As Pending in the House Ways and Means Committee(L# 2448-1)

129th General Assembly Regular Session 2011-2012

Sub. 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 5726.57,

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, to

14

provide that such institutions and dealers in

15

intangibles are no longer subject to the

16

corporation franchise tax or dealers in

17

intangibles tax after 2013, and to require dealers

18

in intangibles to pay the commercial activity tax

19

after 2013.

20

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

Section 1. That sections 122.17, 122.171, 122.85, 145.114,	21
145.116, 149.311, 150.01, 150.07, 150.10, 715.013, 742.114,	22
742.116, 3307.152, 3307.154, 3309.157, 3309.159, 5505.068,	23
5505.0610, 5703.052, 5703.053, 5703.70, 5707.03, 5709.76, 5711.22,	24
5725.02, 5725.14, 5725.16, 5725.26, 5725.33, 5733.01, 5733.02,	25
5733.021, 5733.06, 5747.01, 5747.98, 5751.01, 5751.011, 5751.012,	26
and 5751.98 be amended and sections 5701.12, 5726.01, 5726.02,	27
5726.03, 5726.04, 5726.05, 5726.06, 5726.07, 5726.08, 5726.10,	28
5726.20, 5726.21, 5726.30, 5726.31, 5726.32, 5726.33, 5726.36,	29
5726.40, 5726.41, 5726.42, 5726.43, 5726.50, 5726.51, 5726.52,	30
5726.53, 5726.54, 5726.55, 5726.56, 5726.57, 5726.98, 5726.99,	31
5747.65, and 5751.54 of the Revised Code be enacted to read as	32
follows:	33

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

34

(1) "Income tax revenue" means the total amount withheld	35
under section 5747.06 of the Revised Code by the taxpayer during	36
the taxable year, or during the calendar year that includes the	37
tax period, from the compensation of each employee employed in the	38
project to the extent the employee's withholdings are not used to	39
determine the credit under section 122.171 of the Revised Code.	40
"Income tax revenue" excludes amounts withheld before the day the	41
taxpayer becomes eligible for the credit.	42

(2) "Baseline income tax revenue" means income tax revenue	43
except that the applicable withholding period is the twelve months	44
immediately preceding the date the tax credit authority approves	45
the taxpayer's application multiplied by the sum of one plus an	46
annual pay increase factor to be determined by the tax credit	47
authority. If the taxpayer becomes eligible for the credit after	48
the first day of the taxpayer's taxable year or after the first	49
day of the calendar year that includes the tax period, the	50
taxpayer's baseline income tax revenue for the first such taxable	51
or calendar year of credit eligibility shall be reduced in	52
proportion to the number of days during the taxable or calendar	53
year for which the taxpayer was not eligible for the credit. For	54
subsequent taxable or calendar years, "baseline income tax	55
revenue" equals the unreduced baseline income tax revenue for the	56
preceding taxable or calendar year multiplied by the sum of one	57
plus the pay increase factor.	58

(3) "Excess income tax revenue" means income tax revenue	59
minus baseline income tax revenue.	60

(B) The tax credit authority may make grants under this	61
section to foster job creation in this state. Such a grant shall	62
take the form of a refundable credit allowed against the tax	63
imposed by section 5725.18, 5726.02, 5729.03, 5733.06, or 5747.02	64
or levied under Chapter 5751. of the Revised Code. The credit	65
shall be claimed for the taxable years or tax periods specified in	66
the taxpayer's agreement with the tax credit authority under	67
division (D) of this section. With respect to taxes imposed under	68
section 5726.02, 5733.06, or 5747.02 or Chapter 5751. of the	69
Revised Code, the credit shall be claimed in the order required	70
under section 5726.98, 5733.98, 5747.98, or 5751.98 of the	71
Revised Code. The amount of the credit available for a taxable	72
year or for a calendar year that includes a tax period equals the	73
excess income tax revenue for that year multiplied by the	74
percentage specified in the agreement with the tax credit	75
authority. Any credit granted under this section against the tax	76
imposed by section 5733.06 or 5747.02 of the Revised Code, to the	77
extent not fully utilized against such tax for taxable years	78
ending prior to 2008, shall automatically be converted without any	79
action taken by the tax credit authority to a credit against the	80
tax levied under Chapter 5751. of the Revised Code for tax periods	81
beginning on or after July 1, 2008, provided that the person to	82
whom the credit was granted is subject to such tax. The converted	83
credit shall apply to those calendar years in which the remaining	84
taxable years specified in the agreement end.	85

(C) A taxpayer or potential taxpayer who proposes a project	86
to create new jobs in this state may apply to the tax credit	87
authority to enter into an agreement for a tax credit under this	88
section. The director of development services shall prescribe the	89
form of the application. After receipt of an application, the	90
authority may enter into an agreement with the taxpayer for a	91
credit under this section if it determines all of the following:	92

(1) The taxpayer's project will increase payroll and income	93
tax revenue;	94

(2) The taxpayer's project is economically sound and will	95
benefit the people of this state by increasing opportunities for	96
employment and strengthening the economy of this state;	97

(3) Receiving the tax credit is a major factor in the	98
taxpayer's decision to go forward with the project.	99

(D) An agreement under this section shall include all of the	100
following:	101

(1) A detailed description of the project that is the subject	102
of the agreement;	103

(2) The term of the tax credit, which shall not exceed	104
fifteen years, and the first taxable year, or first calendar year	105
that includes a tax period, for which the credit may be claimed;	106

(3) A requirement that the taxpayer shall maintain operations	107
at the project location for at least the greater of seven years or	108
the term of the credit plus three years;	109

(4) The percentage, as determined by the tax credit	110
authority, of excess income tax revenue that will be allowed as	111
the amount of the credit for each taxable year or for each	112
calendar year that includes a tax period;	113

(5) The pay increase factor to be applied to the taxpayer's	114
baseline income tax revenue;	115

(6) A requirement that the taxpayer annually shall report to	116
the director of development services employment, tax withholding,	117
investment, and other information the director needs to perform	118
the director's duties under this section;	119

(7) A requirement that the director of development services	120
annually review the information reported under division (D)(6) of	121
this section and verify compliance with the agreement; if the	122
taxpayer is in compliance, a requirement that the director issue a	123
certificate to the taxpayer stating that the information has been	124
verified and identifying the amount of the credit that may be	125
claimed for the taxable or calendar year;	126

(8) A provision providing that the taxpayer may not relocate	127
a substantial number of employment positions from elsewhere in	128
this state to the project location unless the director of	129
development services determines that the legislative authority of	130
the county, township, or municipal corporation from which the	131
employment positions would be relocated has been notified by the	132
taxpayer of the relocation.	133

For purposes of this section, the movement of an employment	134
position from one political subdivision to another political	135
subdivision shall be considered a relocation of an employment	136
position unless the employment position in the first political	137
subdivision is replaced.	138

(E) If a taxpayer fails to meet or comply with any condition	139
or requirement set forth in a tax credit agreement, the tax credit	140
authority may amend the agreement to reduce the percentage or term	141
of the tax credit. The reduction of the percentage or term may	142
take effect in the current taxable or calendar year.	143

(F) Projects that consist solely of point-of-final-purchase	144
retail facilities are not eligible for a tax credit under this	145
section. If a project consists of both point-of-final-purchase	146
retail facilities and nonretail facilities, only the portion of	147
the project consisting of the nonretail facilities is eligible for	148
a tax credit and only the excess income tax revenue from the	149
nonretail facilities shall be considered when computing the amount	150
of the tax credit. If a warehouse facility is part of a	151
point-of-final-purchase retail facility and supplies only that	152
facility, the warehouse facility is not eligible for a tax credit.	153
Catalog distribution centers are not considered	154
point-of-final-purchase retail facilities for the purposes of this	155
division, and are eligible for tax credits under this section.	156

(G) Financial statements and other information submitted to	157
the department of development services or the tax credit authority	158
by an applicant or recipient of a tax credit under this section,	159
and any information taken for any purpose from such statements or	160
information, are not public records subject to section 149.43 of	161
the Revised Code. However, the chairperson of the authority may	162
make use of the statements and other information for purposes of	163
issuing public reports or in connection with court proceedings	164
concerning tax credit agreements under this section. Upon the	165
request of the tax commissioner or, if the applicant or recipient	166
is an insurance company, upon the request of the superintendent of	167
insurance, the chairperson of the authority shall provide to the	168
commissioner or superintendent any statement or information	169
submitted by an applicant or recipient of a tax credit in	170
connection with the credit. The commissioner or superintendent	171
shall preserve the confidentiality of the statement or	172
information.	173

(H) A taxpayer claiming a credit under this section shall	174
submit to the tax commissioner or, if the taxpayer is an insurance	175
company, to the superintendent of insurance, a copy of the	176
director of development'sdevelopment services' certificate of	177
verification under division (D)(7) of this section with the	178
taxpayer's tax report or return for the taxable year or for the	179
calendar year that includes the tax period. Failure to submit a	180
copy of the certificate with the report or return does not	181
invalidate a claim for a credit if the taxpayer submits a copy of	182
the certificate to the commissioner or superintendent within sixty	183
days after the commissioner or superintendent requests it.	184

(I) The director of development services, after consultation	185
with the tax commissioner and the superintendent of insurance and	186
in accordance with Chapter 119. of the Revised Code, shall adopt	187
rules necessary to implement this section. The rules may provide	188
for recipients of tax credits under this section to be charged	189
fees to cover administrative costs of the tax credit program. The	190
fees collected shall be credited to the tax incentive programs	191
operating fund created in section 122.174 of the Revised Code. At	192
the time the director gives public notice under division (A) of	193
section 119.03 of the Revised Code of the adoption of the rules,	194
the director shall submit copies of the proposed rules to the	195
chairpersons of the standing committees on economic development in	196
the senate and the house of representatives.	197

(J) For the purposes of this section, a taxpayer may include	198
a partnership, a corporation that has made an election under	199
subchapter S of chapter one of subtitle A of the Internal Revenue	200
Code, or any other business entity through which income flows as a	201
distributive share to its owners. A partnership, S-corporation, or	202
other such business entity may elect to pass the credit received	203
under this section through to the persons to whom the income or	204
profit of the partnership, S-corporation, or other entity is	205
distributed. The election shall be made on the annual report	206
required under division (D)(6) of this section. The election	207
applies to and is irrevocable for the credit for which the report	208
is submitted. If the election is made, the credit shall be	209
apportioned among those persons in the same proportions as those	210
in which the income or profit is distributed.	211

(K) If the director of development services determines that a	212
taxpayer who has received a credit under this section is not	213
complying with the requirement under division (D)(3) of this	214
section, the director shall notify the tax credit authority of the	215
noncompliance. After receiving such a notice, and after giving the	216
taxpayer an opportunity to explain the noncompliance, the tax	217
credit authority may require the taxpayer to refund to this state	218
a portion of the credit in accordance with the following:	219

(1) If the taxpayer maintained operations at the project	220
location for a period less than or equal to the term of the	221
credit, an amount not exceeding one hundred per cent of the sum of	222
any credits allowed and received under this section;	223

(2) If the taxpayer maintained operations at the project	224
location for a period longer than the term of the credit, but less	225
than the greater of seven years or the term of the credit plus	226
three years, an amount not exceeding seventy-five per cent of the	227
sum of any credits allowed and received under this section.	228

In determining the portion of the tax credit to be refunded	229
to this state, the tax credit authority shall consider the effect	230
of market conditions on the taxpayer's project and whether the	231
taxpayer continues to maintain other operations in this state.	232
After making the determination, the authority shall certify the	233
amount to be refunded to the tax commissioner or superintendent of	234
insurance, as appropriate. If the amount is certified to the	235
commissioner, the commissioner shall make an assessment for that	236
amount against the taxpayer under Chapter 5726., 5733., 5747., or	237
5751. of the Revised Code. If the amount is certified to the	238
superintendent, the superintendent shall make an assessment for	239
that amount against the taxpayer under Chapter 5725. or 5729. of	240
the Revised Code. The time limitations on assessments under those	241
chapters do not apply to an assessment under this division, but	242
the commissioner or superintendent, as appropriate, shall make the	243
assessment within one year after the date the authority certifies	244
to the commissioner or superintendent the amount to be refunded.	245

(L) On or before the first day of August each year, the	246
director of development services shall submit a report to the	247
governor, the president of the senate, and the speaker of the	248
house of representatives on the tax credit program under this	249
section. The report shall include information on the number of	250
agreements that were entered into under this section during the	251
preceding calendar year, a description of the project that is the	252
subject of each such agreement, and an update on the status of	253
projects under agreements entered into before the preceding	254
calendar year.	255

(M) There is hereby created the tax credit authority, which	256
consists of the director of development services and four other	257
members appointed as follows: the governor, the president of the	258
senate, and the speaker of the house of representatives each shall	259
appoint one member who shall be a specialist in economic	260
development; the governor also shall appoint a member who is a	261
specialist in taxation. Of the initial appointees, the members	262
appointed by the governor shall serve a term of two years; the	263
members appointed by the president of the senate and the speaker	264
of the house of representatives shall serve a term of four years.	265
Thereafter, terms of office shall be for four years. Initial	266
appointments to the authority shall be made within thirty days	267
after January 13, 1993. Each member shall serve on the authority	268
until the end of the term for which the member was appointed.	269
Vacancies shall be filled in the same manner provided for original	270
appointments. Any member appointed to fill a vacancy occurring	271
prior to the expiration of the term for which the member's	272
predecessor was appointed shall hold office for the remainder of	273
that term. Members may be reappointed to the authority. Members of	274
the authority shall receive their necessary and actual expenses	275
while engaged in the business of the authority. The director of	276
development services shall serve as chairperson of the authority,	277
and the members annually shall elect a vice-chairperson from among	278
themselves. Three members of the authority constitute a quorum to	279
transact and vote on the business of the authority. The majority	280
vote of the membership of the authority is necessary to approve	281
any such business, including the election of the vice-chairperson.	282

The director of development services may appoint a	283
professional employee of the department of development services to	284
serve as the director's substitute at a meeting of the authority.	285
The director shall make the appointment in writing. In the absence	286
of the director from a meeting of the authority, the appointed	287
substitute shall serve as chairperson. In the absence of both the	288
director and the director's substitute from a meeting, the	289
vice-chairperson shall serve as chairperson.	290

(N) For purposes of the credits granted by this section	291
against the taxes imposed under sections 5725.18 and 5729.03 of	292
the Revised Code, "taxable year" means the period covered by the	293
taxpayer's annual statement to the superintendent of insurance.	294

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

295

(1) "Capital investment project" means a plan of investment	296
at a project site for the acquisition, construction, renovation,	297
or repair of buildings, machinery, or equipment, or for	298
capitalized costs of basic research and new product development	299
determined in accordance with generally accepted accounting	300
principles, but does not include any of the following:	301

(a) Payments made for the acquisition of personal property	302
through operating leases;	303

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

304

(c) Payments made to a related member as defined in section	305
5733.042 of the Revised Code or to a consolidated elected taxpayer	306
or a combined taxpayer as defined in section 5751.01 of the	307
Revised Code.	308

(2) "Eligible business" means a taxpayer and its related	309
members with Ohio operations satisfying all of the following:	310

(a) The taxpayer employs at least five hundred full-time	311
equivalent employees or has an annual payroll of at least	312
thirty-five million dollars at the time the tax credit authority	313
grants the tax credit under this section;	314

(b) The taxpayer makes or causes to be made payments for the	315
capital investment project of one of the following:	316

(i) If the taxpayer is engaged at the project site primarily	317
as a manufacturer, at least fifty million dollars in the aggregate	318
at the project site during a period of three consecutive calendar	319
years, including the calendar year that includes a day of the	320
taxpayer's taxable year or tax period with respect to which the	321
credit is granted;	322

(ii) If the taxpayer is engaged at the project site primarily	323
in significant corporate administrative functions, as defined by	324
the director of development services by rule, at least twenty	325
million dollars in the aggregate at the project site during a	326
period of three consecutive calendar years including the calendar	327
year that includes a day of the taxpayer's taxable year or tax	328
period with respect to which the credit is granted;	329

(iii) If the taxpayer is applying to enter into an agreement	330
for a tax credit authorized under division (B)(3) of this section,	331
at least five million dollars in the aggregate at the project site	332
during a period of three consecutive calendar years, including the	333
calendar year that includes a day of the taxpayer's taxable year	334
or tax period with respect to which the credit is granted.	335

(c) The taxpayer had a capital investment project reviewed	336
and approved by the tax credit authority as provided in divisions	337
(C), (D), and (E) of this section.	338

(3) "Full-time equivalent employees" means the quotient	339
obtained by dividing the total number of hours for which employees	340
were compensated for employment in the project by two thousand	341
eighty. "Full-time equivalent employees" shall exclude hours that	342
are counted for a credit under section 122.17 of the Revised Code.	343

(4) "Income tax revenue" means the total amount withheld	344
under section 5747.06 of the Revised Code by the taxpayer during	345
the taxable year, or during the calendar year that includes the	346
tax period, from the compensation of all employees employed in the	347
project whose hours of compensation are included in calculating	348
the number of full-time equivalent employees.	349

(5) "Manufacturer" has the same meaning as in section	350
5739.011 of the Revised Code.	351

(6) "Project site" means an integrated complex of facilities	352
in this state, as specified by the tax credit authority under this	353
section, within a fifteen-mile radius where a taxpayer is	354
primarily operating as an eligible business.	355

(7) "Related member" has the same meaning as in section	356
5733.042 of the Revised Code as that section existed on the	357
effective date of its amendment by Am. Sub. H.B. 215 of the 122nd	358
general assembly, September 29, 1997.	359

(8) "Taxable year" includes, in the case of a domestic or	360
foreign insurance company, the calendar year ending on the	361
thirty-first day of December preceding the day the superintendent	362
of insurance is required to certify to the treasurer of state	363
under section 5725.20 or 5729.05 of the Revised Code the amount of	364
taxes due from insurance companies.	365

(B) The tax credit authority created under section 122.17 of	366
the Revised Code may grant tax credits under this section for the	367
purpose of fostering job retention in this state. Upon application	368
by an eligible business and upon consideration of the	369
recommendation of the director of budget and management, tax	370
commissioner, the superintendent of insurance in the case of an	371
insurance company, and director of development services under	372
division (C) of this section, the tax credit authority may grant	373
the following credits against the tax imposed by section 5725.18,	374
5726.02, 5729.03, 5733.06, 5747.02, or 5751.02 of the Revised	375
Code:	376

(1) A nonrefundable credit to an eligible business;

377

(2) A refundable credit to an eligible business meeting the	378
following conditions, provided that the director of budget and	379
management, tax commissioner, superintendent of insurance in the	380
case of an insurance company, and director of development services	381
have recommended the granting of the credit to the tax credit	382
authority before July 1, 2011:	383

(a) The business retains at least one thousand full-time	384
equivalent employees at the project site.	385

(b) The business makes or causes to be made payments for a	386
capital investment project of at least twenty-five million dollars	387
in the aggregate at the project site during a period of three	388
consecutive calendar years, including the calendar year that	389
includes a day of the business' taxable year or tax period with	390
respect to which the credit is granted.	391

(c) In 2010, the business received a written offer of	392
financial incentives from another state of the United States that	393
the director determines to be sufficient inducement for the	394
business to relocate the business' operations from this state to	395
that state.	396

(3) A refundable credit to an eligible business with a total	397
annual payroll of at least twenty million dollars, provided that	398
the tax credit authority grants the tax credit on or after July 1,	399
2011, and before January 1, 2014.	400

The credits authorized in divisions (B)(1), (2), and (3) of	401
this section may be granted for a period up to fifteen taxable	402
years or, in the case of the tax levied by section 5751.02 of the	403
Revised Code, for a period of up to fifteen calendar years. The	404
credit amount for a taxable year or a calendar year that includes	405
the tax period for which a credit may be claimed equals the income	406
tax revenue for that year multiplied by the percentage specified	407
in the agreement with the tax credit authority. The percentage may	408
not exceed seventy-five per cent. The credit shall be claimed in	409
the order required under section 5725.98, 5726.98, 5729.98,	410
5733.98, 5747.98, or 5751.98 of the Revised Code. In determining	411
the percentage and term of the credit, the tax credit authority	412
shall consider both the number of full-time equivalent employees	413
and the value of the capital investment project. The credit amount	414
may not be based on the income tax revenue for a calendar year	415
before the calendar year in which the tax credit authority	416
specifies the tax credit is to begin, and the credit shall be	417
claimed only for the taxable years or tax periods specified in the	418
eligible business' agreement with the tax credit authority. In no	419
event shall the credit be claimed for a taxable year or tax period	420
terminating before the date specified in the agreement. Any credit	421
granted under this section against the tax imposed by section	422
5733.06 or 5747.02 of the Revised Code, to the extent not fully	423
utilized against such tax for taxable years ending prior to 2008,	424
shall automatically be converted without any action taken by the	425
tax credit authority to a credit against the tax levied under	426
Chapter 5751. of the Revised Code for tax periods beginning on or	427
after July 1, 2008, provided that the person to whom the credit	428
was granted is subject to such tax. The converted credit shall	429
apply to those calendar years in which the remaining taxable years	430
specified in the agreement end.	431

If a nonrefundable credit allowed under division (B)(1) of	432
this section for a taxable year or tax period exceeds the	433
taxpayer's tax liability for that year or period, the excess may	434
be carried forward for the three succeeding taxable or calendar	435
years, but the amount of any excess credit allowed in any taxable	436
year or tax period shall be deducted from the balance carried	437
forward to the succeeding year or period.	438

(C) A taxpayer that proposes a capital investment project to	439
retain jobs in this state may apply to the tax credit authority to	440
enter into an agreement for a tax credit under this section. The	441
director of development services shall prescribe the form of the	442
application. After receipt of an application, the authority shall	443
forward copies of the application to the director of budget and	444
management, the tax commissioner, the superintendent of insurance	445
in the case of an insurance company, and the director of	446
development services, each of whom shall review the application to	447
determine the economic impact the proposed project would have on	448
the state and the affected political subdivisions and shall submit	449
a summary of their determinations and recommendations to the	450
authority.	451

(D) Upon review and consideration of the determinations and	452
recommendations described in division (C) of this section, the tax	453
credit authority may enter into an agreement with the taxpayer for	454
a credit under this section if the authority determines all of the	455
following:	456

(1) The taxpayer's capital investment project will result in	457
the retention of employment in this state.	458

(2) The taxpayer is economically sound and has the ability to	459
complete the proposed capital investment project.	460

(3) The taxpayer intends to and has the ability to maintain	461
operations at the project site for at least the greater of (a) the	462
term of the credit plus three years, or (b) seven years.	463

(4) Receiving the credit is a major factor in the taxpayer's	464
decision to begin, continue with, or complete the project.	465

(5) If the taxpayer is applying to enter into an agreement	466
for a tax credit authorized under division (B)(3) of this section,	467
the taxpayer's capital investment project will be located in the	468
political subdivision in which the taxpayer maintains its	469
principal place of business.	470

(E) An agreement under this section shall include all of the	471
following:	472

(1) A detailed description of the project that is the subject	473
of the agreement, including the amount of the investment, the	474
period over which the investment has been or is being made, the	475
number of full-time equivalent employees at the project site, and	476
the anticipated income tax revenue to be generated.	477

(2) The term of the credit, the percentage of the tax credit,	478
the maximum annual value of tax credits that may be allowed each	479
year, and the first year for which the credit may be claimed.	480

(3) A requirement that the taxpayer maintain operations at	481
the project site for at least the greater of (a) the term of the	482
credit plus three years, or (b) seven years.	483

(4)(a) In the case of a credit granted under division (B)(1)	484
of this section, a requirement that the taxpayer retain at least	485
five hundred full-time equivalent employees at the project site	486
and within this state for the entire term of the credit, or a	487
requirement that the taxpayer maintain an annual payroll of at	488
least thirty-five million dollars for the entire term of the	489
credit;	490

(b) In the case of a credit granted under division (B)(2) of	491
this section, a requirement that the taxpayer retain at least one	492
thousand full-time equivalent employees at the project site and	493
within this state for the entire term of the credit;	494

(c) In the case of a credit granted under division (B)(3) of	495
this section, either of the following:	496

(i) A requirement that the taxpayer retain at least five	497
hundred full-time equivalent employees at the project site and	498
within this state for the entire term of the credit and a	499
requirement that the taxpayer maintain an annual payroll of at	500
least twenty million dollars for the entire term of the credit;	501

(ii) A requirement that the taxpayer maintain an annual	502
payroll of at least thirty-five million dollars for the entire	503
term of the credit.	504

(5) A requirement that the taxpayer annually report to the	505
director of development services employment, tax withholding,	506
capital investment, and other information the director needs to	507
perform the director's duties under this section.	508

(6) A requirement that the director of development services	509
annually review the annual reports of the taxpayer to verify the	510
information reported under division (E)(5) of this section and	511
compliance with the agreement. Upon verification, the director	512
shall issue a certificate to the taxpayer stating that the	513
information has been verified and identifying the amount of the	514
credit for the taxable year or calendar year that includes the tax	515
period. In determining the number of full-time equivalent	516
employees, no position shall be counted that is filled by an	517
employee who is included in the calculation of a tax credit under	518
section 122.17 of the Revised Code.	519

(7) A provision providing that the taxpayer may not relocate	520
a substantial number of employment positions from elsewhere in	521
this state to the project site unless the director of development	522
services determines that the taxpayer notified the legislative	523
authority of the county, township, or municipal corporation from	524
which the employment positions would be relocated.	525

For purposes of this section, the movement of an employment	526
position from one political subdivision to another political	527
subdivision shall be considered a relocation of an employment	528
position unless the movement is confined to the project site. The	529
transfer of an employment position from one political subdivision	530
to another political subdivision shall not be considered a	531
relocation of an employment position if the employment position in	532
the first political subdivision is replaced by another employment	533
position.	534

(8) A waiver by the taxpayer of any limitations periods	535
relating to assessments or adjustments resulting from the	536
taxpayer's failure to comply with the agreement.	537

(F) If a taxpayer fails to meet or comply with any condition	538
or requirement set forth in a tax credit agreement, the tax credit	539
authority may amend the agreement to reduce the percentage or term	540
of the credit. The reduction of the percentage or term may take	541
effect in the current taxable or calendar year.	542

(G) Financial statements and other information submitted to	543
the department of development services or the tax credit authority	544
by an applicant for or recipient of a tax credit under this	545
section, and any information taken for any purpose from such	546
statements or information, are not public records subject to	547
section 149.43 of the Revised Code. However, the chairperson of	548
the authority may make use of the statements and other information	549
for purposes of issuing public reports or in connection with court	550
proceedings concerning tax credit agreements under this section.	551
Upon the request of the tax commissioner, or the superintendent of	552
insurance in the case of an insurance company, the chairperson of	553
the authority shall provide to the commissioner or superintendent	554
any statement or other information submitted by an applicant for	555
or recipient of a tax credit in connection with the credit. The	556
commissioner or superintendent shall preserve the confidentiality	557
of the statement or other information.	558

(H) A taxpayer claiming a tax credit under this section shall	559
submit to the tax commissioner or, in the case of an insurance	560
company, to the superintendent of insurance, a copy of the	561
director of development'sdevelopment services' certificate of	562
verification under division (E)(6) of this section with the	563
taxpayer's tax report or return for the taxable year or for the	564
calendar year that includes the tax period. Failure to submit a	565
copy of the certificate with the report or return does not	566
invalidate a claim for a credit if the taxpayer submits a copy of	567
the certificate to the commissioner or superintendent within sixty	568
days after the commissioner or superintendent requests it.	569

(I) For the purposes of this section, a taxpayer may include	570
a partnership, a corporation that has made an election under	571
subchapter S of chapter one of subtitle A of the Internal Revenue	572
Code, or any other business entity through which income flows as a	573
distributive share to its owners. A partnership, S-corporation, or	574
other such business entity may elect to pass the credit received	575
under this section through to the persons to whom the income or	576
profit of the partnership, S-corporation, or other entity is	577
distributed. The election shall be made on the annual report	578
required under division (E)(5) of this section. The election	579
applies to and is irrevocable for the credit for which the report	580
is submitted. If the election is made, the credit shall be	581
apportioned among those persons in the same proportions as those	582
in which the income or profit is distributed.	583

(J) If the director of development services determines that a	584
taxpayer that received a tax credit under this section is not	585
complying with the requirement under division (E)(3) of this	586
section, the director shall notify the tax credit authority of the	587
noncompliance. After receiving such a notice, and after giving the	588
taxpayer an opportunity to explain the noncompliance, the	589
authority may terminate the agreement and require the taxpayer to	590
refund to the state all or a portion of the credit claimed in	591
previous years, as follows:	592

(1) If the taxpayer maintained operations at the project site	593
for less than or equal to the term of the credit, an amount not to	594
exceed one hundred per cent of the sum of any tax credits allowed	595
and received under this section.	596

(2) If the taxpayer maintained operations at the project site	597
longer than the term of the credit, but less than the greater of	598
(a) the term of the credit plus three years, or (b) seven years,	599
the amount required to be refunded shall not exceed seventy-five	600
per cent of the sum of any tax credits allowed and received under	601
this section.	602

In determining the portion of the credit to be refunded to	603
this state, the authority shall consider the effect of market	604
conditions on the taxpayer's project and whether the taxpayer	605
continues to maintain other operations in this state. After making	606
the determination, the authority shall certify the amount to be	607
refunded to the tax commissioner or the superintendent of	608
insurance. If the taxpayer is not an insurance company, the	609
commissioner shall make an assessment for that amount against the	610
taxpayer under Chapter 5726., 5733., 5747., or 5751. of the	611
Revised Code. If the taxpayer is an insurance company, the	612
superintendent of insurance shall make an assessment under section	613
5725.222 or 5729.102 of the Revised Code. The time limitations on	614
assessments under those chapters and sections do not apply to an	615
assessment under this division, but the commissioner or	616
superintendent shall make the assessment within one year after the	617
date the authority certifies to the commissioner or superintendent	618
the amount to be refunded.	619

(K) The director of development services, after consultation	620
with the tax commissioner and the superintendent of insurance and	621
in accordance with Chapter 119. of the Revised Code, shall adopt	622
rules necessary to implement this section. The rules may provide	623
for recipients of tax credits under this section to be charged	624
fees to cover administrative costs of the tax credit program. The	625
fees collected shall be credited to the tax incentive programs	626
operating fund created in section 122.174 of the Revised Code. At	627
the time the director gives public notice under division (A) of	628
section 119.03 of the Revised Code of the adoption of the rules,	629
the director shall submit copies of the proposed rules to the	630
chairpersons of the standing committees on economic development in	631
the senate and the house of representatives.	632

(L) On or before the first day of August of each year, the	633
director of development services shall submit a report to the	634
governor, the president of the senate, and the speaker of the	635
house of representatives on the tax credit program under this	636
section. The report shall include information on the number of	637
agreements that were entered into under this section during the	638
preceding calendar year, a description of the project that is the	639
subject of each such agreement, and an update on the status of	640
projects under agreements entered into before the preceding	641
calendar year.	642

(M)(1) The aggregate amount of tax credits issued under	643
division (B)(1) of this section during any calendar year for	644
capital investment projects reviewed and approved by the tax	645
credit authority may not exceed the following amounts:	646

(a) For 2010, thirteen million dollars;

647

(b) For 2011 through 2023, the amount of the limit for the	648
preceding calendar year plus thirteen million dollars;	649

(c) For 2024 and each year thereafter, one hundred	650
ninety-five million dollars.	651

(2) The aggregate amount of tax credits authorized under	652
divisions (B)(2) and (3) of this section and allowed to be claimed	653
by taxpayers in any calendar year for capital improvement projects	654
reviewed and approved by the tax credit authority in 2011, 2012,	655
and 2013 combined shall not exceed twenty-five million dollars. An	656
amount equal to the aggregate amount of credits first authorized	657
in calendar year 2011, 2012, and 2013 may be claimed over the	658
ensuing period up to fifteen years, subject to the terms of	659
individual tax credit agreements.	660

The limitations in division (M) of this section do not apply	661
to credits for capital investment projects approved by the tax	662
credit authority before July 1, 2009.	663

(N) Notwithstanding any contrary provision of the agreement	664
between the eligible business and the tax credit authority, any	665
credit granted under this section against the tax imposed by	666
section 5725.18, 5729.03, 5733.06, 5747.02, or 5751.02 of the	667
Revised Code to an eligible business, at the election of the	668
eligible business and without any action by the tax credit	669
authority, may be shared by the taxpayer or any related member or	670
members that comprise the eligible business, which taxpayer or	671
related members may claim the credit against the taxes imposed by	672
section 5725.18, 5726.02, 5729.03, 5733.06, 5747.02, or 5751.02 of	673
the Revised Code. The credits may be allocated among the taxpayer	674
and related members in such manner as the eligible business	675
elects. This division applies to credits granted before, on, or	676
after the effective date of H.B. 510 of the 129th general	677
assembly. Credits granted before that effective date that are	678
shared and allocated under this division may be claimed in those	679
calendar years in which the remaining taxable years specified in	680
the agreement end.	681

Sec. 122.85. (A) As used in this section and in sections	682
5726.55, 5733.59 and, 5747.66, and 5751.54 of the Revised Code:	683

(1) "Tax credit-eligible production" means a motion picture	684
production certified by the director of development services under	685
division (B) of this section as qualifying the motion picture	686
company for a tax credit under section 5726.55, 5733.59 or,	687
5747.66, or 5751.54 of the Revised Code.	688

(2) "Certificate owner" means a motion picture company to	689
which a tax credit certificate is issued.	690

(3) "Motion picture company" means an individual,	691
corporation, partnership, limited liability company, or other form	692
of business association producing a motion picture.	693

(4) "Eligible production expenditures" means expenditures	694
made after June 30, 2009, for goods or services purchased and	695
consumed in this state by a motion picture company directly for	696
the production of a tax credit-eligible production.	697

"Eligible production expenditures" includes, but is not	698
limited to, expenditures for resident and nonresident cast and	699
crew wages, accommodations, costs of set construction and	700
operations, editing and related services, photography, sound	701
synchronization, lighting, wardrobe, makeup and accessories, film	702
processing, transfer, sound mixing, special and visual effects,	703
music, location fees, and the purchase or rental of facilities and	704
equipment.	705

(5) "Motion picture" means entertainment content created in	706
whole or in part within this state for distribution or exhibition	707
to the general public, including, but not limited to,	708
feature-length films; documentaries; long-form, specials,	709
miniseries, series, and interstitial television programming;	710
interactive web sites; sound recordings; videos; music videos;	711
interactive television; interactive games; videogamesvideo games;	712
commercials; any format of digital media; and any trailer, pilot,	713
video teaser, or demo created primarily to stimulate the sale,	714
marketing, promotion, or exploitation of future investment in	715
either a product or a motion picture by any means and media in any	716
digital media format, film, or videotape, provided the motion	717
picture qualifies as a motion picture. "Motion picture" does not	718
include any television program created primarily as news, weather,	719
or financial market reports, a production featuring current events	720
or sporting events, an awards show or other gala event, a	721
production whose sole purpose is fundraising, a long-form	722
production that primarily markets a product or service or in-house	723
corporate advertising or other similar productions, a production	724
for purposes of political advocacy, or any production for which	725
records are required to be maintained under 18 U.S.C. 2257 with	726
respect to sexually explicit content.	727

(B) For the purpose of encouraging and developing a strong	728
film industry in this state, the director of development services	729
may certify a motion picture produced by a motion picture company	730
as a tax credit-eligible production. In the case of a television	731
series, the director may certify the production of each episode of	732
the series as a separate tax credit-eligible production. A motion	733
picture company shall apply for certification of a motion picture	734
as a tax credit-eligible production on a form and in the manner	735
prescribed by the director. Each application shall include the	736
following information:	737

(1) The name and telephone number of the motion picture	738
production company;	739

(2) The name and telephone number of the company's contact	740
person;	741

(3) A list of the first preproduction date through the last	742
production date in Ohio;	743

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

744

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

745

(6) The total budgeted eligible production expenditures and	746
the percentage that amount is of the total production budget of	747
the motion picture;	748

(7) The total percentage of the motion picture being shot in	749
Ohio;	750

(8) The level of employment of cast and crew who reside in	751
Ohio;	752

(9) A synopsis of the script;

753

(10) The shooting script;

754

(11) A creative elements list that includes the names of the	755
principal cast and crew and the producer and director;	756

(12) Documentation of financial ability to undertake and	757
complete the motion picture;	758

(13) Estimated value of the tax credit based upon total	759
budgeted eligible production expenditures;	760

(14) Any other information considered necessary by the	761
director.	762

Within ninety days after certification of a motion picture as	763
a tax credit-eligible production, and any time thereafter upon the	764
director'sdirector of development services' request, the motion	765
picture company shall present to the director of development	766
sufficient evidence of reviewable progress. If the motion picture	767
company fails to present sufficient evidence, the director of	768
development may rescind the certification. Upon rescission, the	769
director shall notify the applicant that the certification has	770
been rescinded. Nothing in this section prohibits an applicant	771
whose tax credit-eligible production certification has been	772
rescinded from submitting a subsequent application for	773
certification.	774

(C)(1) A motion picture company whose motion picture has been	775
certified as a tax credit-eligible production may apply to the	776
director of development services on or after July 1, 2009, for a	777
refundable credit against the tax imposed by section 5726.02,	778
5733.06 or, 5747.02, or 5751.02 of the Revised Code. The director	779
in consultation with the tax commissioner shall prescribe the form	780
and manner of the application and the information or documentation	781
required to be submitted with the application.	782

The credit is determined as follows:

783

(a) If the total budgeted eligible production expenditures	784
stated in the application submitted under division (B) of this	785
section or the actual eligible production expenditures as finally	786
determined under division (D) of this section, whichever is least,	787
is less than or equal to three hundred thousand dollars, no credit	788
is allowed;	789

(b) If the total budgeted eligible production expenditures	790
stated in the application submitted under division (B) of this	791
section or the actual eligible production expenditures as finally	792
determined under division (D) of this section, whichever is least,	793
is greater than three hundred thousand dollars, the credit equals	794
the sum of the following, subject to the limitation in division	795
(C)(4) of this section:	796

(i) Twenty-five per cent of the least of such budgeted or	797
actual eligible expenditure amounts excluding budgeted or actual	798
eligible expenditures for resident cast and crew wages;	799

(ii) Thirty-five per cent of budgeted or actual eligible	800
expenditures for resident cast and crew wages.	801

(2) Except as provided in division (C)(4) of this section, if	802
the director of development services approves a motion picture	803
company's application for a credit, the director shall issue a tax	804
credit certificate to the company. The director in consultation	805
with the tax commissioner shall prescribe the form and manner of	806
issuing certificates. The director shall assign a unique	807
identifying number to each tax credit certificate and shall record	808
the certificate in a register devised and maintained by the	809
director for that purpose. The certificate shall state the amount	810
of the eligible production expenditures on which the credit is	811
based and the amount of the credit. Upon the issuance of a	812
certificate, the director shall certify to the tax commissioner	813
the name of the applicant, the amount of eligible production	814
expenditures shown on the certificate, and any other information	815
required by the rules adopted to administer this section.	816

(3) The amount of eligible production expenditures for which	817
a tax credit may be claimed is subject to inspection and	818
examination by the tax commissioner or employees of the	819
commissioner under section 5703.19 of the Revised Code and any	820
other applicable law. Once the eligible production expenditures	821
are finally determined under section 5703.19 of the Revised Code	822
and division (D) of this section, the credit amount is not subject	823
to adjustment unless the director determines an error was	824
committed in the computation of the credit amount.	825

(4) No tax credit certificate may be issued before the	826
completion of the tax credit-eligible production. For the fiscal	827
biennium beginning July 1, 2009, and ending June 30, 2011, not	828
more than thirty million dollars of tax credit may be allowed, of	829
which not more than ten million dollars of tax credit may be	830
allowed in the first year of the biennium. In succeeding fiscal	831
biennia, not more than twenty million dollars of tax credit may be	832
allowed per fiscal biennium, and not more than ten million dollars	833
may be allowed in the first year of the biennium. At any time, not	834
more than five million dollars of tax credit may be allowed per	835
tax credit-eligible production.	836

(D) A motion picture company whose motion picture has been	837
certified as a tax credit-eligible production shall engage, at the	838
company's expense, an independent certified public accountant to	839
examine the company's production expenditures to identify the	840
expenditures that qualify as eligible production expenditures. The	841
certified public accountant shall issue a report to the company	842
and to the director of development services certifying the	843
company's eligible production expenditures and any other	844
information required by the director. Upon receiving and examining	845
the report, the director may disallow any expenditure the director	846
determines is not an eligible production expenditure. If the	847
director disallows an expenditure, the director shall issue a	848
written notice to the motion picture production company stating	849
that the expenditure is disallowed and the reason for the	850
disallowance. Upon examination of the report and disallowance of	851
any expenditures, the director shall determine finally the lesser	852
of the total budgeted eligible production expenditures stated in	853
the application submitted under division (B) of this section or	854
the actual eligible production expenditures for the purpose of	855
computing the amount of the credit.	856

(E) No credit shall be allowed under section 5726.55, 5733.59	857
or, 5747.66, or 5751.54 of the Revised Code unless the director	858
has reviewed the report and made the determination prescribed by	859
division (D) of this section.	860

(F) This state reserves the right to refuse the use of this	861
state's name in the credits of any tax credit-eligible motion	862
picture production.	863

(G)(1) The director of development services in consultation	864
with the tax commissioner shall adopt rules for the administration	865
of this section, including rules setting forth and governing the	866
criteria for determining whether a motion picture production is a	867
tax credit-eligible production; activities that constitute the	868
production of a motion picture; reporting sufficient evidence of	869
reviewable progress; expenditures that qualify as eligible	870
production expenditures; a competitive process for approving	871
credits; and consideration of geographic distribution of credits.	872
The rules shall be adopted under Chapter 119. of the Revised Code.	873

(2) The director may require a reasonable application fee to	874
cover administrative costs of the tax credit program. The fees	875
collected shall be credited to the motion picture tax credit	876
program operating fund, which is hereby created in the state	877
treasury. The motion picture tax credit program operating fund	878
shall consist of all grants, gifts, fees, and contributions made	879
to the director of development for marketing and promotion of the	880
motion picture industry within this state. The director of	881
development shall use money in the fund to pay expenses related to	882
the administration of the Ohio film office and the credit	883
authorized by this section and sections 5726.55., 5733.59 and,	884
5747.66, and 5751.54 of the Revised Code.	885

Sec. 145.114.  (A) As used in this section and in section	886
145.116 of the Revised Code:	887

(1) "Agent" means a dealer, as defined in section 1707.01 of	888
the Revised Code, who is licensed under sections 1707.01 to	889
1707.45 of the Revised Code or under comparable laws of another	890
state or of the United States.	891

(2) "Minority business enterprise" has the same meaning as in	892
section 122.71 of the Revised Code.	893

(3) "Ohio-qualified agent" means an agent designated as such	894
by the public employees retirement board.	895

(4) "Ohio-qualified investment manager" means an investment	896
manager designated as such by the public employees retirement	897
board.	898

(5) "Principal place of business" means an office in which	899
the agent regularly provides securities or investment advisory	900
services and solicits, meets with, or otherwise communicates with	901
clients.	902

(B) The public employees retirement board shall, for the	903
purposes of this section, designate an agent as an Ohio-qualified	904
agent if the agent meets all of the following requirements:	905

(1) The agent is subject to taxation under Chapter 5725.,	906
5726., 5733., or 5747., or 5751. of the Revised Code;	907

(2) The agent is authorized to conduct business in this	908
state;	909

(3) The agent maintains a principal place of business in this	910
state and employs at least five residents of this state.	911

(C) The public employees retirement board shall adopt and	912
implement a written policy to establish criteria and procedures	913
used to select agents to execute securities transactions on behalf	914
of the retirement system. The policy shall address each of the	915
following:	916

(1) Commissions charged by the agent, both in the aggregate	917
and on a per share basis;	918

(2) The execution speed and trade settlement capabilities of	919
the agent;	920

(3) The responsiveness, reliability, and integrity of the	921
agent;	922

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

923

(5) Any special capabilities of the agent.

