As Passed by the House

129th General Assembly Regular Session 2011-2012

Sub. H. B. No. 510

Representative Amstutz 

Cosponsors: Representatives Adams, R., Beck, Blair, Blessing, Boose, Bubp, Hackett, Henne, Hottinger, Huffman, McClain, Ruhl, Sprague, Stebelton, Uecker, Wachtmann Speaker Batchelder 

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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 undercertificate under	585
division (E)(6) of this section is not complying with the	586
requirement under division (E)(3) of this section, the director	587
shall notify the tax credit authority of the noncompliance. After	588
receiving such a notice, and after giving the taxpayer an	589
opportunity to explain the noncompliance, the authority may	590
terminate the agreement and require the taxpayer, or any related	591
member or members that claimed the tax credit under division (N)	592
of this section, to refund to the state all or a portion of the	593
credit claimed in previous years, as follows:	594

(1) If the taxpayer maintained operations at the project site	595
for less than or equal to the term of the credit, an amount not to	596
exceed one hundred per cent of the sum of any tax credits allowed	597
and received under this section.	598

(2) If the taxpayer maintained operations at the project site	599
longer than the term of the credit, but less than the greater of	600
(a) the term of the credit plus three years, or (b) seven years,	601
the amount required to be refunded shall not exceed seventy-five	602
per cent of the sum of any tax credits allowed and received under	603
this section.	604

In determining the portion of the credit to be refunded to	605
this state, the authority shall consider the effect of market	606
conditions on the taxpayer's project and whether the taxpayer	607
continues to maintain other operations in this state. After making	608
the determination, the authority shall certify the amount to be	609
refunded to the tax commissioner or the superintendent of	610
insurance. If the taxpayer, or any related member or members who	611
claimed the tax credit under division (N) of this section, is not	612
an insurance company, the commissioner shall make an assessment	613
for that amount against the taxpayer under Chapter 5726., 5733.,	614
5747., or 5751. of the Revised Code. If the taxpayer, or any	615
related member or members that claimed the tax credit under	616
division (N) of this section, is an insurance company, the	617
superintendent of insurance shall make an assessment under section	618
5725.222 or 5729.102 of the Revised Code. The time limitations on	619
assessments under those chapters and sections do not apply to an	620
assessment under this division, but the commissioner or	621
superintendent shall make the assessment within one year after the	622
date the authority certifies to the commissioner or superintendent	623
the amount to be refunded.	624

(K) The director of development services, after consultation	625
with the tax commissioner and the superintendent of insurance and	626
in accordance with Chapter 119. of the Revised Code, shall adopt	627
rules necessary to implement this section. The rules may provide	628
for recipients of tax credits under this section to be charged	629
fees to cover administrative costs of the tax credit program. The	630
fees collected shall be credited to the tax incentive programs	631
operating fund created in section 122.174 of the Revised Code. At	632
the time the director gives public notice under division (A) of	633
section 119.03 of the Revised Code of the adoption of the rules,	634
the director shall submit copies of the proposed rules to the	635
chairpersons of the standing committees on economic development in	636
the senate and the house of representatives.	637

(L) On or before the first day of August of each year, the	638
director of development services shall submit a report to the	639
governor, the president of the senate, and the speaker of the	640
house of representatives on the tax credit program under this	641
section. The report shall include information on the number of	642
agreements that were entered into under this section during the	643
preceding calendar year, a description of the project that is the	644
subject of each such agreement, and an update on the status of	645
projects under agreements entered into before the preceding	646
calendar year.	647

(M)(1) The aggregate amount of tax credits issued under	648
division (B)(1) of this section during any calendar year for	649
capital investment projects reviewed and approved by the tax	650
credit authority may not exceed the following amounts:	651

(a) For 2010, thirteen million dollars;

652

(b) For 2011 through 2023, the amount of the limit for the	653
preceding calendar year plus thirteen million dollars;	654

(c) For 2024 and each year thereafter, one hundred	655
ninety-five million dollars.	656

(2) The aggregate amount of tax credits authorized under	657
divisions (B)(2) and (3) of this section and allowed to be claimed	658
by taxpayers in any calendar year for capital improvement projects	659
reviewed and approved by the tax credit authority in 2011, 2012,	660
and 2013 combined shall not exceed twenty-five million dollars. An	661
amount equal to the aggregate amount of credits first authorized	662
in calendar year 2011, 2012, and 2013 may be claimed over the	663
ensuing period up to fifteen years, subject to the terms of	664
individual tax credit agreements.	665

The limitations in division (M) of this section do not apply	666
to credits for capital investment projects approved by the tax	667
credit authority before July 1, 2009.	668

(N) This division applies only to an eligible business that	669
is part of a group of taxpayers that includes a diversified	670
savings and loan holding company as defined in 12 U.S.C. 1467a, as	671
that section existed on January 1, 2012, or a grandfathered	672
unitary savings and loan holding company as defined in 12 U.S.C.	673
1467b. Notwithstanding any contrary provision of the agreement	674
between such an eligible business and the tax credit authority,	675
any credit granted under this section against the tax imposed by	676
section 5725.18, 5729.03, 5733.06, 5747.02, or 5751.02 of the	677
Revised Code to the eligible business, at the election of the	678
eligible business and without any action by the tax credit	679
authority, may be shared by the taxpayer or any related member or	680
members that comprise the eligible business, which taxpayer or	681
related members may claim the credit against the taxes imposed by	682
section 5725.18, 5726.02, 5729.03, 5733.06, 5747.02, or 5751.02 of	683
the Revised Code. Credits shall be claimed by the eligible	684
business in sequential order, as applicable, first claiming the	685
credits to the fullest extent possible against the tax that the	686
certificate holder is subject to, then against the tax imposed by,	687
sequentially, section 5729.03, 5725.18, 5747.02, 5751.02, and	688
lastly 5726.02 of the Revised Code. The credits may be allocated	689
among the taxpayer and related members in such manner as the	690
eligible business elects, but subject to the sequential order	691
required under this division. This division applies to credits	692
granted before, on, or after the effective date of H.B. 510 of the	693
129th general assembly. Credits granted before that effective date	694
that are shared and allocated under this division may be claimed	695
in those calendar years in which the remaining taxable years	696
specified in the agreement end.	697

Sec. 122.85. (A) As used in this section and in sections	698
5726.55, 5733.59 and, 5747.66, and 5751.54 of the Revised Code:	699

(1) "Tax credit-eligible production" means a motion picture	700
production certified by the director of development services under	701
division (B) of this section as qualifying the motion picture	702
company for a tax credit under section 5726.55, 5733.59 or,	703
5747.66, or 5751.54 of the Revised Code.	704

(2) "Certificate owner" means a motion picture company to	705
which a tax credit certificate is issued.	706

(3) "Motion picture company" means an individual,	707
corporation, partnership, limited liability company, or other form	708
of business association producing a motion picture.	709

(4) "Eligible production expenditures" means expenditures	710
made after June 30, 2009, for goods or services purchased and	711
consumed in this state by a motion picture company directly for	712
the production of a tax credit-eligible production.	713

"Eligible production expenditures" includes, but is not	714
limited to, expenditures for resident and nonresident cast and	715
crew wages, accommodations, costs of set construction and	716
operations, editing and related services, photography, sound	717
synchronization, lighting, wardrobe, makeup and accessories, film	718
processing, transfer, sound mixing, special and visual effects,	719
music, location fees, and the purchase or rental of facilities and	720
equipment.	721

(5) "Motion picture" means entertainment content created in	722
whole or in part within this state for distribution or exhibition	723
to the general public, including, but not limited to,	724
feature-length films; documentaries; long-form, specials,	725
miniseries, series, and interstitial television programming;	726
interactive web sites; sound recordings; videos; music videos;	727
interactive television; interactive games; videogamesvideo games;	728
commercials; any format of digital media; and any trailer, pilot,	729
video teaser, or demo created primarily to stimulate the sale,	730
marketing, promotion, or exploitation of future investment in	731
either a product or a motion picture by any means and media in any	732
digital media format, film, or videotape, provided the motion	733
picture qualifies as a motion picture. "Motion picture" does not	734
include any television program created primarily as news, weather,	735
or financial market reports, a production featuring current events	736
or sporting events, an awards show or other gala event, a	737
production whose sole purpose is fundraising, a long-form	738
production that primarily markets a product or service or in-house	739
corporate advertising or other similar productions, a production	740
for purposes of political advocacy, or any production for which	741
records are required to be maintained under 18 U.S.C. 2257 with	742
respect to sexually explicit content.	743

(B) For the purpose of encouraging and developing a strong	744
film industry in this state, the director of development services	745
may certify a motion picture produced by a motion picture company	746
as a tax credit-eligible production. In the case of a television	747
series, the director may certify the production of each episode of	748
the series as a separate tax credit-eligible production. A motion	749
picture company shall apply for certification of a motion picture	750
as a tax credit-eligible production on a form and in the manner	751
prescribed by the director. Each application shall include the	752
following information:	753

(1) The name and telephone number of the motion picture	754
production company;	755

(2) The name and telephone number of the company's contact	756
person;	757

(3) A list of the first preproduction date through the last	758
production date in Ohio;	759

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

760

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

761

(6) The total budgeted eligible production expenditures and	762
the percentage that amount is of the total production budget of	763
the motion picture;	764

(7) The total percentage of the motion picture being shot in	765
Ohio;	766

(8) The level of employment of cast and crew who reside in	767
Ohio;	768

(9) A synopsis of the script;

769

(10) The shooting script;

770

(11) A creative elements list that includes the names of the	771
principal cast and crew and the producer and director;	772

(12) Documentation of financial ability to undertake and	773
complete the motion picture;	774

(13) Estimated value of the tax credit based upon total	775
budgeted eligible production expenditures;	776

(14) Any other information considered necessary by the	777
director.	778

Within ninety days after certification of a motion picture as	779
a tax credit-eligible production, and any time thereafter upon the	780
director'sdirector of development services' request, the motion	781
picture company shall present to the director of development	782
sufficient evidence of reviewable progress. If the motion picture	783
company fails to present sufficient evidence, the director of	784
development may rescind the certification. Upon rescission, the	785
director shall notify the applicant that the certification has	786
been rescinded. Nothing in this section prohibits an applicant	787
whose tax credit-eligible production certification has been	788
rescinded from submitting a subsequent application for	789
certification.	790

(C)(1) A motion picture company whose motion picture has been	791
certified as a tax credit-eligible production may apply to the	792
director of development services on or after July 1, 2009, for a	793
refundable credit against the tax imposed by section 5726.02,	794
5733.06 or, 5747.02, or 5751.02 of the Revised Code. The director	795
in consultation with the tax commissioner shall prescribe the form	796
and manner of the application and the information or documentation	797
required to be submitted with the application.	798

The credit is determined as follows:

799

(a) If the total budgeted eligible production expenditures	800
stated in the application submitted under division (B) of this	801
section or the actual eligible production expenditures as finally	802
determined under division (D) of this section, whichever is least,	803
is less than or equal to three hundred thousand dollars, no credit	804
is allowed;	805

(b) If the total budgeted eligible production expenditures	806
stated in the application submitted under division (B) of this	807
section or the actual eligible production expenditures as finally	808
determined under division (D) of this section, whichever is least,	809
is greater than three hundred thousand dollars, the credit equals	810
the sum of the following, subject to the limitation in division	811
(C)(4) of this section:	812

(i) Twenty-five per cent of the least of such budgeted or	813
actual eligible expenditure amounts excluding budgeted or actual	814
eligible expenditures for resident cast and crew wages;	815

(ii) Thirty-five per cent of budgeted or actual eligible	816
expenditures for resident cast and crew wages.	817

(2) Except as provided in division (C)(4) of this section, if	818
the director of development services approves a motion picture	819
company's application for a credit, the director shall issue a tax	820
credit certificate to the company. The director in consultation	821
with the tax commissioner shall prescribe the form and manner of	822
issuing certificates. The director shall assign a unique	823
identifying number to each tax credit certificate and shall record	824
the certificate in a register devised and maintained by the	825
director for that purpose. The certificate shall state the amount	826
of the eligible production expenditures on which the credit is	827
based and the amount of the credit. Upon the issuance of a	828
certificate, the director shall certify to the tax commissioner	829
the name of the applicant, the amount of eligible production	830
expenditures shown on the certificate, and any other information	831
required by the rules adopted to administer this section.	832

(3) The amount of eligible production expenditures for which	833
a tax credit may be claimed is subject to inspection and	834
examination by the tax commissioner or employees of the	835
commissioner under section 5703.19 of the Revised Code and any	836
other applicable law. Once the eligible production expenditures	837
are finally determined under section 5703.19 of the Revised Code	838
and division (D) of this section, the credit amount is not subject	839
to adjustment unless the director determines an error was	840
committed in the computation of the credit amount.	841

(4) No tax credit certificate may be issued before the	842
completion of the tax credit-eligible production. For the fiscal	843
biennium beginning July 1, 2009, and ending June 30, 2011, not	844
more than thirty million dollars of tax credit may be allowed, of	845
which not more than ten million dollars of tax credit may be	846
allowed in the first year of the biennium. In succeeding fiscal	847
biennia, not more than twenty million dollars of tax credit may be	848
allowed per fiscal biennium, and not more than ten million dollars	849
may be allowed in the first year of the biennium. At any time, not	850
more than five million dollars of tax credit may be allowed per	851
tax credit-eligible production.	852

(D) A motion picture company whose motion picture has been	853
certified as a tax credit-eligible production shall engage, at the	854
company's expense, an independent certified public accountant to	855
examine the company's production expenditures to identify the	856
expenditures that qualify as eligible production expenditures. The	857
certified public accountant shall issue a report to the company	858
and to the director of development services certifying the	859
company's eligible production expenditures and any other	860
information required by the director. Upon receiving and examining	861
the report, the director may disallow any expenditure the director	862
determines is not an eligible production expenditure. If the	863
director disallows an expenditure, the director shall issue a	864
written notice to the motion picture production company stating	865
that the expenditure is disallowed and the reason for the	866
disallowance. Upon examination of the report and disallowance of	867
any expenditures, the director shall determine finally the lesser	868
of the total budgeted eligible production expenditures stated in	869
the application submitted under division (B) of this section or	870
the actual eligible production expenditures for the purpose of	871
computing the amount of the credit.	872

(E) No credit shall be allowed under section 5726.55, 5733.59	873
or, 5747.66, or 5751.54 of the Revised Code unless the director	874
has reviewed the report and made the determination prescribed by	875
division (D) of this section.	876

(F) This state reserves the right to refuse the use of this	877
state's name in the credits of any tax credit-eligible motion	878
picture production.	879

(G)(1) The director of development services in consultation	880
with the tax commissioner shall adopt rules for the administration	881
of this section, including rules setting forth and governing the	882
criteria for determining whether a motion picture production is a	883
tax credit-eligible production; activities that constitute the	884
production of a motion picture; reporting sufficient evidence of	885
reviewable progress; expenditures that qualify as eligible	886
production expenditures; a competitive process for approving	887
credits; and consideration of geographic distribution of credits.	888
The rules shall be adopted under Chapter 119. of the Revised Code.	889

(2) The director may require a reasonable application fee to	890
cover administrative costs of the tax credit program. The fees	891
collected shall be credited to the motion picture tax credit	892
program operating fund, which is hereby created in the state	893
treasury. The motion picture tax credit program operating fund	894
shall consist of all grants, gifts, fees, and contributions made	895
to the director of development for marketing and promotion of the	896
motion picture industry within this state. The director of	897
development shall use money in the fund to pay expenses related to	898
the administration of the Ohio film office and the credit	899
authorized by this section and sections 5726.55., 5733.59 and,	900
5747.66, and 5751.54 of the Revised Code.	901

Sec. 145.114.  (A) As used in this section and in section	902
145.116 of the Revised Code:	903

(1) "Agent" means a dealer, as defined in section 1707.01 of	904
the Revised Code, who is licensed under sections 1707.01 to	905
1707.45 of the Revised Code or under comparable laws of another	906
state or of the United States.	907

(2) "Minority business enterprise" has the same meaning as in	908
section 122.71 of the Revised Code.	909

(3) "Ohio-qualified agent" means an agent designated as such	910
by the public employees retirement board.	911

(4) "Ohio-qualified investment manager" means an investment	912
manager designated as such by the public employees retirement	913
board.	914

(5) "Principal place of business" means an office in which	915
the agent regularly provides securities or investment advisory	916
services and solicits, meets with, or otherwise communicates with	917
clients.	918

(B) The public employees retirement board shall, for the	919
purposes of this section, designate an agent as an Ohio-qualified	920
agent if the agent meets all of the following requirements:	921

(1) The agent is subject to taxation under Chapter 5725.,	922
5726., 5733., or 5747., or 5751. of the Revised Code;	923

(2) The agent is authorized to conduct business in this	924
state;	925

(3) The agent maintains a principal place of business in this	926
state and employs at least five residents of this state.	927

(C) The public employees retirement board shall adopt and	928
implement a written policy to establish criteria and procedures	929
used to select agents to execute securities transactions on behalf	930
of the retirement system. The policy shall address each of the	931
following:	932

(1) Commissions charged by the agent, both in the aggregate	933
and on a per share basis;	934

(2) The execution speed and trade settlement capabilities of	935
the agent;	936

(3) The responsiveness, reliability, and integrity of the	937
agent;	938

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

939

(5) Any special capabilities of the agent.

940

(D)(1) The board shall, at least annually, establish a policy	941
with the goal to increase utilization by the board of	942
Ohio-qualified agents for the execution of domestic equity and	943
fixed income trades on behalf of the retirement system, when an	944
Ohio-qualified agent offers quality, services, and safety	945
comparable to other agents otherwise available to the board and	946
meets the criteria established under division (C) of this section.	947

(2) The board shall review, at least annually, the	948
performance of the agents that execute securities transactions on	949
behalf of the board.	950

(3) The board shall determine whether an agent is an	951
Ohio-qualified agent, meets the criteria established by the board	952
pursuant to division (C) of this section, and offers quality,	953
services, and safety comparable to other agents otherwise	954
available to the board. The board's determination shall be final.	955

(E) The board shall, at least annually, submit to the Ohio	956
retirement study council a report containing the following	957
information:	958

(1) The name of each agent designated as an Ohio-qualified	959
agent under this section;	960

(2) The name of each agent that executes securities	961
transactions on behalf of the board;	962

(3) The amount of equity and fixed-income trades that are	963
executed by Ohio-qualified agents, expressed as a percentage of	964
all equity and fixed-income trades that are executed by agents on	965
behalf of the board;	966

(4) The compensation paid to Ohio-qualified agents, expressed	967
as a percentage of total compensation paid to all agents that	968
execute securities transactions on behalf of the board;	969

(5) The amount of equity and fixed-income trades that are	970
executed by agents that are minority business enterprises,	971
expressed as a percentage of all equity and fixed-income trades	972
that are executed by agents on behalf of the board;	973

(6) Any other information requested by the Ohio retirement	974
study council regarding the board's use of agents.	975

Sec. 145.116. (A) The public employees retirement board	976
shall, for the purposes of this section, designate an investment	977
manager as an Ohio-qualified investment manager if the investment	978
manager meets all of the following requirements:	979

(1) The investment manager is subject to taxation under	980
Chapter 5725., 5726., 5733., or 5747., or 5751. of the Revised	981
Code;	982

(2) The investment manager meets one of the following	983
requirements:	984

(a) Has its corporate headquarters or principal place of	985
business in this state;	986

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

987

(c) Has a principal place of business in this state and	988
employs at least 20 residents of this state.	989

(B)(1) The board shall, at least annually, establish a policy	990
with the goal to increase utilization by the board of	991
Ohio-qualified investment managers, when an Ohio-qualified	992
investment manager offers quality, services, and safety comparable	993
to other investment managers otherwise available to the board. The	994
policy shall also provide for the following:	995

(a) A process whereby the board can develop a list of	996
Ohio-qualified investment managers and their investment products;	997

(b) A process whereby the board can give public notice to	998
Ohio-qualified investment managers of the board's search for an	999
investment manager that includes the board's search criteria.	1000

(2) The board shall determine whether an investment manager	1001
is an Ohio-qualified investment manager and whether the investment	1002
manager offers quality, services, and safety comparable to other	1003
investment managers otherwise available to the board. The board's	1004
determination shall be final.	1005

(C) The board shall, at least annually, submit to the Ohio	1006
retirement study council a report containing the following	1007
information:	1008

(1) The name of each investment manager designated as an	1009
Ohio-qualified investment manager under this section;	1010

(2) The name of each investment manager with which the board	1011
contracts;	1012

(3) The amount of assets managed by Ohio-qualified investment	1013
managers, expressed as a percentage of the total assets held by	1014
the retirement system and as a percentage of assets managed by	1015
investment managers with which the board has contracted;	1016

(4) The compensation paid to Ohio-qualified investment	1017
managers, expressed as a percentage of total compensation paid to	1018
all investment managers with which the board has contracted;	1019

(5) Any other information requested by the Ohio retirement	1020
study council regarding the board's use of investment managers.	1021

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

1022

(1) "Historic building" means a building, including its	1023
structural components, that is located in this state and that is	1024
either individually listed on the national register of historic	1025
places under 16 U.S.C. 470a, located in a registered historic	1026
district, and certified by the state historic preservation officer	1027
as being of historic significance to the district, or is	1028
individually listed as aan historic landmark designated by a	1029
local government certified under 16 U.S.C. 470a(c).	1030

(2) "Qualified rehabilitation expenditures" means	1031
expenditures paid or incurred during the rehabilitation period,	1032
and before and after that period as determined under 26 U.S.C. 47,	1033
by an owner of aan historic building to rehabilitate the	1034
building. "Qualified rehabilitation expenditures" includes	1035
architectural or engineering fees paid or incurred in connection	1036
with the rehabilitation, and expenses incurred in the preparation	1037
of nomination forms for listing on the national register of	1038
historic places. "Qualified rehabilitation expenditures" does not	1039
include any of the following:	1040

(a) The cost of acquiring, expanding, or enlarging aan	1041
historic building;	1042

(b) Expenditures attributable to work done to facilities	1043
related to the building, such as parking lots, sidewalks, and	1044
landscaping;	1045

(c) New building construction costs.

