least thirty-five million dollars for the entire term of the	485
credit;	486

(b) In the case of a credit granted under division (B)(2) of	487
this section, a requirement that the taxpayer retain at least one	488
thousand full-time equivalent employees at the project site and	489
within this state for the entire term of the credit;	490

(c) In the case of a credit granted under division (B)(3) of	491
this section, either of the following:	492

(i) A requirement that the taxpayer retain at least five	493
hundred full-time equivalent employees at the project site and	494
within this state for the entire term of the credit and a	495
requirement that the taxpayer maintain an annual payroll of at	496
least twenty million dollars for the entire term of the credit;	497

(ii) A requirement that the taxpayer maintain an annual	498
payroll of at least thirty-five million dollars for the entire	499
term of the credit.	500

(5) A requirement that the taxpayer annually report to the	501
director of development services employment, tax withholding,	502
capital investment, and other information the director needs to	503
perform the director's duties under this section.	504

(6) A requirement that the director of development services	505
annually review the annual reports of the taxpayer to verify the	506
information reported under division (E)(5) of this section and	507
compliance with the agreement. Upon verification, the director	508
shall issue a certificate to the taxpayer stating that the	509
information has been verified and identifying the amount of the	510
credit for the taxable year or calendar year that includes the tax	511
period. In determining the number of full-time equivalent	512
employees, no position shall be counted that is filled by an	513
employee who is included in the calculation of a tax credit under	514
section 122.17 of the Revised Code.	515

(7) A provision providing that the taxpayer may not relocate	516
a substantial number of employment positions from elsewhere in	517
this state to the project site unless the director of development	518
services determines that the taxpayer notified the legislative	519
authority of the county, township, or municipal corporation from	520
which the employment positions would be relocated.	521

For purposes of this section, the movement of an employment	522
position from one political subdivision to another political	523
subdivision shall be considered a relocation of an employment	524
position unless the movement is confined to the project site. The	525
transfer of an employment position from one political subdivision	526
to another political subdivision shall not be considered a	527
relocation of an employment position if the employment position in	528
the first political subdivision is replaced by another employment	529
position.	530

(8) A waiver by the taxpayer of any limitations periods	531
relating to assessments or adjustments resulting from the	532
taxpayer's failure to comply with the agreement.	533

(F) If a taxpayer fails to meet or comply with any condition	534
or requirement set forth in a tax credit agreement, the tax credit	535
authority may amend the agreement to reduce the percentage or term	536
of the credit. The reduction of the percentage or term may take	537
effect in the current taxable or calendar year.	538

(G) Financial statements and other information submitted to	539
the department of development services or the tax credit authority	540
by an applicant for or recipient of a tax credit under this	541
section, and any information taken for any purpose from such	542
statements or information, are not public records subject to	543
section 149.43 of the Revised Code. However, the chairperson of	544
the authority may make use of the statements and other information	545
for purposes of issuing public reports or in connection with court	546
proceedings concerning tax credit agreements under this section.	547
Upon the request of the tax commissioner, or the superintendent of	548
insurance in the case of an insurance company, the chairperson of	549
the authority shall provide to the commissioner or superintendent	550
any statement or other information submitted by an applicant for	551
or recipient of a tax credit in connection with the credit. The	552
commissioner or superintendent shall preserve the confidentiality	553
of the statement or other information.	554

(H) A taxpayer claiming a tax credit under this section shall	555
submit to the tax commissioner or, in the case of an insurance	556
company, to the superintendent of insurance, a copy of the	557
director of development'sdevelopment services' certificate of	558
verification under division (E)(6) of this section with the	559
taxpayer's tax report or return for the taxable year or for the	560
calendar year that includes the tax period. Failure to submit a	561
copy of the certificate with the report or return does not	562
invalidate a claim for a credit if the taxpayer submits a copy of	563
the certificate to the commissioner or superintendent within sixty	564
days after the commissioner or superintendent requests it.	565

(I) For the purposes of this section, a taxpayer may include	566
a partnership, a corporation that has made an election under	567
subchapter S of chapter one of subtitle A of the Internal Revenue	568
Code, or any other business entity through which income flows as a	569
distributive share to its owners. A partnership, S-corporation, or	570
other such business entity may elect to pass the credit received	571
under this section through to the persons to whom the income or	572
profit of the partnership, S-corporation, or other entity is	573
distributed. The election shall be made on the annual report	574
required under division (E)(5) of this section. The election	575
applies to and is irrevocable for the credit for which the report	576
is submitted. If the election is made, the credit shall be	577
apportioned among those persons in the same proportions as those	578
in which the income or profit is distributed.	579

(J) If the director of development services determines that a	580
taxpayer that received a tax credit under this section is not	581
complying with the requirement under division (E)(3) of this	582
section, the director shall notify the tax credit authority of the	583
noncompliance. After receiving such a notice, and after giving the	584
taxpayer an opportunity to explain the noncompliance, the	585
authority may terminate the agreement and require the taxpayer to	586
refund to the state all or a portion of the credit claimed in	587
previous years, as follows:	588

(1) If the taxpayer maintained operations at the project site	589
for less than or equal to the term of the credit, an amount not to	590
exceed one hundred per cent of the sum of any tax credits allowed	591
and received under this section.	592

(2) If the taxpayer maintained operations at the project site	593
longer than the term of the credit, but less than the greater of	594
(a) the term of the credit plus three years, or (b) seven years,	595
the amount required to be refunded shall not exceed seventy-five	596
per cent of the sum of any tax credits allowed and received under	597
this section.	598

In determining the portion of the credit to be refunded to	599
this state, the authority shall consider the effect of market	600
conditions on the taxpayer's project and whether the taxpayer	601
continues to maintain other operations in this state. After making	602
the determination, the authority shall certify the amount to be	603
refunded to the tax commissioner or the superintendent of	604
insurance. If the taxpayer is not an insurance company, the	605
commissioner shall make an assessment for that amount against the	606
taxpayer under Chapter 5726., 5733., 5747., or 5751. of the	607
Revised Code. If the taxpayer is an insurance company, the	608
superintendent of insurance shall make an assessment under section	609
5725.222 or 5729.102 of the Revised Code. The time limitations on	610
assessments under those chapters and sections do not apply to an	611
assessment under this division, but the commissioner or	612
superintendent shall make the assessment within one year after the	613
date the authority certifies to the commissioner or superintendent	614
the amount to be refunded.	615

(K) The director of development services, after consultation	616
with the tax commissioner and the superintendent of insurance and	617
in accordance with Chapter 119. of the Revised Code, shall adopt	618
rules necessary to implement this section. The rules may provide	619
for recipients of tax credits under this section to be charged	620
fees to cover administrative costs of the tax credit program. The	621
fees collected shall be credited to the tax incentive programs	622
operating fund created in section 122.174 of the Revised Code. At	623
the time the director gives public notice under division (A) of	624
section 119.03 of the Revised Code of the adoption of the rules,	625
the director shall submit copies of the proposed rules to the	626
chairpersons of the standing committees on economic development in	627
the senate and the house of representatives.	628

(L) On or before the first day of August of each year, the	629
director of development services shall submit a report to the	630
governor, the president of the senate, and the speaker of the	631
house of representatives on the tax credit program under this	632
section. The report shall include information on the number of	633
agreements that were entered into under this section during the	634
preceding calendar year, a description of the project that is the	635
subject of each such agreement, and an update on the status of	636
projects under agreements entered into before the preceding	637
calendar year.	638

(M)(1) The aggregate amount of tax credits issued under	639
division (B)(1) of this section during any calendar year for	640
capital investment projects reviewed and approved by the tax	641
credit authority may not exceed the following amounts:	642

(a) For 2010, thirteen million dollars;

643

(b) For 2011 through 2023, the amount of the limit for the	644
preceding calendar year plus thirteen million dollars;	645

(c) For 2024 and each year thereafter, one hundred	646
ninety-five million dollars.	647

(2) The aggregate amount of tax credits authorized under	648
divisions (B)(2) and (3) of this section and allowed to be claimed	649
by taxpayers in any calendar year for capital improvement projects	650
reviewed and approved by the tax credit authority in 2011, 2012,	651
and 2013 combined shall not exceed twenty-five million dollars. An	652
amount equal to the aggregate amount of credits first authorized	653
in calendar year 2011, 2012, and 2013 may be claimed over the	654
ensuing period up to fifteen years, subject to the terms of	655
individual tax credit agreements.	656

The limitations in division (M) of this section do not apply	657
to credits for capital investment projects approved by the tax	658
credit authority before July 1, 2009.	659

Sec. 122.85. (A) As used in this section and in sections	660
5726.55, 5733.59 and, 5747.66, and 5751.54 of the Revised Code:	661

(1) "Tax credit-eligible production" means a motion picture	662
production certified by the director of development services under	663
division (B) of this section as qualifying the motion picture	664
company for a tax credit under section 5726.55, 5733.59 or,	665
5747.66, or 5751.54 of the Revised Code.	666

(2) "Certificate owner" means a motion picture company to	667
which a tax credit certificate is issued.	668

(3) "Motion picture company" means an individual,	669
corporation, partnership, limited liability company, or other form	670
of business association producing a motion picture.	671

(4) "Eligible production expenditures" means expenditures	672
made after June 30, 2009, for goods or services purchased and	673
consumed in this state by a motion picture company directly for	674
the production of a tax credit-eligible production.	675

"Eligible production expenditures" includes, but is not	676
limited to, expenditures for resident and nonresident cast and	677
crew wages, accommodations, costs of set construction and	678
operations, editing and related services, photography, sound	679
synchronization, lighting, wardrobe, makeup and accessories, film	680
processing, transfer, sound mixing, special and visual effects,	681
music, location fees, and the purchase or rental of facilities and	682
equipment.	683

(5) "Motion picture" means entertainment content created in	684
whole or in part within this state for distribution or exhibition	685
to the general public, including, but not limited to,	686
feature-length films; documentaries; long-form, specials,	687
miniseries, series, and interstitial television programming;	688
interactive web sites; sound recordings; videos; music videos;	689
interactive television; interactive games; videogamesvideo games;	690
commercials; any format of digital media; and any trailer, pilot,	691
video teaser, or demo created primarily to stimulate the sale,	692
marketing, promotion, or exploitation of future investment in	693
either a product or a motion picture by any means and media in any	694
digital media format, film, or videotape, provided the motion	695
picture qualifies as a motion picture. "Motion picture" does not	696
include any television program created primarily as news, weather,	697
or financial market reports, a production featuring current events	698
or sporting events, an awards show or other gala event, a	699
production whose sole purpose is fundraising, a long-form	700
production that primarily markets a product or service or in-house	701
corporate advertising or other similar productions, a production	702
for purposes of political advocacy, or any production for which	703
records are required to be maintained under 18 U.S.C. 2257 with	704
respect to sexually explicit content.	705

(B) For the purpose of encouraging and developing a strong	706
film industry in this state, the director of development services	707
may certify a motion picture produced by a motion picture company	708
as a tax credit-eligible production. In the case of a television	709
series, the director may certify the production of each episode of	710
the series as a separate tax credit-eligible production. A motion	711
picture company shall apply for certification of a motion picture	712
as a tax credit-eligible production on a form and in the manner	713
prescribed by the director. Each application shall include the	714
following information:	715

(1) The name and telephone number of the motion picture	716
production company;	717

(2) The name and telephone number of the company's contact	718
person;	719

(3) A list of the first preproduction date through the last	720
production date in Ohio;	721

(4) The Ohio production office address and telephone number;

722

(5) The total production budget of the motion picture;

723

(6) The total budgeted eligible production expenditures and	724
the percentage that amount is of the total production budget of	725
the motion picture;	726

(7) The total percentage of the motion picture being shot in	727
Ohio;	728

(8) The level of employment of cast and crew who reside in	729
Ohio;	730

(9) A synopsis of the script;

731

(10) The shooting script;

732

(11) A creative elements list that includes the names of the	733
principal cast and crew and the producer and director;	734

(12) Documentation of financial ability to undertake and	735
complete the motion picture;	736

(13) Estimated value of the tax credit based upon total	737
budgeted eligible production expenditures;	738

(14) Any other information considered necessary by the	739
director.	740

Within ninety days after certification of a motion picture as	741
a tax credit-eligible production, and any time thereafter upon the	742
director'sdirector of development services' request, the motion	743
picture company shall present to the director of development	744
sufficient evidence of reviewable progress. If the motion picture	745
company fails to present sufficient evidence, the director of	746
development may rescind the certification. Upon rescission, the	747
director shall notify the applicant that the certification has	748
been rescinded. Nothing in this section prohibits an applicant	749
whose tax credit-eligible production certification has been	750
rescinded from submitting a subsequent application for	751
certification.	752

(C)(1) A motion picture company whose motion picture has been	753
certified as a tax credit-eligible production may apply to the	754
director of development services on or after July 1, 2009, for a	755
refundable credit against the tax imposed by section 5726.02,	756
5733.06 or, 5747.02, or 5751.02 of the Revised Code. The director	757
in consultation with the tax commissioner shall prescribe the form	758
and manner of the application and the information or documentation	759
required to be submitted with the application.	760

The credit is determined as follows:

761

(a) If the total budgeted eligible production expenditures	762
stated in the application submitted under division (B) of this	763
section or the actual eligible production expenditures as finally	764
determined under division (D) of this section, whichever is least,	765
is less than or equal to three hundred thousand dollars, no credit	766
is allowed;	767

(b) If the total budgeted eligible production expenditures	768
stated in the application submitted under division (B) of this	769
section or the actual eligible production expenditures as finally	770
determined under division (D) of this section, whichever is least,	771
is greater than three hundred thousand dollars, the credit equals	772
the sum of the following, subject to the limitation in division	773
(C)(4) of this section:	774

(i) Twenty-five per cent of the least of such budgeted or	775
actual eligible expenditure amounts excluding budgeted or actual	776
eligible expenditures for resident cast and crew wages;	777

(ii) Thirty-five per cent of budgeted or actual eligible	778
expenditures for resident cast and crew wages.	779

(2) Except as provided in division (C)(4) of this section, if	780
the director of development services approves a motion picture	781
company's application for a credit, the director shall issue a tax	782
credit certificate to the company. The director in consultation	783
with the tax commissioner shall prescribe the form and manner of	784
issuing certificates. The director shall assign a unique	785
identifying number to each tax credit certificate and shall record	786
the certificate in a register devised and maintained by the	787
director for that purpose. The certificate shall state the amount	788
of the eligible production expenditures on which the credit is	789
based and the amount of the credit. Upon the issuance of a	790
certificate, the director shall certify to the tax commissioner	791
the name of the applicant, the amount of eligible production	792
expenditures shown on the certificate, and any other information	793
required by the rules adopted to administer this section.	794

(3) The amount of eligible production expenditures for which	795
a tax credit may be claimed is subject to inspection and	796
examination by the tax commissioner or employees of the	797
commissioner under section 5703.19 of the Revised Code and any	798
other applicable law. Once the eligible production expenditures	799
are finally determined under section 5703.19 of the Revised Code	800
and division (D) of this section, the credit amount is not subject	801
to adjustment unless the director determines an error was	802
committed in the computation of the credit amount.	803

(4) No tax credit certificate may be issued before the	804
completion of the tax credit-eligible production. For the fiscal	805
biennium beginning July 1, 2009, and ending June 30, 2011, not	806
more than thirty million dollars of tax credit may be allowed, of	807
which not more than ten million dollars of tax credit may be	808
allowed in the first year of the biennium. In succeeding fiscal	809
biennia, not more than twenty million dollars of tax credit may be	810
allowed per fiscal biennium, and not more than ten million dollars	811
may be allowed in the first year of the biennium. At any time, not	812
more than five million dollars of tax credit may be allowed per	813
tax credit-eligible production.	814

(D) A motion picture company whose motion picture has been	815
certified as a tax credit-eligible production shall engage, at the	816
company's expense, an independent certified public accountant to	817
examine the company's production expenditures to identify the	818
expenditures that qualify as eligible production expenditures. The	819
certified public accountant shall issue a report to the company	820
and to the director of development services certifying the	821
company's eligible production expenditures and any other	822
information required by the director. Upon receiving and examining	823
the report, the director may disallow any expenditure the director	824
determines is not an eligible production expenditure. If the	825
director disallows an expenditure, the director shall issue a	826
written notice to the motion picture production company stating	827
that the expenditure is disallowed and the reason for the	828
disallowance. Upon examination of the report and disallowance of	829
any expenditures, the director shall determine finally the lesser	830
of the total budgeted eligible production expenditures stated in	831
the application submitted under division (B) of this section or	832
the actual eligible production expenditures for the purpose of	833
computing the amount of the credit.	834

(E) No credit shall be allowed under section 5726.55, 5733.59	835
or, 5747.66, or 5751.54 of the Revised Code unless the director	836
has reviewed the report and made the determination prescribed by	837
division (D) of this section.	838

(F) This state reserves the right to refuse the use of this	839
state's name in the credits of any tax credit-eligible motion	840
picture production.	841

(G)(1) The director of development services in consultation	842
with the tax commissioner shall adopt rules for the administration	843
of this section, including rules setting forth and governing the	844
criteria for determining whether a motion picture production is a	845
tax credit-eligible production; activities that constitute the	846
production of a motion picture; reporting sufficient evidence of	847
reviewable progress; expenditures that qualify as eligible	848
production expenditures; a competitive process for approving	849
credits; and consideration of geographic distribution of credits.	850
The rules shall be adopted under Chapter 119. of the Revised Code.	851

(2) The director may require a reasonable application fee to	852
cover administrative costs of the tax credit program. The fees	853
collected shall be credited to the motion picture tax credit	854
program operating fund, which is hereby created in the state	855
treasury. The motion picture tax credit program operating fund	856
shall consist of all grants, gifts, fees, and contributions made	857
to the director of development for marketing and promotion of the	858
motion picture industry within this state. The director of	859
development shall use money in the fund to pay expenses related to	860
the administration of the Ohio film office and the credit	861
authorized by this section and sections 5726.55., 5733.59 and,	862
5747.66, and 5751.54 of the Revised Code.	863

Sec. 145.114.  (A) As used in this section and in section	864
145.116 of the Revised Code:	865

(1) "Agent" means a dealer, as defined in section 1707.01 of	866
the Revised Code, who is licensed under sections 1707.01 to	867
1707.45 of the Revised Code or under comparable laws of another	868
state or of the United States.	869

(2) "Minority business enterprise" has the same meaning as in	870
section 122.71 of the Revised Code.	871

(3) "Ohio-qualified agent" means an agent designated as such	872
by the public employees retirement board.	873

(4) "Ohio-qualified investment manager" means an investment	874
manager designated as such by the public employees retirement	875
board.	876

(5) "Principal place of business" means an office in which	877
the agent regularly provides securities or investment advisory	878
services and solicits, meets with, or otherwise communicates with	879
clients.	880

(B) The public employees retirement board shall, for the	881
purposes of this section, designate an agent as an Ohio-qualified	882
agent if the agent meets all of the following requirements:	883

(1) The agent is subject to taxation under Chapter 5725.,	884
5726., 5733., or 5747. of the Revised Code;	885

(2) The agent is authorized to conduct business in this	886
state;	887

(3) The agent maintains a principal place of business in this	888
state and employs at least five residents of this state.	889

(C) The public employees retirement board shall adopt and	890
implement a written policy to establish criteria and procedures	891
used to select agents to execute securities transactions on behalf	892
of the retirement system. The policy shall address each of the	893
following:	894

(1) Commissions charged by the agent, both in the aggregate	895
and on a per share basis;	896

(2) The execution speed and trade settlement capabilities of	897
the agent;	898

(3) The responsiveness, reliability, and integrity of the	899
agent;	900

(4) The nature and value of research provided by the agent;

901

(5) Any special capabilities of the agent.

902

(D)(1) The board shall, at least annually, establish a policy	903
with the goal to increase utilization by the board of	904
Ohio-qualified agents for the execution of domestic equity and	905
fixed income trades on behalf of the retirement system, when an	906
Ohio-qualified agent offers quality, services, and safety	907
comparable to other agents otherwise available to the board and	908
meets the criteria established under division (C) of this section.	909

(2) The board shall review, at least annually, the	910
performance of the agents that execute securities transactions on	911
behalf of the board.	912

(3) The board shall determine whether an agent is an	913
Ohio-qualified agent, meets the criteria established by the board	914
pursuant to division (C) of this section, and offers quality,	915
services, and safety comparable to other agents otherwise	916
available to the board. The board's determination shall be final.	917

(E) The board shall, at least annually, submit to the Ohio	918
retirement study council a report containing the following	919
information:	920

(1) The name of each agent designated as an Ohio-qualified	921
agent under this section;	922

(2) The name of each agent that executes securities	923
transactions on behalf of the board;	924

(3) The amount of equity and fixed-income trades that are	925
executed by Ohio-qualified agents, expressed as a percentage of	926
all equity and fixed-income trades that are executed by agents on	927
behalf of the board;	928

(4) The compensation paid to Ohio-qualified agents, expressed	929
as a percentage of total compensation paid to all agents that	930
execute securities transactions on behalf of the board;	931

(5) The amount of equity and fixed-income trades that are	932
executed by agents that are minority business enterprises,	933
expressed as a percentage of all equity and fixed-income trades	934
that are executed by agents on behalf of the board;	935

(6) Any other information requested by the Ohio retirement	936
study council regarding the board's use of agents.	937

Sec. 145.116. (A) The public employees retirement board	938
shall, for the purposes of this section, designate an investment	939
manager as an Ohio-qualified investment manager if the investment	940
manager meets all of the following requirements:	941

(1) The investment manager is subject to taxation under	942
Chapter 5725., 5726., 5733., or 5747. of the Revised Code;	943

(2) The investment manager meets one of the following	944
requirements:	945

(a) Has its corporate headquarters or principal place of	946
business in this state;	947

(b) Employs at least five hundred individuals in this state;

948

(c) Has a principal place of business in this state and	949
employs at least 20 residents of this state.	950

(B)(1) The board shall, at least annually, establish a policy	951
with the goal to increase utilization by the board of	952
Ohio-qualified investment managers, when an Ohio-qualified	953
investment manager offers quality, services, and safety comparable	954
to other investment managers otherwise available to the board. The	955
policy shall also provide for the following:	956

(a) A process whereby the board can develop a list of	957
Ohio-qualified investment managers and their investment products;	958

(b) A process whereby the board can give public notice to	959
Ohio-qualified investment managers of the board's search for an	960
investment manager that includes the board's search criteria.	961

(2) The board shall determine whether an investment manager	962
is an Ohio-qualified investment manager and whether the investment	963
manager offers quality, services, and safety comparable to other	964
investment managers otherwise available to the board. The board's	965
determination shall be final.	966

(C) The board shall, at least annually, submit to the Ohio	967
retirement study council a report containing the following	968
information:	969

(1) The name of each investment manager designated as an	970
Ohio-qualified investment manager under this section;	971

(2) The name of each investment manager with which the board	972
contracts;	973

(3) The amount of assets managed by Ohio-qualified investment	974
managers, expressed as a percentage of the total assets held by	975
the retirement system and as a percentage of assets managed by	976
investment managers with which the board has contracted;	977

(4) The compensation paid to Ohio-qualified investment	978
managers, expressed as a percentage of total compensation paid to	979
all investment managers with which the board has contracted;	980

(5) Any other information requested by the Ohio retirement	981
study council regarding the board's use of investment managers.	982

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

983

(1) "Historic building" means a building, including its	984
structural components, that is located in this state and that is	985
either individually listed on the national register of historic	986
places under 16 U.S.C. 470a, located in a registered historic	987
district, and certified by the state historic preservation officer	988
as being of historic significance to the district, or is	989
individually listed as aan historic landmark designated by a	990
local government certified under 16 U.S.C. 470a(c).	991

(2) "Qualified rehabilitation expenditures" means	992
expenditures paid or incurred during the rehabilitation period,	993
and before and after that period as determined under 26 U.S.C. 47,	994
by an owner of aan historic building to rehabilitate the	995
building. "Qualified rehabilitation expenditures" includes	996
architectural or engineering fees paid or incurred in connection	997
with the rehabilitation, and expenses incurred in the preparation	998
of nomination forms for listing on the national register of	999
historic places. "Qualified rehabilitation expenditures" does not	1000
include any of the following:	1001

(a) The cost of acquiring, expanding, or enlarging aan	1002
historic building;	1003

(b) Expenditures attributable to work done to facilities	1004
related to the building, such as parking lots, sidewalks, and	1005
landscaping;	1006

(c) New building construction costs.

1007

(3) "Owner" of aan historic building means a person holding	1008
the fee simple interest in the building. "Owner" does not include	1009
the state or a state agency, or any political subdivision as	1010
defined in section 9.23 of the Revised Code.	1011

(4) "Certificate owner" means the owner of aan historic	1012
building to which a rehabilitation tax credit certificate was	1013
issued under this section.	1014

(5) "Registered historic district" means aan historic	1015
district listed in the national register of historic places under	1016
16 U.S.C. 470a, aan historic district designated by a local	1017
government certified under 16 U.S.C. 470a(c), or a local historic	1018
district certified under 36 C.F.R. 67.8 and 67.9.	1019

(6) "Rehabilitation" means the process of repairing or	1020
altering aan historic building or buildings, making possible an	1021
efficient use while preserving those portions and features of the	1022
building and its site and environment that are significant to its	1023
historic, architectural, and cultural values.	1024

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

1025

(a) If the rehabilitation initially was not planned to be	1026
completed in stages, a period chosen by the owner not to exceed	1027
twenty-four months during which rehabilitation occurs;	1028

(b) If the rehabilitation initially was planned to be	1029
completed in stages, a period chosen by the owner not to exceed	1030
sixty months during which rehabilitation occurs. Each stage shall	1031
be reviewed as a phase of a rehabilitation as determined under 26	1032
C.F.R. 1.48-12 or a successor to that section.	1033

(8) "State historic preservation officer" or "officer" means	1034
the state historic preservation officer appointed by the governor	1035
under 16 U.S.C. 470a.	1036

(B) The owner of aan historic building may apply to the	1037
director of development services for a rehabilitation tax credit	1038
certificate for qualified rehabilitation expenditures paid or	1039
incurred after April 4, 2007, for rehabilitation of aan historic	1040
building. The form and manner of filing such applications shall be	1041
prescribed by rule of the director of development. Each	1042
application shall state the amount of qualified rehabilitation	1043
expenditures the applicant estimates will be paid or incurred. The	1044
director may require applicants to furnish documentation of such	1045
estimates.	1046

The director, after consultation with the tax commissioner	1047
and in accordance with Chapter 119. of the Revised Code, shall	1048
adopt rules that establish all of the following:	1049

(1) Forms and procedures by which applicants may apply for	1050
rehabilitation tax credit certificates;	1051

(2) Criteria for reviewing, evaluating, and approving	1052
applications for certificates within the limitations under	1053
division (D) of this section, criteria for assuring that the	1054
certificates issued encompass a mixture of high and low qualified	1055
rehabilitation expenditures, and criteria for issuing certificates	1056
under division (C)(3)(b) of this section;	1057

(3) Eligibility requirements for obtaining a certificate	1058
under this section;	1059

(4) The form of rehabilitation tax credit certificates;

1060

(5) Reporting requirements and monitoring procedures;

1061

(6) Procedures and criteria for conducting cost-benefit	1062
analyses of historic buildings that are the subjects of	1063
applications filed under this section. The purpose of a	1064
cost-benefit analysis shall be to determine whether rehabilitation	1065
of the historic building will result in a net revenue gain in	1066
state and local taxes once the building is used.	1067

(7) Any other rules necessary to implement and administer	1068
this section.	1069

(C) The director of development services shall review the	1070
applications with the assistance of the state historic	1071
preservation officer and determine whether all of the following	1072
criteria are met:	1073

(1) That the building that is the subject of the application	1074
is aan historic building and the applicant is the owner of the	1075
building;	1076

(2) That the rehabilitation will satisfy standards prescribed	1077
by the United States secretary of the interior under 16 U.S.C.	1078
470, et seq., as amended, and 36 C.F.R. 67.7 or a successor to	1079
that section;	1080

(3) That receiving a rehabilitation tax credit certificate	1081
under this section is a major factor in:	1082

(a) The applicant's decision to rehabilitate the historic	1083
building; or	1084

(b) To increase the level of investment in such	1085
rehabilitation.	1086

An applicant shall demonstrate to the satisfaction of the	1087
state historic preservation officer and director of development	1088
services that the rehabilitation will satisfy the standards	1089
described in division (C)(2) of this section before the applicant	1090
begins the physical rehabilitation of the historic building.	1091

(D)(1) If the director of development services determines	1092
that an application meets the criteria in divisions (C)(1), (2),	1093
and (3) of this section, the director shall conduct a cost-benefit	1094
analysis for the historic building that is the subject of the	1095
application to determine whether rehabilitation of the historic	1096
building will result in a net revenue gain in state and local	1097
taxes once the building is used. The director shall consider the	1098
results of the cost-benefit analysis in determining whether to	1099
approve the application. The director shall also consider the	1100
potential economic impact and the regional distributive balance of	1101
the credits throughout the state. The director may approve an	1102
application only after completion of the cost-benefit analysis.	1103

(2) A rehabilitation tax credit certificate shall not be	1104
issued for an amount greater than the estimated amount furnished	1105
by the applicant on the application for such certificate and	1106
approved by the director. The director shall not approve more than	1107
a total of sixty million dollars of rehabilitation tax credits per	1108
fiscal year but the director may reallocate unused tax credits	1109
from a prior fiscal year for new applicants and such reallocated	1110
credits shall not apply toward the dollar limit of this division.	1111

(3) For rehabilitations with a rehabilitation period not	1112
exceeding twenty-four months as provided in division (A)(7)(a) of	1113
this section, a rehabilitation tax credit certificate shall not be	1114
issued before the rehabilitation of the historic building is	1115
completed.	1116

(4) For rehabilitations with a rehabilitation period not	1117
exceeding sixty months as provided in division (A)(7)(b) of this	1118
section, a rehabilitation tax credit certificate shall not be	1119
issued before a stage of rehabilitation is completed. After all	1120
stages of rehabilitation are completed, if the director cannot	1121
determine that the criteria in division (C) of this section are	1122
satisfied for all stages of rehabilitations, the director shall	1123
certify this finding to the tax commissioner, and any	1124
rehabilitation tax credits received by the applicant shall be	1125
repaid by the applicant and may be collected by assessment as	1126
unpaid tax by the commissioner.	1127

(5) The director of development services shall require the	1128
applicant to provide a third-party cost certification by a	1129
certified public accountant of the actual costs attributed to the	1130
rehabilitation of the historic building when qualified	1131
rehabilitation expenditures exceed two hundred thousand dollars.	1132

If an applicant whose application is approved for receipt of	1133
a rehabilitation tax credit certificate fails to provide to the	1134
director of development sufficient evidence of reviewable	1135
progress, including a viable financial plan, copies of final	1136
construction drawings, and evidence that the applicant has	1137
obtained all historic approvals within twelve months after the	1138
date the applicant received notification of approval, and if the	1139
applicant fails to provide evidence to the director of development	1140
that the applicant has secured and closed on financing for the	1141
rehabilitation within eighteen months after receiving notification	1142
of approval, the director may rescind the approval of the	1143
application. The director shall notify the applicant if the	1144
approval has been rescinded. Credits that would have been	1145
available to an applicant whose approval was rescinded shall be	1146
available for other qualified applicants. Nothing in this division	1147
prohibits an applicant whose approval has been rescinded from	1148
submitting a new application for a rehabilitation tax credit	1149
certificate.	1150

(E) Issuance of a certificate represents a finding by the	1151
director of development services of the matters described in	1152
divisions (C)(1), (2), and (3) of this section only; issuance of a	1153
certificate does not represent a verification or certification by	1154
the director of the amount of qualified rehabilitation	1155
expenditures for which a tax credit may be claimed under section	1156
5725.151, 5725.34, 5726.52, 5729.17, 5733.47, or 5747.76 of the	1157
Revised Code. The amount of qualified rehabilitation expenditures	1158
for which a tax credit may be claimed is subject to inspection and	1159
examination by the tax commissioner or employees of the	1160
commissioner under section 5703.19 of the Revised Code and any	1161
other applicable law. Upon the issuance of a certificate, the	1162
director shall certify to the tax commissioner, in the form and	1163
manner requested by the tax commissioner, the name of the	1164
applicant, the amount of qualified rehabilitation expenditures	1165
shown on the certificate, and any other information required by	1166
the rules adopted under this section.	1167

(F)(1) On or before the first day of April each year, the	1168
director of development services and tax commissioner jointly	1169
shall submit to the president of the senate and the speaker of the	1170
house of representatives a report on the tax credit program	1171
established under this section and sections 5725.151, 5725.34,	1172
5726.52, 5729.17, 5733.47, and 5747.76 of the Revised Code. The	1173
report shall present an overview of the program and shall include	1174
information on the number of rehabilitation tax credit	1175
certificates issued under this section during the preceding fiscal	1176
year, an update on the status of each historic building for which	1177
an application was approved under this section, the dollar amount	1178
of the tax credits granted under sections 5725.151, 5725.34,	1179
5726.52, 5729.17, 5733.47, and 5747.76 of the Revised Code, and	1180
any other information the director and commissioner consider	1181
relevant to the topics addressed in the report.	1182

(2) On or before December 1, 2015, the director of	1183
development services and tax commissioner jointly shall submit to	1184
the president of the senate and the speaker of the house of	1185
representatives a comprehensive report that includes the	1186
information required by division (F)(1) of this section and a	1187
detailed analysis of the effectiveness of issuing tax credits for	1188
rehabilitating historic buildings. The report shall be prepared	1189
with the assistance of an economic research organization jointly	1190
chosen by the director and commissioner.	1191

(G) There is hereby created in the state treasury the	1192
historic rehabilitation tax credit operating fund. The director of	1193
development services is authorized to charge reasonable	1194
application and other fees in connection with the administration	1195
of tax credits authorized by this section and sections 5725.151,	1196
5725.34, 5726.52, 5729.17, 5733.44, and 5747.76 of the Revised	1197
Code. Any such fees collected shall be credited to the fund and	1198
used to pay reasonable costs incurred by the department of	1199
development services in administering this section and sections	1200
5725.151, 5725.34, 5726.52, 5729.17, 5733.44, and 5747.76 of the	1201
Revised Code.	1202

The Ohio historic preservation office is authorized to charge	1203
reasonable fees in connection with its review and approval of	1204
applications under this section. Any such fees collected shall be	1205
credited to the fund and used to pay administrative costs incurred	1206
by the Ohio historic preservation office pursuant to this section.	1207

Sec. 150.01. (A) As used in this chapter:

1208

(1) "Authority" means the Ohio venture capital authority	1209
created under section 150.02 of the Revised Code.	1210

(2) "Issuer" means a port authority organized and existing	1211
under applicable provisions of Chapter 4582. of the Revised Code	1212
that, pursuant to an agreement entered into under division (E) of	1213
section 150.02 of the Revised Code, issues or issued obligations	1214
to fund one or more loans to the program fund.	1215

(3) "Lender" means any person that lends money to the program	1216
fund as provided in this chapter and includes any issuer and any	1217
trustee.	1218