924

(D)(1) The board shall, at least annually, establish a policy	925
with the goal to increase utilization by the board of	926
Ohio-qualified agents for the execution of domestic equity and	927
fixed income trades on behalf of the retirement system, when an	928
Ohio-qualified agent offers quality, services, and safety	929
comparable to other agents otherwise available to the board and	930
meets the criteria established under division (C) of this section.	931

(2) The board shall review, at least annually, the	932
performance of the agents that execute securities transactions on	933
behalf of the board.	934

(3) The board shall determine whether an agent is an	935
Ohio-qualified agent, meets the criteria established by the board	936
pursuant to division (C) of this section, and offers quality,	937
services, and safety comparable to other agents otherwise	938
available to the board. The board's determination shall be final.	939

(E) The board shall, at least annually, submit to the Ohio	940
retirement study council a report containing the following	941
information:	942

(1) The name of each agent designated as an Ohio-qualified	943
agent under this section;	944

(2) The name of each agent that executes securities	945
transactions on behalf of the board;	946

(3) The amount of equity and fixed-income trades that are	947
executed by Ohio-qualified agents, expressed as a percentage of	948
all equity and fixed-income trades that are executed by agents on	949
behalf of the board;	950

(4) The compensation paid to Ohio-qualified agents, expressed	951
as a percentage of total compensation paid to all agents that	952
execute securities transactions on behalf of the board;	953

(5) The amount of equity and fixed-income trades that are	954
executed by agents that are minority business enterprises,	955
expressed as a percentage of all equity and fixed-income trades	956
that are executed by agents on behalf of the board;	957

(6) Any other information requested by the Ohio retirement	958
study council regarding the board's use of agents.	959

Sec. 145.116. (A) The public employees retirement board	960
shall, for the purposes of this section, designate an investment	961
manager as an Ohio-qualified investment manager if the investment	962
manager meets all of the following requirements:	963

(1) The investment manager is subject to taxation under	964
Chapter 5725., 5726., 5733., or 5747., or 5751. of the Revised	965
Code;	966

(2) The investment manager meets one of the following	967
requirements:	968

(a) Has its corporate headquarters or principal place of	969
business in this state;	970

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

971

(c) Has a principal place of business in this state and	972
employs at least 20 residents of this state.	973

(B)(1) The board shall, at least annually, establish a policy	974
with the goal to increase utilization by the board of	975
Ohio-qualified investment managers, when an Ohio-qualified	976
investment manager offers quality, services, and safety comparable	977
to other investment managers otherwise available to the board. The	978
policy shall also provide for the following:	979

(a) A process whereby the board can develop a list of	980
Ohio-qualified investment managers and their investment products;	981

(b) A process whereby the board can give public notice to	982
Ohio-qualified investment managers of the board's search for an	983
investment manager that includes the board's search criteria.	984

(2) The board shall determine whether an investment manager	985
is an Ohio-qualified investment manager and whether the investment	986
manager offers quality, services, and safety comparable to other	987
investment managers otherwise available to the board. The board's	988
determination shall be final.	989

(C) The board shall, at least annually, submit to the Ohio	990
retirement study council a report containing the following	991
information:	992

(1) The name of each investment manager designated as an	993
Ohio-qualified investment manager under this section;	994

(2) The name of each investment manager with which the board	995
contracts;	996

(3) The amount of assets managed by Ohio-qualified investment	997
managers, expressed as a percentage of the total assets held by	998
the retirement system and as a percentage of assets managed by	999
investment managers with which the board has contracted;	1000

(4) The compensation paid to Ohio-qualified investment	1001
managers, expressed as a percentage of total compensation paid to	1002
all investment managers with which the board has contracted;	1003

(5) Any other information requested by the Ohio retirement	1004
study council regarding the board's use of investment managers.	1005

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

1006

(1) "Historic building" means a building, including its	1007
structural components, that is located in this state and that is	1008
either individually listed on the national register of historic	1009
places under 16 U.S.C. 470a, located in a registered historic	1010
district, and certified by the state historic preservation officer	1011
as being of historic significance to the district, or is	1012
individually listed as aan historic landmark designated by a	1013
local government certified under 16 U.S.C. 470a(c).	1014

(2) "Qualified rehabilitation expenditures" means	1015
expenditures paid or incurred during the rehabilitation period,	1016
and before and after that period as determined under 26 U.S.C. 47,	1017
by an owner of aan historic building to rehabilitate the	1018
building. "Qualified rehabilitation expenditures" includes	1019
architectural or engineering fees paid or incurred in connection	1020
with the rehabilitation, and expenses incurred in the preparation	1021
of nomination forms for listing on the national register of	1022
historic places. "Qualified rehabilitation expenditures" does not	1023
include any of the following:	1024

(a) The cost of acquiring, expanding, or enlarging aan	1025
historic building;	1026

(b) Expenditures attributable to work done to facilities	1027
related to the building, such as parking lots, sidewalks, and	1028
landscaping;	1029

(c) New building construction costs.

1030

(3) "Owner" of aan historic building means a person holding	1031
the fee simple interest in the building. "Owner" does not include	1032
the state or a state agency, or any political subdivision as	1033
defined in section 9.23 of the Revised Code.	1034

(4) "Certificate owner" means the owner of aan historic	1035
building to which a rehabilitation tax credit certificate was	1036
issued under this section.	1037

(5) "Registered historic district" means aan historic	1038
district listed in the national register of historic places under	1039
16 U.S.C. 470a, aan historic district designated by a local	1040
government certified under 16 U.S.C. 470a(c), or a local historic	1041
district certified under 36 C.F.R. 67.8 and 67.9.	1042

(6) "Rehabilitation" means the process of repairing or	1043
altering aan historic building or buildings, making possible an	1044
efficient use while preserving those portions and features of the	1045
building and its site and environment that are significant to its	1046
historic, architectural, and cultural values.	1047

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

1048

(a) If the rehabilitation initially was not planned to be	1049
completed in stages, a period chosen by the owner not to exceed	1050
twenty-four months during which rehabilitation occurs;	1051

(b) If the rehabilitation initially was planned to be	1052
completed in stages, a period chosen by the owner not to exceed	1053
sixty months during which rehabilitation occurs. Each stage shall	1054
be reviewed as a phase of a rehabilitation as determined under 26	1055
C.F.R. 1.48-12 or a successor to that section.	1056

(8) "State historic preservation officer" or "officer" means	1057
the state historic preservation officer appointed by the governor	1058
under 16 U.S.C. 470a.	1059

(B) The owner of aan historic building may apply to the	1060
director of development services for a rehabilitation tax credit	1061
certificate for qualified rehabilitation expenditures paid or	1062
incurred after April 4, 2007, for rehabilitation of aan historic	1063
building. The form and manner of filing such applications shall be	1064
prescribed by rule of the director of development. Each	1065
application shall state the amount of qualified rehabilitation	1066
expenditures the applicant estimates will be paid or incurred. The	1067
director may require applicants to furnish documentation of such	1068
estimates.	1069

The director, after consultation with the tax commissioner	1070
and in accordance with Chapter 119. of the Revised Code, shall	1071
adopt rules that establish all of the following:	1072

(1) Forms and procedures by which applicants may apply for	1073
rehabilitation tax credit certificates;	1074

(2) Criteria for reviewing, evaluating, and approving	1075
applications for certificates within the limitations under	1076
division (D) of this section, criteria for assuring that the	1077
certificates issued encompass a mixture of high and low qualified	1078
rehabilitation expenditures, and criteria for issuing certificates	1079
under division (C)(3)(b) of this section;	1080

(3) Eligibility requirements for obtaining a certificate	1081
under this section;	1082

(4) The form of rehabilitation tax credit certificates;

1083

(5) Reporting requirements and monitoring procedures;

1084

(6) Procedures and criteria for conducting cost-benefit	1085
analyses of historic buildings that are the subjects of	1086
applications filed under this section. The purpose of a	1087
cost-benefit analysis shall be to determine whether rehabilitation	1088
of the historic building will result in a net revenue gain in	1089
state and local taxes once the building is used.	1090

(7) Any other rules necessary to implement and administer	1091
this section.	1092

(C) The director of development services shall review the	1093
applications with the assistance of the state historic	1094
preservation officer and determine whether all of the following	1095
criteria are met:	1096

(1) That the building that is the subject of the application	1097
is aan historic building and the applicant is the owner of the	1098
building;	1099

(2) That the rehabilitation will satisfy standards prescribed	1100
by the United States secretary of the interior under 16 U.S.C.	1101
470, et seq., as amended, and 36 C.F.R. 67.7 or a successor to	1102
that section;	1103

(3) That receiving a rehabilitation tax credit certificate	1104
under this section is a major factor in:	1105

(a) The applicant's decision to rehabilitate the historic	1106
building; or	1107

(b) To increase the level of investment in such	1108
rehabilitation.	1109

An applicant shall demonstrate to the satisfaction of the	1110
state historic preservation officer and director of development	1111
services that the rehabilitation will satisfy the standards	1112
described in division (C)(2) of this section before the applicant	1113
begins the physical rehabilitation of the historic building.	1114

(D)(1) If the director of development services determines	1115
that an application meets the criteria in divisions (C)(1), (2),	1116
and (3) of this section, the director shall conduct a cost-benefit	1117
analysis for the historic building that is the subject of the	1118
application to determine whether rehabilitation of the historic	1119
building will result in a net revenue gain in state and local	1120
taxes once the building is used. The director shall consider the	1121
results of the cost-benefit analysis in determining whether to	1122
approve the application. The director shall also consider the	1123
potential economic impact and the regional distributive balance of	1124
the credits throughout the state. The director may approve an	1125
application only after completion of the cost-benefit analysis.	1126

(2) A rehabilitation tax credit certificate shall not be	1127
issued for an amount greater than the estimated amount furnished	1128
by the applicant on the application for such certificate and	1129
approved by the director. The director shall not approve more than	1130
a total of sixty million dollars of rehabilitation tax credits per	1131
fiscal year but the director may reallocate unused tax credits	1132
from a prior fiscal year for new applicants and such reallocated	1133
credits shall not apply toward the dollar limit of this division.	1134

(3) For rehabilitations with a rehabilitation period not	1135
exceeding twenty-four months as provided in division (A)(7)(a) of	1136
this section, a rehabilitation tax credit certificate shall not be	1137
issued before the rehabilitation of the historic building is	1138
completed.	1139

(4) For rehabilitations with a rehabilitation period not	1140
exceeding sixty months as provided in division (A)(7)(b) of this	1141
section, a rehabilitation tax credit certificate shall not be	1142
issued before a stage of rehabilitation is completed. After all	1143
stages of rehabilitation are completed, if the director cannot	1144
determine that the criteria in division (C) of this section are	1145
satisfied for all stages of rehabilitations, the director shall	1146
certify this finding to the tax commissioner, and any	1147
rehabilitation tax credits received by the applicant shall be	1148
repaid by the applicant and may be collected by assessment as	1149
unpaid tax by the commissioner.	1150

(5) The director of development services shall require the	1151
applicant to provide a third-party cost certification by a	1152
certified public accountant of the actual costs attributed to the	1153
rehabilitation of the historic building when qualified	1154
rehabilitation expenditures exceed two hundred thousand dollars.	1155

If an applicant whose application is approved for receipt of	1156
a rehabilitation tax credit certificate fails to provide to the	1157
director of development sufficient evidence of reviewable	1158
progress, including a viable financial plan, copies of final	1159
construction drawings, and evidence that the applicant has	1160
obtained all historic approvals within twelve months after the	1161
date the applicant received notification of approval, and if the	1162
applicant fails to provide evidence to the director of development	1163
that the applicant has secured and closed on financing for the	1164
rehabilitation within eighteen months after receiving notification	1165
of approval, the director may rescind the approval of the	1166
application. The director shall notify the applicant if the	1167
approval has been rescinded. Credits that would have been	1168
available to an applicant whose approval was rescinded shall be	1169
available for other qualified applicants. Nothing in this division	1170
prohibits an applicant whose approval has been rescinded from	1171
submitting a new application for a rehabilitation tax credit	1172
certificate.	1173

(E) Issuance of a certificate represents a finding by the	1174
director of development services of the matters described in	1175
divisions (C)(1), (2), and (3) of this section only; issuance of a	1176
certificate does not represent a verification or certification by	1177
the director of the amount of qualified rehabilitation	1178
expenditures for which a tax credit may be claimed under section	1179
5725.151, 5725.34, 5726.52, 5729.17, 5733.47, or 5747.76 of the	1180
Revised Code. The amount of qualified rehabilitation expenditures	1181
for which a tax credit may be claimed is subject to inspection and	1182
examination by the tax commissioner or employees of the	1183
commissioner under section 5703.19 of the Revised Code and any	1184
other applicable law. Upon the issuance of a certificate, the	1185
director shall certify to the tax commissioner, in the form and	1186
manner requested by the tax commissioner, the name of the	1187
applicant, the amount of qualified rehabilitation expenditures	1188
shown on the certificate, and any other information required by	1189
the rules adopted under this section.	1190

(F)(1) On or before the first day of April each year, the	1191
director of development services and tax commissioner jointly	1192
shall submit to the president of the senate and the speaker of the	1193
house of representatives a report on the tax credit program	1194
established under this section and sections 5725.151, 5725.34,	1195
5726.52, 5729.17, 5733.47, and 5747.76 of the Revised Code. The	1196
report shall present an overview of the program and shall include	1197
information on the number of rehabilitation tax credit	1198
certificates issued under this section during the preceding fiscal	1199
year, an update on the status of each historic building for which	1200
an application was approved under this section, the dollar amount	1201
of the tax credits granted under sections 5725.151, 5725.34,	1202
5726.52, 5729.17, 5733.47, and 5747.76 of the Revised Code, and	1203
any other information the director and commissioner consider	1204
relevant to the topics addressed in the report.	1205

(2) On or before December 1, 2015, the director of	1206
development services and tax commissioner jointly shall submit to	1207
the president of the senate and the speaker of the house of	1208
representatives a comprehensive report that includes the	1209
information required by division (F)(1) of this section and a	1210
detailed analysis of the effectiveness of issuing tax credits for	1211
rehabilitating historic buildings. The report shall be prepared	1212
with the assistance of an economic research organization jointly	1213
chosen by the director and commissioner.	1214

(G) There is hereby created in the state treasury the	1215
historic rehabilitation tax credit operating fund. The director of	1216
development services is authorized to charge reasonable	1217
application and other fees in connection with the administration	1218
of tax credits authorized by this section and sections 5725.151,	1219
5725.34, 5726.52, 5729.17, 5733.44, and 5747.76 of the Revised	1220
Code. Any such fees collected shall be credited to the fund and	1221
used to pay reasonable costs incurred by the department of	1222
development services in administering this section and sections	1223
5725.151, 5725.34, 5726.52, 5729.17, 5733.44, and 5747.76 of the	1224
Revised Code.	1225

The Ohio historic preservation office is authorized to charge	1226
reasonable fees in connection with its review and approval of	1227
applications under this section. Any such fees collected shall be	1228
credited to the fund and used to pay administrative costs incurred	1229
by the Ohio historic preservation office pursuant to this section.	1230

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

1231

(1) "Authority" means the Ohio venture capital authority	1232
created under section 150.02 of the Revised Code.	1233

(2) "Issuer" means a port authority organized and existing	1234
under applicable provisions of Chapter 4582. of the Revised Code	1235
that, pursuant to an agreement entered into under division (E) of	1236
section 150.02 of the Revised Code, issues or issued obligations	1237
to fund one or more loans to the program fund.	1238

(3) "Lender" means any person that lends money to the program	1239
fund as provided in this chapter and includes any issuer and any	1240
trustee.	1241

(4) "Loss" means a loss incurred with respect to a lender's	1242
loan to the program fund. Such a loss is incurred only if and to	1243
the extent a program administrator fails to satisfy its	1244
obligations to the lender to make timely payments of principal or	1245
interest as provided in the loan agreement between the lender and	1246
the program administrator. "Loss" does not include either of the	1247
following:	1248

(a) Any loss incurred by the program fund, including a loss	1249
attributable to any investment made by a program administrator;	1250

(b) Any loss of the capital required to be provided by a	1251
program administrator, or income accruing to that capital, under	1252
the agreement entered into under division (B) of section 150.05 of	1253
the Revised Code.	1254

(5) "Ohio-based business enterprise" means a person that is	1255
engaged in business, that employs at least one individual on a	1256
full-time or part-time basis at a place of business in this state,	1257
including a person engaged in business if that person is a	1258
self-employed individual, and that is in the seed or early stage	1259
of business development requiring initial or early stage funding	1260
or is an established business enterprise developing new methods or	1261
technologies.	1262

(6) "Ohio-based venture capital fund" means a venture capital	1263
fund having its principal office in this state, where the majority	1264
of the fund's staff are employed and where at least one investment	1265
professional is employed who has at least five years of experience	1266
in venture capital investment.	1267

(7) "Program fund" means the fund created under section	1268
150.03 of the Revised Code.	1269

(8) "Research and development purposes" has the same meaning	1270
as used in Section 2p of Article VIII, Ohio Constitution, and	1271
includes the development of sites and facilities in this state for	1272
and in support of those research and development purposes.	1273

(9) "Trustee" means a trust company or a bank with corporate	1274
trust powers, in either case having a place of business in this	1275
state, being a taxpayer under Chapter 5707., 5725., 5726., 5727.,	1276
5729., 5733., or 5747 of the Revised Code at the time it may claim	1277
and receive a tax credit under division (E) of section 150.07 of	1278
the Revised Code, and acting in its capacity as a trustee pursuant	1279
to a trust agreement under which an issuer issues obligations to	1280
fund loans to the program fund.	1281

(B) The general assembly declares that its purpose in	1282
enacting Chapter 150. of the Revised Code is to increase the	1283
amount of private investment capital available in this state for	1284
Ohio-based business enterprises in the seed or early stages of	1285
business development and requiring initial or early stage funding,	1286
as well as established Ohio-based business enterprises developing	1287
new methods or technologies, including the promotion of research	1288
and development purposes, thereby increasing employment, creating	1289
additional wealth, and otherwise benefiting the economic welfare	1290
of the people of this state. Accordingly, it is the intention of	1291
the general assembly that the program fund make investments in	1292
support of Ohio-based business enterprises in accordance with the	1293
investment policy authorized and required under section 150.03 of	1294
the Revised Code, and that the Ohio venture capital authority	1295
focus its investment policy principally on venture capital funds	1296
investing in such Ohio-based business enterprises. The general	1297
assembly finds and determines that this chapter and the investment	1298
policy, and actions taken under and consistent therewith, will	1299
promote and implement the public purposes of Section 2p of Article	1300
VIII, Ohio Constitution.	1301

Sec. 150.07.  (A) For the purpose stated in section 150.01 of	1302
the Revised Code, the authority may authorize a lender to claim	1303
one of the refundable tax credits allowed under section 5707.031,	1304
5725.19, 5726.53, 5727.241, 5729.08, 5733.49, or 5747.80 of the	1305
Revised Code. The credits shall be authorized by a written	1306
contract with the lender. The contract shall specify the terms	1307
under which the lender may claim the credit, including the amount	1308
of loss, if any, the lender must incur before the lender may claim	1309
the credit; specify that the credit shall not exceed the amount of	1310
the loss; and specify that the lender may claim the credit only	1311
for a loss certified by a program administrator to the authority	1312
under the procedures prescribed under division (B)(6) of section	1313
150.05 of the Revised Code. The program administrator shall	1314
provide to the authority an estimate of the amount of tax credits,	1315
if any, that are likely, in the administrator's reasonable	1316
judgment, to be claimed by a lender during the current and next	1317
succeeding state fiscal years. The estimate shall be provided at	1318
the same time each year that the administrator is required to	1319
report the annual audit to the authority under section 150.05 of	1320
the Revised Code.	1321

(B) Tax credits may be authorized at any time after the	1322
authority establishes the investment policy under section 150.03	1323
of the Revised Code, but a tax credit so authorized may not be	1324
claimed before July 1, 2007, or after June 30, 2026, except, with	1325
respect to loans made from the proceeds of obligations issued	1326
under section 4582.71 of the Revised Code, a tax credit may not be	1327
claimed before July 1, 2012, or after June 30, 2036.	1328

(C)(1) Upon receiving certification of a lender's loss from a	1329
program administrator pursuant to the procedures in the investment	1330
policy, the authority shall issue a tax credit certificate to the	1331
lender, except as otherwise provided in division (D) of this	1332
section.	1333

(2) If the lender is a pass-through entity, as defined in	1334
section 5733.04 of the Revised Code, then each equity investor in	1335
the lender pass-through entity shall be entitled to claim one of	1336
the tax credits allowed under division (A) of this section for	1337
that equity investor's taxable year in which or with which ends	1338
the taxable year of the lender pass-through entity in an amount	1339
based on the equity investor's distributive or proportionate share	1340
of the credit amount set forth in the certificate issued by the	1341
authority. If all equity investors of the lender pass-through	1342
entity are not eligible to claim a credit against the same tax set	1343
forth in division (A) of this section, then each equity investor	1344
may elect to claim a credit against the tax to which the equity	1345
investor is subject to in an amount based on the equity investor's	1346
distributive or proportionate share of the credit amount set forth	1347
in the certificate issued by the authority.	1348

(3) The certificate shall state the amount of the credit and	1349
the calendar year under section 5707.031, 5725.19, 5727.241, or	1350
5729.08, the tax year under section 5726.53 or 5733.49, or the	1351
taxable year under section 5747.80 of the Revised Code for which	1352
the credit may be claimed. The authority, in conjunction with the	1353
tax commissioner, shall develop a system for issuing tax credit	1354
certificates for the purpose of verifying that any credit claimed	1355
is a credit issued under this section and is properly taken in the	1356
year specified in the certificate and in compliance with division	1357
(B) of this section.	1358

(D) The authority shall not, in any fiscal year, issue tax	1359
credit certificates under this section in a total amount exceeding	1360
twenty million dollars. The authority shall not issue tax credit	1361
certificates under this section in a total amount exceeding three	1362
hundred eighty million dollars.	1363

(E) Notwithstanding any other section of this chapter or any	1364
provision of Chapter 5707., 5725., 5726., 5727., 5729., 5733., or	1365
5747. of the Revised Code, if provided by the terms of an	1366
agreement entered into by the issuer and the authority under	1367
division (E) of section 150.02 of the Revised Code, and subject to	1368
the limitations of divisions (B) and (D) of this section, a	1369
trustee shall have the right, for the benefit of the issuer, to	1370
receive and claim the credits authorized under division (A) of	1371
this section solely for the purpose provided for in section 150.04	1372
of the Revised Code, and the trustee shall be entitled to file a	1373
tax return, an amended tax return, or an estimated tax return at	1374
such times as are permitted or required under the applicable	1375
provisions of Chapter 5707., 5725., 5726., 5727., 5729., 5733., or	1376
5747. of the Revised Code for the purpose of claiming credits	1377
issued to the trustee. The trustee shall receive the proceeds of	1378
such a tax credit for the benefit of the issuer, and shall apply	1379
the proceeds solely to satisfy a loss or restore a reserve as	1380
provided in section 150.04 of the Revised Code. Nothing in this	1381
section shall require a trustee to file a tax return under any	1382
chapter for any purpose other than claiming such credits if the	1383
trustee is not otherwise required to make such a filing.	1384

The general assembly may from time to time modify or repeal	1385
any of the taxes against which the credits authorized under	1386
division (A) of this section may be claimed, and may authorize	1387
those credits to be claimed for the purposes provided for in	1388
section 150.04 of the Revised Code with respect to any other tax	1389
imposed by this state; provided, that if any obligations issued	1390
under section 4582.71 of the Revised Code are then outstanding and	1391
such modification or repeal would have the effect of impairing any	1392
covenant made in or pursuant to an agreement under division (E) of	1393
section 150.02 of the Revised Code regarding the maintenance or	1394
restoration of reserves established and maintained with a trustee	1395
consistent with division (B)(2) of section 150.04 of the Revised	1396
Code and such agreement, the state shall provide other security to	1397
the extent necessary to avoid or offset the impairment of such	1398
covenant.	1399

Sec. 150.10.  (A) On the first day of January of the second	1400
year after the date of entering into an agreement under section	1401
150.05 of the Revised Code and of each ensuing year, the authority	1402
shall file with the clerk of the house of representatives, the	1403
clerk of the senate, and the chairpersons of the house and senate	1404
standing committees predominantly concerned with economic	1405
development a written report on the Ohio venture capital program.	1406
The report shall include all the following:	1407

(1) A description of the details of the investment policy	1408
established or modified in accordance with sections 150.03 and	1409
150.04 of the Revised Code;	1410

(2) The authority's assessment of the program's achievement	1411
of its purpose stated in section 150.01 of the Revised Code;	1412

(3) The value of tax credit certificates issued by the	1413
authority under section 150.07 of the Revised Code in each fiscal	1414
year ending on or before the preceding thirtieth day of June;	1415

(4) The amount of tax credits claimed pursuant to section	1416
5707.031, 5725.19, 5726.53, 5727.241, 5729.08, 5733.49, or 5747.80	1417
of the Revised Code, as to the respective taxes involved;	1418

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

1419

(6) The names of venture capital funds in which money from	1420
the program fund has been invested and the locations of their	1421
principal offices, and the names of the enterprises in which each	1422
of those venture capital funds has invested such money and the	1423
locations of those enterprises' principal offices;	1424

(7) Any recommendations for modifying the program to better	1425
achieve the purpose stated in section 150.01 of the Revised Code.	1426

(B) During each year that a report is issued under division	1427
(A) of this section, the chairperson of the authority, or another	1428
member of the authority designated by the chairperson as the	1429
authority's representative, shall be required to appear in person	1430
before the standing committees of the house and senate	1431
predominantly concerned with economic development to give	1432
testimony concerning the status of the Ohio venture capital	1433
program.	1434

Sec. 715.013. (A) Except as otherwise expressly authorized by	1435
the Revised Code, no municipal corporation shall levy a tax that	1436
is the same as or similar to a tax levied under Chapter 322.,	1437
3734., 3769., 4123., 4141., 4301., 4303., 4305., 4307., 4309.,	1438
5707., 5725., 5726., 5727., 5728., 5729., 5731., 5735., 5737.,	1439
5739., 5741., 5743., or 5749. of the Revised Code.	1440

(B) This section does not prohibit a municipal corporation	1441
from levying a tax on any of the following:	1442

(1) Amounts received for admission to any place;

1443

(2) The income of an electric company or combined company, as	1444
defined in section 5727.01 of the Revised Code;	1445

(3) On and after January 1, 2004, the income of a telephone	1446
company, as defined in section 5727.01 of the Revised Code.	1447

Sec. 742.114. (A) As used in this section and in section	1448
742.116 of the Revised Code:	1449

(1) "Agent" means a dealer, as defined in section 1707.01 of	1450
the Revised Code, who is licensed under sections 1707.01 to	1451
1707.45 of the Revised Code or under comparable laws of another	1452
state or of the United States.	1453

(2) "Minority business enterprise" has the same meaning as in	1454
section 122.71 of the Revised Code.	1455

(3) "Ohio-qualified agent" means an agent designated as such	1456
by the board of trustees of the fund.	1457

(4) "Ohio-qualified investment manager" means an investment	1458
manager designated as such by the board of trustees of the fund.	1459

(5) "Principal place of business" means an office in which	1460
the agent regularly provides securities or investment advisory	1461
services and solicits, meets with, or otherwise communicates with	1462
clients.	1463

(B) The board of trustees of the fund shall, for the purposes	1464
of this section, designate an agent as an Ohio-qualified agent if	1465
the agent meets all of the following requirements:	1466

(1) The agent is subject to taxation under Chapter 5725.,	1467
5726., 5733., or 5747., or 5751. of the Revised Code;	1468

(2) The agent is authorized to conduct business in this	1469
state;	1470

(3) The agent maintains a principal place of business in this	1471
state and employs at least five residents of this state.	1472

(C) The board shall adopt and implement a written policy to	1473
establish criteria and procedures used to select agents to execute	1474
securities transactions on behalf of the retirement system. The	1475
policy shall address each of the following:	1476

(1) Commissions charged by the agent, both in the aggregate	1477
and on a per share basis;	1478

(2) The execution speed and trade settlement capabilities of	1479
the agent;	1480

(3) The responsiveness, reliability, and integrity of the	1481
agent;	1482

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

1483

(5) Any special capabilities of the agent.