1046

(3) "Owner" of aan historic building means a person holding	1047
the fee simple interest in the building. "Owner" does not include	1048
the state or a state agency, or any political subdivision as	1049
defined in section 9.23 of the Revised Code.	1050

(4) "Certificate owner" means the owner of aan historic	1051
building to which a rehabilitation tax credit certificate was	1052
issued under this section.	1053

(5) "Registered historic district" means aan historic	1054
district listed in the national register of historic places under	1055
16 U.S.C. 470a, aan historic district designated by a local	1056
government certified under 16 U.S.C. 470a(c), or a local historic	1057
district certified under 36 C.F.R. 67.8 and 67.9.	1058

(6) "Rehabilitation" means the process of repairing or	1059
altering aan historic building or buildings, making possible an	1060
efficient use while preserving those portions and features of the	1061
building and its site and environment that are significant to its	1062
historic, architectural, and cultural values.	1063

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

1064

(a) If the rehabilitation initially was not planned to be	1065
completed in stages, a period chosen by the owner not to exceed	1066
twenty-four months during which rehabilitation occurs;	1067

(b) If the rehabilitation initially was planned to be	1068
completed in stages, a period chosen by the owner not to exceed	1069
sixty months during which rehabilitation occurs. Each stage shall	1070
be reviewed as a phase of a rehabilitation as determined under 26	1071
C.F.R. 1.48-12 or a successor to that section.	1072

(8) "State historic preservation officer" or "officer" means	1073
the state historic preservation officer appointed by the governor	1074
under 16 U.S.C. 470a.	1075

(B) The owner of aan historic building may apply to the	1076
director of development services for a rehabilitation tax credit	1077
certificate for qualified rehabilitation expenditures paid or	1078
incurred after April 4, 2007, for rehabilitation of aan historic	1079
building. The form and manner of filing such applications shall be	1080
prescribed by rule of the director of development. Each	1081
application shall state the amount of qualified rehabilitation	1082
expenditures the applicant estimates will be paid or incurred. The	1083
director may require applicants to furnish documentation of such	1084
estimates.	1085

The director, after consultation with the tax commissioner	1086
and in accordance with Chapter 119. of the Revised Code, shall	1087
adopt rules that establish all of the following:	1088

(1) Forms and procedures by which applicants may apply for	1089
rehabilitation tax credit certificates;	1090

(2) Criteria for reviewing, evaluating, and approving	1091
applications for certificates within the limitations under	1092
division (D) of this section, criteria for assuring that the	1093
certificates issued encompass a mixture of high and low qualified	1094
rehabilitation expenditures, and criteria for issuing certificates	1095
under division (C)(3)(b) of this section;	1096

(3) Eligibility requirements for obtaining a certificate	1097
under this section;	1098

(4) The form of rehabilitation tax credit certificates;

1099

(5) Reporting requirements and monitoring procedures;

1100

(6) Procedures and criteria for conducting cost-benefit	1101
analyses of historic buildings that are the subjects of	1102
applications filed under this section. The purpose of a	1103
cost-benefit analysis shall be to determine whether rehabilitation	1104
of the historic building will result in a net revenue gain in	1105
state and local taxes once the building is used.	1106

(7) Any other rules necessary to implement and administer	1107
this section.	1108

(C) The director of development services shall review the	1109
applications with the assistance of the state historic	1110
preservation officer and determine whether all of the following	1111
criteria are met:	1112

(1) That the building that is the subject of the application	1113
is aan historic building and the applicant is the owner of the	1114
building;	1115

(2) That the rehabilitation will satisfy standards prescribed	1116
by the United States secretary of the interior under 16 U.S.C.	1117
470, et seq., as amended, and 36 C.F.R. 67.7 or a successor to	1118
that section;	1119

(3) That receiving a rehabilitation tax credit certificate	1120
under this section is a major factor in:	1121

(a) The applicant's decision to rehabilitate the historic	1122
building; or	1123

(b) To increase the level of investment in such	1124
rehabilitation.	1125

An applicant shall demonstrate to the satisfaction of the	1126
state historic preservation officer and director of development	1127
services that the rehabilitation will satisfy the standards	1128
described in division (C)(2) of this section before the applicant	1129
begins the physical rehabilitation of the historic building.	1130

(D)(1) If the director of development services determines	1131
that an application meets the criteria in divisions (C)(1), (2),	1132
and (3) of this section, the director shall conduct a cost-benefit	1133
analysis for the historic building that is the subject of the	1134
application to determine whether rehabilitation of the historic	1135
building will result in a net revenue gain in state and local	1136
taxes once the building is used. The director shall consider the	1137
results of the cost-benefit analysis in determining whether to	1138
approve the application. The director shall also consider the	1139
potential economic impact and the regional distributive balance of	1140
the credits throughout the state. The director may approve an	1141
application only after completion of the cost-benefit analysis.	1142

(2) A rehabilitation tax credit certificate shall not be	1143
issued for an amount greater than the estimated amount furnished	1144
by the applicant on the application for such certificate and	1145
approved by the director. The director shall not approve more than	1146
a total of sixty million dollars of rehabilitation tax credits per	1147
fiscal year but the director may reallocate unused tax credits	1148
from a prior fiscal year for new applicants and such reallocated	1149
credits shall not apply toward the dollar limit of this division.	1150

(3) For rehabilitations with a rehabilitation period not	1151
exceeding twenty-four months as provided in division (A)(7)(a) of	1152
this section, a rehabilitation tax credit certificate shall not be	1153
issued before the rehabilitation of the historic building is	1154
completed.	1155

(4) For rehabilitations with a rehabilitation period not	1156
exceeding sixty months as provided in division (A)(7)(b) of this	1157
section, a rehabilitation tax credit certificate shall not be	1158
issued before a stage of rehabilitation is completed. After all	1159
stages of rehabilitation are completed, if the director cannot	1160
determine that the criteria in division (C) of this section are	1161
satisfied for all stages of rehabilitations, the director shall	1162
certify this finding to the tax commissioner, and any	1163
rehabilitation tax credits received by the applicant shall be	1164
repaid by the applicant and may be collected by assessment as	1165
unpaid tax by the commissioner.	1166

(5) The director of development services shall require the	1167
applicant to provide a third-party cost certification by a	1168
certified public accountant of the actual costs attributed to the	1169
rehabilitation of the historic building when qualified	1170
rehabilitation expenditures exceed two hundred thousand dollars.	1171

If an applicant whose application is approved for receipt of	1172
a rehabilitation tax credit certificate fails to provide to the	1173
director of development sufficient evidence of reviewable	1174
progress, including a viable financial plan, copies of final	1175
construction drawings, and evidence that the applicant has	1176
obtained all historic approvals within twelve months after the	1177
date the applicant received notification of approval, and if the	1178
applicant fails to provide evidence to the director of development	1179
that the applicant has secured and closed on financing for the	1180
rehabilitation within eighteen months after receiving notification	1181
of approval, the director may rescind the approval of the	1182
application. The director shall notify the applicant if the	1183
approval has been rescinded. Credits that would have been	1184
available to an applicant whose approval was rescinded shall be	1185
available for other qualified applicants. Nothing in this division	1186
prohibits an applicant whose approval has been rescinded from	1187
submitting a new application for a rehabilitation tax credit	1188
certificate.	1189

(E) Issuance of a certificate represents a finding by the	1190
director of development services of the matters described in	1191
divisions (C)(1), (2), and (3) of this section only; issuance of a	1192
certificate does not represent a verification or certification by	1193
the director of the amount of qualified rehabilitation	1194
expenditures for which a tax credit may be claimed under section	1195
5725.151, 5725.34, 5726.52, 5729.17, 5733.47, or 5747.76 of the	1196
Revised Code. The amount of qualified rehabilitation expenditures	1197
for which a tax credit may be claimed is subject to inspection and	1198
examination by the tax commissioner or employees of the	1199
commissioner under section 5703.19 of the Revised Code and any	1200
other applicable law. Upon the issuance of a certificate, the	1201
director shall certify to the tax commissioner, in the form and	1202
manner requested by the tax commissioner, the name of the	1203
applicant, the amount of qualified rehabilitation expenditures	1204
shown on the certificate, and any other information required by	1205
the rules adopted under this section.	1206

(F)(1) On or before the first day of April each year, the	1207
director of development services and tax commissioner jointly	1208
shall submit to the president of the senate and the speaker of the	1209
house of representatives a report on the tax credit program	1210
established under this section and sections 5725.151, 5725.34,	1211
5726.52, 5729.17, 5733.47, and 5747.76 of the Revised Code. The	1212
report shall present an overview of the program and shall include	1213
information on the number of rehabilitation tax credit	1214
certificates issued under this section during the preceding fiscal	1215
year, an update on the status of each historic building for which	1216
an application was approved under this section, the dollar amount	1217
of the tax credits granted under sections 5725.151, 5725.34,	1218
5726.52, 5729.17, 5733.47, and 5747.76 of the Revised Code, and	1219
any other information the director and commissioner consider	1220
relevant to the topics addressed in the report.	1221

(2) On or before December 1, 2015, the director of	1222
development services and tax commissioner jointly shall submit to	1223
the president of the senate and the speaker of the house of	1224
representatives a comprehensive report that includes the	1225
information required by division (F)(1) of this section and a	1226
detailed analysis of the effectiveness of issuing tax credits for	1227
rehabilitating historic buildings. The report shall be prepared	1228
with the assistance of an economic research organization jointly	1229
chosen by the director and commissioner.	1230

(G) There is hereby created in the state treasury the	1231
historic rehabilitation tax credit operating fund. The director of	1232
development services is authorized to charge reasonable	1233
application and other fees in connection with the administration	1234
of tax credits authorized by this section and sections 5725.151,	1235
5725.34, 5726.52, 5729.17, 5733.44, and 5747.76 of the Revised	1236
Code. Any such fees collected shall be credited to the fund and	1237
used to pay reasonable costs incurred by the department of	1238
development services in administering this section and sections	1239
5725.151, 5725.34, 5726.52, 5729.17, 5733.44, and 5747.76 of the	1240
Revised Code.	1241

The Ohio historic preservation office is authorized to charge	1242
reasonable fees in connection with its review and approval of	1243
applications under this section. Any such fees collected shall be	1244
credited to the fund and used to pay administrative costs incurred	1245
by the Ohio historic preservation office pursuant to this section.	1246

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

1247

(1) "Authority" means the Ohio venture capital authority	1248
created under section 150.02 of the Revised Code.	1249

(2) "Issuer" means a port authority organized and existing	1250
under applicable provisions of Chapter 4582. of the Revised Code	1251
that, pursuant to an agreement entered into under division (E) of	1252
section 150.02 of the Revised Code, issues or issued obligations	1253
to fund one or more loans to the program fund.	1254

(3) "Lender" means any person that lends money to the program	1255
fund as provided in this chapter and includes any issuer and any	1256
trustee.	1257

(4) "Loss" means a loss incurred with respect to a lender's	1258
loan to the program fund. Such a loss is incurred only if and to	1259
the extent a program administrator fails to satisfy its	1260
obligations to the lender to make timely payments of principal or	1261
interest as provided in the loan agreement between the lender and	1262
the program administrator. "Loss" does not include either of the	1263
following:	1264

(a) Any loss incurred by the program fund, including a loss	1265
attributable to any investment made by a program administrator;	1266

(b) Any loss of the capital required to be provided by a	1267
program administrator, or income accruing to that capital, under	1268
the agreement entered into under division (B) of section 150.05 of	1269
the Revised Code.	1270

(5) "Ohio-based business enterprise" means a person that is	1271
engaged in business, that employs at least one individual on a	1272
full-time or part-time basis at a place of business in this state,	1273
including a person engaged in business if that person is a	1274
self-employed individual, and that is in the seed or early stage	1275
of business development requiring initial or early stage funding	1276
or is an established business enterprise developing new methods or	1277
technologies.	1278

(6) "Ohio-based venture capital fund" means a venture capital	1279
fund having its principal office in this state, where the majority	1280
of the fund's staff are employed and where at least one investment	1281
professional is employed who has at least five years of experience	1282
in venture capital investment.	1283

(7) "Program fund" means the fund created under section	1284
150.03 of the Revised Code.	1285

(8) "Research and development purposes" has the same meaning	1286
as used in Section 2p of Article VIII, Ohio Constitution, and	1287
includes the development of sites and facilities in this state for	1288
and in support of those research and development purposes.	1289

(9) "Trustee" means a trust company or a bank with corporate	1290
trust powers, in either case having a place of business in this	1291
state, being a taxpayer under Chapter 5707., 5725., 5726., 5727.,	1292
5729., 5733., or 5747 of the Revised Code at the time it may claim	1293
and receive a tax credit under division (E) of section 150.07 of	1294
the Revised Code, and acting in its capacity as a trustee pursuant	1295
to a trust agreement under which an issuer issues obligations to	1296
fund loans to the program fund.	1297

(B) The general assembly declares that its purpose in	1298
enacting Chapter 150. of the Revised Code is to increase the	1299
amount of private investment capital available in this state for	1300
Ohio-based business enterprises in the seed or early stages of	1301
business development and requiring initial or early stage funding,	1302
as well as established Ohio-based business enterprises developing	1303
new methods or technologies, including the promotion of research	1304
and development purposes, thereby increasing employment, creating	1305
additional wealth, and otherwise benefiting the economic welfare	1306
of the people of this state. Accordingly, it is the intention of	1307
the general assembly that the program fund make investments in	1308
support of Ohio-based business enterprises in accordance with the	1309
investment policy authorized and required under section 150.03 of	1310
the Revised Code, and that the Ohio venture capital authority	1311
focus its investment policy principally on venture capital funds	1312
investing in such Ohio-based business enterprises. The general	1313
assembly finds and determines that this chapter and the investment	1314
policy, and actions taken under and consistent therewith, will	1315
promote and implement the public purposes of Section 2p of Article	1316
VIII, Ohio Constitution.	1317

Sec. 150.07.  (A) For the purpose stated in section 150.01 of	1318
the Revised Code, the authority may authorize a lender to claim	1319
one of the refundable tax credits allowed under section 5707.031,	1320
5725.19, 5726.53, 5727.241, 5729.08, 5733.49, or 5747.80 of the	1321
Revised Code. The credits shall be authorized by a written	1322
contract with the lender. The contract shall specify the terms	1323
under which the lender may claim the credit, including the amount	1324
of loss, if any, the lender must incur before the lender may claim	1325
the credit; specify that the credit shall not exceed the amount of	1326
the loss; and specify that the lender may claim the credit only	1327
for a loss certified by a program administrator to the authority	1328
under the procedures prescribed under division (B)(6) of section	1329
150.05 of the Revised Code. The program administrator shall	1330
provide to the authority an estimate of the amount of tax credits,	1331
if any, that are likely, in the administrator's reasonable	1332
judgment, to be claimed by a lender during the current and next	1333
succeeding state fiscal years. The estimate shall be provided at	1334
the same time each year that the administrator is required to	1335
report the annual audit to the authority under section 150.05 of	1336
the Revised Code.	1337

(B) Tax credits may be authorized at any time after the	1338
authority establishes the investment policy under section 150.03	1339
of the Revised Code, but a tax credit so authorized may not be	1340
claimed before July 1, 2007, or after June 30, 2026, except, with	1341
respect to loans made from the proceeds of obligations issued	1342
under section 4582.71 of the Revised Code, a tax credit may not be	1343
claimed before July 1, 2012, or after June 30, 2036.	1344

(C)(1) Upon receiving certification of a lender's loss from a	1345
program administrator pursuant to the procedures in the investment	1346
policy, the authority shall issue a tax credit certificate to the	1347
lender, except as otherwise provided in division (D) of this	1348
section.	1349

(2) If the lender is a pass-through entity, as defined in	1350
section 5733.04 of the Revised Code, then each equity investor in	1351
the lender pass-through entity shall be entitled to claim one of	1352
the tax credits allowed under division (A) of this section for	1353
that equity investor's taxable year in which or with which ends	1354
the taxable year of the lender pass-through entity in an amount	1355
based on the equity investor's distributive or proportionate share	1356
of the credit amount set forth in the certificate issued by the	1357
authority. If all equity investors of the lender pass-through	1358
entity are not eligible to claim a credit against the same tax set	1359
forth in division (A) of this section, then each equity investor	1360
may elect to claim a credit against the tax to which the equity	1361
investor is subject to in an amount based on the equity investor's	1362
distributive or proportionate share of the credit amount set forth	1363
in the certificate issued by the authority.	1364

(3) The certificate shall state the amount of the credit and	1365
the calendar year under section 5707.031, 5725.19, 5727.241, or	1366
5729.08, the tax year under section 5726.53 or 5733.49, or the	1367
taxable year under section 5747.80 of the Revised Code for which	1368
the credit may be claimed. The authority, in conjunction with the	1369
tax commissioner, shall develop a system for issuing tax credit	1370
certificates for the purpose of verifying that any credit claimed	1371
is a credit issued under this section and is properly taken in the	1372
year specified in the certificate and in compliance with division	1373
(B) of this section.	1374

(D) The authority shall not, in any fiscal year, issue tax	1375
credit certificates under this section in a total amount exceeding	1376
twenty million dollars. The authority shall not issue tax credit	1377
certificates under this section in a total amount exceeding three	1378
hundred eighty million dollars.	1379

(E) Notwithstanding any other section of this chapter or any	1380
provision of Chapter 5707., 5725., 5726., 5727., 5729., 5733., or	1381
5747. of the Revised Code, if provided by the terms of an	1382
agreement entered into by the issuer and the authority under	1383
division (E) of section 150.02 of the Revised Code, and subject to	1384
the limitations of divisions (B) and (D) of this section, a	1385
trustee shall have the right, for the benefit of the issuer, to	1386
receive and claim the credits authorized under division (A) of	1387
this section solely for the purpose provided for in section 150.04	1388
of the Revised Code, and the trustee shall be entitled to file a	1389
tax return, an amended tax return, or an estimated tax return at	1390
such times as are permitted or required under the applicable	1391
provisions of Chapter 5707., 5725., 5726., 5727., 5729., 5733., or	1392
5747. of the Revised Code for the purpose of claiming credits	1393
issued to the trustee. The trustee shall receive the proceeds of	1394
such a tax credit for the benefit of the issuer, and shall apply	1395
the proceeds solely to satisfy a loss or restore a reserve as	1396
provided in section 150.04 of the Revised Code. Nothing in this	1397
section shall require a trustee to file a tax return under any	1398
chapter for any purpose other than claiming such credits if the	1399
trustee is not otherwise required to make such a filing.	1400

The general assembly may from time to time modify or repeal	1401
any of the taxes against which the credits authorized under	1402
division (A) of this section may be claimed, and may authorize	1403
those credits to be claimed for the purposes provided for in	1404
section 150.04 of the Revised Code with respect to any other tax	1405
imposed by this state; provided, that if any obligations issued	1406
under section 4582.71 of the Revised Code are then outstanding and	1407
such modification or repeal would have the effect of impairing any	1408
covenant made in or pursuant to an agreement under division (E) of	1409
section 150.02 of the Revised Code regarding the maintenance or	1410
restoration of reserves established and maintained with a trustee	1411
consistent with division (B)(2) of section 150.04 of the Revised	1412
Code and such agreement, the state shall provide other security to	1413
the extent necessary to avoid or offset the impairment of such	1414
covenant.	1415

Sec. 150.10.  (A) On the first day of January of the second	1416
year after the date of entering into an agreement under section	1417
150.05 of the Revised Code and of each ensuing year, the authority	1418
shall file with the clerk of the house of representatives, the	1419
clerk of the senate, and the chairpersons of the house and senate	1420
standing committees predominantly concerned with economic	1421
development a written report on the Ohio venture capital program.	1422
The report shall include all the following:	1423

(1) A description of the details of the investment policy	1424
established or modified in accordance with sections 150.03 and	1425
150.04 of the Revised Code;	1426

(2) The authority's assessment of the program's achievement	1427
of its purpose stated in section 150.01 of the Revised Code;	1428

(3) The value of tax credit certificates issued by the	1429
authority under section 150.07 of the Revised Code in each fiscal	1430
year ending on or before the preceding thirtieth day of June;	1431

(4) The amount of tax credits claimed pursuant to section	1432
5707.031, 5725.19, 5726.53, 5727.241, 5729.08, 5733.49, or 5747.80	1433
of the Revised Code, as to the respective taxes involved;	1434

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

1435

(6) The names of venture capital funds in which money from	1436
the program fund has been invested and the locations of their	1437
principal offices, and the names of the enterprises in which each	1438
of those venture capital funds has invested such money and the	1439
locations of those enterprises' principal offices;	1440

(7) Any recommendations for modifying the program to better	1441
achieve the purpose stated in section 150.01 of the Revised Code.	1442

(B) During each year that a report is issued under division	1443
(A) of this section, the chairperson of the authority, or another	1444
member of the authority designated by the chairperson as the	1445
authority's representative, shall be required to appear in person	1446
before the standing committees of the house and senate	1447
predominantly concerned with economic development to give	1448
testimony concerning the status of the Ohio venture capital	1449
program.	1450

Sec. 715.013. (A) Except as otherwise expressly authorized by	1451
the Revised Code, no municipal corporation shall levy a tax that	1452
is the same as or similar to a tax levied under Chapter 322.,	1453
3734., 3769., 4123., 4141., 4301., 4303., 4305., 4307., 4309.,	1454
5707., 5725., 5726., 5727., 5728., 5729., 5731., 5735., 5737.,	1455
5739., 5741., 5743., or 5749. of the Revised Code.	1456

(B) This section does not prohibit a municipal corporation	1457
from levying a tax on any of the following:	1458

(1) Amounts received for admission to any place;

1459

(2) The income of an electric company or combined company, as	1460
defined in section 5727.01 of the Revised Code;	1461

(3) On and after January 1, 2004, the income of a telephone	1462
company, as defined in section 5727.01 of the Revised Code.	1463

Sec. 742.114. (A) As used in this section and in section	1464
742.116 of the Revised Code:	1465

(1) "Agent" means a dealer, as defined in section 1707.01 of	1466
the Revised Code, who is licensed under sections 1707.01 to	1467
1707.45 of the Revised Code or under comparable laws of another	1468
state or of the United States.	1469

(2) "Minority business enterprise" has the same meaning as in	1470
section 122.71 of the Revised Code.	1471

(3) "Ohio-qualified agent" means an agent designated as such	1472
by the board of trustees of the fund.	1473

(4) "Ohio-qualified investment manager" means an investment	1474
manager designated as such by the board of trustees of the fund.	1475

(5) "Principal place of business" means an office in which	1476
the agent regularly provides securities or investment advisory	1477
services and solicits, meets with, or otherwise communicates with	1478
clients.	1479

(B) The board of trustees of the fund shall, for the purposes	1480
of this section, designate an agent as an Ohio-qualified agent if	1481
the agent meets all of the following requirements:	1482

(1) The agent is subject to taxation under Chapter 5725.,	1483
5726., 5733., or 5747., or 5751. of the Revised Code;	1484

(2) The agent is authorized to conduct business in this	1485
state;	1486

(3) The agent maintains a principal place of business in this	1487
state and employs at least five residents of this state.	1488

(C) The board shall adopt and implement a written policy to	1489
establish criteria and procedures used to select agents to execute	1490
securities transactions on behalf of the retirement system. The	1491
policy shall address each of the following:	1492

(1) Commissions charged by the agent, both in the aggregate	1493
and on a per share basis;	1494

(2) The execution speed and trade settlement capabilities of	1495
the agent;	1496

(3) The responsiveness, reliability, and integrity of the	1497
agent;	1498

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

1499

(5) Any special capabilities of the agent.