(4) "Loss" means a loss incurred with respect to a lender's	1219
loan to the program fund. Such a loss is incurred only if and to	1220
the extent a program administrator fails to satisfy its	1221
obligations to the lender to make timely payments of principal or	1222
interest as provided in the loan agreement between the lender and	1223
the program administrator. "Loss" does not include either of the	1224
following:	1225

(a) Any loss incurred by the program fund, including a loss	1226
attributable to any investment made by a program administrator;	1227

(b) Any loss of the capital required to be provided by a	1228
program administrator, or income accruing to that capital, under	1229
the agreement entered into under division (B) of section 150.05 of	1230
the Revised Code.	1231

(5) "Ohio-based business enterprise" means a person that is	1232
engaged in business, that employs at least one individual on a	1233
full-time or part-time basis at a place of business in this state,	1234
including a person engaged in business if that person is a	1235
self-employed individual, and that is in the seed or early stage	1236
of business development requiring initial or early stage funding	1237
or is an established business enterprise developing new methods or	1238
technologies.	1239

(6) "Ohio-based venture capital fund" means a venture capital	1240
fund having its principal office in this state, where the majority	1241
of the fund's staff are employed and where at least one investment	1242
professional is employed who has at least five years of experience	1243
in venture capital investment.	1244

(7) "Program fund" means the fund created under section	1245
150.03 of the Revised Code.	1246

(8) "Research and development purposes" has the same meaning	1247
as used in Section 2p of Article VIII, Ohio Constitution, and	1248
includes the development of sites and facilities in this state for	1249
and in support of those research and development purposes.	1250

(9) "Trustee" means a trust company or a bank with corporate	1251
trust powers, in either case having a place of business in this	1252
state, being a taxpayer under Chapter 5707., 5725., 5726., 5727.,	1253
5729., 5733., or 5747 of the Revised Code at the time it may claim	1254
and receive a tax credit under division (E) of section 150.07 of	1255
the Revised Code, and acting in its capacity as a trustee pursuant	1256
to a trust agreement under which an issuer issues obligations to	1257
fund loans to the program fund.	1258

(B) The general assembly declares that its purpose in	1259
enacting Chapter 150. of the Revised Code is to increase the	1260
amount of private investment capital available in this state for	1261
Ohio-based business enterprises in the seed or early stages of	1262
business development and requiring initial or early stage funding,	1263
as well as established Ohio-based business enterprises developing	1264
new methods or technologies, including the promotion of research	1265
and development purposes, thereby increasing employment, creating	1266
additional wealth, and otherwise benefiting the economic welfare	1267
of the people of this state. Accordingly, it is the intention of	1268
the general assembly that the program fund make investments in	1269
support of Ohio-based business enterprises in accordance with the	1270
investment policy authorized and required under section 150.03 of	1271
the Revised Code, and that the Ohio venture capital authority	1272
focus its investment policy principally on venture capital funds	1273
investing in such Ohio-based business enterprises. The general	1274
assembly finds and determines that this chapter and the investment	1275
policy, and actions taken under and consistent therewith, will	1276
promote and implement the public purposes of Section 2p of Article	1277
VIII, Ohio Constitution.	1278

Sec. 150.07.  (A) For the purpose stated in section 150.01 of	1279
the Revised Code, the authority may authorize a lender to claim	1280
one of the refundable tax credits allowed under section 5707.031,	1281
5725.19, 5726.53, 5727.241, 5729.08, 5733.49, or 5747.80 of the	1282
Revised Code. The credits shall be authorized by a written	1283
contract with the lender. The contract shall specify the terms	1284
under which the lender may claim the credit, including the amount	1285
of loss, if any, the lender must incur before the lender may claim	1286
the credit; specify that the credit shall not exceed the amount of	1287
the loss; and specify that the lender may claim the credit only	1288
for a loss certified by a program administrator to the authority	1289
under the procedures prescribed under division (B)(6) of section	1290
150.05 of the Revised Code. The program administrator shall	1291
provide to the authority an estimate of the amount of tax credits,	1292
if any, that are likely, in the administrator's reasonable	1293
judgment, to be claimed by a lender during the current and next	1294
succeeding state fiscal years. The estimate shall be provided at	1295
the same time each year that the administrator is required to	1296
report the annual audit to the authority under section 150.05 of	1297
the Revised Code.	1298

(B) Tax credits may be authorized at any time after the	1299
authority establishes the investment policy under section 150.03	1300
of the Revised Code, but a tax credit so authorized may not be	1301
claimed before July 1, 2007, or after June 30, 2026, except, with	1302
respect to loans made from the proceeds of obligations issued	1303
under section 4582.71 of the Revised Code, a tax credit may not be	1304
claimed before July 1, 2012, or after June 30, 2036.	1305

(C)(1) Upon receiving certification of a lender's loss from a	1306
program administrator pursuant to the procedures in the investment	1307
policy, the authority shall issue a tax credit certificate to the	1308
lender, except as otherwise provided in division (D) of this	1309
section.	1310

(2) If the lender is a pass-through entity, as defined in	1311
section 5733.04 of the Revised Code, then each equity investor in	1312
the lender pass-through entity shall be entitled to claim one of	1313
the tax credits allowed under division (A) of this section for	1314
that equity investor's taxable year in which or with which ends	1315
the taxable year of the lender pass-through entity in an amount	1316
based on the equity investor's distributive or proportionate share	1317
of the credit amount set forth in the certificate issued by the	1318
authority. If all equity investors of the lender pass-through	1319
entity are not eligible to claim a credit against the same tax set	1320
forth in division (A) of this section, then each equity investor	1321
may elect to claim a credit against the tax to which the equity	1322
investor is subject to in an amount based on the equity investor's	1323
distributive or proportionate share of the credit amount set forth	1324
in the certificate issued by the authority.	1325

(3) The certificate shall state the amount of the credit and	1326
the calendar year under section 5707.031, 5725.19, 5727.241, or	1327
5729.08, the tax year under section 5726.53 or 5733.49, or the	1328
taxable year under section 5747.80 of the Revised Code for which	1329
the credit may be claimed. The authority, in conjunction with the	1330
tax commissioner, shall develop a system for issuing tax credit	1331
certificates for the purpose of verifying that any credit claimed	1332
is a credit issued under this section and is properly taken in the	1333
year specified in the certificate and in compliance with division	1334
(B) of this section.	1335

(D) The authority shall not, in any fiscal year, issue tax	1336
credit certificates under this section in a total amount exceeding	1337
twenty million dollars. The authority shall not issue tax credit	1338
certificates under this section in a total amount exceeding three	1339
hundred eighty million dollars.	1340

(E) Notwithstanding any other section of this chapter or any	1341
provision of Chapter 5707., 5725., 5726., 5727., 5729., 5733., or	1342
5747. of the Revised Code, if provided by the terms of an	1343
agreement entered into by the issuer and the authority under	1344
division (E) of section 150.02 of the Revised Code, and subject to	1345
the limitations of divisions (B) and (D) of this section, a	1346
trustee shall have the right, for the benefit of the issuer, to	1347
receive and claim the credits authorized under division (A) of	1348
this section solely for the purpose provided for in section 150.04	1349
of the Revised Code, and the trustee shall be entitled to file a	1350
tax return, an amended tax return, or an estimated tax return at	1351
such times as are permitted or required under the applicable	1352
provisions of Chapter 5707., 5725., 5726., 5727., 5729., 5733., or	1353
5747. of the Revised Code for the purpose of claiming credits	1354
issued to the trustee. The trustee shall receive the proceeds of	1355
such a tax credit for the benefit of the issuer, and shall apply	1356
the proceeds solely to satisfy a loss or restore a reserve as	1357
provided in section 150.04 of the Revised Code. Nothing in this	1358
section shall require a trustee to file a tax return under any	1359
chapter for any purpose other than claiming such credits if the	1360
trustee is not otherwise required to make such a filing.	1361

The general assembly may from time to time modify or repeal	1362
any of the taxes against which the credits authorized under	1363
division (A) of this section may be claimed, and may authorize	1364
those credits to be claimed for the purposes provided for in	1365
section 150.04 of the Revised Code with respect to any other tax	1366
imposed by this state; provided, that if any obligations issued	1367
under section 4582.71 of the Revised Code are then outstanding and	1368
such modification or repeal would have the effect of impairing any	1369
covenant made in or pursuant to an agreement under division (E) of	1370
section 150.02 of the Revised Code regarding the maintenance or	1371
restoration of reserves established and maintained with a trustee	1372
consistent with division (B)(2) of section 150.04 of the Revised	1373
Code and such agreement, the state shall provide other security to	1374
the extent necessary to avoid or offset the impairment of such	1375
covenant.	1376

Sec. 150.10.  (A) On the first day of January of the second	1377
year after the date of entering into an agreement under section	1378
150.05 of the Revised Code and of each ensuing year, the authority	1379
shall file with the clerk of the house of representatives, the	1380
clerk of the senate, and the chairpersons of the house and senate	1381
standing committees predominantly concerned with economic	1382
development a written report on the Ohio venture capital program.	1383
The report shall include all the following:	1384

(1) A description of the details of the investment policy	1385
established or modified in accordance with sections 150.03 and	1386
150.04 of the Revised Code;	1387

(2) The authority's assessment of the program's achievement	1388
of its purpose stated in section 150.01 of the Revised Code;	1389

(3) The value of tax credit certificates issued by the	1390
authority under section 150.07 of the Revised Code in each fiscal	1391
year ending on or before the preceding thirtieth day of June;	1392

(4) The amount of tax credits claimed pursuant to section	1393
5707.031, 5725.19, 5726.53, 5727.241, 5729.08, 5733.49, or 5747.80	1394
of the Revised Code, as to the respective taxes involved;	1395

(5) The financial status of the Ohio venture capital fund;

1396

(6) The names of venture capital funds in which money from	1397
the program fund has been invested and the locations of their	1398
principal offices, and the names of the enterprises in which each	1399
of those venture capital funds has invested such money and the	1400
locations of those enterprises' principal offices;	1401

(7) Any recommendations for modifying the program to better	1402
achieve the purpose stated in section 150.01 of the Revised Code.	1403

(B) During each year that a report is issued under division	1404
(A) of this section, the chairperson of the authority, or another	1405
member of the authority designated by the chairperson as the	1406
authority's representative, shall be required to appear in person	1407
before the standing committees of the house and senate	1408
predominantly concerned with economic development to give	1409
testimony concerning the status of the Ohio venture capital	1410
program.	1411

Sec. 715.013. (A) Except as otherwise expressly authorized by	1412
the Revised Code, no municipal corporation shall levy a tax that	1413
is the same as or similar to a tax levied under Chapter 322.,	1414
3734., 3769., 4123., 4141., 4301., 4303., 4305., 4307., 4309.,	1415
5707., 5725., 5726., 5727., 5728., 5729., 5731., 5735., 5737.,	1416
5739., 5741., 5743., or 5749. of the Revised Code.	1417

(B) This section does not prohibit a municipal corporation	1418
from levying a tax on any of the following:	1419

(1) Amounts received for admission to any place;

1420

(2) The income of an electric company or combined company, as	1421
defined in section 5727.01 of the Revised Code;	1422

(3) On and after January 1, 2004, the income of a telephone	1423
company, as defined in section 5727.01 of the Revised Code.	1424

Sec. 742.114. (A) As used in this section and in section	1425
742.116 of the Revised Code:	1426

(1) "Agent" means a dealer, as defined in section 1707.01 of	1427
the Revised Code, who is licensed under sections 1707.01 to	1428
1707.45 of the Revised Code or under comparable laws of another	1429
state or of the United States.	1430

(2) "Minority business enterprise" has the same meaning as in	1431
section 122.71 of the Revised Code.	1432

(3) "Ohio-qualified agent" means an agent designated as such	1433
by the board of trustees of the fund.	1434

(4) "Ohio-qualified investment manager" means an investment	1435
manager designated as such by the board of trustees of the fund.	1436

(5) "Principal place of business" means an office in which	1437
the agent regularly provides securities or investment advisory	1438
services and solicits, meets with, or otherwise communicates with	1439
clients.	1440

(B) The board of trustees of the fund shall, for the purposes	1441
of this section, designate an agent as an Ohio-qualified agent if	1442
the agent meets all of the following requirements:	1443

(1) The agent is subject to taxation under Chapter 5725.,	1444
5726., 5733., or 5747. of the Revised Code;	1445

(2) The agent is authorized to conduct business in this	1446
state;	1447

(3) The agent maintains a principal place of business in this	1448
state and employs at least five residents of this state.	1449

(C) The board shall adopt and implement a written policy to	1450
establish criteria and procedures used to select agents to execute	1451
securities transactions on behalf of the retirement system. The	1452
policy shall address each of the following:	1453

(1) Commissions charged by the agent, both in the aggregate	1454
and on a per share basis;	1455

(2) The execution speed and trade settlement capabilities of	1456
the agent;	1457

(3) The responsiveness, reliability, and integrity of the	1458
agent;	1459

(4) The nature and value of research provided by the agent;

1460

(5) Any special capabilities of the agent.

1461

(D)(1) The board shall, at least annually, establish a policy	1462
with the goal to increase utilization by the board of	1463
Ohio-qualified agents for the execution of domestic equity and	1464
fixed-income trades on behalf of the retirement system, when an	1465
Ohio-qualified agent offers quality, services, and safety	1466
comparable to other agents otherwise available to the board and	1467
meets the criteria established under division (C) of this section.	1468

(2) The board shall review, at least annually, the	1469
performance of the agents that execute securities transactions on	1470
behalf of the board.	1471

(3) The board shall determine whether an agent is an	1472
Ohio-qualified agent, meets the criteria established by the board	1473
pursuant to division (C) of this section, and offers quality,	1474
services, and safety comparable to other agents otherwise	1475
available to the board. The board's determination shall be final.	1476

(E) The board shall, at least annually, submit to the Ohio	1477
retirement study council a report containing the following	1478
information:	1479

(1) The name of each agent designated as an Ohio-qualified	1480
agent under this section;	1481

(2) The name of each agent that executes securities	1482
transactions on behalf of the board;	1483

(3) The amount of equity and fixed-income trades that are	1484
executed by Ohio-qualified agents, expressed as a percentage of	1485
all equity and fixed-income trades that are executed by agents on	1486
behalf of the board;	1487

(4) The compensation paid to Ohio-qualified agents, expressed	1488
as a percentage of total compensation paid to all agents that	1489
execute securities transactions on behalf of the board;	1490

(5) The amount of equity and fixed-income trades that are	1491
executed by agents that are minority business enterprises,	1492
expressed as a percentage of all equity and fixed-income trades	1493
that are executed by agents on behalf of the board;	1494

(6) Any other information requested by the Ohio retirement	1495
study council regarding the board's use of agents.	1496

Sec. 742.116. (A) The board of trustees of the pension fund	1497
shall, for the purposes of this section, designate an investment	1498
manager as an Ohio-qualified investment manager if the investment	1499
manager meets all of the following requirements:	1500

(1) The investment manager is subject to taxation under	1501
Chapter 5725., 5726., 5733., or 5747. of the Revised Code;	1502

(2) The investment manager meets one of the following	1503
requirements:	1504

(a) Has its corporate headquarters or principal place of	1505
business in this state;	1506

(b) Employs at least five hundred individuals in this state;

1507

(c) Has a principal place of business in this state and	1508
employs at least 20 residents of this state.	1509

(B)(1) The board shall, at least annually, establish a policy	1510
with the goal to increase utilization by the board of	1511
Ohio-qualified investment managers, when an Ohio-qualified	1512
investment manager offers quality, services, and safety comparable	1513
to other investment managers otherwise available to the board. The	1514
policy shall also provide for the following:	1515

(a) A process whereby the board can develop a list of	1516
Ohio-qualified investment managers and their investment products;	1517

(b) A process whereby the board can give public notice to	1518
Ohio-qualified investment managers of the board's search for an	1519
investment manager that includes the board's search criteria.	1520

(2) The board shall determine whether an investment manager	1521
is an Ohio-qualified investment manager and whether the investment	1522
manager offers quality, services, and safety comparable to other	1523
investment managers otherwise available to the board. The board's	1524
determination shall be final.	1525

(C) The board shall, at least annually, submit to the Ohio	1526
retirement study council a report containing the following	1527
information:	1528

(1) The name of each investment manager designated as an	1529
Ohio-qualified investment manager under this section;	1530

(2) The name of each investment manager with which the board	1531
contracts;	1532

(3) The amount of assets managed by Ohio-qualified investment	1533
managers, expressed as a percentage of the total assets held by	1534
the retirement system and as a percentage of assets managed by	1535
investment managers with which the board has contracted;	1536

(4) The compensation paid to Ohio-qualified investment	1537
managers, expressed as a percentage of total compensation paid to	1538
all investment managers with which the board has contracted;	1539

(5) Any other information requested by the Ohio retirement	1540
study council regarding the board's use of investment managers.	1541

Sec. 3307.152. (A) As used in this section and in section	1542
3307.154 of the Revised Code:	1543

(1) "Agent" means a dealer, as defined in section 1707.01 of	1544
the Revised Code, who is licensed under sections 1707.01 to	1545
1707.45 of the Revised Code or under comparable laws of another	1546
state or of the United States.	1547

(2) "Minority business enterprise" has the same meaning as in	1548
section 122.71 of the Revised Code.	1549

(3) "Ohio-qualified agent" means an agent designated as such	1550
by the state teachers retirement board.	1551

(4) "Ohio-qualified investment manager" means an investment	1552
manager designated as such by the state teachers retirement board.	1553

(5) "Principal place of business" means an office in which	1554
the agent regularly provides securities or investment advisory	1555
services and solicits, meets with, or otherwise communicates with	1556
clients.	1557

(B) The state teachers retirement board shall, for the	1558
purposes of this section, designate an agent as an Ohio-qualified	1559
agent if the agent meets all of the following requirements:	1560

(1) The agent is subject to taxation under Chapter 5725.,	1561
5726., 5733., or 5747. of the Revised Code.	1562

(2) The agent is authorized to conduct business in this	1563
state.	1564

(3) The agent maintains a principal place of business in this	1565
state and employs at least five residents of this state.	1566

(C) The state teachers retirement board shall adopt and	1567
implement a written policy to establish criteria and procedures	1568
used to select agents to execute securities transactions on behalf	1569
of the retirement system. The policy shall address each of the	1570
following:	1571

(a)(1) Commissions charged by the agent, both in the	1572
aggregate and on a per share basis;	1573

(b)(2) The execution speed and trade settlement capabilities	1574
of the agent;	1575

(c)(3) The responsiveness, reliability, and integrity of the	1576
agent;	1577

(d)(4) The nature and value of research provided by the	1578
agent;	1579

(e)(5) Any special capabilities of the agent.

1580

(D)(1) The board shall, at least annually, establish a policy	1581
with the goal to increase utilization by the board of	1582
Ohio-qualified agents for the execution of domestic equity and	1583
fixed income trades on behalf of the retirement system, when an	1584
Ohio-qualified agent offers quality, services, and safety	1585
comparable to other agents otherwise available to the board and	1586
meets the criteria established under division (C) of this section.	1587

(2) The board shall review, at least annually, the	1588
performance of the agents that execute securities transactions on	1589
behalf of the board.	1590

(3) The board shall determine whether an agent is an	1591
Ohio-qualified agent, meets the criteria established by the board	1592
pursuant to division (C) of this section, and offers quality,	1593
services, and safety comparable to other agents otherwise	1594
available to the board. The board's determination shall be final.	1595

(E) The board shall, at least annually, submit to the Ohio	1596
retirement study council a report containing the following	1597
information:	1598

(1) The name of each agent designated as an Ohio-qualified	1599
agent under this section;	1600

(2) The name of each agent that executes securities	1601
transactions on behalf of the board;	1602

(3) The amount of equity and fixed-income trades that are	1603
executed by Ohio-qualified agents, expressed as a percentage of	1604
all equity and fixed-income trades that are executed by agents on	1605
behalf of the board;	1606

(4) The compensation paid to Ohio-qualified agents, expressed	1607
as a percentage of total compensation paid to all agents that	1608
execute securities transactions on behalf of the board;	1609

(5) The amount of equity and fixed-income trades that are	1610
executed by agents that are minority business enterprises,	1611
expressed as a percentage of all equity and fixed-income trades	1612
that are executed by agents on behalf of the board;	1613

(6) Any other information requested by the Ohio retirement	1614
study council regarding the board's use of agents.	1615

Sec. 3307.154. (A) The state teachers retirement board shall,	1616
for the purposes of this section, designate an investment manager	1617
as an Ohio-qualified investment manager if the investment manager	1618
meets all of the following requirements:	1619

(1) The investment manager is subject to taxation under	1620
Chapter 5725., 5726., 5733., or 5747. of the Revised Code.	1621

(2) The investment manager meets one of the following	1622
requirements:	1623

(a) Has its corporate headquarters or principal place of	1624
business in this state;	1625

(b) Employs at least five hundred individuals in this state;

1626

(c) Has a principal place of business in this state and	1627
employs at least twenty residents of this state.	1628

(B)(1) The board shall, at least annually, establish a policy	1629
with the goal to increase utilization by the board of	1630
Ohio-qualified investment managers, when an Ohio-qualified	1631
investment manager offers quality, services, and safety comparable	1632
to other investment managers otherwise available to the board. The	1633
policy shall also provide for the following:	1634

(a) A process whereby the board can develop a list of	1635
Ohio-qualified investment managers and their investment products;	1636

(b) A process whereby the board can give public notice to	1637
Ohio-qualified investment managers of the board's search for an	1638
investment manager that includes the board's search criteria.	1639

(2) The board shall determine whether an investment manager	1640
is an Ohio-qualified investment manager and whether the investment	1641
manager offers quality, services, and safety comparable to other	1642
investment managers otherwise available to the board. The board's	1643
determination shall be final.	1644

(C) The board shall, at least annually, submit to the Ohio	1645
retirement study council a report containing the following	1646
information:	1647

(1) The name of each investment manager designated as an	1648
Ohio-qualified investment manager under this section;	1649

(2) The name of each investment manager with which the board	1650
contracts;	1651

(3) The amount of assets managed by Ohio-qualified investment	1652
managers, expressed as a percentage of the total assets held by	1653
the retirement system and as a percentage of assets managed by	1654
investment managers with which the board has contracted;	1655

(4) The compensation paid to Ohio-qualified investment	1656
managers, expressed as a percentage of total compensation paid to	1657
all investment managers with which the board has contracted;	1658

(5) Any other information requested by the Ohio retirement	1659
study council regarding the board's use of investment managers.	1660

Sec. 3309.157. (A) As used in this section and in section	1661
3309.159 of the Revised Code:	1662

(1) "Agent" means a dealer, as defined in section 1707.01 of	1663
the Revised Code, who is licensed under sections 1707.01 to	1664
1707.45 of the Revised Code or under comparable laws of another	1665
state or of the United States.	1666

(2) "Minority business enterprise" has the same meaning as in	1667
section 122.71 of the Revised Code.	1668

(3) "Ohio-qualified agent" means an agent designated as such	1669
by the school employees retirement board.	1670

(4) "Ohio-qualified investment manager" means an investment	1671
manager designated as such by the school employees retirement	1672
board.	1673

(5) "Principal place of business" means an office in which	1674
the agent regularly provides securities or investment advisory	1675
services and solicits, meets with, or otherwise communicates with	1676
clients.	1677

(B) The school employees retirement board shall, for the	1678
purposes of this section, designate an agent as an Ohio-qualified	1679
agent if the agent meets all of the following requirements:	1680

(1) The agent is subject to taxation under Chapter 5725.,	1681
5726., 5733., or 5747. of the Revised Code.	1682

(2) The agent is authorized to conduct business in this	1683
state.	1684

(3) The agent maintains a principal place of business in this	1685
state and employeesemploys at least five residents of this state.	1686

(C) The school employees retirement board shall adopt and	1687
implement a written policy to establish criteria and procedures	1688
used to select agents to execute securities transactions on behalf	1689
of the retirement system. The policy shall address each of the	1690
following:	1691

(a)(1) Commissions charged by the agent, both in the	1692
aggregate and on a per share basis;	1693

(b)(2) The execution speed and trade settlement capabilities	1694
of the agent;	1695

(c)(3) The responsiveness, reliability, and integrity of the	1696
agent;	1697

(d)(4) The nature and value of research provided by the	1698
agent;	1699

(e)(5) Any special capabilities of the agent.

1700

(D)(1) The board shall, at least annually, establish a policy	1701
with the goal to increase utilization by the board of	1702
Ohio-qualified agents for the execution of domestic equity and	1703
fixed income trades on behalf of the retirement system, when an	1704
Ohio-qualified agent offers quality, services, and safety	1705
comparable to other agents otherwise available to the board and	1706
meets the criteria established under division (C) of this section.	1707

(2) The board shall review, at least annually, the	1708
performance of the agents that execute securities transactions on	1709
behalf of the board.	1710

(3) The board shall determine whether an agent is an	1711
Ohio-qualified agent, meets the criteria established by the board	1712
pursuant to division (C) of this section, and offers quality,	1713
services, and safety comparable to other agents otherwise	1714
available to the board. The board's determination shall be final.	1715

(E) The board shall, at least annually, submit to the Ohio	1716
retirement study council a report containing the following	1717
information:	1718

(1) The name of each agent designated as an Ohio-qualified	1719
agent under this section;	1720

(2) The name of each agent that executes securities	1721
transactions on behalf of the board;	1722

(3) The amount of equity and fixed-income trades that are	1723
executed by Ohio-qualified agents, expressed as a percentage of	1724
all equity and fixed-income trades that are executed by agents on	1725
behalf of the board;	1726

(4) The compensation paid to Ohio-qualified agents, expressed	1727
as a percentage of total compensation paid to all agents that	1728
execute securities transactions on behalf of the board;	1729

(5) The amount of equity and fixed-income trades that are	1730
executed by agents that are minority business enterprises,	1731
expressed as a percentage of all equity and fixed-income trades	1732
that are executed by agents on behalf of the board;	1733

(6) Any other information requested by the Ohio retirement	1734
study council regarding the board's use of agents.	1735

Sec. 3309.159. (A) The school employees retirement board	1736
shall, for the purposes of this section, designate an investment	1737
manager as an Ohio-qualified investment manager if the investment	1738
manager meets all of the following requirements:	1739

(1) The investment manager is subject to taxation under	1740
Chapter 5725., 5726., 5733., or 5747. of the Revised Code.	1741

(2) The investment manager meets one of the following	1742
requirements:	1743

(a) Has its corporate headquarters or principal place of	1744
business in this state;	1745

(b) Employs at least five hundred individuals in this state;

1746

(c) Has a principal place of business in this state and	1747
employs at least 20twenty residents of this state.	1748

(B)(1) The board shall, at least annually, establish a policy	1749
with the goal to increase utilization by the board of	1750
Ohio-qualified investment managers, when an Ohio-qualified	1751
investment manager offers quality, services, and safety comparable	1752
to other investment managers otherwise available to the board. The	1753
policy shall also provide for the following:	1754

(a) A process whereby the board can develop a list of	1755
Ohio-qualified investment managers and their investment products;	1756

(b) A process whereby the board can give public notice to	1757
Ohio-qualified investment managers of the board's search for an	1758
investment manager that includes the board's search criteria.	1759

(2) The board shall determine whether an investment manager	1760
is an Ohio-qualified investment manager and whether the investment	1761
manager offers quality, services, and safety comparable to other	1762
investment managers otherwise available to the board. The board's	1763
determination shall be final.	1764

(C) The board shall, at least annually, submit to the Ohio	1765
retirement study council a report containing the following	1766
information:	1767

(1) The name of each investment manager designated as an	1768
Ohio-qualified investment manager under this section;	1769

(2) The name of each investment manager with which the board	1770
contracts;	1771

(3) The amount of assets managed by Ohio-qualified investment	1772
managers, expressed as a percentage of the total assets held by	1773
the retirement system and as a percentage of assets managed by	1774
investment managers with which the board has contracted;	1775

(4) The compensation paid to Ohio-qualified investment	1776
managers, expressed as a percentage of total compensation paid to	1777
all investment managers with which the board has contracted;	1778

(5) Any other information requested by the Ohio retirement	1779
study council regarding the board's use of investment managers.	1780

Sec. 5505.068. (A) As used in this section and in section	1781
5505.0610 of the Revised Code:	1782

(1) "Agent" means a dealer, as defined in section 1707.01 of	1783
the Revised Code, who is licensed under sections 1707.01 to	1784
1707.45 of the Revised Code or under comparable laws of another	1785
state or of the United States.	1786

(2) "Minority business enterprise" has the same meaning as in	1787
section 122.71 of the Revised Code.	1788

(3) "Ohio-qualified agent" means an agent designated as such	1789
by the state highway patrol retirement board.	1790

(4) "Ohio-qualified investment manager" means an investment	1791
manager designated as such by the state highway patrol retirement	1792
board.	1793

(5) "Principal place of business" means an office in which	1794
the agent regularly provides securities or investment advisory	1795
services and solicits, meets with, or otherwise communicates with	1796
clients.	1797

(B) The state highway patrol retirement board shall, for the	1798
purposes of this section, designate an agent as an Ohio-qualified	1799
agent if the agent meets all of the following requirements:	1800

(1) The agent is subject to taxation under Chapter 5725.,	1801
5726., 5733., or 5747. of the Revised Code.	1802

(2) The agent is authorized to conduct business in this	1803
state;	1804

(3) The agent maintains a principal place of business in this	1805
state and employs at least five residents of this state.	1806

(C) The state highway patrol retirement board shall adopt and	1807
implement a written policy to establish criteria and procedures	1808
used to select agents to execute securities transactions on behalf	1809
of the retirement system. The policy shall address each of the	1810
following:	1811

(1) Commissions charged by the agent, both in the aggregate	1812
and on a per share basis;	1813

(2) The execution speed and trade settlement capabilities of	1814
the agent;	1815

(3) The responsiveness, reliability, and integrity of the	1816
agent;	1817

(4) The nature and value of research provided by the agent;

1818

(5) Any special capabilities of the agent.

1819

(D)(1) The board shall, at least annually, establish a policy	1820
with the goal to increase utilization by the board of	1821
Ohio-qualified agents for the execution of domestic equity and	1822
fixed income trades on behalf of the retirement system, when an	1823
Ohio-qualified agent offers quality, services, and safety	1824
comparable to other agents otherwise available to the board and	1825
meets the criteria established under division (C) of this section.	1826

(2) The board shall review, at least annually, the	1827
performance of the agents that execute securities transactions on	1828
behalf of the board.	1829

(3) The board shall determine whether an agent is an	1830
Ohio-qualified agent, meets the criteria established by the board	1831
pursuant to division (C) of this section, and offers quality,	1832
services, and safety comparable to other agents otherwise	1833
available to the board. The board's determination shall be final.	1834

(E) The board shall, at least annually, submit to the Ohio	1835
retirement study council a report containing the following	1836
information:	1837

(1) The name of each agent designated as an Ohio-qualified	1838
agent under this section;	1839

(2) The name of each agent that executes securities	1840
transactions on behalf of the board;	1841

(3) The amount of equity and fixed-income trades that are	1842
executed by Ohio-qualified agents, expressed as a percentage of	1843
all equity and fixed-income trades that are executed by agents on	1844
behalf of the board;	1845

(4) The compensation paid to Ohio-qualified agents, expressed	1846
as a percentage of total compensation paid to all agents that	1847
execute securities transactions on behalf of the board;	1848

(5) The amount of equity and fixed-income trades that are	1849
executed by agents that are minority business enterprises,	1850
expressed as a percentage of all equity and fixed-income trades	1851
that are executed by agents on behalf of the board;	1852

(6) Any other information requested by the Ohio retirement	1853
study council regarding the board's use of agents.	1854

Sec. 5505.0610. (A) The state highway patrol retirement board	1855
shall, for the purposes of this section, designate an investment	1856
manager as an Ohio-qualified investment manager if the investment	1857
manager meets all of the following requirements:	1858

(1) The investment manager is subject to taxation under	1859
Chapter 5725., 5726., 5733., or 5747. of the Revised Code.	1860

(2) The investment manager meets one of the following	1861
requirements:	1862

(a) Has its corporate headquarters or principal place of	1863
business in this state;	1864

(b) Employs at least five hundred individuals in this state;

1865

(c) Has a principal place of business in this state and	1866
employs at least 20twenty residents of this state.	1867

(B)(1) The board shall, at least annually, establish a policy	1868
with the goal to increase utilization by the board of	1869
Ohio-qualified investment managers, when an Ohio-qualified	1870
investment manager offers quality, services, and safety comparable	1871
to other investment managers otherwise available to the board. The	1872
policy shall also provide for the following:	1873

(a) A process whereby the board can develop a list of	1874
Ohio-qualified investment managers and their investment products;	1875

(b) A process whereby the board can give public notice to	1876
Ohio-qualified investment managers of the board's search for an	1877
investment manager that includes the board's search criteria.	1878

(2) The board shall determine whether an investment manager	1879
is an Ohio-qualified investment manager and whether the investment	1880
manager offers quality, services, and safety comparable to other	1881
investment managers otherwise available to the board. The board's	1882
determination shall be final.	1883

(C) The board shall, at least annually, submit to the Ohio	1884
retirement study council a report containing the following	1885
information:	1886

(1) The name of each investment manager designated as an	1887
Ohio-qualified investment manager under this section;	1888

(2) The name of each investment manager with which the board	1889
contracts;	1890

(3) The amount of assets managed by Ohio-qualified investment	1891
managers, expressed as a percentage of the total assets held by	1892
the retirement system and as a percentage of assets managed by	1893
investment managers with which the board has contracted;	1894

(4) The compensation paid to Ohio-qualified investment	1895
managers, expressed as a percentage of total compensation paid to	1896
all investment managers with which the board has contracted;	1897

(5) Any other information requested by the Ohio retirement	1898
study council regarding the board's use of investment managers.	1899

Sec. 5701.12.  (A) The effective date to which this section	1900
refers is the effective date of this section as enacted by ... B.	1901
... of the 129th general assembly.	1902

(B) Any reference in Title LVII to "consolidated reports of	1903
condition and income" or "call report" means the consolidated	1904
reports of condition and income as those reports existed on the	1905
effective date.	1906

(C) Any reference in Title LVII to "FR Y-9" or "Y-9" means	1907
the FR Y-9 financial statements as those financial statements	1908
existed on the effective date.	1909

(D) This section does not apply to any reference in Title	1910
LVII of the Revised Code to "consolidated reports of condition and	1911
income," "call report," "FR Y-9," or "Y-9" as of a date certain	1912
specifying the day, month, and year.	1913

Sec. 5703.052.  (A) There is hereby created in the state	1914
treasury the tax refund fund, from which refunds shall be paid for	1915
taxes illegally or erroneously assessed or collected, or for any	1916
other reason overpaid, that are levied by Chapter 4301., 4305.,	1917
5726., 5728., 5729., 5733., 5735., 5739., 5741., 5743., 5747.,	1918
5748., 5749., 5751., or 5753. and sections 3737.71, 3905.35,	1919
3905.36, 4303.33, 5707.03, 5725.18, 5727.28, 5727.38, 5727.81, and	1920
5727.811 of the Revised Code. Refunds for fees illegally or	1921
erroneously assessed or collected, or for any other reason	1922
overpaid, that are levied by sections 3734.90 to 3734.9014 of the	1923
Revised Code also shall be paid from the fund. Refunds for amounts	1924
illegally or erroneously assessed or collected by the tax	1925
commissioner, or for any other reason overpaid, that are due under	1926
section 1509.50 of the Revised Code shall be paid from the fund.	1927
However, refunds for taxes levied under section 5739.101 of the	1928
Revised Code shall not be paid from the tax refund fund, but shall	1929
be paid as provided in section 5739.104 of the Revised Code.	1930