1484

(D)(1) The board shall, at least annually, establish a policy	1485
with the goal to increase utilization by the board of	1486
Ohio-qualified agents for the execution of domestic equity and	1487
fixed-income trades on behalf of the retirement system, when an	1488
Ohio-qualified agent offers quality, services, and safety	1489
comparable to other agents otherwise available to the board and	1490
meets the criteria established under division (C) of this section.	1491

(2) The board shall review, at least annually, the	1492
performance of the agents that execute securities transactions on	1493
behalf of the board.	1494

(3) The board shall determine whether an agent is an	1495
Ohio-qualified agent, meets the criteria established by the board	1496
pursuant to division (C) of this section, and offers quality,	1497
services, and safety comparable to other agents otherwise	1498
available to the board. The board's determination shall be final.	1499

(E) The board shall, at least annually, submit to the Ohio	1500
retirement study council a report containing the following	1501
information:	1502

(1) The name of each agent designated as an Ohio-qualified	1503
agent under this section;	1504

(2) The name of each agent that executes securities	1505
transactions on behalf of the board;	1506

(3) The amount of equity and fixed-income trades that are	1507
executed by Ohio-qualified agents, expressed as a percentage of	1508
all equity and fixed-income trades that are executed by agents on	1509
behalf of the board;	1510

(4) The compensation paid to Ohio-qualified agents, expressed	1511
as a percentage of total compensation paid to all agents that	1512
execute securities transactions on behalf of the board;	1513

(5) The amount of equity and fixed-income trades that are	1514
executed by agents that are minority business enterprises,	1515
expressed as a percentage of all equity and fixed-income trades	1516
that are executed by agents on behalf of the board;	1517

(6) Any other information requested by the Ohio retirement	1518
study council regarding the board's use of agents.	1519

Sec. 742.116. (A) The board of trustees of the pension fund	1520
shall, for the purposes of this section, designate an investment	1521
manager as an Ohio-qualified investment manager if the investment	1522
manager meets all of the following requirements:	1523

(1) The investment manager is subject to taxation under	1524
Chapter 5725., 5726., 5733., or 5747., or 5751. of the Revised	1525
Code;	1526

(2) The investment manager meets one of the following	1527
requirements:	1528

(a) Has its corporate headquarters or principal place of	1529
business in this state;	1530

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

1531

(c) Has a principal place of business in this state and	1532
employs at least 20 residents of this state.	1533

(B)(1) The board shall, at least annually, establish a policy	1534
with the goal to increase utilization by the board of	1535
Ohio-qualified investment managers, when an Ohio-qualified	1536
investment manager offers quality, services, and safety comparable	1537
to other investment managers otherwise available to the board. The	1538
policy shall also provide for the following:	1539

(a) A process whereby the board can develop a list of	1540
Ohio-qualified investment managers and their investment products;	1541

(b) A process whereby the board can give public notice to	1542
Ohio-qualified investment managers of the board's search for an	1543
investment manager that includes the board's search criteria.	1544

(2) The board shall determine whether an investment manager	1545
is an Ohio-qualified investment manager and whether the investment	1546
manager offers quality, services, and safety comparable to other	1547
investment managers otherwise available to the board. The board's	1548
determination shall be final.	1549

(C) The board shall, at least annually, submit to the Ohio	1550
retirement study council a report containing the following	1551
information:	1552

(1) The name of each investment manager designated as an	1553
Ohio-qualified investment manager under this section;	1554

(2) The name of each investment manager with which the board	1555
contracts;	1556

(3) The amount of assets managed by Ohio-qualified investment	1557
managers, expressed as a percentage of the total assets held by	1558
the retirement system and as a percentage of assets managed by	1559
investment managers with which the board has contracted;	1560

(4) The compensation paid to Ohio-qualified investment	1561
managers, expressed as a percentage of total compensation paid to	1562
all investment managers with which the board has contracted;	1563

(5) Any other information requested by the Ohio retirement	1564
study council regarding the board's use of investment managers.	1565

Sec. 3307.152. (A) As used in this section and in section	1566
3307.154 of the Revised Code:	1567

(1) "Agent" means a dealer, as defined in section 1707.01 of	1568
the Revised Code, who is licensed under sections 1707.01 to	1569
1707.45 of the Revised Code or under comparable laws of another	1570
state or of the United States.	1571

(2) "Minority business enterprise" has the same meaning as in	1572
section 122.71 of the Revised Code.	1573

(3) "Ohio-qualified agent" means an agent designated as such	1574
by the state teachers retirement board.	1575

(4) "Ohio-qualified investment manager" means an investment	1576
manager designated as such by the state teachers retirement board.	1577

(5) "Principal place of business" means an office in which	1578
the agent regularly provides securities or investment advisory	1579
services and solicits, meets with, or otherwise communicates with	1580
clients.	1581

(B) The state teachers retirement board shall, for the	1582
purposes of this section, designate an agent as an Ohio-qualified	1583
agent if the agent meets all of the following requirements:	1584

(1) The agent is subject to taxation under Chapter 5725.,	1585
5726., 5733., or 5747., or 5751. of the Revised Code.	1586

(2) The agent is authorized to conduct business in this	1587
state.	1588

(3) The agent maintains a principal place of business in this	1589
state and employs at least five residents of this state.	1590

(C) The state teachers retirement board shall adopt and	1591
implement a written policy to establish criteria and procedures	1592
used to select agents to execute securities transactions on behalf	1593
of the retirement system. The policy shall address each of the	1594
following:	1595

(a)(1) Commissions charged by the agent, both in the	1596
aggregate and on a per share basis;	1597

(b)(2) The execution speed and trade settlement capabilities	1598
of the agent;	1599

(c)(3) The responsiveness, reliability, and integrity of the	1600
agent;	1601

(d)(4) The nature and value of research provided by the	1602
agent;	1603

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

1604

(D)(1) The board shall, at least annually, establish a policy	1605
with the goal to increase utilization by the board of	1606
Ohio-qualified agents for the execution of domestic equity and	1607
fixed income trades on behalf of the retirement system, when an	1608
Ohio-qualified agent offers quality, services, and safety	1609
comparable to other agents otherwise available to the board and	1610
meets the criteria established under division (C) of this section.	1611

(2) The board shall review, at least annually, the	1612
performance of the agents that execute securities transactions on	1613
behalf of the board.	1614

(3) The board shall determine whether an agent is an	1615
Ohio-qualified agent, meets the criteria established by the board	1616
pursuant to division (C) of this section, and offers quality,	1617
services, and safety comparable to other agents otherwise	1618
available to the board. The board's determination shall be final.	1619

(E) The board shall, at least annually, submit to the Ohio	1620
retirement study council a report containing the following	1621
information:	1622

(1) The name of each agent designated as an Ohio-qualified	1623
agent under this section;	1624

(2) The name of each agent that executes securities	1625
transactions on behalf of the board;	1626

(3) The amount of equity and fixed-income trades that are	1627
executed by Ohio-qualified agents, expressed as a percentage of	1628
all equity and fixed-income trades that are executed by agents on	1629
behalf of the board;	1630

(4) The compensation paid to Ohio-qualified agents, expressed	1631
as a percentage of total compensation paid to all agents that	1632
execute securities transactions on behalf of the board;	1633

(5) The amount of equity and fixed-income trades that are	1634
executed by agents that are minority business enterprises,	1635
expressed as a percentage of all equity and fixed-income trades	1636
that are executed by agents on behalf of the board;	1637

(6) Any other information requested by the Ohio retirement	1638
study council regarding the board's use of agents.	1639

Sec. 3307.154. (A) The state teachers retirement board shall,	1640
for the purposes of this section, designate an investment manager	1641
as an Ohio-qualified investment manager if the investment manager	1642
meets all of the following requirements:	1643

(1) The investment manager is subject to taxation under	1644
Chapter 5725., 5726., 5733., or 5747., or 5751. of the Revised	1645
Code.	1646

(2) The investment manager meets one of the following	1647
requirements:	1648

(a) Has its corporate headquarters or principal place of	1649
business in this state;	1650

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

1651

(c) Has a principal place of business in this state and	1652
employs at least twenty residents of this state.	1653

(B)(1) The board shall, at least annually, establish a policy	1654
with the goal to increase utilization by the board of	1655
Ohio-qualified investment managers, when an Ohio-qualified	1656
investment manager offers quality, services, and safety comparable	1657
to other investment managers otherwise available to the board. The	1658
policy shall also provide for the following:	1659

(a) A process whereby the board can develop a list of	1660
Ohio-qualified investment managers and their investment products;	1661

(b) A process whereby the board can give public notice to	1662
Ohio-qualified investment managers of the board's search for an	1663
investment manager that includes the board's search criteria.	1664

(2) The board shall determine whether an investment manager	1665
is an Ohio-qualified investment manager and whether the investment	1666
manager offers quality, services, and safety comparable to other	1667
investment managers otherwise available to the board. The board's	1668
determination shall be final.	1669

(C) The board shall, at least annually, submit to the Ohio	1670
retirement study council a report containing the following	1671
information:	1672

(1) The name of each investment manager designated as an	1673
Ohio-qualified investment manager under this section;	1674

(2) The name of each investment manager with which the board	1675
contracts;	1676

(3) The amount of assets managed by Ohio-qualified investment	1677
managers, expressed as a percentage of the total assets held by	1678
the retirement system and as a percentage of assets managed by	1679
investment managers with which the board has contracted;	1680

(4) The compensation paid to Ohio-qualified investment	1681
managers, expressed as a percentage of total compensation paid to	1682
all investment managers with which the board has contracted;	1683

(5) Any other information requested by the Ohio retirement	1684
study council regarding the board's use of investment managers.	1685

Sec. 3309.157. (A) As used in this section and in section	1686
3309.159 of the Revised Code:	1687

(1) "Agent" means a dealer, as defined in section 1707.01 of	1688
the Revised Code, who is licensed under sections 1707.01 to	1689
1707.45 of the Revised Code or under comparable laws of another	1690
state or of the United States.	1691

(2) "Minority business enterprise" has the same meaning as in	1692
section 122.71 of the Revised Code.	1693

(3) "Ohio-qualified agent" means an agent designated as such	1694
by the school employees retirement board.	1695

(4) "Ohio-qualified investment manager" means an investment	1696
manager designated as such by the school employees retirement	1697
board.	1698

(5) "Principal place of business" means an office in which	1699
the agent regularly provides securities or investment advisory	1700
services and solicits, meets with, or otherwise communicates with	1701
clients.	1702

(B) The school employees retirement board shall, for the	1703
purposes of this section, designate an agent as an Ohio-qualified	1704
agent if the agent meets all of the following requirements:	1705

(1) The agent is subject to taxation under Chapter 5725.,	1706
5726., 5733., or 5747., or 5751. of the Revised Code.	1707

(2) The agent is authorized to conduct business in this	1708
state.	1709

(3) The agent maintains a principal place of business in this	1710
state and employeesemploys at least five residents of this state.	1711

(C) The school employees retirement board shall adopt and	1712
implement a written policy to establish criteria and procedures	1713
used to select agents to execute securities transactions on behalf	1714
of the retirement system. The policy shall address each of the	1715
following:	1716

(a)(1) Commissions charged by the agent, both in the	1717
aggregate and on a per share basis;	1718

(b)(2) The execution speed and trade settlement capabilities	1719
of the agent;	1720

(c)(3) The responsiveness, reliability, and integrity of the	1721
agent;	1722

(d)(4) The nature and value of research provided by the	1723
agent;	1724

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

1725

(D)(1) The board shall, at least annually, establish a policy	1726
with the goal to increase utilization by the board of	1727
Ohio-qualified agents for the execution of domestic equity and	1728
fixed income trades on behalf of the retirement system, when an	1729
Ohio-qualified agent offers quality, services, and safety	1730
comparable to other agents otherwise available to the board and	1731
meets the criteria established under division (C) of this section.	1732

(2) The board shall review, at least annually, the	1733
performance of the agents that execute securities transactions on	1734
behalf of the board.	1735

(3) The board shall determine whether an agent is an	1736
Ohio-qualified agent, meets the criteria established by the board	1737
pursuant to division (C) of this section, and offers quality,	1738
services, and safety comparable to other agents otherwise	1739
available to the board. The board's determination shall be final.	1740

(E) The board shall, at least annually, submit to the Ohio	1741
retirement study council a report containing the following	1742
information:	1743

(1) The name of each agent designated as an Ohio-qualified	1744
agent under this section;	1745

(2) The name of each agent that executes securities	1746
transactions on behalf of the board;	1747

(3) The amount of equity and fixed-income trades that are	1748
executed by Ohio-qualified agents, expressed as a percentage of	1749
all equity and fixed-income trades that are executed by agents on	1750
behalf of the board;	1751

(4) The compensation paid to Ohio-qualified agents, expressed	1752
as a percentage of total compensation paid to all agents that	1753
execute securities transactions on behalf of the board;	1754

(5) The amount of equity and fixed-income trades that are	1755
executed by agents that are minority business enterprises,	1756
expressed as a percentage of all equity and fixed-income trades	1757
that are executed by agents on behalf of the board;	1758

(6) Any other information requested by the Ohio retirement	1759
study council regarding the board's use of agents.	1760

Sec. 3309.159. (A) The school employees retirement board	1761
shall, for the purposes of this section, designate an investment	1762
manager as an Ohio-qualified investment manager if the investment	1763
manager meets all of the following requirements:	1764

(1) The investment manager is subject to taxation under	1765
Chapter 5725., 5726., 5733., or 5747., or 5751. of the Revised	1766
Code.	1767

(2) The investment manager meets one of the following	1768
requirements:	1769

(a) Has its corporate headquarters or principal place of	1770
business in this state;	1771

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

1772

(c) Has a principal place of business in this state and	1773
employs at least 20twenty residents of this state.	1774

(B)(1) The board shall, at least annually, establish a policy	1775
with the goal to increase utilization by the board of	1776
Ohio-qualified investment managers, when an Ohio-qualified	1777
investment manager offers quality, services, and safety comparable	1778
to other investment managers otherwise available to the board. The	1779
policy shall also provide for the following:	1780

(a) A process whereby the board can develop a list of	1781
Ohio-qualified investment managers and their investment products;	1782

(b) A process whereby the board can give public notice to	1783
Ohio-qualified investment managers of the board's search for an	1784
investment manager that includes the board's search criteria.	1785

(2) The board shall determine whether an investment manager	1786
is an Ohio-qualified investment manager and whether the investment	1787
manager offers quality, services, and safety comparable to other	1788
investment managers otherwise available to the board. The board's	1789
determination shall be final.	1790

(C) The board shall, at least annually, submit to the Ohio	1791
retirement study council a report containing the following	1792
information:	1793

(1) The name of each investment manager designated as an	1794
Ohio-qualified investment manager under this section;	1795

(2) The name of each investment manager with which the board	1796
contracts;	1797

(3) The amount of assets managed by Ohio-qualified investment	1798
managers, expressed as a percentage of the total assets held by	1799
the retirement system and as a percentage of assets managed by	1800
investment managers with which the board has contracted;	1801

(4) The compensation paid to Ohio-qualified investment	1802
managers, expressed as a percentage of total compensation paid to	1803
all investment managers with which the board has contracted;	1804

(5) Any other information requested by the Ohio retirement	1805
study council regarding the board's use of investment managers.	1806

Sec. 5505.068. (A) As used in this section and in section	1807
5505.0610 of the Revised Code:	1808

(1) "Agent" means a dealer, as defined in section 1707.01 of	1809
the Revised Code, who is licensed under sections 1707.01 to	1810
1707.45 of the Revised Code or under comparable laws of another	1811
state or of the United States.	1812

(2) "Minority business enterprise" has the same meaning as in	1813
section 122.71 of the Revised Code.	1814

(3) "Ohio-qualified agent" means an agent designated as such	1815
by the state highway patrol retirement board.	1816

(4) "Ohio-qualified investment manager" means an investment	1817
manager designated as such by the state highway patrol retirement	1818
board.	1819

(5) "Principal place of business" means an office in which	1820
the agent regularly provides securities or investment advisory	1821
services and solicits, meets with, or otherwise communicates with	1822
clients.	1823

(B) The state highway patrol retirement board shall, for the	1824
purposes of this section, designate an agent as an Ohio-qualified	1825
agent if the agent meets all of the following requirements:	1826

(1) The agent is subject to taxation under Chapter 5725.,	1827
5726., 5733., or 5747., or 5751. of the Revised Code.	1828

(2) The agent is authorized to conduct business in this	1829
state;	1830

(3) The agent maintains a principal place of business in this	1831
state and employs at least five residents of this state.	1832

(C) The state highway patrol retirement board shall adopt and	1833
implement a written policy to establish criteria and procedures	1834
used to select agents to execute securities transactions on behalf	1835
of the retirement system. The policy shall address each of the	1836
following:	1837

(1) Commissions charged by the agent, both in the aggregate	1838
and on a per share basis;	1839

(2) The execution speed and trade settlement capabilities of	1840
the agent;	1841

(3) The responsiveness, reliability, and integrity of the	1842
agent;	1843

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

1844

(5) Any special capabilities of the agent.

1845

(D)(1) The board shall, at least annually, establish a policy	1846
with the goal to increase utilization by the board of	1847
Ohio-qualified agents for the execution of domestic equity and	1848
fixed income trades on behalf of the retirement system, when an	1849
Ohio-qualified agent offers quality, services, and safety	1850
comparable to other agents otherwise available to the board and	1851
meets the criteria established under division (C) of this section.	1852

(2) The board shall review, at least annually, the	1853
performance of the agents that execute securities transactions on	1854
behalf of the board.	1855

(3) The board shall determine whether an agent is an	1856
Ohio-qualified agent, meets the criteria established by the board	1857
pursuant to division (C) of this section, and offers quality,	1858
services, and safety comparable to other agents otherwise	1859
available to the board. The board's determination shall be final.	1860

(E) The board shall, at least annually, submit to the Ohio	1861
retirement study council a report containing the following	1862
information:	1863

(1) The name of each agent designated as an Ohio-qualified	1864
agent under this section;	1865

(2) The name of each agent that executes securities	1866
transactions on behalf of the board;	1867

(3) The amount of equity and fixed-income trades that are	1868
executed by Ohio-qualified agents, expressed as a percentage of	1869
all equity and fixed-income trades that are executed by agents on	1870
behalf of the board;	1871

(4) The compensation paid to Ohio-qualified agents, expressed	1872
as a percentage of total compensation paid to all agents that	1873
execute securities transactions on behalf of the board;	1874

(5) The amount of equity and fixed-income trades that are	1875
executed by agents that are minority business enterprises,	1876
expressed as a percentage of all equity and fixed-income trades	1877
that are executed by agents on behalf of the board;	1878

(6) Any other information requested by the Ohio retirement	1879
study council regarding the board's use of agents.	1880

Sec. 5505.0610. (A) The state highway patrol retirement board	1881
shall, for the purposes of this section, designate an investment	1882
manager as an Ohio-qualified investment manager if the investment	1883
manager meets all of the following requirements:	1884

(1) The investment manager is subject to taxation under	1885
Chapter 5725., 5726., 5733., or 5747., or 5751. of the Revised	1886
Code.	1887

(2) The investment manager meets one of the following	1888
requirements:	1889

(a) Has its corporate headquarters or principal place of	1890
business in this state;	1891

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

1892

(c) Has a principal place of business in this state and	1893
employs at least 20twenty residents of this state.	1894

(B)(1) The board shall, at least annually, establish a policy	1895
with the goal to increase utilization by the board of	1896
Ohio-qualified investment managers, when an Ohio-qualified	1897
investment manager offers quality, services, and safety comparable	1898
to other investment managers otherwise available to the board. The	1899
policy shall also provide for the following:	1900

(a) A process whereby the board can develop a list of	1901
Ohio-qualified investment managers and their investment products;	1902

(b) A process whereby the board can give public notice to	1903
Ohio-qualified investment managers of the board's search for an	1904
investment manager that includes the board's search criteria.	1905

(2) The board shall determine whether an investment manager	1906
is an Ohio-qualified investment manager and whether the investment	1907
manager offers quality, services, and safety comparable to other	1908
investment managers otherwise available to the board. The board's	1909
determination shall be final.	1910

(C) The board shall, at least annually, submit to the Ohio	1911
retirement study council a report containing the following	1912
information:	1913

(1) The name of each investment manager designated as an	1914
Ohio-qualified investment manager under this section;	1915

(2) The name of each investment manager with which the board	1916
contracts;	1917

(3) The amount of assets managed by Ohio-qualified investment	1918
managers, expressed as a percentage of the total assets held by	1919
the retirement system and as a percentage of assets managed by	1920
investment managers with which the board has contracted;	1921

(4) The compensation paid to Ohio-qualified investment	1922
managers, expressed as a percentage of total compensation paid to	1923
all investment managers with which the board has contracted;	1924

(5) Any other information requested by the Ohio retirement	1925
study council regarding the board's use of investment managers.	1926

Sec. 5701.12.  (A) The effective date to which this section	1927
refers is the effective date of this section as enacted by H.B.	1928
510 of the 129th general assembly.	1929

(B) Any reference in Title LVII to "consolidated reports of	1930
condition and income" or "call report" means the consolidated	1931
reports of condition and income as those reports existed on the	1932
effective date.	1933

(C) Any reference in Title LVII to "FR Y-9" or "Y-9" means	1934
the FR Y-9 financial statements as those financial statements	1935
existed on the effective date.	1936

(D) This section does not apply to any reference in Title	1937
LVII of the Revised Code to "consolidated reports of condition and	1938
income," "call report," "FR Y-9," or "Y-9" as of a date certain	1939
specifying the day, month, and year.	1940

Sec. 5703.052.  (A) There is hereby created in the state	1941
treasury the tax refund fund, from which refunds shall be paid for	1942
taxes illegally or erroneously assessed or collected, or for any	1943
other reason overpaid, that are levied by Chapter 4301., 4305.,	1944
5726., 5728., 5729., 5733., 5735., 5739., 5741., 5743., 5747.,	1945
5748., 5749., 5751., or 5753. and sections 3737.71, 3905.35,	1946
3905.36, 4303.33, 5707.03, 5725.18, 5727.28, 5727.38, 5727.81, and	1947
5727.811 of the Revised Code. Refunds for fees illegally or	1948
erroneously assessed or collected, or for any other reason	1949
overpaid, that are levied by sections 3734.90 to 3734.9014 of the	1950
Revised Code also shall be paid from the fund. Refunds for amounts	1951
illegally or erroneously assessed or collected by the tax	1952
commissioner, or for any other reason overpaid, that are due under	1953
section 1509.50 of the Revised Code shall be paid from the fund.	1954
However, refunds for taxes levied under section 5739.101 of the	1955
Revised Code shall not be paid from the tax refund fund, but shall	1956
be paid as provided in section 5739.104 of the Revised Code.	1957

(B)(1) Upon certification by the tax commissioner to the	1958
treasurer of state of a tax refund, a fee refund, or an other	1959
amount refunded, or by the superintendent of insurance of a	1960
domestic or foreign insurance tax refund, the treasurer of state	1961
shall place the amount certified to the credit of the fund. The	1962
certified amount transferred shall be derived from current	1963
receipts of the same tax, fee, or other amount from which the	1964
refund arose. If current receipts from the tax, fee, or other	1965
amount from which the refund arose are inadequate to make the	1966
transfer of the amount so certified, the treasurer of state shall	1967
transfer such certified amount from current receipts of the sales	1968
tax levied by section 5739.02 of the Revised Code.	1969

(2) When the treasurer of state provides for the payment of a	1970
refund of a tax, fee, or other amount from the current receipts of	1971
the sales tax, and the refund is for a tax, fee, or other amount	1972
that is not levied by the state, the tax commissioner shall	1973
recover the amount of that refund from the next distribution of	1974
that tax, fee, or other amount that otherwise would be made to the	1975
taxing jurisdiction. If the amount to be recovered would exceed	1976
twenty-five per cent of the next distribution of that tax, fee, or	1977
other amount, the commissioner may spread the recovery over more	1978
than one future distribution, taking into account the amount to be	1979
recovered and the amount of the anticipated future distributions.	1980
In no event may the commissioner spread the recovery over a period	1981
to exceed twenty-four months.	1982

Sec. 5703.053.  As used in this section, "postal service"	1983
means the United States postal service.	1984

An application to the tax commissioner for a tax refund under	1985
section 4307.05, 4307.07, 5726.30, 5727.28, 5727.91, 5728.061,	1986
5735.122, 5735.13, 5735.14, 5735.141, 5735.142, 5739.07, 5741.10,	1987
5743.05, 5743.53, 5745.11, 5749.08, or 5751.08 of the Revised Code	1988
or division (B) of section 5703.05 of the Revised Code, or a fee	1989
refunded under section 3734.905 of the Revised Code, that is	1990
received after the last day for filing under such section shall be	1991
considered to have been filed in a timely manner if:	1992

(A) The application is delivered by the postal service and	1993
the earliest postal service postmark on the cover in which the	1994
application is enclosed is not later than the last day for filing	1995
the application;	1996

(B) The application is delivered by the postal service, the	1997
only postmark on the cover in which the application is enclosed	1998
was affixed by a private postal meter, the date of that postmark	1999
is not later than the last day for filing the application, and the	2000
application is received within seven days of such last day; or	2001

(C) The application is delivered by the postal service, no	2002
postmark date was affixed to the cover in which the application is	2003
enclosed or the date of the postmark so affixed is not legible,	2004
and the application is received within seven days of the last day	2005
for making the application.	2006

Sec. 5703.70. (A) On the filing of an application for refund	2007
under section 3734.905, 4307.05, 4307.07, 5726.30, 5727.28,	2008
5727.91, 5728.061, 5733.12, 5735.122, 5735.13, 5735.14, 5735.141,	2009
5735.142, 5735.18, 5739.07, 5739.071, 5739.104, 5741.10, 5743.05,	2010
5743.53, 5749.08, 5751.08, or 5753.06 of the Revised Code, or an	2011
application for compensation under section 5739.061 of the Revised	2012
Code, if the tax commissioner determines that the amount of the	2013
refund or compensation to which the applicant is entitled is less	2014
than the amount claimed in the application, the commissioner shall	2015
give the applicant written notice by ordinary mail of the amount.	2016
The notice shall be sent to the address shown on the application	2017
unless the applicant notifies the commissioner of a different	2018
address. The applicant shall have sixty days from the date the	2019
commissioner mails the notice to provide additional information to	2020
the commissioner or request a hearing, or both.	2021

(B) If the applicant neither requests a hearing nor provides	2022
additional information to the tax commissioner within the time	2023
prescribed by division (A) of this section, the commissioner shall	2024
take no further action, and the refund or compensation amount	2025
denied becomes final.	2026

(C)(1) If the applicant requests a hearing within the time	2027
prescribed by division (A) of this section, the tax commissioner	2028
shall assign a time and place for the hearing and notify the	2029
applicant of such time and place, but the commissioner may	2030
continue the hearing from time to time as necessary. After the	2031
hearing, the commissioner may make such adjustments to the refund	2032
or compensation as the commissioner finds proper, and shall issue	2033
a final determination thereon.	2034

(2) If the applicant does not request a hearing, but provides	2035
additional information, within the time prescribed by division (A)	2036
of this section, the commissioner shall review the information,	2037
make such adjustments to the refund or compensation as the	2038
commissioner finds proper, and issue a final determination	2039
thereon.	2040

(3) The commissioner shall serve a copy of the final	2041
determination made under division (C)(1) or (2) of this section on	2042
the applicant in the manner provided in section 5703.37 of the	2043
Revised Code, and the decision is final, subject to appeal under	2044
section 5717.02 of the Revised Code.	2045

(D) The tax commissioner shall certify to the director of	2046
budget and management and treasurer of state for payment from the	2047
tax refund fund created by section 5703.052 of the Revised Code,	2048
the amount of the refund to be refunded under division (B) or (C)	2049
of this section. The commissioner also shall certify to the	2050
director and treasurer of state for payment from the general	2051
revenue fund the amount of compensation to be paid under division	2052
(B) or (C) of this section.	2053

Sec. 5707.03.  Annual taxes are hereby levied on the kinds of	2054
intangible property, enumerated in this section, on the intangible	2055
property tax list in the office of the treasurer of state at the	2056
following rates:	2057

(A) On investments, five per cent of income yield or of	2058
income as provided by section 5711.10 of the Revised Code for the	2059
1983, 1984, and 1985 return years and no tax for subsequent return	2060
years;	2061

(B) On unproductive investments, two mills on the dollar for	2062
the 1983, 1984, and 1985 return years and no tax for subsequent	2063
return years;	2064

(C) On deposits, one and three-eighths mills on the dollar	2065
for the 1982 and 1983 return years and no tax for subsequent	2066
return years;	2067

(D) On shares of, and capital employed by, dealers in	2068
intangibles, eight mills on the dollar for return years prior to	2069
2014 and no tax under this section for subsequent return years;	2070

(E) On money, credits, and all other taxable intangibles,	2071
three mills on the dollar for the 1983, 1984, and 1985 return	2072
years and no tax for subsequent return years.	2073

The object and distribution of such taxes shall be as	2074
provided in section 5725.24 of the Revised Code.	2075

Sec. 5709.76.  (A) All of the following are exempt from taxes	2076
levied by the state and its subdivisions:	2077

(1) Public obligations;

2078

(2) Interest or interest equivalent on public obligations and	2079
on purchase obligations;	2080

(3) The transfer, and any profit made on the sale, exchange,	2081
or other disposition, of public obligations.	2082

(B) The exemptions granted by division (A) of this section	2083
apply to public obligations and purchase obligations issued,	2084
incurred, or entered into before, on, or after the effective date	2085
of this sectionMarch 29, 1988, but only for taxable years ending	2086
on or after the later of July 1, 1988, or the effective date of	2087
this sectionMarch 29, 1988.	2088

(C) This section supplements, and does not restrict, limit,	2089
or impair, any exemption from taxation otherwise provided for in	2090
the Ohio Constitution, the Revised Code, or other laws.	2091

(D) As used in this section:

2092

(1) "Fractionalized interests in purchase obligations" means	2093
participations, shares, or other instruments or agreements,	2094
separate from the purchase obligations themselves, evidencing	2095
ownership of interests in purchase obligations or of rights to	2096
receive payments of, or on account of, principal or interest or	2097
their equivalents payable by or on behalf of the state or a	2098
subdivision pursuant to purchase obligations, and does not include	2099
interests or shares in qualified investment trusts.	2100

(2) "Interest or interest equivalent" means those payments or	2101
portions of payments, however denominated, that constitute or	2102
represent consideration for forbearing the collection of money, or	2103
for deferring the receipt of payment of money to a future time, as	2104
determined for federal income tax purposes, and includes those	2105
portions of a qualified investment trust's distributions to its	2106
shareholders or beneficial owners, whether distributed or deemed	2107
distributed in cash or in trust shares or interests, that are	2108
attributable to the trust's receipt of interest or interest	2109
equivalent.	2110

(3) "Internal Revenue Code" has the same meaning as in	2111
division (H) of section 5747.01 of the Revised Code.	2112

(4) "Qualified investment trust" or "trust" means a unit	2113
investment trust, grantor trust, or regulated investment company,	2114
if at all times at least fifty per cent of the value of the total	2115
assets of the trust or company consists of public securities or	2116
purchase obligations, or similar obligations of other states or	2117
their subdivisions.	2118

(5) "Public obligations" means public securities,	2119
fractionalized interests in purchase obligations, and any	2120
obligation or evidence of obligation to pay interest or interest	2121
equivalent on public securities or on fractionalized interests in	2122
purchase obligations, and does not include purchase obligations.	2123

(6) "Public securities" means bonds, notes, certificates of	2124
indebtedness, commercial paper, and other instruments in writing	2125
issued by the state or a subdivision, or by any nonprofit	2126
corporation authorized to issue public securities for or on behalf	2127
of the state or a subdivision, to evidence the obligation of the	2128
state, subdivision, or nonprofit corporation to repay money	2129
borrowed by, or to pay at any future time other money obligations	2130
of, the state, subdivision, or nonprofit corporation, and does not	2131
include purchase obligations. Public securities may be in the form	2132
of either certificated securities or uncertificated securities, as	2133
those terms are defined in section 1308.01 of the Revised Code.	2134

(7) "Purchase obligations" means interest-bearing obligations	2135
of the state or a subdivision to make payments under installment	2136
sale, lease, lease purchase, or similar types of agreements.	2137

(8) "Regulated investment company" means a regulated	2138
investment company as defined in section 851 of the Internal	2139
Revenue Code.	2140

(9) "State" means the state, state officers, and state	2141
agencies, including commissions, institutions, boards, agencies,	2142
authorities, or other instrumentalities.	2143

(10) "Subdivision" means any local taxing authority,	2144
political or governmental subdivision, body corporate and politic,	2145
or other local public or governmental entity in the state, any	2146
combination or consortium of two or more of those subdivisions,	2147
and any public division, district, commission, authority,	2148
department, board, officer, or institution of any one or more of	2149
those subdivisions.	2150

(11) "Taxes" means any direct or indirect taxes, including	2151
income, ad valorem, transfer, and excise taxes, and including the	2152
tax on the net income measure of the issued and outstanding shares	2153
of a corporation under Chapter 5733. of the Revised Code. "Taxes"	2154
does not mean any of the following:	2155

(a) The tax on the net worth measure of the issued and	2156
outstanding shares of corporations and financial institutions	2157
under Chapter 5733. of the Revised Code;	2158

(b) The tax on the value of the gross estate under Chapter	2159
5731. of the Revised Code;	2160

(c) The tax on the value of the capital and surplus of a	2161
domestic insurance company under Chapter 5725. of the Revised	2162
Code;	2163

(d) The tax on the shares of and capital employed by dealers	2164
in intangibles under Chapter 5725. and section 5707.03 of the	2165
Revised Code;	2166

(e) The tax levied on the basis of the total equity capital	2167
of financial institutions under Chapter 5726. of the Revised Code.	2168

Sec. 5711.22.  (A) Deposits not taxed at the source shall be	2169
listed and assessed at their amount in dollars on the day they are	2170
required to be listed. Moneys shall be listed and assessed at the	2171
amount thereof in dollars on hand on the day that they are	2172
required to be listed. In listing investments, the amount of the	2173
income yield of each for the calendar year next preceding the date	2174
of listing shall, except as otherwise provided in this chapter, be	2175
stated in dollars and cents and the assessment thereof shall be at	2176
the amount of such income yield; but any property defined as	2177
investments in either division (A) or (B) of section 5701.06 of	2178
the Revised Code that has not been outstanding for the full	2179
calendar year next preceding the date of listing, except shares of	2180
stock of like kind as other shares of the same corporation	2181
outstanding for the full calendar year next preceding the date of	2182
listing, or which has yielded no income during such calendar year	2183
shall be listed and assessed as unproductive investments, at their	2184
true value in money on the day that such investments are required	2185
to be listed.	2186

Credits and other taxable intangibles shall be listed and	2187
assessed at their true value in money on the day as of which the	2188
same are required to be listed.	2189

Shares of stock of a bank holding company, as defined in	2190
Title 12 U.S.C.A., section 1841, that are required to be listed	2191
for taxation under this division and upon which dividends were	2192
paid during the year of their issuance, which dividends are	2193
subject to taxation under the provisions of Chapter 5747. of the	2194
Revised Code, shall be exempt from the intangibles tax for the	2195
year immediately succeeding their issuance. If such shares bear	2196
dividends the first calendar year after their issuance, which	2197
dividends are subject to taxation under the provisions of Chapter	2198
5747. of the Revised Code, it shall be deemed that the	2199
nondelinquent intangible property tax pursuant to division (A) of	2200
section 5707.04 of the Revised Code was paid on those dividends	2201
paid that first calendar year after the issuance of the shares.	2202

(B) For tax years before tax year 2009, boilers, machinery,	2203
equipment, and personal property the true value of which is	2204
determined under division (B) of section 5711.21 of the Revised	2205
Code shall be listed and assessed at an amount equal to the sum of	2206
the products determined under divisions (B)(1), (2), and (3) of	2207
this section:	2208

(1) Multiply the portion of the true value determined under	2209
division (B)(1) of section 5711.21 of the Revised Code by the	2210
assessment rate for the tax year in division (G) of this section;	2211

(2) Multiply the portion of the true value determined under	2212
division (B)(2) of section 5711.21 of the Revised Code by the	2213
assessment rate in section 5727.111 of the Revised Code that is	2214
applicable to the production equipment of an electric company;	2215

(3) Multiply the portion of the true value determined under	2216
division (B)(3) of section 5711.21 of the Revised Code by the	2217
assessment rate in section 5727.111 of the Revised Code that is	2218
applicable to the property of an electric company that is not	2219
production equipment.	2220

(C) For tax years before tax year 2009, personal property	2221
leased to a public utility or interexchange telecommunications	2222
company as defined in section 5727.01 of the Revised Code and used	2223
directly in the rendition of a public utility service as defined	2224
in division (P) of section 5739.01 of the Revised Code shall be	2225
listed and assessed at the same percentage of true value in money	2226
that such property is required to be assessed by section 5727.111	2227
of the Revised Code if owned by the public utility or	2228
interexchange telecommunications company.	2229

(D)(1) Merchandise or an agricultural product shipped from	2230
outside this state and held in this state in a warehouse or a	2231
place of storage without further manufacturing or processing and	2232
for storage only and for shipment outside this state, but that	2233
does not qualify as "not used in business in this state" under	2234
division (B)(1) or (2) of section 5701.08 of the Revised Code, is	2235
nevertheless not used in business in this state for property tax	2236
purposes.	2237

(2) Merchandise or an agricultural product owned by a	2238
qualified out-of-state person shipped from outside this state and	2239
held in this state in a public warehouse without further	2240
manufacturing or processing and for temporary storage only and for	2241
shipment inside this state, but that does not qualify as "not used	2242
in business in this state" under division (B)(1) or (2) of section	2243
5701.08 of the Revised Code, is nevertheless not used in business	2244
in this state for property tax purposes.	2245

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

2246

(a) "Qualified out-of-state person" means a person that does	2247
not own, lease, or use property, other than merchandise or an	2248
agricultural product described in this division, in this state,	2249
and does not have employees, agents, or representatives in this	2250
state;	2251

(b) "Public warehouse" means a warehouse in this state that	2252
is not subject to the control of or under the supervision of the	2253
owner of the merchandise or agricultural product stored in it, or	2254
staffed by the owner's employees, and from which the property is	2255
to be shipped inside this state.	2256

(E) Personal property valued pursuant to section 5711.15 of	2257
the Revised Code and personal property required to be listed on	2258
the average basis by division (B) of section 5711.16 of the	2259
Revised Code, except property described in division (D) of this	2260
section, business fixtures, and furniture not held for sale in the	2261
course of business, shall be listed and assessed at twenty-three	2262
per cent of its true value in money for tax year 2005 and at the	2263
percentage of such true value specified in division (G) of this	2264
section for tax year 2006 and each tax year thereafter.	2265

(F) All manufacturing equipment as defined in section 5711.16	2266
of the Revised Code shall be listed and assessed at the following	2267
percentage of its true value in money:	2268

(1) For all such property not previously used in business in	2269
this state by the owner thereof, or by related member or	2270
predecessor of the owner, other than as inventory, before January	2271
1, 2005, zero per cent of true value;	2272

(2) For all other such property, at the percentage of true	2273
value specified in division (G) of this section for tax year 2005	2274
and each tax year thereafter.	2275

(G) Unless otherwise provided by law, all other personal	2276
property used in business that has not been legally regarded as an	2277
improvement on land and considered in arriving at the value of the	2278
real property assessed for taxation shall be listed and assessed	2279
at the following percentages of true value in money:	2280

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

2281

(2) For tax year 2006, eighteen and three-fourths per cent of	2282
true value;	2283

(3) For tax year 2007, twelve and one-half per cent of true	2284
value;	2285

(4) For tax year 2008, six and one-fourth per cent of true	2286
value;	2287

(5) For tax year 2009 and each tax year thereafter, zero per	2288
cent of true value.	2289

(H)(1) For tax year 2007 and thereafter, all personal	2290
property used by a telephone company, telegraph company, or	2291
interexchange telecommunications company shall be listed as	2292
provided in this chapter and assessed at the following percentages	2293
of true value in money:	2294

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

2295

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

2296

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

2297

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

2298

(e) For tax year 2011 and each tax year thereafter, zero per	2299
cent of true value.	2300

(2) The property owned by a telephone, telegraph, or	2301
telecommunications company shall be apportioned to each	2302
appropriate taxing district as provided in section 5727.15 of the	2303
Revised Code.	2304

(I) During and after the tax year in which the assessment	2305
rate equals zero per cent, the property described in division (E),	2306
(F), (G), or (H) of this section shall not be listed for taxation.	2307

(J) Divisions (E), (F), (G), and (H) of this section apply to	2308
the property of a person described in divisions (E)(3) to (10),	2309
(4), and (5) of section 5751.01 of the Revised Code. Division (J)	2310
of this section does not prevent the application of the exemption	2311
of property from taxation under section 5725.25 or 5725.26 of the	2312
Revised Code.	2313

Sec. 5725.02. TheFor report years prior to 2014, the	2314
cashier or other principal accounting officer of each bank, the	2315
secretary or other principal accounting officer of each other	2316
incorporated financial institution, and the manager or owner of	2317
each unincorporated financial institution shall return to the	2318
department of taxation between the first and second Mondays of	2319
March, annually, a report exhibiting in detail, and under	2320
appropriate heads, the resources and liabilities of such	2321
institution at the close of business on the thirty-first day of	2322
December next preceding.	2323

The report of each financial institution shall also show the	2324
aggregate balances of the taxable deposits of its depositors in	2325
each county in which the institution maintained an office for the	2326
receipt of deposits, at the end of business on the day fixed by	2327
the tax commissioner pursuant to section 5725.05 of the Revised	2328
Code. The report shall show also the names and addresses of all	2329
depositors whose deposits were wholly withdrawn from such	2330
institution between the day so fixed and the date on which notice	2331
of the fixing was received by such institution, or if no such	2332
notice was received, then between the day fixed and the first day	2333
of January next following, and the amount of taxable deposits of	2334
each such depositerdepositor on the day fixed.	2335

Sec. 5725.14. (A) As used in this section and section 5725.15	2336
of the Revised Code:	2337

(1) "Billing address" of a customer means one of the	2338
following:	2339

(a) The customer's address as set forth in any notice,	2340
statement, bill, or similar acknowledgment shall be presumed to be	2341
the address where the customer is located with respect to the	2342
transaction for which the dealer issued the notice, statement,	2343
bill, or acknowledgment.	2344

(b) If the dealer issues any notice, statement, bill, or	2345
similar acknowledgment electronically to an address other than a	2346
street address or post office box address or if the dealer does	2347
not issue such a notice, statement, bill, or acknowledgment, the	2348
customer's street address as set forth in the records of the	2349
dealer at the time of the transaction shall be presumed to be the	2350
address where the customer is located.	2351

(2) "Commissions" includes but is not limited to brokerage	2352
commissions, asset management fees, and similar fees charged in	2353
the regular course of business to a customer for the maintenance	2354
and management of the customer's account.	2355

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

2356

(a) In the case of a dealer in intangibles principally	2357
engaged in the business of lending money or discounting loans, the	2358
aggregate amount of loans effected or discounted;	2359

(b) In the case of a dealer in intangibles principally	2360
engaged in the business of selling or buying stocks, bonds, or	2361
other similar securities either on the dealer's own account or as	2362
agent for another, the aggregate amount of all commissions	2363
charged.	2364