1500

(D)(1) The board shall, at least annually, establish a policy	1501
with the goal to increase utilization by the board of	1502
Ohio-qualified agents for the execution of domestic equity and	1503
fixed-income trades on behalf of the retirement system, when an	1504
Ohio-qualified agent offers quality, services, and safety	1505
comparable to other agents otherwise available to the board and	1506
meets the criteria established under division (C) of this section.	1507

(2) The board shall review, at least annually, the	1508
performance of the agents that execute securities transactions on	1509
behalf of the board.	1510

(3) The board shall determine whether an agent is an	1511
Ohio-qualified agent, meets the criteria established by the board	1512
pursuant to division (C) of this section, and offers quality,	1513
services, and safety comparable to other agents otherwise	1514
available to the board. The board's determination shall be final.	1515

(E) The board shall, at least annually, submit to the Ohio	1516
retirement study council a report containing the following	1517
information:	1518

(1) The name of each agent designated as an Ohio-qualified	1519
agent under this section;	1520

(2) The name of each agent that executes securities	1521
transactions on behalf of the board;	1522

(3) The amount of equity and fixed-income trades that are	1523
executed by Ohio-qualified agents, expressed as a percentage of	1524
all equity and fixed-income trades that are executed by agents on	1525
behalf of the board;	1526

(4) The compensation paid to Ohio-qualified agents, expressed	1527
as a percentage of total compensation paid to all agents that	1528
execute securities transactions on behalf of the board;	1529

(5) The amount of equity and fixed-income trades that are	1530
executed by agents that are minority business enterprises,	1531
expressed as a percentage of all equity and fixed-income trades	1532
that are executed by agents on behalf of the board;	1533

(6) Any other information requested by the Ohio retirement	1534
study council regarding the board's use of agents.	1535

Sec. 742.116. (A) The board of trustees of the pension fund	1536
shall, for the purposes of this section, designate an investment	1537
manager as an Ohio-qualified investment manager if the investment	1538
manager meets all of the following requirements:	1539

(1) The investment manager is subject to taxation under	1540
Chapter 5725., 5726., 5733., or 5747., or 5751. of the Revised	1541
Code;	1542

(2) The investment manager meets one of the following	1543
requirements:	1544

(a) Has its corporate headquarters or principal place of	1545
business in this state;	1546

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

1547

(c) Has a principal place of business in this state and	1548
employs at least 20 residents of this state.	1549

(B)(1) The board shall, at least annually, establish a policy	1550
with the goal to increase utilization by the board of	1551
Ohio-qualified investment managers, when an Ohio-qualified	1552
investment manager offers quality, services, and safety comparable	1553
to other investment managers otherwise available to the board. The	1554
policy shall also provide for the following:	1555

(a) A process whereby the board can develop a list of	1556
Ohio-qualified investment managers and their investment products;	1557

(b) A process whereby the board can give public notice to	1558
Ohio-qualified investment managers of the board's search for an	1559
investment manager that includes the board's search criteria.	1560

(2) The board shall determine whether an investment manager	1561
is an Ohio-qualified investment manager and whether the investment	1562
manager offers quality, services, and safety comparable to other	1563
investment managers otherwise available to the board. The board's	1564
determination shall be final.	1565

(C) The board shall, at least annually, submit to the Ohio	1566
retirement study council a report containing the following	1567
information:	1568

(1) The name of each investment manager designated as an	1569
Ohio-qualified investment manager under this section;	1570

(2) The name of each investment manager with which the board	1571
contracts;	1572

(3) The amount of assets managed by Ohio-qualified investment	1573
managers, expressed as a percentage of the total assets held by	1574
the retirement system and as a percentage of assets managed by	1575
investment managers with which the board has contracted;	1576

(4) The compensation paid to Ohio-qualified investment	1577
managers, expressed as a percentage of total compensation paid to	1578
all investment managers with which the board has contracted;	1579

(5) Any other information requested by the Ohio retirement	1580
study council regarding the board's use of investment managers.	1581

Sec. 3307.152. (A) As used in this section and in section	1582
3307.154 of the Revised Code:	1583

(1) "Agent" means a dealer, as defined in section 1707.01 of	1584
the Revised Code, who is licensed under sections 1707.01 to	1585
1707.45 of the Revised Code or under comparable laws of another	1586
state or of the United States.	1587

(2) "Minority business enterprise" has the same meaning as in	1588
section 122.71 of the Revised Code.	1589

(3) "Ohio-qualified agent" means an agent designated as such	1590
by the state teachers retirement board.	1591

(4) "Ohio-qualified investment manager" means an investment	1592
manager designated as such by the state teachers retirement board.	1593

(5) "Principal place of business" means an office in which	1594
the agent regularly provides securities or investment advisory	1595
services and solicits, meets with, or otherwise communicates with	1596
clients.	1597

(B) The state teachers retirement board shall, for the	1598
purposes of this section, designate an agent as an Ohio-qualified	1599
agent if the agent meets all of the following requirements:	1600

(1) The agent is subject to taxation under Chapter 5725.,	1601
5726., 5733., or 5747., or 5751. of the Revised Code.	1602

(2) The agent is authorized to conduct business in this	1603
state.	1604

(3) The agent maintains a principal place of business in this	1605
state and employs at least five residents of this state.	1606

(C) The state teachers retirement board shall adopt and	1607
implement a written policy to establish criteria and procedures	1608
used to select agents to execute securities transactions on behalf	1609
of the retirement system. The policy shall address each of the	1610
following:	1611

(a)(1) Commissions charged by the agent, both in the	1612
aggregate and on a per share basis;	1613

(b)(2) The execution speed and trade settlement capabilities	1614
of the agent;	1615

(c)(3) The responsiveness, reliability, and integrity of the	1616
agent;	1617

(d)(4) The nature and value of research provided by the	1618
agent;	1619

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

1620

(D)(1) The board shall, at least annually, establish a policy	1621
with the goal to increase utilization by the board of	1622
Ohio-qualified agents for the execution of domestic equity and	1623
fixed income trades on behalf of the retirement system, when an	1624
Ohio-qualified agent offers quality, services, and safety	1625
comparable to other agents otherwise available to the board and	1626
meets the criteria established under division (C) of this section.	1627

(2) The board shall review, at least annually, the	1628
performance of the agents that execute securities transactions on	1629
behalf of the board.	1630

(3) The board shall determine whether an agent is an	1631
Ohio-qualified agent, meets the criteria established by the board	1632
pursuant to division (C) of this section, and offers quality,	1633
services, and safety comparable to other agents otherwise	1634
available to the board. The board's determination shall be final.	1635

(E) The board shall, at least annually, submit to the Ohio	1636
retirement study council a report containing the following	1637
information:	1638

(1) The name of each agent designated as an Ohio-qualified	1639
agent under this section;	1640

(2) The name of each agent that executes securities	1641
transactions on behalf of the board;	1642

(3) The amount of equity and fixed-income trades that are	1643
executed by Ohio-qualified agents, expressed as a percentage of	1644
all equity and fixed-income trades that are executed by agents on	1645
behalf of the board;	1646

(4) The compensation paid to Ohio-qualified agents, expressed	1647
as a percentage of total compensation paid to all agents that	1648
execute securities transactions on behalf of the board;	1649

(5) The amount of equity and fixed-income trades that are	1650
executed by agents that are minority business enterprises,	1651
expressed as a percentage of all equity and fixed-income trades	1652
that are executed by agents on behalf of the board;	1653

(6) Any other information requested by the Ohio retirement	1654
study council regarding the board's use of agents.	1655

Sec. 3307.154. (A) The state teachers retirement board shall,	1656
for the purposes of this section, designate an investment manager	1657
as an Ohio-qualified investment manager if the investment manager	1658
meets all of the following requirements:	1659

(1) The investment manager is subject to taxation under	1660
Chapter 5725., 5726., 5733., or 5747., or 5751. of the Revised	1661
Code.	1662

(2) The investment manager meets one of the following	1663
requirements:	1664

(a) Has its corporate headquarters or principal place of	1665
business in this state;	1666

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

1667

(c) Has a principal place of business in this state and	1668
employs at least twenty residents of this state.	1669

(B)(1) The board shall, at least annually, establish a policy	1670
with the goal to increase utilization by the board of	1671
Ohio-qualified investment managers, when an Ohio-qualified	1672
investment manager offers quality, services, and safety comparable	1673
to other investment managers otherwise available to the board. The	1674
policy shall also provide for the following:	1675

(a) A process whereby the board can develop a list of	1676
Ohio-qualified investment managers and their investment products;	1677

(b) A process whereby the board can give public notice to	1678
Ohio-qualified investment managers of the board's search for an	1679
investment manager that includes the board's search criteria.	1680

(2) The board shall determine whether an investment manager	1681
is an Ohio-qualified investment manager and whether the investment	1682
manager offers quality, services, and safety comparable to other	1683
investment managers otherwise available to the board. The board's	1684
determination shall be final.	1685

(C) The board shall, at least annually, submit to the Ohio	1686
retirement study council a report containing the following	1687
information:	1688

(1) The name of each investment manager designated as an	1689
Ohio-qualified investment manager under this section;	1690

(2) The name of each investment manager with which the board	1691
contracts;	1692

(3) The amount of assets managed by Ohio-qualified investment	1693
managers, expressed as a percentage of the total assets held by	1694
the retirement system and as a percentage of assets managed by	1695
investment managers with which the board has contracted;	1696

(4) The compensation paid to Ohio-qualified investment	1697
managers, expressed as a percentage of total compensation paid to	1698
all investment managers with which the board has contracted;	1699

(5) Any other information requested by the Ohio retirement	1700
study council regarding the board's use of investment managers.	1701

Sec. 3309.157. (A) As used in this section and in section	1702
3309.159 of the Revised Code:	1703

(1) "Agent" means a dealer, as defined in section 1707.01 of	1704
the Revised Code, who is licensed under sections 1707.01 to	1705
1707.45 of the Revised Code or under comparable laws of another	1706
state or of the United States.	1707

(2) "Minority business enterprise" has the same meaning as in	1708
section 122.71 of the Revised Code.	1709

(3) "Ohio-qualified agent" means an agent designated as such	1710
by the school employees retirement board.	1711

(4) "Ohio-qualified investment manager" means an investment	1712
manager designated as such by the school employees retirement	1713
board.	1714

(5) "Principal place of business" means an office in which	1715
the agent regularly provides securities or investment advisory	1716
services and solicits, meets with, or otherwise communicates with	1717
clients.	1718

(B) The school employees retirement board shall, for the	1719
purposes of this section, designate an agent as an Ohio-qualified	1720
agent if the agent meets all of the following requirements:	1721

(1) The agent is subject to taxation under Chapter 5725.,	1722
5726., 5733., or 5747., or 5751. of the Revised Code.	1723

(2) The agent is authorized to conduct business in this	1724
state.	1725

(3) The agent maintains a principal place of business in this	1726
state and employeesemploys at least five residents of this state.	1727

(C) The school employees retirement board shall adopt and	1728
implement a written policy to establish criteria and procedures	1729
used to select agents to execute securities transactions on behalf	1730
of the retirement system. The policy shall address each of the	1731
following:	1732

(a)(1) Commissions charged by the agent, both in the	1733
aggregate and on a per share basis;	1734

(b)(2) The execution speed and trade settlement capabilities	1735
of the agent;	1736

(c)(3) The responsiveness, reliability, and integrity of the	1737
agent;	1738

(d)(4) The nature and value of research provided by the	1739
agent;	1740

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

1741

(D)(1) The board shall, at least annually, establish a policy	1742
with the goal to increase utilization by the board of	1743
Ohio-qualified agents for the execution of domestic equity and	1744
fixed income trades on behalf of the retirement system, when an	1745
Ohio-qualified agent offers quality, services, and safety	1746
comparable to other agents otherwise available to the board and	1747
meets the criteria established under division (C) of this section.	1748

(2) The board shall review, at least annually, the	1749
performance of the agents that execute securities transactions on	1750
behalf of the board.	1751

(3) The board shall determine whether an agent is an	1752
Ohio-qualified agent, meets the criteria established by the board	1753
pursuant to division (C) of this section, and offers quality,	1754
services, and safety comparable to other agents otherwise	1755
available to the board. The board's determination shall be final.	1756

(E) The board shall, at least annually, submit to the Ohio	1757
retirement study council a report containing the following	1758
information:	1759

(1) The name of each agent designated as an Ohio-qualified	1760
agent under this section;	1761

(2) The name of each agent that executes securities	1762
transactions on behalf of the board;	1763

(3) The amount of equity and fixed-income trades that are	1764
executed by Ohio-qualified agents, expressed as a percentage of	1765
all equity and fixed-income trades that are executed by agents on	1766
behalf of the board;	1767

(4) The compensation paid to Ohio-qualified agents, expressed	1768
as a percentage of total compensation paid to all agents that	1769
execute securities transactions on behalf of the board;	1770

(5) The amount of equity and fixed-income trades that are	1771
executed by agents that are minority business enterprises,	1772
expressed as a percentage of all equity and fixed-income trades	1773
that are executed by agents on behalf of the board;	1774

(6) Any other information requested by the Ohio retirement	1775
study council regarding the board's use of agents.	1776

Sec. 3309.159. (A) The school employees retirement board	1777
shall, for the purposes of this section, designate an investment	1778
manager as an Ohio-qualified investment manager if the investment	1779
manager meets all of the following requirements:	1780

(1) The investment manager is subject to taxation under	1781
Chapter 5725., 5726., 5733., or 5747., or 5751. of the Revised	1782
Code.	1783

(2) The investment manager meets one of the following	1784
requirements:	1785

(a) Has its corporate headquarters or principal place of	1786
business in this state;	1787

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

1788

(c) Has a principal place of business in this state and	1789
employs at least 20twenty residents of this state.	1790

(B)(1) The board shall, at least annually, establish a policy	1791
with the goal to increase utilization by the board of	1792
Ohio-qualified investment managers, when an Ohio-qualified	1793
investment manager offers quality, services, and safety comparable	1794
to other investment managers otherwise available to the board. The	1795
policy shall also provide for the following:	1796

(a) A process whereby the board can develop a list of	1797
Ohio-qualified investment managers and their investment products;	1798

(b) A process whereby the board can give public notice to	1799
Ohio-qualified investment managers of the board's search for an	1800
investment manager that includes the board's search criteria.	1801

(2) The board shall determine whether an investment manager	1802
is an Ohio-qualified investment manager and whether the investment	1803
manager offers quality, services, and safety comparable to other	1804
investment managers otherwise available to the board. The board's	1805
determination shall be final.	1806

(C) The board shall, at least annually, submit to the Ohio	1807
retirement study council a report containing the following	1808
information:	1809

(1) The name of each investment manager designated as an	1810
Ohio-qualified investment manager under this section;	1811

(2) The name of each investment manager with which the board	1812
contracts;	1813

(3) The amount of assets managed by Ohio-qualified investment	1814
managers, expressed as a percentage of the total assets held by	1815
the retirement system and as a percentage of assets managed by	1816
investment managers with which the board has contracted;	1817

(4) The compensation paid to Ohio-qualified investment	1818
managers, expressed as a percentage of total compensation paid to	1819
all investment managers with which the board has contracted;	1820

(5) Any other information requested by the Ohio retirement	1821
study council regarding the board's use of investment managers.	1822

Sec. 5505.068. (A) As used in this section and in section	1823
5505.0610 of the Revised Code:	1824

(1) "Agent" means a dealer, as defined in section 1707.01 of	1825
the Revised Code, who is licensed under sections 1707.01 to	1826
1707.45 of the Revised Code or under comparable laws of another	1827
state or of the United States.	1828

(2) "Minority business enterprise" has the same meaning as in	1829
section 122.71 of the Revised Code.	1830

(3) "Ohio-qualified agent" means an agent designated as such	1831
by the state highway patrol retirement board.	1832

(4) "Ohio-qualified investment manager" means an investment	1833
manager designated as such by the state highway patrol retirement	1834
board.	1835

(5) "Principal place of business" means an office in which	1836
the agent regularly provides securities or investment advisory	1837
services and solicits, meets with, or otherwise communicates with	1838
clients.	1839

(B) The state highway patrol retirement board shall, for the	1840
purposes of this section, designate an agent as an Ohio-qualified	1841
agent if the agent meets all of the following requirements:	1842

(1) The agent is subject to taxation under Chapter 5725.,	1843
5726., 5733., or 5747., or 5751. of the Revised Code.	1844

(2) The agent is authorized to conduct business in this	1845
state;	1846

(3) The agent maintains a principal place of business in this	1847
state and employs at least five residents of this state.	1848

(C) The state highway patrol retirement board shall adopt and	1849
implement a written policy to establish criteria and procedures	1850
used to select agents to execute securities transactions on behalf	1851
of the retirement system. The policy shall address each of the	1852
following:	1853

(1) Commissions charged by the agent, both in the aggregate	1854
and on a per share basis;	1855

(2) The execution speed and trade settlement capabilities of	1856
the agent;	1857

(3) The responsiveness, reliability, and integrity of the	1858
agent;	1859

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

1860

(5) Any special capabilities of the agent.

1861

(D)(1) The board shall, at least annually, establish a policy	1862
with the goal to increase utilization by the board of	1863
Ohio-qualified agents for the execution of domestic equity and	1864
fixed income trades on behalf of the retirement system, when an	1865
Ohio-qualified agent offers quality, services, and safety	1866
comparable to other agents otherwise available to the board and	1867
meets the criteria established under division (C) of this section.	1868

(2) The board shall review, at least annually, the	1869
performance of the agents that execute securities transactions on	1870
behalf of the board.	1871

(3) The board shall determine whether an agent is an	1872
Ohio-qualified agent, meets the criteria established by the board	1873
pursuant to division (C) of this section, and offers quality,	1874
services, and safety comparable to other agents otherwise	1875
available to the board. The board's determination shall be final.	1876

(E) The board shall, at least annually, submit to the Ohio	1877
retirement study council a report containing the following	1878
information:	1879

(1) The name of each agent designated as an Ohio-qualified	1880
agent under this section;	1881

(2) The name of each agent that executes securities	1882
transactions on behalf of the board;	1883

(3) The amount of equity and fixed-income trades that are	1884
executed by Ohio-qualified agents, expressed as a percentage of	1885
all equity and fixed-income trades that are executed by agents on	1886
behalf of the board;	1887

(4) The compensation paid to Ohio-qualified agents, expressed	1888
as a percentage of total compensation paid to all agents that	1889
execute securities transactions on behalf of the board;	1890

(5) The amount of equity and fixed-income trades that are	1891
executed by agents that are minority business enterprises,	1892
expressed as a percentage of all equity and fixed-income trades	1893
that are executed by agents on behalf of the board;	1894

(6) Any other information requested by the Ohio retirement	1895
study council regarding the board's use of agents.	1896

Sec. 5505.0610. (A) The state highway patrol retirement board	1897
shall, for the purposes of this section, designate an investment	1898
manager as an Ohio-qualified investment manager if the investment	1899
manager meets all of the following requirements:	1900

(1) The investment manager is subject to taxation under	1901
Chapter 5725., 5726., 5733., or 5747., or 5751. of the Revised	1902
Code.	1903

(2) The investment manager meets one of the following	1904
requirements:	1905

(a) Has its corporate headquarters or principal place of	1906
business in this state;	1907

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

1908

(c) Has a principal place of business in this state and	1909
employs at least 20twenty residents of this state.	1910

(B)(1) The board shall, at least annually, establish a policy	1911
with the goal to increase utilization by the board of	1912
Ohio-qualified investment managers, when an Ohio-qualified	1913
investment manager offers quality, services, and safety comparable	1914
to other investment managers otherwise available to the board. The	1915
policy shall also provide for the following:	1916

(a) A process whereby the board can develop a list of	1917
Ohio-qualified investment managers and their investment products;	1918

(b) A process whereby the board can give public notice to	1919
Ohio-qualified investment managers of the board's search for an	1920
investment manager that includes the board's search criteria.	1921

(2) The board shall determine whether an investment manager	1922
is an Ohio-qualified investment manager and whether the investment	1923
manager offers quality, services, and safety comparable to other	1924
investment managers otherwise available to the board. The board's	1925
determination shall be final.	1926

(C) The board shall, at least annually, submit to the Ohio	1927
retirement study council a report containing the following	1928
information:	1929

(1) The name of each investment manager designated as an	1930
Ohio-qualified investment manager under this section;	1931

(2) The name of each investment manager with which the board	1932
contracts;	1933

(3) The amount of assets managed by Ohio-qualified investment	1934
managers, expressed as a percentage of the total assets held by	1935
the retirement system and as a percentage of assets managed by	1936
investment managers with which the board has contracted;	1937

(4) The compensation paid to Ohio-qualified investment	1938
managers, expressed as a percentage of total compensation paid to	1939
all investment managers with which the board has contracted;	1940

(5) Any other information requested by the Ohio retirement	1941
study council regarding the board's use of investment managers.	1942

Sec. 5701.12.  (A) The effective date to which this section	1943
refers is the effective date of this section as enacted by H.B.	1944
510 of the 129th general assembly.	1945

(B) Any reference in Title LVII to "consolidated reports of	1946
condition and income" or "call report" means the consolidated	1947
reports of condition and income as those reports existed on the	1948
effective date.	1949

(C) Any reference in Title LVII to "FR Y-9" or "Y-9" means	1950
the FR Y-9 financial statements as those financial statements	1951
existed on the effective date.	1952

(D) This section does not apply to any reference in Title	1953
LVII of the Revised Code to "consolidated reports of condition and	1954
income," "call report," "FR Y-9," or "Y-9" as of a date certain	1955
specifying the day, month, and year.	1956

Sec. 5703.052.  (A) There is hereby created in the state	1957
treasury the tax refund fund, from which refunds shall be paid for	1958
taxes illegally or erroneously assessed or collected, or for any	1959
other reason overpaid, that are levied by Chapter 4301., 4305.,	1960
5726., 5728., 5729., 5733., 5735., 5739., 5741., 5743., 5747.,	1961
5748., 5749., 5751., or 5753. and sections 3737.71, 3905.35,	1962
3905.36, 4303.33, 5707.03, 5725.18, 5727.28, 5727.38, 5727.81, and	1963
5727.811 of the Revised Code. Refunds for fees illegally or	1964
erroneously assessed or collected, or for any other reason	1965
overpaid, that are levied by sections 3734.90 to 3734.9014 of the	1966
Revised Code also shall be paid from the fund. Refunds for amounts	1967
illegally or erroneously assessed or collected by the tax	1968
commissioner, or for any other reason overpaid, that are due under	1969
section 1509.50 of the Revised Code shall be paid from the fund.	1970
However, refunds for taxes levied under section 5739.101 of the	1971
Revised Code shall not be paid from the tax refund fund, but shall	1972
be paid as provided in section 5739.104 of the Revised Code.	1973

(B)(1) Upon certification by the tax commissioner to the	1974
treasurer of state of a tax refund, a fee refund, or an other	1975
amount refunded, or by the superintendent of insurance of a	1976
domestic or foreign insurance tax refund, the treasurer of state	1977
shall place the amount certified to the credit of the fund. The	1978
certified amount transferred shall be derived from current	1979
receipts of the same tax, fee, or other amount from which the	1980
refund arose. If current receipts from the tax, fee, or other	1981
amount from which the refund arose are inadequate to make the	1982
transfer of the amount so certified, the treasurer of state shall	1983
transfer such certified amount from current receipts of the sales	1984
tax levied by section 5739.02 of the Revised Code.	1985

(2) When the treasurer of state provides for the payment of a	1986
refund of a tax, fee, or other amount from the current receipts of	1987
the sales tax, and the refund is for a tax, fee, or other amount	1988
that is not levied by the state, the tax commissioner shall	1989
recover the amount of that refund from the next distribution of	1990
that tax, fee, or other amount that otherwise would be made to the	1991
taxing jurisdiction. If the amount to be recovered would exceed	1992
twenty-five per cent of the next distribution of that tax, fee, or	1993
other amount, the commissioner may spread the recovery over more	1994
than one future distribution, taking into account the amount to be	1995
recovered and the amount of the anticipated future distributions.	1996
In no event may the commissioner spread the recovery over a period	1997
to exceed twenty-four months.	1998