(B)(1) Upon certification by the tax commissioner to the	1931
treasurer of state of a tax refund, a fee refund, or an other	1932
amount refunded, or by the superintendent of insurance of a	1933
domestic or foreign insurance tax refund, the treasurer of state	1934
shall place the amount certified to the credit of the fund. The	1935
certified amount transferred shall be derived from current	1936
receipts of the same tax, fee, or other amount from which the	1937
refund arose. If current receipts from the tax, fee, or other	1938
amount from which the refund arose are inadequate to make the	1939
transfer of the amount so certified, the treasurer of state shall	1940
transfer such certified amount from current receipts of the sales	1941
tax levied by section 5739.02 of the Revised Code.	1942

(2) When the treasurer of state provides for the payment of a	1943
refund of a tax, fee, or other amount from the current receipts of	1944
the sales tax, and the refund is for a tax, fee, or other amount	1945
that is not levied by the state, the tax commissioner shall	1946
recover the amount of that refund from the next distribution of	1947
that tax, fee, or other amount that otherwise would be made to the	1948
taxing jurisdiction. If the amount to be recovered would exceed	1949
twenty-five per cent of the next distribution of that tax, fee, or	1950
other amount, the commissioner may spread the recovery over more	1951
than one future distribution, taking into account the amount to be	1952
recovered and the amount of the anticipated future distributions.	1953
In no event may the commissioner spread the recovery over a period	1954
to exceed twenty-four months.	1955

Sec. 5703.053.  As used in this section, "postal service"	1956
means the United States postal service.	1957

An application to the tax commissioner for a tax refund under	1958
section 4307.05, 4307.07, 5726.30, 5727.28, 5727.91, 5728.061,	1959
5735.122, 5735.13, 5735.14, 5735.141, 5735.142, 5739.07, 5741.10,	1960
5743.05, 5743.53, 5745.11, 5749.08, or 5751.08 of the Revised Code	1961
or division (B) of section 5703.05 of the Revised Code, or a fee	1962
refunded under section 3734.905 of the Revised Code, that is	1963
received after the last day for filing under such section shall be	1964
considered to have been filed in a timely manner if:	1965

(A) The application is delivered by the postal service and	1966
the earliest postal service postmark on the cover in which the	1967
application is enclosed is not later than the last day for filing	1968
the application;	1969

(B) The application is delivered by the postal service, the	1970
only postmark on the cover in which the application is enclosed	1971
was affixed by a private postal meter, the date of that postmark	1972
is not later than the last day for filing the application, and the	1973
application is received within seven days of such last day; or	1974

(C) The application is delivered by the postal service, no	1975
postmark date was affixed to the cover in which the application is	1976
enclosed or the date of the postmark so affixed is not legible,	1977
and the application is received within seven days of the last day	1978
for making the application.	1979

Sec. 5703.70. (A) On the filing of an application for refund	1980
under section 3734.905, 4307.05, 4307.07, 5726.30, 5727.28,	1981
5727.91, 5728.061, 5733.12, 5735.122, 5735.13, 5735.14, 5735.141,	1982
5735.142, 5735.18, 5739.07, 5739.071, 5739.104, 5741.10, 5743.05,	1983
5743.53, 5749.08, 5751.08, or 5753.06 of the Revised Code, or an	1984
application for compensation under section 5739.061 of the Revised	1985
Code, if the tax commissioner determines that the amount of the	1986
refund or compensation to which the applicant is entitled is less	1987
than the amount claimed in the application, the commissioner shall	1988
give the applicant written notice by ordinary mail of the amount.	1989
The notice shall be sent to the address shown on the application	1990
unless the applicant notifies the commissioner of a different	1991
address. The applicant shall have sixty days from the date the	1992
commissioner mails the notice to provide additional information to	1993
the commissioner or request a hearing, or both.	1994

(B) If the applicant neither requests a hearing nor provides	1995
additional information to the tax commissioner within the time	1996
prescribed by division (A) of this section, the commissioner shall	1997
take no further action, and the refund or compensation amount	1998
denied becomes final.	1999

(C)(1) If the applicant requests a hearing within the time	2000
prescribed by division (A) of this section, the tax commissioner	2001
shall assign a time and place for the hearing and notify the	2002
applicant of such time and place, but the commissioner may	2003
continue the hearing from time to time as necessary. After the	2004
hearing, the commissioner may make such adjustments to the refund	2005
or compensation as the commissioner finds proper, and shall issue	2006
a final determination thereon.	2007

(2) If the applicant does not request a hearing, but provides	2008
additional information, within the time prescribed by division (A)	2009
of this section, the commissioner shall review the information,	2010
make such adjustments to the refund or compensation as the	2011
commissioner finds proper, and issue a final determination	2012
thereon.	2013

(3) The commissioner shall serve a copy of the final	2014
determination made under division (C)(1) or (2) of this section on	2015
the applicant in the manner provided in section 5703.37 of the	2016
Revised Code, and the decision is final, subject to appeal under	2017
section 5717.02 of the Revised Code.	2018

(D) The tax commissioner shall certify to the director of	2019
budget and management and treasurer of state for payment from the	2020
tax refund fund created by section 5703.052 of the Revised Code,	2021
the amount of the refund to be refunded under division (B) or (C)	2022
of this section. The commissioner also shall certify to the	2023
director and treasurer of state for payment from the general	2024
revenue fund the amount of compensation to be paid under division	2025
(B) or (C) of this section.	2026

Sec. 5707.03.  Annual taxes are hereby levied on the kinds of	2027
intangible property, enumerated in this section, on the intangible	2028
property tax list in the office of the treasurer of state at the	2029
following rates:	2030

(A) On investments, five per cent of income yield or of	2031
income as provided by section 5711.10 of the Revised Code for the	2032
1983, 1984, and 1985 return years and no tax for subsequent return	2033
years;	2034

(B) On unproductive investments, two mills on the dollar for	2035
the 1983, 1984, and 1985 return years and no tax for subsequent	2036
return years;	2037

(C) On deposits, one and three-eighths mills on the dollar	2038
for the 1982 and 1983 return years and no tax for subsequent	2039
return years;	2040

(D) On shares of, and capital employed by, dealers in	2041
intangibles, eight mills on the dollar for return years prior to	2042
2014 and no tax under this section for subsequent return years;	2043

(E) On money, credits, and all other taxable intangibles,	2044
three mills on the dollar for the 1983, 1984, and 1985 return	2045
years and no tax for subsequent return years.	2046

The object and distribution of such taxes shall be as	2047
provided in section 5725.24 of the Revised Code.	2048

Sec. 5709.76.  (A) All of the following are exempt from taxes	2049
levied by the state and its subdivisions:	2050

(1) Public obligations;

2051

(2) Interest or interest equivalent on public obligations and	2052
on purchase obligations;	2053

(3) The transfer, and any profit made on the sale, exchange,	2054
or other disposition, of public obligations.	2055

(B) The exemptions granted by division (A) of this section	2056
apply to public obligations and purchase obligations issued,	2057
incurred, or entered into before, on, or after the effective date	2058
of this sectionMarch 29, 1988, but only for taxable years ending	2059
on or after the later of July 1, 1988, or the effective date of	2060
this sectionMarch 29, 1988.	2061

(C) This section supplements, and does not restrict, limit,	2062
or impair, any exemption from taxation otherwise provided for in	2063
the Ohio Constitution, the Revised Code, or other laws.	2064

(D) As used in this section:

2065

(1) "Fractionalized interests in purchase obligations" means	2066
participations, shares, or other instruments or agreements,	2067
separate from the purchase obligations themselves, evidencing	2068
ownership of interests in purchase obligations or of rights to	2069
receive payments of, or on account of, principal or interest or	2070
their equivalents payable by or on behalf of the state or a	2071
subdivision pursuant to purchase obligations, and does not include	2072
interests or shares in qualified investment trusts.	2073

(2) "Interest or interest equivalent" means those payments or	2074
portions of payments, however denominated, that constitute or	2075
represent consideration for forbearing the collection of money, or	2076
for deferring the receipt of payment of money to a future time, as	2077
determined for federal income tax purposes, and includes those	2078
portions of a qualified investment trust's distributions to its	2079
shareholders or beneficial owners, whether distributed or deemed	2080
distributed in cash or in trust shares or interests, that are	2081
attributable to the trust's receipt of interest or interest	2082
equivalent.	2083

(3) "Internal Revenue Code" has the same meaning as in	2084
division (H) of section 5747.01 of the Revised Code.	2085

(4) "Qualified investment trust" or "trust" means a unit	2086
investment trust, grantor trust, or regulated investment company,	2087
if at all times at least fifty per cent of the value of the total	2088
assets of the trust or company consists of public securities or	2089
purchase obligations, or similar obligations of other states or	2090
their subdivisions.	2091

(5) "Public obligations" means public securities,	2092
fractionalized interests in purchase obligations, and any	2093
obligation or evidence of obligation to pay interest or interest	2094
equivalent on public securities or on fractionalized interests in	2095
purchase obligations, and does not include purchase obligations.	2096

(6) "Public securities" means bonds, notes, certificates of	2097
indebtedness, commercial paper, and other instruments in writing	2098
issued by the state or a subdivision, or by any nonprofit	2099
corporation authorized to issue public securities for or on behalf	2100
of the state or a subdivision, to evidence the obligation of the	2101
state, subdivision, or nonprofit corporation to repay money	2102
borrowed by, or to pay at any future time other money obligations	2103
of, the state, subdivision, or nonprofit corporation, and does not	2104
include purchase obligations. Public securities may be in the form	2105
of either certificated securities or uncertificated securities, as	2106
those terms are defined in section 1308.01 of the Revised Code.	2107

(7) "Purchase obligations" means interest-bearing obligations	2108
of the state or a subdivision to make payments under installment	2109
sale, lease, lease purchase, or similar types of agreements.	2110

(8) "Regulated investment company" means a regulated	2111
investment company as defined in section 851 of the Internal	2112
Revenue Code.	2113

(9) "State" means the state, state officers, and state	2114
agencies, including commissions, institutions, boards, agencies,	2115
authorities, or other instrumentalities.	2116

(10) "Subdivision" means any local taxing authority,	2117
political or governmental subdivision, body corporate and politic,	2118
or other local public or governmental entity in the state, any	2119
combination or consortium of two or more of those subdivisions,	2120
and any public division, district, commission, authority,	2121
department, board, officer, or institution of any one or more of	2122
those subdivisions.	2123

(11) "Taxes" means any direct or indirect taxes, including	2124
income, ad valorem, transfer, and excise taxes, and including the	2125
tax on the net income measure of the issued and outstanding shares	2126
of a corporation under Chapter 5733. of the Revised Code. "Taxes"	2127
does not mean any of the following:	2128

(a) The tax on the net worth measure of the issued and	2129
outstanding shares of corporations and financial institutions	2130
under Chapter 5733. of the Revised Code;	2131

(b) The tax on the value of the gross estate under Chapter	2132
5731. of the Revised Code;	2133

(c) The tax on the value of the capital and surplus of a	2134
domestic insurance company under Chapter 5725. of the Revised	2135
Code;	2136

(d) The tax on the shares of and capital employed by dealers	2137
in intangibles under Chapter 5725. and section 5707.03 of the	2138
Revised Code;	2139

(e) The tax levied on the basis of the total equity capital	2140
of financial institutions under Chapter 5726. of the Revised Code.	2141

Sec. 5711.22.  (A) Deposits not taxed at the source shall be	2142
listed and assessed at their amount in dollars on the day they are	2143
required to be listed. Moneys shall be listed and assessed at the	2144
amount thereof in dollars on hand on the day that they are	2145
required to be listed. In listing investments, the amount of the	2146
income yield of each for the calendar year next preceding the date	2147
of listing shall, except as otherwise provided in this chapter, be	2148
stated in dollars and cents and the assessment thereof shall be at	2149
the amount of such income yield; but any property defined as	2150
investments in either division (A) or (B) of section 5701.06 of	2151
the Revised Code that has not been outstanding for the full	2152
calendar year next preceding the date of listing, except shares of	2153
stock of like kind as other shares of the same corporation	2154
outstanding for the full calendar year next preceding the date of	2155
listing, or which has yielded no income during such calendar year	2156
shall be listed and assessed as unproductive investments, at their	2157
true value in money on the day that such investments are required	2158
to be listed.	2159

Credits and other taxable intangibles shall be listed and	2160
assessed at their true value in money on the day as of which the	2161
same are required to be listed.	2162

Shares of stock of a bank holding company, as defined in	2163
Title 12 U.S.C.A., section 1841, that are required to be listed	2164
for taxation under this division and upon which dividends were	2165
paid during the year of their issuance, which dividends are	2166
subject to taxation under the provisions of Chapter 5747. of the	2167
Revised Code, shall be exempt from the intangibles tax for the	2168
year immediately succeeding their issuance. If such shares bear	2169
dividends the first calendar year after their issuance, which	2170
dividends are subject to taxation under the provisions of Chapter	2171
5747. of the Revised Code, it shall be deemed that the	2172
nondelinquent intangible property tax pursuant to division (A) of	2173
section 5707.04 of the Revised Code was paid on those dividends	2174
paid that first calendar year after the issuance of the shares.	2175

(B) For tax years before tax year 2009, boilers, machinery,	2176
equipment, and personal property the true value of which is	2177
determined under division (B) of section 5711.21 of the Revised	2178
Code shall be listed and assessed at an amount equal to the sum of	2179
the products determined under divisions (B)(1), (2), and (3) of	2180
this section:	2181

(1) Multiply the portion of the true value determined under	2182
division (B)(1) of section 5711.21 of the Revised Code by the	2183
assessment rate for the tax year in division (G) of this section;	2184

(2) Multiply the portion of the true value determined under	2185
division (B)(2) of section 5711.21 of the Revised Code by the	2186
assessment rate in section 5727.111 of the Revised Code that is	2187
applicable to the production equipment of an electric company;	2188

(3) Multiply the portion of the true value determined under	2189
division (B)(3) of section 5711.21 of the Revised Code by the	2190
assessment rate in section 5727.111 of the Revised Code that is	2191
applicable to the property of an electric company that is not	2192
production equipment.	2193

(C) For tax years before tax year 2009, personal property	2194
leased to a public utility or interexchange telecommunications	2195
company as defined in section 5727.01 of the Revised Code and used	2196
directly in the rendition of a public utility service as defined	2197
in division (P) of section 5739.01 of the Revised Code shall be	2198
listed and assessed at the same percentage of true value in money	2199
that such property is required to be assessed by section 5727.111	2200
of the Revised Code if owned by the public utility or	2201
interexchange telecommunications company.	2202

(D)(1) Merchandise or an agricultural product shipped from	2203
outside this state and held in this state in a warehouse or a	2204
place of storage without further manufacturing or processing and	2205
for storage only and for shipment outside this state, but that	2206
does not qualify as "not used in business in this state" under	2207
division (B)(1) or (2) of section 5701.08 of the Revised Code, is	2208
nevertheless not used in business in this state for property tax	2209
purposes.	2210

(2) Merchandise or an agricultural product owned by a	2211
qualified out-of-state person shipped from outside this state and	2212
held in this state in a public warehouse without further	2213
manufacturing or processing and for temporary storage only and for	2214
shipment inside this state, but that does not qualify as "not used	2215
in business in this state" under division (B)(1) or (2) of section	2216
5701.08 of the Revised Code, is nevertheless not used in business	2217
in this state for property tax purposes.	2218

(3) As used in division (D)(2) of this section:

2219

(a) "Qualified out-of-state person" means a person that does	2220
not own, lease, or use property, other than merchandise or an	2221
agricultural product described in this division, in this state,	2222
and does not have employees, agents, or representatives in this	2223
state;	2224

(b) "Public warehouse" means a warehouse in this state that	2225
is not subject to the control of or under the supervision of the	2226
owner of the merchandise or agricultural product stored in it, or	2227
staffed by the owner's employees, and from which the property is	2228
to be shipped inside this state.	2229

(E) Personal property valued pursuant to section 5711.15 of	2230
the Revised Code and personal property required to be listed on	2231
the average basis by division (B) of section 5711.16 of the	2232
Revised Code, except property described in division (D) of this	2233
section, business fixtures, and furniture not held for sale in the	2234
course of business, shall be listed and assessed at twenty-three	2235
per cent of its true value in money for tax year 2005 and at the	2236
percentage of such true value specified in division (G) of this	2237
section for tax year 2006 and each tax year thereafter.	2238

(F) All manufacturing equipment as defined in section 5711.16	2239
of the Revised Code shall be listed and assessed at the following	2240
percentage of its true value in money:	2241

(1) For all such property not previously used in business in	2242
this state by the owner thereof, or by related member or	2243
predecessor of the owner, other than as inventory, before January	2244
1, 2005, zero per cent of true value;	2245

(2) For all other such property, at the percentage of true	2246
value specified in division (G) of this section for tax year 2005	2247
and each tax year thereafter.	2248

(G) Unless otherwise provided by law, all other personal	2249
property used in business that has not been legally regarded as an	2250
improvement on land and considered in arriving at the value of the	2251
real property assessed for taxation shall be listed and assessed	2252
at the following percentages of true value in money:	2253

(1) For tax year 2005, twenty-five per cent of true value;

2254

(2) For tax year 2006, eighteen and three-fourths per cent of	2255
true value;	2256

(3) For tax year 2007, twelve and one-half per cent of true	2257
value;	2258

(4) For tax year 2008, six and one-fourth per cent of true	2259
value;	2260

(5) For tax year 2009 and each tax year thereafter, zero per	2261
cent of true value.	2262

(H)(1) For tax year 2007 and thereafter, all personal	2263
property used by a telephone company, telegraph company, or	2264
interexchange telecommunications company shall be listed as	2265
provided in this chapter and assessed at the following percentages	2266
of true value in money:	2267

(a) For tax year 2007, twenty per cent of true value;

2268

(b) For tax year 2008, fifteen per cent of true value;

2269

(c) For tax year 2009, ten per cent of true value;

2270

(d) For tax year 2010, five per cent of true value;

2271

(e) For tax year 2011 and each tax year thereafter, zero per	2272
cent of true value.	2273

(2) The property owned by a telephone, telegraph, or	2274
telecommunications company shall be apportioned to each	2275
appropriate taxing district as provided in section 5727.15 of the	2276
Revised Code.	2277

(I) During and after the tax year in which the assessment	2278
rate equals zero per cent, the property described in division (E),	2279
(F), (G), or (H) of this section shall not be listed for taxation.	2280

(J) Divisions (E), (F), (G), and (H) of this section apply to	2281
the property of a person described in divisions (E)(3) to (10)and	2282
(4) of section 5751.01 of the Revised Code. Division (J) of this	2283
section does not prevent the application of the exemption of	2284
property from taxation under section 5725.25 or 5725.26 of the	2285
Revised Code.	2286

Sec. 5725.02. TheFor report years prior to 2014, the	2287
cashier or other principal accounting officer of each bank, the	2288
secretary or other principal accounting officer of each other	2289
incorporated financial institution, and the manager or owner of	2290
each unincorporated financial institution shall return to the	2291
department of taxation between the first and second Mondays of	2292
March, annually, a report exhibiting in detail, and under	2293
appropriate heads, the resources and liabilities of such	2294
institution at the close of business on the thirty-first day of	2295
December next preceding.	2296

The report of each financial institution shall also show the	2297
aggregate balances of the taxable deposits of its depositors in	2298
each county in which the institution maintained an office for the	2299
receipt of deposits, at the end of business on the day fixed by	2300
the tax commissioner pursuant to section 5725.05 of the Revised	2301
Code. The report shall show also the names and addresses of all	2302
depositors whose deposits were wholly withdrawn from such	2303
institution between the day so fixed and the date on which notice	2304
of the fixing was received by such institution, or if no such	2305
notice was received, then between the day fixed and the first day	2306
of January next following, and the amount of taxable deposits of	2307
each such depositerdepositor on the day fixed.	2308

Sec. 5725.14. (A) As used in this section and section 5725.15	2309
of the Revised Code:	2310

(1) "Billing address" of a customer means one of the	2311
following:	2312

(a) The customer's address as set forth in any notice,	2313
statement, bill, or similar acknowledgment shall be presumed to be	2314
the address where the customer is located with respect to the	2315
transaction for which the dealer issued the notice, statement,	2316
bill, or acknowledgment.	2317

(b) If the dealer issues any notice, statement, bill, or	2318
similar acknowledgment electronically to an address other than a	2319
street address or post office box address or if the dealer does	2320
not issue such a notice, statement, bill, or acknowledgment, the	2321
customer's street address as set forth in the records of the	2322
dealer at the time of the transaction shall be presumed to be the	2323
address where the customer is located.	2324

(2) "Commissions" includes but is not limited to brokerage	2325
commissions, asset management fees, and similar fees charged in	2326
the regular course of business to a customer for the maintenance	2327
and management of the customer's account.	2328

(3) "Gross receipts" means one of the following:

2329

(a) In the case of a dealer in intangibles principally	2330
engaged in the business of lending money or discounting loans, the	2331
aggregate amount of loans effected or discounted;	2332

(b) In the case of a dealer in intangibles principally	2333
engaged in the business of selling or buying stocks, bonds, or	2334
other similar securities either on the dealer's own account or as	2335
agent for another, the aggregate amount of all commissions	2336
charged.	2337

(B) Each dealer in intangibles shall return to the tax	2338
commissioner between the first and second Mondays of March,	2339
annually for return years prior to 2014, a report exhibiting in	2340
detail, and under appropriate heads, the dealer's resources and	2341
liabilities at the close of business on the thirty-first day of	2342
December next preceding. In the case of an unincorporated dealer	2343
in intangibles, such report shall also exhibit the amount or value	2344
as of the date of conversion of all property within the year	2345
preceding the date of listing, and on or after the first day of	2346
November converted into bonds or other securities not taxed to the	2347
extent such nontaxable bonds or securities may be shown in the	2348
dealer's resources on such date, without deduction for	2349
indebtedness created in the purchase of such nontaxable bonds or	2350
securities.	2351

If a dealer in intangibles maintains separate business	2352
offices, whether within this state only or within and without this	2353
state, the report shall also show the gross receipts from business	2354
done at each such office during the year ending on the	2355
thirty-first day of December next preceding.	2356

For the purposes of this section and section 5725.15 of the	2357
Revised Code, business is considered done at an office when it	2358
originates at such office, but the receipts from business	2359
originating at one office and consummated at another office shall	2360
be divided equitably between such offices.	2361

(C) For the purposes of this section and section 5725.15 of	2362
the Revised Code, in the case of a dealer in intangibles	2363
principally engaged in the business of selling or buying stocks,	2364
bonds, or other similar securities either on the dealer's own	2365
account or as agent for another, the dealer's capital, surplus,	2366
and undivided profits employed in this state shall bear the same	2367
ratio to the dealer's total capital, surplus, and undivided	2368
profits employed everywhere as the amount described in division	2369
(C)(1) of this section bears to the amount described in division	2370
(C)(2) of this section:	2371

(1) The sum of the commissions earned during the year covered	2372
by the report from transactions with respect to brokerage accounts	2373
owned by customers having billing addresses in this state;	2374

(2) The sum of the commissions earned during that year from	2375
transactions with respect to brokerage accounts owned by all of	2376
the dealer's customers.	2377

(D) An incorporated dealer in intangibles which owns or	2378
controls fifty-one per cent or more of the common stock of another	2379
incorporated dealer in intangibles may, under uniform regulations	2380
prescribed by the tax commissioner, make a consolidated return for	2381
the purpose of sections 5725.01 to 5725.26, inclusive, of the	2382
Revised Code. In such case the parent corporation making such	2383
return is not required to include in its resources any of the	2384
stocks, securities, or other obligations of its subsidiary	2385
dealers, nor permitted to include in its liabilities any of its	2386
own securities or other obligations belonging to its subsidiaries.	2387

Sec. 5725.16.  On or before the first Monday of May, annually	2388
for return years prior to 2014, the tax commissioner shall certify	2389
to the treasurer of state the assessment of the shares or property	2390
representing capital, or apportionment of either, of each dealer	2391
in intangibles doing business in the state, showing separately the	2392
amount representing capital employed in each county.	2393

The treasurer of state shall place the amounts certified on	2394
the intangible property tax list in histhe treasurer of state's	2395
office in the names of the dealers represented by those	2396
certificates.	2397

Any certificate of abatement issued pursuant to section	2398
5703.05 of the Revised Code for the overpayment of the tax on	2399
shares or property representing capital of a dealer in intangibles	2400
may be tendered by the payee or transferee thereof to the	2401
treasurer of state as payment for any taxes allocable to the	2402
county in which the claim for overpayment arose.	2403

Sec. 5725.26.  The real estate of a financial institution or	2404
dealer in intangibles shall be taxed in the place where it is	2405
located, the same as the real estate of persons is taxed, but the	2406
taxes provided for in Chapters 5725., 5726., and 5733. of the	2407
Revised Code, shall be in lieu of all other taxes on the other	2408
property and assets of such institution or dealer, except personal	2409
property taxable under Chapter 5711. of the Revised Code and	2410
leased, or held for the purpose of leasing, to others if the owner	2411
or lessor of the property acquired it for the sole purpose of	2412
leasing it to others.	2413

For reports required to be filed under section 5725.14 of the	2414
Revised Code in 2003 and thereafter, nothing in this section shall	2415
be construed to exempt the property of any dealer in intangibles	2416
under section 5725.13 of the Revised Code from the tax imposed	2417
under section 5707.03 of the Revised Code.	2418

Sec. 5725.33.  (A) Except as otherwise provided in this	2419
section, terms used in this section have the same meaning as	2420
section 45D of the Internal Revenue Code, any related proposed,	2421
temporary or final regulations promulgated under the Internal	2422
Revenue Code, any rules or guidance of the internal revenue	2423
service or the United States department of the treasury, and any	2424
related rules or guidance issued by the community development	2425
financial institutions fund of the United States department of the	2426
treasury, as such law, regulations, rules, and guidance exist on	2427
the effective date of the enactment of this section by H.B. 1 of	2428
the 128th general assemblyOctober 16, 2009.	2429

As used in this section:

2430

(1) "Adjusted purchase price" means the amount paid for	2431
qualified equity investments multiplied by the qualified	2432
low-income community investments made by the issuer in projects	2433
located in this state as a percentage of the total amount of	2434
qualified low-income community investments made by the issuer in	2435
projects located in all states on the credit allowance date during	2436
the applicable tax year, subject to divisions (B)(1) and (2) of	2437
this section.	2438

(2) "Applicable percentage" means zero per cent for each of	2439
the first two credit allowance dates, seven per cent for the third	2440
credit allowance date, and eight per cent for the four following	2441
credit allowance dates.	2442

(3) "Credit allowance date" means the date, on or after	2443
January 1, 2010, a qualified equity investment is made and each of	2444
the six anniversary dates thereafter. For qualified equity	2445
investments made after the effective date of this sectionOctober	2446
16, 2009, but before January 1, 2010, the initial credit allowance	2447
date is January 1, 2010, and each of the six anniversary dates	2448
thereafter is on the first day of January of each year.	2449

(4) "Qualified active low-income community business" excludes	2450
any business that derives or projects to derive fifteen per cent	2451
or more of annual revenue from the rental or sale of real	2452
property, except any business that is a special purpose entity	2453
principally owned by a principal user of that property formed	2454
solely for the purpose of renting, either directly or indirectly,	2455
or selling real property back to such principal user if such	2456
principal user does not derive fifteen per cent or more of its	2457
gross annual revenue from the rental or sale of real property.	2458

(5) "Qualified community development entity" includes only	2459
entities:	2460

(a) That have entered into an allocation agreement with the	2461
community development financial institutions fund of the United	2462
States department of the treasury with respect to credits	2463
authorized by section 45D of the Internal Revenue Code;	2464

(b) Whose service area includes any portion of this state;	2465
and	2466

(c) That will designate an equity investment in such entities	2467
as a qualified equity investment for purposes of both section 45D	2468
of the Internal Revenue Code and this section.	2469

(6) "Qualified equity investment" is limited to an equity	2470
investment in a qualified community development entity that:	2471

(a) Is acquired after the effective date of the enactment of	2472
this sectionOctober 16, 2009, at its original issuance solely in	2473
exchange for cash;	2474

(b) Has at least eighty-five per cent of its cash purchase	2475
price used by the qualified community development entity to make	2476
qualified low-income community investments, provided that in the	2477
seventh year after a qualified equity investment is made, only	2478
seventy-five per cent of such cash purchase price must be used by	2479
the qualified community development entity to make qualified	2480
low-income community investments; and	2481

(c) Is designated by the issuer as a qualified equity	2482
investment.	2483

"Qualified equity investment" includes any equity investment	2484
that would, but for division (A)(6)(a) of this section, be a	2485
qualified equity investment in the hands of the taxpayer if such	2486
investment was a qualified equity investment in the hands of a	2487
prior holder.	2488

(B) There is hereby allowed a nonrefundable credit against	2489
the tax imposed by section 5725.18 of the Revised Code for an	2490
insurance company holding a qualified equity investment on the	2491
credit allowance date occurring in the calendar year for which the	2492
tax is due. The credit shall equal the applicable percentage of	2493
the adjusted purchase price of qualified low-income community	2494
investments, subject to divisions (B)(1) and (2) of this section:	2495

(1) For the purpose of calculating the amount of qualified	2496
low-income community investments held by a qualified community	2497
development entity, an investment shall be considered held by a	2498
qualified community development entity even if the investment has	2499
been sold or repaid, provided that, at any time before the seventh	2500
anniversary of the issuance of the qualified equity investment,	2501
the qualified community development entity reinvests an amount	2502
equal to the capital returned to or received or recovered by the	2503
qualified community development entity from the original	2504
investment, exclusive of any profits realized and costs incurred	2505
in the sale or repayment, in another qualified low-income	2506
community investment within twelve months of the receipt of such	2507
capital. If the qualified low-income community investment is sold	2508
or repaid after the sixth anniversary of the issuance of the	2509
qualified equity investment, the qualified low-income community	2510
investment shall be considered held by the qualfiedqualified	2511
community development entity through the seventh anniversary of	2512
the qualified equity investment's issuance.	2513

(2) The qualified low-income community investment made in	2514
this state shall equal the sum of the qualified low-income	2515
community investments in each qualified active low-income	2516
community business in this state, not to exceed two million five	2517
hundred sixty-four thousand dollars, in which the qualified	2518
community development entity invests, including such investments	2519
in any such businesses in this state related to that qualified	2520
active low-income community business through majority ownership or	2521
control.	2522

The credit shall be claimed in the order prescribed by	2523
section 5725.98 of the Revised Code. If the amount of the credit	2524
exceeds the amount of tax otherwise due after deducting all other	2525
credits in that order, the excess may be carried forward and	2526
applied to the tax due for not more than four ensuing years.	2527

By claiming a tax credit under this section, an insurance	2528
company waives its rights under section 5725.222 of the Revised	2529
Code with respect to the time limitation for the assessment of	2530
taxes as it relates to credits claimed that later become subject	2531
to recapture under division (E) of this section.	2532

(C) The amount of qualified equity investments on the basis	2533
of which credits may be claimed under this section and sections	2534
5726.54, 5729.16, and 5733.58 of the Revised Code shall not exceed	2535
the amount, estimated by the director of development, that would	2536
cause the total amount of credits allowed each fiscal year to	2537
exceed ten million dollars, computed without regard to the	2538
potential for taxpayers to carry tax credits forward to later	2539
years.	2540

(D) If any amount of the federal tax credit allowed for a	2541
qualified equity investment for which a credit was received under	2542
this section is recaptured under section 45D of the Internal	2543
Revenue Code, or if the director of development services	2544
determines that an investment for which a tax credit is claimed	2545
under this section is not a qualified equity investment or that	2546
the proceeds of an investment for which a tax credit is claimed	2547
under this section are used to make qualified low-income community	2548
investments other than in a qualified active low-income community	2549
business, all or a portion of the credit received on account of	2550
that investment shall be paid by the insurance company that	2551
received the credit to the superintendent of insurance. The amount	2552
to be recovered shall be determined by the director of development	2553
services pursuant to rules adopted under division (E) of this	2554
section. The director shall certify any amount due under this	2555
division to the superintendent of insurance, and the	2556
superintendent shall notify the treasurer of state of the amount	2557
due. Upon notification, the treasurer shall invoice the insurance	2558
company for the amount due. The amount due is payable not later	2559
than thirty days after the date the treasurer invoices the	2560
insurance company. The amount due shall be considered to be tax	2561
due under section 5725.18 of the Revised Code, and may be	2562
collected by assessment without regard to the time limitations	2563
imposed under section 5725.222 of the Revised Code for the	2564
assessment of taxes by the superintendent. All amounts collected	2565
under this division shall be credited as revenue from the tax	2566
levied under section 5725.18 of the Revised Code.	2567

(E) The tax credits authorized under this section and	2568
sections 5726.54, 5729.16, and 5733.58 of the Revised Code shall	2569
be administered by the department of development services. The	2570
director of development services, in consultation with the tax	2571
commissioner and the superintendent of insurance, pursuant to	2572
Chapter 119. of the Revised Code, shall adopt rules for the	2573
administration of this section and sections 5726.54, 5729.16, and	2574
5733.58 of the Revised Code. The rules shall provide for	2575
determining the recovery of credits under division (D) of this	2576
section, division (D) of sectionand under sections 5726.54,	2577
5729.16, and section 5733.58 of the Revised Code, including	2578
prorating the amount of the credit to be recovered on any	2579
reasonable basis, the manner in which credits may be allocated	2580
among claimants, and the amount of any application or other fees	2581
to be charged in connection with a recovery.	2582

(F) There is hereby created in the state treasury the new	2583
markets tax credit operating fund. The director of development	2584
services is authorized to charge reasonable application and other	2585
fees in connection with the administration of tax credits	2586
authorized by this section and sections 5726.54, 5729.16, and	2587
5733.58 of the Revised Code. Any such fees collected shall be	2588
credited to the fund. The director of development services shall	2589
use money in the fund to pay expenses related to the	2590
administration of tax credits authorized under sections 5725.33,	2591
5726.54, 5729.16, and 5733.58 of the Revised Code.	2592

Sec. 5726.01. As used in this chapter:

2593

(A) "Bank organization" means any of the following:

2594

(1) A national bank organized and operating as a national	2595
bank association pursuant to the "National Bank Act," 13 Stat. 100	2596
(1864), 12 U.S.C. 21, et seq.;	2597

(2) A federal savings association or federal savings bank	2598
chartered under 12 U.S.C. 1464;	2599

(3) A bank, banking association, trust company, savings and	2600
loan association, savings bank, or other banking institution that	2601
is organized or incorporated under the laws of the United States,	2602
any state, or a foreign country;	2603

(4) Any corporation organized and operating pursuant to 12	2604
U.S.C. 611, et seq.;	2605

(5) Any agency or branch of a foreign bank, as those terms	2606
are defined in 12 U.S.C. 3101;	2607