(B) Each dealer in intangibles shall return to the tax	2365
commissioner between the first and second Mondays of March,	2366
annually for return years prior to 2014, a report exhibiting in	2367
detail, and under appropriate heads, the dealer's resources and	2368
liabilities at the close of business on the thirty-first day of	2369
December next preceding. In the case of an unincorporated dealer	2370
in intangibles, such report shall also exhibit the amount or value	2371
as of the date of conversion of all property within the year	2372
preceding the date of listing, and on or after the first day of	2373
November converted into bonds or other securities not taxed to the	2374
extent such nontaxable bonds or securities may be shown in the	2375
dealer's resources on such date, without deduction for	2376
indebtedness created in the purchase of such nontaxable bonds or	2377
securities.	2378

If a dealer in intangibles maintains separate business	2379
offices, whether within this state only or within and without this	2380
state, the report shall also show the gross receipts from business	2381
done at each such office during the year ending on the	2382
thirty-first day of December next preceding.	2383

For the purposes of this section and section 5725.15 of the	2384
Revised Code, business is considered done at an office when it	2385
originates at such office, but the receipts from business	2386
originating at one office and consummated at another office shall	2387
be divided equitably between such offices.	2388

(C) For the purposes of this section and section 5725.15 of	2389
the Revised Code, in the case of a dealer in intangibles	2390
principally engaged in the business of selling or buying stocks,	2391
bonds, or other similar securities either on the dealer's own	2392
account or as agent for another, the dealer's capital, surplus,	2393
and undivided profits employed in this state shall bear the same	2394
ratio to the dealer's total capital, surplus, and undivided	2395
profits employed everywhere as the amount described in division	2396
(C)(1) of this section bears to the amount described in division	2397
(C)(2) of this section:	2398

(1) The sum of the commissions earned during the year covered	2399
by the report from transactions with respect to brokerage accounts	2400
owned by customers having billing addresses in this state;	2401

(2) The sum of the commissions earned during that year from	2402
transactions with respect to brokerage accounts owned by all of	2403
the dealer's customers.	2404

(D) An incorporated dealer in intangibles which owns or	2405
controls fifty-one per cent or more of the common stock of another	2406
incorporated dealer in intangibles may, under uniform regulations	2407
prescribed by the tax commissioner, make a consolidated return for	2408
the purpose of sections 5725.01 to 5725.26, inclusive, of the	2409
Revised Code. In such case the parent corporation making such	2410
return is not required to include in its resources any of the	2411
stocks, securities, or other obligations of its subsidiary	2412
dealers, nor permitted to include in its liabilities any of its	2413
own securities or other obligations belonging to its subsidiaries.	2414

Sec. 5725.16.  On or before the first Monday of May, annually	2415
for return years prior to 2014, the tax commissioner shall certify	2416
to the treasurer of state the assessment of the shares or property	2417
representing capital, or apportionment of either, of each dealer	2418
in intangibles doing business in the state, showing separately the	2419
amount representing capital employed in each county.	2420

The treasurer of state shall place the amounts certified on	2421
the intangible property tax list in histhe treasurer of state's	2422
office in the names of the dealers represented by those	2423
certificates.	2424

Any certificate of abatement issued pursuant to section	2425
5703.05 of the Revised Code for the overpayment of the tax on	2426
shares or property representing capital of a dealer in intangibles	2427
may be tendered by the payee or transferee thereof to the	2428
treasurer of state as payment for any taxes allocable to the	2429
county in which the claim for overpayment arose.	2430

Sec. 5725.26.  The real estate of a financial institution or	2431
dealer in intangibles shall be taxed in the place where it is	2432
located, the same as the real estate of persons is taxed, but the	2433
taxes provided for in Chapters 5725. and, 5726., 5733., and 5751.	2434
of the Revised Code, shall be in lieu of all other taxes on the	2435
other property and assets of such institution or dealer, except	2436
personal property taxable under Chapter 5711. of the Revised Code	2437
and leased, or held for the purpose of leasing, to others if the	2438
owner or lessor of the property acquired it for the sole purpose	2439
of leasing it to others.	2440

For reports required to be filed under section 5725.14 of the	2441
Revised Code in 2003 and thereafter, nothing in this section shall	2442
be construed to exempt the property of any dealer in intangibles	2443
under section 5725.13 of the Revised Code from the tax imposed	2444
under section 5707.03 of the Revised Code.	2445

Sec. 5725.33.  (A) Except as otherwise provided in this	2446
section, terms used in this section have the same meaning as	2447
section 45D of the Internal Revenue Code, any related proposed,	2448
temporary or final regulations promulgated under the Internal	2449
Revenue Code, any rules or guidance of the internal revenue	2450
service or the United States department of the treasury, and any	2451
related rules or guidance issued by the community development	2452
financial institutions fund of the United States department of the	2453
treasury, as such law, regulations, rules, and guidance exist on	2454
the effective date of the enactment of this section by H.B. 1 of	2455
the 128th general assemblyOctober 16, 2009.	2456

As used in this section:

2457

(1) "Adjusted purchase price" means the amount paid for	2458
qualified equity investments multiplied by the qualified	2459
low-income community investments made by the issuer in projects	2460
located in this state as a percentage of the total amount of	2461
qualified low-income community investments made by the issuer in	2462
projects located in all states on the credit allowance date during	2463
the applicable tax year, subject to divisions (B)(1) and (2) of	2464
this section.	2465

(2) "Applicable percentage" means zero per cent for each of	2466
the first two credit allowance dates, seven per cent for the third	2467
credit allowance date, and eight per cent for the four following	2468
credit allowance dates.	2469

(3) "Credit allowance date" means the date, on or after	2470
January 1, 2010, a qualified equity investment is made and each of	2471
the six anniversary dates thereafter. For qualified equity	2472
investments made after the effective date of this sectionOctober	2473
16, 2009, but before January 1, 2010, the initial credit allowance	2474
date is January 1, 2010, and each of the six anniversary dates	2475
thereafter is on the first day of January of each year.	2476

(4) "Qualified active low-income community business" excludes	2477
any business that derives or projects to derive fifteen per cent	2478
or more of annual revenue from the rental or sale of real	2479
property, except any business that is a special purpose entity	2480
principally owned by a principal user of that property formed	2481
solely for the purpose of renting, either directly or indirectly,	2482
or selling real property back to such principal user if such	2483
principal user does not derive fifteen per cent or more of its	2484
gross annual revenue from the rental or sale of real property.	2485

(5) "Qualified community development entity" includes only	2486
entities:	2487

(a) That have entered into an allocation agreement with the	2488
community development financial institutions fund of the United	2489
States department of the treasury with respect to credits	2490
authorized by section 45D of the Internal Revenue Code;	2491

(b) Whose service area includes any portion of this state;	2492
and	2493

(c) That will designate an equity investment in such entities	2494
as a qualified equity investment for purposes of both section 45D	2495
of the Internal Revenue Code and this section.	2496

(6) "Qualified equity investment" is limited to an equity	2497
investment in a qualified community development entity that:	2498

(a) Is acquired after the effective date of the enactment of	2499
this sectionOctober 16, 2009, at its original issuance solely in	2500
exchange for cash;	2501

(b) Has at least eighty-five per cent of its cash purchase	2502
price used by the qualified community development entity to make	2503
qualified low-income community investments, provided that in the	2504
seventh year after a qualified equity investment is made, only	2505
seventy-five per cent of such cash purchase price must be used by	2506
the qualified community development entity to make qualified	2507
low-income community investments; and	2508

(c) Is designated by the issuer as a qualified equity	2509
investment.	2510

"Qualified equity investment" includes any equity investment	2511
that would, but for division (A)(6)(a) of this section, be a	2512
qualified equity investment in the hands of the taxpayer if such	2513
investment was a qualified equity investment in the hands of a	2514
prior holder.	2515

(B) There is hereby allowed a nonrefundable credit against	2516
the tax imposed by section 5725.18 of the Revised Code for an	2517
insurance company holding a qualified equity investment on the	2518
credit allowance date occurring in the calendar year for which the	2519
tax is due. The credit shall equal the applicable percentage of	2520
the adjusted purchase price of qualified low-income community	2521
investments, subject to divisions (B)(1) and (2) of this section:	2522

(1) For the purpose of calculating the amount of qualified	2523
low-income community investments held by a qualified community	2524
development entity, an investment shall be considered held by a	2525
qualified community development entity even if the investment has	2526
been sold or repaid, provided that, at any time before the seventh	2527
anniversary of the issuance of the qualified equity investment,	2528
the qualified community development entity reinvests an amount	2529
equal to the capital returned to or received or recovered by the	2530
qualified community development entity from the original	2531
investment, exclusive of any profits realized and costs incurred	2532
in the sale or repayment, in another qualified low-income	2533
community investment within twelve months of the receipt of such	2534
capital. If the qualified low-income community investment is sold	2535
or repaid after the sixth anniversary of the issuance of the	2536
qualified equity investment, the qualified low-income community	2537
investment shall be considered held by the qualfiedqualified	2538
community development entity through the seventh anniversary of	2539
the qualified equity investment's issuance.	2540

(2) The qualified low-income community investment made in	2541
this state shall equal the sum of the qualified low-income	2542
community investments in each qualified active low-income	2543
community business in this state, not to exceed two million five	2544
hundred sixty-four thousand dollars, in which the qualified	2545
community development entity invests, including such investments	2546
in any such businesses in this state related to that qualified	2547
active low-income community business through majority ownership or	2548
control.	2549

The credit shall be claimed in the order prescribed by	2550
section 5725.98 of the Revised Code. If the amount of the credit	2551
exceeds the amount of tax otherwise due after deducting all other	2552
credits in that order, the excess may be carried forward and	2553
applied to the tax due for not more than four ensuing years.	2554

By claiming a tax credit under this section, an insurance	2555
company waives its rights under section 5725.222 of the Revised	2556
Code with respect to the time limitation for the assessment of	2557
taxes as it relates to credits claimed that later become subject	2558
to recapture under division (E) of this section.	2559

(C) The amount of qualified equity investments on the basis	2560
of which credits may be claimed under this section and sections	2561
5726.54, 5729.16, and 5733.58 of the Revised Code shall not exceed	2562
the amount, estimated by the director of development, that would	2563
cause the total amount of credits allowed each fiscal year to	2564
exceed ten million dollars, computed without regard to the	2565
potential for taxpayers to carry tax credits forward to later	2566
years.	2567

(D) If any amount of the federal tax credit allowed for a	2568
qualified equity investment for which a credit was received under	2569
this section is recaptured under section 45D of the Internal	2570
Revenue Code, or if the director of development services	2571
determines that an investment for which a tax credit is claimed	2572
under this section is not a qualified equity investment or that	2573
the proceeds of an investment for which a tax credit is claimed	2574
under this section are used to make qualified low-income community	2575
investments other than in a qualified active low-income community	2576
business, all or a portion of the credit received on account of	2577
that investment shall be paid by the insurance company that	2578
received the credit to the superintendent of insurance. The amount	2579
to be recovered shall be determined by the director of development	2580
services pursuant to rules adopted under division (E) of this	2581
section. The director shall certify any amount due under this	2582
division to the superintendent of insurance, and the	2583
superintendent shall notify the treasurer of state of the amount	2584
due. Upon notification, the treasurer shall invoice the insurance	2585
company for the amount due. The amount due is payable not later	2586
than thirty days after the date the treasurer invoices the	2587
insurance company. The amount due shall be considered to be tax	2588
due under section 5725.18 of the Revised Code, and may be	2589
collected by assessment without regard to the time limitations	2590
imposed under section 5725.222 of the Revised Code for the	2591
assessment of taxes by the superintendent. All amounts collected	2592
under this division shall be credited as revenue from the tax	2593
levied under section 5725.18 of the Revised Code.	2594

(E) The tax credits authorized under this section and	2595
sections 5726.54, 5729.16, and 5733.58 of the Revised Code shall	2596
be administered by the department of development services. The	2597
director of development services, in consultation with the tax	2598
commissioner and the superintendent of insurance, pursuant to	2599
Chapter 119. of the Revised Code, shall adopt rules for the	2600
administration of this section and sections 5726.54, 5729.16, and	2601
5733.58 of the Revised Code. The rules shall provide for	2602
determining the recovery of credits under division (D) of this	2603
section, division (D) of sectionand under sections 5726.54,	2604
5729.16, and section 5733.58 of the Revised Code, including	2605
prorating the amount of the credit to be recovered on any	2606
reasonable basis, the manner in which credits may be allocated	2607
among claimants, and the amount of any application or other fees	2608
to be charged in connection with a recovery.	2609

(F) There is hereby created in the state treasury the new	2610
markets tax credit operating fund. The director of development	2611
services is authorized to charge reasonable application and other	2612
fees in connection with the administration of tax credits	2613
authorized by this section and sections 5726.54, 5729.16, and	2614
5733.58 of the Revised Code. Any such fees collected shall be	2615
credited to the fund. The director of development services shall	2616
use money in the fund to pay expenses related to the	2617
administration of tax credits authorized under sections 5725.33,	2618
5726.54, 5729.16, and 5733.58 of the Revised Code.	2619

Sec. 5726.01. As used in this chapter:

2620

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

2621

(1) A national bank organized and operating as a national	2622
bank association pursuant to the "National Bank Act," 13 Stat. 100	2623
(1864), 12 U.S.C. 21, et seq.;	2624

(2) A federal savings association or federal savings bank	2625
chartered under 12 U.S.C. 1464;	2626

(3) A bank, banking association, trust company, savings and	2627
loan association, savings bank, or other banking institution that	2628
is organized or incorporated under the laws of the United States,	2629
any state, or a foreign country;	2630

(4) Any corporation organized and operating pursuant to 12	2631
U.S.C. 611, et seq.;	2632

(5) Any agency or branch of a foreign bank, as those terms	2633
are defined in 12 U.S.C. 3101;	2634

(6) An entity licensed as a small business investment company	2635
under the "Small Business Investment Act of 1958," 72 Stat. 689,	2636
15 U.S.C. 661, et seq.;	2637

(7) A company chartered under the "Farm Credit Act of 1933,"	2638
48 Stat. 257, or a successor of such a company.	2639

"Bank organization" does not include an institution organized	2640
under the "Federal Farm Loan Act," 39 Stat. 360 (1916), or a	2641
successor of such an institution, an insurance company, or a	2642
credit union.	2643

(B) "Call report" means the consolidated reports of condition	2644
and income prescribed by the federal financial institutions	2645
examination council that a person is required to file with a	2646
federal regulatory agency pursuant to 12 U.S.C. 161, 12 U.S.C.	2647
324, or 12 U.S.C. 1817.	2648

(C) "Credit union" means a nonprofit cooperative financial	2649
institution organized or chartered under the laws of this state,	2650
any other state, or the United States.	2651

(D) "Document of creation" means the articles of	2652
incorporation of a corporation, articles of organization of a	2653
limited liability company, registration of a foreign limited	2654
liability company, certificate of limited partnership,	2655
registration of a foreign limited partnership, registration of a	2656
domestic or foreign limited liability partnership, or registration	2657
of a trade name.	2658

(E) "Financial institution" means a bank organization or a	2659
holding company of a bank organization, except when one of the	2660
following applies:	2661

(1) If two or more such entities are consolidated for the	2662
purposes of filing an FR Y-9, "financial institution" means a	2663
group consisting of all entities that are included in the FR Y-9.	2664

(2) If two or more such entities are consolidated for the	2665
purposes of filing a call report, "financial institution" means a	2666
group consisting of all entities that are included in the call	2667
report and that are not included in a group described in division	2668
(E)(1) of this section.	2669

"Financial institution" does not include a diversified	2670
savings and loan holding company as defined in 12 U.S.C. 1467a, as	2671
that section existed on January 1, 2012, or a grandfathered	2672
unitary savings and loan holding company as defined in 12 U.S.C.	2673
1467b.	2674

(F) "FR Y-9" means the consolidated or parent-only financial	2675
statements that a holding company is required to file with the	2676
federal reserve board pursuant to 12 U.S.C. 1844. In the case of a	2677
holding company required to file both consolidated and parent-only	2678
financial statements, "FR Y-9" means the consolidated financial	2679
statements that the holding company is required to file.	2680

(G) "Gross receipts" means all items of income, without	2681
deduction for expenses. If the reporting person for a taxpayer is	2682
a holding company, "gross receipts" includes all items of income	2683
reported on the FR Y-9 filed by the holding company. If the	2684
reporting person for a taxpayer is a bank organization, "gross	2685
receipts" includes all items of income reported on the call report	2686
filed by the bank organization.	2687

(H) "Insurance company" means every corporation, association,	2688
and society engaged in the business of insurance of any character,	2689
or engaged in the business of entering into contracts	2690
substantially amounting to insurance of any character, or of	2691
indemnifying or guaranteeing against loss or damage, or acting as	2692
surety on bonds or undertakings. "Insurance company" also includes	2693
any health insuring corporation as defined in section 1751.01 of	2694
the Revised Code.	2695

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

2696

(1) In the case of a financial institution described in	2697
division (E)(1) of this section, the top-tier holding company	2698
required to file an FR Y-9 unless the top-tier holding company is	2699
a diversified savings and loan holding company, as defined in 12	2700
U.S.C. 1467a, as that section existed on January 1, 2012, or a	2701
grandfathered unitary savings and loan holding company as defined	2702
in 12 U.S.C. 1467b. If the top-tier holding company is such a	2703
holding company, then the reporting person shall be the bank	2704
organization.	2705

(2) In the case of a financial institution described in	2706
division (E)(2) of this section, the bank organizationrequired to	2707
file the call report.	2708

(3) In the case of a bank organization that is not included	2709
in a group described in division (E)(1) or (2) of this section,	2710
the bank organization.	2711

(J) "Tax year" means the calendar year for which the tax	2712
levied under section 5726.02 of the Revised Code is required to be	2713
paid.	2714

(K) "Taxable year" means the calendar year preceding the year	2715
in which an annual report is required to be filed under section	2716
5726.03 of the Revised Code.	2717

(L) "Taxpayer" means a financial institution subject to the	2718
tax levied under section 5726.02 of the Revised Code.	2719

(M) "Total equity capital" means the sum of the common stock	2720
at par value, perpetual preferred stock and related surplus, other	2721
surplus not related to perpetual preferred stock, retained	2722
earnings, accumulated other comprehensive income, treasury stock,	2723
unearned employee stock ownership plan shares, and other equity	2724
components of a financial institution. "Total equity capital"	2725
shall include any noncontrolling (minority) interests in	2726
consolidated subsidiaries that are financial institutions, as	2727
reported on a financial institution's FR Y-9 or call report, but	2728
shall not include such interests in consolidated subsidiaries that	2729
are not financial institutions.	2730

(N) "Total Ohio equity capital" means the portion of the	2731
total equity capital of a financial institution apportioned to	2732
Ohio pursuant to section 5726.05 of the Revised Code.	2733

(O) "Holding company" does not include a diversified savings	2734
and loan holding company as defined in 12 U.S.C. 1467a, as that	2735
section existed on January 1, 2012, or a grandfathered unitary	2736
savings and loan holding company as defined in 12 U.S.C. 1467b.	2737

Sec. 5726.02. (A) For the purpose of funding the needs of	2738
this state and its local governments beginning with the tax year	2739
that commences on January 1, 2014, and continuing for every tax	2740
year thereafter, there is hereby levied a tax on each financial	2741
institution for the privilege of doing business in this state. A	2742
financial institution is subject to the tax imposed under this	2743
chapter for each calendar year that the financial institution	2744
conducts business as a financial institution in this state or	2745
otherwise has nexus in or with this state under the Constitution	2746
of the United States on the first day of January of that calendar	2747
year.	2748

(B) The amount of tax a financial institution is required to	2749
pay under this chapter shall equal the greater of the minimum tax	2750
required under division (A)(1) of section 5726.04 of the Revised	2751
Code or the amount by which the tax calculated under division	2752
(A)(2) of that section exceeds any credits allowed against the	2753
tax.	2754

Sec. 5726.03. (A)(1) Annually, on or before the thirty-first	2755
day of March, or on or before a later date as extended under	2756
division (B) of this section, the reporting person for each	2757
taxpayer shall make a report in writing to the tax commissioner,	2758
in such form as the commissioner prescribes, and shall remit to	2759
the commissioner the amount of tax shown to be due on the report.	2760
The remittance shall be made payable to the treasurer of state.	2761
The commissioner shall make available, on the official internet	2762
web site of the department of taxation, copies of the forms	2763
prescribed by the commissioner for the purpose of making the	2764
annual report.	2765

(2) An annual report shall be signed by the president,	2766
vice-president, secretary, treasurer, general manager,	2767
superintendent, or managing agent in this state of the reporting	2768
person.	2769

(3) An annual report shall contain the facts, figures,	2770
computations, and attachments that result in the determination of	2771
the amount of tax due from a taxpayer under this chapter.	2772

(B) The tax commissioner may extend the period of time for	2773
filing an annual report to the fifteenth day of the month	2774
following the due date, including extensions thereof, for the	2775
filing of the federal corporate income tax return for the taxable	2776
year. The extension of time to file an annual report shall not	2777
extend the time for payment of the tax. Any tax not paid on or	2778
before the due date for such payment shall be subject to penalty	2779
and interest as provided in this chapter.	2780

(C)(1) In the case of a financial institution described in	2781
division (E)(1) of section 5726.01 of the Revised Code, the annual	2782
report filed for a taxable year shall list, and include	2783
information related to, each person includable in an FR Y-9 filed	2784
by the reporting person for that taxable year.	2785

(2) In the case of a financial institution described in	2786
division (E)(2) of section 5726.01 of the Revised Code, the annual	2787
report for a taxable year shall list, and include information	2788
related to, each person includable in a call report filed by the	2789
reporting person for that taxable year.	2790

(D)(1) The reporting person for a taxpayer shall remit each	2791
tax payment and, if required by the commissioner, file each annual	2792
or estimated tax report electronically. The commissioner may	2793
require reporting persons to use the Ohio business gateway as	2794
defined in section 718.051 of the Revised Code to file reports and	2795
remit the tax, or may provide another means for reporting persons	2796
to file and remit the tax electronically.	2797

(2) The payment of taxes as provided in division (D) of this	2798
section shall not affect a taxpayer's obligation to file an annual	2799
report required under division (A) of this section.	2800

(3) The reporting person for a taxpayer that is required to	2801
remit tax payments electronically under this section may apply to	2802
the tax commissioner, in the manner prescribed by the	2803
commissioner, to be excused from that requirement. The	2804
commissioner may excuse the taxpayer from the requirements of	2805
division (D) of this section for good cause.	2806

(4) If the reporting person for a taxpayer that is required	2807
to remit tax payments or file reports electronically under this	2808
section fails to do so, the commissioner may impose a penalty not	2809
to exceed the following:	2810

(a) For either of the first two reports the person so fails,	2811
five per cent of the amount of the payment that was required to be	2812
remitted;	2813

(b) For the third and any subsequent reports the person so	2814
fails, ten per cent of the amount of the payment that was required	2815
to be remitted.	2816

The penalty imposed under this section is in addition to any	2817
other penalty or charge imposed under this chapter and shall be	2818
considered as revenue arising from the tax levied under this	2819
chapter. A penalty may be collected by assessment in the manner	2820
prescribed by section 5726.20 of the Revised Code. The tax	2821
commissioner may abate all or a portion of such a penalty and may	2822
adopt rules governing such abatements.	2823

Sec. 5726.04. (A) The tax levied on a financial institution	2824
under this chapter shall be the greater of the following:	2825

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

2826

(2) The product of the total Ohio equity capital of the	2827
financial institution, as determined under this section,	2828
multiplied by eight mills for each dollar of the first five	2829
hundred million dollars of total Ohio equity capital and by two	2830
and one-half mills for each dollar of total Ohio equity capital in	2831
excess of five hundred million dollars.	2832

(B) The total equity capital of a financial institution shall	2833
equal the total equity capital shown on the reporting person's FR	2834
Y-9 or call report as of the end of the taxable year.	2835

(C) For the purposes of this section, "total Ohio equity	2836
capital" means the product of the total equity capital of a	2837
financial institution as of the end of a taxable year multiplied	2838
by the Ohio apportionment ratio calculated for the financial	2839
institution under section 5726.05 of the Revised Code.	2840

(D) All payments received from the tax levied under this	2841
chapter shall be credited to the general revenue fund.	2842

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

2843

(a) "Target tax amount" means two hundred five million	2844
dollars.	2845

(b) "Amount of taxes collected" means the amount of taxes	2846
received by the tax commissioner from the tax levied under this	2847
chapter for a tax year, less any amounts refunded to taxpayers for	2848
the same tax year.	2849

(2) If, for the tax year beginning on January 1, 2014, the	2850
total amount of taxes collected from all taxpayers under this	2851
chapter is greater than one hundred ten per cent of the target tax	2852
amount, the tax commissioner shall decrease each tax rate provided	2853
in division (A)(2) of this section by a percentage equal to the	2854
difference of (a) the percentage by which the amount of taxes	2855
collected exceeded the target tax amount minus (b) ten per cent of	2856
the target tax amount.	2857

(3) If, for the tax year beginning on January 1, 2014, the	2858
total amount of taxes collected from all taxpayers under this	2859
chapter is less than ninety per cent of the target tax amount, the	2860
tax commissioner shall increase each tax rate provided in division	2861
(A)(2) of this section by a percentage equal to the difference of	2862
(a) the percentage by which the target tax amount exceeded the	2863
amount of taxes collected minus (b) ten per cent of the target tax	2864
amount.	2865

(4) Tax rates adjusted pursuant to division (E)(2) or (3) of	2866
this section shall be rounded to the nearest one-tenth of one mill	2867
per dollar. The tax commissioner shall publish the new tax rates	2868
by journal entry and provide notice of the new tax rates to	2869
taxpayers. The new tax rates shall apply to tax years beginning on	2870
or after January 1, 2015.	2871

Sec. 5726.05. (A) An apportionment factor shall be used to	2872
determine the total Ohio equity capital of a financial	2873
institution. The factor shall be based upon the gross receipts	2874
generated by the financial institution and reported in the same	2875
manner as provided for the determination of the financial	2876
institution's total equity capital for a tax year under division	2877
(B) of section 5726.04 of the Revised Code.	2878

(B) The apportionment factor is a fraction, the numerator of	2879
which is the total gross receipts of the financial institution in	2880
this state during the taxable year and the denominator of which is	2881
the total gross receipts of the financial institution everywhere	2882
during the taxable year. Gross receipts generated by a financial	2883
institution shall be sitused to this state in the proportion that	2884
the customers' benefit in this state with respect to the services	2885
received bears to the customers' benefit everywhere with respect	2886
to the services received. The physical location where the customer	2887
ultimately uses or receives the benefit of what was received shall	2888
be paramount in determining the proportion of the benefit in this	2889
state to the benefit everywhere. The method of calculating gross	2890
receipts for purposes of the denominator shall be the same as the	2891
method used in determining gross receipts for purposes of the	2892
numerator.	2893

(C) The following are examples of gross receipts to be	2894
included in the numerator of the apportionment factor:	2895

(1) Receipts from the lease, sublease, rental, or subrental	2896
of real property located in this state;	2897

(2) Receipts from the lease, sublease, rental, or subrental	2898
of tangible personal property to the extent such property is used	2899
in this state;	2900

(3) Interest, fees, penalties, or any other charge received	2901
from loans secured by real property located within this state;	2902

(4) Interest, fees, penalties, or any other charge received	2903
from loans not secured by real property if the borrower is located	2904
in this state;	2905

(5) The amount of positive net gains from the sale of loans	2906
secured by real property located in this state;	2907

(6) The amount of positive net gains from the sale of loans	2908
not secured by real property if the borrower is located in this	2909
state;	2910

(7) Interest, annual fees, penalties, or any other charges	2911
received from credit card receivables and from cardholders if the	2912
billing address of the cardholder is located in this state;	2913

(8) The amount of positive net gains from the sale of credit	2914
card receivables if the billing address of the cardholder is	2915
located in this state;	2916

(9) Reimbursement fees of a credit card issuer if the billing	2917
address of the cardholder is located in this state;	2918

(10) Receipts from merchant discounts if the merchant is	2919
located in this state;	2920

(11) Loan servicing fees derived from loans secured by real	2921
property located in this state;	2922

(12) Loan servicing fees derived from loans not secured by	2923
real property if the borrower is located in this state;	2924

(13) Loan servicing fees derived from servicing loans from	2925
other financial institutions if the borrower is located in this	2926
state;	2927

(14) Interest, dividends, positive net gains, and other	2928
income from investment assets and activities and from trading	2929
assets and activities proportionate to the taxpayer's customers	2930
located in this state;	2931

(15) Receipts not otherwise listed herein if the payor of	2932
those receipts is located in this state.	2933

(D) Receipts from investment assets and activities and	2934
trading assets and activities, including interest and dividends,	2935
are in this state to the extent the financial institution's	2936
customers are in this state. This shall be determined by applying	2937
the gross receipts factor calculated in division (B) of this	2938
section to the investment assets and activities and trading assets	2939
and activities. "Investment assets and activities and trading	2940
assets and activities" includes interest, dividends, and other	2941
income from assets and activities, including, but not limited to:	2942
investment securities; trading account assets; federal funds;	2943
securities purchased and sold under agreements to resell or	2944
repurchase; options; futures contracts; forward contracts;	2945
notional principal contracts such as swaps; equities; foreign	2946
currency transactions; amounts in the matched book and in the	2947
arbitrage book, but excluding amounts otherwise sourced in this	2948
section.	2949

(E) If the apportionment provisions of this section do not	2950
fairly represent the extent of the taxpayer's business activity in	2951
this state, the taxpayer may request, or the tax commissioner may	2952
require or permit, an alternative method. Such a request must be	2953
made within any applicable statute of limitations set forth in	2954
this chapter.	2955

(F) A financial institution's "gross receipts" for purposes	2956
of the calculation required by division (B) of this section shall	2957
be determined using the financial institution's method of	2958
accounting for income tax purposes. If a financial institution's	2959
method of accounting is changed for income tax purposes, its	2960
method of accounting for purposes of the calculation required by	2961
division (B) of this section shall be changed accordingly.	2962

(G) The tax commissioner shall adopt administrative rules to	2963
provide additional guidance for the application of this section.	2964

Sec. 5726.06. (A) The reporting person for a taxpayer shall	2965
file estimated tax reports and remit the amount of tax estimated	2966
to be due for a tax year to the tax commissioner as follows:	2967

(1) The minimum tax required under division (A)(1) of section	2968
5726.04 of the Revised Code or one-third of the estimated tax,	2969
whichever is greater, on or before the thirty-first day of January	2970
of the tax year;	2971

(2) One-half of the amount by which the estimated tax exceeds	2972
the amount paid under division (A)(1) of this section on or before	2973
the thirty-first day of March of the tax year;	2974

(3) One-half of the amount by which the estimated tax exceeds	2975
the amount paid under division (A)(1) of this section on or before	2976
the thirty-first day of May of the tax year.	2977

(B)(1) The reporting person for a taxpayer shall remit the	2978
estimated tax electronically as provided in division (D) of	2979
section 5726.03 of the Revised Code. Remittance shall be made	2980
payable to the treasurer of state.	2981

(2) The tax commissioner shall immediately forward to the	2982
treasurer of state all amounts received under this section, and	2983
the treasurer of state shall credit all payments of such estimated	2984
tax as provided in division (D) of section 5726.04 of the Revised	2985
Code.	2986

(C)(1) If a taxpayer was not subject to the tax imposed by	2987
section 5726.02 of the Revised Code for the preceeding tax year,	2988
"estimated tax" for purposes of division (A)(1) of this section	2989
means ninety per cent of the qualifying net tax for the tax year.	2990
If a taxpayer was subject to the tax for the preceding tax year,	2991
"estimated tax" for purposes of division (A)(1) of this section	2992
means the lesser of one hundred per cent of the taxpayer's	2993
qualifying net tax for the preceding tax year or ninety per cent	2994
of the qualifying net tax for the tax year.	2995

(2) If the taxpayer did not file a report under section	2996
5726.02 of the Revised Code for the tax year or failed to prepare	2997
and file the report in good faith for the tax year, "qualifying	2998
net tax" as used in division (C)(1) of this section for that tax	2999
year means the amount described in division (C)(2)(a) of this	3000
section. Otherwise, "qualifying net tax" as used in division	3001
(C)(1) of this section for that tax year means the lesser of the	3002
amount described in division (C)(2)(a) or (b) of this section.	3003

(a) The tax imposed by section 5726.02 of the Revised Code	3004
for that tax year reduced by the credits listed in section 5726.98	3005
of the Revised Code. If the credits exceed the total tax, the	3006
qualifying net tax is the minimum tax.	3007

(b) The lesser of the tax shown on the report, prepared and	3008
filed in good faith, reduced by the credits shown on that report,	3009
or the tax shown on an amended report, prepared and filed in good	3010
faith, reduced by the credits shown on that amended report. If the	3011
credits shown exceed the total tax shown, the qualifying net tax	3012
is the minimum tax.	3013

Sec. 5726.07. (A) In the case of an underpayment of estimated	3014
taxes required to be paid under section 5726.06 of the Revised	3015
Code, interest upon the amount of underpayment, calculated at the	3016
rate per annum prescribed by section 5703.47 of the Revised Code	3017
for the period of underpayment, shall be added to the tax due for	3018
the tax year for which the estimated tax is paid.	3019

(B) The amount of underpayment upon which such interest is	3020
computed equals the amount by which division (B)(1) of this	3021
section exceeds division (B)(2) of this section.	3022

(1) The amount of the estimated tax payment that would be	3023
required to be paid if the total estimated tax due were equal to	3024
the amount of tax shown to be due on the annual report filed for	3025
the tax year or, if no report was filed, the total amount of tax	3026
due for the tax year;	3027

(2) The amount, if any, of the estimated tax that has been	3028
paid on or before the last day prescribed for such payment.	3029

(C) The period of underpayment for which such interest is	3030
computed shall run from the date the estimated tax payment was	3031
required to be made to the date the payment is made.	3032

For purposes of this section, a payment of estimated tax on	3033
any payment date shall be considered a payment of any previous	3034
underpayment only to the extent that such payment exceeds the	3035
amount of payment currently due.	3036

Sec. 5726.08. Except as otherwise provided in this section,	3037
if any report, claim, statement, or other document required to be	3038
filed, or any payment required to be made, within a prescribed	3039
period or on or before a prescribed date under this chapter is,	3040
after such period or date, delivered by United States mail to the	3041
agency, officer, or office with which such report, claim,	3042
statement, or other document is required to be filed, or to which	3043
such payment is required to be made, the date of the postmark	3044
stamped on the cover in which such report, claim, statement, or	3045
other document, or payment is mailed shall be deemed the date of	3046
delivery or the date of payment.	3047

If a payment is made electronically, the payment is	3048
considered to be made when the payment is received by the	3049
treasurer of state or credited to an account designated by the	3050
treasurer of state for the receipt of tax payments.	3051

As used in this section, "the date of the postmark" means, in	3052
the event there is more than one date on the cover, the earliest	3053
date imprinted on the cover by the post office.	3054

Sec. 5726.10. The tax commissioner shall enforce and	3055
administer this chapter. In addition to any other powers conferred	3056
upon the commissioner by law, the commissioner may do any of the	3057
following:	3058

(A) Prescribe all forms required to be filed pursuant to this	3059
chapter;	3060

(B) Promulgate such rules and regulations as the commissioner	3061
finds necessary to carry out this chapter;	3062

(C) Appoint and employ such personnel as are necessary to	3063
carry out the duties imposed upon the commissioner by this	3064
chapter.	3065

Sec. 5726.20. (A) The tax commissioner may make an	3066
assessment, based on any information in the commissioner's	3067
possession, against any person that fails to file a return or	3068
report or pay any tax as required by this chapter. The reporting	3069
person for a taxpayer shall file the annual report required under	3070
section 5726.02 of the Revised Code and remit the tax imposed by	3071
this chapter. Each person included in the annual report of the	3072
taxpayer is jointly and severally liable for the tax imposed by	3073
this chapter and any penalties and interest thereon. If the	3074
reporting person fails, for any reason, to file and remit any tax,	3075
the amount due may be collected by assessment against the	3076
reporting person and against any or all other persons required to	3077
be included in the annual report of the taxpayer in the manner	3078
provided by this section. The commissioner shall give the person	3079
assessed written notice of the assessment as provided in section	3080
5703.37 of the Revised Code. With the notice, the commissioner	3081
shall provide instructions on the manner in which to petition for	3082
reassessment and request a hearing with respect to the petition.	3083

(B) No assessment shall be made or issued against a person	3084
under this section more than four years after the later of the	3085
final date the report subject to assessment was required to be	3086
filed or the date such report was filed. Such time limit may be	3087
extended if both the person and the commissioner consent in	3088
writing to the extension or if an agreement waiving or extending	3089
the time limit has been entered into pursuant to section 122.171	3090
of the Revised Code. Any such extension shall extend the four-year	3091
time limit prescribed in division (A) of section 5726.30 of the	3092
Revised Code for the same period of time. There shall be no bar or	3093
limit to an assessment against a person that fails to file a	3094
report subject to assessment as required by this chapter, or that	3095
files a fraudulent report.	3096

(C) Unless the person assessed, within sixty days after	3097
service of the notice of assessment, files with the tax	3098
commissioner, either in person or by certified mail, a written	3099
petition for reassessment signed by the person or the person's	3100
authorized agent having knowledge of the facts, the assessment	3101
shall become final, and the amount of the assessment is due and	3102
payable from the person assessed to the treasurer of state. A	3103
petition shall indicate the objections of the person assessed, but	3104
additional objections may be raised in writing if received by the	3105
commissioner prior to the date shown on the final determination.	3106
If a petition for reassessment has been properly filed, the	3107
commissioner shall proceed under section 5703.60 of the Revised	3108
Code.	3109

(D)(1) After an assessment becomes final, if any portion of	3110
the assessment, including any accrued interest, remains unpaid, a	3111
certified copy of the tax commissioner's entry making the	3112
assessment final may be filed in the office of the clerk of the	3113
court of common pleas in the county in which the person resides or	3114
has its principal place of business in this state, or in the	3115
office of the clerk of court of common pleas of Franklin county.	3116

(2) Immediately upon the filing of the entry, the clerk shall	3117
enter judgment for the state against the person assessed in the	3118
amount shown on the entry. The judgment may be filed by the clerk	3119
in a loose-leaf book entitled, "special judgments for the	3120
financial institution tax" and shall have the same effect as other	3121
judgments. Execution shall issue upon the judgment at the request	3122
of the tax commissioner, and all laws applicable to sales on	3123
execution shall apply to sales made under the judgment.	3124

(3) The portion of the assessment not paid within sixty days	3125
after the day the assessment was issued shall bear interest at the	3126
rate per annum prescribed by section 5703.47 of the Revised Code	3127
from the date the tax commissioner issues the assessment until the	3128
date the assessment is paid. Interest shall be paid in the same	3129
manner as the tax and may be collected by the issuance of an	3130
assessment under this section.	3131