Sec. 5703.053.  As used in this section, "postal service"	1999
means the United States postal service.	2000

An application to the tax commissioner for a tax refund under	2001
section 4307.05, 4307.07, 5726.30, 5727.28, 5727.91, 5728.061,	2002
5735.122, 5735.13, 5735.14, 5735.141, 5735.142, 5739.07, 5741.10,	2003
5743.05, 5743.53, 5745.11, 5749.08, or 5751.08 of the Revised Code	2004
or division (B) of section 5703.05 of the Revised Code, or a fee	2005
refunded under section 3734.905 of the Revised Code, that is	2006
received after the last day for filing under such section shall be	2007
considered to have been filed in a timely manner if:	2008

(A) The application is delivered by the postal service and	2009
the earliest postal service postmark on the cover in which the	2010
application is enclosed is not later than the last day for filing	2011
the application;	2012

(B) The application is delivered by the postal service, the	2013
only postmark on the cover in which the application is enclosed	2014
was affixed by a private postal meter, the date of that postmark	2015
is not later than the last day for filing the application, and the	2016
application is received within seven days of such last day; or	2017

(C) The application is delivered by the postal service, no	2018
postmark date was affixed to the cover in which the application is	2019
enclosed or the date of the postmark so affixed is not legible,	2020
and the application is received within seven days of the last day	2021
for making the application.	2022

Sec. 5703.70. (A) On the filing of an application for refund	2023
under section 3734.905, 4307.05, 4307.07, 5726.30, 5727.28,	2024
5727.91, 5728.061, 5733.12, 5735.122, 5735.13, 5735.14, 5735.141,	2025
5735.142, 5735.18, 5739.07, 5739.071, 5739.104, 5741.10, 5743.05,	2026
5743.53, 5749.08, 5751.08, or 5753.06 of the Revised Code, or an	2027
application for compensation under section 5739.061 of the Revised	2028
Code, if the tax commissioner determines that the amount of the	2029
refund or compensation to which the applicant is entitled is less	2030
than the amount claimed in the application, the commissioner shall	2031
give the applicant written notice by ordinary mail of the amount.	2032
The notice shall be sent to the address shown on the application	2033
unless the applicant notifies the commissioner of a different	2034
address. The applicant shall have sixty days from the date the	2035
commissioner mails the notice to provide additional information to	2036
the commissioner or request a hearing, or both.	2037

(B) If the applicant neither requests a hearing nor provides	2038
additional information to the tax commissioner within the time	2039
prescribed by division (A) of this section, the commissioner shall	2040
take no further action, and the refund or compensation amount	2041
denied becomes final.	2042

(C)(1) If the applicant requests a hearing within the time	2043
prescribed by division (A) of this section, the tax commissioner	2044
shall assign a time and place for the hearing and notify the	2045
applicant of such time and place, but the commissioner may	2046
continue the hearing from time to time as necessary. After the	2047
hearing, the commissioner may make such adjustments to the refund	2048
or compensation as the commissioner finds proper, and shall issue	2049
a final determination thereon.	2050

(2) If the applicant does not request a hearing, but provides	2051
additional information, within the time prescribed by division (A)	2052
of this section, the commissioner shall review the information,	2053
make such adjustments to the refund or compensation as the	2054
commissioner finds proper, and issue a final determination	2055
thereon.	2056

(3) The commissioner shall serve a copy of the final	2057
determination made under division (C)(1) or (2) of this section on	2058
the applicant in the manner provided in section 5703.37 of the	2059
Revised Code, and the decision is final, subject to appeal under	2060
section 5717.02 of the Revised Code.	2061

(D) The tax commissioner shall certify to the director of	2062
budget and management and treasurer of state for payment from the	2063
tax refund fund created by section 5703.052 of the Revised Code,	2064
the amount of the refund to be refunded under division (B) or (C)	2065
of this section. The commissioner also shall certify to the	2066
director and treasurer of state for payment from the general	2067
revenue fund the amount of compensation to be paid under division	2068
(B) or (C) of this section.	2069

Sec. 5707.03.  Annual taxes are hereby levied on the kinds of	2070
intangible property, enumerated in this section, on the intangible	2071
property tax list in the office of the treasurer of state at the	2072
following rates:	2073

(A) On investments, five per cent of income yield or of	2074
income as provided by section 5711.10 of the Revised Code for the	2075
1983, 1984, and 1985 return years and no tax for subsequent return	2076
years;	2077

(B) On unproductive investments, two mills on the dollar for	2078
the 1983, 1984, and 1985 return years and no tax for subsequent	2079
return years;	2080

(C) On deposits, one and three-eighths mills on the dollar	2081
for the 1982 and 1983 return years and no tax for subsequent	2082
return years;	2083

(D) On shares of, and capital employed by, dealers in	2084
intangibles, eight mills on the dollar for return years prior to	2085
2014 and no tax under this section for subsequent return years;	2086

(E) On money, credits, and all other taxable intangibles,	2087
three mills on the dollar for the 1983, 1984, and 1985 return	2088
years and no tax for subsequent return years.	2089

The object and distribution of such taxes shall be as	2090
provided in section 5725.24 of the Revised Code.	2091

Sec. 5709.76.  (A) All of the following are exempt from taxes	2092
levied by the state and its subdivisions:	2093

(1) Public obligations;

2094

(2) Interest or interest equivalent on public obligations and	2095
on purchase obligations;	2096

(3) The transfer, and any profit made on the sale, exchange,	2097
or other disposition, of public obligations.	2098

(B) The exemptions granted by division (A) of this section	2099
apply to public obligations and purchase obligations issued,	2100
incurred, or entered into before, on, or after the effective date	2101
of this sectionMarch 29, 1988, but only for taxable years ending	2102
on or after the later of July 1, 1988, or the effective date of	2103
this sectionMarch 29, 1988.	2104

(C) This section supplements, and does not restrict, limit,	2105
or impair, any exemption from taxation otherwise provided for in	2106
the Ohio Constitution, the Revised Code, or other laws.	2107

(D) As used in this section:

2108

(1) "Fractionalized interests in purchase obligations" means	2109
participations, shares, or other instruments or agreements,	2110
separate from the purchase obligations themselves, evidencing	2111
ownership of interests in purchase obligations or of rights to	2112
receive payments of, or on account of, principal or interest or	2113
their equivalents payable by or on behalf of the state or a	2114
subdivision pursuant to purchase obligations, and does not include	2115
interests or shares in qualified investment trusts.	2116

(2) "Interest or interest equivalent" means those payments or	2117
portions of payments, however denominated, that constitute or	2118
represent consideration for forbearing the collection of money, or	2119
for deferring the receipt of payment of money to a future time, as	2120
determined for federal income tax purposes, and includes those	2121
portions of a qualified investment trust's distributions to its	2122
shareholders or beneficial owners, whether distributed or deemed	2123
distributed in cash or in trust shares or interests, that are	2124
attributable to the trust's receipt of interest or interest	2125
equivalent.	2126

(3) "Internal Revenue Code" has the same meaning as in	2127
division (H) of section 5747.01 of the Revised Code.	2128

(4) "Qualified investment trust" or "trust" means a unit	2129
investment trust, grantor trust, or regulated investment company,	2130
if at all times at least fifty per cent of the value of the total	2131
assets of the trust or company consists of public securities or	2132
purchase obligations, or similar obligations of other states or	2133
their subdivisions.	2134

(5) "Public obligations" means public securities,	2135
fractionalized interests in purchase obligations, and any	2136
obligation or evidence of obligation to pay interest or interest	2137
equivalent on public securities or on fractionalized interests in	2138
purchase obligations, and does not include purchase obligations.	2139

(6) "Public securities" means bonds, notes, certificates of	2140
indebtedness, commercial paper, and other instruments in writing	2141
issued by the state or a subdivision, or by any nonprofit	2142
corporation authorized to issue public securities for or on behalf	2143
of the state or a subdivision, to evidence the obligation of the	2144
state, subdivision, or nonprofit corporation to repay money	2145
borrowed by, or to pay at any future time other money obligations	2146
of, the state, subdivision, or nonprofit corporation, and does not	2147
include purchase obligations. Public securities may be in the form	2148
of either certificated securities or uncertificated securities, as	2149
those terms are defined in section 1308.01 of the Revised Code.	2150

(7) "Purchase obligations" means interest-bearing obligations	2151
of the state or a subdivision to make payments under installment	2152
sale, lease, lease purchase, or similar types of agreements.	2153

(8) "Regulated investment company" means a regulated	2154
investment company as defined in section 851 of the Internal	2155
Revenue Code.	2156

(9) "State" means the state, state officers, and state	2157
agencies, including commissions, institutions, boards, agencies,	2158
authorities, or other instrumentalities.	2159

(10) "Subdivision" means any local taxing authority,	2160
political or governmental subdivision, body corporate and politic,	2161
or other local public or governmental entity in the state, any	2162
combination or consortium of two or more of those subdivisions,	2163
and any public division, district, commission, authority,	2164
department, board, officer, or institution of any one or more of	2165
those subdivisions.	2166

(11) "Taxes" means any direct or indirect taxes, including	2167
income, ad valorem, transfer, and excise taxes, and including the	2168
tax on the net income measure of the issued and outstanding shares	2169
of a corporation under Chapter 5733. of the Revised Code. "Taxes"	2170
does not mean any of the following:	2171

(a) The tax on the net worth measure of the issued and	2172
outstanding shares of corporations and financial institutions	2173
under Chapter 5733. of the Revised Code;	2174

(b) The tax on the value of the gross estate under Chapter	2175
5731. of the Revised Code;	2176

(c) The tax on the value of the capital and surplus of a	2177
domestic insurance company under Chapter 5725. of the Revised	2178
Code;	2179

(d) The tax on the shares of and capital employed by dealers	2180
in intangibles under Chapter 5725. and section 5707.03 of the	2181
Revised Code;	2182

(e) The tax levied on the basis of the total equity capital	2183
of financial institutions under Chapter 5726. of the Revised Code.	2184

Sec. 5711.22.  (A) Deposits not taxed at the source shall be	2185
listed and assessed at their amount in dollars on the day they are	2186
required to be listed. Moneys shall be listed and assessed at the	2187
amount thereof in dollars on hand on the day that they are	2188
required to be listed. In listing investments, the amount of the	2189
income yield of each for the calendar year next preceding the date	2190
of listing shall, except as otherwise provided in this chapter, be	2191
stated in dollars and cents and the assessment thereof shall be at	2192
the amount of such income yield; but any property defined as	2193
investments in either division (A) or (B) of section 5701.06 of	2194
the Revised Code that has not been outstanding for the full	2195
calendar year next preceding the date of listing, except shares of	2196
stock of like kind as other shares of the same corporation	2197
outstanding for the full calendar year next preceding the date of	2198
listing, or which has yielded no income during such calendar year	2199
shall be listed and assessed as unproductive investments, at their	2200
true value in money on the day that such investments are required	2201
to be listed.	2202

Credits and other taxable intangibles shall be listed and	2203
assessed at their true value in money on the day as of which the	2204
same are required to be listed.	2205

Shares of stock of a bank holding company, as defined in	2206
Title 12 U.S.C.A., section 1841, that are required to be listed	2207
for taxation under this division and upon which dividends were	2208
paid during the year of their issuance, which dividends are	2209
subject to taxation under the provisions of Chapter 5747. of the	2210
Revised Code, shall be exempt from the intangibles tax for the	2211
year immediately succeeding their issuance. If such shares bear	2212
dividends the first calendar year after their issuance, which	2213
dividends are subject to taxation under the provisions of Chapter	2214
5747. of the Revised Code, it shall be deemed that the	2215
nondelinquent intangible property tax pursuant to division (A) of	2216
section 5707.04 of the Revised Code was paid on those dividends	2217
paid that first calendar year after the issuance of the shares.	2218

(B) For tax years before tax year 2009, boilers, machinery,	2219
equipment, and personal property the true value of which is	2220
determined under division (B) of section 5711.21 of the Revised	2221
Code shall be listed and assessed at an amount equal to the sum of	2222
the products determined under divisions (B)(1), (2), and (3) of	2223
this section:	2224

(1) Multiply the portion of the true value determined under	2225
division (B)(1) of section 5711.21 of the Revised Code by the	2226
assessment rate for the tax year in division (G) of this section;	2227

(2) Multiply the portion of the true value determined under	2228
division (B)(2) of section 5711.21 of the Revised Code by the	2229
assessment rate in section 5727.111 of the Revised Code that is	2230
applicable to the production equipment of an electric company;	2231

(3) Multiply the portion of the true value determined under	2232
division (B)(3) of section 5711.21 of the Revised Code by the	2233
assessment rate in section 5727.111 of the Revised Code that is	2234
applicable to the property of an electric company that is not	2235
production equipment.	2236

(C) For tax years before tax year 2009, personal property	2237
leased to a public utility or interexchange telecommunications	2238
company as defined in section 5727.01 of the Revised Code and used	2239
directly in the rendition of a public utility service as defined	2240
in division (P) of section 5739.01 of the Revised Code shall be	2241
listed and assessed at the same percentage of true value in money	2242
that such property is required to be assessed by section 5727.111	2243
of the Revised Code if owned by the public utility or	2244
interexchange telecommunications company.	2245

(D)(1) Merchandise or an agricultural product shipped from	2246
outside this state and held in this state in a warehouse or a	2247
place of storage without further manufacturing or processing and	2248
for storage only and for shipment outside this state, but that	2249
does not qualify as "not used in business in this state" under	2250
division (B)(1) or (2) of section 5701.08 of the Revised Code, is	2251
nevertheless not used in business in this state for property tax	2252
purposes.	2253

(2) Merchandise or an agricultural product owned by a	2254
qualified out-of-state person shipped from outside this state and	2255
held in this state in a public warehouse without further	2256
manufacturing or processing and for temporary storage only and for	2257
shipment inside this state, but that does not qualify as "not used	2258
in business in this state" under division (B)(1) or (2) of section	2259
5701.08 of the Revised Code, is nevertheless not used in business	2260
in this state for property tax purposes.	2261

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

2262

(a) "Qualified out-of-state person" means a person that does	2263
not own, lease, or use property, other than merchandise or an	2264
agricultural product described in this division, in this state,	2265
and does not have employees, agents, or representatives in this	2266
state;	2267

(b) "Public warehouse" means a warehouse in this state that	2268
is not subject to the control of or under the supervision of the	2269
owner of the merchandise or agricultural product stored in it, or	2270
staffed by the owner's employees, and from which the property is	2271
to be shipped inside this state.	2272

(E) Personal property valued pursuant to section 5711.15 of	2273
the Revised Code and personal property required to be listed on	2274
the average basis by division (B) of section 5711.16 of the	2275
Revised Code, except property described in division (D) of this	2276
section, business fixtures, and furniture not held for sale in the	2277
course of business, shall be listed and assessed at twenty-three	2278
per cent of its true value in money for tax year 2005 and at the	2279
percentage of such true value specified in division (G) of this	2280
section for tax year 2006 and each tax year thereafter.	2281

(F) All manufacturing equipment as defined in section 5711.16	2282
of the Revised Code shall be listed and assessed at the following	2283
percentage of its true value in money:	2284

(1) For all such property not previously used in business in	2285
this state by the owner thereof, or by related member or	2286
predecessor of the owner, other than as inventory, before January	2287
1, 2005, zero per cent of true value;	2288

(2) For all other such property, at the percentage of true	2289
value specified in division (G) of this section for tax year 2005	2290
and each tax year thereafter.	2291

(G) Unless otherwise provided by law, all other personal	2292
property used in business that has not been legally regarded as an	2293
improvement on land and considered in arriving at the value of the	2294
real property assessed for taxation shall be listed and assessed	2295
at the following percentages of true value in money:	2296

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

2297

(2) For tax year 2006, eighteen and three-fourths per cent of	2298
true value;	2299

(3) For tax year 2007, twelve and one-half per cent of true	2300
value;	2301

(4) For tax year 2008, six and one-fourth per cent of true	2302
value;	2303

(5) For tax year 2009 and each tax year thereafter, zero per	2304
cent of true value.	2305

(H)(1) For tax year 2007 and thereafter, all personal	2306
property used by a telephone company, telegraph company, or	2307
interexchange telecommunications company shall be listed as	2308
provided in this chapter and assessed at the following percentages	2309
of true value in money:	2310

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

2311

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

2312

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

2313

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

2314

(e) For tax year 2011 and each tax year thereafter, zero per	2315
cent of true value.	2316

(2) The property owned by a telephone, telegraph, or	2317
telecommunications company shall be apportioned to each	2318
appropriate taxing district as provided in section 5727.15 of the	2319
Revised Code.	2320

(I) During and after the tax year in which the assessment	2321
rate equals zero per cent, the property described in division (E),	2322
(F), (G), or (H) of this section shall not be listed for taxation.	2323

(J) Divisions (E), (F), (G), and (H) of this section apply to	2324
the property of a person described in divisions (E)(3) to (10),	2325
(4), and (5) of section 5751.01 of the Revised Code. Division (J)	2326
of this section does not prevent the application of the exemption	2327
of property from taxation under section 5725.25 or 5725.26 of the	2328
Revised Code.	2329

Sec. 5725.02. TheFor report years prior to 2014, the	2330
cashier or other principal accounting officer of each bank, the	2331
secretary or other principal accounting officer of each other	2332
incorporated financial institution, and the manager or owner of	2333
each unincorporated financial institution shall return to the	2334
department of taxation between the first and second Mondays of	2335
March, annually, a report exhibiting in detail, and under	2336
appropriate heads, the resources and liabilities of such	2337
institution at the close of business on the thirty-first day of	2338
December next preceding.	2339

The report of each financial institution shall also show the	2340
aggregate balances of the taxable deposits of its depositors in	2341
each county in which the institution maintained an office for the	2342
receipt of deposits, at the end of business on the day fixed by	2343
the tax commissioner pursuant to section 5725.05 of the Revised	2344
Code. The report shall show also the names and addresses of all	2345
depositors whose deposits were wholly withdrawn from such	2346
institution between the day so fixed and the date on which notice	2347
of the fixing was received by such institution, or if no such	2348
notice was received, then between the day fixed and the first day	2349
of January next following, and the amount of taxable deposits of	2350
each such depositerdepositor on the day fixed.	2351

Sec. 5725.14. (A) As used in this section and section 5725.15	2352
of the Revised Code:	2353

(1) "Billing address" of a customer means one of the	2354
following:	2355

(a) The customer's address as set forth in any notice,	2356
statement, bill, or similar acknowledgment shall be presumed to be	2357
the address where the customer is located with respect to the	2358
transaction for which the dealer issued the notice, statement,	2359
bill, or acknowledgment.	2360

(b) If the dealer issues any notice, statement, bill, or	2361
similar acknowledgment electronically to an address other than a	2362
street address or post office box address or if the dealer does	2363
not issue such a notice, statement, bill, or acknowledgment, the	2364
customer's street address as set forth in the records of the	2365
dealer at the time of the transaction shall be presumed to be the	2366
address where the customer is located.	2367

(2) "Commissions" includes but is not limited to brokerage	2368
commissions, asset management fees, and similar fees charged in	2369
the regular course of business to a customer for the maintenance	2370
and management of the customer's account.	2371

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

2372

(a) In the case of a dealer in intangibles principally	2373
engaged in the business of lending money or discounting loans, the	2374
aggregate amount of loans effected or discounted;	2375

(b) In the case of a dealer in intangibles principally	2376
engaged in the business of selling or buying stocks, bonds, or	2377
other similar securities either on the dealer's own account or as	2378
agent for another, the aggregate amount of all commissions	2379
charged.	2380

(B) Each dealer in intangibles shall return to the tax	2381
commissioner between the first and second Mondays of March,	2382
annually for return years prior to 2014, a report exhibiting in	2383
detail, and under appropriate heads, the dealer's resources and	2384
liabilities at the close of business on the thirty-first day of	2385
December next preceding. In the case of an unincorporated dealer	2386
in intangibles, such report shall also exhibit the amount or value	2387
as of the date of conversion of all property within the year	2388
preceding the date of listing, and on or after the first day of	2389
November converted into bonds or other securities not taxed to the	2390
extent such nontaxable bonds or securities may be shown in the	2391
dealer's resources on such date, without deduction for	2392
indebtedness created in the purchase of such nontaxable bonds or	2393
securities.	2394

If a dealer in intangibles maintains separate business	2395
offices, whether within this state only or within and without this	2396
state, the report shall also show the gross receipts from business	2397
done at each such office during the year ending on the	2398
thirty-first day of December next preceding.	2399

For the purposes of this section and section 5725.15 of the	2400
Revised Code, business is considered done at an office when it	2401
originates at such office, but the receipts from business	2402
originating at one office and consummated at another office shall	2403
be divided equitably between such offices.	2404

(C) For the purposes of this section and section 5725.15 of	2405
the Revised Code, in the case of a dealer in intangibles	2406
principally engaged in the business of selling or buying stocks,	2407
bonds, or other similar securities either on the dealer's own	2408
account or as agent for another, the dealer's capital, surplus,	2409
and undivided profits employed in this state shall bear the same	2410
ratio to the dealer's total capital, surplus, and undivided	2411
profits employed everywhere as the amount described in division	2412
(C)(1) of this section bears to the amount described in division	2413
(C)(2) of this section:	2414

(1) The sum of the commissions earned during the year covered	2415
by the report from transactions with respect to brokerage accounts	2416
owned by customers having billing addresses in this state;	2417

(2) The sum of the commissions earned during that year from	2418
transactions with respect to brokerage accounts owned by all of	2419
the dealer's customers.	2420

(D) An incorporated dealer in intangibles which owns or	2421
controls fifty-one per cent or more of the common stock of another	2422
incorporated dealer in intangibles may, under uniform regulations	2423
prescribed by the tax commissioner, make a consolidated return for	2424
the purpose of sections 5725.01 to 5725.26, inclusive, of the	2425
Revised Code. In such case the parent corporation making such	2426
return is not required to include in its resources any of the	2427
stocks, securities, or other obligations of its subsidiary	2428
dealers, nor permitted to include in its liabilities any of its	2429
own securities or other obligations belonging to its subsidiaries.	2430

Sec. 5725.16.  On or before the first Monday of May, annually	2431
for return years prior to 2014, the tax commissioner shall certify	2432
to the treasurer of state the assessment of the shares or property	2433
representing capital, or apportionment of either, of each dealer	2434
in intangibles doing business in the state, showing separately the	2435
amount representing capital employed in each county.	2436

The treasurer of state shall place the amounts certified on	2437
the intangible property tax list in histhe treasurer of state's	2438
office in the names of the dealers represented by those	2439
certificates.	2440

Any certificate of abatement issued pursuant to section	2441
5703.05 of the Revised Code for the overpayment of the tax on	2442
shares or property representing capital of a dealer in intangibles	2443
may be tendered by the payee or transferee thereof to the	2444
treasurer of state as payment for any taxes allocable to the	2445
county in which the claim for overpayment arose.	2446