(6) An entity licensed as a small business investment company	2608
under the "Small Business Investment Act of 1958," 72 Stat. 689,	2609
15 U.S.C. 661, et seq.;	2610

(7) A company chartered under the "Farm Credit Act of 1933,"	2611
48 Stat. 257, or a successor of such a company.	2612

"Bank organization" does not include an institution organized	2613
under the "Federal Farm Loan Act," 39 Stat. 360 (1916), or a	2614
successor of such an institution, an insurance company, or a	2615
credit union.	2616

(B) "Call report" means the consolidated reports of condition	2617
and income prescribed by the federal financial institutions	2618
examination council that a person is required to file with a	2619
federal regulatory agency pursuant to 12 U.S.C. 161, 12 U.S.C.	2620
324, or 12 U.S.C. 1817.	2621

(C) "Credit union" means a nonprofit cooperative financial	2622
institution organized or chartered under the laws of this state,	2623
any other state, or the United States.	2624

(D) "Document of creation" means the articles of	2625
incorporation of a corporation, articles of organization of a	2626
limited liability company, registration of a foreign limited	2627
liability company, certificate of limited partnership,	2628
registration of a foreign limited partnership, registration of a	2629
domestic or foreign limited liability partnership, or registration	2630
of a trade name.	2631

(E) "Financial institution" means a bank organization, a	2632
holding company of a bank organization, or a nonbank financial	2633
organization, except when one of the following applies:	2634

(1) If two or more such entities are consolidated for the	2635
purposes of filing an FR Y-9, "financial institution" means a	2636
group consisting of all such entities that are included in the FR	2637
Y-9.	2638

(2) If two or more such entities are consolidated for the	2639
purposes of filing a call report, "financial institution" means a	2640
group consisting of all such entities that are included in the	2641
call report and that are not included in a group described in	2642
division (E)(1) of this section.	2643

(3) If a nonbank financial organization directly or	2644
indirectly owns or controls more than fifty per cent of the	2645
ownership interests in one or more other nonbank financial	2646
organizations, or if another common owner owns or controls more	2647
than fifty per cent of the ownership interests in two or more	2648
nonbank financial organizations, "financial institution" means a	2649
group consisting of all such nonbank financial organizations that	2650
are not included in a group described in division (E)(1) or (2) of	2651
this section.	2652

"Financial institution" does not include a diversified	2653
savings and loan holding company as defined in 12 U.S.C. 1467a.	2654

(F) "FR Y-9" means the consolidated or parent-only financial	2655
statements that a holding company is required to file with the	2656
federal reserve board pursuant to 12 U.S.C. 1844. In the case of a	2657
holding company required to file both consolidated and parent-only	2658
financial statements, "FR Y-9" means the consolidated financial	2659
statements that the holding company is required to file.	2660

(G) "Gross receipts" means all items of income, without	2661
deduction for expenses. If the reporting person for a taxpayer is	2662
a holding company, "gross receipts" includes all items of income	2663
reported on the FR Y-9 filed by the holding company. If the	2664
reporting person for a taxpayer is a bank organization, "gross	2665
receipts" includes all items of income reported on the call report	2666
filed by the bank organization. If the reporting person for a	2667
taxpayer is a nonbank financial organization, "gross receipts"	2668
includes all items of income reported in accordance with generally	2669
accepted accounting principles.	2670

(H) "Insurance company" means every corporation, association,	2671
and society engaged in the business of insurance of any character,	2672
or engaged in the business of entering into contracts	2673
substantially amounting to insurance of any character, or of	2674
indemnifying or guaranteeing against loss or damage, or acting as	2675
surety on bonds or undertakings. "Insurance company" also includes	2676
any health insuring corporation as defined in section 1751.01 of	2677
the Revised Code.	2678

(I)(1) "Nonbank financial organization" means every person	2679
that is not a bank organization and that engages in a business	2680
that consists primarily of lending money; discounting,	2681
securitizing, buying, or selling bills of exchange, drafts,	2682
acceptances, notes, mortgages, or other evidences of indebtedness;	2683
or securitizing, buying, or selling bonds, stocks, or other	2684
investment securities, whether on the person's own account, or as	2685
an agent or broker for others, with a view to profit or personal	2686
earnings. The investment of funds as personal accumulations or as	2687
business reserves or working capital shall not constitute engaging	2688
in a business within the meaning of this division, provided that a	2689
"nonbank financial organization" shall include any person that	2690
was, but is not currently, engaged in a business within the	2691
meaning of this division and that remains in business primarily	2692
for the purpose of realizing upon the assets of the business.	2693
"Nonbank financial organization" does not include an institution	2694
organized under the "Federal Farm Loan Act," 39 Stat. 360 (1916),	2695
or a successor of such an institution, an insurance company, a	2696
credit union, or an institution organized and operated exclusively	2697
for charitable purposes within the meaning of section 501(c)(3) of	2698
the Internal Revenue Code.	2699

(2) The tax commissioner shall adopt a rule defining	2700
"primarily" as that term is used in division (I)(1) of this	2701
section.	2702

(J) "Reporting person" means one of the following:

2703

(1) In the case of a financial institution described in	2704
division (E)(1) of this section, the top-tier holding company	2705
required to file an FR Y-9.	2706

(2) In the case of a financial institution described in	2707
division (E)(2) of this section, the bank organizationrequired to	2708
file the call report.	2709

(3) In the case of a financial institution described in	2710
division (E)(3) of this section, the nonbank financial	2711
organization that directly or indirectly owns or controls more	2712
than fifty per cent of the ownership interests in the other	2713
nonbank financial organizations or, if the common owner is not a	2714
nonbank financial organization, a member of the group described in	2715
division (E)(3) of this section selected by the group to be the	2716
reporting person for purposes of this chapter.	2717

(4) In the case of a bank organization or nonbank financial	2718
organization that is not included in a group described in division	2719
(E)(1), (2), or (3) of this section, the bank organization or	2720
nonbank financial organization.	2721

(K) "Tax year" means the calendar year for which the tax	2722
levied under section 5726.02 of the Revised Code is required to be	2723
paid.	2724

(L) "Taxable year" means the calendar year preceding the year	2725
in which an annual report is required to be filed under section	2726
5726.03 of the Revised Code.	2727

(M) "Taxpayer" means a financial institution subject to the	2728
tax levied under section 5726.02 of the Revised Code.	2729

(N) "Total equity capital" means the sum of the common stock	2730
at par value, perpetual preferred stock and related surplus, other	2731
surplus not related to perpetual preferred stock, retained	2732
earnings, accumulated other comprehensive income, treasury stock,	2733
unearned employee stock ownership plan shares, and other equity	2734
components of a financial institution.	2735

(O) "Total Ohio equity capital" means the portion of the	2736
total equity capital of a financial institution apportioned to	2737
Ohio pursuant to section 5726.05 of the Revised Code.	2738

Sec. 5726.02. (A) For the purpose of funding the needs of	2739
this state and its local governments beginning with the tax year	2740
that commences on January 1, 2014, and continuing for every tax	2741
year thereafter, there is hereby levied a tax on each financial	2742
institution for the privilege of doing business in this state.	2743
Financial institutions upon which the tax is levied include	2744
financial institutions organized for profit and conducting	2745
business as a financial institution in this state and financial	2746
institutions otherwise having nexus in or with this state under	2747
the Constitution of the United States. The tax is an annual	2748
privilege tax that shall be paid in each tax year for the	2749
privilege of doing business in this state for any portion of the	2750
calendar year preceding the tax year.	2751

(B) The amount of tax a financial institution is required to	2752
pay under this chapter shall equal the greater of the minimum tax	2753
required under division (A)(1) of section 5726.04 of the Revised	2754
Code or the amount by which the tax calculated under division	2755
(A)(2) of that section exceeds any credits allowed against the	2756
tax.	2757

Sec. 5726.03. (A)(1) Annually, on or before the thirty-first	2758
day of March, or on or before a later date as extended under	2759
division (B) of this section, the reporting person for each	2760
taxpayer shall make a report in writing to the tax commissioner,	2761
in such form as the commissioner prescribes, and shall remit to	2762
the commissioner the amount of tax shown to be due on the report.	2763
The remittance shall be made payable to the treasurer of state.	2764
The remittance shall be made in the form prescribed by the	2765
commissioner, including by electronic funds transfer if so	2766
required under division (D) of this section. The commissioner	2767
shall make available, on the official internet web site of the	2768
department of taxation, copies of the forms prescribed by the	2769
commissioner for the purpose of making the annual report.	2770

(2) A domestic reporting person shall not dissolve, and a	2771
foreign reporting person shall not withdraw or retire from	2772
business in Ohio, on or after the first day of January of any year	2773
without filing an annual report with the commissioner and paying	2774
or securing the tax due for the tax year in which such dissolution	2775
or withdrawal occurs.	2776

(3) An annual report shall be signed by the president,	2777
vice-president, secretary, treasurer, general manager,	2778
superintendent, or managing agent in this state of the reporting	2779
person.	2780

(4) An annual report shall contain the facts, figures,	2781
computations, and attachments that result in the determination of	2782
the amount of tax due from a taxpayer under this chapter.	2783

(B) The tax commissioner may extend, for not more than three	2784
months, the period of time for filing an annual report. The	2785
extension of time to file an annual report shall not extend the	2786
time for payment of the tax. Any tax not paid on or before the due	2787
date for such payment shall be subject to penalty and interest as	2788
provided in this chapter.	2789

(C)(1) In the case of a financial institution described in	2790
division (E)(1) of section 5726.01 of the Revised Code, the annual	2791
report filed for a taxable year shall list, and include	2792
information related to, each person includable in an FR Y-9 filed	2793
by the reporting person for that taxable year.	2794

(2) In the case of a financial institution described in	2795
division (E)(2) of section 5726.01 of the Revised Code, the annual	2796
report for a taxable year shall list, and include information	2797
related to, each person includable in a call report filed by the	2798
reporting person for that taxable year.	2799

(3) In the case of a financial institution described in	2800
division (E)(3) of section 5726.01 of the Revised Code, the annual	2801
report for a taxable year shall list, and include information	2802
related to, each nonbank financial organization that is a member	2803
of the group described in that division.	2804

(D)(1) Except as provided in division (D)(4) of this section,	2805
if the total liability of a taxpayer for the tax imposed by	2806
section 5726.02 of the Revised Code, after reduction for all	2807
credits allowed to the taxpayer, exceeds fifty thousand dollars in	2808
a tax year, the reporting person for the taxpayer shall remit tax	2809
payments for each succeeding tax year by electronic funds transfer	2810
in accordance with division (D) of this section.	2811

If a taxpayer's total tax payments for each of two	2812
consecutive tax years is less than fifty thousand dollars, the	2813
taxpayer is relieved of the requirement to remit taxes by	2814
electronic funds transfer for the tax year that next follows the	2815
second of the consecutive years in which the tax payment is less	2816
than that amount, and is relieved of that requirement for each	2817
succeeding year, unless the tax payment in a subsequent tax year	2818
equals or exceeds fifty thousand dollars.	2819

The tax commissioner shall notify each taxpayer required to	2820
remit taxes by electronic funds transfer of the taxpayer's	2821
obligation to do so. The commissioner shall maintain an updated	2822
list of such taxpayers and provide the list, along with any	2823
additions to or deletions from the list, to the treasurer of	2824
state. Failure by the tax commissioner to notify a taxpayer of its	2825
obligation to remit taxes by electronic funds transfer under	2826
division (D) of this section shall not relieve the taxpayer of	2827
such obligation.	2828

(2) The reporting person for a taxpayer required to remit tax	2829
payments by electronic funds transfer under division (D)(1) of	2830
this section shall remit such payments to the treasurer of state	2831
in the manner prescribed by rules adopted by the treasurer under	2832
section 113.061 of the Revised Code.	2833

(3) The payment of taxes by electronic funds transfer shall	2834
not affect a taxpayer's obligation to file an annual report	2835
required under division (A) of this section.	2836

(4) The reporting person for a taxpayer that is required to	2837
remit tax payments by electronic funds transfer under this section	2838
may apply to the treasurer of state, in the manner prescribed by	2839
the treasurer, to be excused from that requirement. The treasurer	2840
may excuse the taxpayer from remittance by electronic funds	2841
transfer for good cause shown for the period of time requested by	2842
the reporting person or for a portion of that period. The	2843
treasurer shall notify the tax commissioner and the taxpayer of	2844
the treasurer's decision as soon as is practicable.	2845

(5)(a) If the reporting person for a taxpayer that is	2846
required to remit tax payments by electronic funds transfer under	2847
this section remits those payments by some means other than	2848
electronic funds transfer as prescribed by this section and the	2849
rules adopted by the treasurer of state, and if the treasurer	2850
determines that such failure was not due to reasonable cause or	2851
was due to willful neglect, the treasurer shall notify the tax	2852
commissioner of the failure to remit by electronic funds transfer	2853
and shall provide the commissioner with any information used in	2854
making that determination.	2855

(b) For the failure of a reporting person to remit payments	2856
by electronic funds transfer, the tax commissioner may collect an	2857
additional charge by assessment against the taxpayer in the manner	2858
prescribed by section 5726.20 of the Revised Code. The additional	2859
charge shall equal five per cent of the amount of taxes or	2860
estimated tax payments required to be paid by electronic funds	2861
transfer, but shall not exceed five thousand dollars. An	2862
additional charge assessed under this section is in addition to	2863
any other penalty or charge imposed under this chapter and shall	2864
be considered as revenue arising from the tax levied under this	2865
chapter. The tax commissioner may remit all or a portion of such a	2866
charge and may adopt rules governing such remission.	2867

(c) No additional charge shall be assessed under division	2868
(D)(5) of this section against a taxpayer that has been notified	2869
of its obligation to remit taxes under this section and that	2870
remits its first two tax payments after such notification by some	2871
means other than electronic funds transfer. The additional charge	2872
may be assessed upon the remittance of any subsequent tax payment	2873
that the reporting person for the taxpayer remits by some means	2874
other than electronic funds transfer.	2875

Sec. 5726.04. (A) The tax levied on a financial institution	2876
under this chapter shall be the greater of the following:	2877

(1) A minimum tax equal to one thousand dollars;

2878

(2) The product of the total Ohio equity capital of the	2879
financial institution, as determined under this section,	2880
multiplied by eight mills for each dollar of the first five	2881
hundred million dollars of total Ohio equity capital and by two	2882
and one-half mills for each dollar of total Ohio equity capital in	2883
excess of five hundred million dollars.	2884

(B) If the reporting person for a financial institution files	2885
an FR Y-9 or call report, the total equity capital of the	2886
financial institution shall equal the total equity capital shown	2887
on the reporting person's FR Y-9 or call report as of the end of	2888
the taxable year. The total equity capital of all other financial	2889
institutions shall be reported as of the end of the taxable year	2890
in accordance with generally accepted accounting principles.	2891

(C) For the purposes of this section, "total Ohio equity	2892
capital" means the product of the total equity capital of a	2893
financial institution as of the end of a taxable year multiplied	2894
by the Ohio apportionment ratio calculated for the financial	2895
institution under section 5726.05 of the Revised Code.	2896

(D) All payments received from the tax levied under this	2897
chapter shall be credited to the general revenue fund.	2898

(E)(1) As used in this division:

2899

(a) "Target tax amount" means two hundred twenty-five million	2900
dollars.	2901

(b) "Amount of taxes collected" means the amount of taxes	2902
received by the tax commissioner from the tax levied under this	2903
chapter for a tax year, less any amounts refunded to taxpayers for	2904
the same tax year.	2905

(2) If, for the tax year beginning on January 1, 2014, the	2906
total amount of taxes collected from all taxpayers under this	2907
chapter is greater than one hundred ten per cent of the target tax	2908
amount, the tax commissioner shall decrease each tax rate provided	2909
in division (A)(2) of this section by a percentage equal to the	2910
difference of (a) the percentage by which the amount of taxes	2911
collected exceeded the target tax amount minus (b) ten per cent of	2912
the target tax amount.	2913

(3) If, for the tax year beginning on January 1, 2014, the	2914
total amount of taxes collected from all taxpayers under this	2915
chapter is less than ninety per cent of the target tax amount, the	2916
tax commissioner shall increase each tax rate provided in division	2917
(A)(2) of this section by a percentage equal to the difference of	2918
(a) the percentage by which the target tax amount exceeded the	2919
amount of taxes collected minus (b) ten per cent of the target tax	2920
amount.	2921

(4) Tax rates adjusted pursuant to division (E)(2) or (3) of	2922
this section shall be rounded to the nearest one-tenth of one mill	2923
per dollar. The tax commissioner shall publish the new tax rates	2924
by journal entry and provide notice of the new tax rates to	2925
taxpayers. The new tax rates shall apply to tax years beginning on	2926
or after January 1, 2015.	2927

Sec. 5726.05. (A) An apportionment factor shall be used to	2928
determine the total Ohio equity capital of a financial	2929
institution. The factor shall be based upon the gross receipts	2930
generated by the financial institution and reported in the same	2931
manner as provided for the determination of the financial	2932
institution's total equity capital for a tax year under division	2933
(B) of section 5726.04 of the Revised Code.	2934

(B) Gross receipts generated by a financial institution shall	2935
be sitused to this state in the proportion that the customers'	2936
benefit in this state with respect to the services received bears	2937
to the customers' benefit everywhere with respect to the services	2938
received. The physical location where the customer ultimately uses	2939
or receives the benefit of what was received shall be paramount in	2940
determining the proportion of the benefit in this state to the	2941
benefit everywhere. The method of calculating gross receipts for	2942
purposes of the denominator shall be the same as the method used	2943
in determining gross receipts for purposes of the numerator.	2944

(C) Gross receipts from the sale of capital assets shall be	2945
excluded from both the numerator and the denominator of the	2946
apportionment factor.	2947

(D) If the apportionment provisions of this section do not	2948
fairly represent the extent of the taxpayer's business activity in	2949
this state, the taxpayer may request, or the tax commissioner may	2950
require or permit, an alternative method. Such a request must be	2951
made within any applicable statute of limitations set forth in	2952
this chapter.	2953

(E) The tax commissioner shall adopt administrative rules to	2954
provide additional guidance for the application of this section.	2955

Sec. 5726.06. (A) The reporting person for a taxpayer shall	2956
file estimated tax reports and remit the amount of tax estimated	2957
to be due for a tax year to the tax commissioner as follows:	2958

(1) The minimum tax required under division (A)(1) of section	2959
5726.04 of the Revised Code or one-third of the estimated tax,	2960
whichever is greater, on or before the fifteenth day of August of	2961
the year preceding the tax year;	2962

(2) One-half of the amount by which the estimated tax exceeds	2963
the amount paid under division (A)(1) of this section on or before	2964
the fifteenth day of November of the year preceding the tax year;	2965

(3) One-half of the amount by which the estimated tax exceeds	2966
the amount paid under division (A)(1) of this section on or before	2967
the fifteenth day of February of the tax year.	2968

(B)(1) Remittance of the estimated tax shall be made payable	2969
to the treasurer of state and shall be made in the form prescribed	2970
by the tax commissioner, including by electronic funds transfer if	2971
the taxpayeris required to remit payments by that method under	2972
section 5726.03 of the Revised Code.	2973

(2) The tax commissioner shall immediately forward to the	2974
treasurer of state all amounts received under this section, and	2975
the treasurer of state shall credit all payments of such estimated	2976
tax as provided in division (D) of section 5726.04 of the Revised	2977
Code.	2978

(C) If a taxpayer was not subject to the tax imposed by	2979
section 5726.02 of the Revised Code for the tax year in which the	2980
payment is due under division (A)(1) of this section for the	2981
succeeding tax year, "estimated tax" for purposes of this section	2982
means ninety per cent of the amount that the taxpayer estimates to	2983
be the sum of its liability under section 5726.02 of the Revised	2984
Code for that succeeding tax year. If a taxpayer was subject to	2985
the tax for the tax year in which the payment is due under	2986
division (A)(1) of this section for the succeeding tax year,	2987
"estimated tax" for purposes of this section means the lesser of	2988
(1) one hundred per cent of the taxpayer's tax liability for the	2989
current tax year or (2) ninety per cent of the amount the taxpayer	2990
estimates to be the sum of its liability under section 5726.02 of	2991
the Revised Code for the succeeding tax year.	2992

Sec. 5726.07. (A) In the case of an underpayment of estimated	2993
taxes required to be paid under section 5726.06 of the Revised	2994
Code, interest upon the amount of underpayment, calculated at the	2995
rate per annum prescribed by section 5703.47 of the Revised Code	2996
for the period of underpayment, shall be added to the tax due for	2997
the tax year for which the estimated tax is paid.	2998

(B) The amount of underpayment upon which such interest is	2999
computed equals the amount by which division (B)(1) of this	3000
section exceeds division (B)(2) of this section.	3001

(1) The amount of the estimated tax payment that would be	3002
required to be paid if the total estimated tax due were equal to	3003
the amount of tax shown to be due on the annual report filed for	3004
the tax year or, if no report was filed, the total amount of tax	3005
due for the tax year;	3006

(2) The amount, if any, of the estimated tax that has been	3007
paid on or before the last day prescribed for such payment.	3008

(C) The period of underpayment for which such interest is	3009
computed shall run from the date the estimated tax payment was	3010
required to be made to the date the payment is made.	3011

For purposes of this section, a payment of estimated tax on	3012
any payment date shall be considered a payment of any previous	3013
underpayment only to the extent that such payment exceeds the	3014
amount of payment currently due.	3015

Sec. 5726.08. Except as otherwise provided in this section,	3016
if any report, claim, statement, or other document required to be	3017
filed, or any payment required to be made, within a prescribed	3018
period or on or before a prescribed date under this chapter is,	3019
after such period or date, delivered by United States mail to the	3020
agency, officer, or office with which such report, claim,	3021
statement, or other document is required to be filed, or to which	3022
such payment is required to be made, the date of the postmark	3023
stamped on the cover in which such report, claim, statement, or	3024
other document, or payment is mailed shall be deemed the date of	3025
delivery or the date of payment.	3026

If a payment is required to be made by electronic funds	3027
transfer pursuant to division (D) of section 5726.03 of the	3028
Revised Code, the payment is considered to be made when the	3029
payment is received by the treasurer of state or credited to an	3030
account designated by the treasurer of state for the receipt of	3031
tax payments.	3032

As used in this section, "the date of the postmark" means, in	3033
the event there is more than one date on the cover, the earliest	3034
date imprinted on the cover by the post office.	3035

Sec. 5726.10. The tax commissioner shall enforce and	3036
administer this chapter. In addition to any other powers conferred	3037
upon the commissioner by law, the commissioner may do any of the	3038
following:	3039

(A) Prescribe all forms required to be filed pursuant to this	3040
chapter;	3041

(B) Promulgate such rules and regulations as the commissioner	3042
finds necessary to carry out this chapter;	3043

(C) Appoint and employ such personnel as are necessary to	3044
carry out the duties imposed upon the commissioner by this	3045
chapter.	3046

Sec. 5726.20. (A) The tax commissioner may make an	3047
assessment, based on any information in the commissioner's	3048
possession, against any person that fails to file a return or	3049
report or pay any tax as required by this chapter. The reporting	3050
person for a taxpayer shall file the annual report required under	3051
section 5726.02 of the Revised Code and remit the tax imposed by	3052
this chapter. Each person included in the annual report of the	3053
taxpayer is jointly and severally liable for the tax imposed by	3054
this chapter and any penalties and interest thereon. If the	3055
reporting person fails, for any reason, to file and remit any tax,	3056
the amount due may be collected by assessment against the	3057
reporting person and against any or all other persons required to	3058
be included in the annual report of the taxpayer in the manner	3059
provided by this section. The commissioner shall give the person	3060
assessed written notice of the assessment as provided in section	3061
5703.37 of the Revised Code. With the notice, the commissioner	3062
shall provide instructions on the manner in which to petition for	3063
reassessment and request a hearing with respect to the petition.	3064

(B) No assessment shall be made or issued against a person	3065
under this section more than four years after the later of the	3066
final date the report subject to assessment was required to be	3067
filed or the date such report was filed. Such time limit may be	3068
extended if both the person and the commissioner consent in	3069
writing to the extension or if an agreement waiving or extending	3070
the time limit has been entered into pursuant to section 122.171	3071
of the Revised Code. Any such extension shall extend the four-year	3072
time limit prescribed in division (A) of section 5726.30 of the	3073
Revised Code for the same period of time. There shall be no bar or	3074
limit to an assessment against a person that fails to file a	3075
report subject to assessment as required by this chapter, or that	3076
files a fraudulent report.	3077

(C) Unless the person assessed, within sixty days after	3078
service of the notice of assessment, files with the tax	3079
commissioner, either in person or by certified mail, a written	3080
petition for reassessment signed by the person or the person's	3081
authorized agent having knowledge of the facts, the assessment	3082
shall become final, and the amount of the assessment is due and	3083
payable from the person assessed to the treasurer of state. A	3084
petition shall indicate the objections of the person assessed, but	3085
additional objections may be raised in writing if received by the	3086
commissioner prior to the date shown on the final determination.	3087
If a petition for reassessment has been properly filed, the	3088
commissioner shall proceed under section 5703.60 of the Revised	3089
Code.	3090

(D)(1) After an assessment becomes final, if any portion of	3091
the assessment, including any accrued interest, remains unpaid, a	3092
certified copy of the tax commissioner's entry making the	3093
assessment final may be filed in the office of the clerk of the	3094
court of common pleas in the county in which the person resides or	3095
has its principal place of business in this state, or in the	3096
office of the clerk of court of common pleas of Franklin county.	3097

(2) Immediately upon the filing of the entry, the clerk shall	3098
enter judgment for the state against the person assessed in the	3099
amount shown on the entry. The judgment may be filed by the clerk	3100
in a loose-leaf book entitled, "special judgments for the	3101
financial institution tax" and shall have the same effect as other	3102
judgments. Execution shall issue upon the judgment at the request	3103
of the tax commissioner, and all laws applicable to sales on	3104
execution shall apply to sales made under the judgment.	3105

(3) The portion of the assessment not paid within sixty days	3106
after the day the assessment was issued shall bear interest at the	3107
rate per annum prescribed by section 5703.47 of the Revised Code	3108
from the date the tax commissioner issues the assessment until the	3109
date the assessment is paid. Interest shall be paid in the same	3110
manner as the tax and may be collected by the issuance of an	3111
assessment under this section.	3112

(E) If the tax commissioner believes that collection of the	3113
tax imposed by this chapter will be jeopardized unless proceedings	3114
to collect or secure collection of the tax are instituted without	3115
delay, the commissioner may issue a jeopardy assessment against	3116
the person liable for the tax. Immediately upon the issuance of	3117
the jeopardy assessment, the commissioner shall file an entry with	3118
the clerk of the court of common pleas in the manner prescribed by	3119
division (D) of this section. Notice of the jeopardy assessment	3120
shall be served on the person assessed or the person's authorized	3121
agent in the manner provided in section 5703.37 of the Revised	3122
Code within five days of the filing of the entry with the clerk.	3123
The total amount assessed shall be immediately due and payable,	3124
unless the person assessed files a petition for reassessment in	3125
accordance with division (C) of this section and provides security	3126
in a form satisfactory to the commissioner and in an amount	3127
sufficient to satisfy the unpaid balance of the assessment. Full	3128
or partial payment of the assessment shall not prejudice the	3129
commissioner's consideration of the petition for reassessment.	3130

(F) The tax commissioner shall immediately forward to the	3131
treasurer of state all amounts the commissioner receives under	3132
this section. Such amounts shall be considered as revenue arising	3133
from the tax imposed by this chapter.	3134

(G) If the tax commissioner possesses information indicating	3135
that the amount of tax a taxpayer is required to pay under this	3136
chapter exceeds the amount the reporting person for the taxpayer	3137
paid, the tax commissioner may audit a sample of the taxpayer's	3138
gross receipts over a representative period of time to ascertain	3139
the amount of tax due, and may issue an assessment based on the	3140
audit. The tax commissioner shall make a good faith effort to	3141
reach agreement with the taxpayer in selecting a representative	3142
sample. The tax commissioner may apply a sampling method only if	3143
the commissioner has prescribed the method by rule.	3144

(H) If the whereabouts of a person subject to this chapter is	3145
not known to the tax commissioner, the secretary of state is	3146
hereby deemed to be that person's agent for purposes of service of	3147
process or notice of any assessment, action, or proceedings	3148
instituted in this state against the person under this chapter.	3149
Such process or notice shall be served on such person by the	3150
commissioner or by an agent of the commissioner by leaving a true	3151
and attested copy of the process or notice at the office of the	3152
secretary of state at least fifteen days before the return day of	3153
such process or notice, and by sending a copy of the process or	3154
notice to such person by ordinary mail, with an endorsement	3155
thereon of the service upon the secretary of state, addressed to	3156
such person at the person's last known address.	3157

Sec. 5726.21. (A) In addition to any other penalty imposed by	3158
this chapter or Chapter 5703. of the Revised Code, the following	3159
penalties shall apply:	3160

(1) If a taxpayer required to file any report under this	3161
chapter fails to make and file the report within the time	3162
prescribed, including any extensions of time granted by the tax	3163
commissioner, a penalty may be imposed not exceeding the greater	3164
of fifty dollars per month or fraction of a month, not to exceed	3165
five hundred dollars, or five per cent per month or fraction of a	3166
month, not to exceed fifty per cent of the tax required to be	3167
shown on the report, for each month or fraction of a month	3168
elapsing between the due date, including extensions of the due	3169
date, and the date on which the report is filed.	3170

(2) If a taxpayer fails to pay the amount of tax required to	3171
be paid under this chapter, except for estimated tax under section	3172
5726.06 of the Revised Code, by the dates prescribed in this	3173
chapter for payment, a penalty may be imposed not exceeding	3174
fifteen per cent of the delinquent payment.	3175

(3) If a taxpayer files what purports to be a report required	3176
by this chapter that does not contain information upon which the	3177
substantial correctness of the report may be judged or contains	3178
information that on its face indicates that the report is	3179
substantially incorrect, and the filing of the report in that	3180
manner is due to a position that is frivolous or a desire that is	3181
apparent from the report to delay or impede the administration of	3182
the tax levied under this chapter, a penalty of up to five hundred	3183
dollars may be imposed.	3184

(4) If a taxpayer makes a fraudulent attempt to evade the	3185
reporting or payment of the tax required to be shown on any report	3186
required under this chapter, a penalty may be imposed not	3187
exceeding the greater of one thousand dollars or one hundred per	3188
cent of the tax required to be shown on the report.	3189

(5) If a taxpayer makes a false or fraudulent claim for a	3190
refund under this chapter, a penalty may be imposed not exceeding	3191
the greater of one thousand dollars or one hundred per cent of the	3192
claim.	3193

(B) The tax commissioner may collect any penalty imposed by	3194
this section in the same manner as the tax levied under this	3195
chapter. Penalties so collected shall be considered as revenue	3196
arising from the tax levied under this chapter.	3197

(C) For purposes of this section, the tax required to be	3198
shown on the report shall be reduced by the amount of any part of	3199
the tax paid on or before the date, including extensions of the	3200
date, prescribed for filing the report.	3201

(D) The tax commissioner may abate all or a portion of any	3202
penalties imposed under this section and may adopt rules governing	3203
such abatements.	3204

Sec. 5726.30. (A) The tax commissioner shall refund the	3205
amount of taxes imposed under this chapter that a person overpaid,	3206
paid illegally or erroneously, or paid on an illegal or erroneous	3207
assessment. The person shall file an application for refund with	3208
the tax commissioner, on the form prescribed by the commissioner,	3209
within four years after the date of the illegal or erroneous	3210
payment of the tax, or within any additional period allowed under	3211
division (B) of section 5726.20 of the Revised Code. The applicant	3212
shall provide the amount of the requested refund along with the	3213
claimed reasons for, and documentation to support, the issuance of	3214
a refund.	3215

For purposes of this division, a payment that an applicant	3216
made before the due date or extended due date for filing the	3217
report to which the payment relates shall be deemed to have been	3218
made on the due date or extended due date of the report.	3219

(B) Upon the filing of a refund application, the tax	3220
commissioner shall determine the amount of refund to which the	3221
applicant is entitled. If the amount is not less than that	3222
claimed, the commissioner shall certify the amount to the director	3223
of budget and management and treasurer of state for payment from	3224
the tax refund fund created under section 5703.052 of the Revised	3225
Code. If the amount is less than that claimed, the commissioner	3226
shall proceed in accordance with section 5703.70 of the Revised	3227
Code.	3228

(C)(1) Except as provided in division (C)(2) of this section,	3229
interest on a refund applied for under this section, computed at	3230
the rate provided for in section 5703.47 of the Revised Code,	3231
shall be allowed from the later of the date the tax was paid or	3232
the date the tax payment was due until the refund is paid.	3233

(2) No interest shall be allowed under this section on an	3234
amount refunded to a person to the extent that the refund results	3235
from the allowance of a refundable credit against the tax imposed	3236
by section 5726.02 of the Revised Code.	3237

Sec. 5726.31. As used in this section, "debt to this state"	3238
means unpaid taxes due the state, unpaid workers' compensation	3239
premiums due under section 4123.35 of the Revised Code, unpaid	3240
unemployment compensation contributions due under section 4141.25	3241
of the Revised Code, unpaid unemployment compensation payments in	3242
lieu of contributions due under section 4141.241 of the Revised	3243
Code, unpaid claims certified under section 131.02 or 131.021 of	3244
the Revised Code, unpaid fees payable to the state or to the clerk	3245
of courts pursuant to section 4505.06 of the Revised Code or any	3246
unpaid charge, penalty, or interest arising from any of the	3247
foregoing.	3248

If a person entitled to a refund under section 5726.30 of the	3249
Revised Code owes any debt to this state, the amount refundable	3250
may be applied in satisfaction of the debt. If the amount	3251
refundable is less than the amount of the debt, it may be applied	3252
in partial satisfaction of the debt. If the amount refundable is	3253
greater than the amount of the debt, the amount remaining after	3254
satisfaction of the debt shall be refunded. If the taxpayer has	3255
more than one such debt, any debt subject to section 5739.33 or	3256
division (G) of section 5747.07 of the Revised Code shall be	3257
satisfied first.	3258

Except as provided in section 131.021 of the Revised Code,	3259
this section applies only to debts that have become final. For the	3260
purposes of this section, a debt becomes final when, under the	3261
applicable law, any time provided for petition for reassessment,	3262
request for reconsideration, or other appeal of the legality or	3263
validity of the amount giving rise to the debt expires without an	3264
appeal having been filed in the manner provided by law.	3265

The tax commissioner may charge each respective agency of the	3266
state for the commissioner's cost in applying refunds to debts due	3267
to the state and may charge the attorney general for the	3268
commissioner's cost in applying refunds to certified claims. The	3269
commissioner may promulgate rules to implement this section.	3270

The commissioner may, with the consent of the reporting	3271
person for a taxpayer, provide for the crediting of the amount of	3272
any refund due to the taxpayer under this chapter for a tax year	3273
against the tax due for any succeeding tax year.	3274