(E) If the tax commissioner believes that collection of the	3132
tax imposed by this chapter will be jeopardized unless proceedings	3133
to collect or secure collection of the tax are instituted without	3134
delay, the commissioner may issue a jeopardy assessment against	3135
the person liable for the tax. Immediately upon the issuance of	3136
the jeopardy assessment, the commissioner shall file an entry with	3137
the clerk of the court of common pleas in the manner prescribed by	3138
division (D) of this section. Notice of the jeopardy assessment	3139
shall be served on the person assessed or the person's authorized	3140
agent in the manner provided in section 5703.37 of the Revised	3141
Code within five days of the filing of the entry with the clerk.	3142
The total amount assessed shall be immediately due and payable,	3143
unless the person assessed files a petition for reassessment in	3144
accordance with division (C) of this section and provides security	3145
in a form satisfactory to the commissioner and in an amount	3146
sufficient to satisfy the unpaid balance of the assessment. Full	3147
or partial payment of the assessment shall not prejudice the	3148
commissioner's consideration of the petition for reassessment.	3149

(F) The tax commissioner shall immediately forward to the	3150
treasurer of state all amounts the commissioner receives under	3151
this section. Such amounts shall be considered as revenue arising	3152
from the tax imposed by this chapter.	3153

(G) If the tax commissioner possesses information indicating	3154
that the amount of tax a taxpayer is required to pay under this	3155
chapter exceeds the amount the reporting person for the taxpayer	3156
paid, the tax commissioner may audit a sample of the taxpayer's	3157
gross receipts over a representative period of time to ascertain	3158
the amount of tax due, and may issue an assessment based on the	3159
audit. The tax commissioner shall make a good faith effort to	3160
reach agreement with the taxpayer in selecting a representative	3161
sample. The tax commissioner may apply a sampling method only if	3162
the commissioner has prescribed the method by rule.	3163

(H) If the whereabouts of a person subject to this chapter is	3164
not known to the tax commissioner, the secretary of state is	3165
hereby deemed to be that person's agent for purposes of service of	3166
process or notice of any assessment, action, or proceedings	3167
instituted in this state against the person under this chapter.	3168
Such process or notice shall be served on such person by the	3169
commissioner or by an agent of the commissioner by leaving a true	3170
and attested copy of the process or notice at the office of the	3171
secretary of state at least fifteen days before the return day of	3172
such process or notice, and by sending a copy of the process or	3173
notice to such person by ordinary mail, with an endorsement	3174
thereon of the service upon the secretary of state, addressed to	3175
such person at the person's last known address.	3176

Sec. 5726.21. (A) In addition to any other penalty imposed by	3177
this chapter or Chapter 5703. of the Revised Code, the following	3178
penalties shall apply:	3179

(1) If a taxpayer required to file any report under this	3180
chapter fails to make and file the report within the time	3181
prescribed, including any extensions of time granted by the tax	3182
commissioner, a penalty may be imposed not exceeding the greater	3183
of fifty dollars per month or fraction of a month, not to exceed	3184
five hundred dollars, or five per cent per month or fraction of a	3185
month, not to exceed fifty per cent of the tax required to be	3186
shown on the report, for each month or fraction of a month	3187
elapsing between the due date, including extensions of the due	3188
date, and the date on which the report is filed.	3189

(2) If a taxpayer fails to pay the amount of tax required to	3190
be paid under this chapter, except for estimated tax under section	3191
5726.06 of the Revised Code, by the dates prescribed in this	3192
chapter for payment, a penalty may be imposed not exceeding	3193
fifteen per cent of the delinquent payment.	3194

(3) If a taxpayer files what purports to be a report required	3195
by this chapter that does not contain information upon which the	3196
substantial correctness of the report may be judged or contains	3197
information that on its face indicates that the report is	3198
substantially incorrect, and the filing of the report in that	3199
manner is due to a position that is frivolous or a desire that is	3200
apparent from the report to delay or impede the administration of	3201
the tax levied under this chapter, a penalty of up to five hundred	3202
dollars may be imposed.	3203

(4) If a taxpayer makes a fraudulent attempt to evade the	3204
reporting or payment of the tax required to be shown on any report	3205
required under this chapter, a penalty may be imposed not	3206
exceeding the greater of one thousand dollars or one hundred per	3207
cent of the tax required to be shown on the report.	3208

(5) If a taxpayer makes a false or fraudulent claim for a	3209
refund under this chapter, a penalty may be imposed not exceeding	3210
the greater of one thousand dollars or one hundred per cent of the	3211
claim.	3212

(B) The tax commissioner may collect any penalty imposed by	3213
this section in the same manner as the tax levied under this	3214
chapter. Penalties so collected shall be considered as revenue	3215
arising from the tax levied under this chapter.	3216

(C) For purposes of this section, the tax required to be	3217
shown on the report shall be reduced by the amount of any part of	3218
the tax paid on or before the date, including extensions of the	3219
date, prescribed for filing the report.	3220

(D) The tax commissioner may abate all or a portion of any	3221
penalties imposed under this section and may adopt rules governing	3222
such abatements.	3223

Sec. 5726.30. (A) The tax commissioner shall refund the	3224
amount of taxes imposed under this chapter that a person overpaid,	3225
paid illegally or erroneously, or paid on an illegal or erroneous	3226
assessment. The person shall file an application for refund with	3227
the tax commissioner, on the form prescribed by the commissioner,	3228
within four years after the date of the illegal or erroneous	3229
payment of the tax, or within any additional period allowed under	3230
division (B) of section 5726.20 of the Revised Code. The applicant	3231
shall provide the amount of the requested refund along with the	3232
claimed reasons for, and documentation to support, the issuance of	3233
a refund.	3234

For purposes of this division, a payment that an applicant	3235
made before the due date or extended due date for filing the	3236
report to which the payment relates shall be deemed to have been	3237
made on the due date or extended due date of the report.	3238

(B) Upon the filing of a refund application, the tax	3239
commissioner shall determine the amount of refund to which the	3240
applicant is entitled. If the amount is not less than that	3241
claimed, the commissioner shall certify the amount to the director	3242
of budget and management and treasurer of state for payment from	3243
the tax refund fund created under section 5703.052 of the Revised	3244
Code. If the amount is less than that claimed, the commissioner	3245
shall proceed in accordance with section 5703.70 of the Revised	3246
Code.	3247

(C)(1) Except as provided in division (C)(2) of this section,	3248
interest on a refund applied for under this section, computed at	3249
the rate provided for in section 5703.47 of the Revised Code,	3250
shall be allowed from the later of the date the tax was paid or	3251
the date the tax payment was due until the refund is paid.	3252

(2) No interest shall be allowed under this section on an	3253
amount refunded to a person to the extent that the refund results	3254
from the allowance of a refundable credit against the tax imposed	3255
by section 5726.02 of the Revised Code.	3256

Sec. 5726.31. As used in this section, "debt to this state"	3257
means unpaid taxes due the state, unpaid workers' compensation	3258
premiums due under section 4123.35 of the Revised Code, unpaid	3259
unemployment compensation contributions due under section 4141.25	3260
of the Revised Code, unpaid unemployment compensation payments in	3261
lieu of contributions due under section 4141.241 of the Revised	3262
Code, unpaid claims certified under section 131.02 or 131.021 of	3263
the Revised Code, unpaid fees payable to the state or to the clerk	3264
of courts pursuant to section 4505.06 of the Revised Code or any	3265
unpaid charge, penalty, or interest arising from any of the	3266
foregoing.	3267

If a person entitled to a refund under section 5726.30 of the	3268
Revised Code owes any debt to this state, the amount refundable	3269
may be applied in satisfaction of the debt. If the amount	3270
refundable is less than the amount of the debt, it may be applied	3271
in partial satisfaction of the debt. If the amount refundable is	3272
greater than the amount of the debt, the amount remaining after	3273
satisfaction of the debt shall be refunded. If the taxpayer has	3274
more than one such debt, any debt subject to section 5739.33 or	3275
division (G) of section 5747.07 of the Revised Code shall be	3276
satisfied first.	3277

Except as provided in section 131.021 of the Revised Code,	3278
this section applies only to debts that have become final. For the	3279
purposes of this section, a debt becomes final when, under the	3280
applicable law, any time provided for petition for reassessment,	3281
request for reconsideration, or other appeal of the legality or	3282
validity of the amount giving rise to the debt expires without an	3283
appeal having been filed in the manner provided by law.	3284

The tax commissioner may charge each respective agency of the	3285
state for the commissioner's cost in applying refunds to debts due	3286
to the state and may charge the attorney general for the	3287
commissioner's cost in applying refunds to certified claims. The	3288
commissioner may promulgate rules to implement this section.	3289

The commissioner may, with the consent of the reporting	3290
person for a taxpayer, provide for the crediting of the amount of	3291
any refund due to the taxpayer under this chapter for a tax year	3292
against the tax due for any succeeding tax year.	3293

Sec. 5726.32.  If any tax due under this chapter is not paid	3294
on or before the date prescribed for its payment, interest shall	3295
be assessed, collected, and paid, in the same manner as the tax,	3296
upon such unpaid amount at the rate per annum prescribed by	3297
section 5703.47 of the Revised Code from the date prescribed for	3298
the payment of the tax until the date the tax is paid or the date	3299
an assessment is issued under section 5726.20 of the Revised Code,	3300
whichever is earlier. Interest so collected shall be considered as	3301
revenue arising from the tax imposed by this chapter.	3302

Sec. 5726.33. (A) As used in this section, "qualifying refund	3303
overpayment" means an amount received by a taxpayer in excess of a	3304
refund claimed or a request for payment made by the reporting	3305
person for the taxpayer on a return, report, or other document	3306
filed with the tax commissioner.	3307

(B) A taxpayer is not liable for any interest or penalty with	3308
respect to the repayment of a qualifying refund overpayment if the	3309
reporting person for the taxpayer pays the entire amount of the	3310
qualifying refund overpayment to the commissioner not later than	3311
thirty days after the taxpayer receives an assessment for the	3312
amount. If the reporting person does not pay the entire amount of	3313
the overpayment to the commissioner within the time prescribed by	3314
this section, interest shall accrue on the amount of the	3315
deficiency pursuant to section 5726.32 of the Revised Code from	3316
the date the commissioner issues the assessment until the date the	3317
deficiency is paid.	3318

Sec. 5726.36. (A) A person shall notify the tax commissioner	3319
when the person is no longer subject to the tax imposed by this	3320
chapter.	3321

(B) If the ownership structure of a financial institution	3322
changes such that a person is no longer includable in the annual	3323
report of the financial institution, the reporting person for the	3324
financial institution shall notify the commissioner of the change	3325
when the reporting person files its next annual report or in	3326
writing prior to the due date of that report.	3327

Sec. 5726.40. If a person, wherever organized, doing business	3328
in this state or owning or issuing all or part of the entity's	3329
capital or property in this state, and required by law to file any	3330
report or return or to pay any tax or fee under Title LVII of the	3331
Revised Code, fails or neglects to make such report or return or	3332
to pay any such tax or fee for ninety days after the time	3333
prescribed by law for making such report or return or for paying	3334
such tax or fee, the tax commissioner shall certify such fact to	3335
the secretary of state. The secretary of state shall thereupon	3336
cancel the document of creation authorizing the person to do	3337
business in this state. Upon such cancellation, all of the powers,	3338
privileges, and franchises conferred upon that person by its	3339
document of creation shall cease, subject to section 1701.88 of	3340
the Revised Code. The secretary of state shall immediately notify	3341
the person of the action taken by the secretary, and shall also	3342
forward for filing a certificate of the action so taken to the	3343
county recorder of the county in which the principal place of	3344
business of the person in this state is located. No fee shall be	3345
charged for the filing.	3346

Sec. 5726.41. No person shall exercise, or attempt to	3347
exercise, any powers, privileges, or franchises under the person's	3348
document of creation after the document is canceled pursuant to	3349
section 5726.40 of the Revised Code. A penalty of one hundred	3350
dollars shall be imposed for each day a violation of this section	3351
occurs, up to a maximum penalty of five thousand dollars.	3352

Sec. 5726.42. (A)(1) A person whose document of creation has	3353
been canceled by the secretary of state pursuant to section	3354
5726.40 the Revised Code shall be reinstated and again entitled to	3355
exercise its rights, privileges, and franchises in this state upon	3356
compliance with all of the following:	3357

(a) Filing with the secretary of state a certificate from the	3358
tax commissioner that the person has complied with all the	3359
requirements of law as to tax reports and paid all taxes, fees, or	3360
penalties due thereon for every year of delinquency;	3361

(b) Payment to the secretary of state of any additional fees	3362
and penalties required to be paid to the secretary of state;	3363

(c) Payment to the secretary of state of an additional fee of	3364
ten dollars.	3365

Upon the person's compliance with this division, the	3366
secretary of state shall cancel the entry of cancellation filed	3367
under section 5726.40 of the Revised Code.	3368

(2) If a reinstatement is not made within one year from the	3369
date of cancellation of the document of creation, and if it	3370
appears that a document of creation has been issued to a person of	3371
the same or similar name as the applicant for reinstatement, the	3372
secretary of state shall require, as a condition prerequisite to	3373
such reinstatement, that the applicant amend its document of	3374
creation by changing the applicant's name.	3375

(B) Any officer, shareholder, creditor, or receiver of a	3376
person may at any time take all steps required by this section to	3377
effect a reinstatement.	3378

(C) The rights, privileges, and franchises of a person whose	3379
document of creation has been reinstated in accordance with this	3380
section are subject to section 1701.922 of the Revised Code.	3381

(D) Notwithstanding a violation of section 5726.41 of the	3382
Revised Code, upon reinstatement of a person's document of	3383
creation in accordance with this section, neither section 5726.40	3384
nor section 5726.41 of the Revised Code shall be applied to	3385
invalidate the exercise or attempt to exercise any right,	3386
privilege, or franchise on behalf of the person by an officer,	3387
agent, or employee of the person after cancellation and prior to	3388
the reinstatement of the document of creation, if the conditions	3389
set forth in divisions (B)(1)(a) and (b) of section 1701.922 of	3390
the Revised Code are met.	3391

Sec. 5726.43. If any financial institution fails to make and	3392
file any return or report required under this chapter, or to pay	3393
the penalties provided by law for failure to make and file such	3394
reports or returns, for a period of ninety days after the time	3395
prescribed by law, the attorney general, on the request of the tax	3396
commissioner, shall commence an action in quo warranto in the	3397
court of appeals of the county in which the reporting person for	3398
the financial institution has its principal place of business in	3399
this state to forfeit and annul the privileges and franchises of	3400
each person included in the annual report of the financial	3401
institution. If the court is satisfied that any such financial	3402
institution is in default, it shall render judgment ousting each	3403
person included in the annual report of the financial institution	3404
from the exercise of its privileges and franchises within this	3405
state, and shall otherwise proceed as provided in sections 2733.01	3406
to 2733.39 of the Revised Code.	3407

Sec. 5726.50. (A) A taxpayer may claim a refundable tax	3408
credit against the tax imposed under this chapter for each person	3409
included in the annual report of the taxpayer that is granted a	3410
credit by the tax credit authority under section 122.17 or	3411
division (B)(2) or (3) of section 122.171 of the Revised Code.	3412
Such a credit shall not be claimed for any tax year following the	3413
calendar year in which a relocation of employment positions occurs	3414
in violation of an agreement entered into under section 122.171 of	3415
the Revised Code. For the purpose of making tax payments under	3416
this chapter, taxes equal to the amount of the refundable credit	3417
shall be considered to be paid on the first day of the tax year.	3418

(B) A taxpayer may claim a nonrefundable tax credit against	3419
the tax imposed under this chapter for each person included in the	3420
annual report of the taxpayer that is granted a credit by the tax	3421
credit authority under division (B)(1) of section 122.171 of the	3422
Revised Code. A taxpayer may claim against the tax imposed by this	3423
chapter any unused portion of the credits authorized under	3424
division (B) of section 5733.0610 of the Revised Code.	3425

(C) The credits authorized in divisions (A) and (B) of this	3426
section shall be claimed in the order required under section	3427
5726.98 of the Revised Code. If the amount of a credit authorized	3428
in division (A) of this section exceeds the tax otherwise due	3429
under section 5726.02 of the Revised Code after deducting all	3430
other credits preceding the credit in the order prescribed in	3431
section 5726.98 of the Revised Code, the excess shall be refunded	3432
to the taxpayer.	3433

Sec. 5726.51. A taxpayer may claim a nonrefundable credit	3434
against the tax imposed under this chapter for each bank	3435
organization that is organized under Title XI of the Revised Code	3436
and included in the annual report of the taxpayer. The credit	3437
shall equal the sum of the annual assessments such bank	3438
organizations paid during the taxable year to the division of	3439
financial institutions pursuant to Title XI of the Revised Code	3440
and the schedule of fees published by the division. A taxpayer may	3441
claim against the tax imposed by this chapter any unused portion	3442
of the credits authorized under section 5733.063 of the Revised	3443
Code.	3444

The credit authorized by this section shall be claimed in the	3445
order required under section 5726.98 of the Revised Code. The	3446
credit shall not be allowed unless there is filed with the	3447
taxpayer's annual report a document certified by the division of	3448
financial institutions verifying the amount of state annual	3449
assessment fees and federal supervisory fees paid by the bank	3450
organizations during the taxable year.	3451

Sec. 5726.52. (A) As used in this section, "certificate	3452
owner" has the same meaning as in section 149.311 of the Revised	3453
Code.	3454

(B) A taxpayer may claim a refundable credit against the tax	3455
imposed by this chapter for each person included in the annual	3456
report of a taxpayer that is a certificate owner of a	3457
rehabilitation tax credit certificate issued under section 149.311	3458
of the Revised Code. The credit shall equal twenty-five per cent	3459
of the dollar amount indicated on each certificate, but shall not	3460
exceed five million dollars for each certificate.	3461

The credit shall be claimed for the calendar year specified	3462
in the certificate and in the order required under section 5726.98	3463
of the Revised Code. If the credit exceeds the amount of tax	3464
otherwise due in that year, the excess shall be refunded to the	3465
taxpayer, provided that, if any amount of the credit is refunded,	3466
the sum of the amount refunded and the amount applied to reduce	3467
the tax otherwise due in that year shall not exceed three million	3468
dollars. The taxpayer may carry forward any balance of the credit	3469
in excess of the amount claimed in that year for not more than	3470
five ensuing years, and shall deduct any amount claimed in any	3471
such year from the amount claimed in an ensuing year. A taxpayer	3472
may claim against the tax imposed by this chapter any unused	3473
portion of the credit authorized under section 5725.151 of the	3474
Revised Code, but only to the extent of the five-year carry	3475
forward period authorized by that section.	3476

(C) A taxpayer claiming a credit under this section shall	3477
retain the rehabilitation tax credit certificate for four years	3478
following the end of the year to which the credit was applied, and	3479
shall make the certificate available for inspection by the tax	3480
commissioner upon the request of the commissioner during that	3481
period.	3482

Sec. 5726.53. A taxpayer may claim a refundable credit	3483
against the tax imposed by this chapter for each person included	3484
in the annual report of the taxpayer that was issued a tax credit	3485
certificate by the Ohio venture capital authority under section	3486
150.07 of the Revised Code. The amount of the credit shall equal	3487
the amount specified in the tax credit certificate. The credit	3488
shall be claimed for the tax year specified in the tax credit	3489
certificate. The taxpayer shall claim the credit in the order	3490
required under section 5726.98 of the Revised Code. If the credit	3491
amount exceeds the tax otherwise due under section 5726.02 of the	3492
Revised Code after deducting all other credits preceding the	3493
credit in the order prescribed in section 5726.98 of the Revised	3494
Code, the excess shall be refunded to the taxpayer.	3495

Sec. 5726.54. (A) Any term used in this section has the same	3496
meaning as in section 5725.33 of the Revised Code.	3497

(B) A taxpayer may claim a nonrefundable credit against the	3498
tax imposed by this chapter for each person included in the annual	3499
report of the taxpayer that holds a qualified equity investment on	3500
a credit allowance date occurring in the calendar year immediately	3501
preceding the tax year for which the tax is due. The credit shall	3502
be computed in the same manner prescribed for the computation of	3503
credits allowed under section 5725.33 of the Revised Code.	3504

By claiming a tax credit under this section, a taxpayer	3505
waives its rights under section 5726.20 of the Revised Code with	3506
respect to the time limitation for the assessment of taxes as it	3507
relates to credits claimed under this section that later become	3508
subject to recapture under division (D) of this section.	3509

A taxpayer may claim against the tax imposed by this chapter	3510
any unused portion of the credits authorized under sections	3511
5725.33 and 5733.58 of the Revised Code, but only to the extent of	3512
the remaining carry forward period authorized by those sections.	3513

The credit shall be claimed in the order prescribed by	3514
section 5726.98 of the Revised Code. If the amount of the credit	3515
exceeds the amount of tax otherwise due after deducting all other	3516
credits preceding the credit in the order prescribed in section	3517
5726.98 of the Revised Code, the excess may be carried forward for	3518
not more than four ensuing tax years.	3519

(C) The total amount of qualified equity investments on the	3520
basis of which credits may be claimed under this section and	3521
sections 5725.33, 5729.16, and 5733.58 of the Revised Code is	3522
subject to the limitation of division (C) of section 5725.33 of	3523
the Revised Code.	3524

(D) If any amount of the federal tax credit allowed for a	3525
qualified equity investment for which a credit was received under	3526
this section is recaptured under section 45D of the Internal	3527
Revenue Code, or if the director of development services	3528
determines that an investment for which a tax credit is claimed	3529
under this section is not a qualified equity investment or that	3530
the proceeds of an investment for which a tax credit is claimed	3531
under this section are used to make qualified low-income community	3532
investments other than in a qualified active low-income community	3533
business, all or a portion of the credit received on account of	3534
that investment shall be paid by the taxpayer that received the	3535
credit to the tax commissioner. The amount to be recovered shall	3536
be determined by the director pursuant to rules adopted under	3537
section 5725.33 of the Revised Code. The director shall certify	3538
any amount due under this division to the tax commissioner, and	3539
the commissioner shall notify the taxpayer of the amount due. The	3540
amount due is payable not later than thirty days after the day the	3541
commissioner issues the notice. The amount due shall be considered	3542
to be tax due under section 5726.02 of the Revised Code, and may	3543
be collected by assessment without regard to the limitations	3544
imposed under section 5726.20 of the Revised Code for the	3545
assessment of taxes by the commissioner. All amounts collected	3546
under this division shall be credited as revenue from the tax	3547
levied under section 5726.02 of the Revised Code.	3548

Sec. 5726.55. (A) Any term used in this section has the same	3549
meaning as in section 122.85 of the Revised Code.	3550

(B) A taxpayer may claim a refundable credit against the tax	3551
imposed under this chapter for each person included in the annual	3552
report of the taxpayer that is a certificate owner of a tax credit	3553
certificate issued under section 122.85 of the Revised Code. The	3554
credit shall be claimed for the taxable year in which the	3555
certificate is issued by the director of development services. The	3556
credit amount equals the amount stated in the certificate. The	3557
credit shall be claimed in the order required under section	3558
5726.98 of the Revised Code. If the credit amount exceeds the tax	3559
otherwise due under section 5726.02 of the Revised Code after	3560
deducting all other credits preceding the credit in the order	3561
prescribed in section 5726.98 of the Revised Code, the excess	3562
shall be refunded to the taxpayer.	3563

(C) Nothing in this section shall allow a taxpayer to claim	3564
more than one credit per tax credit-eligible production.	3565

Sec. 5726.56. (A) As used in this section, "qualified	3566
research expenses" has the same meaning as in section 41 of the	3567
Internal Revenue Code.	3568

(B) A taxpayer may claim a nonrefundable credit against the	3569
tax imposed under this chapter equal to seven per cent of the	3570
excess of (1) the qualified research expenses incurred by the	3571
taxpayer in this state in a taxable year over (2) the average	3572
annual qualified research expenses incurred by the taxpayer in	3573
this state in the three previous taxable years. For the purposes	3574
of this division, "qualified research expenses incurred by the	3575
taxpayer" includes the qualified research expenses incurred by all	3576
persons included in the annual report of the taxpayer and by any	3577
insurance company subject to the tax levied under section 5725.18	3578
or Chapter 5729. of the Revised Code that has more than fifty per	3579
cent of its ownership interests directly or indirectly owned or	3580
controlled by a person included in the annual report of the	3581
taxpayer, even though such an insurance company is not subject to	3582
the tax imposed under this chapter.	3583

(C) A taxpayer shall claim the credit allowed under this	3584
section in the order prescribed by section 5726.98 of the Revised	3585
Code. If the amount of the credit exceeds the amount of tax	3586
otherwise due after deducting all other credits preceding the	3587
credit in the order prescribed in section 5726.98 of the Revised	3588
Code, the excess may be carried forward for not more than seven	3589
ensuing tax years. The amount of the excess credit claimed in any	3590
such year shall be deducted from the balance carried forward to	3591
the next tax year.	3592

(D) A taxpayer may claim against the tax imposed under this	3593
chapter any unused portion of a credit authorized under section	3594
5733.351 of the Revised Code but only to the extent of the	3595
remaining portion of the seven-year carry-forward period	3596
authorized by that section.	3597

Sec. 5726.57. (A) As used in this section, "qualifying dealer	3598
in intangibles" means a dealer in intangibles that is a member of	3599
a qualifying controlled group of which a financial institution is	3600
also a member on the first day of the financial institution's tax	3601
year.	3602

(B) For tax year 2014 there is hereby allowed to each	3603
financial institution a nonrefundable credit against the tax	3604
imposed by section 5726.02 of the Revised Code. The amount of the	3605
credit shall be computed in accordance with division (C) of this	3606
section. The credit shall be claimed in the order prescribed by	3607
section 5726.98 of the Revised Code. The credit shall not exceed	3608
the amount of tax otherwise due under section 5726.02 of the	3609
Revised Code after deducting any other credits that precede the	3610
credit claimed under this section in that order.	3611

(C) Subject to division (D) of this section, the amount of	3612
the credit equals the lesser of the amount described in division	3613
(C)(1) of this section or in division (C)(2) of this section.	3614

(1) The amount of tax that a qualifying dealer in intangibles	3615
paid under Chapter 5707. of the Revised Code during the calendar	3616
year immediately preceding the financial institution's tax year.	3617
Such amount shall be reduced, but not below zero, by any refunds	3618
of such tax received by the qualifying dealer in intangibles under	3619
Chapter 5703. of the Revised Code during that calendar year.	3620

(2) The product of the amounts described in divisions	3621
(C)(2)(a) to (c) of this section.	3622

(a) The cost of the financial institution's direct investment	3623
in the capital stock of the qualifying dealer in intangibles	3624
calculated on the last day of the financial institution's taxable	3625
year immediately preceding the tax year;	3626

(b) The ratio described in section 5725.15 of the Revised	3627
Code for the calendar year immediately preceding the financial	3628
institution's tax year;	3629

(c) The tax rate imposed under division (D) of section	3630
5707.03 of the Revised Code for the calendar year immediately	3631
preceding the financial institution's tax year.	3632

(D)(1) The principles and concepts described in section	3633
5733.057 of the Revised Code shall apply in determining whether a	3634
dealer in intangibles is a member of a qualifying controlled group	3635
of which the financial institution also is a member and to	3636
ascertain the cost of the financial institution's direct	3637
investment in the capital stock of the qualifying dealer in	3638
intangibles.	3639

(2) Notwithstanding section 5703.56 of the Revised Code to	3640
the contrary, a financial institution claiming the credit provided	3641
by this section has the burden to establish by a preponderance of	3642
the evidence that the doctrines enumerated in that section would	3643
not apply to deny to the financial institution all or a part of	3644
the credit otherwise provided by this section.	3645

Sec. 5726.98. (A) To provide a uniform procedure for	3646
calculating the amount of tax due under section 5726.02 of the	3647
Revised Code, a taxpayer shall claim any credits to which the	3648
taxpayer is entitled under this chapter in the following order:	3649

(1) The bank organization assessment credit under section	3650
5726.51 of the Revised Code;	3651

(2) The nonrefundable job retention credit under division (B)	3652
of section 5726.50 of the Revised Code;	3653

(3) The nonrefundable credit for purchases of qualified	3654
low-income community investments under section 5726.54 of the	3655
Revised Code;	3656

(4) The nonrefundable credit for qualified research expenses	3657
under section 5726.56 of the Revised Code;	3658

(5) The nonrefundable credit for qualifying dealer in	3659
intangibles taxes under section 5726.57 of the Revised Code.	3660

(6) The refundable credit for rehabilitating an historic	3661
building under section 5726.52 of the Revised Code;	3662

(7) The refundable job retention or job creation credit under	3663
division (A) of section 5726.50 of the Revised Code;	3664

(8) The refundable credit under section 5726.53 of the	3665
Revised Code for losses on loans made under the Ohio venture	3666
capital program under sections 150.01 to 150.10 of the Revised	3667
Code;	3668

(9) The refundable motion picture production credit under	3669
section 5726.55 of the Revised Code.	3670

(B) For any credit except the refundable credits enumerated	3671
in this section, the amount of the credit for a taxable year shall	3672
not exceed the tax due after allowing for any other credit that	3673
precedes it in the order required under this section. Any excess	3674
amount of a particular credit may be carried forward if authorized	3675
under the section creating that credit. Nothing in this chapter	3676
shall be construed to allow a taxpayer to claim, directly or	3677
indirectly, a credit more than once for a taxable year.	3678

Sec. 5726.99. Whoever violates section 5726.41 of the Revised	3679
Code shall be fined not less than one hundred dollars or more than	3680
one thousand dollars.	3681

Sec. 5733.01.  (A) The tax provided by this chapter for	3682
domestic corporations shall be the amount charged against each	3683
corporation organized for profit under the laws of this state and	3684
each nonprofit corporation organized pursuant to Chapter 1729. of	3685
the Revised Code, except as provided in sections 5733.09 and	3686
5733.10 of the Revised Code, for the privilege of exercising its	3687
franchise during the calendar year in which that amount is	3688
payable, and the tax provided by this chapter for foreign	3689
corporations shall be the amount charged against each corporation	3690
organized for profit and each nonprofit corporation organized or	3691
operating in the same or similar manner as nonprofit corporations	3692
organized under Chapter 1729. of the Revised Code, under the laws	3693
of any state or country other than this state, except as provided	3694
in sections 5733.09 and 5733.10 of the Revised Code, for the	3695
privilege of doing business in this state, owning or using a part	3696
or all of its capital or property in this state, holding a	3697
certificate of compliance with the laws of this state authorizing	3698
it to do business in this state, or otherwise having nexus in or	3699
with this state under the Constitution of the United States,	3700
during the calendar year in which that amount is payable.	3701

(B) A corporation is subject to the tax imposed by section	3702
5733.06 of the Revised Code for each calendar year prior to 2014	3703
that it is so organized, doing business, owning or using a part or	3704
all of its capital or property, holding a certificate of	3705
compliance, or otherwise having nexus in or with this state under	3706
the Constitution of the United States, on the first day of January	3707
of that calendar year. No credit authorized by this chapter may be	3708
claimed for tax year 2014 or any tax year thereafter.	3709

(C) Any corporation subject to this chapter that is not	3710
subject to the federal income tax shall file its returns and	3711
compute its tax liability as required by this chapter in the same	3712
manner as if that corporation were subject to the federal income	3713
tax.	3714

(D) For purposes of this chapter, a federally chartered	3715
financial institution shall be deemed to be organized under the	3716
laws of the state within which its principal office is located.	3717

(E) For purposes of this chapter, any person, as defined in	3718
section 5701.01 of the Revised Code, shall be treated as a	3719
corporation if the person is classified for federal income tax	3720
purposes as an association taxable as a corporation, and an equity	3721
interest in the person shall be treated as capital stock of the	3722
person.	3723

(F) For the purposes of this chapter, "disregarded entity"	3724
has the same meaning as in division (D) of section 5745.01 of the	3725
Revised Code.	3726

(1) A person's interest in a disregarded entity, whether held	3727
directly or indirectly, shall be treated as the person's ownership	3728
of the assets and liabilities of the disregarded entity, and the	3729
income, including gain or loss, shall be included in the person's	3730
net income under this chapter.	3731

(2) Any sale, exchange, or other disposition of the person's	3732
interest in the disregarded entity, whether held directly or	3733
indirectly, shall be treated as a sale, exchange, or other	3734
disposition of the person's share of the disregarded entity's	3735
underlying assets or liabilities, and the gain or loss from such	3736
sale, exchange, or disposition shall be included in the person's	3737
net income under this chapter.	3738

(3) The disregarded entity's payroll, property, and sales	3739
factors shall be included in the person's factors.	3740

(G) The tax a corporation is required to pay under this	3741
chapter shall be as follows:	3742

(1)(a) For financial institutions, the greater of the minimum	3743
payment required under division (E) of section 5733.06 of the	3744
Revised Code or the difference between all taxes charged the	3745
financial institution under this chapter, without regard to	3746
division (G)(2) of this section, less any credits allowable	3747
against such tax.	3748

(b) A corporation satisfying the description in division	3749
(E)(5), (6), (7), (8), or (10) of section 5751.01 of the Revised	3750
Code, as that section existed before its amendment by H.B. 510 of	3751
the 129th general assembly, that is not a financial institution,	3752
insurance company, or dealer in intangibles is subject to the	3753
taxes imposed under this chapter as a corporation and not subject	3754
to tax as a financial institution, and shall pay the greater of	3755
the minimum payment required under division (E) of section 5733.06	3756
of the Revised Code or the difference between all the taxes	3757
charged under this chapter, without regard to division (G)(2) of	3758
this section, less any credits allowable against such tax.	3759

(2) For all corporations other than those persons described	3760
in division (G)(1)(a) or (b) of this section, the amount under	3761
division (G)(2)(a) of this section applicable to the tax year	3762
specified less the amount under division (G)(2)(b) of this	3763
section:	3764

(a)(i) For tax year 2005, the greater of the minimum payment	3765
required under division (E) of section 5733.06 of the Revised Code	3766
or the difference between all taxes charged the corporation under	3767
this chapter and any credits allowable against such tax;	3768

(ii) For tax year 2006, the greater of the minimum payment	3769
required under division (E) of section 5733.06 of the Revised Code	3770
or four-fifths of the difference between all taxes charged the	3771
corporation under this chapter and any credits allowable against	3772
such tax, except the qualifying pass-through entity tax credit	3773
described in division (A)(30) and the refundable credits described	3774
in divisions (A)(31) to (35) of section 5733.98 of the Revised	3775
Code;	3776

(iii) For tax year 2007, the greater of the minimum payment	3777
required under division (E) of section 5733.06 of the Revised Code	3778
or three-fifths of the difference between all taxes charged the	3779
corporation under this chapter and any credits allowable against	3780
such tax, except the qualifying pass-through entity tax credit	3781
described in division (A)(30) and the refundable credits described	3782
in divisions (A)(31) to (35) of section 5733.98 of the Revised	3783
Code;	3784

(iv) For tax year 2008, the greater of the minimum payment	3785
required under division (E) of section 5733.06 of the Revised Code	3786
or two-fifths of the difference between all taxes charged the	3787
corporation under this chapter and any credits allowable against	3788
such tax, except the qualifying pass-through entity tax credit	3789
described in division (A)(30) and the refundable credits described	3790
in divisions (A)(31) to (35) of section 5733.98 of the Revised	3791
Code;	3792

(v) For tax year 2009, the greater of the minimum payment	3793
required under division (E) of section 5733.06 of the Revised Code	3794
or one-fifth of the difference between all taxes charged the	3795
corporation under this chapter and any credits allowable against	3796
such tax, except the qualifying pass-through entity tax credit	3797
described in division (A)(30) and the refundable credits described	3798
in divisions (A)(31), (32), (33), and (34) of section 5733.98 of	3799
the Revised Code;	3800

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

3801

(b) A corporation shall subtract from the amount calculated	3802
under division (G)(2)(a)(ii), (iii), (iv), or (v) of this section	3803
any qualifying pass-through entity tax credit described in	3804
division (A)(30) and any refundable credits described in divisions	3805
(A)(31) to (35) of section 5733.98 of the Revised Code to which	3806
the corporation is entitled. Any unused qualifying pass-through	3807
entity tax credit is not refundable.	3808

(c) For the purposes of computing the amount of a credit that	3809
may be carried forward to a subsequent tax year under division	3810
(G)(2) of this section, a credit is utilized against the tax for a	3811
tax year to the extent the credit applies against the tax for that	3812
tax year, even if the difference is then multiplied by the	3813
applicable fraction under division (G)(2)(a) of this section.	3814

(3) Nothing in division (G) of this section eliminates or	3815
reduces the tax imposed by section 5733.41 of the Revised Code on	3816
a qualifying pass-through entity.	3817

Sec. 5733.02.  Annually, for tax years prior to tax year	3818
2014, between the first day of January and the thirty-first day of	3819
March or on or before the date as extended under section 5733.13	3820
of the Revised Code, each taxpayer shall make a report in writing	3821
to the tax commissioner in such form as the tax commissioner	3822
prescribes, and shall remit to the commissioner, with the	3823
remittance made payable to the treasurer of state, the amount of	3824
the tax as shown to be due by such report less the amount paid for	3825
the year on a declaration of estimated tax report filed by the	3826
taxpayer as provided by section 5733.021 of the Revised Code.	3827
Remittance shall be made in the form prescribed by the	3828
commissioner, including electronic funds transfer if required by	3829
section 5733.022 of the Revised Code.	3830

The commissioner shall furnish corporations, on request,	3831
copies of the forms prescribed by the commissioner for the purpose	3832
of making such report. A domestic corporation shall not dissolve,	3833
and a foreign corporation shall not withdraw or retire from	3834
business in Ohio, on or after the first day of January in any year	3835
prior to 2014 without making a franchise tax report to the	3836
commissioner and paying or securing the tax charged for the year	3837
in which such dissolution or withdrawal occurs.	3838

The annual corporation report shall be signed by the	3839
president, vice-president, secretary, treasurer, general manager,	3840
superintendent, or managing agent in this state of such	3841
corporation. If a domestic corporation has not completed its	3842
organization, its annual report shall be signed by one of its	3843
incorporators.	3844

The report shall contain the facts, figures, computations,	3845
and attachments that result in the tax charged by this chapter and	3846
determined in the manner provided within the chapter.	3847

Sec. 5733.021.  (A) Each taxpayer that does not in January of	3848
any year prior to 2014 file the report and make the payment	3849
required by section 5733.02 of the Revised Code shall make and	3850
file a declaration of estimated tax report for the tax year.	3851

The declaration of estimated tax report shall be filed with	3852
the tax commissioner on or before the last day of January in such	3853
form as prescribed by the tax commissioner, and shall reflect an	3854
estimate of the total amount due under this chapter for the tax	3855
year.	3856