Sec. 5725.26.  The real estate of a financial institution or	2447
dealer in intangibles shall be taxed in the place where it is	2448
located, the same as the real estate of persons is taxed, but the	2449
taxes provided for in Chapters 5725. and, 5726., 5733., and 5751.	2450
of the Revised Code, shall be in lieu of all other taxes on the	2451
other property and assets of such institution or dealer, except	2452
personal property taxable under Chapter 5711. of the Revised Code	2453
and leased, or held for the purpose of leasing, to others if the	2454
owner or lessor of the property acquired it for the sole purpose	2455
of leasing it to others.	2456

For reports required to be filed under section 5725.14 of the	2457
Revised Code in 2003 and thereafter, nothing in this section shall	2458
be construed to exempt the property of any dealer in intangibles	2459
under section 5725.13 of the Revised Code from the tax imposed	2460
under section 5707.03 of the Revised Code.	2461

Sec. 5725.33.  (A) Except as otherwise provided in this	2462
section, terms used in this section have the same meaning as	2463
section 45D of the Internal Revenue Code, any related proposed,	2464
temporary or final regulations promulgated under the Internal	2465
Revenue Code, any rules or guidance of the internal revenue	2466
service or the United States department of the treasury, and any	2467
related rules or guidance issued by the community development	2468
financial institutions fund of the United States department of the	2469
treasury, as such law, regulations, rules, and guidance exist on	2470
the effective date of the enactment of this section by H.B. 1 of	2471
the 128th general assemblyOctober 16, 2009.	2472

As used in this section:

2473

(1) "Adjusted purchase price" means the amount paid for	2474
qualified equity investments multiplied by the qualified	2475
low-income community investments made by the issuer in projects	2476
located in this state as a percentage of the total amount of	2477
qualified low-income community investments made by the issuer in	2478
projects located in all states on the credit allowance date during	2479
the applicable tax year, subject to divisions (B)(1) and (2) of	2480
this section.	2481

(2) "Applicable percentage" means zero per cent for each of	2482
the first two credit allowance dates, seven per cent for the third	2483
credit allowance date, and eight per cent for the four following	2484
credit allowance dates.	2485

(3) "Credit allowance date" means the date, on or after	2486
January 1, 2010, a qualified equity investment is made and each of	2487
the six anniversary dates thereafter. For qualified equity	2488
investments made after the effective date of this sectionOctober	2489
16, 2009, but before January 1, 2010, the initial credit allowance	2490
date is January 1, 2010, and each of the six anniversary dates	2491
thereafter is on the first day of January of each year.	2492

(4) "Qualified active low-income community business" excludes	2493
any business that derives or projects to derive fifteen per cent	2494
or more of annual revenue from the rental or sale of real	2495
property, except any business that is a special purpose entity	2496
principally owned by a principal user of that property formed	2497
solely for the purpose of renting, either directly or indirectly,	2498
or selling real property back to such principal user if such	2499
principal user does not derive fifteen per cent or more of its	2500
gross annual revenue from the rental or sale of real property.	2501

(5) "Qualified community development entity" includes only	2502
entities:	2503

(a) That have entered into an allocation agreement with the	2504
community development financial institutions fund of the United	2505
States department of the treasury with respect to credits	2506
authorized by section 45D of the Internal Revenue Code;	2507

(b) Whose service area includes any portion of this state;	2508
and	2509

(c) That will designate an equity investment in such entities	2510
as a qualified equity investment for purposes of both section 45D	2511
of the Internal Revenue Code and this section.	2512

(6) "Qualified equity investment" is limited to an equity	2513
investment in a qualified community development entity that:	2514

(a) Is acquired after the effective date of the enactment of	2515
this sectionOctober 16, 2009, at its original issuance solely in	2516
exchange for cash;	2517

(b) Has at least eighty-five per cent of its cash purchase	2518
price used by the qualified community development entity to make	2519
qualified low-income community investments, provided that in the	2520
seventh year after a qualified equity investment is made, only	2521
seventy-five per cent of such cash purchase price must be used by	2522
the qualified community development entity to make qualified	2523
low-income community investments; and	2524

(c) Is designated by the issuer as a qualified equity	2525
investment.	2526

"Qualified equity investment" includes any equity investment	2527
that would, but for division (A)(6)(a) of this section, be a	2528
qualified equity investment in the hands of the taxpayer if such	2529
investment was a qualified equity investment in the hands of a	2530
prior holder.	2531

(B) There is hereby allowed a nonrefundable credit against	2532
the tax imposed by section 5725.18 of the Revised Code for an	2533
insurance company holding a qualified equity investment on the	2534
credit allowance date occurring in the calendar year for which the	2535
tax is due. The credit shall equal the applicable percentage of	2536
the adjusted purchase price of qualified low-income community	2537
investments, subject to divisions (B)(1) and (2) of this section:	2538

(1) For the purpose of calculating the amount of qualified	2539
low-income community investments held by a qualified community	2540
development entity, an investment shall be considered held by a	2541
qualified community development entity even if the investment has	2542
been sold or repaid, provided that, at any time before the seventh	2543
anniversary of the issuance of the qualified equity investment,	2544
the qualified community development entity reinvests an amount	2545
equal to the capital returned to or received or recovered by the	2546
qualified community development entity from the original	2547
investment, exclusive of any profits realized and costs incurred	2548
in the sale or repayment, in another qualified low-income	2549
community investment within twelve months of the receipt of such	2550
capital. If the qualified low-income community investment is sold	2551
or repaid after the sixth anniversary of the issuance of the	2552
qualified equity investment, the qualified low-income community	2553
investment shall be considered held by the qualfiedqualified	2554
community development entity through the seventh anniversary of	2555
the qualified equity investment's issuance.	2556

(2) The qualified low-income community investment made in	2557
this state shall equal the sum of the qualified low-income	2558
community investments in each qualified active low-income	2559
community business in this state, not to exceed two million five	2560
hundred sixty-four thousand dollars, in which the qualified	2561
community development entity invests, including such investments	2562
in any such businesses in this state related to that qualified	2563
active low-income community business through majority ownership or	2564
control.	2565

The credit shall be claimed in the order prescribed by	2566
section 5725.98 of the Revised Code. If the amount of the credit	2567
exceeds the amount of tax otherwise due after deducting all other	2568
credits in that order, the excess may be carried forward and	2569
applied to the tax due for not more than four ensuing years.	2570

By claiming a tax credit under this section, an insurance	2571
company waives its rights under section 5725.222 of the Revised	2572
Code with respect to the time limitation for the assessment of	2573
taxes as it relates to credits claimed that later become subject	2574
to recapture under division (E) of this section.	2575

(C) The amount of qualified equity investments on the basis	2576
of which credits may be claimed under this section and sections	2577
5726.54, 5729.16, and 5733.58 of the Revised Code shall not exceed	2578
the amount, estimated by the director of development, that would	2579
cause the total amount of credits allowed each fiscal year to	2580
exceed ten million dollars, computed without regard to the	2581
potential for taxpayers to carry tax credits forward to later	2582
years.	2583

(D) If any amount of the federal tax credit allowed for a	2584
qualified equity investment for which a credit was received under	2585
this section is recaptured under section 45D of the Internal	2586
Revenue Code, or if the director of development services	2587
determines that an investment for which a tax credit is claimed	2588
under this section is not a qualified equity investment or that	2589
the proceeds of an investment for which a tax credit is claimed	2590
under this section are used to make qualified low-income community	2591
investments other than in a qualified active low-income community	2592
business, all or a portion of the credit received on account of	2593
that investment shall be paid by the insurance company that	2594
received the credit to the superintendent of insurance. The amount	2595
to be recovered shall be determined by the director of development	2596
services pursuant to rules adopted under division (E) of this	2597
section. The director shall certify any amount due under this	2598
division to the superintendent of insurance, and the	2599
superintendent shall notify the treasurer of state of the amount	2600
due. Upon notification, the treasurer shall invoice the insurance	2601
company for the amount due. The amount due is payable not later	2602
than thirty days after the date the treasurer invoices the	2603
insurance company. The amount due shall be considered to be tax	2604
due under section 5725.18 of the Revised Code, and may be	2605
collected by assessment without regard to the time limitations	2606
imposed under section 5725.222 of the Revised Code for the	2607
assessment of taxes by the superintendent. All amounts collected	2608
under this division shall be credited as revenue from the tax	2609
levied under section 5725.18 of the Revised Code.	2610

(E) The tax credits authorized under this section and	2611
sections 5726.54, 5729.16, and 5733.58 of the Revised Code shall	2612
be administered by the department of development services. The	2613
director of development services, in consultation with the tax	2614
commissioner and the superintendent of insurance, pursuant to	2615
Chapter 119. of the Revised Code, shall adopt rules for the	2616
administration of this section and sections 5726.54, 5729.16, and	2617
5733.58 of the Revised Code. The rules shall provide for	2618
determining the recovery of credits under division (D) of this	2619
section, division (D) of sectionand under sections 5726.54,	2620
5729.16, and section 5733.58 of the Revised Code, including	2621
prorating the amount of the credit to be recovered on any	2622
reasonable basis, the manner in which credits may be allocated	2623
among claimants, and the amount of any application or other fees	2624
to be charged in connection with a recovery.	2625

(F) There is hereby created in the state treasury the new	2626
markets tax credit operating fund. The director of development	2627
services is authorized to charge reasonable application and other	2628
fees in connection with the administration of tax credits	2629
authorized by this section and sections 5726.54, 5729.16, and	2630
5733.58 of the Revised Code. Any such fees collected shall be	2631
credited to the fund. The director of development services shall	2632
use money in the fund to pay expenses related to the	2633
administration of tax credits authorized under sections 5725.33,	2634
5726.54, 5729.16, and 5733.58 of the Revised Code.	2635

Sec. 5726.01. As used in this chapter:

2636

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

2637

(1) A national bank organized and operating as a national	2638
bank association pursuant to the "National Bank Act," 13 Stat. 100	2639
(1864), 12 U.S.C. 21, et seq.;	2640

(2) A federal savings association or federal savings bank	2641
chartered under 12 U.S.C. 1464;	2642

(3) A bank, banking association, trust company, savings and	2643
loan association, savings bank, or other banking institution that	2644
is organized or incorporated under the laws of the United States,	2645
any state, or a foreign country;	2646

(4) Any corporation organized and operating pursuant to 12	2647
U.S.C. 611, et seq.;	2648

(5) Any agency or branch of a foreign bank, as those terms	2649
are defined in 12 U.S.C. 3101;	2650

(6) An entity licensed as a small business investment company	2651
under the "Small Business Investment Act of 1958," 72 Stat. 689,	2652
15 U.S.C. 661, et seq.;	2653

(7) A company chartered under the "Farm Credit Act of 1933,"	2654
48 Stat. 257, or a successor of such a company.	2655

"Bank organization" does not include an institution organized	2656
under the "Federal Farm Loan Act," 39 Stat. 360 (1916), or a	2657
successor of such an institution, an insurance company, or a	2658
credit union.	2659

(B) "Call report" means the consolidated reports of condition	2660
and income prescribed by the federal financial institutions	2661
examination council that a person is required to file with a	2662
federal regulatory agency pursuant to 12 U.S.C. 161, 12 U.S.C.	2663
324, or 12 U.S.C. 1817.	2664

(C) "Credit union" means a nonprofit cooperative financial	2665
institution organized or chartered under the laws of this state,	2666
any other state, or the United States.	2667

(D) "Document of creation" means the articles of	2668
incorporation of a corporation, articles of organization of a	2669
limited liability company, registration of a foreign limited	2670
liability company, certificate of limited partnership,	2671
registration of a foreign limited partnership, registration of a	2672
domestic or foreign limited liability partnership, or registration	2673
of a trade name.	2674

(E) "Financial institution" means a bank organization or a	2675
holding company of a bank organization, except when one of the	2676
following applies:	2677

(1) If two or more entities are consolidated for the purposes	2678
of filing an FR Y-9, "financial institution" means a group	2679
consisting of all entities that are included in the FR Y-9.	2680

(2) If two or more entities are consolidated for the purposes	2681
of filing a call report, "financial institution" means a group	2682
consisting of all entities that are included in the call report	2683
and that are not included in a group described in division (E)(1)	2684
of this section.	2685

"Financial institution" does not include a diversified	2686
savings and loan holding company as defined in 12 U.S.C. 1467a, as	2687
that section existed on January 1, 2012, or a grandfathered	2688
unitary savings and loan holding company as defined in 12 U.S.C.	2689
1467b.	2690

(F) "FR Y-9" means the consolidated or parent-only financial	2691
statements that a holding company is required to file with the	2692
federal reserve board pursuant to 12 U.S.C. 1844. In the case of a	2693
holding company required to file both consolidated and parent-only	2694
financial statements, "FR Y-9" means the consolidated financial	2695
statements that the holding company is required to file.	2696

(G) "Gross receipts" means all items of income, without	2697
deduction for expenses. If the reporting person for a taxpayer is	2698
a holding company, "gross receipts" includes all items of income	2699
reported on the FR Y-9 filed by the holding company. If the	2700
reporting person for a taxpayer is a bank organization, "gross	2701
receipts" includes all items of income reported on the call report	2702
filed by the bank organization.	2703

(H) "Insurance company" means every corporation, association,	2704
and society engaged in the business of insurance of any character,	2705
or engaged in the business of entering into contracts	2706
substantially amounting to insurance of any character, or of	2707
indemnifying or guaranteeing against loss or damage, or acting as	2708
surety on bonds or undertakings. "Insurance company" also includes	2709
any health insuring corporation as defined in section 1751.01 of	2710
the Revised Code.	2711

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

2712

(1) In the case of a financial institution described in	2713
division (E)(1) of this section, the top-tier holding company	2714
required to file an FR Y-9 unless the top-tier holding company is	2715
a diversified savings and loan holding company, as defined in 12	2716
U.S.C. 1467a, as that section existed on January 1, 2012, or a	2717
grandfathered unitary savings and loan holding company as defined	2718
in 12 U.S.C. 1467b. If the top-tier holding company is such a	2719
holding company, then the reporting person shall be the bank	2720
organization.	2721

(2) In the case of a financial institution described in	2722
division (E)(2) of this section, the bank organizationrequired to	2723
file the call report.	2724

(J) "Tax year" means the calendar year for which the tax	2725
levied under section 5726.02 of the Revised Code is required to be	2726
paid.	2727

(K) "Taxable year" means the calendar year preceding the year	2728
in which an annual report is required to be filed under section	2729
5726.03 of the Revised Code.	2730

(L) "Taxpayer" means a financial institution subject to the	2731
tax levied under section 5726.02 of the Revised Code.	2732

(M) "Total equity capital" means the sum of the common stock	2733
at par value, perpetual preferred stock and related surplus, other	2734
surplus not related to perpetual preferred stock, retained	2735
earnings, accumulated other comprehensive income, treasury stock,	2736
unearned employee stock ownership plan shares, and other equity	2737
components of a financial institution. "Total equity capital"	2738
shall include any noncontrolling (minority) interests in	2739
consolidated subsidiaries that are financial institutions, as	2740
reported on a financial institution's FR Y-9 or call report, but	2741
shall not include such interests in consolidated subsidiaries that	2742
are not financial institutions.	2743

(N) "Total Ohio equity capital" means the portion of the	2744
total equity capital of a financial institution apportioned to	2745
Ohio pursuant to section 5726.05 of the Revised Code.	2746

(O) "Holding company" does not include a diversified savings	2747
and loan holding company as defined in 12 U.S.C. 1467a, as that	2748
section existed on January 1, 2012, or a grandfathered unitary	2749
savings and loan holding company as defined in 12 U.S.C. 1467b.	2750

Sec. 5726.02. (A) For the purpose of funding the needs of	2751
this state and its local governments beginning with the tax year	2752
that commences on January 1, 2014, and continuing for every tax	2753
year thereafter, there is hereby levied a tax on each financial	2754
institution for the privilege of doing business in this state. A	2755
financial institution is subject to the tax imposed under this	2756
chapter for each calendar year that the financial institution	2757
conducts business as a financial institution in this state or	2758
otherwise has nexus in or with this state under the Constitution	2759
of the United States on the first day of January of that calendar	2760
year.	2761

(B) The amount of tax a financial institution is required to	2762
pay under this chapter shall equal the greater of the minimum tax	2763
required under division (A)(1) of section 5726.04 of the Revised	2764
Code or the amount by which the tax calculated under division	2765
(A)(2) of that section exceeds any credits allowed against the	2766
tax.	2767

Sec. 5726.03. (A)(1) Annually, on or before the thirty-first	2768
day of March, or on or before a later date as extended under	2769
division (B) of this section, the reporting person for each	2770
taxpayer shall make a report in writing to the tax commissioner,	2771
in such form as the commissioner prescribes, and shall remit to	2772
the commissioner the amount of tax shown to be due on the report.	2773
The remittance shall be made payable to the treasurer of state.	2774
The commissioner shall make available, on the official internet	2775
web site of the department of taxation, copies of the forms	2776
prescribed by the commissioner for the purpose of making the	2777
annual report.	2778

(2) An annual report shall be signed by the president,	2779
vice-president, secretary, treasurer, general manager,	2780
superintendent, or managing agent in this state of the reporting	2781
person.	2782

(3) An annual report shall contain the facts, figures,	2783
computations, and attachments that result in the determination of	2784
the amount of tax due from a taxpayer under this chapter.	2785

(B) The tax commissioner may extend the period of time for	2786
filing an annual report to the fifteenth day of the month	2787
following the due date, including extensions thereof, for the	2788
filing of the federal corporate income tax return for the taxable	2789
year. The extension of time to file an annual report shall not	2790
extend the time for payment of the tax. Any tax not paid on or	2791
before the due date for such payment shall be subject to penalty	2792
and interest as provided in this chapter.	2793

(C)(1) In the case of a financial institution described in	2794
division (E)(1) of section 5726.01 of the Revised Code, the annual	2795
report filed for a taxable year shall list, and include	2796
information related to, each person includable in an FR Y-9 filed	2797
by the reporting person for that taxable year.	2798

(2) In the case of a financial institution described in	2799
division (E)(2) of section 5726.01 of the Revised Code, the annual	2800
report for a taxable year shall list, and include information	2801
related to, each person includable in a call report filed by the	2802
reporting person for that taxable year.	2803

(D)(1) The reporting person for a taxpayer shall remit each	2804
tax payment and, if required by the commissioner, file each annual	2805
or estimated tax report electronically. The commissioner may	2806
require reporting persons to use the Ohio business gateway as	2807
defined in section 718.051 of the Revised Code to file reports and	2808
remit the tax, or may provide another means for reporting persons	2809
to file and remit the tax electronically.	2810

(2) The payment of taxes as provided in division (D) of this	2811
section shall not affect a taxpayer's obligation to file an annual	2812
report required under division (A) of this section.	2813

(3) The reporting person for a taxpayer that is required to	2814
remit tax payments electronically under this section may apply to	2815
the tax commissioner, in the manner prescribed by the	2816
commissioner, to be excused from that requirement. The	2817
commissioner may excuse the taxpayer from the requirements of	2818
division (D) of this section for good cause.	2819

(4) If the reporting person for a taxpayer that is required	2820
to remit tax payments or file reports electronically under this	2821
section fails to do so, the commissioner may impose a penalty not	2822
to exceed the following:	2823

(a) For either of the first two reports the person so fails,	2824
five per cent of the amount of the payment that was required to be	2825
remitted;	2826

(b) For the third and any subsequent reports the person so	2827
fails, ten per cent of the amount of the payment that was required	2828
to be remitted.	2829

The penalty imposed under this section is in addition to any	2830
other penalty or charge imposed under this chapter and shall be	2831
considered as revenue arising from the tax levied under this	2832
chapter. A penalty may be collected by assessment in the manner	2833
prescribed by section 5726.20 of the Revised Code. The tax	2834
commissioner may abate all or a portion of such a penalty and may	2835
adopt rules governing such abatements.	2836

Sec. 5726.04. (A) The tax levied on a financial institution	2837
under this chapter shall be the greater of the following:	2838

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

2839

(2) The product of the total Ohio equity capital of the	2840
financial institution, as determined under this section,	2841
multiplied by eight mills for each dollar of the first two hundred	2842
million dollars of total Ohio equity capital, by four mills for	2843
each dollar of total Ohio equity capital greater than two hundred	2844
million and less than one billion three hundred million one	2845
dollars, and by two and one-half mills for each dollar of total	2846
Ohio equity capital in excess of one billion three hundred million	2847
dollars.	2848

(B) The total equity capital of a financial institution shall	2849
equal the total equity capital shown on the reporting person's FR	2850
Y-9 or call report as of the end of the taxable year.	2851

(C) For the purposes of this section, "total Ohio equity	2852
capital" means the product of the total equity capital of a	2853
financial institution as of the end of a taxable year multiplied	2854
by the Ohio apportionment ratio calculated for the financial	2855
institution under section 5726.05 of the Revised Code.	2856

(D) All payments received from the tax levied under this	2857
chapter shall be credited to the general revenue fund.	2858

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

2859

(a) "First target tax amount" means two hundred million	2860
dollars.	2861

(b) "Second target tax amount" means one hundred six per cent	2862
of the first target tax amount or, if applicable, the first target	2863
tax amount as adjusted under division (E)(2) or (3) of this	2864
section.	2865

(c) "Amount of taxes collected" means the amount of taxes	2866
received by the tax commissioner from the tax levied under this	2867
chapter for a tax year, less any amounts refunded to taxpayers for	2868
the same tax year.	2869

(2) If, for the tax year beginning on January 1, 2014, the	2870
total amount of taxes collected from all taxpayers under this	2871
chapter is greater than one hundred ten per cent of the first	2872
target tax amount, the tax commissioner shall decrease each tax	2873
rate provided in division (A)(2) of this section by a percentage	2874
equal to the percentage by which the amount of taxes collected	2875
exceeded the first target tax amount.	2876

(3) If, for the tax year beginning on January 1, 2014, the	2877
total amount of taxes collected from all taxpayers under this	2878
chapter is less than ninety per cent of the target tax amount, the	2879
tax commissioner shall increase the tax rate for each dollar of	2880
total Ohio equity capital in excess of one billion three hundred	2881
million dollars as provided in division (A)(2) of this section by	2882
a percentage equal to the difference of (a) the percentage by	2883
which the first target tax amount exceeded the amount of taxes	2884
collected minus (b) ten per cent of the first target tax amount.	2885

(4) If, for the tax year beginning on January 1, 2016, the	2886
total amount of taxes collected from all taxpayers under this	2887
chapter is greater than one hundred ten per cent of the second	2888
target tax amount, the tax commissioner shall decrease each tax	2889
rate in effect on January 1, 2016, by a percentage equal to the	2890
percentage by which the amount of taxes collected exceeded the	2891
second target tax amount.	2892

(5) If, for the tax year beginning on January 1, 2016, the	2893
total amount of taxes collected from all taxpayers under this	2894
chapter is less than ninety per cent of the second target tax	2895
amount, the tax commissioner shall increase the tax rate for each	2896
dollar of total Ohio equity capital in excess of one billion three	2897
hundred million dollars as provided in division (A)(2) of this	2898
section by a percentage equal to the difference of (a) the	2899
percentage by which the second target tax amount exceeded the	2900
amount of taxes collected minus (b) ten per cent of the second	2901
target tax amount.	2902