Sec. 5726.32.  If any tax due under this chapter is not paid	3275
on or before the date prescribed for its payment, interest shall	3276
be assessed, collected, and paid, in the same manner as the tax,	3277
upon such unpaid amount at the rate per annum prescribed by	3278
section 5703.47 of the Revised Code from the date prescribed for	3279
the payment of the tax until the date the tax is paid or the date	3280
an assessment is issued under section 5726.20 of the Revised Code,	3281
whichever is earlier. Interest so collected shall be considered as	3282
revenue arising from the tax imposed by this chapter.	3283

Sec. 5726.33. (A) As used in this section, "qualifying refund	3284
overpayment" means an amount received by a taxpayer in excess of a	3285
refund claimed or a request for payment made by the reporting	3286
person for the taxpayer on a return, report, or other document	3287
filed with the tax commissioner.	3288

(B) A taxpayer is not liable for any interest or penalty with	3289
respect to the repayment of a qualifying refund overpayment if the	3290
reporting person for the taxpayer pays the entire amount of the	3291
qualifying refund overpayment to the commissioner not later than	3292
thirty days after the taxpayer receives an assessment for the	3293
amount. If the reporting person does not pay the entire amount of	3294
the overpayment to the commissioner within the time prescribed by	3295
this section, interest shall accrue on the amount of the	3296
deficiency pursuant to section 5726.32 of the Revised Code from	3297
the date the commissioner issues the assessment until the date the	3298
deficiency is paid.	3299

Sec. 5726.36. (A) A person shall notify the tax commissioner	3300
when the person is no longer subject to the tax imposed by this	3301
chapter.	3302

(B) If the ownership structure of a financial institution	3303
changes such that a person is no longer includable in the annual	3304
report of the financial institution, the reporting person for the	3305
financial institution shall notify the commissioner of the change	3306
when the reporting person files its next annual report or in	3307
writing prior to the due date of that report.	3308

Sec. 5726.40. If a person, wherever organized, doing business	3309
in this state or owning or issuing all or part of the entity's	3310
capital or property in this state, and required by law to file any	3311
report or return or to pay any tax or fee under Title LVII of the	3312
Revised Code, fails or neglects to make such report or return or	3313
to pay any such tax or fee for ninety days after the time	3314
prescribed by law for making such report or return or for paying	3315
such tax or fee, the tax commissioner shall certify such fact to	3316
the secretary of state. The secretary of state shall thereupon	3317
cancel the document of creation authorizing the person to do	3318
business in this state. Upon such cancellation, all of the powers,	3319
privileges, and franchises conferred upon that person by its	3320
document of creation shall cease, subject to section 1701.88 of	3321
the Revised Code. The secretary of state shall immediately notify	3322
the person of the action taken by the secretary, and shall also	3323
forward for filing a certificate of the action so taken to the	3324
county recorder of the county in which the principal place of	3325
business of the person in this state is located. No fee shall be	3326
charged for the filing.	3327

Sec. 5726.41. No person shall exercise, or attempt to	3328
exercise, any powers, privileges, or franchises under the person's	3329
document of creation after the document is canceled pursuant to	3330
section 5726.40 of the Revised Code. A penalty of one hundred	3331
dollars shall be imposed for each day a violation of this section	3332
occurs, up to a maximum penalty of five thousand dollars.	3333

Sec. 5726.42. (A)(1) A person whose document of creation has	3334
been canceled by the secretary of state pursuant to section	3335
5726.40 the Revised Code shall be reinstated and again entitled to	3336
exercise its rights, privileges, and franchises in this state upon	3337
compliance with all of the following:	3338

(a) Filing with the secretary of state a certificate from the	3339
tax commissioner that the person has complied with all the	3340
requirements of law as to tax reports and paid all taxes, fees, or	3341
penalties due thereon for every year of delinquency;	3342

(b) Payment to the secretary of state of any additional fees	3343
and penalties required to be paid to the secretary of state;	3344

(c) Payment to the secretary of state of an additional fee of	3345
ten dollars.	3346

Upon the person's compliance with this division, the	3347
secretary of state shall cancel the entry of cancellation filed	3348
under section 5726.40 of the Revised Code.	3349

(2) If a reinstatement is not made within one year from the	3350
date of cancellation of the document of creation, and if it	3351
appears that a document of creation has been issued to a person of	3352
the same or similar name as the applicant for reinstatement, the	3353
secretary of state shall require, as a condition prerequisite to	3354
such reinstatement, that the applicant amend its document of	3355
creation by changing the applicant's name.	3356

(B) Any officer, shareholder, creditor, or receiver of a	3357
person may at any time take all steps required by this section to	3358
effect a reinstatement.	3359

(C) The rights, privileges, and franchises of a person whose	3360
document of creation has been reinstated in accordance with this	3361
section are subject to section 1701.922 of the Revised Code.	3362

(D) Notwithstanding a violation of section 5726.41 of the	3363
Revised Code, upon reinstatement of a person's document of	3364
creation in accordance with this section, neither section 5726.40	3365
nor section 5726.41 of the Revised Code shall be applied to	3366
invalidate the exercise or attempt to exercise any right,	3367
privilege, or franchise on behalf of the person by an officer,	3368
agent, or employee of the person after cancellation and prior to	3369
the reinstatement of the document of creation, if the conditions	3370
set forth in divisions (B)(1)(a) and (b) of section 1701.922 of	3371
the Revised Code are met.	3372

Sec. 5726.43. If any financial institution fails to make and	3373
file any return or report required under this chapter, or to pay	3374
the penalties provided by law for failure to make and file such	3375
reports or returns, for a period of ninety days after the time	3376
prescribed by law, the attorney general, on the request of the tax	3377
commissioner, shall commence an action in quo warranto in the	3378
court of appeals of the county in which the reporting person for	3379
the financial institution has its principal place of business in	3380
this state to forfeit and annul the privileges and franchises of	3381
each person included in the annual report of the financial	3382
institution. If the court is satisfied that any such financial	3383
institution is in default, it shall render judgment ousting each	3384
person included in the annual report of the financial institution	3385
from the exercise of its privileges and franchises within this	3386
state, and shall otherwise proceed as provided in sections 2733.01	3387
to 2733.39 of the Revised Code.	3388

Sec. 5726.50. (A) A taxpayer may claim a refundable tax	3389
credit against the tax imposed under this chapter for each person	3390
included in the annual report of the taxpayer that is granted a	3391
credit by the tax credit authority under section 122.17 or	3392
division (B)(2) or (3) of section 122.171 of the Revised Code.	3393
Such a credit shall not be claimed for any tax year following the	3394
calendar year in which a relocation of employment positions occurs	3395
in violation of an agreement entered into under section 122.171 of	3396
the Revised Code. For the purpose of making tax payments under	3397
this chapter, taxes equal to the amount of the refundable credit	3398
shall be considered to be paid on the first day of the tax year.	3399

(B) A taxpayer may claim a nonrefundable tax credit against	3400
the tax imposed under this chapter for each person included in the	3401
annual report of the taxpayer that is granted a credit by the tax	3402
credit authority under division (B)(1) of section 122.171 of the	3403
Revised Code.	3404

(C) The credits authorized in divisions (A) and (B) of this	3405
section shall be claimed in the order required under section	3406
5726.98 of the Revised Code. If the amount of a credit authorized	3407
in division (A) of this section exceeds the tax otherwise due	3408
under section 5726.02 of the Revised Code after deducting all	3409
other credits preceding the credit in the order prescribed in	3410
section 5726.98 of the Revised Code, the excess shall be refunded	3411
to the taxpayer.	3412

Sec. 5726.51. A taxpayer may claim a nonrefundable credit	3413
against the tax imposed under this chapter for each bank	3414
organization that is organized under Title XI of the Revised Code	3415
and included in the annual report of the taxpayer. The credit	3416
shall equal the sum of the annual assessments such bank	3417
organizations paid during the taxable year to the division of	3418
financial institutions pursuant to Title XI of the Revised Code	3419
and the schedule of fees published by the division.	3420

The credit authorized by this section shall be claimed in the	3421
order required under section 5726.98 of the Revised Code. The	3422
credit shall not be allowed unless there is filed with the	3423
taxpayer's annual report a document certified by the division of	3424
financial institutions verifying the amount of state annual	3425
assessment fees and federal supervisory fees paid by the bank	3426
organizations during the taxable year.	3427

Sec. 5726.52. (A) As used in this section, "certificate	3428
owner" has the same meaning as in section 149.311 of the Revised	3429
Code.	3430

(B) A taxpayer may claim a refundable credit against the tax	3431
imposed by this chapter for each person included in the annual	3432
report of a taxpayer that is a certificate owner of a	3433
rehabilitation tax credit certificate issued under section 149.311	3434
of the Revised Code. The credit shall equal twenty-five per cent	3435
of the dollar amount indicated on each certificate, but shall not	3436
exceed five million dollars for each certificate.	3437

The credit shall be claimed for the calendar year specified	3438
in the certificate and in the order required under section 5726.98	3439
of the Revised Code. If the credit exceeds the amount of tax	3440
otherwise due in that year, the excess shall be refunded to the	3441
taxpayer, provided that, if any amount of the credit is refunded,	3442
the sum of the amount refunded and the amount applied to reduce	3443
the tax otherwise due in that year shall not exceed three million	3444
dollars. The taxpayer may carry forward any balance of the credit	3445
in excess of the amount claimed in that year for not more than	3446
five ensuing years, and shall deduct any amount claimed in any	3447
such year from the amount claimed in an ensuing year.	3448

(C) A taxpayer claiming a credit under this section shall	3449
retain the rehabilitation tax credit certificate for four years	3450
following the end of the year to which the credit was applied, and	3451
shall make the certificate available for inspection by the tax	3452
commissioner upon the request of the commissioner during that	3453
period.	3454

Sec. 5726.53. A taxpayer may claim a refundable credit	3455
against the tax imposed by this chapter for each person included	3456
in the annual report of the taxpayer that was issued a tax credit	3457
certificate by the Ohio venture capital authority under section	3458
150.07 of the Revised Code. The amount of the credit shall equal	3459
the amount specified in the tax credit certificate. The credit	3460
shall be claimed for the tax year specified in the tax credit	3461
certificate. The taxpayer shall claim the credit in the order	3462
required under section 5726.98 of the Revised Code. If the credit	3463
amount exceeds the tax otherwise due under section 5726.02 of the	3464
Revised Code after deducting all other credits preceding the	3465
credit in the order prescribed in section 5726.98 of the Revised	3466
Code, the excess shall be refunded to the taxpayer.	3467

Sec. 5726.54. (A) Any term used in this section has the same	3468
meaning as in section 5725.33 of the Revised Code.	3469

(B) A taxpayer may claim a nonrefundable credit against the	3470
tax imposed by this chapter for each person included in the annual	3471
report of the taxpayer that holds a qualified equity investment on	3472
a credit allowance date occurring in the calendar year immediately	3473
preceding the tax year for which the tax is due. The credit shall	3474
be computed in the same manner prescribed for the computation of	3475
credits allowed under section 5725.33 of the Revised Code.	3476

By claiming a tax credit under this section, a taxpayer	3477
waives its rights under section 5726.20 of the Revised Code with	3478
respect to the time limitation for the assessment of taxes as it	3479
relates to credits claimed under this section that later become	3480
subject to recapture under division (D) of this section.	3481

The credit shall be claimed in the order prescribed by	3482
section 5726.98 of the Revised Code. If the amount of the credit	3483
exceeds the amount of tax otherwise due after deducting all other	3484
credits preceding the credit in the order prescribed in section	3485
5726.98 of the Revised Code, the excess may be carried forward for	3486
not more than four ensuing tax years.	3487

(C) The total amount of qualified equity investments on the	3488
basis of which credits may be claimed under this section and	3489
sections 5725.33, 5729.16, and 5733.58 of the Revised Code is	3490
subject to the limitation of division (C) of section 5725.33 of	3491
the Revised Code.	3492

(D) If any amount of the federal tax credit allowed for a	3493
qualified equity investment for which a credit was received under	3494
this section is recaptured under section 45D of the Internal	3495
Revenue Code, or if the director of development services	3496
determines that an investment for which a tax credit is claimed	3497
under this section is not a qualified equity investment or that	3498
the proceeds of an investment for which a tax credit is claimed	3499
under this section are used to make qualified low-income community	3500
investments other than in a qualified active low-income community	3501
business, all or a portion of the credit received on account of	3502
that investment shall be paid by the taxpayer that received the	3503
credit to the tax commissioner. The amount to be recovered shall	3504
be determined by the director pursuant to rules adopted under	3505
section 5725.33 of the Revised Code. The director shall certify	3506
any amount due under this division to the tax commissioner, and	3507
the commissioner shall notify the taxpayer of the amount due. The	3508
amount due is payable not later than thirty days after the day the	3509
commissioner issues the notice. The amount due shall be considered	3510
to be tax due under section 5726.02 of the Revised Code, and may	3511
be collected by assessment without regard to the limitations	3512
imposed under section 5726.20 of the Revised Code for the	3513
assessment of taxes by the commissioner. All amounts collected	3514
under this division shall be credited as revenue from the tax	3515
levied under section 5726.02 of the Revised Code.	3516

Sec. 5726.55. (A) Any term used in this section has the same	3517
meaning as in section 122.85 of the Revised Code.	3518

(B) A taxpayer may claim a refundable credit against the tax	3519
imposed under this chapter for each person included in the annual	3520
report of the taxpayer that is a certificate owner of a tax credit	3521
certificate issued under section 122.85 of the Revised Code. The	3522
credit shall be claimed for the taxable year in which the	3523
certificate is issued by the director of development services. The	3524
credit amount equals the amount stated in the certificate. The	3525
credit shall be claimed in the order required under section	3526
5726.98 of the Revised Code. If the credit amount exceeds the tax	3527
otherwise due under section 5726.02 of the Revised Code after	3528
deducting all other credits preceding the credit in the order	3529
prescribed in section 5726.98 of the Revised Code, the excess	3530
shall be refunded to the taxpayer.	3531

(C) Nothing in this section shall allow a taxpayer to claim	3532
more than one credit per tax credit-eligible production.	3533

Sec. 5726.98. (A) To provide a uniform procedure for	3534
calculating the amount of tax due under section 5726.02 of the	3535
Revised Code, a taxpayer shall claim any credits to which the	3536
taxpayer is entitled under this chapter in the following order:	3537

(1) The bank organization assessment credit under section	3538
5726.51 of the Revised Code;	3539

(2) The nonrefundable job retention credit under division (B)	3540
of section 5726.50 of the Revised Code;	3541

(3) The nonrefundable credit for purchases of qualified	3542
low-income community investments under section 5726.54 of the	3543
Revised Code;	3544

(4) The refundable credit for rehabilitating an historic	3545
building under section 5726.52 of the Revised Code;	3546

(5) The refundable job retention or job creation credit under	3547
division (A) of section 5726.50 of the Revised Code;	3548

(6) The refundable credit under section 5726.53 of the	3549
Revised Code for losses on loans made under the Ohio venture	3550
capital program under sections 150.01 to 150.10 of the Revised	3551
Code;	3552

(7) The refundable motion picture production credit under	3553
section 5726.55 of the Revised Code.	3554

(B) For any credit except the refundable credits enumerated	3555
in this section, the amount of the credit for a taxable year shall	3556
not exceed the tax due after allowing for any other credit that	3557
precedes it in the order required under this section. Any excess	3558
amount of a particular credit may be carried forward if authorized	3559
under the section creating that credit. Nothing in this chapter	3560
shall be construed to allow a taxpayer to claim, directly or	3561
indirectly, a credit more than once for a taxable year.	3562

Sec. 5726.99. Whoever violates section 5726.41 of the Revised	3563
Code shall be fined not less than one hundred dollars or more than	3564
one thousand dollars.	3565

Sec. 5733.01.  (A) The tax provided by this chapter for	3566
domestic corporations shall be the amount charged against each	3567
corporation organized for profit under the laws of this state and	3568
each nonprofit corporation organized pursuant to Chapter 1729. of	3569
the Revised Code, except as provided in sections 5733.09 and	3570
5733.10 of the Revised Code, for the privilege of exercising its	3571
franchise during the calendar year in which that amount is	3572
payable, and the tax provided by this chapter for foreign	3573
corporations shall be the amount charged against each corporation	3574
organized for profit and each nonprofit corporation organized or	3575
operating in the same or similar manner as nonprofit corporations	3576
organized under Chapter 1729. of the Revised Code, under the laws	3577
of any state or country other than this state, except as provided	3578
in sections 5733.09 and 5733.10 of the Revised Code, for the	3579
privilege of doing business in this state, owning or using a part	3580
or all of its capital or property in this state, holding a	3581
certificate of compliance with the laws of this state authorizing	3582
it to do business in this state, or otherwise having nexus in or	3583
with this state under the Constitution of the United States,	3584
during the calendar year in which that amount is payable.	3585

(B) A corporation is subject to the tax imposed by section	3586
5733.06 of the Revised Code for each calendar year prior to 2014	3587
that it is so organized, doing business, owning or using a part or	3588
all of its capital or property, holding a certificate of	3589
compliance, or otherwise having nexus in or with this state under	3590
the Constitution of the United States, on the first day of January	3591
of that calendar year. No credit authorized by this chapter may be	3592
claimed for tax year 2014 or any tax year thereafter.	3593

(C) Any corporation subject to this chapter that is not	3594
subject to the federal income tax shall file its returns and	3595
compute its tax liability as required by this chapter in the same	3596
manner as if that corporation were subject to the federal income	3597
tax.	3598

(D) For purposes of this chapter, a federally chartered	3599
financial institution shall be deemed to be organized under the	3600
laws of the state within which its principal office is located.	3601

(E) For purposes of this chapter, any person, as defined in	3602
section 5701.01 of the Revised Code, shall be treated as a	3603
corporation if the person is classified for federal income tax	3604
purposes as an association taxable as a corporation, and an equity	3605
interest in the person shall be treated as capital stock of the	3606
person.	3607

(F) For the purposes of this chapter, "disregarded entity"	3608
has the same meaning as in division (D) of section 5745.01 of the	3609
Revised Code.	3610

(1) A person's interest in a disregarded entity, whether held	3611
directly or indirectly, shall be treated as the person's ownership	3612
of the assets and liabilities of the disregarded entity, and the	3613
income, including gain or loss, shall be included in the person's	3614
net income under this chapter.	3615

(2) Any sale, exchange, or other disposition of the person's	3616
interest in the disregarded entity, whether held directly or	3617
indirectly, shall be treated as a sale, exchange, or other	3618
disposition of the person's share of the disregarded entity's	3619
underlying assets or liabilities, and the gain or loss from such	3620
sale, exchange, or disposition shall be included in the person's	3621
net income under this chapter.	3622

(3) The disregarded entity's payroll, property, and sales	3623
factors shall be included in the person's factors.	3624

(G) The tax a corporation is required to pay under this	3625
chapter shall be as follows:	3626

(1)(a) For financial institutions, the greater of the minimum	3627
payment required under division (E) of section 5733.06 of the	3628
Revised Code or the difference between all taxes charged the	3629
financial institution under this chapter, without regard to	3630
division (G)(2) of this section, less any credits allowable	3631
against such tax.	3632

(b) A corporation satisfying the description in division	3633
(E)(5), (6), (7), (8), or (10) of section 5751.01 of the Revised	3634
Code, as that section existed before its amendment by ...B... of	3635
the 129th general assembly, that is not a financial institution,	3636
insurance company, or dealer in intangibles is subject to the	3637
taxes imposed under this chapter as a corporation and not subject	3638
to tax as a financial institution, and shall pay the greater of	3639
the minimum payment required under division (E) of section 5733.06	3640
of the Revised Code or the difference between all the taxes	3641
charged under this chapter, without regard to division (G)(2) of	3642
this section, less any credits allowable against such tax.	3643

(2) For all corporations other than those persons described	3644
in division (G)(1)(a) or (b) of this section, the amount under	3645
division (G)(2)(a) of this section applicable to the tax year	3646
specified less the amount under division (G)(2)(b) of this	3647
section:	3648

(a)(i) For tax year 2005, the greater of the minimum payment	3649
required under division (E) of section 5733.06 of the Revised Code	3650
or the difference between all taxes charged the corporation under	3651
this chapter and any credits allowable against such tax;	3652

(ii) For tax year 2006, the greater of the minimum payment	3653
required under division (E) of section 5733.06 of the Revised Code	3654
or four-fifths of the difference between all taxes charged the	3655
corporation under this chapter and any credits allowable against	3656
such tax, except the qualifying pass-through entity tax credit	3657
described in division (A)(30) and the refundable credits described	3658
in divisions (A)(31) to (35) of section 5733.98 of the Revised	3659
Code;	3660

(iii) For tax year 2007, the greater of the minimum payment	3661
required under division (E) of section 5733.06 of the Revised Code	3662
or three-fifths of the difference between all taxes charged the	3663
corporation under this chapter and any credits allowable against	3664
such tax, except the qualifying pass-through entity tax credit	3665
described in division (A)(30) and the refundable credits described	3666
in divisions (A)(31) to (35) of section 5733.98 of the Revised	3667
Code;	3668

(iv) For tax year 2008, the greater of the minimum payment	3669
required under division (E) of section 5733.06 of the Revised Code	3670
or two-fifths of the difference between all taxes charged the	3671
corporation under this chapter and any credits allowable against	3672
such tax, except the qualifying pass-through entity tax credit	3673
described in division (A)(30) and the refundable credits described	3674
in divisions (A)(31) to (35) of section 5733.98 of the Revised	3675
Code;	3676

(v) For tax year 2009, the greater of the minimum payment	3677
required under division (E) of section 5733.06 of the Revised Code	3678
or one-fifth of the difference between all taxes charged the	3679
corporation under this chapter and any credits allowable against	3680
such tax, except the qualifying pass-through entity tax credit	3681
described in division (A)(30) and the refundable credits described	3682
in divisions (A)(31), (32), (33), and (34) of section 5733.98 of	3683
the Revised Code;	3684

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

3685

(b) A corporation shall subtract from the amount calculated	3686
under division (G)(2)(a)(ii), (iii), (iv), or (v) of this section	3687
any qualifying pass-through entity tax credit described in	3688
division (A)(30) and any refundable credits described in divisions	3689
(A)(31) to (35) of section 5733.98 of the Revised Code to which	3690
the corporation is entitled. Any unused qualifying pass-through	3691
entity tax credit is not refundable.	3692

(c) For the purposes of computing the amount of a credit that	3693
may be carried forward to a subsequent tax year under division	3694
(G)(2) of this section, a credit is utilized against the tax for a	3695
tax year to the extent the credit applies against the tax for that	3696
tax year, even if the difference is then multiplied by the	3697
applicable fraction under division (G)(2)(a) of this section.	3698

(3) Nothing in division (G) of this section eliminates or	3699
reduces the tax imposed by section 5733.41 of the Revised Code on	3700
a qualifying pass-through entity.	3701

Sec. 5733.02.  Annually, for tax years prior to tax year	3702
2014, between the first day of January and the thirty-first day of	3703
March or on or before the date as extended under section 5733.13	3704
of the Revised Code, each taxpayer shall make a report in writing	3705
to the tax commissioner in such form as the tax commissioner	3706
prescribes, and shall remit to the commissioner, with the	3707
remittance made payable to the treasurer of state, the amount of	3708
the tax as shown to be due by such report less the amount paid for	3709
the year on a declaration of estimated tax report filed by the	3710
taxpayer as provided by section 5733.021 of the Revised Code.	3711
Remittance shall be made in the form prescribed by the	3712
commissioner, including electronic funds transfer if required by	3713
section 5733.022 of the Revised Code.	3714

The commissioner shall furnish corporations, on request,	3715
copies of the forms prescribed by the commissioner for the purpose	3716
of making such report. A domestic corporation shall not dissolve,	3717
and a foreign corporation shall not withdraw or retire from	3718
business in Ohio, on or after the first day of January in any year	3719
prior to 2014 without making a franchise tax report to the	3720
commissioner and paying or securing the tax charged for the year	3721
in which such dissolution or withdrawal occurs.	3722

The annual corporation report shall be signed by the	3723
president, vice-president, secretary, treasurer, general manager,	3724
superintendent, or managing agent in this state of such	3725
corporation. If a domestic corporation has not completed its	3726
organization, its annual report shall be signed by one of its	3727
incorporators.	3728

The report shall contain the facts, figures, computations,	3729
and attachments that result in the tax charged by this chapter and	3730
determined in the manner provided within the chapter.	3731

Sec. 5733.021.  (A) Each taxpayer that does not in January of	3732
any year prior to 2014 file the report and make the payment	3733
required by section 5733.02 of the Revised Code shall make and	3734
file a declaration of estimated tax report for the tax year.	3735

The declaration of estimated tax report shall be filed with	3736
the tax commissioner on or before the last day of January in such	3737
form as prescribed by the tax commissioner, and shall reflect an	3738
estimate of the total amount due under this chapter for the tax	3739
year.	3740

(B) A taxpayer required to file a declaration of estimated	3741
tax report shall make remittance of such estimated tax to the tax	3742
commissioner as follows:	3743

(1) The entire estimated tax at the time of filing the	3744
declaration of estimated tax report, if such estimated tax is not	3745
in excess of the minimum tax as provided in section 5733.06 of the	3746
Revised Code;	3747

(2) If the estimated tax is in excess of the minimum tax:

3748

(a) One-third of the estimated tax at the time of filing the	3749
declaration of estimated tax report;	3750

(b) Two-thirds of the estimated tax on or before the last day	3751
of March of the tax year, if the report required by section	3752
5733.02 of the Revised Code is filed on or before the last day of	3753
March of the tax year.	3754

(3) If the estimated tax is in excess of the minimum tax, and	3755
an extension of time for filing the report required by section	3756
5733.02 of the Revised Code has been granted pursuant to section	3757
5733.13 of the Revised Code:	3758

(a) One-third of the estimated tax at the time of filing the	3759
declaration of estimated tax report;	3760

(b) One-third of the estimated tax on or before the last day	3761
of March of the tax year;	3762

(c) One-third of the estimated tax on or before the last day	3763
of May of the tax year.	3764

Remittance of the estimated tax shall be made payable to the	3765
treasurer of state and shall be made in the form prescribed by the	3766
tax commissioner, including electronic funds transfer if required	3767
by section 5733.022 of the Revised Code.	3768

The tax commissioner shall immediately forward to the	3769
treasurer of state all amounts received under this section, and	3770
the treasurer of state shall credit all payments of such estimated	3771
tax as provided in section 5733.12 of the Revised Code.	3772

(C)(1)(a) For any period of delinquency ending prior to the	3773
first day of June of the tax year, the penalty under division	3774
(A)(2) of section 5733.28 of the Revised Code may be imposed only	3775
on the delinquent portion of the estimated tax required to be paid	3776
under divisions (B)(2)(a) and (b) and (B)(3)(a) and (b) of this	3777
section.	3778

(b) If the taxpayer was not subject to tax for the	3779
immediately preceding tax year, "estimated tax" for purposes of	3780
division (C)(1) of this section is ninety per cent of the	3781
qualifying net tax for the tax year. If the taxpayer was subject	3782
to the tax for the immediately preceding tax year, "estimated tax"	3783
for purposes of division (C)(1) of this section is the lesser of	3784
one hundred per cent of the qualifying net tax for the immediately	3785
preceding tax year or ninety per cent of the qualifying net tax	3786
for the tax year.	3787

(2)(a) For any period of delinquency commencing the first day	3788
of June of the tax year and concluding on the extended due date	3789
pursuant to section 5733.13 of the Revised Code, the penalty under	3790
division (A)(2) of section 5733.28 of the Revised Code may be	3791
imposed only on the delinquent portion of the estimated tax	3792
required to be paid under division (B)(3)(c) of this section.	3793

(b) For purposes of division (C)(2) of this section,	3794
"estimated tax" is ninety per cent of the qualifying net tax for	3795
the tax year.	3796

(3) If the taxpayer did not file a report under section	3797
5733.02 of the Revised Code for the tax year or failed to prepare	3798
and file the report in good faith for the tax year, "qualifying	3799
net tax" as used in division (C) of this section for that tax year	3800
means the amount described in division (C)(3)(a) of this section.	3801
Otherwise, "qualifying net tax" as used in division (C) of this	3802
section for that tax year means the lesser of the amount described	3803
in division (C)(3)(a) or (b) of this section:	3804

(a) The tax imposed by sections 5733.06, 5733.065, and	3805
5733.066 of the Revised Code for that tax year reduced by the	3806
credits listed in section 5733.98 of the Revised Code. If the	3807
credits exceed the total tax, the qualifying net tax is the	3808
minimum tax.	3809

(b) The lesser of the tax shown on the report, prepared and	3810
filed in good faith, reduced by the credits shown on that report,	3811
or the tax shown on an amended report, prepared and filed in good	3812
faith, reduced by the credits shown on that amended report. If the	3813
credits shown exceed the total tax shown, the qualifying net tax	3814
is the minimum tax.	3815

Sec. 5733.06. TheFor tax years prior to tax year 2014, the	3816
tax hereby charged each corporation subject to this chapter shall	3817
be the greater of the sum of divisions (A) and (B) of this	3818
section, after the reduction, if any, provided by division (J) of	3819
this section, or division (C) of this section, after the	3820
reduction, if any, provided by division (J) of this section,	3821
except that the tax hereby charged each financial institution	3822
subject to this chapter shall be the amount computed under	3823
division (D) of this section:	3824

(A) Except as set forth in division (F) of this section, five	3825
and one-tenth per cent upon the first fifty thousand dollars of	3826
the value of the taxpayer's issued and outstanding shares of stock	3827
as determined under division (B) of section 5733.05 of the Revised	3828
Code;	3829

(B) Except as set forth in division (F) of this section,	3830
eight and one-half per cent upon the value so determined in excess	3831
of fifty thousand dollars; or	3832

(C)(1) Except as otherwise provided under division (G) of	3833
this section, four mills times that portion of the value of the	3834
issued and outstanding shares of stock as determined under	3835
division (C) of section 5733.05 of the Revised Code. For the	3836
purposes of division (C) of this section, division (C)(2) of	3837
section 5733.065, and division (C) of section 5733.066 of the	3838
Revised Code, the value of the issued and outstanding shares of	3839
stock of an eligible corporation for tax year 2003 through tax	3840
year 2007, or of a qualifiedqualifying holding company, is zero.	3841

(2) As used in division (C) of this section, "eligible	3842
corporation" means a person treated as a corporation for federal	3843
income tax purposes that meets all of the following criteria:	3844

(a) The corporation conducts business for an entire taxable	3845
year as a qualified trade or business as defined by division (C)	3846
of section 122.15 of the Revised Code.	3847

(b) The corporation uses more than fifty per cent of the	3848
corporation's assets, based on net book value, that are located in	3849
Ohio solely to conduct activities that constitute a qualified	3850
trade or business as defined by section 122.15 of the Revised	3851
Code.	3852

(c) The corporation has been formed or organized not more	3853
than three years before the report required to be filed by section	3854
5733.02 of the Revised Code is due, without regard to any	3855
extensions.	3856

(d) The corporation is not a related member, as defined in	3857
section 5733.042 of the Revised Code, at any time during the	3858
taxable year with respect to another person treated as a	3859
corporation for federal income tax purposes. A corporation is not	3860
a related member if during the entire taxable year at least	3861
seventy-five per cent of the corporation's stock is owned directly	3862
or through a pass-through entity by individuals, estates, and	3863
grantor trusts, and the individuals, estates, and grantor trusts	3864
do not directly or indirectly own more than twenty per cent of the	3865
value of another person treated as a corporation for federal	3866
income tax purposes that is conducting a qualified trade or	3867
business.	3868

(D) The tax charged each financial institution subject to	3869
this chapter shall be that portion of the value of the issued and	3870
outstanding shares of stock as determined under division (A) of	3871
section 5733.05 of the Revised Code, multiplied by the following	3872
amounts:	3873

(1) For tax years prior to the 1999 tax year, fifteen mills;

3874

(2) For the 1999 tax year, fourteen mills;

3875

(3) For tax year 2000 and thereafter, thirteen mills.

3876

(E) No tax shall be charged from any corporation that has	3877
been adjudicated bankrupt, or for which a receiver has been	3878
appointed, or that has made a general assignment for the benefit	3879
of creditors, except for the portion of the then current tax year	3880
during which the tax commissioner finds such corporation had the	3881
power to exercise its corporate franchise unimpaired by such	3882
proceedings or act. The minimum payment for each corporation shall	3883
be as follows:	3884

(1) One thousand dollars in the case of a corporation having	3885
gross receipts for the taxable year equal to at least five million	3886
dollars from activities within or outside this state or in the	3887
case of a corporation employing at least three hundred employees	3888
at some time during the taxable year within or outside this state;	3889

(2) Fifty dollars in the case of any other corporation.