(B) A taxpayer required to file a declaration of estimated	3857
tax report shall make remittance of such estimated tax to the tax	3858
commissioner as follows:	3859

(1) The entire estimated tax at the time of filing the	3860
declaration of estimated tax report, if such estimated tax is not	3861
in excess of the minimum tax as provided in section 5733.06 of the	3862
Revised Code;	3863

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

3864

(a) One-third of the estimated tax at the time of filing the	3865
declaration of estimated tax report;	3866

(b) Two-thirds of the estimated tax on or before the last day	3867
of March of the tax year, if the report required by section	3868
5733.02 of the Revised Code is filed on or before the last day of	3869
March of the tax year.	3870

(3) If the estimated tax is in excess of the minimum tax, and	3871
an extension of time for filing the report required by section	3872
5733.02 of the Revised Code has been granted pursuant to section	3873
5733.13 of the Revised Code:	3874

(a) One-third of the estimated tax at the time of filing the	3875
declaration of estimated tax report;	3876

(b) One-third of the estimated tax on or before the last day	3877
of March of the tax year;	3878

(c) One-third of the estimated tax on or before the last day	3879
of May of the tax year.	3880

Remittance of the estimated tax shall be made payable to the	3881
treasurer of state and shall be made in the form prescribed by the	3882
tax commissioner, including electronic funds transfer if required	3883
by section 5733.022 of the Revised Code.	3884

The tax commissioner shall immediately forward to the	3885
treasurer of state all amounts received under this section, and	3886
the treasurer of state shall credit all payments of such estimated	3887
tax as provided in section 5733.12 of the Revised Code.	3888

(C)(1)(a) For any period of delinquency ending prior to the	3889
first day of June of the tax year, the penalty under division	3890
(A)(2) of section 5733.28 of the Revised Code may be imposed only	3891
on the delinquent portion of the estimated tax required to be paid	3892
under divisions (B)(2)(a) and (b) and (B)(3)(a) and (b) of this	3893
section.	3894

(b) If the taxpayer was not subject to tax for the	3895
immediately preceding tax year, "estimated tax" for purposes of	3896
division (C)(1) of this section is ninety per cent of the	3897
qualifying net tax for the tax year. If the taxpayer was subject	3898
to the tax for the immediately preceding tax year, "estimated tax"	3899
for purposes of division (C)(1) of this section is the lesser of	3900
one hundred per cent of the qualifying net tax for the immediately	3901
preceding tax year or ninety per cent of the qualifying net tax	3902
for the tax year.	3903

(2)(a) For any period of delinquency commencing the first day	3904
of June of the tax year and concluding on the extended due date	3905
pursuant to section 5733.13 of the Revised Code, the penalty under	3906
division (A)(2) of section 5733.28 of the Revised Code may be	3907
imposed only on the delinquent portion of the estimated tax	3908
required to be paid under division (B)(3)(c) of this section.	3909

(b) For purposes of division (C)(2) of this section,	3910
"estimated tax" is ninety per cent of the qualifying net tax for	3911
the tax year.	3912

(3) If the taxpayer did not file a report under section	3913
5733.02 of the Revised Code for the tax year or failed to prepare	3914
and file the report in good faith for the tax year, "qualifying	3915
net tax" as used in division (C) of this section for that tax year	3916
means the amount described in division (C)(3)(a) of this section.	3917
Otherwise, "qualifying net tax" as used in division (C) of this	3918
section for that tax year means the lesser of the amount described	3919
in division (C)(3)(a) or (b) of this section:	3920

(a) The tax imposed by sections 5733.06, 5733.065, and	3921
5733.066 of the Revised Code for that tax year reduced by the	3922
credits listed in section 5733.98 of the Revised Code. If the	3923
credits exceed the total tax, the qualifying net tax is the	3924
minimum tax.	3925

(b) The lesser of the tax shown on the report, prepared and	3926
filed in good faith, reduced by the credits shown on that report,	3927
or the tax shown on an amended report, prepared and filed in good	3928
faith, reduced by the credits shown on that amended report. If the	3929
credits shown exceed the total tax shown, the qualifying net tax	3930
is the minimum tax.	3931

Sec. 5733.06. TheFor tax years prior to tax year 2014, the	3932
tax hereby charged each corporation subject to this chapter shall	3933
be the greater of the sum of divisions (A) and (B) of this	3934
section, after the reduction, if any, provided by division (J) of	3935
this section, or division (C) of this section, after the	3936
reduction, if any, provided by division (J) of this section,	3937
except that the tax hereby charged each financial institution	3938
subject to this chapter shall be the amount computed under	3939
division (D) of this section:	3940

(A) Except as set forth in division (F) of this section, five	3941
and one-tenth per cent upon the first fifty thousand dollars of	3942
the value of the taxpayer's issued and outstanding shares of stock	3943
as determined under division (B) of section 5733.05 of the Revised	3944
Code;	3945

(B) Except as set forth in division (F) of this section,	3946
eight and one-half per cent upon the value so determined in excess	3947
of fifty thousand dollars; or	3948

(C)(1) Except as otherwise provided under division (G) of	3949
this section, four mills times that portion of the value of the	3950
issued and outstanding shares of stock as determined under	3951
division (C) of section 5733.05 of the Revised Code. For the	3952
purposes of division (C) of this section, division (C)(2) of	3953
section 5733.065, and division (C) of section 5733.066 of the	3954
Revised Code, the value of the issued and outstanding shares of	3955
stock of an eligible corporation for tax year 2003 through tax	3956
year 2007, or of a qualifiedqualifying holding company, is zero.	3957

(2) As used in division (C) of this section, "eligible	3958
corporation" means a person treated as a corporation for federal	3959
income tax purposes that meets all of the following criteria:	3960

(a) The corporation conducts business for an entire taxable	3961
year as a qualified trade or business as defined by division (C)	3962
of section 122.15 of the Revised Code.	3963

(b) The corporation uses more than fifty per cent of the	3964
corporation's assets, based on net book value, that are located in	3965
Ohio solely to conduct activities that constitute a qualified	3966
trade or business as defined by section 122.15 of the Revised	3967
Code.	3968

(c) The corporation has been formed or organized not more	3969
than three years before the report required to be filed by section	3970
5733.02 of the Revised Code is due, without regard to any	3971
extensions.	3972

(d) The corporation is not a related member, as defined in	3973
section 5733.042 of the Revised Code, at any time during the	3974
taxable year with respect to another person treated as a	3975
corporation for federal income tax purposes. A corporation is not	3976
a related member if during the entire taxable year at least	3977
seventy-five per cent of the corporation's stock is owned directly	3978
or through a pass-through entity by individuals, estates, and	3979
grantor trusts, and the individuals, estates, and grantor trusts	3980
do not directly or indirectly own more than twenty per cent of the	3981
value of another person treated as a corporation for federal	3982
income tax purposes that is conducting a qualified trade or	3983
business.	3984

(D) The tax charged each financial institution subject to	3985
this chapter shall be that portion of the value of the issued and	3986
outstanding shares of stock as determined under division (A) of	3987
section 5733.05 of the Revised Code, multiplied by the following	3988
amounts:	3989

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

3990

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

3991

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

3992

(E) No tax shall be charged from any corporation that has	3993
been adjudicated bankrupt, or for which a receiver has been	3994
appointed, or that has made a general assignment for the benefit	3995
of creditors, except for the portion of the then current tax year	3996
during which the tax commissioner finds such corporation had the	3997
power to exercise its corporate franchise unimpaired by such	3998
proceedings or act. The minimum payment for each corporation shall	3999
be as follows:	4000

(1) One thousand dollars in the case of a corporation having	4001
gross receipts for the taxable year equal to at least five million	4002
dollars from activities within or outside this state or in the	4003
case of a corporation employing at least three hundred employees	4004
at some time during the taxable year within or outside this state;	4005

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

4006

The tax charged to corporations under this chapter for the	4007
privilege of engaging in business in this state, which is an	4008
excise tax levied on the value of the issued and outstanding	4009
shares of stock, shall in no manner be construed as prohibiting or	4010
otherwise limiting the powers of municipal corporations, joint	4011
economic development zones created under section 715.691 of the	4012
Revised Code, and joint economic development districts created	4013
under section 715.70 or 715.71 or sections 715.72 to 715.81 of the	4014
Revised Code in this state to impose an income tax on the income	4015
of such corporations.	4016

(F) If two or more taxpayers satisfy the ownership or control	4017
requirements of division (A) of section 5733.052 of the Revised	4018
Code, each such taxpayer shall substitute "the taxpayer's pro-rata	4019
amount" for "fifty thousand dollars" in divisions (A) and (B) of	4020
this section. For purposes of this division, "the taxpayer's	4021
pro-rata amount" is an amount that, when added to the other such	4022
taxpayers' pro-rata amounts, does not exceed fifty thousand	4023
dollars. For the purpose of making that computation, the	4024
taxpayer's pro-rata amount shall not be less than zero. Nothing in	4025
this division derogates from or eliminates the requirement to make	4026
the alternative computation of tax under division (C) of this	4027
section.	4028

(G) The tax liability of any corporation under division (C)	4029
of this section shall not exceed one hundred fifty thousand	4030
dollars.	4031

(H)(1) For the purposes of division (H) of this section,	4032
"exiting corporation" means a corporation that satisfies all of	4033
the following conditions:	4034

(a) The corporation had nexus with or in this state under the	4035
Constitution of the United States during any portion of a calendar	4036
year;	4037

(b) The corporation was not a corporation described in	4038
division (A) of section 5733.01 of the Revised Code on the first	4039
day of January immediately following that calendar year;	4040

(c) The corporation was not a financial institution on the	4041
first day of January immediately following that calendar year;	4042

(d) If the corporation was a transferor as defined in section	4043
5733.053 of the Revised Code, the corporation's transferee was not	4044
required to add to the transferee's net income the income of the	4045
transferor pursuant to division (B) of that section;	4046

(e) During any portion of that calendar year, or any portion	4047
of the immediately preceding calendar year, the corporation had	4048
net income that was not included in a report filed by the	4049
corporation or its transferee pursuant to section 5733.02,	4050
5733.021, 5733.03, 5733.031, or 5733.053 of the Revised Code;	4051

(f) The corporation would have been subject to the tax	4052
computed under divisions (A), (B), (C), (F), and (G) of this	4053
section if the corporation is assumed to be a corporation	4054
described in division (A) of section 5733.01 of the Revised Code	4055
on the first day of January immediately following the calendar	4056
year to which division (H)(1)(a) of this section refers.	4057

(2) For the purposes of division (H) of this section,	4058
"unreported net income" means net income that was not previously	4059
included in a report filed pursuant to section 5733.02, 5733.021,	4060
5733.03, 5733.031, or 5733.053 of the Revised Code and that was	4061
realized or recognized during the calendar year to which division	4062
(H)(1) of this section refers or the immediately preceding	4063
calendar year.	4064

(3) Each exiting corporation shall pay a tax computed by	4065
first allocating and apportioning the unreported net income	4066
pursuant to division (B) of section 5733.05 and section 5733.051	4067
and, if applicable, section 5733.052 of the Revised Code. The	4068
exiting corporation then shall compute the tax due on its	4069
unreported net income allocated and apportioned to this state by	4070
applying divisions (A), (B), and (F) of this section to that	4071
income.	4072

(4) Divisions (C) and (G) of this section, division (D)(2) of	4073
section 5733.065, and division (C) of section 5733.066 of the	4074
Revised Code do not apply to an exiting corporation, but exiting	4075
corporations are subject to every other provision of this chapter.	4076

(5) Notwithstanding division (B) of section 5733.01 or	4077
sections 5733.02, 5733.021, and 5733.03 of the Revised Code to the	4078
contrary, each exiting corporation shall report and pay the tax	4079
due under division (H) of this section on or before the	4080
thirty-first day of May immediately following the calendar year to	4081
which division (H)(1)(a) of this section refers. The exiting	4082
corporation shall file that report on the form most recently	4083
prescribed by the tax commissioner for the purposes of complying	4084
with sections 5733.02 and 5733.03 of the Revised Code. Upon	4085
request by the corporation, the tax commissioner may extend the	4086
date for filing the report.	4087

(6) If, on account of the application of section 5733.053 of	4088
the Revised Code, net income is subject to the tax imposed by	4089
divisions (A) and (B) of this section, such income shall not be	4090
subject to the tax imposed by division (H)(3) of this section.	4091

(7) The amendments made to division (H) of this section by	4092
Am. Sub. S.B. 287 of the 123rd general assembly do not apply to	4093
any transfer, as defined in section 5733.053 of the Revised Code,	4094
for which negotiations began prior to January 1, 2001, and that	4095
was commenced in and completed during calendar year 2001, unless	4096
the taxpayer makes an election prior to December 31, 2001, to	4097
apply those amendments.	4098

(8) The tax commissioner may adopt rules governing division	4099
(H) of this section.	4100

(I) Any reference in the Revised Code to "the tax imposed by	4101
section 5733.06 of the Revised Code" or "the tax due under section	4102
5733.06 of the Revised Code" includes the taxes imposed under	4103
sections 5733.065 and 5733.066 of the Revised Code.	4104

(J)(1) Division (J) of this section applies solely to a	4105
combined company. Section 5733.057 of the Revised Code shall apply	4106
when calculating the adjustments required by division (J) of this	4107
section.	4108

(2) Subject to division (J)(4) of this section, the total tax	4109
calculated in divisions (A) and (B) of this section shall be	4110
reduced by an amount calculated by multiplying such tax by a	4111
fraction, the numerator of which is the total taxable gross	4112
receipts attributed to providing public utility activity other	4113
than as an electric company under section 5727.03 of the Revised	4114
Code for the year upon which the taxable gross receipts are	4115
measured immediately preceding the tax year, and the denominator	4116
of which is the total gross receipts from all sources for the year	4117
upon which the taxable gross receipts are measured immediately	4118
preceding the tax year. Nothing herein shall be construed to	4119
exclude from the denominator any item of income described in	4120
section 5733.051 of the Revised Code.	4121

(3) Subject to division (J)(4) of this section, the total tax	4122
calculated in division (C) of this section shall be reduced by an	4123
amount calculated by multiplying such tax by the fraction	4124
described in division (J)(2) of this section.	4125

(4) In no event shall the reduction provided by division	4126
(J)(2) or (J)(3) of this section exceed the amount of the excise	4127
tax paid in accordance with section 5727.38 of the Revised Code,	4128
for the year upon which the taxable gross receipts are measured	4129
immediately preceding the tax year.	4130

Sec. 5747.01.  Except as otherwise expressly provided or	4131
clearly appearing from the context, any term used in this chapter	4132
that is not otherwise defined in this section has the same meaning	4133
as when used in a comparable context in the laws of the United	4134
States relating to federal income taxes or if not used in a	4135
comparable context in those laws, has the same meaning as in	4136
section 5733.40 of the Revised Code. Any reference in this chapter	4137
to the Internal Revenue Code includes other laws of the United	4138
States relating to federal income taxes.	4139

As used in this chapter:

4140

(A) "Adjusted gross income" or "Ohio adjusted gross income"	4141
means federal adjusted gross income, as defined and used in the	4142
Internal Revenue Code, adjusted as provided in this section:	4143

(1) Add interest or dividends on obligations or securities of	4144
any state or of any political subdivision or authority of any	4145
state, other than this state and its subdivisions and authorities.	4146

(2) Add interest or dividends on obligations of any	4147
authority, commission, instrumentality, territory, or possession	4148
of the United States to the extent that the interest or dividends	4149
are exempt from federal income taxes but not from state income	4150
taxes.	4151

(3) Deduct interest or dividends on obligations of the United	4152
States and its territories and possessions or of any authority,	4153
commission, or instrumentality of the United States to the extent	4154
that the interest or dividends are included in federal adjusted	4155
gross income but exempt from state income taxes under the laws of	4156
the United States.	4157

(4) Deduct disability and survivor's benefits to the extent	4158
included in federal adjusted gross income.	4159

(5) Deduct benefits under Title II of the Social Security Act	4160
and tier 1 railroad retirement benefits to the extent included in	4161
federal adjusted gross income under section 86 of the Internal	4162
Revenue Code.	4163

(6) In the case of a taxpayer who is a beneficiary of a trust	4164
that makes an accumulation distribution as defined in section 665	4165
of the Internal Revenue Code, add, for the beneficiary's taxable	4166
years beginning before 2002, the portion, if any, of such	4167
distribution that does not exceed the undistributed net income of	4168
the trust for the three taxable years preceding the taxable year	4169
in which the distribution is made to the extent that the portion	4170
was not included in the trust's taxable income for any of the	4171
trust's taxable years beginning in 2002 or thereafter.	4172
"Undistributed net income of a trust" means the taxable income of	4173
the trust increased by (a)(i) the additions to adjusted gross	4174
income required under division (A) of this section and (ii) the	4175
personal exemptions allowed to the trust pursuant to section	4176
642(b) of the Internal Revenue Code, and decreased by (b)(i) the	4177
deductions to adjusted gross income required under division (A) of	4178
this section, (ii) the amount of federal income taxes attributable	4179
to such income, and (iii) the amount of taxable income that has	4180
been included in the adjusted gross income of a beneficiary by	4181
reason of a prior accumulation distribution. Any undistributed net	4182
income included in the adjusted gross income of a beneficiary	4183
shall reduce the undistributed net income of the trust commencing	4184
with the earliest years of the accumulation period.	4185

(7) Deduct the amount of wages and salaries, if any, not	4186
otherwise allowable as a deduction but that would have been	4187
allowable as a deduction in computing federal adjusted gross	4188
income for the taxable year, had the targeted jobs credit allowed	4189
and determined under sections 38, 51, and 52 of the Internal	4190
Revenue Code not been in effect.	4191

(8) Deduct any interest or interest equivalent on public	4192
obligations and purchase obligations to the extent that the	4193
interest or interest equivalent is included in federal adjusted	4194
gross income.	4195

(9) Add any loss or deduct any gain resulting from the sale,	4196
exchange, or other disposition of public obligations to the extent	4197
that the loss has been deducted or the gain has been included in	4198
computing federal adjusted gross income.	4199

(10) Deduct or add amounts, as provided under section 5747.70	4200
of the Revised Code, related to contributions to variable college	4201
savings program accounts made or tuition units purchased pursuant	4202
to Chapter 3334. of the Revised Code.	4203

(11)(a) Deduct, to the extent not otherwise allowable as a	4204
deduction or exclusion in computing federal or Ohio adjusted gross	4205
income for the taxable year, the amount the taxpayer paid during	4206
the taxable year for medical care insurance and qualified	4207
long-term care insurance for the taxpayer, the taxpayer's spouse,	4208
and dependents. No deduction for medical care insurance under	4209
division (A)(11) of this section shall be allowed either to any	4210
taxpayer who is eligible to participate in any subsidized health	4211
plan maintained by any employer of the taxpayer or of the	4212
taxpayer's spouse, or to any taxpayer who is entitled to, or on	4213
application would be entitled to, benefits under part A of Title	4214
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.	4215
301, as amended. For the purposes of division (A)(11)(a) of this	4216
section, "subsidized health plan" means a health plan for which	4217
the employer pays any portion of the plan's cost. The deduction	4218
allowed under division (A)(11)(a) of this section shall be the net	4219
of any related premium refunds, related premium reimbursements, or	4220
related insurance premium dividends received during the taxable	4221
year.	4222

(b) Deduct, to the extent not otherwise deducted or excluded	4223
in computing federal or Ohio adjusted gross income during the	4224
taxable year, the amount the taxpayer paid during the taxable	4225
year, not compensated for by any insurance or otherwise, for	4226
medical care of the taxpayer, the taxpayer's spouse, and	4227
dependents, to the extent the expenses exceed seven and one-half	4228
per cent of the taxpayer's federal adjusted gross income.	4229

(c) Deduct, to the extent not otherwise deducted or excluded	4230
in computing federal or Ohio adjusted gross income, any amount	4231
included in federal adjusted gross income under section 105 or not	4232
excluded under section 106 of the Internal Revenue Code solely	4233
because it relates to an accident and health plan for a person who	4234
otherwise would be a "qualifying relative" and thus a "dependent"	4235
under section 152 of the Internal Revenue Code but for the fact	4236
that the person fails to meet the income and support limitations	4237
under section 152(d)(1)(B) and (C) of the Internal Revenue Code.	4238

(d) For purposes of division (A)(11) of this section,	4239
"medical care" has the meaning given in section 213 of the	4240
Internal Revenue Code, subject to the special rules, limitations,	4241
and exclusions set forth therein, and "qualified long-term care"	4242
has the same meaning given in section 7702B(c) of the Internal	4243
Revenue Code. Solely for purposes of divisions (A)(11)(a) and (c)	4244
of this section, "dependent" includes a person who otherwise would	4245
be a "qualifying relative" and thus a "dependent" under section	4246
152 of the Internal Revenue Code but for the fact that the person	4247
fails to meet the income and support limitations under section	4248
152(d)(1)(B) and (C) of the Internal Revenue Code.	4249

(12)(a) Deduct any amount included in federal adjusted gross	4250
income solely because the amount represents a reimbursement or	4251
refund of expenses that in any year the taxpayer had deducted as	4252
an itemized deduction pursuant to section 63 of the Internal	4253
Revenue Code and applicable United States department of the	4254
treasury regulations. The deduction otherwise allowed under	4255
division (A)(12)(a) of this section shall be reduced to the extent	4256
the reimbursement is attributable to an amount the taxpayer	4257
deducted under this section in any taxable year.	4258

(b) Add any amount not otherwise included in Ohio adjusted	4259
gross income for any taxable year to the extent that the amount is	4260
attributable to the recovery during the taxable year of any amount	4261
deducted or excluded in computing federal or Ohio adjusted gross	4262
income in any taxable year.	4263

(13) Deduct any portion of the deduction described in section	4264
1341(a)(2) of the Internal Revenue Code, for repaying previously	4265
reported income received under a claim of right, that meets both	4266
of the following requirements:	4267

(a) It is allowable for repayment of an item that was	4268
included in the taxpayer's adjusted gross income for a prior	4269
taxable year and did not qualify for a credit under division (A)	4270
or (B) of section 5747.05 of the Revised Code for that year;	4271

(b) It does not otherwise reduce the taxpayer's adjusted	4272
gross income for the current or any other taxable year.	4273

(14) Deduct an amount equal to the deposits made to, and net	4274
investment earnings of, a medical savings account during the	4275
taxable year, in accordance with section 3924.66 of the Revised	4276
Code. The deduction allowed by division (A)(14) of this section	4277
does not apply to medical savings account deposits and earnings	4278
otherwise deducted or excluded for the current or any other	4279
taxable year from the taxpayer's federal adjusted gross income.	4280

(15)(a) Add an amount equal to the funds withdrawn from a	4281
medical savings account during the taxable year, and the net	4282
investment earnings on those funds, when the funds withdrawn were	4283
used for any purpose other than to reimburse an account holder	4284
for, or to pay, eligible medical expenses, in accordance with	4285
section 3924.66 of the Revised Code;	4286

(b) Add the amounts distributed from a medical savings	4287
account under division (A)(2) of section 3924.68 of the Revised	4288
Code during the taxable year.	4289

(16) Add any amount claimed as a credit under section	4290
5747.059 or 5747.65 of the Revised Code to the extent that such	4291
amount satisfies either of the following:	4292

(a) The amount was deducted or excluded from the computation	4293
of the taxpayer's federal adjusted gross income as required to be	4294
reported for the taxpayer's taxable year under the Internal	4295
Revenue Code;	4296

(b) The amount resulted in a reduction of the taxpayer's	4297
federal adjusted gross income as required to be reported for any	4298
of the taxpayer's taxable years under the Internal Revenue Code.	4299

(17) Deduct the amount contributed by the taxpayer to an	4300
individual development account program established by a county	4301
department of job and family services pursuant to sections 329.11	4302
to 329.14 of the Revised Code for the purpose of matching funds	4303
deposited by program participants. On request of the tax	4304
commissioner, the taxpayer shall provide any information that, in	4305
the tax commissioner's opinion, is necessary to establish the	4306
amount deducted under division (A)(17) of this section.	4307

(18) Beginning in taxable year 2001 but not for any taxable	4308
year beginning after December 31, 2005, if the taxpayer is married	4309
and files a joint return and the combined federal adjusted gross	4310
income of the taxpayer and the taxpayer's spouse for the taxable	4311
year does not exceed one hundred thousand dollars, or if the	4312
taxpayer is single and has a federal adjusted gross income for the	4313
taxable year not exceeding fifty thousand dollars, deduct amounts	4314
paid during the taxable year for qualified tuition and fees paid	4315
to an eligible institution for the taxpayer, the taxpayer's	4316
spouse, or any dependent of the taxpayer, who is a resident of	4317
this state and is enrolled in or attending a program that	4318
culminates in a degree or diploma at an eligible institution. The	4319
deduction may be claimed only to the extent that qualified tuition	4320
and fees are not otherwise deducted or excluded for any taxable	4321
year from federal or Ohio adjusted gross income. The deduction may	4322
not be claimed for educational expenses for which the taxpayer	4323
claims a credit under section 5747.27 of the Revised Code.	4324

(19) Add any reimbursement received during the taxable year	4325
of any amount the taxpayer deducted under division (A)(18) of this	4326
section in any previous taxable year to the extent the amount is	4327
not otherwise included in Ohio adjusted gross income.	4328

(20)(a)(i) Add five-sixths of the amount of depreciation	4329
expense allowed by subsection (k) of section 168 of the Internal	4330
Revenue Code, including the taxpayer's proportionate or	4331
distributive share of the amount of depreciation expense allowed	4332
by that subsection to a pass-through entity in which the taxpayer	4333
has a direct or indirect ownership interest.	4334

(ii) Add five-sixths of the amount of qualifying section 179	4335
depreciation expense, including a person's proportionate or	4336
distributive share of the amount of qualifying section 179	4337
depreciation expense allowed to any pass-through entity in which	4338
the person has a direct or indirect ownership. For the purposes of	4339
this division, "qualifying section 179 depreciation expense" means	4340
the difference between (I) the amount of depreciation expense	4341
directly or indirectly allowed to the taxpayer under section 179	4342
of the Internal Revenue Code, and (II) the amount of depreciation	4343
expense directly or indirectly allowed to the taxpayer under	4344
section 179 of the Internal Revenue Code as that section existed	4345
on December 31, 2002.	4346

The tax commissioner, under procedures established by the	4347
commissioner, may waive the add-backs related to a pass-through	4348
entity if the taxpayer owns, directly or indirectly, less than	4349
five per cent of the pass-through entity.	4350

(b) Nothing in division (A)(20) of this section shall be	4351
construed to adjust or modify the adjusted basis of any asset.	4352

(c) To the extent the add-back required under division	4353
(A)(20)(a) of this section is attributable to property generating	4354
nonbusiness income or loss allocated under section 5747.20 of the	4355
Revised Code, the add-back shall be sitused to the same location	4356
as the nonbusiness income or loss generated by the property for	4357
the purpose of determining the credit under division (A) of	4358
section 5747.05 of the Revised Code. Otherwise, the add-back shall	4359
be apportioned, subject to one or more of the four alternative	4360
methods of apportionment enumerated in section 5747.21 of the	4361
Revised Code.	4362

(d) For the purposes of division (A) of this section, net	4363
operating loss carryback and carryforward shall not include	4364
five-sixths of the allowance of any net operating loss deduction	4365
carryback or carryforward to the taxable year to the extent such	4366
loss resulted from depreciation allowed by section 168(k) of the	4367
Internal Revenue Code and by the qualifying section 179	4368
depreciation expense amount.	4369

(21)(a) If the taxpayer was required to add an amount under	4370
division (A)(20)(a) of this section for a taxable year, deduct	4371
one-fifth of the amount so added for each of the five succeeding	4372
taxable years.	4373

(b) If the amount deducted under division (A)(21)(a) of this	4374
section is attributable to an add-back allocated under division	4375
(A)(20)(c) of this section, the amount deducted shall be sitused	4376
to the same location. Otherwise, the add-back shall be apportioned	4377
using the apportionment factors for the taxable year in which the	4378
deduction is taken, subject to one or more of the four alternative	4379
methods of apportionment enumerated in section 5747.21 of the	4380
Revised Code.	4381

(c) No deduction is available under division (A)(21)(a) of	4382
this section with regard to any depreciation allowed by section	4383
168(k) of the Internal Revenue Code and by the qualifying section	4384
179 depreciation expense amount to the extent that such	4385
depreciation resulted in or increased a federal net operating loss	4386
carryback or carryforward to a taxable year to which division	4387
(A)(20)(d) of this section does not apply.	4388

(22) Deduct, to the extent not otherwise deducted or excluded	4389
in computing federal or Ohio adjusted gross income for the taxable	4390
year, the amount the taxpayer received during the taxable year as	4391
reimbursement for life insurance premiums under section 5919.31 of	4392
the Revised Code.	4393

(23) Deduct, to the extent not otherwise deducted or excluded	4394
in computing federal or Ohio adjusted gross income for the taxable	4395
year, the amount the taxpayer received during the taxable year as	4396
a death benefit paid by the adjutant general under section 5919.33	4397
of the Revised Code.	4398

(24) Deduct, to the extent included in federal adjusted gross	4399
income and not otherwise allowable as a deduction or exclusion in	4400
computing federal or Ohio adjusted gross income for the taxable	4401
year, military pay and allowances received by the taxpayer during	4402
the taxable year for active duty service in the United States	4403
army, air force, navy, marine corps, or coast guard or reserve	4404
components thereof or the national guard. The deduction may not be	4405
claimed for military pay and allowances received by the taxpayer	4406
while the taxpayer is stationed in this state.	4407

(25) Deduct, to the extent not otherwise allowable as a	4408
deduction or exclusion in computing federal or Ohio adjusted gross	4409
income for the taxable year and not otherwise compensated for by	4410
any other source, the amount of qualified organ donation expenses	4411
incurred by the taxpayer during the taxable year, not to exceed	4412
ten thousand dollars. A taxpayer may deduct qualified organ	4413
donation expenses only once for all taxable years beginning with	4414
taxable years beginning in 2007.	4415

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

4416

(a) "Human organ" means all or any portion of a human liver,	4417
pancreas, kidney, intestine, or lung, and any portion of human	4418
bone marrow.	4419

(b) "Qualified organ donation expenses" means travel	4420
expenses, lodging expenses, and wages and salary forgone by a	4421
taxpayer in connection with the taxpayer's donation, while living,	4422
of one or more of the taxpayer's human organs to another human	4423
being.	4424

(26) Deduct, to the extent not otherwise deducted or excluded	4425
in computing federal or Ohio adjusted gross income for the taxable	4426
year, amounts received by the taxpayer as retired military	4427
personnel pay for service in the United States army, navy, air	4428
force, coast guard, or marine corps or reserve components thereof,	4429
or the national guard, or received by the surviving spouse or	4430
former spouse of such a taxpayer under the survivor benefit plan	4431
on account of such a taxpayer's death. If the taxpayer receives	4432
income on account of retirement paid under the federal civil	4433
service retirement system or federal employees retirement system,	4434
or under any successor retirement program enacted by the congress	4435
of the United States that is established and maintained for	4436
retired employees of the United States government, and such	4437
retirement income is based, in whole or in part, on credit for the	4438
taxpayer's military service, the deduction allowed under this	4439
division shall include only that portion of such retirement income	4440
that is attributable to the taxpayer's military service, to the	4441
extent that portion of such retirement income is otherwise	4442
included in federal adjusted gross income and is not otherwise	4443
deducted under this section. Any amount deducted under division	4444
(A)(26) of this section is not included in a taxpayer's adjusted	4445
gross income for the purposes of section 5747.055 of the Revised	4446
Code. No amount may be deducted under division (A)(26) of this	4447
section on the basis of which a credit was claimed under section	4448
5747.055 of the Revised Code.	4449

(27) Deduct, to the extent not otherwise deducted or excluded	4450
in computing federal or Ohio adjusted gross income for the taxable	4451
year, the amount the taxpayer received during the taxable year	4452
from the military injury relief fund created in section 5101.98 of	4453
the Revised Code.	4454

(28) Deduct, to the extent not otherwise deducted or excluded	4455
in computing federal or Ohio adjusted gross income for the taxable	4456
year, the amount the taxpayer received as a veterans bonus during	4457
the taxable year from the Ohio department of veterans services as	4458
authorized by Section 2r of Article VIII, Ohio Constitution.	4459

(29) Deduct, to the extent not otherwise deducted or excluded	4460
in computing federal or Ohio adjusted gross income for the taxable	4461
year, any loss from wagering transactions that is allowed as an	4462
itemized deduction under section 165 of the Internal Revenue Code	4463
and that the taxpayer deducted in computing federal taxable	4464
income.	4465

(30) Deduct, to the extent not otherwise deducted or excluded	4466
in computing federal or Ohio adjusted gross income for the taxable	4467
year, any income derived from providing public services under a	4468
contract through a project owned by the state, as described in	4469
section 126.604 of the Revised Code or derived from a transfer	4470
agreement or from the enterprise transferred under that agreement	4471
under section 4313.02 of the Revised Code.	4472

(31) Deduct, to the extent not otherwise deducted or excluded	4473
in computing federal or Ohio adjusted gross income for the taxable	4474
year, Ohio college opportunity or federal Pell grant amounts	4475
received by the taxpayer or the taxpayer's spouse or dependent	4476
pursuant to section 3333.122 of the Revised Code or 20 U.S.C.	4477
1070a, et seq., and used to pay room or board furnished by the	4478
educational institution for which the grant was awarded at the	4479
institution's facilities, including meal plans administered by the	4480
institution. For the purposes of this division, receipt of a grant	4481
includes the distribution of a grant directly to an educational	4482
institution and the crediting of the grant to the enrollee's	4483
account with the institution.	4484

(B) "Business income" means income, including gain or loss,	4485
arising from transactions, activities, and sources in the regular	4486
course of a trade or business and includes income, gain, or loss	4487
from real property, tangible property, and intangible property if	4488
the acquisition, rental, management, and disposition of the	4489
property constitute integral parts of the regular course of a	4490
trade or business operation. "Business income" includes income,	4491
including gain or loss, from a partial or complete liquidation of	4492
a business, including, but not limited to, gain or loss from the	4493
sale or other disposition of goodwill.	4494

(C) "Nonbusiness income" means all income other than business	4495
income and may include, but is not limited to, compensation, rents	4496
and royalties from real or tangible personal property, capital	4497
gains, interest, dividends and distributions, patent or copyright	4498
royalties, or lottery winnings, prizes, and awards.	4499

(D) "Compensation" means any form of remuneration paid to an	4500
employee for personal services.	4501

(E) "Fiduciary" means a guardian, trustee, executor,	4502
administrator, receiver, conservator, or any other person acting	4503
in any fiduciary capacity for any individual, trust, or estate.	4504

(F) "Fiscal year" means an accounting period of twelve months	4505
ending on the last day of any month other than December.	4506

(G) "Individual" means any natural person.