(6) Tax rates adjusted pursuant to division (E)(2), (3), (4),	2903
or (5) of this section shall be rounded to the nearest one-tenth	2904
of one mill per dollar. The tax commissioner shall publish the new	2905
tax rates by journal entry and provide notice of the new tax rates	2906
to taxpayers. The new tax rates adjusted pursuant to division	2907
(E)(2) or (3) of this section shall apply to tax years beginning	2908
on or after January 1, 2015. The new tax rates adjusted pursuant	2909
to division (E)(4) or (5) of this section shall apply to tax years	2910
beginning on or after January 1, 2017.	2911

Sec. 5726.05. (A) An apportionment factor shall be used to	2912
determine the total Ohio equity capital of a financial	2913
institution. The factor shall be based upon the gross receipts	2914
generated by the financial institution and reported in the same	2915
manner as provided for the determination of the financial	2916
institution's total equity capital for a tax year under division	2917
(B) of section 5726.04 of the Revised Code.	2918

(B) The apportionment factor is a fraction, the numerator of	2919
which is the total gross receipts of the financial institution in	2920
this state during the taxable year and the denominator of which is	2921
the total gross receipts of the financial institution everywhere	2922
during the taxable year. Gross receipts generated by a financial	2923
institution shall be sitused to this state in the proportion that	2924
the customers' benefit in this state with respect to the services	2925
received bears to the customers' benefit everywhere with respect	2926
to the services received. The physical location where the customer	2927
ultimately uses or receives the benefit of what was received shall	2928
be paramount in determining the proportion of the benefit in this	2929
state to the benefit everywhere. The method of calculating gross	2930
receipts for purposes of the denominator shall be the same as the	2931
method used in determining gross receipts for purposes of the	2932
numerator.	2933

(C) The following are examples of gross receipts to be	2934
included in the numerator of the apportionment factor:	2935

(1) Receipts from the lease, sublease, rental, or subrental	2936
of real property located in this state;	2937

(2) Receipts from the lease, sublease, rental, or subrental	2938
of tangible personal property to the extent such property is used	2939
in this state;	2940

(3) Interest, fees, penalties, or any other charge received	2941
from loans secured by real property located within this state;	2942

(4) Interest, fees, penalties, or any other charge received	2943
from loans not secured by real property if the borrower is located	2944
in this state;	2945

(5) The amount of positive net gains from the sale of loans	2946
secured by real property located in this state;	2947

(6) The amount of positive net gains from the sale of loans	2948
not secured by real property if the borrower is located in this	2949
state;	2950

(7) Interest, annual fees, penalties, or any other charges	2951
received from credit card receivables and from cardholders if the	2952
billing address of the cardholder is located in this state;	2953

(8) The amount of positive net gains from the sale of credit	2954
card receivables if the billing address of the cardholder is	2955
located in this state;	2956

(9) Reimbursement fees of a credit card issuer if the billing	2957
address of the cardholder is located in this state;	2958

(10) Receipts from merchant discounts if the merchant is	2959
located in this state;	2960

(11) Loan servicing fees derived from loans secured by real	2961
property located in this state;	2962

(12) Loan servicing fees derived from loans not secured by	2963
real property if the borrower is located in this state;	2964

(13) Loan servicing fees derived from servicing loans from	2965
other financial institutions if the borrower is located in this	2966
state;	2967

(14) Receipts not otherwise listed herein if the payor of	2968
those receipts is located in this state.	2969

(D) Receipts from investment assets and activities and	2970
trading assets and activities, including interest and dividends,	2971
are in this state to the extent the financial institution's	2972
customers are in this state. This shall be determined by applying	2973
the gross receipts factor calculated in division (B) of this	2974
section to the investment assets and activities and trading assets	2975
and activities. "Investment assets and activities and trading	2976
assets and activities" includes interest, dividends, and other	2977
income from assets and activities, including, but not limited to:	2978
investment securities; trading account assets; federal funds;	2979
securities purchased and sold under agreements to resell or	2980
repurchase; options; futures contracts; forward contracts;	2981
notional principal contracts such as swaps; equities; foreign	2982
currency transactions; amounts in the matched book and in the	2983
arbitrage book, but excluding amounts otherwise sourced in this	2984
section.	2985

(E) If the apportionment provisions of this section do not	2986
fairly represent the extent of the taxpayer's business activity in	2987
this state, the taxpayer may request, or the tax commissioner may	2988
require or permit, an alternative method. Such a request must be	2989
made within any applicable statute of limitations set forth in	2990
this chapter.	2991

(F) A financial institution's "gross receipts" for purposes	2992
of the calculation required by division (B) of this section shall	2993
be determined using the financial institution's method of	2994
accounting for income tax purposes. If a financial institution's	2995
method of accounting is changed for income tax purposes, its	2996
method of accounting for purposes of the calculation required by	2997
division (B) of this section shall be changed accordingly.	2998

(G) The tax commissioner shall adopt administrative rules to	2999
provide additional guidance for the application of this section.	3000

Sec. 5726.06. (A) The reporting person for a taxpayer shall	3001
file estimated tax reports and remit the amount of tax estimated	3002
to be due for a tax year to the tax commissioner as follows:	3003

(1) The minimum tax required under division (A)(1) of section	3004
5726.04 of the Revised Code or one-third of the estimated tax,	3005
whichever is greater, on or before the thirty-first day of January	3006
of the tax year;	3007

(2) One-half of the amount by which the estimated tax exceeds	3008
the amount paid under division (A)(1) of this section on or before	3009
the thirty-first day of March of the tax year;	3010

(3) One-half of the amount by which the estimated tax exceeds	3011
the amount paid under division (A)(1) of this section on or before	3012
the thirty-first day of May of the tax year.	3013

(B)(1) The reporting person for a taxpayer shall remit the	3014
estimated tax electronically as provided in division (D) of	3015
section 5726.03 of the Revised Code. Remittance shall be made	3016
payable to the treasurer of state.	3017

(2) The tax commissioner shall immediately forward to the	3018
treasurer of state all amounts received under this section, and	3019
the treasurer of state shall credit all payments of such estimated	3020
tax as provided in division (D) of section 5726.04 of the Revised	3021
Code.	3022

(C)(1) If a taxpayer was not subject to the tax imposed by	3023
section 5726.02 of the Revised Code for the preceding tax year,	3024
"estimated tax" for purposes of division (A)(1) of this section	3025
means ninety per cent of the qualifying net tax for the tax year.	3026
If a taxpayer was subject to the tax for the preceding tax year,	3027
"estimated tax" for purposes of division (A)(1) of this section	3028
means the lesser of one hundred per cent of the taxpayer's	3029
qualifying net tax for the preceding tax year or ninety per cent	3030
of the qualifying net tax for the tax year.	3031

(2) If the taxpayer did not file a report under section	3032
5726.02 of the Revised Code for the tax year or failed to prepare	3033
and file the report in good faith for the tax year, "qualifying	3034
net tax" as used in division (C)(1) of this section for that tax	3035
year means the amount described in division (C)(2)(a) of this	3036
section. Otherwise, "qualifying net tax" as used in division	3037
(C)(1) of this section for that tax year means the lesser of the	3038
amount described in division (C)(2)(a) or (b) of this section.	3039

(a) The tax imposed by section 5726.02 of the Revised Code	3040
for that tax year reduced by the credits listed in section 5726.98	3041
of the Revised Code. If the credits exceed the total tax, the	3042
qualifying net tax is the minimum tax.	3043

(b) The lesser of the tax shown on the report, prepared and	3044
filed in good faith, reduced by the credits shown on that report,	3045
or the tax shown on an amended report, prepared and filed in good	3046
faith, reduced by the credits shown on that amended report. If the	3047
credits shown exceed the total tax shown, the qualifying net tax	3048
is the minimum tax.	3049

Sec. 5726.07. (A) In the case of an underpayment of estimated	3050
taxes required to be paid under section 5726.06 of the Revised	3051
Code, interest upon the amount of underpayment, calculated at the	3052
rate per annum prescribed by section 5703.47 of the Revised Code	3053
for the period of underpayment, shall be added to the tax due for	3054
the tax year for which the estimated tax is paid.	3055

(B) The amount of underpayment upon which such interest is	3056
computed equals the amount by which division (B)(1) of this	3057
section exceeds division (B)(2) of this section.	3058

(1) The amount of the estimated tax payment that would be	3059
required to be paid if the total estimated tax due were equal to	3060
the amount of tax shown to be due on the annual report filed for	3061
the tax year or, if no report was filed, the total amount of tax	3062
due for the tax year;	3063

(2) The amount, if any, of the estimated tax that has been	3064
paid on or before the last day prescribed for such payment.	3065

(C) The period of underpayment for which such interest is	3066
computed shall run from the date the estimated tax payment was	3067
required to be made to the date the payment is made.	3068

For purposes of this section, a payment of estimated tax on	3069
any payment date shall be considered a payment of any previous	3070
underpayment only to the extent that such payment exceeds the	3071
amount of payment currently due.	3072

Sec. 5726.08. Except as otherwise provided in this section,	3073
if any report, claim, statement, or other document required to be	3074
filed, or any payment required to be made, within a prescribed	3075
period or on or before a prescribed date under this chapter is,	3076
after such period or date, delivered by United States mail to the	3077
agency, officer, or office with which such report, claim,	3078
statement, or other document is required to be filed, or to which	3079
such payment is required to be made, the date of the postmark	3080
stamped on the cover in which such report, claim, statement, or	3081
other document, or payment is mailed shall be deemed the date of	3082
delivery or the date of payment.	3083

If a payment is made electronically, the payment is	3084
considered to be made when the payment is received by the	3085
treasurer of state or credited to an account designated by the	3086
treasurer of state for the receipt of tax payments.	3087

As used in this section, "the date of the postmark" means, in	3088
the event there is more than one date on the cover, the earliest	3089
date imprinted on the cover by the post office.	3090

Sec. 5726.10. The tax commissioner shall enforce and	3091
administer this chapter. In addition to any other powers conferred	3092
upon the commissioner by law, the commissioner may do any of the	3093
following:	3094

(A) Prescribe all forms required to be filed pursuant to this	3095
chapter;	3096

(B) Promulgate such rules and regulations as the commissioner	3097
finds necessary to carry out this chapter;	3098

(C) Appoint and employ such personnel as are necessary to	3099
carry out the duties imposed upon the commissioner by this	3100
chapter.	3101

Sec. 5726.20. (A) The tax commissioner may make an	3102
assessment, based on any information in the commissioner's	3103
possession, against any person that fails to file a return or	3104
report or pay any tax as required by this chapter. The reporting	3105
person for a taxpayer shall file the annual report required under	3106
section 5726.02 of the Revised Code and remit the tax imposed by	3107
this chapter. Each person included in the annual report of the	3108
taxpayer is jointly and severally liable for the tax imposed by	3109
this chapter and any penalties and interest thereon. If the	3110
reporting person fails, for any reason, to file and remit any tax,	3111
the amount due may be collected by assessment against the	3112
reporting person and against any or all other persons required to	3113
be included in the annual report of the taxpayer in the manner	3114
provided by this section. The commissioner shall give the person	3115
assessed written notice of the assessment as provided in section	3116
5703.37 of the Revised Code. With the notice, the commissioner	3117
shall provide instructions on the manner in which to petition for	3118
reassessment and request a hearing with respect to the petition.	3119

(B) No assessment shall be made or issued against a person	3120
under this section more than four years after the later of the	3121
final date the report subject to assessment was required to be	3122
filed or the date such report was filed. Such time limit may be	3123
extended if both the person and the commissioner consent in	3124
writing to the extension or if an agreement waiving or extending	3125
the time limit has been entered into pursuant to section 122.171	3126
of the Revised Code. Any such extension shall extend the four-year	3127
time limit prescribed in division (A) of section 5726.30 of the	3128
Revised Code for the same period of time. There shall be no bar or	3129
limit to an assessment against a person that fails to file a	3130
report subject to assessment as required by this chapter, or that	3131
files a fraudulent report.	3132

(C) Unless the person assessed, within sixty days after	3133
service of the notice of assessment, files with the tax	3134
commissioner, either in person or by certified mail, a written	3135
petition for reassessment signed by the person or the person's	3136
authorized agent having knowledge of the facts, the assessment	3137
shall become final, and the amount of the assessment is due and	3138
payable from the person assessed to the treasurer of state. A	3139
petition shall indicate the objections of the person assessed, but	3140
additional objections may be raised in writing if received by the	3141
commissioner prior to the date shown on the final determination.	3142
If a petition for reassessment has been properly filed, the	3143
commissioner shall proceed under section 5703.60 of the Revised	3144
Code.	3145

(D)(1) After an assessment becomes final, if any portion of	3146
the assessment, including any accrued interest, remains unpaid, a	3147
certified copy of the tax commissioner's entry making the	3148
assessment final may be filed in the office of the clerk of the	3149
court of common pleas in the county in which the person resides or	3150
has its principal place of business in this state, or in the	3151
office of the clerk of court of common pleas of Franklin county.	3152

(2) Immediately upon the filing of the entry, the clerk shall	3153
enter judgment for the state against the person assessed in the	3154
amount shown on the entry. The judgment may be filed by the clerk	3155
in a loose-leaf book entitled, "special judgments for the	3156
financial institution tax" and shall have the same effect as other	3157
judgments. Execution shall issue upon the judgment at the request	3158
of the tax commissioner, and all laws applicable to sales on	3159
execution shall apply to sales made under the judgment.	3160

(3) The portion of the assessment not paid within sixty days	3161
after the day the assessment was issued shall bear interest at the	3162
rate per annum prescribed by section 5703.47 of the Revised Code	3163
from the date the tax commissioner issues the assessment until the	3164
date the assessment is paid. Interest shall be paid in the same	3165
manner as the tax and may be collected by the issuance of an	3166
assessment under this section.	3167

(E) If the tax commissioner believes that collection of the	3168
tax imposed by this chapter will be jeopardized unless proceedings	3169
to collect or secure collection of the tax are instituted without	3170
delay, the commissioner may issue a jeopardy assessment against	3171
the person liable for the tax. Immediately upon the issuance of	3172
the jeopardy assessment, the commissioner shall file an entry with	3173
the clerk of the court of common pleas in the manner prescribed by	3174
division (D) of this section. Notice of the jeopardy assessment	3175
shall be served on the person assessed or the person's authorized	3176
agent in the manner provided in section 5703.37 of the Revised	3177
Code within five days of the filing of the entry with the clerk.	3178
The total amount assessed shall be immediately due and payable,	3179
unless the person assessed files a petition for reassessment in	3180
accordance with division (C) of this section and provides security	3181
in a form satisfactory to the commissioner and in an amount	3182
sufficient to satisfy the unpaid balance of the assessment. Full	3183
or partial payment of the assessment shall not prejudice the	3184
commissioner's consideration of the petition for reassessment.	3185

(F) The tax commissioner shall immediately forward to the	3186
treasurer of state all amounts the commissioner receives under	3187
this section. Such amounts shall be considered as revenue arising	3188
from the tax imposed by this chapter.	3189

(G) If the tax commissioner possesses information indicating	3190
that the amount of tax a taxpayer is required to pay under this	3191
chapter exceeds the amount the reporting person for the taxpayer	3192
paid, the tax commissioner may audit a sample of the taxpayer's	3193
gross receipts over a representative period of time to ascertain	3194
the amount of tax due, and may issue an assessment based on the	3195
audit. The tax commissioner shall make a good faith effort to	3196
reach agreement with the taxpayer in selecting a representative	3197
sample. The tax commissioner may apply a sampling method only if	3198
the commissioner has prescribed the method by rule.	3199

(H) If the whereabouts of a person subject to this chapter is	3200
not known to the tax commissioner, the secretary of state is	3201
hereby deemed to be that person's agent for purposes of service of	3202
process or notice of any assessment, action, or proceedings	3203
instituted in this state against the person under this chapter.	3204
Such process or notice shall be served on such person by the	3205
commissioner or by an agent of the commissioner by leaving a true	3206
and attested copy of the process or notice at the office of the	3207
secretary of state at least fifteen days before the return day of	3208
such process or notice, and by sending a copy of the process or	3209
notice to such person by ordinary mail, with an endorsement	3210
thereon of the service upon the secretary of state, addressed to	3211
such person at the person's last known address.	3212

Sec. 5726.21. (A) In addition to any other penalty imposed by	3213
this chapter or Chapter 5703. of the Revised Code, the following	3214
penalties shall apply:	3215

(1) If a taxpayer required to file any report under this	3216
chapter fails to make and file the report within the time	3217
prescribed, including any extensions of time granted by the tax	3218
commissioner, a penalty may be imposed not exceeding the greater	3219
of fifty dollars per month or fraction of a month, not to exceed	3220
five hundred dollars, or five per cent per month or fraction of a	3221
month, not to exceed fifty per cent of the tax required to be	3222
shown on the report, for each month or fraction of a month	3223
elapsing between the due date, including extensions of the due	3224
date, and the date on which the report is filed.	3225

(2) If a taxpayer fails to pay the amount of tax required to	3226
be paid under this chapter, except for estimated tax under section	3227
5726.06 of the Revised Code, by the dates prescribed in this	3228
chapter for payment, a penalty may be imposed not exceeding	3229
fifteen per cent of the delinquent payment.	3230

(3) If a taxpayer files what purports to be a report required	3231
by this chapter that does not contain information upon which the	3232
substantial correctness of the report may be judged or contains	3233
information that on its face indicates that the report is	3234
substantially incorrect, and the filing of the report in that	3235
manner is due to a position that is frivolous or a desire that is	3236
apparent from the report to delay or impede the administration of	3237
the tax levied under this chapter, a penalty of up to five hundred	3238
dollars may be imposed.	3239

(4) If a taxpayer makes a fraudulent attempt to evade the	3240
reporting or payment of the tax required to be shown on any report	3241
required under this chapter, a penalty may be imposed not	3242
exceeding the greater of one thousand dollars or one hundred per	3243
cent of the tax required to be shown on the report.	3244

(5) If a taxpayer makes a false or fraudulent claim for a	3245
refund under this chapter, a penalty may be imposed not exceeding	3246
the greater of one thousand dollars or one hundred per cent of the	3247
claim.	3248

(B) The tax commissioner may collect any penalty imposed by	3249
this section in the same manner as the tax levied under this	3250
chapter. Penalties so collected shall be considered as revenue	3251
arising from the tax levied under this chapter.	3252

(C) For purposes of this section, the tax required to be	3253
shown on the report shall be reduced by the amount of any part of	3254
the tax paid on or before the date, including extensions of the	3255
date, prescribed for filing the report.	3256

(D) The tax commissioner may abate all or a portion of any	3257
penalties imposed under this section and may adopt rules governing	3258
such abatements.	3259

Sec. 5726.30. (A) The tax commissioner shall refund the	3260
amount of taxes imposed under this chapter that a person overpaid,	3261
paid illegally or erroneously, or paid on an illegal or erroneous	3262
assessment. The person shall file an application for refund with	3263
the tax commissioner, on the form prescribed by the commissioner,	3264
within four years after the date of the illegal or erroneous	3265
payment of the tax, or within any additional period allowed under	3266
division (B) of section 5726.20 of the Revised Code. The applicant	3267
shall provide the amount of the requested refund along with the	3268
claimed reasons for, and documentation to support, the issuance of	3269
a refund.	3270

For purposes of this division, a payment that an applicant	3271
made before the due date or extended due date for filing the	3272
report to which the payment relates shall be deemed to have been	3273
made on the due date or extended due date of the report.	3274

(B) Upon the filing of a refund application, the tax	3275
commissioner shall determine the amount of refund to which the	3276
applicant is entitled. If the amount is not less than that	3277
claimed, the commissioner shall certify the amount to the director	3278
of budget and management and treasurer of state for payment from	3279
the tax refund fund created under section 5703.052 of the Revised	3280
Code. If the amount is less than that claimed, the commissioner	3281
shall proceed in accordance with section 5703.70 of the Revised	3282
Code.	3283

(C)(1) Except as provided in division (C)(2) of this section,	3284
interest on a refund applied for under this section, computed at	3285
the rate provided for in section 5703.47 of the Revised Code,	3286
shall be allowed from the later of the date the tax was paid or	3287
the date the tax payment was due until the refund is paid.	3288

(2) No interest shall be allowed under this section on an	3289
amount refunded to a person to the extent that the refund results	3290
from the allowance of a refundable credit against the tax imposed	3291
by section 5726.02 of the Revised Code.	3292

Sec. 5726.31. As used in this section, "debt to this state"	3293
means unpaid taxes due the state, unpaid workers' compensation	3294
premiums due under section 4123.35 of the Revised Code, unpaid	3295
unemployment compensation contributions due under section 4141.25	3296
of the Revised Code, unpaid unemployment compensation payments in	3297
lieu of contributions due under section 4141.241 of the Revised	3298
Code, unpaid claims certified under section 131.02 or 131.021 of	3299
the Revised Code, unpaid fees payable to the state or to the clerk	3300
of courts pursuant to section 4505.06 of the Revised Code or any	3301
unpaid charge, penalty, or interest arising from any of the	3302
foregoing.	3303

If a person entitled to a refund under section 5726.30 of the	3304
Revised Code owes any debt to this state, the amount refundable	3305
may be applied in satisfaction of the debt. If the amount	3306
refundable is less than the amount of the debt, it may be applied	3307
in partial satisfaction of the debt. If the amount refundable is	3308
greater than the amount of the debt, the amount remaining after	3309
satisfaction of the debt shall be refunded. If the taxpayer has	3310
more than one such debt, any debt subject to section 5739.33 or	3311
division (G) of section 5747.07 of the Revised Code shall be	3312
satisfied first.	3313

Except as provided in section 131.021 of the Revised Code,	3314
this section applies only to debts that have become final. For the	3315
purposes of this section, a debt becomes final when, under the	3316
applicable law, any time provided for petition for reassessment,	3317
request for reconsideration, or other appeal of the legality or	3318
validity of the amount giving rise to the debt expires without an	3319
appeal having been filed in the manner provided by law.	3320

The tax commissioner may charge each respective agency of the	3321
state for the commissioner's cost in applying refunds to debts due	3322
to the state and may charge the attorney general for the	3323
commissioner's cost in applying refunds to certified claims. The	3324
commissioner may promulgate rules to implement this section.	3325

The commissioner may, with the consent of the reporting	3326
person for a taxpayer, provide for the crediting of the amount of	3327
any refund due to the taxpayer under this chapter for a tax year	3328
against the tax due for any succeeding tax year.	3329

Sec. 5726.32.  If any tax due under this chapter is not paid	3330
on or before the date prescribed for its payment, interest shall	3331
be assessed, collected, and paid, in the same manner as the tax,	3332
upon such unpaid amount at the rate per annum prescribed by	3333
section 5703.47 of the Revised Code from the date prescribed for	3334
the payment of the tax until the date the tax is paid or the date	3335
an assessment is issued under section 5726.20 of the Revised Code,	3336
whichever is earlier. Interest so collected shall be considered as	3337
revenue arising from the tax imposed by this chapter.	3338

Sec. 5726.33. (A) As used in this section, "qualifying refund	3339
overpayment" means an amount received by a taxpayer in excess of a	3340
refund claimed or a request for payment made by the reporting	3341
person for the taxpayer on a return, report, or other document	3342
filed with the tax commissioner.	3343