3890

The tax charged to corporations under this chapter for the	3891
privilege of engaging in business in this state, which is an	3892
excise tax levied on the value of the issued and outstanding	3893
shares of stock, shall in no manner be construed as prohibiting or	3894
otherwise limiting the powers of municipal corporations, joint	3895
economic development zones created under section 715.691 of the	3896
Revised Code, and joint economic development districts created	3897
under section 715.70 or 715.71 or sections 715.72 to 715.81 of the	3898
Revised Code in this state to impose an income tax on the income	3899
of such corporations.	3900

(F) If two or more taxpayers satisfy the ownership or control	3901
requirements of division (A) of section 5733.052 of the Revised	3902
Code, each such taxpayer shall substitute "the taxpayer's pro-rata	3903
amount" for "fifty thousand dollars" in divisions (A) and (B) of	3904
this section. For purposes of this division, "the taxpayer's	3905
pro-rata amount" is an amount that, when added to the other such	3906
taxpayers' pro-rata amounts, does not exceed fifty thousand	3907
dollars. For the purpose of making that computation, the	3908
taxpayer's pro-rata amount shall not be less than zero. Nothing in	3909
this division derogates from or eliminates the requirement to make	3910
the alternative computation of tax under division (C) of this	3911
section.	3912

(G) The tax liability of any corporation under division (C)	3913
of this section shall not exceed one hundred fifty thousand	3914
dollars.	3915

(H)(1) For the purposes of division (H) of this section,	3916
"exiting corporation" means a corporation that satisfies all of	3917
the following conditions:	3918

(a) The corporation had nexus with or in this state under the	3919
Constitution of the United States during any portion of a calendar	3920
year;	3921

(b) The corporation was not a corporation described in	3922
division (A) of section 5733.01 of the Revised Code on the first	3923
day of January immediately following that calendar year;	3924

(c) The corporation was not a financial institution on the	3925
first day of January immediately following that calendar year;	3926

(d) If the corporation was a transferor as defined in section	3927
5733.053 of the Revised Code, the corporation's transferee was not	3928
required to add to the transferee's net income the income of the	3929
transferor pursuant to division (B) of that section;	3930

(e) During any portion of that calendar year, or any portion	3931
of the immediately preceding calendar year, the corporation had	3932
net income that was not included in a report filed by the	3933
corporation or its transferee pursuant to section 5733.02,	3934
5733.021, 5733.03, 5733.031, or 5733.053 of the Revised Code;	3935

(f) The corporation would have been subject to the tax	3936
computed under divisions (A), (B), (C), (F), and (G) of this	3937
section if the corporation is assumed to be a corporation	3938
described in division (A) of section 5733.01 of the Revised Code	3939
on the first day of January immediately following the calendar	3940
year to which division (H)(1)(a) of this section refers.	3941

(2) For the purposes of division (H) of this section,	3942
"unreported net income" means net income that was not previously	3943
included in a report filed pursuant to section 5733.02, 5733.021,	3944
5733.03, 5733.031, or 5733.053 of the Revised Code and that was	3945
realized or recognized during the calendar year to which division	3946
(H)(1) of this section refers or the immediately preceding	3947
calendar year.	3948

(3) Each exiting corporation shall pay a tax computed by	3949
first allocating and apportioning the unreported net income	3950
pursuant to division (B) of section 5733.05 and section 5733.051	3951
and, if applicable, section 5733.052 of the Revised Code. The	3952
exiting corporation then shall compute the tax due on its	3953
unreported net income allocated and apportioned to this state by	3954
applying divisions (A), (B), and (F) of this section to that	3955
income.	3956

(4) Divisions (C) and (G) of this section, division (D)(2) of	3957
section 5733.065, and division (C) of section 5733.066 of the	3958
Revised Code do not apply to an exiting corporation, but exiting	3959
corporations are subject to every other provision of this chapter.	3960

(5) Notwithstanding division (B) of section 5733.01 or	3961
sections 5733.02, 5733.021, and 5733.03 of the Revised Code to the	3962
contrary, each exiting corporation shall report and pay the tax	3963
due under division (H) of this section on or before the	3964
thirty-first day of May immediately following the calendar year to	3965
which division (H)(1)(a) of this section refers. The exiting	3966
corporation shall file that report on the form most recently	3967
prescribed by the tax commissioner for the purposes of complying	3968
with sections 5733.02 and 5733.03 of the Revised Code. Upon	3969
request by the corporation, the tax commissioner may extend the	3970
date for filing the report.	3971

(6) If, on account of the application of section 5733.053 of	3972
the Revised Code, net income is subject to the tax imposed by	3973
divisions (A) and (B) of this section, such income shall not be	3974
subject to the tax imposed by division (H)(3) of this section.	3975

(7) The amendments made to division (H) of this section by	3976
Am. Sub. S.B. 287 of the 123rd general assembly do not apply to	3977
any transfer, as defined in section 5733.053 of the Revised Code,	3978
for which negotiations began prior to January 1, 2001, and that	3979
was commenced in and completed during calendar year 2001, unless	3980
the taxpayer makes an election prior to December 31, 2001, to	3981
apply those amendments.	3982

(8) The tax commissioner may adopt rules governing division	3983
(H) of this section.	3984

(I) Any reference in the Revised Code to "the tax imposed by	3985
section 5733.06 of the Revised Code" or "the tax due under section	3986
5733.06 of the Revised Code" includes the taxes imposed under	3987
sections 5733.065 and 5733.066 of the Revised Code.	3988

(J)(1) Division (J) of this section applies solely to a	3989
combined company. Section 5733.057 of the Revised Code shall apply	3990
when calculating the adjustments required by division (J) of this	3991
section.	3992

(2) Subject to division (J)(4) of this section, the total tax	3993
calculated in divisions (A) and (B) of this section shall be	3994
reduced by an amount calculated by multiplying such tax by a	3995
fraction, the numerator of which is the total taxable gross	3996
receipts attributed to providing public utility activity other	3997
than as an electric company under section 5727.03 of the Revised	3998
Code for the year upon which the taxable gross receipts are	3999
measured immediately preceding the tax year, and the denominator	4000
of which is the total gross receipts from all sources for the year	4001
upon which the taxable gross receipts are measured immediately	4002
preceding the tax year. Nothing herein shall be construed to	4003
exclude from the denominator any item of income described in	4004
section 5733.051 of the Revised Code.	4005

(3) Subject to division (J)(4) of this section, the total tax	4006
calculated in division (C) of this section shall be reduced by an	4007
amount calculated by multiplying such tax by the fraction	4008
described in division (J)(2) of this section.	4009

(4) In no event shall the reduction provided by division	4010
(J)(2) or (J)(3) of this section exceed the amount of the excise	4011
tax paid in accordance with section 5727.38 of the Revised Code,	4012
for the year upon which the taxable gross receipts are measured	4013
immediately preceding the tax year.	4014

Sec. 5747.01.  Except as otherwise expressly provided or	4015
clearly appearing from the context, any term used in this chapter	4016
that is not otherwise defined in this section has the same meaning	4017
as when used in a comparable context in the laws of the United	4018
States relating to federal income taxes or if not used in a	4019
comparable context in those laws, has the same meaning as in	4020
section 5733.40 of the Revised Code. Any reference in this chapter	4021
to the Internal Revenue Code includes other laws of the United	4022
States relating to federal income taxes.	4023

As used in this chapter:

4024

(A) "Adjusted gross income" or "Ohio adjusted gross income"	4025
means federal adjusted gross income, as defined and used in the	4026
Internal Revenue Code, adjusted as provided in this section:	4027

(1) Add interest or dividends on obligations or securities of	4028
any state or of any political subdivision or authority of any	4029
state, other than this state and its subdivisions and authorities.	4030

(2) Add interest or dividends on obligations of any	4031
authority, commission, instrumentality, territory, or possession	4032
of the United States to the extent that the interest or dividends	4033
are exempt from federal income taxes but not from state income	4034
taxes.	4035

(3) Deduct interest or dividends on obligations of the United	4036
States and its territories and possessions or of any authority,	4037
commission, or instrumentality of the United States to the extent	4038
that the interest or dividends are included in federal adjusted	4039
gross income but exempt from state income taxes under the laws of	4040
the United States.	4041

(4) Deduct disability and survivor's benefits to the extent	4042
included in federal adjusted gross income.	4043

(5) Deduct benefits under Title II of the Social Security Act	4044
and tier 1 railroad retirement benefits to the extent included in	4045
federal adjusted gross income under section 86 of the Internal	4046
Revenue Code.	4047

(6) In the case of a taxpayer who is a beneficiary of a trust	4048
that makes an accumulation distribution as defined in section 665	4049
of the Internal Revenue Code, add, for the beneficiary's taxable	4050
years beginning before 2002, the portion, if any, of such	4051
distribution that does not exceed the undistributed net income of	4052
the trust for the three taxable years preceding the taxable year	4053
in which the distribution is made to the extent that the portion	4054
was not included in the trust's taxable income for any of the	4055
trust's taxable years beginning in 2002 or thereafter.	4056
"Undistributed net income of a trust" means the taxable income of	4057
the trust increased by (a)(i) the additions to adjusted gross	4058
income required under division (A) of this section and (ii) the	4059
personal exemptions allowed to the trust pursuant to section	4060
642(b) of the Internal Revenue Code, and decreased by (b)(i) the	4061
deductions to adjusted gross income required under division (A) of	4062
this section, (ii) the amount of federal income taxes attributable	4063
to such income, and (iii) the amount of taxable income that has	4064
been included in the adjusted gross income of a beneficiary by	4065
reason of a prior accumulation distribution. Any undistributed net	4066
income included in the adjusted gross income of a beneficiary	4067
shall reduce the undistributed net income of the trust commencing	4068
with the earliest years of the accumulation period.	4069

(7) Deduct the amount of wages and salaries, if any, not	4070
otherwise allowable as a deduction but that would have been	4071
allowable as a deduction in computing federal adjusted gross	4072
income for the taxable year, had the targeted jobs credit allowed	4073
and determined under sections 38, 51, and 52 of the Internal	4074
Revenue Code not been in effect.	4075

(8) Deduct any interest or interest equivalent on public	4076
obligations and purchase obligations to the extent that the	4077
interest or interest equivalent is included in federal adjusted	4078
gross income.	4079

(9) Add any loss or deduct any gain resulting from the sale,	4080
exchange, or other disposition of public obligations to the extent	4081
that the loss has been deducted or the gain has been included in	4082
computing federal adjusted gross income.	4083

(10) Deduct or add amounts, as provided under section 5747.70	4084
of the Revised Code, related to contributions to variable college	4085
savings program accounts made or tuition units purchased pursuant	4086
to Chapter 3334. of the Revised Code.	4087

(11)(a) Deduct, to the extent not otherwise allowable as a	4088
deduction or exclusion in computing federal or Ohio adjusted gross	4089
income for the taxable year, the amount the taxpayer paid during	4090
the taxable year for medical care insurance and qualified	4091
long-term care insurance for the taxpayer, the taxpayer's spouse,	4092
and dependents. No deduction for medical care insurance under	4093
division (A)(11) of this section shall be allowed either to any	4094
taxpayer who is eligible to participate in any subsidized health	4095
plan maintained by any employer of the taxpayer or of the	4096
taxpayer's spouse, or to any taxpayer who is entitled to, or on	4097
application would be entitled to, benefits under part A of Title	4098
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.	4099
301, as amended. For the purposes of division (A)(11)(a) of this	4100
section, "subsidized health plan" means a health plan for which	4101
the employer pays any portion of the plan's cost. The deduction	4102
allowed under division (A)(11)(a) of this section shall be the net	4103
of any related premium refunds, related premium reimbursements, or	4104
related insurance premium dividends received during the taxable	4105
year.	4106

(b) Deduct, to the extent not otherwise deducted or excluded	4107
in computing federal or Ohio adjusted gross income during the	4108
taxable year, the amount the taxpayer paid during the taxable	4109
year, not compensated for by any insurance or otherwise, for	4110
medical care of the taxpayer, the taxpayer's spouse, and	4111
dependents, to the extent the expenses exceed seven and one-half	4112
per cent of the taxpayer's federal adjusted gross income.	4113

(c) Deduct, to the extent not otherwise deducted or excluded	4114
in computing federal or Ohio adjusted gross income, any amount	4115
included in federal adjusted gross income under section 105 or not	4116
excluded under section 106 of the Internal Revenue Code solely	4117
because it relates to an accident and health plan for a person who	4118
otherwise would be a "qualifying relative" and thus a "dependent"	4119
under section 152 of the Internal Revenue Code but for the fact	4120
that the person fails to meet the income and support limitations	4121
under section 152(d)(1)(B) and (C) of the Internal Revenue Code.	4122

(d) For purposes of division (A)(11) of this section,	4123
"medical care" has the meaning given in section 213 of the	4124
Internal Revenue Code, subject to the special rules, limitations,	4125
and exclusions set forth therein, and "qualified long-term care"	4126
has the same meaning given in section 7702B(c) of the Internal	4127
Revenue Code. Solely for purposes of divisions (A)(11)(a) and (c)	4128
of this section, "dependent" includes a person who otherwise would	4129
be a "qualifying relative" and thus a "dependent" under section	4130
152 of the Internal Revenue Code but for the fact that the person	4131
fails to meet the income and support limitations under section	4132
152(d)(1)(B) and (C) of the Internal Revenue Code.	4133

(12)(a) Deduct any amount included in federal adjusted gross	4134
income solely because the amount represents a reimbursement or	4135
refund of expenses that in any year the taxpayer had deducted as	4136
an itemized deduction pursuant to section 63 of the Internal	4137
Revenue Code and applicable United States department of the	4138
treasury regulations. The deduction otherwise allowed under	4139
division (A)(12)(a) of this section shall be reduced to the extent	4140
the reimbursement is attributable to an amount the taxpayer	4141
deducted under this section in any taxable year.	4142

(b) Add any amount not otherwise included in Ohio adjusted	4143
gross income for any taxable year to the extent that the amount is	4144
attributable to the recovery during the taxable year of any amount	4145
deducted or excluded in computing federal or Ohio adjusted gross	4146
income in any taxable year.	4147

(13) Deduct any portion of the deduction described in section	4148
1341(a)(2) of the Internal Revenue Code, for repaying previously	4149
reported income received under a claim of right, that meets both	4150
of the following requirements:	4151

(a) It is allowable for repayment of an item that was	4152
included in the taxpayer's adjusted gross income for a prior	4153
taxable year and did not qualify for a credit under division (A)	4154
or (B) of section 5747.05 of the Revised Code for that year;	4155

(b) It does not otherwise reduce the taxpayer's adjusted	4156
gross income for the current or any other taxable year.	4157

(14) Deduct an amount equal to the deposits made to, and net	4158
investment earnings of, a medical savings account during the	4159
taxable year, in accordance with section 3924.66 of the Revised	4160
Code. The deduction allowed by division (A)(14) of this section	4161
does not apply to medical savings account deposits and earnings	4162
otherwise deducted or excluded for the current or any other	4163
taxable year from the taxpayer's federal adjusted gross income.	4164

(15)(a) Add an amount equal to the funds withdrawn from a	4165
medical savings account during the taxable year, and the net	4166
investment earnings on those funds, when the funds withdrawn were	4167
used for any purpose other than to reimburse an account holder	4168
for, or to pay, eligible medical expenses, in accordance with	4169
section 3924.66 of the Revised Code;	4170

(b) Add the amounts distributed from a medical savings	4171
account under division (A)(2) of section 3924.68 of the Revised	4172
Code during the taxable year.	4173

(16) Add any amount claimed as a credit under section	4174
5747.059 or 5747.65 of the Revised Code to the extent that such	4175
amount satisfies either of the following:	4176

(a) The amount was deducted or excluded from the computation	4177
of the taxpayer's federal adjusted gross income as required to be	4178
reported for the taxpayer's taxable year under the Internal	4179
Revenue Code;	4180

(b) The amount resulted in a reduction of the taxpayer's	4181
federal adjusted gross income as required to be reported for any	4182
of the taxpayer's taxable years under the Internal Revenue Code.	4183

(17) Deduct the amount contributed by the taxpayer to an	4184
individual development account program established by a county	4185
department of job and family services pursuant to sections 329.11	4186
to 329.14 of the Revised Code for the purpose of matching funds	4187
deposited by program participants. On request of the tax	4188
commissioner, the taxpayer shall provide any information that, in	4189
the tax commissioner's opinion, is necessary to establish the	4190
amount deducted under division (A)(17) of this section.	4191

(18) Beginning in taxable year 2001 but not for any taxable	4192
year beginning after December 31, 2005, if the taxpayer is married	4193
and files a joint return and the combined federal adjusted gross	4194
income of the taxpayer and the taxpayer's spouse for the taxable	4195
year does not exceed one hundred thousand dollars, or if the	4196
taxpayer is single and has a federal adjusted gross income for the	4197
taxable year not exceeding fifty thousand dollars, deduct amounts	4198
paid during the taxable year for qualified tuition and fees paid	4199
to an eligible institution for the taxpayer, the taxpayer's	4200
spouse, or any dependent of the taxpayer, who is a resident of	4201
this state and is enrolled in or attending a program that	4202
culminates in a degree or diploma at an eligible institution. The	4203
deduction may be claimed only to the extent that qualified tuition	4204
and fees are not otherwise deducted or excluded for any taxable	4205
year from federal or Ohio adjusted gross income. The deduction may	4206
not be claimed for educational expenses for which the taxpayer	4207
claims a credit under section 5747.27 of the Revised Code.	4208

(19) Add any reimbursement received during the taxable year	4209
of any amount the taxpayer deducted under division (A)(18) of this	4210
section in any previous taxable year to the extent the amount is	4211
not otherwise included in Ohio adjusted gross income.	4212

(20)(a)(i) Add five-sixths of the amount of depreciation	4213
expense allowed by subsection (k) of section 168 of the Internal	4214
Revenue Code, including the taxpayer's proportionate or	4215
distributive share of the amount of depreciation expense allowed	4216
by that subsection to a pass-through entity in which the taxpayer	4217
has a direct or indirect ownership interest.	4218

(ii) Add five-sixths of the amount of qualifying section 179	4219
depreciation expense, including a person's proportionate or	4220
distributive share of the amount of qualifying section 179	4221
depreciation expense allowed to any pass-through entity in which	4222
the person has a direct or indirect ownership. For the purposes of	4223
this division, "qualifying section 179 depreciation expense" means	4224
the difference between (I) the amount of depreciation expense	4225
directly or indirectly allowed to the taxpayer under section 179	4226
of the Internal Revenue Code, and (II) the amount of depreciation	4227
expense directly or indirectly allowed to the taxpayer under	4228
section 179 of the Internal Revenue Code as that section existed	4229
on December 31, 2002.	4230

The tax commissioner, under procedures established by the	4231
commissioner, may waive the add-backs related to a pass-through	4232
entity if the taxpayer owns, directly or indirectly, less than	4233
five per cent of the pass-through entity.	4234

(b) Nothing in division (A)(20) of this section shall be	4235
construed to adjust or modify the adjusted basis of any asset.	4236

(c) To the extent the add-back required under division	4237
(A)(20)(a) of this section is attributable to property generating	4238
nonbusiness income or loss allocated under section 5747.20 of the	4239
Revised Code, the add-back shall be sitused to the same location	4240
as the nonbusiness income or loss generated by the property for	4241
the purpose of determining the credit under division (A) of	4242
section 5747.05 of the Revised Code. Otherwise, the add-back shall	4243
be apportioned, subject to one or more of the four alternative	4244
methods of apportionment enumerated in section 5747.21 of the	4245
Revised Code.	4246

(d) For the purposes of division (A) of this section, net	4247
operating loss carryback and carryforward shall not include	4248
five-sixths of the allowance of any net operating loss deduction	4249
carryback or carryforward to the taxable year to the extent such	4250
loss resulted from depreciation allowed by section 168(k) of the	4251
Internal Revenue Code and by the qualifying section 179	4252
depreciation expense amount.	4253

(21)(a) If the taxpayer was required to add an amount under	4254
division (A)(20)(a) of this section for a taxable year, deduct	4255
one-fifth of the amount so added for each of the five succeeding	4256
taxable years.	4257

(b) If the amount deducted under division (A)(21)(a) of this	4258
section is attributable to an add-back allocated under division	4259
(A)(20)(c) of this section, the amount deducted shall be sitused	4260
to the same location. Otherwise, the add-back shall be apportioned	4261
using the apportionment factors for the taxable year in which the	4262
deduction is taken, subject to one or more of the four alternative	4263
methods of apportionment enumerated in section 5747.21 of the	4264
Revised Code.	4265

(c) No deduction is available under division (A)(21)(a) of	4266
this section with regard to any depreciation allowed by section	4267
168(k) of the Internal Revenue Code and by the qualifying section	4268
179 depreciation expense amount to the extent that such	4269
depreciation resulted in or increased a federal net operating loss	4270
carryback or carryforward to a taxable year to which division	4271
(A)(20)(d) of this section does not apply.	4272

(22) Deduct, to the extent not otherwise deducted or excluded	4273
in computing federal or Ohio adjusted gross income for the taxable	4274
year, the amount the taxpayer received during the taxable year as	4275
reimbursement for life insurance premiums under section 5919.31 of	4276
the Revised Code.	4277

(23) Deduct, to the extent not otherwise deducted or excluded	4278
in computing federal or Ohio adjusted gross income for the taxable	4279
year, the amount the taxpayer received during the taxable year as	4280
a death benefit paid by the adjutant general under section 5919.33	4281
of the Revised Code.	4282

(24) Deduct, to the extent included in federal adjusted gross	4283
income and not otherwise allowable as a deduction or exclusion in	4284
computing federal or Ohio adjusted gross income for the taxable	4285
year, military pay and allowances received by the taxpayer during	4286
the taxable year for active duty service in the United States	4287
army, air force, navy, marine corps, or coast guard or reserve	4288
components thereof or the national guard. The deduction may not be	4289
claimed for military pay and allowances received by the taxpayer	4290
while the taxpayer is stationed in this state.	4291

(25) Deduct, to the extent not otherwise allowable as a	4292
deduction or exclusion in computing federal or Ohio adjusted gross	4293
income for the taxable year and not otherwise compensated for by	4294
any other source, the amount of qualified organ donation expenses	4295
incurred by the taxpayer during the taxable year, not to exceed	4296
ten thousand dollars. A taxpayer may deduct qualified organ	4297
donation expenses only once for all taxable years beginning with	4298
taxable years beginning in 2007.	4299

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

4300

(a) "Human organ" means all or any portion of a human liver,	4301
pancreas, kidney, intestine, or lung, and any portion of human	4302
bone marrow.	4303

(b) "Qualified organ donation expenses" means travel	4304
expenses, lodging expenses, and wages and salary forgone by a	4305
taxpayer in connection with the taxpayer's donation, while living,	4306
of one or more of the taxpayer's human organs to another human	4307
being.	4308

(26) Deduct, to the extent not otherwise deducted or excluded	4309
in computing federal or Ohio adjusted gross income for the taxable	4310
year, amounts received by the taxpayer as retired military	4311
personnel pay for service in the United States army, navy, air	4312
force, coast guard, or marine corps or reserve components thereof,	4313
or the national guard, or received by the surviving spouse or	4314
former spouse of such a taxpayer under the survivor benefit plan	4315
on account of such a taxpayer's death. If the taxpayer receives	4316
income on account of retirement paid under the federal civil	4317
service retirement system or federal employees retirement system,	4318
or under any successor retirement program enacted by the congress	4319
of the United States that is established and maintained for	4320
retired employees of the United States government, and such	4321
retirement income is based, in whole or in part, on credit for the	4322
taxpayer's military service, the deduction allowed under this	4323
division shall include only that portion of such retirement income	4324
that is attributable to the taxpayer's military service, to the	4325
extent that portion of such retirement income is otherwise	4326
included in federal adjusted gross income and is not otherwise	4327
deducted under this section. Any amount deducted under division	4328
(A)(26) of this section is not included in a taxpayer's adjusted	4329
gross income for the purposes of section 5747.055 of the Revised	4330
Code. No amount may be deducted under division (A)(26) of this	4331
section on the basis of which a credit was claimed under section	4332
5747.055 of the Revised Code.	4333

(27) Deduct, to the extent not otherwise deducted or excluded	4334
in computing federal or Ohio adjusted gross income for the taxable	4335
year, the amount the taxpayer received during the taxable year	4336
from the military injury relief fund created in section 5101.98 of	4337
the Revised Code.	4338

(28) Deduct, to the extent not otherwise deducted or excluded	4339
in computing federal or Ohio adjusted gross income for the taxable	4340
year, the amount the taxpayer received as a veterans bonus during	4341
the taxable year from the Ohio department of veterans services as	4342
authorized by Section 2r of Article VIII, Ohio Constitution.	4343

(29) Deduct, to the extent not otherwise deducted or excluded	4344
in computing federal or Ohio adjusted gross income for the taxable	4345
year, any loss from wagering transactions that is allowed as an	4346
itemized deduction under section 165 of the Internal Revenue Code	4347
and that the taxpayer deducted in computing federal taxable	4348
income.	4349

(30) Deduct, to the extent not otherwise deducted or excluded	4350
in computing federal or Ohio adjusted gross income for the taxable	4351
year, any income derived from providing public services under a	4352
contract through a project owned by the state, as described in	4353
section 126.604 of the Revised Code or derived from a transfer	4354
agreement or from the enterprise transferred under that agreement	4355
under section 4313.02 of the Revised Code.	4356

(31) Deduct, to the extent not otherwise deducted or excluded	4357
in computing federal or Ohio adjusted gross income for the taxable	4358
year, Ohio college opportunity or federal Pell grant amounts	4359
received by the taxpayer or the taxpayer's spouse or dependent	4360
pursuant to section 3333.122 of the Revised Code or 20 U.S.C.	4361
1070a, et seq., and used to pay room or board furnished by the	4362
educational institution for which the grant was awarded at the	4363
institution's facilities, including meal plans administered by the	4364
institution. For the purposes of this division, receipt of a grant	4365
includes the distribution of a grant directly to an educational	4366
institution and the crediting of the grant to the enrollee's	4367
account with the institution.	4368

(B) "Business income" means income, including gain or loss,	4369
arising from transactions, activities, and sources in the regular	4370
course of a trade or business and includes income, gain, or loss	4371
from real property, tangible property, and intangible property if	4372
the acquisition, rental, management, and disposition of the	4373
property constitute integral parts of the regular course of a	4374
trade or business operation. "Business income" includes income,	4375
including gain or loss, from a partial or complete liquidation of	4376
a business, including, but not limited to, gain or loss from the	4377
sale or other disposition of goodwill.	4378

(C) "Nonbusiness income" means all income other than business	4379
income and may include, but is not limited to, compensation, rents	4380
and royalties from real or tangible personal property, capital	4381
gains, interest, dividends and distributions, patent or copyright	4382
royalties, or lottery winnings, prizes, and awards.	4383

(D) "Compensation" means any form of remuneration paid to an	4384
employee for personal services.	4385

(E) "Fiduciary" means a guardian, trustee, executor,	4386
administrator, receiver, conservator, or any other person acting	4387
in any fiduciary capacity for any individual, trust, or estate.	4388

(F) "Fiscal year" means an accounting period of twelve months	4389
ending on the last day of any month other than December.	4390

(G) "Individual" means any natural person.

4391

(H) "Internal Revenue Code" means the "Internal Revenue Code	4392
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.	4393

(I) "Resident" means any of the following, provided that	4394
division (I)(3) of this section applies only to taxable years of a	4395
trust beginning in 2002 or thereafter:	4396

(1) An individual who is domiciled in this state, subject to	4397
section 5747.24 of the Revised Code;	4398

(2) The estate of a decedent who at the time of death was	4399
domiciled in this state. The domicile tests of section 5747.24 of	4400
the Revised Code are not controlling for purposes of division	4401
(I)(2) of this section.	4402

(3) A trust that, in whole or part, resides in this state. If	4403
only part of a trust resides in this state, the trust is a	4404
resident only with respect to that part.	4405

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

4406

(a) A trust resides in this state for the trust's current	4407
taxable year to the extent, as described in division (I)(3)(d) of	4408
this section, that the trust consists directly or indirectly, in	4409
whole or in part, of assets, net of any related liabilities, that	4410
were transferred, or caused to be transferred, directly or	4411
indirectly, to the trust by any of the following:	4412

(i) A person, a court, or a governmental entity or	4413
instrumentality on account of the death of a decedent, but only if	4414
the trust is described in division (I)(3)(e)(i) or (ii) of this	4415
section;	4416

(ii) A person who was domiciled in this state for the	4417
purposes of this chapter when the person directly or indirectly	4418
transferred assets to an irrevocable trust, but only if at least	4419
one of the trust's qualifying beneficiaries is domiciled in this	4420
state for the purposes of this chapter during all or some portion	4421
of the trust's current taxable year;	4422

(iii) A person who was domiciled in this state for the	4423
purposes of this chapter when the trust document or instrument or	4424
part of the trust document or instrument became irrevocable, but	4425
only if at least one of the trust's qualifying beneficiaries is a	4426
resident domiciled in this state for the purposes of this chapter	4427
during all or some portion of the trust's current taxable year. If	4428
a trust document or instrument became irrevocable upon the death	4429
of a person who at the time of death was domiciled in this state	4430
for purposes of this chapter, that person is a person described in	4431
division (I)(3)(a)(iii) of this section.	4432

(b) A trust is irrevocable to the extent that the transferor	4433
is not considered to be the owner of the net assets of the trust	4434
under sections 671 to 678 of the Internal Revenue Code.	4435

(c) With respect to a trust other than a charitable lead	4436
trust, "qualifying beneficiary" has the same meaning as "potential	4437
current beneficiary" as defined in section 1361(e)(2) of the	4438
Internal Revenue Code, and with respect to a charitable lead trust	4439
"qualifying beneficiary" is any current, future, or contingent	4440
beneficiary, but with respect to any trust "qualifying	4441
beneficiary" excludes a person or a governmental entity or	4442
instrumentality to any of which a contribution would qualify for	4443
the charitable deduction under section 170 of the Internal Revenue	4444
Code.	4445

(d) For the purposes of division (I)(3)(a) of this section,	4446
the extent to which a trust consists directly or indirectly, in	4447
whole or in part, of assets, net of any related liabilities, that	4448
were transferred directly or indirectly, in whole or part, to the	4449
trust by any of the sources enumerated in that division shall be	4450
ascertained by multiplying the fair market value of the trust's	4451
assets, net of related liabilities, by the qualifying ratio, which	4452
shall be computed as follows:	4453

(i) The first time the trust receives assets, the numerator	4454
of the qualifying ratio is the fair market value of those assets	4455
at that time, net of any related liabilities, from sources	4456
enumerated in division (I)(3)(a) of this section. The denominator	4457
of the qualifying ratio is the fair market value of all the	4458
trust's assets at that time, net of any related liabilities.	4459

(ii) Each subsequent time the trust receives assets, a	4460
revised qualifying ratio shall be computed. The numerator of the	4461
revised qualifying ratio is the sum of (1) the fair market value	4462
of the trust's assets immediately prior to the subsequent	4463
transfer, net of any related liabilities, multiplied by the	4464
qualifying ratio last computed without regard to the subsequent	4465
transfer, and (2) the fair market value of the subsequently	4466
transferred assets at the time transferred, net of any related	4467
liabilities, from sources enumerated in division (I)(3)(a) of this	4468
section. The denominator of the revised qualifying ratio is the	4469
fair market value of all the trust's assets immediately after the	4470
subsequent transfer, net of any related liabilities.	4471

(iii) Whether a transfer to the trust is by or from any of	4472
the sources enumerated in division (I)(3)(a) of this section shall	4473
be ascertained without regard to the domicile of the trust's	4474
beneficiaries.	4475

(e) For the purposes of division (I)(3)(a)(i) of this	4476
section:	4477

(i) A trust is described in division (I)(3)(e)(i) of this	4478
section if the trust is a testamentary trust and the testator of	4479
that testamentary trust was domiciled in this state at the time of	4480
the testator's death for purposes of the taxes levied under	4481
Chapter 5731. of the Revised Code.	4482

(ii) A trust is described in division (I)(3)(e)(ii) of this	4483
section if the transfer is a qualifying transfer described in any	4484
of divisions (I)(3)(f)(i) to (vi) of this section, the trust is an	4485
irrevocable inter vivos trust, and at least one of the trust's	4486
qualifying beneficiaries is domiciled in this state for purposes	4487
of this chapter during all or some portion of the trust's current	4488
taxable year.	4489

(f) For the purposes of division (I)(3)(e)(ii) of this	4490
section, a "qualifying transfer" is a transfer of assets, net of	4491
any related liabilities, directly or indirectly to a trust, if the	4492
transfer is described in any of the following:	4493

(i) The transfer is made to a trust, created by the decedent	4494
before the decedent's death and while the decedent was domiciled	4495
in this state for the purposes of this chapter, and, prior to the	4496
death of the decedent, the trust became irrevocable while the	4497
decedent was domiciled in this state for the purposes of this	4498
chapter.	4499

(ii) The transfer is made to a trust to which the decedent,	4500
prior to the decedent's death, had directly or indirectly	4501
transferred assets, net of any related liabilities, while the	4502
decedent was domiciled in this state for the purposes of this	4503
chapter, and prior to the death of the decedent the trust became	4504
irrevocable while the decedent was domiciled in this state for the	4505
purposes of this chapter.	4506

(iii) The transfer is made on account of a contractual	4507
relationship existing directly or indirectly between the	4508
transferor and either the decedent or the estate of the decedent	4509
at any time prior to the date of the decedent's death, and the	4510
decedent was domiciled in this state at the time of death for	4511
purposes of the taxes levied under Chapter 5731. of the Revised	4512
Code.	4513

(iv) The transfer is made to a trust on account of a	4514
contractual relationship existing directly or indirectly between	4515
the transferor and another person who at the time of the	4516
decedent's death was domiciled in this state for purposes of this	4517
chapter.	4518

(v) The transfer is made to a trust on account of the will of	4519
a testator who was domiciled in this state at the time of the	4520
testator's death for purposes of the taxes levied under Chapter	4521
5731. of the Revised Code.	4522

(vi) The transfer is made to a trust created by or caused to	4523
be created by a court, and the trust was directly or indirectly	4524
created in connection with or as a result of the death of an	4525
individual who, for purposes of the taxes levied under Chapter	4526
5731. of the Revised Code, was domiciled in this state at the time	4527
of the individual's death.	4528

(g) The tax commissioner may adopt rules to ascertain the	4529
part of a trust residing in this state.	4530

(J) "Nonresident" means an individual or estate that is not a	4531
resident. An individual who is a resident for only part of a	4532
taxable year is a nonresident for the remainder of that taxable	4533
year.	4534

(K) "Pass-through entity" has the same meaning as in section	4535
5733.04 of the Revised Code.	4536

(L) "Return" means the notifications and reports required to	4537
be filed pursuant to this chapter for the purpose of reporting the	4538
tax due and includes declarations of estimated tax when so	4539
required.	4540

(M) "Taxable year" means the calendar year or the taxpayer's	4541
fiscal year ending during the calendar year, or fractional part	4542
thereof, upon which the adjusted gross income is calculated	4543
pursuant to this chapter.	4544

(N) "Taxpayer" means any person subject to the tax imposed by	4545
section 5747.02 of the Revised Code or any pass-through entity	4546
that makes the election under division (D) of section 5747.08 of	4547
the Revised Code.	4548

(O) "Dependents" means dependents as defined in the Internal	4549
Revenue Code and as claimed in the taxpayer's federal income tax	4550
return for the taxable year or which the taxpayer would have been	4551
permitted to claim had the taxpayer filed a federal income tax	4552
return.	4553

(P) "Principal county of employment" means, in the case of a	4554
nonresident, the county within the state in which a taxpayer	4555
performs services for an employer or, if those services are	4556
performed in more than one county, the county in which the major	4557
portion of the services are performed.	4558

(Q) As used in sections 5747.50 to 5747.55 of the Revised	4559
Code:	4560

(1) "Subdivision" means any county, municipal corporation,	4561
park district, or township.	4562

(2) "Essential local government purposes" includes all	4563
functions that any subdivision is required by general law to	4564
exercise, including like functions that are exercised under a	4565
charter adopted pursuant to the Ohio Constitution.	4566

(R) "Overpayment" means any amount already paid that exceeds	4567
the figure determined to be the correct amount of the tax.	4568

(S) "Taxable income" or "Ohio taxable income" applies only to	4569
estates and trusts, and means federal taxable income, as defined	4570
and used in the Internal Revenue Code, adjusted as follows:	4571

(1) Add interest or dividends, net of ordinary, necessary,	4572
and reasonable expenses not deducted in computing federal taxable	4573
income, on obligations or securities of any state or of any	4574
political subdivision or authority of any state, other than this	4575
state and its subdivisions and authorities, but only to the extent	4576
that such net amount is not otherwise includible in Ohio taxable	4577
income and is described in either division (S)(1)(a) or (b) of	4578
this section:	4579

(a) The net amount is not attributable to the S portion of an	4580
electing small business trust and has not been distributed to	4581
beneficiaries for the taxable year;	4582

(b) The net amount is attributable to the S portion of an	4583
electing small business trust for the taxable year.	4584

(2) Add interest or dividends, net of ordinary, necessary,	4585
and reasonable expenses not deducted in computing federal taxable	4586
income, on obligations of any authority, commission,	4587
instrumentality, territory, or possession of the United States to	4588
the extent that the interest or dividends are exempt from federal	4589
income taxes but not from state income taxes, but only to the	4590
extent that such net amount is not otherwise includible in Ohio	4591
taxable income and is described in either division (S)(1)(a) or	4592
(b) of this section;	4593

(3) Add the amount of personal exemption allowed to the	4594
estate pursuant to section 642(b) of the Internal Revenue Code;	4595