4507

(H) "Internal Revenue Code" means the "Internal Revenue Code	4508
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.	4509

(I) "Resident" means any of the following, provided that	4510
division (I)(3) of this section applies only to taxable years of a	4511
trust beginning in 2002 or thereafter:	4512

(1) An individual who is domiciled in this state, subject to	4513
section 5747.24 of the Revised Code;	4514

(2) The estate of a decedent who at the time of death was	4515
domiciled in this state. The domicile tests of section 5747.24 of	4516
the Revised Code are not controlling for purposes of division	4517
(I)(2) of this section.	4518

(3) A trust that, in whole or part, resides in this state. If	4519
only part of a trust resides in this state, the trust is a	4520
resident only with respect to that part.	4521

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

4522

(a) A trust resides in this state for the trust's current	4523
taxable year to the extent, as described in division (I)(3)(d) of	4524
this section, that the trust consists directly or indirectly, in	4525
whole or in part, of assets, net of any related liabilities, that	4526
were transferred, or caused to be transferred, directly or	4527
indirectly, to the trust by any of the following:	4528

(i) A person, a court, or a governmental entity or	4529
instrumentality on account of the death of a decedent, but only if	4530
the trust is described in division (I)(3)(e)(i) or (ii) of this	4531
section;	4532

(ii) A person who was domiciled in this state for the	4533
purposes of this chapter when the person directly or indirectly	4534
transferred assets to an irrevocable trust, but only if at least	4535
one of the trust's qualifying beneficiaries is domiciled in this	4536
state for the purposes of this chapter during all or some portion	4537
of the trust's current taxable year;	4538

(iii) A person who was domiciled in this state for the	4539
purposes of this chapter when the trust document or instrument or	4540
part of the trust document or instrument became irrevocable, but	4541
only if at least one of the trust's qualifying beneficiaries is a	4542
resident domiciled in this state for the purposes of this chapter	4543
during all or some portion of the trust's current taxable year. If	4544
a trust document or instrument became irrevocable upon the death	4545
of a person who at the time of death was domiciled in this state	4546
for purposes of this chapter, that person is a person described in	4547
division (I)(3)(a)(iii) of this section.	4548

(b) A trust is irrevocable to the extent that the transferor	4549
is not considered to be the owner of the net assets of the trust	4550
under sections 671 to 678 of the Internal Revenue Code.	4551

(c) With respect to a trust other than a charitable lead	4552
trust, "qualifying beneficiary" has the same meaning as "potential	4553
current beneficiary" as defined in section 1361(e)(2) of the	4554
Internal Revenue Code, and with respect to a charitable lead trust	4555
"qualifying beneficiary" is any current, future, or contingent	4556
beneficiary, but with respect to any trust "qualifying	4557
beneficiary" excludes a person or a governmental entity or	4558
instrumentality to any of which a contribution would qualify for	4559
the charitable deduction under section 170 of the Internal Revenue	4560
Code.	4561

(d) For the purposes of division (I)(3)(a) of this section,	4562
the extent to which a trust consists directly or indirectly, in	4563
whole or in part, of assets, net of any related liabilities, that	4564
were transferred directly or indirectly, in whole or part, to the	4565
trust by any of the sources enumerated in that division shall be	4566
ascertained by multiplying the fair market value of the trust's	4567
assets, net of related liabilities, by the qualifying ratio, which	4568
shall be computed as follows:	4569

(i) The first time the trust receives assets, the numerator	4570
of the qualifying ratio is the fair market value of those assets	4571
at that time, net of any related liabilities, from sources	4572
enumerated in division (I)(3)(a) of this section. The denominator	4573
of the qualifying ratio is the fair market value of all the	4574
trust's assets at that time, net of any related liabilities.	4575

(ii) Each subsequent time the trust receives assets, a	4576
revised qualifying ratio shall be computed. The numerator of the	4577
revised qualifying ratio is the sum of (1) the fair market value	4578
of the trust's assets immediately prior to the subsequent	4579
transfer, net of any related liabilities, multiplied by the	4580
qualifying ratio last computed without regard to the subsequent	4581
transfer, and (2) the fair market value of the subsequently	4582
transferred assets at the time transferred, net of any related	4583
liabilities, from sources enumerated in division (I)(3)(a) of this	4584
section. The denominator of the revised qualifying ratio is the	4585
fair market value of all the trust's assets immediately after the	4586
subsequent transfer, net of any related liabilities.	4587

(iii) Whether a transfer to the trust is by or from any of	4588
the sources enumerated in division (I)(3)(a) of this section shall	4589
be ascertained without regard to the domicile of the trust's	4590
beneficiaries.	4591

(e) For the purposes of division (I)(3)(a)(i) of this	4592
section:	4593

(i) A trust is described in division (I)(3)(e)(i) of this	4594
section if the trust is a testamentary trust and the testator of	4595
that testamentary trust was domiciled in this state at the time of	4596
the testator's death for purposes of the taxes levied under	4597
Chapter 5731. of the Revised Code.	4598

(ii) A trust is described in division (I)(3)(e)(ii) of this	4599
section if the transfer is a qualifying transfer described in any	4600
of divisions (I)(3)(f)(i) to (vi) of this section, the trust is an	4601
irrevocable inter vivos trust, and at least one of the trust's	4602
qualifying beneficiaries is domiciled in this state for purposes	4603
of this chapter during all or some portion of the trust's current	4604
taxable year.	4605

(f) For the purposes of division (I)(3)(e)(ii) of this	4606
section, a "qualifying transfer" is a transfer of assets, net of	4607
any related liabilities, directly or indirectly to a trust, if the	4608
transfer is described in any of the following:	4609

(i) The transfer is made to a trust, created by the decedent	4610
before the decedent's death and while the decedent was domiciled	4611
in this state for the purposes of this chapter, and, prior to the	4612
death of the decedent, the trust became irrevocable while the	4613
decedent was domiciled in this state for the purposes of this	4614
chapter.	4615

(ii) The transfer is made to a trust to which the decedent,	4616
prior to the decedent's death, had directly or indirectly	4617
transferred assets, net of any related liabilities, while the	4618
decedent was domiciled in this state for the purposes of this	4619
chapter, and prior to the death of the decedent the trust became	4620
irrevocable while the decedent was domiciled in this state for the	4621
purposes of this chapter.	4622

(iii) The transfer is made on account of a contractual	4623
relationship existing directly or indirectly between the	4624
transferor and either the decedent or the estate of the decedent	4625
at any time prior to the date of the decedent's death, and the	4626
decedent was domiciled in this state at the time of death for	4627
purposes of the taxes levied under Chapter 5731. of the Revised	4628
Code.	4629

(iv) The transfer is made to a trust on account of a	4630
contractual relationship existing directly or indirectly between	4631
the transferor and another person who at the time of the	4632
decedent's death was domiciled in this state for purposes of this	4633
chapter.	4634

(v) The transfer is made to a trust on account of the will of	4635
a testator who was domiciled in this state at the time of the	4636
testator's death for purposes of the taxes levied under Chapter	4637
5731. of the Revised Code.	4638

(vi) The transfer is made to a trust created by or caused to	4639
be created by a court, and the trust was directly or indirectly	4640
created in connection with or as a result of the death of an	4641
individual who, for purposes of the taxes levied under Chapter	4642
5731. of the Revised Code, was domiciled in this state at the time	4643
of the individual's death.	4644

(g) The tax commissioner may adopt rules to ascertain the	4645
part of a trust residing in this state.	4646

(J) "Nonresident" means an individual or estate that is not a	4647
resident. An individual who is a resident for only part of a	4648
taxable year is a nonresident for the remainder of that taxable	4649
year.	4650

(K) "Pass-through entity" has the same meaning as in section	4651
5733.04 of the Revised Code.	4652

(L) "Return" means the notifications and reports required to	4653
be filed pursuant to this chapter for the purpose of reporting the	4654
tax due and includes declarations of estimated tax when so	4655
required.	4656

(M) "Taxable year" means the calendar year or the taxpayer's	4657
fiscal year ending during the calendar year, or fractional part	4658
thereof, upon which the adjusted gross income is calculated	4659
pursuant to this chapter.	4660

(N) "Taxpayer" means any person subject to the tax imposed by	4661
section 5747.02 of the Revised Code or any pass-through entity	4662
that makes the election under division (D) of section 5747.08 of	4663
the Revised Code.	4664

(O) "Dependents" means dependents as defined in the Internal	4665
Revenue Code and as claimed in the taxpayer's federal income tax	4666
return for the taxable year or which the taxpayer would have been	4667
permitted to claim had the taxpayer filed a federal income tax	4668
return.	4669

(P) "Principal county of employment" means, in the case of a	4670
nonresident, the county within the state in which a taxpayer	4671
performs services for an employer or, if those services are	4672
performed in more than one county, the county in which the major	4673
portion of the services are performed.	4674

(Q) As used in sections 5747.50 to 5747.55 of the Revised	4675
Code:	4676

(1) "Subdivision" means any county, municipal corporation,	4677
park district, or township.	4678

(2) "Essential local government purposes" includes all	4679
functions that any subdivision is required by general law to	4680
exercise, including like functions that are exercised under a	4681
charter adopted pursuant to the Ohio Constitution.	4682

(R) "Overpayment" means any amount already paid that exceeds	4683
the figure determined to be the correct amount of the tax.	4684

(S) "Taxable income" or "Ohio taxable income" applies only to	4685
estates and trusts, and means federal taxable income, as defined	4686
and used in the Internal Revenue Code, adjusted as follows:	4687

(1) Add interest or dividends, net of ordinary, necessary,	4688
and reasonable expenses not deducted in computing federal taxable	4689
income, on obligations or securities of any state or of any	4690
political subdivision or authority of any state, other than this	4691
state and its subdivisions and authorities, but only to the extent	4692
that such net amount is not otherwise includible in Ohio taxable	4693
income and is described in either division (S)(1)(a) or (b) of	4694
this section:	4695

(a) The net amount is not attributable to the S portion of an	4696
electing small business trust and has not been distributed to	4697
beneficiaries for the taxable year;	4698

(b) The net amount is attributable to the S portion of an	4699
electing small business trust for the taxable year.	4700

(2) Add interest or dividends, net of ordinary, necessary,	4701
and reasonable expenses not deducted in computing federal taxable	4702
income, on obligations of any authority, commission,	4703
instrumentality, territory, or possession of the United States to	4704
the extent that the interest or dividends are exempt from federal	4705
income taxes but not from state income taxes, but only to the	4706
extent that such net amount is not otherwise includible in Ohio	4707
taxable income and is described in either division (S)(1)(a) or	4708
(b) of this section;	4709

(3) Add the amount of personal exemption allowed to the	4710
estate pursuant to section 642(b) of the Internal Revenue Code;	4711

(4) Deduct interest or dividends, net of related expenses	4712
deducted in computing federal taxable income, on obligations of	4713
the United States and its territories and possessions or of any	4714
authority, commission, or instrumentality of the United States to	4715
the extent that the interest or dividends are exempt from state	4716
taxes under the laws of the United States, but only to the extent	4717
that such amount is included in federal taxable income and is	4718
described in either division (S)(1)(a) or (b) of this section;	4719

(5) Deduct the amount of wages and salaries, if any, not	4720
otherwise allowable as a deduction but that would have been	4721
allowable as a deduction in computing federal taxable income for	4722
the taxable year, had the targeted jobs credit allowed under	4723
sections 38, 51, and 52 of the Internal Revenue Code not been in	4724
effect, but only to the extent such amount relates either to	4725
income included in federal taxable income for the taxable year or	4726
to income of the S portion of an electing small business trust for	4727
the taxable year;	4728

(6) Deduct any interest or interest equivalent, net of	4729
related expenses deducted in computing federal taxable income, on	4730
public obligations and purchase obligations, but only to the	4731
extent that such net amount relates either to income included in	4732
federal taxable income for the taxable year or to income of the S	4733
portion of an electing small business trust for the taxable year;	4734

(7) Add any loss or deduct any gain resulting from sale,	4735
exchange, or other disposition of public obligations to the extent	4736
that such loss has been deducted or such gain has been included in	4737
computing either federal taxable income or income of the S portion	4738
of an electing small business trust for the taxable year;	4739

(8) Except in the case of the final return of an estate, add	4740
any amount deducted by the taxpayer on both its Ohio estate tax	4741
return pursuant to section 5731.14 of the Revised Code, and on its	4742
federal income tax return in determining federal taxable income;	4743

(9)(a) Deduct any amount included in federal taxable income	4744
solely because the amount represents a reimbursement or refund of	4745
expenses that in a previous year the decedent had deducted as an	4746
itemized deduction pursuant to section 63 of the Internal Revenue	4747
Code and applicable treasury regulations. The deduction otherwise	4748
allowed under division (S)(9)(a) of this section shall be reduced	4749
to the extent the reimbursement is attributable to an amount the	4750
taxpayer or decedent deducted under this section in any taxable	4751
year.	4752

(b) Add any amount not otherwise included in Ohio taxable	4753
income for any taxable year to the extent that the amount is	4754
attributable to the recovery during the taxable year of any amount	4755
deducted or excluded in computing federal or Ohio taxable income	4756
in any taxable year, but only to the extent such amount has not	4757
been distributed to beneficiaries for the taxable year.	4758

(10) Deduct any portion of the deduction described in section	4759
1341(a)(2) of the Internal Revenue Code, for repaying previously	4760
reported income received under a claim of right, that meets both	4761
of the following requirements:	4762

(a) It is allowable for repayment of an item that was	4763
included in the taxpayer's taxable income or the decedent's	4764
adjusted gross income for a prior taxable year and did not qualify	4765
for a credit under division (A) or (B) of section 5747.05 of the	4766
Revised Code for that year.	4767

(b) It does not otherwise reduce the taxpayer's taxable	4768
income or the decedent's adjusted gross income for the current or	4769
any other taxable year.	4770

(11) Add any amount claimed as a credit under section	4771
5747.059 or 5747.65 of the Revised Code to the extent that the	4772
amount satisfies either of the following:	4773

(a) The amount was deducted or excluded from the computation	4774
of the taxpayer's federal taxable income as required to be	4775
reported for the taxpayer's taxable year under the Internal	4776
Revenue Code;	4777

(b) The amount resulted in a reduction in the taxpayer's	4778
federal taxable income as required to be reported for any of the	4779
taxpayer's taxable years under the Internal Revenue Code.	4780

(12) Deduct any amount, net of related expenses deducted in	4781
computing federal taxable income, that a trust is required to	4782
report as farm income on its federal income tax return, but only	4783
if the assets of the trust include at least ten acres of land	4784
satisfying the definition of "land devoted exclusively to	4785
agricultural use" under section 5713.30 of the Revised Code,	4786
regardless of whether the land is valued for tax purposes as such	4787
land under sections 5713.30 to 5713.38 of the Revised Code. If the	4788
trust is a pass-through entity investor, section 5747.231 of the	4789
Revised Code applies in ascertaining if the trust is eligible to	4790
claim the deduction provided by division (S)(12) of this section	4791
in connection with the pass-through entity's farm income.	4792

Except for farm income attributable to the S portion of an	4793
electing small business trust, the deduction provided by division	4794
(S)(12) of this section is allowed only to the extent that the	4795
trust has not distributed such farm income. Division (S)(12) of	4796
this section applies only to taxable years of a trust beginning in	4797
2002 or thereafter.	4798

(13) Add the net amount of income described in section 641(c)	4799
of the Internal Revenue Code to the extent that amount is not	4800
included in federal taxable income.	4801

(14) Add or deduct the amount the taxpayer would be required	4802
to add or deduct under division (A)(20) or (21) of this section if	4803
the taxpayer's Ohio taxable income were computed in the same	4804
manner as an individual's Ohio adjusted gross income is computed	4805
under this section. In the case of a trust, division (S)(14) of	4806
this section applies only to any of the trust's taxable years	4807
beginning in 2002 or thereafter.	4808

(T) "School district income" and "school district income tax"	4809
have the same meanings as in section 5748.01 of the Revised Code.	4810

(U) As used in divisions (A)(8), (A)(9), (S)(6), and (S)(7)	4811
of this section, "public obligations," "purchase obligations," and	4812
"interest or interest equivalent" have the same meanings as in	4813
section 5709.76 of the Revised Code.	4814

(V) "Limited liability company" means any limited liability	4815
company formed under Chapter 1705. of the Revised Code or under	4816
the laws of any other state.	4817

(W) "Pass-through entity investor" means any person who,	4818
during any portion of a taxable year of a pass-through entity, is	4819
a partner, member, shareholder, or equity investor in that	4820
pass-through entity.	4821

(X) "Banking day" has the same meaning as in section 1304.01	4822
of the Revised Code.	4823

(Y) "Month" means a calendar month.

4824

(Z) "Quarter" means the first three months, the second three	4825
months, the third three months, or the last three months of the	4826
taxpayer's taxable year.	4827

(AA)(1) "Eligible institution" means a state university or	4828
state institution of higher education as defined in section	4829
3345.011 of the Revised Code, or a private, nonprofit college,	4830
university, or other post-secondary institution located in this	4831
state that possesses a certificate of authorization issued by the	4832
Ohio board of regents pursuant to Chapter 1713. of the Revised	4833
Code or a certificate of registration issued by the state board of	4834
career colleges and schools under Chapter 3332. of the Revised	4835
Code.	4836

(2) "Qualified tuition and fees" means tuition and fees	4837
imposed by an eligible institution as a condition of enrollment or	4838
attendance, not exceeding two thousand five hundred dollars in	4839
each of the individual's first two years of post-secondary	4840
education. If the individual is a part-time student, "qualified	4841
tuition and fees" includes tuition and fees paid for the academic	4842
equivalent of the first two years of post-secondary education	4843
during a maximum of five taxable years, not exceeding a total of	4844
five thousand dollars. "Qualified tuition and fees" does not	4845
include:	4846

(a) Expenses for any course or activity involving sports,	4847
games, or hobbies unless the course or activity is part of the	4848
individual's degree or diploma program;	4849

(b) The cost of books, room and board, student activity fees,	4850
athletic fees, insurance expenses, or other expenses unrelated to	4851
the individual's academic course of instruction;	4852

(c) Tuition, fees, or other expenses paid or reimbursed	4853
through an employer, scholarship, grant in aid, or other	4854
educational benefit program.	4855

(BB)(1) "Modified business income" means the business income	4856
included in a trust's Ohio taxable income after such taxable	4857
income is first reduced by the qualifying trust amount, if any.	4858

(2) "Qualifying trust amount" of a trust means capital gains	4859
and losses from the sale, exchange, or other disposition of equity	4860
or ownership interests in, or debt obligations of, a qualifying	4861
investee to the extent included in the trust's Ohio taxable	4862
income, but only if the following requirements are satisfied:	4863

(a) The book value of the qualifying investee's physical	4864
assets in this state and everywhere, as of the last day of the	4865
qualifying investee's fiscal or calendar year ending immediately	4866
prior to the date on which the trust recognizes the gain or loss,	4867
is available to the trust.	4868

(b) The requirements of section 5747.011 of the Revised Code	4869
are satisfied for the trust's taxable year in which the trust	4870
recognizes the gain or loss.	4871

Any gain or loss that is not a qualifying trust amount is	4872
modified business income, qualifying investment income, or	4873
modified nonbusiness income, as the case may be.	4874

(3) "Modified nonbusiness income" means a trust's Ohio	4875
taxable income other than modified business income, other than the	4876
qualifying trust amount, and other than qualifying investment	4877
income, as defined in section 5747.012 of the Revised Code, to the	4878
extent such qualifying investment income is not otherwise part of	4879
modified business income.	4880

(4) "Modified Ohio taxable income" applies only to trusts,	4881
and means the sum of the amounts described in divisions (BB)(4)(a)	4882
to (c) of this section:	4883

(a) The fraction, calculated under section 5747.013, and	4884
applying section 5747.231 of the Revised Code, multiplied by the	4885
sum of the following amounts:	4886

(i) The trust's modified business income;

4887

(ii) The trust's qualifying investment income, as defined in	4888
section 5747.012 of the Revised Code, but only to the extent the	4889
qualifying investment income does not otherwise constitute	4890
modified business income and does not otherwise constitute a	4891
qualifying trust amount.	4892

(b) The qualifying trust amount multiplied by a fraction, the	4893
numerator of which is the sum of the book value of the qualifying	4894
investee's physical assets in this state on the last day of the	4895
qualifying investee's fiscal or calendar year ending immediately	4896
prior to the day on which the trust recognizes the qualifying	4897
trust amount, and the denominator of which is the sum of the book	4898
value of the qualifying investee's total physical assets	4899
everywhere on the last day of the qualifying investee's fiscal or	4900
calendar year ending immediately prior to the day on which the	4901
trust recognizes the qualifying trust amount. If, for a taxable	4902
year, the trust recognizes a qualifying trust amount with respect	4903
to more than one qualifying investee, the amount described in	4904
division (BB)(4)(b) of this section shall equal the sum of the	4905
products so computed for each such qualifying investee.	4906

(c)(i) With respect to a trust or portion of a trust that is	4907
a resident as ascertained in accordance with division (I)(3)(d) of	4908
this section, its modified nonbusiness income.	4909

(ii) With respect to a trust or portion of a trust that is	4910
not a resident as ascertained in accordance with division	4911
(I)(3)(d) of this section, the amount of its modified nonbusiness	4912
income satisfying the descriptions in divisions (B)(2) to (5) of	4913
section 5747.20 of the Revised Code, except as otherwise provided	4914
in division (BB)(4)(c)(ii) of this section. With respect to a	4915
trust or portion of a trust that is not a resident as ascertained	4916
in accordance with division (I)(3)(d) of this section, the trust's	4917
portion of modified nonbusiness income recognized from the sale,	4918
exchange, or other disposition of a debt interest in or equity	4919
interest in a section 5747.212 entity, as defined in section	4920
5747.212 of the Revised Code, without regard to division (A) of	4921
that section, shall not be allocated to this state in accordance	4922
with section 5747.20 of the Revised Code but shall be apportioned	4923
to this state in accordance with division (B) of section 5747.212	4924
of the Revised Code without regard to division (A) of that	4925
section.	4926

If the allocation and apportionment of a trust's income under	4927
divisions (BB)(4)(a) and (c) of this section do not fairly	4928
represent the modified Ohio taxable income of the trust in this	4929
state, the alternative methods described in division (C) of	4930
section 5747.21 of the Revised Code may be applied in the manner	4931
and to the same extent provided in that section.	4932

(5)(a) Except as set forth in division (BB)(5)(b) of this	4933
section, "qualifying investee" means a person in which a trust has	4934
an equity or ownership interest, or a person or unit of government	4935
the debt obligations of either of which are owned by a trust. For	4936
the purposes of division (BB)(2)(a) of this section and for the	4937
purpose of computing the fraction described in division (BB)(4)(b)	4938
of this section, all of the following apply:	4939

(i) If the qualifying investee is a member of a qualifying	4940
controlled group on the last day of the qualifying investee's	4941
fiscal or calendar year ending immediately prior to the date on	4942
which the trust recognizes the gain or loss, then "qualifying	4943
investee" includes all persons in the qualifying controlled group	4944
on such last day.	4945

(ii) If the qualifying investee, or if the qualifying	4946
investee and any members of the qualifying controlled group of	4947
which the qualifying investee is a member on the last day of the	4948
qualifying investee's fiscal or calendar year ending immediately	4949
prior to the date on which the trust recognizes the gain or loss,	4950
separately or cumulatively own, directly or indirectly, on the	4951
last day of the qualifying investee's fiscal or calendar year	4952
ending immediately prior to the date on which the trust recognizes	4953
the qualifying trust amount, more than fifty per cent of the	4954
equity of a pass-through entity, then the qualifying investee and	4955
the other members are deemed to own the proportionate share of the	4956
pass-through entity's physical assets which the pass-through	4957
entity directly or indirectly owns on the last day of the	4958
pass-through entity's calendar or fiscal year ending within or	4959
with the last day of the qualifying investee's fiscal or calendar	4960
year ending immediately prior to the date on which the trust	4961
recognizes the qualifying trust amount.	4962

(iii) For the purposes of division (BB)(5)(a)(iii) of this	4963
section, "upper level pass-through entity" means a pass-through	4964
entity directly or indirectly owning any equity of another	4965
pass-through entity, and "lower level pass-through entity" means	4966
that other pass-through entity.	4967

An upper level pass-through entity, whether or not it is also	4968
a qualifying investee, is deemed to own, on the last day of the	4969
upper level pass-through entity's calendar or fiscal year, the	4970
proportionate share of the lower level pass-through entity's	4971
physical assets that the lower level pass-through entity directly	4972
or indirectly owns on the last day of the lower level pass-through	4973
entity's calendar or fiscal year ending within or with the last	4974
day of the upper level pass-through entity's fiscal or calendar	4975
year. If the upper level pass-through entity directly and	4976
indirectly owns less than fifty per cent of the equity of the	4977
lower level pass-through entity on each day of the upper level	4978
pass-through entity's calendar or fiscal year in which or with	4979
which ends the calendar or fiscal year of the lower level	4980
pass-through entity and if, based upon clear and convincing	4981
evidence, complete information about the location and cost of the	4982
physical assets of the lower pass-through entity is not available	4983
to the upper level pass-through entity, then solely for purposes	4984
of ascertaining if a gain or loss constitutes a qualifying trust	4985
amount, the upper level pass-through entity shall be deemed as	4986
owning no equity of the lower level pass-through entity for each	4987
day during the upper level pass-through entity's calendar or	4988
fiscal year in which or with which ends the lower level	4989
pass-through entity's calendar or fiscal year. Nothing in division	4990
(BB)(5)(a)(iii) of this section shall be construed to provide for	4991
any deduction or exclusion in computing any trust's Ohio taxable	4992
income.	4993

(b) With respect to a trust that is not a resident for the	4994
taxable year and with respect to a part of a trust that is not a	4995
resident for the taxable year, "qualifying investee" for that	4996
taxable year does not include a C corporation if both of the	4997
following apply:	4998

(i) During the taxable year the trust or part of the trust	4999
recognizes a gain or loss from the sale, exchange, or other	5000
disposition of equity or ownership interests in, or debt	5001
obligations of, the C corporation.	5002

(ii) Such gain or loss constitutes nonbusiness income.

5003

(6) "Available" means information is such that a person is	5004
able to learn of the information by the due date plus extensions,	5005
if any, for filing the return for the taxable year in which the	5006
trust recognizes the gain or loss.	5007

(CC) "Qualifying controlled group" has the same meaning as in	5008
section 5733.04 of the Revised Code.	5009

(DD) "Related member" has the same meaning as in section	5010
5733.042 of the Revised Code.	5011

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

5012

(a) "Qualifying person" means any person other than a	5013
qualifying corporation.	5014

(b) "Qualifying corporation" means any person classified for	5015
federal income tax purposes as an association taxable as a	5016
corporation, except either of the following:	5017

(i) A corporation that has made an election under subchapter	5018
S, chapter one, subtitle A, of the Internal Revenue Code for its	5019
taxable year ending within, or on the last day of, the investor's	5020
taxable year;	5021

(ii) A subsidiary that is wholly owned by any corporation	5022
that has made an election under subchapter S, chapter one,	5023
subtitle A of the Internal Revenue Code for its taxable year	5024
ending within, or on the last day of, the investor's taxable year.	5025

(2) For the purposes of this chapter, unless expressly stated	5026
otherwise, no qualifying person indirectly owns any asset directly	5027
or indirectly owned by any qualifying corporation.	5028

(FF) For purposes of this chapter and Chapter 5751. of the	5029
Revised Code:	5030

(1) "Trust" does not include a qualified pre-income tax	5031
trust.	5032

(2) A "qualified pre-income tax trust" is any pre-income tax	5033
trust that makes a qualifying pre-income tax trust election as	5034
described in division (FF)(3) of this section.	5035

(3) A "qualifying pre-income tax trust election" is an	5036
election by a pre-income tax trust to subject to the tax imposed	5037
by section 5751.02 of the Revised Code the pre-income tax trust	5038
and all pass-through entities of which the trust owns or controls,	5039
directly, indirectly, or constructively through related interests,	5040
five per cent or more of the ownership or equity interests. The	5041
trustee shall notify the tax commissioner in writing of the	5042
election on or before April 15, 2006. The election, if timely	5043
made, shall be effective on and after January 1, 2006, and shall	5044
apply for all tax periods and tax years until revoked by the	5045
trustee of the trust.	5046

(4) A "pre-income tax trust" is a trust that satisfies all of	5047
the following requirements:	5048

(a) The document or instrument creating the trust was	5049
executed by the grantor before January 1, 1972;	5050

(b) The trust became irrevocable upon the creation of the	5051
trust; and	5052

(c) The grantor was domiciled in this state at the time the	5053
trust was created.	5054

Sec. 5747.65.  There is hereby allowed a refundable credit	5055
against the tax imposed under section 5747.02 of the Revised Code.	5056
The amount of the credit shall equal the taxpayer's proportionate	5057
share of the lesser of either the tax due or the tax paid for the	5058
tax imposed by section 5726.02 of the Revised Code by a	5059
pass-through entity for the pass-through entity's taxable year	5060
ending in the taxpayer's taxable year.	5061

The taxpayer shall claim the credit for the taxpayer's	5062
taxable year that includes the last day of the pass-through	5063
entity's taxable year. For purposes of making tax payments under	5064
this chapter, taxes equal to the amount of the credit shall be	5065
considered to be paid by the taxpayer on the day the pass-through	5066
entity pays to the treasurer of state the amount due for the tax	5067
imposed by section 5726.02 of the Revised Code.	5068

In claiming the credit and determining the taxpayer's	5069
proportionate share of the tax due and the tax paid by a	5070
pass-through entity, the taxpayer shall follow the concepts set	5071
forth in subchapters J and K of the Internal Revenue Code.	5072

The credit shall be claimed in the order required under	5073
section 5747.98 of the Revised Code. If the amount of the credit	5074
exceeds the amount of tax otherwise due under section 5747.02 of	5075
the Revised Code after deduction of all other credits in that	5076
order, the taxpayer is entitled to a refund of the excess.	5077

Sec. 5747.98.  (A) To provide a uniform procedure for	5078
calculating the amount of tax due under section 5747.02 of the	5079
Revised Code, a taxpayer shall claim any credits to which the	5080
taxpayer is entitled in the following order:	5081

(1) The retirement income credit under division (B) of	5082
section 5747.055 of the Revised Code;	5083

(2) The senior citizen credit under division (C) of section	5084
5747.05 of the Revised Code;	5085

(3) The lump sum distribution credit under division (D) of	5086
section 5747.05 of the Revised Code;	5087

(4) The dependent care credit under section 5747.054 of the	5088
Revised Code;	5089

(5) The lump sum retirement income credit under division (C)	5090
of section 5747.055 of the Revised Code;	5091

(6) The lump sum retirement income credit under division (D)	5092
of section 5747.055 of the Revised Code;	5093

(7) The lump sum retirement income credit under division (E)	5094
of section 5747.055 of the Revised Code;	5095

(8) The low-income credit under section 5747.056 of the	5096
Revised Code;	5097

(9) The credit for displaced workers who pay for job training	5098
under section 5747.27 of the Revised Code;	5099

(10) The campaign contribution credit under section 5747.29	5100
of the Revised Code;	5101

(11) The twenty-dollar personal exemption credit under	5102
section 5747.022 of the Revised Code;	5103

(12) The joint filing credit under division (G) of section	5104
5747.05 of the Revised Code;	5105

(13) The nonresident credit under division (A) of section	5106
5747.05 of the Revised Code;	5107

(14) The credit for a resident's out-of-state income under	5108
division (B) of section 5747.05 of the Revised Code;	5109

(15) The credit for employers that enter into agreements with	5110
child day-care centers under section 5747.34 of the Revised Code;	5111

(16) The credit for employers that reimburse employee child	5112
care expenses under section 5747.36 of the Revised Code;	5113

(17) The credit for adoption of a minor child under section	5114
5747.37 of the Revised Code;	5115

(18) The credit for purchases of lights and reflectors under	5116
section 5747.38 of the Revised Code;	5117

(19) The nonrefundable job retention credit under division	5118
(B) of section 5747.058 of the Revised Code;	5119

(20) The credit for selling alternative fuel under section	5120
5747.77 of the Revised Code;	5121

(21) The second credit for purchases of new manufacturing	5122
machinery and equipment and the credit for using Ohio coal under	5123
section 5747.31 of the Revised Code;	5124

(22) The job training credit under section 5747.39 of the	5125
Revised Code;	5126

(23) The enterprise zone credit under section 5709.66 of the	5127
Revised Code;	5128

(24) The credit for the eligible costs associated with a	5129
voluntary action under section 5747.32 of the Revised Code;	5130

(25) The credit for employers that establish on-site child	5131
day-care centers under section 5747.35 of the Revised Code;	5132

(26) The ethanol plant investment credit under section	5133
5747.75 of the Revised Code;	5134

(27) The credit for purchases of qualifying grape production	5135
property under section 5747.28 of the Revised Code;	5136

(28) The small business investment credit under section	5137
5747.81 of the Revised Code;	5138

(29) The credit for research and development and technology	5139
transfer investors under section 5747.33 of the Revised Code;	5140

(30) The enterprise zone credits under section 5709.65 of the	5141
Revised Code;	5142

(31) The research and development credit under section	5143
5747.331 of the Revised Code;	5144

(32) The credit for rehabilitating a historic building under	5145
section 5747.76 of the Revised Code;	5146

(33) The refundable credit for rehabilitating a historic	5147
building under section 5747.76 of the Revised Code;	5148

(34) The refundable jobs creation credit or job retention	5149
credit under division (A) of section 5747.058 of the Revised Code;	5150

(35) The refundable credit for taxes paid by a qualifying	5151
entity granted under section 5747.059 of the Revised Code;	5152

(36) The refundable credits for taxes paid by a qualifying	5153
pass-through entity granted under division (J) of section 5747.08	5154
of the Revised Code;	5155

(37) The refundable credit for tax withheld under division	5156
(B)(1) of section 5747.062 of the Revised Code;	5157

(38) The refundable credit for tax withheld under section	5158
5747.063 of the Revised Code;	5159

(39) The refundable credit under section 5747.80 of the	5160
Revised Code for losses on loans made to the Ohio venture capital	5161
program under sections 150.01 to 150.10 of the Revised Code;	5162

(40) The refundable motion picture production credit under	5163
section 5747.66 of the Revised Code;	5164

(41) The refundable credit for financial institution taxes	5165
paid by a pass-through entity granted under section 5747.65 of the	5166
Revised Code.	5167

(B) For any credit, except the refundable credits enumerated	5168
in this section and the credit granted under division (I) of	5169
section 5747.08 of the Revised Code, the amount of the credit for	5170
a taxable year shall not exceed the tax due after allowing for any	5171
other credit that precedes it in the order required under this	5172
section. Any excess amount of a particular credit may be carried	5173
forward if authorized under the section creating that credit.	5174
Nothing in this chapter shall be construed to allow a taxpayer to	5175
claim, directly or indirectly, a credit more than once for a	5176
taxable year.	5177

Sec. 5751.01.  As used in this chapter:

5178

(A) "Person" means, but is not limited to, individuals,	5179
combinations of individuals of any form, receivers, assignees,	5180
trustees in bankruptcy, firms, companies, joint-stock companies,	5181
business trusts, estates, partnerships, limited liability	5182
partnerships, limited liability companies, associations, joint	5183
ventures, clubs, societies, for-profit corporations, S	5184
corporations, qualified subchapter S subsidiaries, qualified	5185
subchapter S trusts, trusts, entities that are disregarded for	5186
federal income tax purposes, and any other entities.	5187

(B) "Consolidated elected taxpayer" means a group of two or	5188
more persons treated as a single taxpayer for purposes of this	5189
chapter as the result of an election made under section 5751.011	5190
of the Revised Code.	5191

(C) "Combined taxpayer" means a group of two or more persons	5192
treated as a single taxpayer for purposes of this chapter under	5193
section 5751.012 of the Revised Code.	5194

(D) "Taxpayer" means any person, or any group of persons in	5195
the case of a consolidated elected taxpayer or combined taxpayer	5196
treated as one taxpayer, required to register or pay tax under	5197
this chapter. "Taxpayer" does not include excluded persons.	5198

(E) "Excluded person" means any of the following:

5199

(1) Any person with not more than one hundred fifty thousand	5200
dollars of taxable gross receipts during the calendar year.	5201
Division (E)(1) of this section does not apply to a person that is	5202
a member of a consolidated elected taxpayer;	5203

(2) A public utility that paid the excise tax imposed by	5204
section 5727.24 or 5727.30 of the Revised Code based on one or	5205
more measurement periods that include the entire tax period under	5206
this chapter, except that a public utility that is a combined	5207
company is a taxpayer with regard to the following gross receipts:	5208

(a) Taxable gross receipts directly attributed to a public	5209
utility activity, but not directly attributed to an activity that	5210
is subject to the excise tax imposed by section 5727.24 or 5727.30	5211
of the Revised Code;	5212

(b) Taxable gross receipts that cannot be directly attributed	5213
to any activity, multiplied by a fraction whose numerator is the	5214
taxable gross receipts described in division (E)(2)(a) of this	5215
section and whose denominator is the total taxable gross receipts	5216
that can be directly attributed to any activity;	5217

(c) Except for any differences resulting from the use of an	5218
accrual basis method of accounting for purposes of determining	5219
gross receipts under this chapter and the use of the cash basis	5220
method of accounting for purposes of determining gross receipts	5221
under section 5727.24 of the Revised Code, the gross receipts	5222
directly attributed to the activity of a natural gas company shall	5223
be determined in a manner consistent with division (D) of section	5224
5727.03 of the Revised Code.	5225

As used in division (E)(2) of this section, "combined	5226
company" and "public utility" have the same meanings as in section	5227
5727.01 of the Revised Code.	5228

(3) A financial institution, as defined in section 5725.01	5229
5726.01 of the Revised Code, that paid the corporation franchise	5230
tax charged by division (D) ofimposed by section 5733.065726.02	5231
of the Revised Code based on one or more taxable years that	5232
include the entire tax period under this chapter;	5233

(4) A dealer in intangibles, as defined in section 5725.01 of	5234
the Revised Code, that paid the dealer in intangibles tax levied	5235
by division (D) of section 5707.03 of the Revised Code based on	5236
one or more measurement periods that include the entire tax period	5237
under this chapter;	5238

(5) A financial holding company as defined in the "Bank	5239
Holding Company Act," 12 U.S.C. 1841(p);	5240

(6) A bank holding company as defined in the "Bank Holding	5241
Company Act," 12 U.S.C. 1841(a);	5242

(7) A savings and loan holding company as defined in the	5243
"Home Owners Loan Act," 12 U.S.C. 1467a(a)(1)(D) that is engaging	5244
only in activities or investments permissible for a financial	5245
holding company under 12 U.S.C. 1843(k);	5246

(8) A person directly or indirectly owned by one or more	5247
financial institutions, financial holding companies, bank holding	5248
companies, or savings and loan holding companies described in	5249
division (E)(3), (5), (6), or (7) of this section that is engaged	5250
in activities permissible for a financial holding company under 12	5251
U.S.C. 1843(k), except that any such person held pursuant to	5252
merchant banking authority under 12 U.S.C. 1843(k)(4)(H) or 12	5253
U.S.C. 1843(k)(4)(I) is not an excluded person, or a person	5254
directly or indirectly owned by one or more insurance companies	5255
described in division (E)(9) of this section that is authorized to	5256
do the business of insurance in this state.A person directly or	5257
indirectly owned by one or more financial institutions, as defined	5258
in section 5726.01 of the Revised Code, that paid the tax imposed	5259
by section 5726.02 of the Revised Code based on one or more	5260
taxable years that include the entire tax period under this	5261
chapter.	5262

For the purposes of division (E)(8)(4) of this section, a	5263
person owns another person under the following circumstances:	5264

(a) In the case of corporations issuing capital stock, one	5265
corporation owns another corporation if it owns fifty per cent or	5266
more of the other corporation's capital stock with current voting	5267
rights;	5268

(b) In the case of a limited liability company, one person	5269
owns the company if that person's membership interest, as defined	5270
in section 1705.01 of the Revised Code, is fifty per cent or more	5271
of the combined membership interests of all persons owning such	5272
interests in the company;	5273

(c) In the case of a partnership, trust, or other	5274
unincorporated business organization other than a limited	5275
liability company, one person owns the organization if, under the	5276
articles of organization or other instrument governing the affairs	5277
of the organization, that person has a beneficial interest in the	5278
organization's profits, surpluses, losses, or distributions of	5279
fifty per cent or more of the combined beneficial interests of all	5280
persons having such an interest in the organization;	5281

(d) In the case of multiple ownership, the ownership	5282
interests of more than one person may be aggregated to meet the	5283
fifty per cent ownership tests in this division only when each	5284
such owner is described in division (E)(3), (5), (6), or (7) of	5285
this section and is engaged in activities permissible for a	5286
financial holding company under 12 U.S.C. 1843(k) or is a person	5287
directly or indirectly owned by one or more insurance companies	5288
described in division (E)(9) of this section that is authorized to	5289
do the business of insurance in this state.	5290

(9)(5) A domestic insurance company or foreign insurance	5291
company, as defined in section 5725.01 of the Revised Code, that	5292
paid the insurance company premiums tax imposed by section 5725.18	5293
or Chapter 5729. of the Revised Code based on one or more	5294
measurement periods that include the entire tax period under this	5295
chapter;	5296

(10) A person that solely facilitates or services one or more	5297
securitizations or similar transactions for any person described	5298
in division (E)(3), (5), (6), (7), (8), or (9) of this section.	5299
For purposes of this division, "securitization" means transferring	5300
one or more assets to one or more persons and then issuing	5301
securities backed by the right to receive payment from the asset	5302
or assets so transferred.	5303

(11)(6) Except as otherwise provided in this division, a	5304
pre-income tax trust as defined in division (FF)(4) of section	5305
5747.01 of the Revised Code and any pass-through entity of which	5306
such pre-income tax trust owns or controls, directly, indirectly,	5307
or constructively through related interests, more than five per	5308
cent of the ownership or equity interests. If the pre-income tax	5309
trust has made a qualifying pre-income tax trust election under	5310
division (FF)(3) of section 5747.01 of the Revised Code, then the	5311
trust and the pass-through entities of which it owns or controls,	5312
directly, indirectly, or constructively through related interests,	5313
more than five per cent of the ownership or equity interests,	5314
shall not be excluded persons for purposes of the tax imposed	5315
under section 5751.02 of the Revised Code.	5316

(12)(7) Nonprofit organizations or the state and its	5317
agencies, instrumentalities, or political subdivisions.	5318

(F) Except as otherwise provided in divisions (F)(2), (3),	5319
and (4) of this section, "gross receipts" means the total amount	5320
realized by a person, without deduction for the cost of goods sold	5321
or other expenses incurred, that contributes to the production of	5322
gross income of the person, including the fair market value of any	5323
property and any services received, and any debt transferred or	5324
forgiven as consideration.	5325

(1) The following are examples of gross receipts:

5326

(a) Amounts realized from the sale, exchange, or other	5327
disposition of the taxpayer's property to or with another;	5328

(b) Amounts realized from the taxpayer's performance of	5329
services for another;	5330

(c) Amounts realized from another's use or possession of the	5331
taxpayer's property or capital;	5332

(d) Any combination of the foregoing amounts.