(B) A taxpayer is not liable for any interest or penalty with	3344
respect to the repayment of a qualifying refund overpayment if the	3345
reporting person for the taxpayer pays the entire amount of the	3346
qualifying refund overpayment to the commissioner not later than	3347
thirty days after the taxpayer receives an assessment for the	3348
amount. If the reporting person does not pay the entire amount of	3349
the overpayment to the commissioner within the time prescribed by	3350
this section, interest shall accrue on the amount of the	3351
deficiency pursuant to section 5726.32 of the Revised Code from	3352
the date the commissioner issues the assessment until the date the	3353
deficiency is paid.	3354

Sec. 5726.36. (A) A person shall notify the tax commissioner	3355
when the person is no longer subject to the tax imposed by this	3356
chapter.	3357

(B) If the ownership structure of a financial institution	3358
changes such that a person is no longer includable in the annual	3359
report of the financial institution, the reporting person for the	3360
financial institution shall notify the commissioner of the change	3361
when the reporting person files its next annual report or in	3362
writing prior to the due date of that report.	3363

Sec. 5726.40. If a person, wherever organized, doing business	3364
in this state or owning or issuing all or part of the entity's	3365
capital or property in this state, and required by law to file any	3366
report or return or to pay any tax or fee under Title LVII of the	3367
Revised Code, fails or neglects to make such report or return or	3368
to pay any such tax or fee for ninety days after the time	3369
prescribed by law for making such report or return or for paying	3370
such tax or fee, the tax commissioner shall certify such fact to	3371
the secretary of state. The secretary of state shall thereupon	3372
cancel the document of creation authorizing the person to do	3373
business in this state. Upon such cancellation, all of the powers,	3374
privileges, and franchises conferred upon that person by its	3375
document of creation shall cease, subject to section 1701.88 of	3376
the Revised Code. The secretary of state shall immediately notify	3377
the person of the action taken by the secretary, and shall also	3378
forward for filing a certificate of the action so taken to the	3379
county recorder of the county in which the principal place of	3380
business of the person in this state is located. No fee shall be	3381
charged for the filing.	3382

Sec. 5726.41. No person shall exercise, or attempt to	3383
exercise, any powers, privileges, or franchises under the person's	3384
document of creation after the document is canceled pursuant to	3385
section 5726.40 of the Revised Code. A penalty of one hundred	3386
dollars shall be imposed for each day a violation of this section	3387
occurs, up to a maximum penalty of five thousand dollars.	3388

Sec. 5726.42. (A)(1) A person whose document of creation has	3389
been canceled by the secretary of state pursuant to section	3390
5726.40 the Revised Code shall be reinstated and again entitled to	3391
exercise its rights, privileges, and franchises in this state upon	3392
compliance with all of the following:	3393

(a) Filing with the secretary of state a certificate from the	3394
tax commissioner that the person has complied with all the	3395
requirements of law as to tax reports and paid all taxes, fees, or	3396
penalties due thereon for every year of delinquency;	3397

(b) Payment to the secretary of state of any additional fees	3398
and penalties required to be paid to the secretary of state;	3399

(c) Payment to the secretary of state of an additional fee of	3400
ten dollars.	3401

Upon the person's compliance with this division, the	3402
secretary of state shall cancel the entry of cancellation filed	3403
under section 5726.40 of the Revised Code.	3404

(2) If a reinstatement is not made within one year from the	3405
date of cancellation of the document of creation, and if it	3406
appears that a document of creation has been issued to a person of	3407
the same or similar name as the applicant for reinstatement, the	3408
secretary of state shall require, as a condition prerequisite to	3409
such reinstatement, that the applicant amend its document of	3410
creation by changing the applicant's name.	3411

(B) Any officer, shareholder, creditor, or receiver of a	3412
person may at any time take all steps required by this section to	3413
effect a reinstatement.	3414

(C) The rights, privileges, and franchises of a person whose	3415
document of creation has been reinstated in accordance with this	3416
section are subject to section 1701.922 of the Revised Code.	3417

(D) Notwithstanding a violation of section 5726.41 of the	3418
Revised Code, upon reinstatement of a person's document of	3419
creation in accordance with this section, neither section 5726.40	3420
nor section 5726.41 of the Revised Code shall be applied to	3421
invalidate the exercise or attempt to exercise any right,	3422
privilege, or franchise on behalf of the person by an officer,	3423
agent, or employee of the person after cancellation and prior to	3424
the reinstatement of the document of creation, if the conditions	3425
set forth in divisions (B)(1)(a) and (b) of section 1701.922 of	3426
the Revised Code are met.	3427

Sec. 5726.43. If any financial institution fails to make and	3428
file any return or report required under this chapter, or to pay	3429
the penalties provided by law for failure to make and file such	3430
reports or returns, for a period of ninety days after the time	3431
prescribed by law, the attorney general, on the request of the tax	3432
commissioner, shall commence an action in quo warranto in the	3433
court of appeals of the county in which the reporting person for	3434
the financial institution has its principal place of business in	3435
this state to forfeit and annul the privileges and franchises of	3436
each person included in the annual report of the financial	3437
institution. If the court is satisfied that any such financial	3438
institution is in default, it shall render judgment ousting each	3439
person included in the annual report of the financial institution	3440
from the exercise of its privileges and franchises within this	3441
state, and shall otherwise proceed as provided in sections 2733.01	3442
to 2733.39 of the Revised Code.	3443

Sec. 5726.50. (A) A taxpayer may claim a refundable tax	3444
credit against the tax imposed under this chapter for each person	3445
included in the annual report of the taxpayer that is granted a	3446
credit by the tax credit authority under section 122.17 or	3447
division (B)(2) or (3) of section 122.171 of the Revised Code.	3448
Such a credit shall not be claimed for any tax year following the	3449
calendar year in which a relocation of employment positions occurs	3450
in violation of an agreement entered into under section 122.171 of	3451
the Revised Code. For the purpose of making tax payments under	3452
this chapter, taxes equal to the amount of the refundable credit	3453
shall be considered to be paid on the first day of the tax year.	3454

(B) A taxpayer may claim a nonrefundable tax credit against	3455
the tax imposed under this chapter for each person included in the	3456
annual report of the taxpayer that is granted a credit by the tax	3457
credit authority under division (B)(1) of section 122.171 of the	3458
Revised Code. A taxpayer may claim against the tax imposed by this	3459
chapter any unused portion of the credits authorized under	3460
division (B) of section 5733.0610 of the Revised Code.	3461

(C) The credits authorized in divisions (A) and (B) of this	3462
section shall be claimed in the order required under section	3463
5726.98 of the Revised Code. If the amount of a credit authorized	3464
in division (A) of this section exceeds the tax otherwise due	3465
under section 5726.02 of the Revised Code after deducting all	3466
other credits preceding the credit in the order prescribed in	3467
section 5726.98 of the Revised Code, the excess shall be refunded	3468
to the taxpayer.	3469

Sec. 5726.51. A taxpayer may claim a nonrefundable credit	3470
against the tax imposed under this chapter for each bank	3471
organization that is organized under Title XI of the Revised Code	3472
and included in the annual report of the taxpayer. The credit	3473
shall equal the sum of the annual assessments such bank	3474
organizations paid during the taxable year to the division of	3475
financial institutions pursuant to Title XI of the Revised Code	3476
and the schedule of fees published by the division. A taxpayer may	3477
claim against the tax imposed by this chapter any unused portion	3478
of the credits authorized under section 5733.063 of the Revised	3479
Code.	3480

The credit authorized by this section shall be claimed in the	3481
order required under section 5726.98 of the Revised Code. The	3482
credit shall not be allowed unless there is filed with the	3483
taxpayer's annual report a document certified by the division of	3484
financial institutions verifying the amount of state annual	3485
assessment fees and federal supervisory fees paid by the bank	3486
organizations during the taxable year.	3487

Sec. 5726.52. (A) As used in this section, "certificate	3488
owner" has the same meaning as in section 149.311 of the Revised	3489
Code.	3490

(B) A taxpayer may claim a refundable credit against the tax	3491
imposed by this chapter for each person included in the annual	3492
report of a taxpayer that is a certificate owner of a	3493
rehabilitation tax credit certificate issued under section 149.311	3494
of the Revised Code. The credit shall equal twenty-five per cent	3495
of the dollar amount indicated on each certificate, but shall not	3496
exceed five million dollars for each certificate.	3497

The credit shall be claimed for the calendar year specified	3498
in the certificate and in the order required under section 5726.98	3499
of the Revised Code. If the credit exceeds the amount of tax	3500
otherwise due in that year, the excess shall be refunded to the	3501
taxpayer, provided that, if any amount of the credit is refunded,	3502
the sum of the amount refunded and the amount applied to reduce	3503
the tax otherwise due in that year shall not exceed three million	3504
dollars. The taxpayer may carry forward any balance of the credit	3505
in excess of the amount claimed in that year for not more than	3506
five ensuing years, and shall deduct any amount claimed in any	3507
such year from the amount claimed in an ensuing year. A taxpayer	3508
may claim against the tax imposed by this chapter any unused	3509
portion of the credit authorized under section 5725.151 of the	3510
Revised Code, but only to the extent of the five-year carry	3511
forward period authorized by that section.	3512

(C) A taxpayer claiming a credit under this section shall	3513
retain the rehabilitation tax credit certificate for four years	3514
following the end of the year to which the credit was applied, and	3515
shall make the certificate available for inspection by the tax	3516
commissioner upon the request of the commissioner during that	3517
period.	3518

Sec. 5726.53. A taxpayer may claim a refundable credit	3519
against the tax imposed by this chapter for each person included	3520
in the annual report of the taxpayer that was issued a tax credit	3521
certificate by the Ohio venture capital authority under section	3522
150.07 of the Revised Code. The amount of the credit shall equal	3523
the amount specified in the tax credit certificate. The credit	3524
shall be claimed for the tax year specified in the tax credit	3525
certificate. The taxpayer shall claim the credit in the order	3526
required under section 5726.98 of the Revised Code. If the credit	3527
amount exceeds the tax otherwise due under section 5726.02 of the	3528
Revised Code after deducting all other credits preceding the	3529
credit in the order prescribed in section 5726.98 of the Revised	3530
Code, the excess shall be refunded to the taxpayer.	3531

Sec. 5726.54. (A) Any term used in this section has the same	3532
meaning as in section 5725.33 of the Revised Code.	3533

(B) A taxpayer may claim a nonrefundable credit against the	3534
tax imposed by this chapter for each person included in the annual	3535
report of the taxpayer that holds a qualified equity investment on	3536
a credit allowance date occurring in the calendar year immediately	3537
preceding the tax year for which the tax is due. The credit shall	3538
be computed in the same manner prescribed for the computation of	3539
credits allowed under section 5725.33 of the Revised Code.	3540

By claiming a tax credit under this section, a taxpayer	3541
waives its rights under section 5726.20 of the Revised Code with	3542
respect to the time limitation for the assessment of taxes as it	3543
relates to credits claimed under this section that later become	3544
subject to recapture under division (D) of this section.	3545

A taxpayer may claim against the tax imposed by this chapter	3546
any unused portion of the credits authorized under sections	3547
5725.33 and 5733.58 of the Revised Code, but only to the extent of	3548
the remaining carry forward period authorized by those sections.	3549

The credit shall be claimed in the order prescribed by	3550
section 5726.98 of the Revised Code. If the amount of the credit	3551
exceeds the amount of tax otherwise due after deducting all other	3552
credits preceding the credit in the order prescribed in section	3553
5726.98 of the Revised Code, the excess may be carried forward for	3554
not more than four ensuing tax years.	3555

(C) The total amount of qualified equity investments on the	3556
basis of which credits may be claimed under this section and	3557
sections 5725.33, 5729.16, and 5733.58 of the Revised Code is	3558
subject to the limitation of division (C) of section 5725.33 of	3559
the Revised Code.	3560

(D) If any amount of the federal tax credit allowed for a	3561
qualified equity investment for which a credit was received under	3562
this section is recaptured under section 45D of the Internal	3563
Revenue Code, or if the director of development services	3564
determines that an investment for which a tax credit is claimed	3565
under this section is not a qualified equity investment or that	3566
the proceeds of an investment for which a tax credit is claimed	3567
under this section are used to make qualified low-income community	3568
investments other than in a qualified active low-income community	3569
business, all or a portion of the credit received on account of	3570
that investment shall be paid by the taxpayer that received the	3571
credit to the tax commissioner. The amount to be recovered shall	3572
be determined by the director pursuant to rules adopted under	3573
section 5725.33 of the Revised Code. The director shall certify	3574
any amount due under this division to the tax commissioner, and	3575
the commissioner shall notify the taxpayer of the amount due. The	3576
amount due is payable not later than thirty days after the day the	3577
commissioner issues the notice. The amount due shall be considered	3578
to be tax due under section 5726.02 of the Revised Code, and may	3579
be collected by assessment without regard to the limitations	3580
imposed under section 5726.20 of the Revised Code for the	3581
assessment of taxes by the commissioner. All amounts collected	3582
under this division shall be credited as revenue from the tax	3583
levied under section 5726.02 of the Revised Code.	3584

Sec. 5726.55. (A) Any term used in this section has the same	3585
meaning as in section 122.85 of the Revised Code.	3586

(B) A taxpayer may claim a refundable credit against the tax	3587
imposed under this chapter for each person included in the annual	3588
report of the taxpayer that is a certificate owner of a tax credit	3589
certificate issued under section 122.85 of the Revised Code. The	3590
credit shall be claimed for the taxable year in which the	3591
certificate is issued by the director of development services. The	3592
credit amount equals the amount stated in the certificate. The	3593
credit shall be claimed in the order required under section	3594
5726.98 of the Revised Code. If the credit amount exceeds the tax	3595
otherwise due under section 5726.02 of the Revised Code after	3596
deducting all other credits preceding the credit in the order	3597
prescribed in section 5726.98 of the Revised Code, the excess	3598
shall be refunded to the taxpayer.	3599

(C) Nothing in this section shall allow a taxpayer to claim	3600
more than one credit per tax credit-eligible production.	3601

Sec. 5726.56. (A) As used in this section, "qualified	3602
research expenses" has the same meaning as in section 41 of the	3603
Internal Revenue Code.	3604

(B) A taxpayer may claim a nonrefundable credit against the	3605
tax imposed under this chapter equal to seven per cent of the	3606
excess of (1) the qualified research expenses incurred by the	3607
taxpayer in this state in a taxable year over (2) the average	3608
annual qualified research expenses incurred by the taxpayer in	3609
this state in the three previous taxable years. For the purposes	3610
of this division, "qualified research expenses incurred by the	3611
taxpayer" includes the qualified research expenses incurred by all	3612
persons included in the annual report of the taxpayer and by any	3613
insurance company subject to the tax levied under section 5725.18	3614
or Chapter 5729. of the Revised Code that has more than fifty per	3615
cent of its ownership interests directly or indirectly owned or	3616
controlled by a person included in the annual report of the	3617
taxpayer, even though such an insurance company is not subject to	3618
the tax imposed under this chapter.	3619

(C) A taxpayer shall claim the credit allowed under this	3620
section in the order prescribed by section 5726.98 of the Revised	3621
Code. If the amount of the credit exceeds the amount of tax	3622
otherwise due after deducting all other credits preceding the	3623
credit in the order prescribed in section 5726.98 of the Revised	3624
Code, the excess may be carried forward for not more than seven	3625
ensuing tax years. The amount of the excess credit claimed in any	3626
such year shall be deducted from the balance carried forward to	3627
the next tax year.	3628

(D) A taxpayer may claim against the tax imposed under this	3629
chapter any unused portion of a credit authorized under section	3630
5733.351 of the Revised Code but only to the extent of the	3631
remaining portion of the seven-year carry-forward period	3632
authorized by that section.	3633

Sec. 5726.57. (A) As used in this section, "qualifying dealer	3634
in intangibles" means a dealer in intangibles that is a member of	3635
a qualifying controlled group of which a financial institution is	3636
also a member on the first day of the financial institution's tax	3637
year.	3638

(B) For tax year 2014 there is hereby allowed to each	3639
financial institution a nonrefundable credit against the tax	3640
imposed by section 5726.02 of the Revised Code. The amount of the	3641
credit shall be computed in accordance with division (C) of this	3642
section. The credit shall be claimed in the order prescribed by	3643
section 5726.98 of the Revised Code. The credit shall not exceed	3644
the amount of tax otherwise due under section 5726.02 of the	3645
Revised Code after deducting any other credits that precede the	3646
credit claimed under this section in that order.	3647

(C) Subject to division (D) of this section, the amount of	3648
the credit equals the lesser of the amount described in division	3649
(C)(1) of this section or in division (C)(2) of this section.	3650

(1) The amount of tax that a qualifying dealer in intangibles	3651
paid under Chapter 5707. of the Revised Code during the calendar	3652
year immediately preceding the financial institution's tax year.	3653
Such amount shall be reduced, but not below zero, by any refunds	3654
of such tax received by the qualifying dealer in intangibles under	3655
Chapter 5703. of the Revised Code during that calendar year.	3656

(2) The product of the amounts described in divisions	3657
(C)(2)(a) to (c) of this section.	3658

(a) The cost of the financial institution's direct investment	3659
in the capital stock of the qualifying dealer in intangibles	3660
calculated on the last day of the financial institution's taxable	3661
year immediately preceding the tax year;	3662

(b) The ratio described in section 5725.15 of the Revised	3663
Code for the calendar year immediately preceding the financial	3664
institution's tax year;	3665

(c) The tax rate imposed under division (D) of section	3666
5707.03 of the Revised Code for the calendar year immediately	3667
preceding the financial institution's tax year.	3668

(D)(1) The principles and concepts described in section	3669
5733.057 of the Revised Code shall apply in determining whether a	3670
dealer in intangibles is a member of a qualifying controlled group	3671
of which the financial institution also is a member and to	3672
ascertain the cost of the financial institution's direct	3673
investment in the capital stock of the qualifying dealer in	3674
intangibles.	3675

(2) Notwithstanding section 5703.56 of the Revised Code to	3676
the contrary, a financial institution claiming the credit provided	3677
by this section has the burden to establish by a preponderance of	3678
the evidence that the doctrines enumerated in that section would	3679
not apply to deny to the financial institution all or a part of	3680
the credit otherwise provided by this section.	3681

Sec. 5726.98. (A) To provide a uniform procedure for	3682
calculating the amount of tax due under section 5726.02 of the	3683
Revised Code, a taxpayer shall claim any credits to which the	3684
taxpayer is entitled under this chapter in the following order:	3685

(1) The bank organization assessment credit under section	3686
5726.51 of the Revised Code;	3687

(2) The nonrefundable job retention credit under division (B)	3688
of section 5726.50 of the Revised Code;	3689

(3) The nonrefundable credit for purchases of qualified	3690
low-income community investments under section 5726.54 of the	3691
Revised Code;	3692

(4) The nonrefundable credit for qualified research expenses	3693
under section 5726.56 of the Revised Code;	3694

(5) The nonrefundable credit for qualifying dealer in	3695
intangibles taxes under section 5726.57 of the Revised Code.	3696

(6) The refundable credit for rehabilitating an historic	3697
building under section 5726.52 of the Revised Code;	3698

(7) The refundable job retention or job creation credit under	3699
division (A) of section 5726.50 of the Revised Code;	3700

(8) The refundable credit under section 5726.53 of the	3701
Revised Code for losses on loans made under the Ohio venture	3702
capital program under sections 150.01 to 150.10 of the Revised	3703
Code;	3704

(9) The refundable motion picture production credit under	3705
section 5726.55 of the Revised Code.	3706

(B) For any credit except the refundable credits enumerated	3707
in this section, the amount of the credit for a taxable year shall	3708
not exceed the tax due after allowing for any other credit that	3709
precedes it in the order required under this section. Any excess	3710
amount of a particular credit may be carried forward if authorized	3711
under the section creating that credit. Nothing in this chapter	3712
shall be construed to allow a taxpayer to claim, directly or	3713
indirectly, a credit more than once for a taxable year.	3714

Sec. 5726.99. Whoever violates section 5726.41 of the Revised	3715
Code shall be fined not less than one hundred dollars or more than	3716
one thousand dollars.	3717

Sec. 5733.01.  (A) The tax provided by this chapter for	3718
domestic corporations shall be the amount charged against each	3719
corporation organized for profit under the laws of this state and	3720
each nonprofit corporation organized pursuant to Chapter 1729. of	3721
the Revised Code, except as provided in sections 5733.09 and	3722
5733.10 of the Revised Code, for the privilege of exercising its	3723
franchise during the calendar year in which that amount is	3724
payable, and the tax provided by this chapter for foreign	3725
corporations shall be the amount charged against each corporation	3726
organized for profit and each nonprofit corporation organized or	3727
operating in the same or similar manner as nonprofit corporations	3728
organized under Chapter 1729. of the Revised Code, under the laws	3729
of any state or country other than this state, except as provided	3730
in sections 5733.09 and 5733.10 of the Revised Code, for the	3731
privilege of doing business in this state, owning or using a part	3732
or all of its capital or property in this state, holding a	3733
certificate of compliance with the laws of this state authorizing	3734
it to do business in this state, or otherwise having nexus in or	3735
with this state under the Constitution of the United States,	3736
during the calendar year in which that amount is payable.	3737

(B) A corporation is subject to the tax imposed by section	3738
5733.06 of the Revised Code for each calendar year prior to 2014	3739
that it is so organized, doing business, owning or using a part or	3740
all of its capital or property, holding a certificate of	3741
compliance, or otherwise having nexus in or with this state under	3742
the Constitution of the United States, on the first day of January	3743
of that calendar year. No credit authorized by this chapter may be	3744
claimed for tax year 2014 or any tax year thereafter.	3745

(C) Any corporation subject to this chapter that is not	3746
subject to the federal income tax shall file its returns and	3747
compute its tax liability as required by this chapter in the same	3748
manner as if that corporation were subject to the federal income	3749
tax.	3750

(D) For purposes of this chapter, a federally chartered	3751
financial institution shall be deemed to be organized under the	3752
laws of the state within which its principal office is located.	3753

(E) For purposes of this chapter, any person, as defined in	3754
section 5701.01 of the Revised Code, shall be treated as a	3755
corporation if the person is classified for federal income tax	3756
purposes as an association taxable as a corporation, and an equity	3757
interest in the person shall be treated as capital stock of the	3758
person.	3759

(F) For the purposes of this chapter, "disregarded entity"	3760
has the same meaning as in division (D) of section 5745.01 of the	3761
Revised Code.	3762

(1) A person's interest in a disregarded entity, whether held	3763
directly or indirectly, shall be treated as the person's ownership	3764
of the assets and liabilities of the disregarded entity, and the	3765
income, including gain or loss, shall be included in the person's	3766
net income under this chapter.	3767

(2) Any sale, exchange, or other disposition of the person's	3768
interest in the disregarded entity, whether held directly or	3769
indirectly, shall be treated as a sale, exchange, or other	3770
disposition of the person's share of the disregarded entity's	3771
underlying assets or liabilities, and the gain or loss from such	3772
sale, exchange, or disposition shall be included in the person's	3773
net income under this chapter.	3774

(3) The disregarded entity's payroll, property, and sales	3775
factors shall be included in the person's factors.	3776

(G) The tax a corporation is required to pay under this	3777
chapter shall be as follows:	3778