(4) Deduct interest or dividends, net of related expenses	4596
deducted in computing federal taxable income, on obligations of	4597
the United States and its territories and possessions or of any	4598
authority, commission, or instrumentality of the United States to	4599
the extent that the interest or dividends are exempt from state	4600
taxes under the laws of the United States, but only to the extent	4601
that such amount is included in federal taxable income and is	4602
described in either division (S)(1)(a) or (b) of this section;	4603

(5) Deduct the amount of wages and salaries, if any, not	4604
otherwise allowable as a deduction but that would have been	4605
allowable as a deduction in computing federal taxable income for	4606
the taxable year, had the targeted jobs credit allowed under	4607
sections 38, 51, and 52 of the Internal Revenue Code not been in	4608
effect, but only to the extent such amount relates either to	4609
income included in federal taxable income for the taxable year or	4610
to income of the S portion of an electing small business trust for	4611
the taxable year;	4612

(6) Deduct any interest or interest equivalent, net of	4613
related expenses deducted in computing federal taxable income, on	4614
public obligations and purchase obligations, but only to the	4615
extent that such net amount relates either to income included in	4616
federal taxable income for the taxable year or to income of the S	4617
portion of an electing small business trust for the taxable year;	4618

(7) Add any loss or deduct any gain resulting from sale,	4619
exchange, or other disposition of public obligations to the extent	4620
that such loss has been deducted or such gain has been included in	4621
computing either federal taxable income or income of the S portion	4622
of an electing small business trust for the taxable year;	4623

(8) Except in the case of the final return of an estate, add	4624
any amount deducted by the taxpayer on both its Ohio estate tax	4625
return pursuant to section 5731.14 of the Revised Code, and on its	4626
federal income tax return in determining federal taxable income;	4627

(9)(a) Deduct any amount included in federal taxable income	4628
solely because the amount represents a reimbursement or refund of	4629
expenses that in a previous year the decedent had deducted as an	4630
itemized deduction pursuant to section 63 of the Internal Revenue	4631
Code and applicable treasury regulations. The deduction otherwise	4632
allowed under division (S)(9)(a) of this section shall be reduced	4633
to the extent the reimbursement is attributable to an amount the	4634
taxpayer or decedent deducted under this section in any taxable	4635
year.	4636

(b) Add any amount not otherwise included in Ohio taxable	4637
income for any taxable year to the extent that the amount is	4638
attributable to the recovery during the taxable year of any amount	4639
deducted or excluded in computing federal or Ohio taxable income	4640
in any taxable year, but only to the extent such amount has not	4641
been distributed to beneficiaries for the taxable year.	4642

(10) Deduct any portion of the deduction described in section	4643
1341(a)(2) of the Internal Revenue Code, for repaying previously	4644
reported income received under a claim of right, that meets both	4645
of the following requirements:	4646

(a) It is allowable for repayment of an item that was	4647
included in the taxpayer's taxable income or the decedent's	4648
adjusted gross income for a prior taxable year and did not qualify	4649
for a credit under division (A) or (B) of section 5747.05 of the	4650
Revised Code for that year.	4651

(b) It does not otherwise reduce the taxpayer's taxable	4652
income or the decedent's adjusted gross income for the current or	4653
any other taxable year.	4654

(11) Add any amount claimed as a credit under section	4655
5747.059 or 5747.65 of the Revised Code to the extent that the	4656
amount satisfies either of the following:	4657

(a) The amount was deducted or excluded from the computation	4658
of the taxpayer's federal taxable income as required to be	4659
reported for the taxpayer's taxable year under the Internal	4660
Revenue Code;	4661

(b) The amount resulted in a reduction in the taxpayer's	4662
federal taxable income as required to be reported for any of the	4663
taxpayer's taxable years under the Internal Revenue Code.	4664

(12) Deduct any amount, net of related expenses deducted in	4665
computing federal taxable income, that a trust is required to	4666
report as farm income on its federal income tax return, but only	4667
if the assets of the trust include at least ten acres of land	4668
satisfying the definition of "land devoted exclusively to	4669
agricultural use" under section 5713.30 of the Revised Code,	4670
regardless of whether the land is valued for tax purposes as such	4671
land under sections 5713.30 to 5713.38 of the Revised Code. If the	4672
trust is a pass-through entity investor, section 5747.231 of the	4673
Revised Code applies in ascertaining if the trust is eligible to	4674
claim the deduction provided by division (S)(12) of this section	4675
in connection with the pass-through entity's farm income.	4676

Except for farm income attributable to the S portion of an	4677
electing small business trust, the deduction provided by division	4678
(S)(12) of this section is allowed only to the extent that the	4679
trust has not distributed such farm income. Division (S)(12) of	4680
this section applies only to taxable years of a trust beginning in	4681
2002 or thereafter.	4682

(13) Add the net amount of income described in section 641(c)	4683
of the Internal Revenue Code to the extent that amount is not	4684
included in federal taxable income.	4685

(14) Add or deduct the amount the taxpayer would be required	4686
to add or deduct under division (A)(20) or (21) of this section if	4687
the taxpayer's Ohio taxable income were computed in the same	4688
manner as an individual's Ohio adjusted gross income is computed	4689
under this section. In the case of a trust, division (S)(14) of	4690
this section applies only to any of the trust's taxable years	4691
beginning in 2002 or thereafter.	4692

(T) "School district income" and "school district income tax"	4693
have the same meanings as in section 5748.01 of the Revised Code.	4694

(U) As used in divisions (A)(8), (A)(9), (S)(6), and (S)(7)	4695
of this section, "public obligations," "purchase obligations," and	4696
"interest or interest equivalent" have the same meanings as in	4697
section 5709.76 of the Revised Code.	4698

(V) "Limited liability company" means any limited liability	4699
company formed under Chapter 1705. of the Revised Code or under	4700
the laws of any other state.	4701

(W) "Pass-through entity investor" means any person who,	4702
during any portion of a taxable year of a pass-through entity, is	4703
a partner, member, shareholder, or equity investor in that	4704
pass-through entity.	4705

(X) "Banking day" has the same meaning as in section 1304.01	4706
of the Revised Code.	4707

(Y) "Month" means a calendar month.

4708

(Z) "Quarter" means the first three months, the second three	4709
months, the third three months, or the last three months of the	4710
taxpayer's taxable year.	4711

(AA)(1) "Eligible institution" means a state university or	4712
state institution of higher education as defined in section	4713
3345.011 of the Revised Code, or a private, nonprofit college,	4714
university, or other post-secondary institution located in this	4715
state that possesses a certificate of authorization issued by the	4716
Ohio board of regents pursuant to Chapter 1713. of the Revised	4717
Code or a certificate of registration issued by the state board of	4718
career colleges and schools under Chapter 3332. of the Revised	4719
Code.	4720

(2) "Qualified tuition and fees" means tuition and fees	4721
imposed by an eligible institution as a condition of enrollment or	4722
attendance, not exceeding two thousand five hundred dollars in	4723
each of the individual's first two years of post-secondary	4724
education. If the individual is a part-time student, "qualified	4725
tuition and fees" includes tuition and fees paid for the academic	4726
equivalent of the first two years of post-secondary education	4727
during a maximum of five taxable years, not exceeding a total of	4728
five thousand dollars. "Qualified tuition and fees" does not	4729
include:	4730

(a) Expenses for any course or activity involving sports,	4731
games, or hobbies unless the course or activity is part of the	4732
individual's degree or diploma program;	4733

(b) The cost of books, room and board, student activity fees,	4734
athletic fees, insurance expenses, or other expenses unrelated to	4735
the individual's academic course of instruction;	4736

(c) Tuition, fees, or other expenses paid or reimbursed	4737
through an employer, scholarship, grant in aid, or other	4738
educational benefit program.	4739

(BB)(1) "Modified business income" means the business income	4740
included in a trust's Ohio taxable income after such taxable	4741
income is first reduced by the qualifying trust amount, if any.	4742

(2) "Qualifying trust amount" of a trust means capital gains	4743
and losses from the sale, exchange, or other disposition of equity	4744
or ownership interests in, or debt obligations of, a qualifying	4745
investee to the extent included in the trust's Ohio taxable	4746
income, but only if the following requirements are satisfied:	4747

(a) The book value of the qualifying investee's physical	4748
assets in this state and everywhere, as of the last day of the	4749
qualifying investee's fiscal or calendar year ending immediately	4750
prior to the date on which the trust recognizes the gain or loss,	4751
is available to the trust.	4752

(b) The requirements of section 5747.011 of the Revised Code	4753
are satisfied for the trust's taxable year in which the trust	4754
recognizes the gain or loss.	4755

Any gain or loss that is not a qualifying trust amount is	4756
modified business income, qualifying investment income, or	4757
modified nonbusiness income, as the case may be.	4758

(3) "Modified nonbusiness income" means a trust's Ohio	4759
taxable income other than modified business income, other than the	4760
qualifying trust amount, and other than qualifying investment	4761
income, as defined in section 5747.012 of the Revised Code, to the	4762
extent such qualifying investment income is not otherwise part of	4763
modified business income.	4764

(4) "Modified Ohio taxable income" applies only to trusts,	4765
and means the sum of the amounts described in divisions (BB)(4)(a)	4766
to (c) of this section:	4767

(a) The fraction, calculated under section 5747.013, and	4768
applying section 5747.231 of the Revised Code, multiplied by the	4769
sum of the following amounts:	4770

(i) The trust's modified business income;

4771

(ii) The trust's qualifying investment income, as defined in	4772
section 5747.012 of the Revised Code, but only to the extent the	4773
qualifying investment income does not otherwise constitute	4774
modified business income and does not otherwise constitute a	4775
qualifying trust amount.	4776

(b) The qualifying trust amount multiplied by a fraction, the	4777
numerator of which is the sum of the book value of the qualifying	4778
investee's physical assets in this state on the last day of the	4779
qualifying investee's fiscal or calendar year ending immediately	4780
prior to the day on which the trust recognizes the qualifying	4781
trust amount, and the denominator of which is the sum of the book	4782
value of the qualifying investee's total physical assets	4783
everywhere on the last day of the qualifying investee's fiscal or	4784
calendar year ending immediately prior to the day on which the	4785
trust recognizes the qualifying trust amount. If, for a taxable	4786
year, the trust recognizes a qualifying trust amount with respect	4787
to more than one qualifying investee, the amount described in	4788
division (BB)(4)(b) of this section shall equal the sum of the	4789
products so computed for each such qualifying investee.	4790

(c)(i) With respect to a trust or portion of a trust that is	4791
a resident as ascertained in accordance with division (I)(3)(d) of	4792
this section, its modified nonbusiness income.	4793

(ii) With respect to a trust or portion of a trust that is	4794
not a resident as ascertained in accordance with division	4795
(I)(3)(d) of this section, the amount of its modified nonbusiness	4796
income satisfying the descriptions in divisions (B)(2) to (5) of	4797
section 5747.20 of the Revised Code, except as otherwise provided	4798
in division (BB)(4)(c)(ii) of this section. With respect to a	4799
trust or portion of a trust that is not a resident as ascertained	4800
in accordance with division (I)(3)(d) of this section, the trust's	4801
portion of modified nonbusiness income recognized from the sale,	4802
exchange, or other disposition of a debt interest in or equity	4803
interest in a section 5747.212 entity, as defined in section	4804
5747.212 of the Revised Code, without regard to division (A) of	4805
that section, shall not be allocated to this state in accordance	4806
with section 5747.20 of the Revised Code but shall be apportioned	4807
to this state in accordance with division (B) of section 5747.212	4808
of the Revised Code without regard to division (A) of that	4809
section.	4810

If the allocation and apportionment of a trust's income under	4811
divisions (BB)(4)(a) and (c) of this section do not fairly	4812
represent the modified Ohio taxable income of the trust in this	4813
state, the alternative methods described in division (C) of	4814
section 5747.21 of the Revised Code may be applied in the manner	4815
and to the same extent provided in that section.	4816

(5)(a) Except as set forth in division (BB)(5)(b) of this	4817
section, "qualifying investee" means a person in which a trust has	4818
an equity or ownership interest, or a person or unit of government	4819
the debt obligations of either of which are owned by a trust. For	4820
the purposes of division (BB)(2)(a) of this section and for the	4821
purpose of computing the fraction described in division (BB)(4)(b)	4822
of this section, all of the following apply:	4823

(i) If the qualifying investee is a member of a qualifying	4824
controlled group on the last day of the qualifying investee's	4825
fiscal or calendar year ending immediately prior to the date on	4826
which the trust recognizes the gain or loss, then "qualifying	4827
investee" includes all persons in the qualifying controlled group	4828
on such last day.	4829

(ii) If the qualifying investee, or if the qualifying	4830
investee and any members of the qualifying controlled group of	4831
which the qualifying investee is a member on the last day of the	4832
qualifying investee's fiscal or calendar year ending immediately	4833
prior to the date on which the trust recognizes the gain or loss,	4834
separately or cumulatively own, directly or indirectly, on the	4835
last day of the qualifying investee's fiscal or calendar year	4836
ending immediately prior to the date on which the trust recognizes	4837
the qualifying trust amount, more than fifty per cent of the	4838
equity of a pass-through entity, then the qualifying investee and	4839
the other members are deemed to own the proportionate share of the	4840
pass-through entity's physical assets which the pass-through	4841
entity directly or indirectly owns on the last day of the	4842
pass-through entity's calendar or fiscal year ending within or	4843
with the last day of the qualifying investee's fiscal or calendar	4844
year ending immediately prior to the date on which the trust	4845
recognizes the qualifying trust amount.	4846

(iii) For the purposes of division (BB)(5)(a)(iii) of this	4847
section, "upper level pass-through entity" means a pass-through	4848
entity directly or indirectly owning any equity of another	4849
pass-through entity, and "lower level pass-through entity" means	4850
that other pass-through entity.	4851

An upper level pass-through entity, whether or not it is also	4852
a qualifying investee, is deemed to own, on the last day of the	4853
upper level pass-through entity's calendar or fiscal year, the	4854
proportionate share of the lower level pass-through entity's	4855
physical assets that the lower level pass-through entity directly	4856
or indirectly owns on the last day of the lower level pass-through	4857
entity's calendar or fiscal year ending within or with the last	4858
day of the upper level pass-through entity's fiscal or calendar	4859
year. If the upper level pass-through entity directly and	4860
indirectly owns less than fifty per cent of the equity of the	4861
lower level pass-through entity on each day of the upper level	4862
pass-through entity's calendar or fiscal year in which or with	4863
which ends the calendar or fiscal year of the lower level	4864
pass-through entity and if, based upon clear and convincing	4865
evidence, complete information about the location and cost of the	4866
physical assets of the lower pass-through entity is not available	4867
to the upper level pass-through entity, then solely for purposes	4868
of ascertaining if a gain or loss constitutes a qualifying trust	4869
amount, the upper level pass-through entity shall be deemed as	4870
owning no equity of the lower level pass-through entity for each	4871
day during the upper level pass-through entity's calendar or	4872
fiscal year in which or with which ends the lower level	4873
pass-through entity's calendar or fiscal year. Nothing in division	4874
(BB)(5)(a)(iii) of this section shall be construed to provide for	4875
any deduction or exclusion in computing any trust's Ohio taxable	4876
income.	4877

(b) With respect to a trust that is not a resident for the	4878
taxable year and with respect to a part of a trust that is not a	4879
resident for the taxable year, "qualifying investee" for that	4880
taxable year does not include a C corporation if both of the	4881
following apply:	4882

(i) During the taxable year the trust or part of the trust	4883
recognizes a gain or loss from the sale, exchange, or other	4884
disposition of equity or ownership interests in, or debt	4885
obligations of, the C corporation.	4886

(ii) Such gain or loss constitutes nonbusiness income.

4887

(6) "Available" means information is such that a person is	4888
able to learn of the information by the due date plus extensions,	4889
if any, for filing the return for the taxable year in which the	4890
trust recognizes the gain or loss.	4891

(CC) "Qualifying controlled group" has the same meaning as in	4892
section 5733.04 of the Revised Code.	4893

(DD) "Related member" has the same meaning as in section	4894
5733.042 of the Revised Code.	4895

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

4896

(a) "Qualifying person" means any person other than a	4897
qualifying corporation.	4898

(b) "Qualifying corporation" means any person classified for	4899
federal income tax purposes as an association taxable as a	4900
corporation, except either of the following:	4901

(i) A corporation that has made an election under subchapter	4902
S, chapter one, subtitle A, of the Internal Revenue Code for its	4903
taxable year ending within, or on the last day of, the investor's	4904
taxable year;	4905

(ii) A subsidiary that is wholly owned by any corporation	4906
that has made an election under subchapter S, chapter one,	4907
subtitle A of the Internal Revenue Code for its taxable year	4908
ending within, or on the last day of, the investor's taxable year.	4909

(2) For the purposes of this chapter, unless expressly stated	4910
otherwise, no qualifying person indirectly owns any asset directly	4911
or indirectly owned by any qualifying corporation.	4912

(FF) For purposes of this chapter and Chapter 5751. of the	4913
Revised Code:	4914

(1) "Trust" does not include a qualified pre-income tax	4915
trust.	4916

(2) A "qualified pre-income tax trust" is any pre-income tax	4917
trust that makes a qualifying pre-income tax trust election as	4918
described in division (FF)(3) of this section.	4919

(3) A "qualifying pre-income tax trust election" is an	4920
election by a pre-income tax trust to subject to the tax imposed	4921
by section 5751.02 of the Revised Code the pre-income tax trust	4922
and all pass-through entities of which the trust owns or controls,	4923
directly, indirectly, or constructively through related interests,	4924
five per cent or more of the ownership or equity interests. The	4925
trustee shall notify the tax commissioner in writing of the	4926
election on or before April 15, 2006. The election, if timely	4927
made, shall be effective on and after January 1, 2006, and shall	4928
apply for all tax periods and tax years until revoked by the	4929
trustee of the trust.	4930

(4) A "pre-income tax trust" is a trust that satisfies all of	4931
the following requirements:	4932

(a) The document or instrument creating the trust was	4933
executed by the grantor before January 1, 1972;	4934

(b) The trust became irrevocable upon the creation of the	4935
trust; and	4936

(c) The grantor was domiciled in this state at the time the	4937
trust was created.	4938

Sec. 5747.65.  There is hereby allowed a refundable credit	4939
against the tax imposed under section 5747.02 of the Revised Code.	4940
The amount of the credit shall equal the taxpayer's proportionate	4941
share of the lesser of either the tax due or the tax paid for the	4942
tax imposed by section 5726.02 of the Revised Code by a	4943
pass-through entity for the pass-through entity's taxable year	4944
ending in the taxpayer's taxable year.	4945

The taxpayer shall claim the credit for the taxpayer's	4946
taxable year that includes the last day of the pass-through	4947
entity's taxable year. For purposes of making tax payments under	4948
this chapter, taxes equal to the amount of the credit shall be	4949
considered to be paid by the taxpayer on the day the pass-through	4950
entity pays to the treasurer of state the amount due for the tax	4951
imposed by section 5726.02 of the Revised Code.	4952

In claiming the credit and determining the taxpayer's	4953
proportionate share of the tax due and the tax paid by a	4954
pass-through entity, the taxpayer shall follow the concepts set	4955
forth in subchapters J and K of the Internal Revenue Code.	4956

The credit shall be claimed in the order required under	4957
section 5747.98 of the Revised Code. If the amount of the credit	4958
exceeds the amount of tax otherwise due under section 5747.02 of	4959
the Revised Code after deduction of all other credits in that	4960
order, the taxpayer is entitled to a refund of the excess.	4961

Sec. 5747.98.  (A) To provide a uniform procedure for	4962
calculating the amount of tax due under section 5747.02 of the	4963
Revised Code, a taxpayer shall claim any credits to which the	4964
taxpayer is entitled in the following order:	4965

(1) The retirement income credit under division (B) of	4966
section 5747.055 of the Revised Code;	4967

(2) The senior citizen credit under division (C) of section	4968
5747.05 of the Revised Code;	4969

(3) The lump sum distribution credit under division (D) of	4970
section 5747.05 of the Revised Code;	4971

(4) The dependent care credit under section 5747.054 of the	4972
Revised Code;	4973

(5) The lump sum retirement income credit under division (C)	4974
of section 5747.055 of the Revised Code;	4975

(6) The lump sum retirement income credit under division (D)	4976
of section 5747.055 of the Revised Code;	4977

(7) The lump sum retirement income credit under division (E)	4978
of section 5747.055 of the Revised Code;	4979

(8) The low-income credit under section 5747.056 of the	4980
Revised Code;	4981

(9) The credit for displaced workers who pay for job training	4982
under section 5747.27 of the Revised Code;	4983

(10) The campaign contribution credit under section 5747.29	4984
of the Revised Code;	4985

(11) The twenty-dollar personal exemption credit under	4986
section 5747.022 of the Revised Code;	4987

(12) The joint filing credit under division (G) of section	4988
5747.05 of the Revised Code;	4989

(13) The nonresident credit under division (A) of section	4990
5747.05 of the Revised Code;	4991

(14) The credit for a resident's out-of-state income under	4992
division (B) of section 5747.05 of the Revised Code;	4993

(15) The credit for employers that enter into agreements with	4994
child day-care centers under section 5747.34 of the Revised Code;	4995

(16) The credit for employers that reimburse employee child	4996
care expenses under section 5747.36 of the Revised Code;	4997

(17) The credit for adoption of a minor child under section	4998
5747.37 of the Revised Code;	4999

(18) The credit for purchases of lights and reflectors under	5000
section 5747.38 of the Revised Code;	5001

(19) The nonrefundable job retention credit under division	5002
(B) of section 5747.058 of the Revised Code;	5003

(20) The credit for selling alternative fuel under section	5004
5747.77 of the Revised Code;	5005

(21) The second credit for purchases of new manufacturing	5006
machinery and equipment and the credit for using Ohio coal under	5007
section 5747.31 of the Revised Code;	5008

(22) The job training credit under section 5747.39 of the	5009
Revised Code;	5010

(23) The enterprise zone credit under section 5709.66 of the	5011
Revised Code;	5012

(24) The credit for the eligible costs associated with a	5013
voluntary action under section 5747.32 of the Revised Code;	5014

(25) The credit for employers that establish on-site child	5015
day-care centers under section 5747.35 of the Revised Code;	5016

(26) The ethanol plant investment credit under section	5017
5747.75 of the Revised Code;	5018

(27) The credit for purchases of qualifying grape production	5019
property under section 5747.28 of the Revised Code;	5020

(28) The small business investment credit under section	5021
5747.81 of the Revised Code;	5022

(29) The credit for research and development and technology	5023
transfer investors under section 5747.33 of the Revised Code;	5024

(30) The enterprise zone credits under section 5709.65 of the	5025
Revised Code;	5026

(31) The research and development credit under section	5027
5747.331 of the Revised Code;	5028

(32) The credit for rehabilitating a historic building under	5029
section 5747.76 of the Revised Code;	5030

(33) The refundable credit for rehabilitating a historic	5031
building under section 5747.76 of the Revised Code;	5032

(34) The refundable jobs creation credit or job retention	5033
credit under division (A) of section 5747.058 of the Revised Code;	5034

(35) The refundable credit for taxes paid by a qualifying	5035
entity granted under section 5747.059 of the Revised Code;	5036

(36) The refundable credits for taxes paid by a qualifying	5037
pass-through entity granted under division (J) of section 5747.08	5038
of the Revised Code;	5039

(37) The refundable credit for tax withheld under division	5040
(B)(1) of section 5747.062 of the Revised Code;	5041

(38) The refundable credit for tax withheld under section	5042
5747.063 of the Revised Code;	5043

(39) The refundable credit under section 5747.80 of the	5044
Revised Code for losses on loans made to the Ohio venture capital	5045
program under sections 150.01 to 150.10 of the Revised Code;	5046

(40) The refundable motion picture production credit under	5047
section 5747.66 of the Revised Code;	5048

(41) The refundable credit for financial institution taxes	5049
paid by a pass-through entity granted under section 5747.65 of the	5050
Revised Code.	5051

(B) For any credit, except the refundable credits enumerated	5052
in this section and the credit granted under division (I) of	5053
section 5747.08 of the Revised Code, the amount of the credit for	5054
a taxable year shall not exceed the tax due after allowing for any	5055
other credit that precedes it in the order required under this	5056
section. Any excess amount of a particular credit may be carried	5057
forward if authorized under the section creating that credit.	5058
Nothing in this chapter shall be construed to allow a taxpayer to	5059
claim, directly or indirectly, a credit more than once for a	5060
taxable year.	5061

Sec. 5751.01.  As used in this chapter:

5062

(A) "Person" means, but is not limited to, individuals,	5063
combinations of individuals of any form, receivers, assignees,	5064
trustees in bankruptcy, firms, companies, joint-stock companies,	5065
business trusts, estates, partnerships, limited liability	5066
partnerships, limited liability companies, associations, joint	5067
ventures, clubs, societies, for-profit corporations, S	5068
corporations, qualified subchapter S subsidiaries, qualified	5069
subchapter S trusts, trusts, entities that are disregarded for	5070
federal income tax purposes, and any other entities.	5071

(B) "Consolidated elected taxpayer" means a group of two or	5072
more persons treated as a single taxpayer for purposes of this	5073
chapter as the result of an election made under section 5751.011	5074
of the Revised Code.	5075

(C) "Combined taxpayer" means a group of two or more persons	5076
treated as a single taxpayer for purposes of this chapter under	5077
section 5751.012 of the Revised Code.	5078

(D) "Taxpayer" means any person, or any group of persons in	5079
the case of a consolidated elected taxpayer or combined taxpayer	5080
treated as one taxpayer, required to register or pay tax under	5081
this chapter. "Taxpayer" does not include excluded persons.	5082

(E) "Excluded person" means any of the following:

5083

(1) Any person with not more than one hundred fifty thousand	5084
dollars of taxable gross receipts during the calendar year.	5085
Division (E)(1) of this section does not apply to a person that is	5086
a member of a consolidated elected taxpayer;	5087

(2) A public utility that paid the excise tax imposed by	5088
section 5727.24 or 5727.30 of the Revised Code based on one or	5089
more measurement periods that include the entire tax period under	5090
this chapter, except that a public utility that is a combined	5091
company is a taxpayer with regard to the following gross receipts:	5092

(a) Taxable gross receipts directly attributed to a public	5093
utility activity, but not directly attributed to an activity that	5094
is subject to the excise tax imposed by section 5727.24 or 5727.30	5095
of the Revised Code;	5096

(b) Taxable gross receipts that cannot be directly attributed	5097
to any activity, multiplied by a fraction whose numerator is the	5098
taxable gross receipts described in division (E)(2)(a) of this	5099
section and whose denominator is the total taxable gross receipts	5100
that can be directly attributed to any activity;	5101

(c) Except for any differences resulting from the use of an	5102
accrual basis method of accounting for purposes of determining	5103
gross receipts under this chapter and the use of the cash basis	5104
method of accounting for purposes of determining gross receipts	5105
under section 5727.24 of the Revised Code, the gross receipts	5106
directly attributed to the activity of a natural gas company shall	5107
be determined in a manner consistent with division (D) of section	5108
5727.03 of the Revised Code.	5109

As used in division (E)(2) of this section, "combined	5110
company" and "public utility" have the same meanings as in section	5111
5727.01 of the Revised Code.	5112

(3) A financial institution, as defined in section 5725.01	5113
5726.01 of the Revised Code, that paid the corporation franchise	5114
tax charged by division (D) ofimposed by section 5733.065726.02	5115
of the Revised Code based on one or more taxable years that	5116
include the entire tax period under this chapter;	5117

(4) A dealer in intangibles, as defined in section 5725.01 of	5118
the Revised Code, that paid the dealer in intangibles tax levied	5119
by division (D) of section 5707.03 of the Revised Code based on	5120
one or more measurement periods that include the entire tax period	5121
under this chapter;	5122

(5) A financial holding company as defined in the "Bank	5123
Holding Company Act," 12 U.S.C. 1841(p);	5124

(6) A bank holding company as defined in the "Bank Holding	5125
Company Act," 12 U.S.C. 1841(a);	5126

(7) A savings and loan holding company as defined in the	5127
"Home Owners Loan Act," 12 U.S.C. 1467a(a)(1)(D) that is engaging	5128
only in activities or investments permissible for a financial	5129
holding company under 12 U.S.C. 1843(k);	5130

(8) A person directly or indirectly owned by one or more	5131
financial institutions, financial holding companies, bank holding	5132
companies, or savings and loan holding companies described in	5133
division (E)(3), (5), (6), or (7) of this section that is engaged	5134
in activities permissible for a financial holding company under 12	5135
U.S.C. 1843(k), except that any such person held pursuant to	5136
merchant banking authority under 12 U.S.C. 1843(k)(4)(H) or 12	5137
U.S.C. 1843(k)(4)(I) is not an excluded person, or a person	5138
directly or indirectly owned by one or more insurance companies	5139
described in division (E)(9) of this section that is authorized to	5140
do the business of insurance in this state.	5141

For the purposes of division (E)(8) of this section, a person	5142
owns another person under the following circumstances:	5143

(a) In the case of corporations issuing capital stock, one	5144
corporation owns another corporation if it owns fifty per cent or	5145
more of the other corporation's capital stock with current voting	5146
rights;	5147

(b) In the case of a limited liability company, one person	5148
owns the company if that person's membership interest, as defined	5149
in section 1705.01 of the Revised Code, is fifty per cent or more	5150
of the combined membership interests of all persons owning such	5151
interests in the company;	5152

(c) In the case of a partnership, trust, or other	5153
unincorporated business organization other than a limited	5154
liability company, one person owns the organization if, under the	5155
articles of organization or other instrument governing the affairs	5156
of the organization, that person has a beneficial interest in the	5157
organization's profits, surpluses, losses, or distributions of	5158
fifty per cent or more of the combined beneficial interests of all	5159
persons having such an interest in the organization;	5160

(d) In the case of multiple ownership, the ownership	5161
interests of more than one person may be aggregated to meet the	5162
fifty per cent ownership tests in this division only when each	5163
such owner is described in division (E)(3), (5), (6), or (7) of	5164
this section and is engaged in activities permissible for a	5165
financial holding company under 12 U.S.C. 1843(k) or is a person	5166
directly or indirectly owned by one or more insurance companies	5167
described in division (E)(9) of this section that is authorized to	5168
do the business of insurance in this state.	5169

(9) A domestic insurance company or foreign insurance	5170
company, as defined in section 5725.01 of the Revised Code, that	5171
paid the insurance company premiums tax imposed by section 5725.18	5172
or Chapter 5729. of the Revised Code based on one or more	5173
measurement periods that include the entire tax period under this	5174
chapter;	5175

(10) A person that solely facilitates or services one or more	5176
securitizations or similar transactions for any person described	5177
in division (E)(3), (5), (6), (7), (8), or (9) of this section.	5178
For purposes of this division, "securitization" means transferring	5179
one or more assets to one or more persons and then issuing	5180
securities backed by the right to receive payment from the asset	5181
or assets so transferred.	5182

(11)(5) Except as otherwise provided in this division, a	5183
pre-income tax trust as defined in division (FF)(4) of section	5184
5747.01 of the Revised Code and any pass-through entity of which	5185
such pre-income tax trust owns or controls, directly, indirectly,	5186
or constructively through related interests, more than five per	5187
cent of the ownership or equity interests. If the pre-income tax	5188
trust has made a qualifying pre-income tax trust election under	5189
division (FF)(3) of section 5747.01 of the Revised Code, then the	5190
trust and the pass-through entities of which it owns or controls,	5191
directly, indirectly, or constructively through related interests,	5192
more than five per cent of the ownership or equity interests,	5193
shall not be excluded persons for purposes of the tax imposed	5194
under section 5751.02 of the Revised Code.	5195

(12)(6) Nonprofit organizations or the state and its	5196
agencies, instrumentalities, or political subdivisions.	5197

(F) Except as otherwise provided in divisions (F)(2), (3),	5198
and (4) of this section, "gross receipts" means the total amount	5199
realized by a person, without deduction for the cost of goods sold	5200
or other expenses incurred, that contributes to the production of	5201
gross income of the person, including the fair market value of any	5202
property and any services received, and any debt transferred or	5203
forgiven as consideration.	5204

(1) The following are examples of gross receipts:

5205

(a) Amounts realized from the sale, exchange, or other	5206
disposition of the taxpayer's property to or with another;	5207

(b) Amounts realized from the taxpayer's performance of	5208
services for another;	5209

(c) Amounts realized from another's use or possession of the	5210
taxpayer's property or capital;	5211

(d) Any combination of the foregoing amounts.