5333

(2) "Gross receipts" excludes the following amounts:

5334

(a) Interest income except interest on credit sales;

5335

(b) Dividends and distributions from corporations, and	5336
distributive or proportionate shares of receipts and income from a	5337
pass-through entity as defined under section 5733.04 of the	5338
Revised Code;	5339

(c) Receipts from the sale, exchange, or other disposition of	5340
an asset described in section 1221 or 1231 of the Internal Revenue	5341
Code, without regard to the length of time the person held the	5342
asset. Notwithstanding section 1221 of the Internal Revenue Code,	5343
receipts from hedging transactions also are excluded to the extent	5344
the transactions are entered into primarily to protect a financial	5345
position, such as managing the risk of exposure to (i) foreign	5346
currency fluctuations that affect assets, liabilities, profits,	5347
losses, equity, or investments in foreign operations; (ii)	5348
interest rate fluctuations; or (iii) commodity price fluctuations.	5349
As used in division (F)(2)(c) of this section, "hedging	5350
transaction" has the same meaning as used in section 1221 of the	5351
Internal Revenue Code and also includes transactions accorded	5352
hedge accounting treatment under statement of financial accounting	5353
standards number 133 of the financial accounting standards board.	5354
For the purposes of division (F)(2)(c) of this section, the actual	5355
transfer of title of real or tangible personal property to another	5356
entity is not a hedging transaction.	5357

(d) Proceeds received attributable to the repayment,	5358
maturity, or redemption of the principal of a loan, bond, mutual	5359
fund, certificate of deposit, or marketable instrument;	5360

(e) The principal amount received under a repurchase	5361
agreement or on account of any transaction properly characterized	5362
as a loan to the person;	5363

(f) Contributions received by a trust, plan, or other	5364
arrangement, any of which is described in section 501(a) of the	5365
Internal Revenue Code, or to which Title 26, Subtitle A, Chapter	5366
1, Subchapter (D) of the Internal Revenue Code applies;	5367

(g) Compensation, whether current or deferred, and whether in	5368
cash or in kind, received or to be received by an employee, former	5369
employee, or the employee's legal successor for services rendered	5370
to or for an employer, including reimbursements received by or for	5371
an individual for medical or education expenses, health insurance	5372
premiums, or employee expenses, or on account of a dependent care	5373
spending account, legal services plan, any cafeteria plan	5374
described in section 125 of the Internal Revenue Code, or any	5375
similar employee reimbursement;	5376

(h) Proceeds received from the issuance of the taxpayer's own	5377
stock, options, warrants, puts, or calls, or from the sale of the	5378
taxpayer's treasury stock;	5379

(i) Proceeds received on the account of payments from	5380
insurance policies, except those proceeds received for the loss of	5381
business revenue;	5382

(j) Gifts or charitable contributions received; membership	5383
dues received by trade, professional, homeowners', or condominium	5384
associations; and payments received for educational courses,	5385
meetings, meals, or similar payments to a trade, professional, or	5386
other similar association; and fundraising receipts received by	5387
any person when any excess receipts are donated or used	5388
exclusively for charitable purposes;	5389

(k) Damages received as the result of litigation in excess of	5390
amounts that, if received without litigation, would be gross	5391
receipts;	5392

(l) Property, money, and other amounts received or acquired	5393
by an agent on behalf of another in excess of the agent's	5394
commission, fee, or other remuneration;	5395

(m) Tax refunds, other tax benefit recoveries, and	5396
reimbursements for the tax imposed under this chapter made by	5397
entities that are part of the same combined taxpayer or	5398
consolidated elected taxpayer group, and reimbursements made by	5399
entities that are not members of a combined taxpayer or	5400
consolidated elected taxpayer group that are required to be made	5401
for economic parity among multiple owners of an entity whose tax	5402
obligation under this chapter is required to be reported and paid	5403
entirely by one owner, pursuant to the requirements of sections	5404
5751.011 and 5751.012 of the Revised Code;	5405

(n) Pension reversions;

5406

(o) Contributions to capital;

5407

(p) Sales or use taxes collected as a vendor or an	5408
out-of-state seller on behalf of the taxing jurisdiction from a	5409
consumer or other taxes the taxpayer is required by law to collect	5410
directly from a purchaser and remit to a local, state, or federal	5411
tax authority;	5412

(q) In the case of receipts from the sale of cigarettes or	5413
tobacco products by a wholesale dealer, retail dealer,	5414
distributor, manufacturer, or seller, all as defined in section	5415
5743.01 of the Revised Code, an amount equal to the federal and	5416
state excise taxes paid by any person on or for such cigarettes or	5417
tobacco products under subtitle E of the Internal Revenue Code or	5418
Chapter 5743. of the Revised Code;	5419

(r) In the case of receipts from the sale of motor fuel by a	5420
licensed motor fuel dealer, licensed retail dealer, or licensed	5421
permissive motor fuel dealer, all as defined in section 5735.01 of	5422
the Revised Code, an amount equal to federal and state excise	5423
taxes paid by any person on such motor fuel under section 4081 of	5424
the Internal Revenue Code or Chapter 5735. of the Revised Code;	5425

(s) In the case of receipts from the sale of beer or	5426
intoxicating liquor, as defined in section 4301.01 of the Revised	5427
Code, by a person holding a permit issued under Chapter 4301. or	5428
4303. of the Revised Code, an amount equal to federal and state	5429
excise taxes paid by any person on or for such beer or	5430
intoxicating liquor under subtitle E of the Internal Revenue Code	5431
or Chapter 4301. or 4305. of the Revised Code;	5432

(t) Receipts realized by a new motor vehicle dealer or used	5433
motor vehicle dealer, as defined in section 4517.01 of the Revised	5434
Code, from the sale or other transfer of a motor vehicle, as	5435
defined in that section, to another motor vehicle dealer for the	5436
purpose of resale by the transferee motor vehicle dealer, but only	5437
if the sale or other transfer was based upon the transferee's need	5438
to meet a specific customer's preference for a motor vehicle;	5439

(u) Receipts from a financial institution described in	5440
division (E)(3) of this section for services provided to the	5441
financial institution in connection with the issuance, processing,	5442
servicing, and management of loans or credit accounts, if such	5443
financial institution and the recipient of such receipts have at	5444
least fifty per cent of their ownership interests owned or	5445
controlled, directly or constructively through related interests,	5446
by common owners;	5447

(v) Receipts realized from administering anti-neoplastic	5448
drugs and other cancer chemotherapy, biologicals, therapeutic	5449
agents, and supportive drugs in a physician's office to patients	5450
with cancer;	5451

(w) Funds received or used by a mortgage broker that is not a	5452
dealer in intangibles, other than fees or other consideration,	5453
pursuant to a table-funding mortgage loan or warehouse-lending	5454
mortgage loan. Terms used in division (F)(2)(w) of this section	5455
have the same meanings as in section 1322.01 of the Revised Code,	5456
except "mortgage broker" means a person assisting a buyer in	5457
obtaining a mortgage loan for a fee or other consideration paid by	5458
the buyer or a lender, or a person engaged in table-funding or	5459
warehouse-lending mortgage loans that are first lien mortgage	5460
loans.	5461

(x) Property, money, and other amounts received by a	5462
professional employer organization, as defined in section 4125.01	5463
of the Revised Code, from a client employer, as defined in that	5464
section, in excess of the administrative fee charged by the	5465
professional employer organization to the client employer;	5466

(y) In the case of amounts retained as commissions by a	5467
permit holder under Chapter 3769. of the Revised Code, an amount	5468
equal to the amounts specified under that chapter that must be	5469
paid to or collected by the tax commissioner as a tax and the	5470
amounts specified under that chapter to be used as purse money;	5471

(z) Qualifying distribution center receipts.

5472

(i) For purposes of division (F)(2)(z) of this section:

5473

(I) "Qualifying distribution center receipts" means receipts	5474
of a supplier from qualified property that is delivered to a	5475
qualified distribution center, multiplied by a quantity that	5476
equals one minus the Ohio delivery percentage.	5477

(II) "Qualified property" means tangible personal property	5478
delivered to a qualified distribution center that is shipped to	5479
that qualified distribution center solely for further shipping by	5480
the qualified distribution center to another location in this	5481
state or elsewhere. "Further shipping" includes storing and	5482
repackaging such property into smaller or larger bundles, so long	5483
as such property is not subject to further manufacturing or	5484
processing.	5485

(III) "Qualified distribution center" means a warehouse or	5486
other similar facility in this state that, for the qualifying	5487
year, is operated by a person that is not part of a combined	5488
taxpayer group and that has a qualifying certificate. However, all	5489
warehouses or other similar facilities that are operated by	5490
persons in the same taxpayer group and that are located within one	5491
mile of each other shall be treated as one qualified distribution	5492
center.	5493

(IV) "Qualifying year" means the calendar year to which the	5494
qualifying certificate applies.	5495

(V) "Qualifying period" means the period of the first day of	5496
July of the second year preceding the qualifying year through the	5497
thirtieth day of June of the year preceding the qualifying year.	5498

(VI) "Qualifying certificate" means the certificate issued by	5499
the tax commissioner after the operator of a distribution center	5500
files an annual application with the commissioner. The application	5501
and annual fee shall be filed and paid for each qualified	5502
distribution center on or before the first day of September before	5503
the qualifying year or within forty-five days after the	5504
distribution center opens, whichever is later.	5505

The applicant must substantiate to the commissioner's	5506
satisfaction that, for the qualifying period, all persons	5507
operating the distribution center have more than fifty per cent of	5508
the cost of the qualified property shipped to a location such that	5509
it would be sitused outside this state under the provisions of	5510
division (E) of section 5751.033 of the Revised Code. The	5511
applicant must also substantiate that the distribution center	5512
cumulatively had costs from its suppliers equal to or exceeding	5513
five hundred million dollars during the qualifying period. (For	5514
purposes of division (F)(2)(z)(i)(VI) of this section, "supplier"	5515
excludes any person that is part of the consolidated elected	5516
taxpayer group, if applicable, of the operator of the qualified	5517
distribution center.) The commissioner may require the applicant	5518
to have an independent certified public accountant certify that	5519
the calculation of the minimum thresholds required for a qualified	5520
distribution center by the operator of a distribution center has	5521
been made in accordance with generally accepted accounting	5522
principles. The commissioner shall issue or deny the issuance of a	5523
certificate within sixty days after the receipt of the	5524
application. A denial is subject to appeal under section 5717.02	5525
of the Revised Code. If the operator files a timely appeal under	5526
section 5717.02 of the Revised Code, the operator shall be granted	5527
a qualifying certificate, provided that the operator is liable for	5528
any tax, interest, or penalty upon amounts claimed as qualifying	5529
distribution center receipts, other than those receipts exempt	5530
under division (C)(1) of section 5751.011 of the Revised Code,	5531
that would have otherwise not been owed by its suppliers if the	5532
qualifying certificate was valid.	5533

(VII) "Ohio delivery percentage" means the proportion of the	5534
total property delivered to a destination inside Ohio from the	5535
qualified distribution center during the qualifying period	5536
compared with total deliveries from such distribution center	5537
everywhere during the qualifying period.	5538

(ii) If the distribution center is new and was not open for	5539
the entire qualifying period, the operator of the distribution	5540
center may request that the commissioner grant a qualifying	5541
certificate. If the certificate is granted and it is later	5542
determined that more than fifty per cent of the qualified property	5543
during that year was not shipped to a location such that it would	5544
be sitused outside of this state under the provisions of division	5545
(E) of section 5751.033 of the Revised Code or if it is later	5546
determined that the person that operates the distribution center	5547
had average monthly costs from its suppliers of less than forty	5548
million dollars during that year, then the operator of the	5549
distribution center shall be liable for any tax, interest, or	5550
penalty upon amounts claimed as qualifying distribution center	5551
receipts, other than those receipts exempt under division (C)(1)	5552
of section 5751.011 of the Revised Code, that would have not	5553
otherwise been owed by its suppliers during the qualifying year if	5554
the qualifying certificate was valid. (For purposes of division	5555
(F)(2)(z)(ii) of this section, "supplier" excludes any person that	5556
is part of the consolidated elected taxpayer group, if applicable,	5557
of the operator of the qualified distribution center.)	5558

(iii) When filing an application for a qualifying certificate	5559
under division (F)(2)(z)(i)(VI) of this section, the operator of a	5560
qualified distribution center also shall provide documentation, as	5561
the commissioner requires, for the commissioner to ascertain the	5562
Ohio delivery percentage. The commissioner, upon issuing the	5563
qualifying certificate, also shall certify the Ohio delivery	5564
percentage. The operator of the qualified distribution center may	5565
appeal the commissioner's certification of the Ohio delivery	5566
percentage in the same manner as an appeal is taken from the	5567
denial of a qualifying certificate under division (F)(2)(z)(i)(VI)	5568
of this section.	5569

Within thirty days after all appeals have been exhausted, the	5570
operator of the qualified distribution center shall notify the	5571
affected suppliers of qualified property that such suppliers are	5572
required to file, within sixty days after receiving notice from	5573
the operator of the qualified distribution center, amended reports	5574
for the impacted calendar quarter or quarters or calendar year,	5575
whichever the case may be. Any additional tax liability or tax	5576
overpayment shall be subject to interest but shall not be subject	5577
to the imposition of any penalty so long as the amended returns	5578
are timely filed. The supplier of tangible personal property	5579
delivered to the qualified distribution center shall include in	5580
its report of taxable gross receipts the receipts from the total	5581
sales of property delivered to the qualified distribution center	5582
for the calendar quarter or calendar year, whichever the case may	5583
be, multiplied by the Ohio delivery percentage for the qualifying	5584
year. Nothing in division (F)(2)(z)(iii) of this section shall be	5585
construed as imposing liability on the operator of a qualified	5586
distribution center for the tax imposed by this chapter arising	5587
from any change to the Ohio delivery percentage.	5588

(iv) In the case where the distribution center is new and not	5589
open for the entire qualifying period, the operator shall make a	5590
good faith estimate of an Ohio delivery percentage for use by	5591
suppliers in their reports of taxable gross receipts for the	5592
remainder of the qualifying period. The operator of the facility	5593
shall disclose to the suppliers that such Ohio delivery percentage	5594
is an estimate and is subject to recalculation. By the due date of	5595
the next application for a qualifying certificate, the operator	5596
shall determine the actual Ohio delivery percentage for the	5597
estimated qualifying period and proceed as provided in division	5598
(F)(2)(z)(iii) of this section with respect to the calculation and	5599
recalculation of the Ohio delivery percentage. The supplier is	5600
required to file, within sixty days after receiving notice from	5601
the operator of the qualified distribution center, amended reports	5602
for the impacted calendar quarter or quarters or calendar year,	5603
whichever the case may be. Any additional tax liability or tax	5604
overpayment shall be subject to interest but shall not be subject	5605
to the imposition of any penalty so long as the amended returns	5606
are timely filed.	5607

(v) Qualifying certificates and Ohio delivery percentages	5608
issued by the commissioner shall be open to public inspection and	5609
shall be timely published by the commissioner. A supplier relying	5610
in good faith on a certificate issued under this division shall	5611
not be subject to tax on the qualifying distribution center	5612
receipts under division (F)(2)(z) of this section. A person	5613
receiving a qualifying certificate is responsible for paying the	5614
tax, interest, and penalty upon amounts claimed as qualifying	5615
distribution center receipts that would not otherwise have been	5616
owed by the supplier if the qualifying certificate were available	5617
when it is later determined that the qualifying certificate should	5618
not have been issued because the statutory requirements were in	5619
fact not met.	5620

(vi) The annual fee for a qualifying certificate shall be one	5621
hundred thousand dollars for each qualified distribution center.	5622
If a qualifying certificate is not issued, the annual fee is	5623
subject to refund after the exhaustion of all appeals provided for	5624
in division (F)(2)(z)(i)(VI) of this section. The fee imposed	5625
under this division may be assessed in the same manner as the tax	5626
imposed under this chapter. The first one hundred thousand dollars	5627
of the annual application fees collected each calendar year shall	5628
be credited to the commercial activity tax administrative fund.	5629
The remainder of the annual application fees collected shall be	5630
distributed in the same manner required under section 5751.20 of	5631
the Revised Code.	5632

(vii) The tax commissioner may require that adequate security	5633
be posted by the operator of the distribution center on appeal	5634
when the commissioner disagrees that the applicant has met the	5635
minimum thresholds for a qualified distribution center as set	5636
forth in divisions (F)(2)(z)(i)(VI) and (F)(2)(z)(ii) of this	5637
section.	5638

(aa) Receipts of an employer from payroll deductions relating	5639
to the reimbursement of the employer for advancing moneys to an	5640
unrelated third party on an employee's behalf;	5641

(bb) Cash discounts allowed and taken;

5642

(cc) Returns and allowances;

5643

(dd) Bad debts from receipts on the basis of which the tax	5644
imposed by this chapter was paid in a prior quarterly tax payment	5645
period. For the purpose of this division, "bad debts" means any	5646
debts that have become worthless or uncollectible between the	5647
preceding and current quarterly tax payment periods, have been	5648
uncollected for at least six months, and that may be claimed as a	5649
deduction under section 166 of the Internal Revenue Code and the	5650
regulations adopted under that section, or that could be claimed	5651
as such if the taxpayer kept its accounts on the accrual basis.	5652
"Bad debts" does not include repossessed property, uncollectible	5653
amounts on property that remains in the possession of the taxpayer	5654
until the full purchase price is paid, or expenses in attempting	5655
to collect any account receivable or for any portion of the debt	5656
recovered;	5657

(ee) Any amount realized from the sale of an account	5658
receivable to the extent the receipts from the underlying	5659
transaction giving rise to the account receivable were included in	5660
the gross receipts of the taxpayer;	5661

(ff) Any receipts directly attributed to providing public	5662
services pursuant to sections 126.60 to 126.605 of the Revised	5663
Code, or any receipts directly attributed to a transfer agreement	5664
or to the enterprise transferred under that agreement under	5665
section 4313.02 of the Revised Code.	5666

(gg) Any receipts for which the tax imposed by this chapter	5667
is prohibited by the Constitution or laws of the United States or	5668
the Constitution of Ohio.	5669

(hh)(i) As used in this division:

5670

(I) "Qualified uranium receipts" means receipts from the	5671
sale, exchange, lease, loan, production, processing, or other	5672
disposition of uranium within a uranium enrichment zone certified	5673
by the tax commissioner under division (F)(2)(hh)(ii) of this	5674
section. "Qualified uranium receipts" does not include any	5675
receipts with a situs in this state outside a uranium enrichment	5676
zone certified by the tax commissioner under division	5677
(F)(2)(hh)(ii) of this section.	5678

(II) "Uranium enrichment zone" means all real property that	5679
is part of a uranium enrichment facility licensed by the United	5680
States nuclear regulatory commission and that was or is owned or	5681
controlled by the United States department of energy or its	5682
successor.	5683

(ii) Any person that owns, leases, or operates real or	5684
tangible personal property constituting or located within a	5685
uranium enrichment zone may apply to the tax commissioner to have	5686
the uranium enrichment zone certified for the purpose of excluding	5687
qualified uranium receipts under division (F)(2)(hh) of this	5688
section. The application shall include such information that the	5689
tax commissioner prescribes. Within sixty days after receiving the	5690
application, the tax commissioner shall certify the zone for that	5691
purpose if the commissioner determines that the property qualifies	5692
as a uranium enrichment zone as defined in division (F)(2)(hh) of	5693
this section, or, if the tax commissioner determines that the	5694
property does not qualify, the commissioner shall deny the	5695
application or request additional information from the applicant.	5696
If the tax commissioner denies an application, the commissioner	5697
shall state the reasons for the denial. The applicant may appeal	5698
the denial of an application to the board of tax appeals pursuant	5699
to section 5717.02 of the Revised Code. If the applicant files a	5700
timely appeal, the tax commissioner shall conditionally certify	5701
the applicant's property. The conditional certification shall	5702
expire when all of the applicant's appeals are exhausted. Until	5703
final resolution of the appeal, the applicant shall retain the	5704
applicant's records in accordance with section 5751.12 of the	5705
Revised Code, notwithstanding any time limit on the preservation	5706
of records under that section.	5707

(ii) Amounts realized by licensed motor fuel dealers or	5708
licensed permissive motor fuel dealers from the exchange of	5709
petroleum products, including motor fuel, between such dealers,	5710
provided that delivery of the petroleum products occurs at a	5711
refinery, terminal, pipeline, or marine vessel and that the	5712
exchanging dealers agree neither dealer shall require monetary	5713
compensation from the other for the value of the exchanged	5714
petroleum products other than such compensation for differences in	5715
product location or grade. Division (F)(2)(ii) of this section	5716
does not apply to amounts realized as a result of differences in	5717
location or grade of exchanged petroleum products or from	5718
handling, lubricity, dye, or other additive injections fees,	5719
pipeline security fees, or similar fees. As used in this division,	5720
"motor fuel," "licensed motor fuel dealer," "licensed permissive	5721
motor fuel dealer," and "terminal" have the same meanings as in	5722
section 5735.01 of the Revised Code.	5723

(hh)(jj) In the case of amounts collected by a licensed	5724
casino operator from casino gaming, amounts in excess of the	5725
casino operator's gross casino revenue. In this division, "casino	5726
operator" and "casino gaming" have the meanings defined in section	5727
3772.01 of the Revised Code, and "gross casino revenue" has the	5728
meaning defined in section 5753.01 of the Revised Code.	5729

(3) In the case of a taxpayer when acting as a real estate	5730
broker, "gross receipts" includes only the portion of any fee for	5731
the service of a real estate broker, or service of a real estate	5732
salesperson associated with that broker, that is retained by the	5733
broker and not paid to an associated real estate salesperson or	5734
another real estate broker. For the purposes of this division,	5735
"real estate broker" and "real estate salesperson" have the same	5736
meanings as in section 4735.01 of the Revised Code.	5737

(4) A taxpayer's method of accounting for gross receipts for	5738
a tax period shall be the same as the taxpayer's method of	5739
accounting for federal income tax purposes for the taxpayer's	5740
federal taxable year that includes the tax period. If a taxpayer's	5741
method of accounting for federal income tax purposes changes, its	5742
method of accounting for gross receipts under this chapter shall	5743
be changed accordingly.	5744

(G) "Taxable gross receipts" means gross receipts sitused to	5745
this state under section 5751.033 of the Revised Code.	5746

(H) A person has "substantial nexus with this state" if any	5747
of the following applies. The person:	5748

(1) Owns or uses a part or all of its capital in this state;

5749

(2) Holds a certificate of compliance with the laws of this	5750
state authorizing the person to do business in this state;	5751

(3) Has bright-line presence in this state;

5752

(4) Otherwise has nexus with this state to an extent that the	5753
person can be required to remit the tax imposed under this chapter	5754
under the Constitution of the United States.	5755

(I) A person has "bright-line presence" in this state for a	5756
reporting period and for the remaining portion of the calendar	5757
year if any of the following applies. The person:	5758

(1) Has at any time during the calendar year property in this	5759
state with an aggregate value of at least fifty thousand dollars.	5760
For the purpose of division (I)(1) of this section, owned property	5761
is valued at original cost and rented property is valued at eight	5762
times the net annual rental charge.	5763

(2) Has during the calendar year payroll in this state of at	5764
least fifty thousand dollars. Payroll in this state includes all	5765
of the following:	5766

(a) Any amount subject to withholding by the person under	5767
section 5747.06 of the Revised Code;	5768

(b) Any other amount the person pays as compensation to an	5769
individual under the supervision or control of the person for work	5770
done in this state; and	5771

(c) Any amount the person pays for services performed in this	5772
state on its behalf by another.	5773

(3) Has during the calendar year taxable gross receipts of at	5774
least five hundred thousand dollars.	5775

(4) Has at any time during the calendar year within this	5776
state at least twenty-five per cent of the person's total	5777
property, total payroll, or total gross receipts.	5778

(5) Is domiciled in this state as an individual or for	5779
corporate, commercial, or other business purposes.	5780

(J) "Tangible personal property" has the same meaning as in	5781
section 5739.01 of the Revised Code.	5782

(K) "Internal Revenue Code" means the Internal Revenue Code	5783
of 1986, 100 Stat. 2085, 26 U.S.C. 1, as amended. Any term used in	5784
this chapter that is not otherwise defined has the same meaning as	5785
when used in a comparable context in the laws of the United States	5786
relating to federal income taxes unless a different meaning is	5787
clearly required. Any reference in this chapter to the Internal	5788
Revenue Code includes other laws of the United States relating to	5789
federal income taxes.	5790

(L) "Calendar quarter" means a three-month period ending on	5791
the thirty-first day of March, the thirtieth day of June, the	5792
thirtieth day of September, or the thirty-first day of December.	5793

(M) "Tax period" means the calendar quarter or calendar year	5794
on the basis of which a taxpayer is required to pay the tax	5795
imposed under this chapter.	5796

(N) "Calendar year taxpayer" means a taxpayer for which the	5797
tax period is a calendar year.	5798

(O) "Calendar quarter taxpayer" means a taxpayer for which	5799
the tax period is a calendar quarter.	5800

(P) "Agent" means a person authorized by another person to	5801
act on its behalf to undertake a transaction for the other,	5802
including any of the following:	5803

(1) A person receiving a fee to sell financial instruments;

5804

(2) A person retaining only a commission from a transaction	5805
with the other proceeds from the transaction being remitted to	5806
another person;	5807

(3) A person issuing licenses and permits under section	5808
1533.13 of the Revised Code;	5809

(4) A lottery sales agent holding a valid license issued	5810
under section 3770.05 of the Revised Code;	5811

(5) A person acting as an agent of the division of liquor	5812
control under section 4301.17 of the Revised Code.	5813

(Q) "Received" includes amounts accrued under the accrual	5814
method of accounting.	5815

(R) "Reporting person" means a person in a consolidated	5816
elected taxpayer or combined taxpayer group that is designated by	5817
that group to legally bind the group for all filings and tax	5818
liabilities and to receive all legal notices with respect to	5819
matters under this chapter, or, for the purposes of section	5820
5751.04 of the Revised Code, a separate taxpayer that is not a	5821
member of such a group.	5822

Sec. 5751.011.  (A) A group of two or more persons may elect	5823
to be a consolidated elected taxpayer for the purposes of this	5824
chapter if the group satisfies all of the following requirements:	5825

(1) The group elects to include all persons, including	5826
persons enumerated in divisions (E)(2) to (10)(5) of section	5827
5751.01 of the Revised Code, having at least eighty per cent, or	5828
having at least fifty per cent, of the value of their ownership	5829
interests owned or controlled, directly or constructively through	5830
related interests, by common owners during all or any portion of	5831
the tax period, together with the common owners.	5832

A group making its initial election on the basis of the	5833
eighty per cent ownership test may change its election so that its	5834
consolidated elected taxpayer group is formed on the basis of the	5835
fifty per cent ownership test if all of the following are	5836
satisfied:	5837

(a) When the initial election was made, the group did not	5838
have any persons satisfying the fifty per cent ownership test;	5839

(b) One or more of the persons in the initial group	5840
subsequently acquires ownership interests in a person such that	5841
the fifty per cent ownership test is satisfied, the eighty per	5842
cent ownership test is not satisfied, and the acquired person	5843
would be required to be included in a combined taxpayer group	5844
under section 5751.012 of the Revised Code;	5845

(c) The group requests the change in a written request to the	5846
tax commissioner on or before the due date for filing the first	5847
return due under section 5751.051 of the Revised Code after the	5848
date of the acquisition;	5849

(d) The group has not previously changed its election.

5850

At the election of the group, all entities that are not	5851
incorporated or formed under the laws of a state or of the United	5852
States and that meet the consolidated elected ownership test shall	5853
either be included in the group or all shall be excluded from the	5854
group. If, at the time of registration, the group does not include	5855
any such entities that meet the consolidated elected ownership	5856
test, the group shall elect to either include or exclude the newly	5857
acquired entities before the due date of the first return due	5858
after the date of the acquisition.	5859

Each group shall notify the tax commissioner of the foregoing	5860
elections before the due date of the return for the period in	5861
which the election becomes binding. If fifty per cent of the value	5862
of a person's ownership interests is owned or controlled by each	5863
of two consolidated elected taxpayer groups formed under the fifty	5864
per cent ownership or control test, that person is a member of	5865
each group for the purposes of this section, and each group shall	5866
include in the group's taxable gross receipts fifty per cent of	5867
that person's taxable gross receipts. Otherwise, all of that	5868
person's taxable gross receipts shall be included in the taxable	5869
gross receipts of the consolidated elected taxpayer group of which	5870
the person is a member. In no event shall the ownership or control	5871
of fifty per cent of the value of a person's ownership interests	5872
by two otherwise unrelated groups form the basis for consolidating	5873
the groups into a single consolidated elected taxpayer group or	5874
permit any exclusion under division (C) of this section of taxable	5875
gross receipts between members of the two groups. Division (A)(3)	5876
of this section applies with respect to the elections described in	5877
this division.	5878

(2) The group makes the election to be treated as a	5879
consolidated elected taxpayer in the manner prescribed under	5880
division (D) of this section.	5881

(3) Subject to review and audit by the tax commissioner, the	5882
group agrees that all of the following apply:	5883

(a) The group shall file reports as a single taxpayer for at	5884
least the next eight calendar quarters following the election so	5885
long as at least two or more of the members of the group meet the	5886
requirements of division (A)(1) of this section.	5887

(b) Before the expiration of the eighth such calendar	5888
quarter, the group shall notify the commissioner if it elects to	5889
cancel its designation as a consolidated elected taxpayer. If the	5890
group does not so notify the tax commissioner, the election	5891
remains in effect for another eight calendar quarters.	5892

(c) If, at any time during any of those eight calendar	5893
quarters following the election, a former member of the group no	5894
longer meets the requirements under division (A)(1) of this	5895
section, that member shall report and pay the tax imposed under	5896
this chapter separately, as a member of a combined taxpayer, or,	5897
if the former member satisfies such requirements with respect to	5898
another consolidated elected group, as a member of that	5899
consolidated elected group.	5900

(d) The group agrees to the application of division (B) of	5901
this section.	5902

(B) A group of persons making the election under this section	5903
shall report and pay tax on all of the group's taxable gross	5904
receipts even if substantial nexus with this state does not exist	5905
for one or more persons in the group.	5906

(C)(1)(a) Members of a consolidated elected taxpayer group	5907
shall exclude gross receipts among persons included in the	5908
consolidated elected taxpayer group.	5909

(b) Subject to divisions (C)(1)(c) and (C)(2) of this	5910
section, nothing in this section shall have the effect of	5911
requiring a consolidated elected taxpayer group to include gross	5912
receipts received by a person enumerated in divisions (E)(2) to	5913
(10)(5) of section 5751.01 of the Revised Code if that person is a	5914
member of the group pursuant to the elections made by the group	5915
under division (A)(1) of this section.	5916

(c)(i) As used in division (C)(1)(c) of this section, "dealer	5917
transfer" means a transfer of property that satisfies both of the	5918
following: (I) the property is directly transferred by any means	5919
from one member of the group to another member of the group that	5920
is a dealer in intangibles but is not a qualifying dealer as	5921
defined in section 5707.031 of the Revised Code; and (II) the	5922
property is subsequently delivered by the dealer in intangibles to	5923
a person that is not a member of the group.	5924

(ii) In the event of a dealer transfer, a consolidated	5925
elected taxpayer group shall not exclude, under division (C) of	5926
this section, gross receipts from the transfer described in	5927
division (C)(1)(c)(i)(I) of this section.	5928

(2) Gross receipts related to the sale or transmission of	5929
electricity through the use of an intermediary regional	5930
transmission organization approved by the federal energy	5931
regulatory commission shall be excluded from taxable gross	5932
receipts under division (C)(1) of this section if all other	5933
requirements of that division are met, even if the receipts are	5934
from and to the same member of the group.	5935

(D) To make the election to be a consolidated elected	5936
taxpayer, a group of persons shall notify the tax commissioner of	5937
the election in the manner prescribed by the commissioner and pay	5938
the commissioner a registration fee equal to the lesser of two	5939
hundred dollars or twenty dollars for each person in the group. No	5940
additional fee shall be imposed for the addition of new members to	5941
the group once the group has remitted a fee in the amount of two	5942
hundred dollars. The election shall be made and the fee paid	5943
before the beginning of the first calendar quarter to which the	5944
election applies. The fee shall be collected and used in the same	5945
manner as provided in section 5751.04 of the Revised Code.	5946

The election shall be made on a form prescribed by the tax	5947
commissioner for that purpose and shall be signed by one or more	5948
individuals with authority, separately or together, to make a	5949
binding election on behalf of all persons in the group.	5950

Any person acquired or formed after the filing of the	5951
registration shall be included in the group if the person meets	5952
the requirements of division (A)(1) of this section, and the group	5953
shall notify the tax commissioner of any additions to the group	5954
with the next tax return it files with the commissioner.	5955

Sec. 5751.012.  (A) All persons, other than persons	5956
enumerated in divisions (E)(2) to (10)(5) of section 5751.01 of	5957
the Revised Code, having more than fifty per cent of the value of	5958
their ownership interest owned or controlled, directly or	5959
constructively through related interests, by common owners during	5960
all or any portion of the tax period, together with the common	5961
owners, shall be members of a combined taxpayer if those persons	5962
are not members of a consolidated elected taxpayer pursuant to an	5963
election under section 5751.011 of the Revised Code.	5964

(B) A combined taxpayer shall register, file returns, and pay	5965
taxes under this chapter as a single taxpayer.	5966

(C) A combined taxpayer shall neither exclude taxable gross	5967
receipts between its members nor from others that are not members.	5968

(D) A combined taxpayer shall pay to the tax commissioner a	5969
registration fee equal to the lesser of two hundred dollars or	5970
twenty dollars for each person in the group. No additional fee	5971
shall be imposed for the addition of new members to the group once	5972
the group has remitted a fee in the amount of two hundred dollars.	5973
The fee shall be timely paid before the later of the beginning of	5974
the first calendar quarter or November 15, 2005. The fee shall be	5975
collected and used in the same manner as provided in section	5976
5751.04 of the Revised Code.	5977

Any person acquired or formed after the filing of the	5978
registration shall be included in the group if the person meets	5979
the requirements of division (A) of this section, and the group	5980
must notify the tax commissioner of any additions with the next	5981
quarterly tax return it files with the commissioner.	5982

Sec. 5751.54.  (A) Any term used in this section has the same	5983
meaning as in section 122.85 of the Revised Code.	5984

(B) There is allowed a refundable credit against the tax	5985
imposed by section 5751.02 of the Revised Code for any person that	5986
is the certificate owner of a tax credit certificate issued under	5987
section 122.85 of the Revised Code. The credit shall be claimed	5988
for the tax period in which the certificate is issued by the	5989
director of development services. The credit amount equals the	5990
amount stated in the certificate. The credit shall be claimed in	5991
the order required under section 5751.98 of the Revised Code. If	5992
the credit amount exceeds the tax otherwise due under section	5993
5751.02 of the Revised Code after deducting all other credits in	5994
that order, the excess shall be refunded.	5995

(C) Nothing in this section allows a person to claim more	5996
than one credit per tax credit-eligible production.	5997

Sec. 5751.98.  (A) To provide a uniform procedure for	5998
calculating the amount of tax due under this chapter, a taxpayer	5999
shall claim any credits to which it is entitled in the following	6000
order:	6001

(1) The nonrefundable jobs retention credit under division	6002
(B) of section 5751.50 of the Revised Code;	6003

(2) The nonrefundable credit for qualified research expenses	6004
under division (B) of section 5751.51 of the Revised Code;	6005

(3) The nonrefundable credit for a borrower's qualified	6006
research and development loan payments under division (B) of	6007
section 5751.52 of the Revised Code;	6008

(4) The nonrefundable credit for calendar years 2010 to 2029	6009
for unused net operating losses under division (B) of section	6010
5751.53 of the Revised Code;	6011

(5) The refundable motion picture production credit for	6012
calendar year 2030 for unused net operating losses under division	6013
(C) of section 5751.535751.54 of the Revised Code;	6014

(6) The refundable jobs creation credit or job retention	6015
credit under division (A) of section 5751.50 of the Revised Code;	6016

(7) The refundable credit for calendar year 2030 for unused	6017
net operating losses under division (C) of section 5751.53 of the	6018
Revised Code.	6019

(B) For any credit except the refundable credits enumerated	6020
in this section, the amount of the credit for a tax period shall	6021
not exceed the tax due after allowing for any other credit that	6022
precedes it in the order required under this section. Any excess	6023
amount of a particular credit may be carried forward if authorized	6024
under the section creating the credit.	6025

Section 2.  That existing sections 122.17, 122.171, 122.85,	6026
145.114, 145.116, 149.311, 150.01, 150.07, 150.10, 715.013,	6027
742.114, 742.116, 3307.152, 3307.154, 3309.157, 3309.159,	6028
5505.068, 5505.0610, 5703.052, 5703.053, 5703.70, 5707.03,	6029
5709.76, 5711.22, 5725.02, 5725.14, 5725.16, 5725.26, 5725.33,	6030
5733.01, 5733.02, 5733.021, 5733.06, 5747.01, 5747.98, 5751.01,	6031
5751.011, 5751.012, and 5751.98 of the Revised Code are hereby	6032
repealed.	6033

Section 3. The amendment by this act of division (E) of	6034
section 5751.01 and sections 5751.011 and 5751.012 of the Revised	6035
Code applies to tax periods beginning on or after January 1, 2014.	6036

Section 4. The General Assembly, applying the principle	6037
stated in division (B) of section 1.52 of the Revised Code that	6038
amendments are to be harmonized if reasonably capable of	6039
simultaneous operation, finds that the following sections,	6040
presented in this act as composites of the sections as amended by	6041
the acts indicated, are the resulting versions of the sections in	6042
effect prior to the effective date of the sections as presented in	6043
this act:	6044

Section 5747.01 of the Revised Code as amended by both Am.	6045
Sub. H.B. 153 and Am. H.B. 167 of the 129th General Assembly.	6046

Section 5751.01 of the Revised Code as amended by both Am.	6047
Sub. H.B. 153 and Sub. H.B. 277 of the 129th General Assembly.	6048