5212

(2) "Gross receipts" excludes the following amounts:

5213

(a) Interest income except interest on credit sales;

5214

(b) Dividends and distributions from corporations, and	5215
distributive or proportionate shares of receipts and income from a	5216
pass-through entity as defined under section 5733.04 of the	5217
Revised Code;	5218

(c) Receipts from the sale, exchange, or other disposition of	5219
an asset described in section 1221 or 1231 of the Internal Revenue	5220
Code, without regard to the length of time the person held the	5221
asset. Notwithstanding section 1221 of the Internal Revenue Code,	5222
receipts from hedging transactions also are excluded to the extent	5223
the transactions are entered into primarily to protect a financial	5224
position, such as managing the risk of exposure to (i) foreign	5225
currency fluctuations that affect assets, liabilities, profits,	5226
losses, equity, or investments in foreign operations; (ii)	5227
interest rate fluctuations; or (iii) commodity price fluctuations.	5228
As used in division (F)(2)(c) of this section, "hedging	5229
transaction" has the same meaning as used in section 1221 of the	5230
Internal Revenue Code and also includes transactions accorded	5231
hedge accounting treatment under statement of financial accounting	5232
standards number 133 of the financial accounting standards board.	5233
For the purposes of division (F)(2)(c) of this section, the actual	5234
transfer of title of real or tangible personal property to another	5235
entity is not a hedging transaction.	5236

(d) Proceeds received attributable to the repayment,	5237
maturity, or redemption of the principal of a loan, bond, mutual	5238
fund, certificate of deposit, or marketable instrument;	5239

(e) The principal amount received under a repurchase	5240
agreement or on account of any transaction properly characterized	5241
as a loan to the person;	5242

(f) Contributions received by a trust, plan, or other	5243
arrangement, any of which is described in section 501(a) of the	5244
Internal Revenue Code, or to which Title 26, Subtitle A, Chapter	5245
1, Subchapter (D) of the Internal Revenue Code applies;	5246

(g) Compensation, whether current or deferred, and whether in	5247
cash or in kind, received or to be received by an employee, former	5248
employee, or the employee's legal successor for services rendered	5249
to or for an employer, including reimbursements received by or for	5250
an individual for medical or education expenses, health insurance	5251
premiums, or employee expenses, or on account of a dependent care	5252
spending account, legal services plan, any cafeteria plan	5253
described in section 125 of the Internal Revenue Code, or any	5254
similar employee reimbursement;	5255

(h) Proceeds received from the issuance of the taxpayer's own	5256
stock, options, warrants, puts, or calls, or from the sale of the	5257
taxpayer's treasury stock;	5258

(i) Proceeds received on the account of payments from	5259
insurance policies, except those proceeds received for the loss of	5260
business revenue;	5261

(j) Gifts or charitable contributions received; membership	5262
dues received by trade, professional, homeowners', or condominium	5263
associations; and payments received for educational courses,	5264
meetings, meals, or similar payments to a trade, professional, or	5265
other similar association; and fundraising receipts received by	5266
any person when any excess receipts are donated or used	5267
exclusively for charitable purposes;	5268

(k) Damages received as the result of litigation in excess of	5269
amounts that, if received without litigation, would be gross	5270
receipts;	5271

(l) Property, money, and other amounts received or acquired	5272
by an agent on behalf of another in excess of the agent's	5273
commission, fee, or other remuneration;	5274

(m) Tax refunds, other tax benefit recoveries, and	5275
reimbursements for the tax imposed under this chapter made by	5276
entities that are part of the same combined taxpayer or	5277
consolidated elected taxpayer group, and reimbursements made by	5278
entities that are not members of a combined taxpayer or	5279
consolidated elected taxpayer group that are required to be made	5280
for economic parity among multiple owners of an entity whose tax	5281
obligation under this chapter is required to be reported and paid	5282
entirely by one owner, pursuant to the requirements of sections	5283
5751.011 and 5751.012 of the Revised Code;	5284

(n) Pension reversions;

5285

(o) Contributions to capital;

5286

(p) Sales or use taxes collected as a vendor or an	5287
out-of-state seller on behalf of the taxing jurisdiction from a	5288
consumer or other taxes the taxpayer is required by law to collect	5289
directly from a purchaser and remit to a local, state, or federal	5290
tax authority;	5291

(q) In the case of receipts from the sale of cigarettes or	5292
tobacco products by a wholesale dealer, retail dealer,	5293
distributor, manufacturer, or seller, all as defined in section	5294
5743.01 of the Revised Code, an amount equal to the federal and	5295
state excise taxes paid by any person on or for such cigarettes or	5296
tobacco products under subtitle E of the Internal Revenue Code or	5297
Chapter 5743. of the Revised Code;	5298

(r) In the case of receipts from the sale of motor fuel by a	5299
licensed motor fuel dealer, licensed retail dealer, or licensed	5300
permissive motor fuel dealer, all as defined in section 5735.01 of	5301
the Revised Code, an amount equal to federal and state excise	5302
taxes paid by any person on such motor fuel under section 4081 of	5303
the Internal Revenue Code or Chapter 5735. of the Revised Code;	5304

(s) In the case of receipts from the sale of beer or	5305
intoxicating liquor, as defined in section 4301.01 of the Revised	5306
Code, by a person holding a permit issued under Chapter 4301. or	5307
4303. of the Revised Code, an amount equal to federal and state	5308
excise taxes paid by any person on or for such beer or	5309
intoxicating liquor under subtitle E of the Internal Revenue Code	5310
or Chapter 4301. or 4305. of the Revised Code;	5311

(t) Receipts realized by a new motor vehicle dealer or used	5312
motor vehicle dealer, as defined in section 4517.01 of the Revised	5313
Code, from the sale or other transfer of a motor vehicle, as	5314
defined in that section, to another motor vehicle dealer for the	5315
purpose of resale by the transferee motor vehicle dealer, but only	5316
if the sale or other transfer was based upon the transferee's need	5317
to meet a specific customer's preference for a motor vehicle;	5318

(u) Receipts from a financial institution described in	5319
division (E)(3) of this section for services provided to the	5320
financial institution in connection with the issuance, processing,	5321
servicing, and management of loans or credit accounts, if such	5322
financial institution and the recipient of such receipts have at	5323
least fifty per cent of their ownership interests owned or	5324
controlled, directly or constructively through related interests,	5325
by common owners;	5326

(v) Receipts realized from administering anti-neoplastic	5327
drugs and other cancer chemotherapy, biologicals, therapeutic	5328
agents, and supportive drugs in a physician's office to patients	5329
with cancer;	5330

(w) Funds received or used by a mortgage broker that is not a	5331
dealer in intangibles, other than fees or other consideration,	5332
pursuant to a table-funding mortgage loan or warehouse-lending	5333
mortgage loan. Terms used in division (F)(2)(w) of this section	5334
have the same meanings as in section 1322.01 of the Revised Code,	5335
except "mortgage broker" means a person assisting a buyer in	5336
obtaining a mortgage loan for a fee or other consideration paid by	5337
the buyer or a lender, or a person engaged in table-funding or	5338
warehouse-lending mortgage loans that are first lien mortgage	5339
loans.	5340

(x) Property, money, and other amounts received by a	5341
professional employer organization, as defined in section 4125.01	5342
of the Revised Code, from a client employer, as defined in that	5343
section, in excess of the administrative fee charged by the	5344
professional employer organization to the client employer;	5345

(y) In the case of amounts retained as commissions by a	5346
permit holder under Chapter 3769. of the Revised Code, an amount	5347
equal to the amounts specified under that chapter that must be	5348
paid to or collected by the tax commissioner as a tax and the	5349
amounts specified under that chapter to be used as purse money;	5350

(z) Qualifying distribution center receipts.

5351

(i) For purposes of division (F)(2)(z) of this section:

5352

(I) "Qualifying distribution center receipts" means receipts	5353
of a supplier from qualified property that is delivered to a	5354
qualified distribution center, multiplied by a quantity that	5355
equals one minus the Ohio delivery percentage.	5356

(II) "Qualified property" means tangible personal property	5357
delivered to a qualified distribution center that is shipped to	5358
that qualified distribution center solely for further shipping by	5359
the qualified distribution center to another location in this	5360
state or elsewhere. "Further shipping" includes storing and	5361
repackaging such property into smaller or larger bundles, so long	5362
as such property is not subject to further manufacturing or	5363
processing.	5364

(III) "Qualified distribution center" means a warehouse or	5365
other similar facility in this state that, for the qualifying	5366
year, is operated by a person that is not part of a combined	5367
taxpayer group and that has a qualifying certificate. However, all	5368
warehouses or other similar facilities that are operated by	5369
persons in the same taxpayer group and that are located within one	5370
mile of each other shall be treated as one qualified distribution	5371
center.	5372

(IV) "Qualifying year" means the calendar year to which the	5373
qualifying certificate applies.	5374

(V) "Qualifying period" means the period of the first day of	5375
July of the second year preceding the qualifying year through the	5376
thirtieth day of June of the year preceding the qualifying year.	5377

(VI) "Qualifying certificate" means the certificate issued by	5378
the tax commissioner after the operator of a distribution center	5379
files an annual application with the commissioner. The application	5380
and annual fee shall be filed and paid for each qualified	5381
distribution center on or before the first day of September before	5382
the qualifying year or within forty-five days after the	5383
distribution center opens, whichever is later.	5384

The applicant must substantiate to the commissioner's	5385
satisfaction that, for the qualifying period, all persons	5386
operating the distribution center have more than fifty per cent of	5387
the cost of the qualified property shipped to a location such that	5388
it would be sitused outside this state under the provisions of	5389
division (E) of section 5751.033 of the Revised Code. The	5390
applicant must also substantiate that the distribution center	5391
cumulatively had costs from its suppliers equal to or exceeding	5392
five hundred million dollars during the qualifying period. (For	5393
purposes of division (F)(2)(z)(i)(VI) of this section, "supplier"	5394
excludes any person that is part of the consolidated elected	5395
taxpayer group, if applicable, of the operator of the qualified	5396
distribution center.) The commissioner may require the applicant	5397
to have an independent certified public accountant certify that	5398
the calculation of the minimum thresholds required for a qualified	5399
distribution center by the operator of a distribution center has	5400
been made in accordance with generally accepted accounting	5401
principles. The commissioner shall issue or deny the issuance of a	5402
certificate within sixty days after the receipt of the	5403
application. A denial is subject to appeal under section 5717.02	5404
of the Revised Code. If the operator files a timely appeal under	5405
section 5717.02 of the Revised Code, the operator shall be granted	5406
a qualifying certificate, provided that the operator is liable for	5407
any tax, interest, or penalty upon amounts claimed as qualifying	5408
distribution center receipts, other than those receipts exempt	5409
under division (C)(1) of section 5751.011 of the Revised Code,	5410
that would have otherwise not been owed by its suppliers if the	5411
qualifying certificate was valid.	5412

(VII) "Ohio delivery percentage" means the proportion of the	5413
total property delivered to a destination inside Ohio from the	5414
qualified distribution center during the qualifying period	5415
compared with total deliveries from such distribution center	5416
everywhere during the qualifying period.	5417

(ii) If the distribution center is new and was not open for	5418
the entire qualifying period, the operator of the distribution	5419
center may request that the commissioner grant a qualifying	5420
certificate. If the certificate is granted and it is later	5421
determined that more than fifty per cent of the qualified property	5422
during that year was not shipped to a location such that it would	5423
be sitused outside of this state under the provisions of division	5424
(E) of section 5751.033 of the Revised Code or if it is later	5425
determined that the person that operates the distribution center	5426
had average monthly costs from its suppliers of less than forty	5427
million dollars during that year, then the operator of the	5428
distribution center shall be liable for any tax, interest, or	5429
penalty upon amounts claimed as qualifying distribution center	5430
receipts, other than those receipts exempt under division (C)(1)	5431
of section 5751.011 of the Revised Code, that would have not	5432
otherwise been owed by its suppliers during the qualifying year if	5433
the qualifying certificate was valid. (For purposes of division	5434
(F)(2)(z)(ii) of this section, "supplier" excludes any person that	5435
is part of the consolidated elected taxpayer group, if applicable,	5436
of the operator of the qualified distribution center.)	5437

(iii) When filing an application for a qualifying certificate	5438
under division (F)(2)(z)(i)(VI) of this section, the operator of a	5439
qualified distribution center also shall provide documentation, as	5440
the commissioner requires, for the commissioner to ascertain the	5441
Ohio delivery percentage. The commissioner, upon issuing the	5442
qualifying certificate, also shall certify the Ohio delivery	5443
percentage. The operator of the qualified distribution center may	5444
appeal the commissioner's certification of the Ohio delivery	5445
percentage in the same manner as an appeal is taken from the	5446
denial of a qualifying certificate under division (F)(2)(z)(i)(VI)	5447
of this section.	5448

Within thirty days after all appeals have been exhausted, the	5449
operator of the qualified distribution center shall notify the	5450
affected suppliers of qualified property that such suppliers are	5451
required to file, within sixty days after receiving notice from	5452
the operator of the qualified distribution center, amended reports	5453
for the impacted calendar quarter or quarters or calendar year,	5454
whichever the case may be. Any additional tax liability or tax	5455
overpayment shall be subject to interest but shall not be subject	5456
to the imposition of any penalty so long as the amended returns	5457
are timely filed. The supplier of tangible personal property	5458
delivered to the qualified distribution center shall include in	5459
its report of taxable gross receipts the receipts from the total	5460
sales of property delivered to the qualified distribution center	5461
for the calendar quarter or calendar year, whichever the case may	5462
be, multiplied by the Ohio delivery percentage for the qualifying	5463
year. Nothing in division (F)(2)(z)(iii) of this section shall be	5464
construed as imposing liability on the operator of a qualified	5465
distribution center for the tax imposed by this chapter arising	5466
from any change to the Ohio delivery percentage.	5467

(iv) In the case where the distribution center is new and not	5468
open for the entire qualifying period, the operator shall make a	5469
good faith estimate of an Ohio delivery percentage for use by	5470
suppliers in their reports of taxable gross receipts for the	5471
remainder of the qualifying period. The operator of the facility	5472
shall disclose to the suppliers that such Ohio delivery percentage	5473
is an estimate and is subject to recalculation. By the due date of	5474
the next application for a qualifying certificate, the operator	5475
shall determine the actual Ohio delivery percentage for the	5476
estimated qualifying period and proceed as provided in division	5477
(F)(2)(z)(iii) of this section with respect to the calculation and	5478
recalculation of the Ohio delivery percentage. The supplier is	5479
required to file, within sixty days after receiving notice from	5480
the operator of the qualified distribution center, amended reports	5481
for the impacted calendar quarter or quarters or calendar year,	5482
whichever the case may be. Any additional tax liability or tax	5483
overpayment shall be subject to interest but shall not be subject	5484
to the imposition of any penalty so long as the amended returns	5485
are timely filed.	5486

(v) Qualifying certificates and Ohio delivery percentages	5487
issued by the commissioner shall be open to public inspection and	5488
shall be timely published by the commissioner. A supplier relying	5489
in good faith on a certificate issued under this division shall	5490
not be subject to tax on the qualifying distribution center	5491
receipts under division (F)(2)(z) of this section. A person	5492
receiving a qualifying certificate is responsible for paying the	5493
tax, interest, and penalty upon amounts claimed as qualifying	5494
distribution center receipts that would not otherwise have been	5495
owed by the supplier if the qualifying certificate were available	5496
when it is later determined that the qualifying certificate should	5497
not have been issued because the statutory requirements were in	5498
fact not met.	5499

(vi) The annual fee for a qualifying certificate shall be one	5500
hundred thousand dollars for each qualified distribution center.	5501
If a qualifying certificate is not issued, the annual fee is	5502
subject to refund after the exhaustion of all appeals provided for	5503
in division (F)(2)(z)(i)(VI) of this section. The fee imposed	5504
under this division may be assessed in the same manner as the tax	5505
imposed under this chapter. The first one hundred thousand dollars	5506
of the annual application fees collected each calendar year shall	5507
be credited to the commercial activity tax administrative fund.	5508
The remainder of the annual application fees collected shall be	5509
distributed in the same manner required under section 5751.20 of	5510
the Revised Code.	5511

(vii) The tax commissioner may require that adequate security	5512
be posted by the operator of the distribution center on appeal	5513
when the commissioner disagrees that the applicant has met the	5514
minimum thresholds for a qualified distribution center as set	5515
forth in divisions (F)(2)(z)(i)(VI) and (F)(2)(z)(ii) of this	5516
section.	5517

(aa) Receipts of an employer from payroll deductions relating	5518
to the reimbursement of the employer for advancing moneys to an	5519
unrelated third party on an employee's behalf;	5520

(bb) Cash discounts allowed and taken;

5521

(cc) Returns and allowances;

5522

(dd) Bad debts from receipts on the basis of which the tax	5523
imposed by this chapter was paid in a prior quarterly tax payment	5524
period. For the purpose of this division, "bad debts" means any	5525
debts that have become worthless or uncollectible between the	5526
preceding and current quarterly tax payment periods, have been	5527
uncollected for at least six months, and that may be claimed as a	5528
deduction under section 166 of the Internal Revenue Code and the	5529
regulations adopted under that section, or that could be claimed	5530
as such if the taxpayer kept its accounts on the accrual basis.	5531
"Bad debts" does not include repossessed property, uncollectible	5532
amounts on property that remains in the possession of the taxpayer	5533
until the full purchase price is paid, or expenses in attempting	5534
to collect any account receivable or for any portion of the debt	5535
recovered;	5536

(ee) Any amount realized from the sale of an account	5537
receivable to the extent the receipts from the underlying	5538
transaction giving rise to the account receivable were included in	5539
the gross receipts of the taxpayer;	5540

(ff) Any receipts directly attributed to providing public	5541
services pursuant to sections 126.60 to 126.605 of the Revised	5542
Code, or any receipts directly attributed to a transfer agreement	5543
or to the enterprise transferred under that agreement under	5544
section 4313.02 of the Revised Code.	5545

(gg) Any receipts for which the tax imposed by this chapter	5546
is prohibited by the Constitution or laws of the United States or	5547
the Constitution of Ohio.	5548

(hh)(i) As used in this division:

5549

(I) "Qualified uranium receipts" means receipts from the	5550
sale, exchange, lease, loan, production, processing, or other	5551
disposition of uranium within a uranium enrichment zone certified	5552
by the tax commissioner under division (F)(2)(hh)(ii) of this	5553
section. "Qualified uranium receipts" does not include any	5554
receipts with a situs in this state outside a uranium enrichment	5555
zone certified by the tax commissioner under division	5556
(F)(2)(hh)(ii) of this section.	5557

(II) "Uranium enrichment zone" means all real property that	5558
is part of a uranium enrichment facility licensed by the United	5559
States nuclear regulatory commission and that was or is owned or	5560
controlled by the United States department of energy or its	5561
successor.	5562

(ii) Any person that owns, leases, or operates real or	5563
tangible personal property constituting or located within a	5564
uranium enrichment zone may apply to the tax commissioner to have	5565
the uranium enrichment zone certified for the purpose of excluding	5566
qualified uranium receipts under division (F)(2)(hh) of this	5567
section. The application shall include such information that the	5568
tax commissioner prescribes. Within sixty days after receiving the	5569
application, the tax commissioner shall certify the zone for that	5570
purpose if the commissioner determines that the property qualifies	5571
as a uranium enrichment zone as defined in division (F)(2)(hh) of	5572
this section, or, if the tax commissioner determines that the	5573
property does not qualify, the commissioner shall deny the	5574
application or request additional information from the applicant.	5575
If the tax commissioner denies an application, the commissioner	5576
shall state the reasons for the denial. The applicant may appeal	5577
the denial of an application to the board of tax appeals pursuant	5578
to section 5717.02 of the Revised Code. If the applicant files a	5579
timely appeal, the tax commissioner shall conditionally certify	5580
the applicant's property. The conditional certification shall	5581
expire when all of the applicant's appeals are exhausted. Until	5582
final resolution of the appeal, the applicant shall retain the	5583
applicant's records in accordance with section 5751.12 of the	5584
Revised Code, notwithstanding any time limit on the preservation	5585
of records under that section.	5586

(ii) Amounts realized by licensed motor fuel dealers or	5587
licensed permissive motor fuel dealers from the exchange of	5588
petroleum products, including motor fuel, between such dealers,	5589
provided that delivery of the petroleum products occurs at a	5590
refinery, terminal, pipeline, or marine vessel and that the	5591
exchanging dealers agree neither dealer shall require monetary	5592
compensation from the other for the value of the exchanged	5593
petroleum products other than such compensation for differences in	5594
product location or grade. Division (F)(2)(ii) of this section	5595
does not apply to amounts realized as a result of differences in	5596
location or grade of exchanged petroleum products or from	5597
handling, lubricity, dye, or other additive injections fees,	5598
pipeline security fees, or similar fees. As used in this division,	5599
"motor fuel," "licensed motor fuel dealer," "licensed permissive	5600
motor fuel dealer," and "terminal" have the same meanings as in	5601
section 5735.01 of the Revised Code.	5602

(hh)(jj) In the case of amounts collected by a licensed	5603
casino operator from casino gaming, amounts in excess of the	5604
casino operator's gross casino revenue. In this division, "casino	5605
operator" and "casino gaming" have the meanings defined in section	5606
3772.01 of the Revised Code, and "gross casino revenue" has the	5607
meaning defined in section 5753.01 of the Revised Code.	5608

(3) In the case of a taxpayer when acting as a real estate	5609
broker, "gross receipts" includes only the portion of any fee for	5610
the service of a real estate broker, or service of a real estate	5611
salesperson associated with that broker, that is retained by the	5612
broker and not paid to an associated real estate salesperson or	5613
another real estate broker. For the purposes of this division,	5614
"real estate broker" and "real estate salesperson" have the same	5615
meanings as in section 4735.01 of the Revised Code.	5616

(4) A taxpayer's method of accounting for gross receipts for	5617
a tax period shall be the same as the taxpayer's method of	5618
accounting for federal income tax purposes for the taxpayer's	5619
federal taxable year that includes the tax period. If a taxpayer's	5620
method of accounting for federal income tax purposes changes, its	5621
method of accounting for gross receipts under this chapter shall	5622
be changed accordingly.	5623

(G) "Taxable gross receipts" means gross receipts sitused to	5624
this state under section 5751.033 of the Revised Code.	5625

(H) A person has "substantial nexus with this state" if any	5626
of the following applies. The person:	5627

(1) Owns or uses a part or all of its capital in this state;

5628

(2) Holds a certificate of compliance with the laws of this	5629
state authorizing the person to do business in this state;	5630

(3) Has bright-line presence in this state;

5631

(4) Otherwise has nexus with this state to an extent that the	5632
person can be required to remit the tax imposed under this chapter	5633
under the Constitution of the United States.	5634

(I) A person has "bright-line presence" in this state for a	5635
reporting period and for the remaining portion of the calendar	5636
year if any of the following applies. The person:	5637

(1) Has at any time during the calendar year property in this	5638
state with an aggregate value of at least fifty thousand dollars.	5639
For the purpose of division (I)(1) of this section, owned property	5640
is valued at original cost and rented property is valued at eight	5641
times the net annual rental charge.	5642

(2) Has during the calendar year payroll in this state of at	5643
least fifty thousand dollars. Payroll in this state includes all	5644
of the following:	5645

(a) Any amount subject to withholding by the person under	5646
section 5747.06 of the Revised Code;	5647

(b) Any other amount the person pays as compensation to an	5648
individual under the supervision or control of the person for work	5649
done in this state; and	5650

(c) Any amount the person pays for services performed in this	5651
state on its behalf by another.	5652

(3) Has during the calendar year taxable gross receipts of at	5653
least five hundred thousand dollars.	5654

(4) Has at any time during the calendar year within this	5655
state at least twenty-five per cent of the person's total	5656
property, total payroll, or total gross receipts.	5657

(5) Is domiciled in this state as an individual or for	5658
corporate, commercial, or other business purposes.	5659

(J) "Tangible personal property" has the same meaning as in	5660
section 5739.01 of the Revised Code.	5661

(K) "Internal Revenue Code" means the Internal Revenue Code	5662
of 1986, 100 Stat. 2085, 26 U.S.C. 1, as amended. Any term used in	5663
this chapter that is not otherwise defined has the same meaning as	5664
when used in a comparable context in the laws of the United States	5665
relating to federal income taxes unless a different meaning is	5666
clearly required. Any reference in this chapter to the Internal	5667
Revenue Code includes other laws of the United States relating to	5668
federal income taxes.	5669

(L) "Calendar quarter" means a three-month period ending on	5670
the thirty-first day of March, the thirtieth day of June, the	5671
thirtieth day of September, or the thirty-first day of December.	5672

(M) "Tax period" means the calendar quarter or calendar year	5673
on the basis of which a taxpayer is required to pay the tax	5674
imposed under this chapter.	5675

(N) "Calendar year taxpayer" means a taxpayer for which the	5676
tax period is a calendar year.	5677

(O) "Calendar quarter taxpayer" means a taxpayer for which	5678
the tax period is a calendar quarter.	5679

(P) "Agent" means a person authorized by another person to	5680
act on its behalf to undertake a transaction for the other,	5681
including any of the following:	5682

(1) A person receiving a fee to sell financial instruments;

5683

(2) A person retaining only a commission from a transaction	5684
with the other proceeds from the transaction being remitted to	5685
another person;	5686

(3) A person issuing licenses and permits under section	5687
1533.13 of the Revised Code;	5688

(4) A lottery sales agent holding a valid license issued	5689
under section 3770.05 of the Revised Code;	5690

(5) A person acting as an agent of the division of liquor	5691
control under section 4301.17 of the Revised Code.	5692

(Q) "Received" includes amounts accrued under the accrual	5693
method of accounting.	5694

(R) "Reporting person" means a person in a consolidated	5695
elected taxpayer or combined taxpayer group that is designated by	5696
that group to legally bind the group for all filings and tax	5697
liabilities and to receive all legal notices with respect to	5698
matters under this chapter, or, for the purposes of section	5699
5751.04 of the Revised Code, a separate taxpayer that is not a	5700
member of such a group.	5701

Sec. 5751.011.  (A) A group of two or more persons may elect	5702
to be a consolidated elected taxpayer for the purposes of this	5703
chapter if the group satisfies all of the following requirements:	5704

(1) The group elects to include all persons, including	5705
persons enumerated in divisions (E)(2) to (10)(4) of section	5706
5751.01 of the Revised Code, having at least eighty per cent, or	5707
having at least fifty per cent, of the value of their ownership	5708
interests owned or controlled, directly or constructively through	5709
related interests, by common owners during all or any portion of	5710
the tax period, together with the common owners.	5711

A group making its initial election on the basis of the	5712
eighty per cent ownership test may change its election so that its	5713
consolidated elected taxpayer group is formed on the basis of the	5714
fifty per cent ownership test if all of the following are	5715
satisfied:	5716

(a) When the initial election was made, the group did not	5717
have any persons satisfying the fifty per cent ownership test;	5718

(b) One or more of the persons in the initial group	5719
subsequently acquires ownership interests in a person such that	5720
the fifty per cent ownership test is satisfied, the eighty per	5721
cent ownership test is not satisfied, and the acquired person	5722
would be required to be included in a combined taxpayer group	5723
under section 5751.012 of the Revised Code;	5724

(c) The group requests the change in a written request to the	5725
tax commissioner on or before the due date for filing the first	5726
return due under section 5751.051 of the Revised Code after the	5727
date of the acquisition;	5728

(d) The group has not previously changed its election.

5729

At the election of the group, all entities that are not	5730
incorporated or formed under the laws of a state or of the United	5731
States and that meet the consolidated elected ownership test shall	5732
either be included in the group or all shall be excluded from the	5733
group. If, at the time of registration, the group does not include	5734
any such entities that meet the consolidated elected ownership	5735
test, the group shall elect to either include or exclude the newly	5736
acquired entities before the due date of the first return due	5737
after the date of the acquisition.	5738

Each group shall notify the tax commissioner of the foregoing	5739
elections before the due date of the return for the period in	5740
which the election becomes binding. If fifty per cent of the value	5741
of a person's ownership interests is owned or controlled by each	5742
of two consolidated elected taxpayer groups formed under the fifty	5743
per cent ownership or control test, that person is a member of	5744
each group for the purposes of this section, and each group shall	5745
include in the group's taxable gross receipts fifty per cent of	5746
that person's taxable gross receipts. Otherwise, all of that	5747
person's taxable gross receipts shall be included in the taxable	5748
gross receipts of the consolidated elected taxpayer group of which	5749
the person is a member. In no event shall the ownership or control	5750
of fifty per cent of the value of a person's ownership interests	5751
by two otherwise unrelated groups form the basis for consolidating	5752
the groups into a single consolidated elected taxpayer group or	5753
permit any exclusion under division (C) of this section of taxable	5754
gross receipts between members of the two groups. Division (A)(3)	5755
of this section applies with respect to the elections described in	5756
this division.	5757

(2) The group makes the election to be treated as a	5758
consolidated elected taxpayer in the manner prescribed under	5759
division (D) of this section.	5760

(3) Subject to review and audit by the tax commissioner, the	5761
group agrees that all of the following apply:	5762

(a) The group shall file reports as a single taxpayer for at	5763
least the next eight calendar quarters following the election so	5764
long as at least two or more of the members of the group meet the	5765
requirements of division (A)(1) of this section.	5766

(b) Before the expiration of the eighth such calendar	5767
quarter, the group shall notify the commissioner if it elects to	5768
cancel its designation as a consolidated elected taxpayer. If the	5769
group does not so notify the tax commissioner, the election	5770
remains in effect for another eight calendar quarters.	5771

(c) If, at any time during any of those eight calendar	5772
quarters following the election, a former member of the group no	5773
longer meets the requirements under division (A)(1) of this	5774
section, that member shall report and pay the tax imposed under	5775
this chapter separately, as a member of a combined taxpayer, or,	5776
if the former member satisfies such requirements with respect to	5777
another consolidated elected group, as a member of that	5778
consolidated elected group.	5779

(d) The group agrees to the application of division (B) of	5780
this section.	5781

(B) A group of persons making the election under this section	5782
shall report and pay tax on all of the group's taxable gross	5783
receipts even if substantial nexus with this state does not exist	5784
for one or more persons in the group.	5785

(C)(1)(a) Members of a consolidated elected taxpayer group	5786
shall exclude gross receipts among persons included in the	5787
consolidated elected taxpayer group.	5788

(b) Subject to divisions (C)(1)(c) and (C)(2) of this	5789
section, nothing in this section shall have the effect of	5790
requiring a consolidated elected taxpayer group to include gross	5791
receipts received by a person enumerated in divisions (E)(2) to	5792
(10)(4) of section 5751.01 of the Revised Code if that person is a	5793
member of the group pursuant to the elections made by the group	5794
under division (A)(1) of this section.	5795

(c)(i) As used in division (C)(1)(c) of this section, "dealer	5796
transfer" means a transfer of property that satisfies both of the	5797
following: (I) the property is directly transferred by any means	5798
from one member of the group to another member of the group that	5799
is a dealer in intangibles but is not a qualifying dealer as	5800
defined in section 5707.031 of the Revised Code; and (II) the	5801
property is subsequently delivered by the dealer in intangibles to	5802
a person that is not a member of the group.	5803

(ii) In the event of a dealer transfer, a consolidated	5804
elected taxpayer group shall not exclude, under division (C) of	5805
this section, gross receipts from the transfer described in	5806
division (C)(1)(c)(i)(I) of this section.	5807

(2) Gross receipts related to the sale or transmission of	5808
electricity through the use of an intermediary regional	5809
transmission organization approved by the federal energy	5810
regulatory commission shall be excluded from taxable gross	5811
receipts under division (C)(1) of this section if all other	5812
requirements of that division are met, even if the receipts are	5813
from and to the same member of the group.	5814

(D) To make the election to be a consolidated elected	5815
taxpayer, a group of persons shall notify the tax commissioner of	5816
the election in the manner prescribed by the commissioner and pay	5817
the commissioner a registration fee equal to the lesser of two	5818
hundred dollars or twenty dollars for each person in the group. No	5819
additional fee shall be imposed for the addition of new members to	5820
the group once the group has remitted a fee in the amount of two	5821
hundred dollars. The election shall be made and the fee paid	5822
before the beginning of the first calendar quarter to which the	5823
election applies. The fee shall be collected and used in the same	5824
manner as provided in section 5751.04 of the Revised Code.	5825

The election shall be made on a form prescribed by the tax	5826
commissioner for that purpose and shall be signed by one or more	5827
individuals with authority, separately or together, to make a	5828
binding election on behalf of all persons in the group.	5829

Any person acquired or formed after the filing of the	5830
registration shall be included in the group if the person meets	5831
the requirements of division (A)(1) of this section, and the group	5832
shall notify the tax commissioner of any additions to the group	5833
with the next tax return it files with the commissioner.	5834

Sec. 5751.012.  (A) All persons, other than persons	5835
enumerated in divisions (E)(2) to (10)(4) of section 5751.01 of	5836
the Revised Code, having more than fifty per cent of the value of	5837
their ownership interest owned or controlled, directly or	5838
constructively through related interests, by common owners during	5839
all or any portion of the tax period, together with the common	5840
owners, shall be members of a combined taxpayer if those persons	5841
are not members of a consolidated elected taxpayer pursuant to an	5842
election under section 5751.011 of the Revised Code.	5843

(B) A combined taxpayer shall register, file returns, and pay	5844
taxes under this chapter as a single taxpayer.	5845

(C) A combined taxpayer shall neither exclude taxable gross	5846
receipts between its members nor from others that are not members.	5847

(D) A combined taxpayer shall pay to the tax commissioner a	5848
registration fee equal to the lesser of two hundred dollars or	5849
twenty dollars for each person in the group. No additional fee	5850
shall be imposed for the addition of new members to the group once	5851
the group has remitted a fee in the amount of two hundred dollars.	5852
The fee shall be timely paid before the later of the beginning of	5853
the first calendar quarter or November 15, 2005. The fee shall be	5854
collected and used in the same manner as provided in section	5855
5751.04 of the Revised Code.	5856

Any person acquired or formed after the filing of the	5857
registration shall be included in the group if the person meets	5858
the requirements of division (A) of this section, and the group	5859
must notify the tax commissioner of any additions with the next	5860
quarterly tax return it files with the commissioner.	5861

Sec. 5751.54.  (A) Any term used in this section has the same	5862
meaning as in section 122.85 of the Revised Code.	5863

(B) There is allowed a refundable credit against the tax	5864
imposed by section 5751.02 of the Revised Code for any person that	5865
is the certificate owner of a tax credit certificate issued under	5866
section 122.85 of the Revised Code. The credit shall be claimed	5867
for the tax period in which the certificate is issued by the	5868
director of development services. The credit amount equals the	5869
amount stated in the certificate. The credit shall be claimed in	5870
the order required under section 5751.98 of the Revised Code. If	5871
the credit amount exceeds the tax otherwise due under section	5872
5751.02 of the Revised Code after deducting all other credits in	5873
that order, the excess shall be refunded.	5874

(C) Nothing in this section allows a person to claim more	5875
than one credit per tax credit-eligible production.	5876

Sec. 5751.98.  (A) To provide a uniform procedure for	5877
calculating the amount of tax due under this chapter, a taxpayer	5878
shall claim any credits to which it is entitled in the following	5879
order:	5880

(1) The nonrefundable jobs retention credit under division	5881
(B) of section 5751.50 of the Revised Code;	5882

(2) The nonrefundable credit for qualified research expenses	5883
under division (B) of section 5751.51 of the Revised Code;	5884

(3) The nonrefundable credit for a borrower's qualified	5885
research and development loan payments under division (B) of	5886
section 5751.52 of the Revised Code;	5887

(4) The nonrefundable credit for calendar years 2010 to 2029	5888
for unused net operating losses under division (B) of section	5889
5751.53 of the Revised Code;	5890

(5) The refundable motion picture production credit for	5891
calendar year 2030 for unused net operating losses under division	5892
(C) of section 5751.535751.54 of the Revised Code;	5893

(6) The refundable jobs creation credit or job retention	5894
credit under division (A) of section 5751.50 of the Revised Code;	5895

(7) The refundable credit for calendar year 2030 for unused	5896
net operating losses under division (C) of section 5751.53 of the	5897
Revised Code.	5898

(B) For any credit except the refundable credits enumerated	5899
in this section, the amount of the credit for a tax period shall	5900
not exceed the tax due after allowing for any other credit that	5901
precedes it in the order required under this section. Any excess	5902
amount of a particular credit may be carried forward if authorized	5903
under the section creating the credit.	5904

Section 2.  That existing sections 122.17, 122.171, 122.85,	5905
145.114, 145.116, 149.311, 150.01, 150.07, 150.10, 715.013,	5906
742.114, 742.116, 3307.152, 3307.154, 3309.157, 3309.159,	5907
5505.068, 5505.0610, 5703.052, 5703.053, 5703.70, 5707.03,	5908
5709.76, 5711.22, 5725.02, 5725.14, 5725.16, 5725.26, 5725.33,	5909
5733.01, 5733.02, 5733.021, 5733.06, 5747.01, 5747.98, 5751.01,	5910
5751.011, 5751.012, and 5751.98 of the Revised Code are hereby	5911
repealed.	5912

Section 3. The amendment by this act of division (E) of	5913
section 5751.01 and sections 5751.011 and 5751.012 of the Revised	5914
Code applies to tax periods beginning on or after January 1, 2014.	5915

Section 4. The General Assembly, applying the principle	5916
stated in division (B) of section 1.52 of the Revised Code that	5917
amendments are to be harmonized if reasonably capable of	5918
simultaneous operation, finds that the following sections,	5919
presented in this act as composites of the sections as amended by	5920
the acts indicated, are the resulting versions of the sections in	5921
effect prior to the effective date of the sections as presented in	5922
this act:	5923

Section 5747.01 of the Revised Code as amended by both Am.	5924
Sub. H.B. 153 and Am. H.B. 167 of the 129th General Assembly.	5925

Section 5751.01 of the Revised Code as amended by both Am.	5926
Sub. H.B. 153 and Sub. H.B. 277 of the 129th General Assembly.	5927