(1)(a) For financial institutions, the greater of the minimum	3779
payment required under division (E) of section 5733.06 of the	3780
Revised Code or the difference between all taxes charged the	3781
financial institution under this chapter, without regard to	3782
division (G)(2) of this section, less any credits allowable	3783
against such tax.	3784

(b) A corporation satisfying the description in division	3785
(E)(5), (6), (7), (8), or (10) of section 5751.01 of the Revised	3786
Code, as that section existed before its amendment by H.B. 510 of	3787
the 129th general assembly, that is not a financial institution,	3788
insurance company, or dealer in intangibles is subject to the	3789
taxes imposed under this chapter as a corporation and not subject	3790
to tax as a financial institution, and shall pay the greater of	3791
the minimum payment required under division (E) of section 5733.06	3792
of the Revised Code or the difference between all the taxes	3793
charged under this chapter, without regard to division (G)(2) of	3794
this section, less any credits allowable against such tax.	3795

(2) For all corporations other than those persons described	3796
in division (G)(1)(a) or (b) of this section, the amount under	3797
division (G)(2)(a) of this section applicable to the tax year	3798
specified less the amount under division (G)(2)(b) of this	3799
section:	3800

(a)(i) For tax year 2005, the greater of the minimum payment	3801
required under division (E) of section 5733.06 of the Revised Code	3802
or the difference between all taxes charged the corporation under	3803
this chapter and any credits allowable against such tax;	3804

(ii) For tax year 2006, the greater of the minimum payment	3805
required under division (E) of section 5733.06 of the Revised Code	3806
or four-fifths of the difference between all taxes charged the	3807
corporation under this chapter and any credits allowable against	3808
such tax, except the qualifying pass-through entity tax credit	3809
described in division (A)(30) and the refundable credits described	3810
in divisions (A)(31) to (35) of section 5733.98 of the Revised	3811
Code;	3812

(iii) For tax year 2007, the greater of the minimum payment	3813
required under division (E) of section 5733.06 of the Revised Code	3814
or three-fifths of the difference between all taxes charged the	3815
corporation under this chapter and any credits allowable against	3816
such tax, except the qualifying pass-through entity tax credit	3817
described in division (A)(30) and the refundable credits described	3818
in divisions (A)(31) to (35) of section 5733.98 of the Revised	3819
Code;	3820

(iv) For tax year 2008, the greater of the minimum payment	3821
required under division (E) of section 5733.06 of the Revised Code	3822
or two-fifths of the difference between all taxes charged the	3823
corporation under this chapter and any credits allowable against	3824
such tax, except the qualifying pass-through entity tax credit	3825
described in division (A)(30) and the refundable credits described	3826
in divisions (A)(31) to (35) of section 5733.98 of the Revised	3827
Code;	3828

(v) For tax year 2009, the greater of the minimum payment	3829
required under division (E) of section 5733.06 of the Revised Code	3830
or one-fifth of the difference between all taxes charged the	3831
corporation under this chapter and any credits allowable against	3832
such tax, except the qualifying pass-through entity tax credit	3833
described in division (A)(30) and the refundable credits described	3834
in divisions (A)(31), (32), (33), and (34) of section 5733.98 of	3835
the Revised Code;	3836

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

3837

(b) A corporation shall subtract from the amount calculated	3838
under division (G)(2)(a)(ii), (iii), (iv), or (v) of this section	3839
any qualifying pass-through entity tax credit described in	3840
division (A)(30) and any refundable credits described in divisions	3841
(A)(31) to (35) of section 5733.98 of the Revised Code to which	3842
the corporation is entitled. Any unused qualifying pass-through	3843
entity tax credit is not refundable.	3844

(c) For the purposes of computing the amount of a credit that	3845
may be carried forward to a subsequent tax year under division	3846
(G)(2) of this section, a credit is utilized against the tax for a	3847
tax year to the extent the credit applies against the tax for that	3848
tax year, even if the difference is then multiplied by the	3849
applicable fraction under division (G)(2)(a) of this section.	3850

(3) Nothing in division (G) of this section eliminates or	3851
reduces the tax imposed by section 5733.41 of the Revised Code on	3852
a qualifying pass-through entity.	3853

Sec. 5733.02.  Annually, for tax years prior to tax year	3854
2014, between the first day of January and the thirty-first day of	3855
March or on or before the date as extended under section 5733.13	3856
of the Revised Code, each taxpayer shall make a report in writing	3857
to the tax commissioner in such form as the tax commissioner	3858
prescribes, and shall remit to the commissioner, with the	3859
remittance made payable to the treasurer of state, the amount of	3860
the tax as shown to be due by such report less the amount paid for	3861
the year on a declaration of estimated tax report filed by the	3862
taxpayer as provided by section 5733.021 of the Revised Code.	3863
Remittance shall be made in the form prescribed by the	3864
commissioner, including electronic funds transfer if required by	3865
section 5733.022 of the Revised Code.	3866

The commissioner shall furnish corporations, on request,	3867
copies of the forms prescribed by the commissioner for the purpose	3868
of making such report. A domestic corporation shall not dissolve,	3869
and a foreign corporation shall not withdraw or retire from	3870
business in Ohio, on or after the first day of January in any year	3871
prior to 2014 without making a franchise tax report to the	3872
commissioner and paying or securing the tax charged for the year	3873
in which such dissolution or withdrawal occurs.	3874

The annual corporation report shall be signed by the	3875
president, vice-president, secretary, treasurer, general manager,	3876
superintendent, or managing agent in this state of such	3877
corporation. If a domestic corporation has not completed its	3878
organization, its annual report shall be signed by one of its	3879
incorporators.	3880

The report shall contain the facts, figures, computations,	3881
and attachments that result in the tax charged by this chapter and	3882
determined in the manner provided within the chapter.	3883

Sec. 5733.021.  (A) Each taxpayer that does not in January of	3884
any year prior to 2014 file the report and make the payment	3885
required by section 5733.02 of the Revised Code shall make and	3886
file a declaration of estimated tax report for the tax year.	3887

The declaration of estimated tax report shall be filed with	3888
the tax commissioner on or before the last day of January in such	3889
form as prescribed by the tax commissioner, and shall reflect an	3890
estimate of the total amount due under this chapter for the tax	3891
year.	3892

(B) A taxpayer required to file a declaration of estimated	3893
tax report shall make remittance of such estimated tax to the tax	3894
commissioner as follows:	3895

(1) The entire estimated tax at the time of filing the	3896
declaration of estimated tax report, if such estimated tax is not	3897
in excess of the minimum tax as provided in section 5733.06 of the	3898
Revised Code;	3899

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

3900

(a) One-third of the estimated tax at the time of filing the	3901
declaration of estimated tax report;	3902

(b) Two-thirds of the estimated tax on or before the last day	3903
of March of the tax year, if the report required by section	3904
5733.02 of the Revised Code is filed on or before the last day of	3905
March of the tax year.	3906

(3) If the estimated tax is in excess of the minimum tax, and	3907
an extension of time for filing the report required by section	3908
5733.02 of the Revised Code has been granted pursuant to section	3909
5733.13 of the Revised Code:	3910

(a) One-third of the estimated tax at the time of filing the	3911
declaration of estimated tax report;	3912

(b) One-third of the estimated tax on or before the last day	3913
of March of the tax year;	3914

(c) One-third of the estimated tax on or before the last day	3915
of May of the tax year.	3916

Remittance of the estimated tax shall be made payable to the	3917
treasurer of state and shall be made in the form prescribed by the	3918
tax commissioner, including electronic funds transfer if required	3919
by section 5733.022 of the Revised Code.	3920

The tax commissioner shall immediately forward to the	3921
treasurer of state all amounts received under this section, and	3922
the treasurer of state shall credit all payments of such estimated	3923
tax as provided in section 5733.12 of the Revised Code.	3924

(C)(1)(a) For any period of delinquency ending prior to the	3925
first day of June of the tax year, the penalty under division	3926
(A)(2) of section 5733.28 of the Revised Code may be imposed only	3927
on the delinquent portion of the estimated tax required to be paid	3928
under divisions (B)(2)(a) and (b) and (B)(3)(a) and (b) of this	3929
section.	3930

(b) If the taxpayer was not subject to tax for the	3931
immediately preceding tax year, "estimated tax" for purposes of	3932
division (C)(1) of this section is ninety per cent of the	3933
qualifying net tax for the tax year. If the taxpayer was subject	3934
to the tax for the immediately preceding tax year, "estimated tax"	3935
for purposes of division (C)(1) of this section is the lesser of	3936
one hundred per cent of the qualifying net tax for the immediately	3937
preceding tax year or ninety per cent of the qualifying net tax	3938
for the tax year.	3939

(2)(a) For any period of delinquency commencing the first day	3940
of June of the tax year and concluding on the extended due date	3941
pursuant to section 5733.13 of the Revised Code, the penalty under	3942
division (A)(2) of section 5733.28 of the Revised Code may be	3943
imposed only on the delinquent portion of the estimated tax	3944
required to be paid under division (B)(3)(c) of this section.	3945

(b) For purposes of division (C)(2) of this section,	3946
"estimated tax" is ninety per cent of the qualifying net tax for	3947
the tax year.	3948

(3) If the taxpayer did not file a report under section	3949
5733.02 of the Revised Code for the tax year or failed to prepare	3950
and file the report in good faith for the tax year, "qualifying	3951
net tax" as used in division (C) of this section for that tax year	3952
means the amount described in division (C)(3)(a) of this section.	3953
Otherwise, "qualifying net tax" as used in division (C) of this	3954
section for that tax year means the lesser of the amount described	3955
in division (C)(3)(a) or (b) of this section:	3956

(a) The tax imposed by sections 5733.06, 5733.065, and	3957
5733.066 of the Revised Code for that tax year reduced by the	3958
credits listed in section 5733.98 of the Revised Code. If the	3959
credits exceed the total tax, the qualifying net tax is the	3960
minimum tax.	3961

(b) The lesser of the tax shown on the report, prepared and	3962
filed in good faith, reduced by the credits shown on that report,	3963
or the tax shown on an amended report, prepared and filed in good	3964
faith, reduced by the credits shown on that amended report. If the	3965
credits shown exceed the total tax shown, the qualifying net tax	3966
is the minimum tax.	3967

Sec. 5733.06. TheFor tax years prior to tax year 2014, the	3968
tax hereby charged each corporation subject to this chapter shall	3969
be the greater of the sum of divisions (A) and (B) of this	3970
section, after the reduction, if any, provided by division (J) of	3971
this section, or division (C) of this section, after the	3972
reduction, if any, provided by division (J) of this section,	3973
except that the tax hereby charged each financial institution	3974
subject to this chapter shall be the amount computed under	3975
division (D) of this section:	3976

(A) Except as set forth in division (F) of this section, five	3977
and one-tenth per cent upon the first fifty thousand dollars of	3978
the value of the taxpayer's issued and outstanding shares of stock	3979
as determined under division (B) of section 5733.05 of the Revised	3980
Code;	3981

(B) Except as set forth in division (F) of this section,	3982
eight and one-half per cent upon the value so determined in excess	3983
of fifty thousand dollars; or	3984

(C)(1) Except as otherwise provided under division (G) of	3985
this section, four mills times that portion of the value of the	3986
issued and outstanding shares of stock as determined under	3987
division (C) of section 5733.05 of the Revised Code. For the	3988
purposes of division (C) of this section, division (C)(2) of	3989
section 5733.065, and division (C) of section 5733.066 of the	3990
Revised Code, the value of the issued and outstanding shares of	3991
stock of an eligible corporation for tax year 2003 through tax	3992
year 2007, or of a qualifiedqualifying holding company, is zero.	3993

(2) As used in division (C) of this section, "eligible	3994
corporation" means a person treated as a corporation for federal	3995
income tax purposes that meets all of the following criteria:	3996

(a) The corporation conducts business for an entire taxable	3997
year as a qualified trade or business as defined by division (C)	3998
of section 122.15 of the Revised Code.	3999

(b) The corporation uses more than fifty per cent of the	4000
corporation's assets, based on net book value, that are located in	4001
Ohio solely to conduct activities that constitute a qualified	4002
trade or business as defined by section 122.15 of the Revised	4003
Code.	4004

(c) The corporation has been formed or organized not more	4005
than three years before the report required to be filed by section	4006
5733.02 of the Revised Code is due, without regard to any	4007
extensions.	4008

(d) The corporation is not a related member, as defined in	4009
section 5733.042 of the Revised Code, at any time during the	4010
taxable year with respect to another person treated as a	4011
corporation for federal income tax purposes. A corporation is not	4012
a related member if during the entire taxable year at least	4013
seventy-five per cent of the corporation's stock is owned directly	4014
or through a pass-through entity by individuals, estates, and	4015
grantor trusts, and the individuals, estates, and grantor trusts	4016
do not directly or indirectly own more than twenty per cent of the	4017
value of another person treated as a corporation for federal	4018
income tax purposes that is conducting a qualified trade or	4019
business.	4020

(D) The tax charged each financial institution subject to	4021
this chapter shall be that portion of the value of the issued and	4022
outstanding shares of stock as determined under division (A) of	4023
section 5733.05 of the Revised Code, multiplied by the following	4024
amounts:	4025

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

4026

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

4027

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

4028

(E) No tax shall be charged from any corporation that has	4029
been adjudicated bankrupt, or for which a receiver has been	4030
appointed, or that has made a general assignment for the benefit	4031
of creditors, except for the portion of the then current tax year	4032
during which the tax commissioner finds such corporation had the	4033
power to exercise its corporate franchise unimpaired by such	4034
proceedings or act. The minimum payment for each corporation shall	4035
be as follows:	4036

(1) One thousand dollars in the case of a corporation having	4037
gross receipts for the taxable year equal to at least five million	4038
dollars from activities within or outside this state or in the	4039
case of a corporation employing at least three hundred employees	4040
at some time during the taxable year within or outside this state;	4041

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

4042

The tax charged to corporations under this chapter for the	4043
privilege of engaging in business in this state, which is an	4044
excise tax levied on the value of the issued and outstanding	4045
shares of stock, shall in no manner be construed as prohibiting or	4046
otherwise limiting the powers of municipal corporations, joint	4047
economic development zones created under section 715.691 of the	4048
Revised Code, and joint economic development districts created	4049
under section 715.70 or 715.71 or sections 715.72 to 715.81 of the	4050
Revised Code in this state to impose an income tax on the income	4051
of such corporations.	4052

(F) If two or more taxpayers satisfy the ownership or control	4053
requirements of division (A) of section 5733.052 of the Revised	4054
Code, each such taxpayer shall substitute "the taxpayer's pro-rata	4055
amount" for "fifty thousand dollars" in divisions (A) and (B) of	4056
this section. For purposes of this division, "the taxpayer's	4057
pro-rata amount" is an amount that, when added to the other such	4058
taxpayers' pro-rata amounts, does not exceed fifty thousand	4059
dollars. For the purpose of making that computation, the	4060
taxpayer's pro-rata amount shall not be less than zero. Nothing in	4061
this division derogates from or eliminates the requirement to make	4062
the alternative computation of tax under division (C) of this	4063
section.	4064

(G) The tax liability of any corporation under division (C)	4065
of this section shall not exceed one hundred fifty thousand	4066
dollars.	4067

(H)(1) For the purposes of division (H) of this section,	4068
"exiting corporation" means a corporation that satisfies all of	4069
the following conditions:	4070

(a) The corporation had nexus with or in this state under the	4071
Constitution of the United States during any portion of a calendar	4072
year;	4073

(b) The corporation was not a corporation described in	4074
division (A) of section 5733.01 of the Revised Code on the first	4075
day of January immediately following that calendar year;	4076

(c) The corporation was not a financial institution on the	4077
first day of January immediately following that calendar year;	4078

(d) If the corporation was a transferor as defined in section	4079
5733.053 of the Revised Code, the corporation's transferee was not	4080
required to add to the transferee's net income the income of the	4081
transferor pursuant to division (B) of that section;	4082

(e) During any portion of that calendar year, or any portion	4083
of the immediately preceding calendar year, the corporation had	4084
net income that was not included in a report filed by the	4085
corporation or its transferee pursuant to section 5733.02,	4086
5733.021, 5733.03, 5733.031, or 5733.053 of the Revised Code;	4087

(f) The corporation would have been subject to the tax	4088
computed under divisions (A), (B), (C), (F), and (G) of this	4089
section if the corporation is assumed to be a corporation	4090
described in division (A) of section 5733.01 of the Revised Code	4091
on the first day of January immediately following the calendar	4092
year to which division (H)(1)(a) of this section refers.	4093

(2) For the purposes of division (H) of this section,	4094
"unreported net income" means net income that was not previously	4095
included in a report filed pursuant to section 5733.02, 5733.021,	4096
5733.03, 5733.031, or 5733.053 of the Revised Code and that was	4097
realized or recognized during the calendar year to which division	4098
(H)(1) of this section refers or the immediately preceding	4099
calendar year.	4100

(3) Each exiting corporation shall pay a tax computed by	4101
first allocating and apportioning the unreported net income	4102
pursuant to division (B) of section 5733.05 and section 5733.051	4103
and, if applicable, section 5733.052 of the Revised Code. The	4104
exiting corporation then shall compute the tax due on its	4105
unreported net income allocated and apportioned to this state by	4106
applying divisions (A), (B), and (F) of this section to that	4107
income.	4108

(4) Divisions (C) and (G) of this section, division (D)(2) of	4109
section 5733.065, and division (C) of section 5733.066 of the	4110
Revised Code do not apply to an exiting corporation, but exiting	4111
corporations are subject to every other provision of this chapter.	4112

(5) Notwithstanding division (B) of section 5733.01 or	4113
sections 5733.02, 5733.021, and 5733.03 of the Revised Code to the	4114
contrary, each exiting corporation shall report and pay the tax	4115
due under division (H) of this section on or before the	4116
thirty-first day of May immediately following the calendar year to	4117
which division (H)(1)(a) of this section refers. The exiting	4118
corporation shall file that report on the form most recently	4119
prescribed by the tax commissioner for the purposes of complying	4120
with sections 5733.02 and 5733.03 of the Revised Code. Upon	4121
request by the corporation, the tax commissioner may extend the	4122
date for filing the report.	4123

(6) If, on account of the application of section 5733.053 of	4124
the Revised Code, net income is subject to the tax imposed by	4125
divisions (A) and (B) of this section, such income shall not be	4126
subject to the tax imposed by division (H)(3) of this section.	4127

(7) The amendments made to division (H) of this section by	4128
Am. Sub. S.B. 287 of the 123rd general assembly do not apply to	4129
any transfer, as defined in section 5733.053 of the Revised Code,	4130
for which negotiations began prior to January 1, 2001, and that	4131
was commenced in and completed during calendar year 2001, unless	4132
the taxpayer makes an election prior to December 31, 2001, to	4133
apply those amendments.	4134

(8) The tax commissioner may adopt rules governing division	4135
(H) of this section.	4136

(I) Any reference in the Revised Code to "the tax imposed by	4137
section 5733.06 of the Revised Code" or "the tax due under section	4138
5733.06 of the Revised Code" includes the taxes imposed under	4139
sections 5733.065 and 5733.066 of the Revised Code.	4140

(J)(1) Division (J) of this section applies solely to a	4141
combined company. Section 5733.057 of the Revised Code shall apply	4142
when calculating the adjustments required by division (J) of this	4143
section.	4144

(2) Subject to division (J)(4) of this section, the total tax	4145
calculated in divisions (A) and (B) of this section shall be	4146
reduced by an amount calculated by multiplying such tax by a	4147
fraction, the numerator of which is the total taxable gross	4148
receipts attributed to providing public utility activity other	4149
than as an electric company under section 5727.03 of the Revised	4150
Code for the year upon which the taxable gross receipts are	4151
measured immediately preceding the tax year, and the denominator	4152
of which is the total gross receipts from all sources for the year	4153
upon which the taxable gross receipts are measured immediately	4154
preceding the tax year. Nothing herein shall be construed to	4155
exclude from the denominator any item of income described in	4156
section 5733.051 of the Revised Code.	4157

(3) Subject to division (J)(4) of this section, the total tax	4158
calculated in division (C) of this section shall be reduced by an	4159
amount calculated by multiplying such tax by the fraction	4160
described in division (J)(2) of this section.	4161

(4) In no event shall the reduction provided by division	4162
(J)(2) or (J)(3) of this section exceed the amount of the excise	4163
tax paid in accordance with section 5727.38 of the Revised Code,	4164
for the year upon which the taxable gross receipts are measured	4165
immediately preceding the tax year.	4166

Sec. 5747.01.  Except as otherwise expressly provided or	4167
clearly appearing from the context, any term used in this chapter	4168
that is not otherwise defined in this section has the same meaning	4169
as when used in a comparable context in the laws of the United	4170
States relating to federal income taxes or if not used in a	4171
comparable context in those laws, has the same meaning as in	4172
section 5733.40 of the Revised Code. Any reference in this chapter	4173
to the Internal Revenue Code includes other laws of the United	4174
States relating to federal income taxes.	4175

As used in this chapter:

4176

(A) "Adjusted gross income" or "Ohio adjusted gross income"	4177
means federal adjusted gross income, as defined and used in the	4178
Internal Revenue Code, adjusted as provided in this section:	4179

(1) Add interest or dividends on obligations or securities of	4180
any state or of any political subdivision or authority of any	4181
state, other than this state and its subdivisions and authorities.	4182

(2) Add interest or dividends on obligations of any	4183
authority, commission, instrumentality, territory, or possession	4184
of the United States to the extent that the interest or dividends	4185
are exempt from federal income taxes but not from state income	4186
taxes.	4187

(3) Deduct interest or dividends on obligations of the United	4188
States and its territories and possessions or of any authority,	4189
commission, or instrumentality of the United States to the extent	4190
that the interest or dividends are included in federal adjusted	4191
gross income but exempt from state income taxes under the laws of	4192
the United States.	4193

(4) Deduct disability and survivor's benefits to the extent	4194
included in federal adjusted gross income.	4195

(5) Deduct benefits under Title II of the Social Security Act	4196
and tier 1 railroad retirement benefits to the extent included in	4197
federal adjusted gross income under section 86 of the Internal	4198
Revenue Code.	4199

(6) In the case of a taxpayer who is a beneficiary of a trust	4200
that makes an accumulation distribution as defined in section 665	4201
of the Internal Revenue Code, add, for the beneficiary's taxable	4202
years beginning before 2002, the portion, if any, of such	4203
distribution that does not exceed the undistributed net income of	4204
the trust for the three taxable years preceding the taxable year	4205
in which the distribution is made to the extent that the portion	4206
was not included in the trust's taxable income for any of the	4207
trust's taxable years beginning in 2002 or thereafter.	4208
"Undistributed net income of a trust" means the taxable income of	4209
the trust increased by (a)(i) the additions to adjusted gross	4210
income required under division (A) of this section and (ii) the	4211
personal exemptions allowed to the trust pursuant to section	4212
642(b) of the Internal Revenue Code, and decreased by (b)(i) the	4213
deductions to adjusted gross income required under division (A) of	4214
this section, (ii) the amount of federal income taxes attributable	4215
to such income, and (iii) the amount of taxable income that has	4216
been included in the adjusted gross income of a beneficiary by	4217
reason of a prior accumulation distribution. Any undistributed net	4218
income included in the adjusted gross income of a beneficiary	4219
shall reduce the undistributed net income of the trust commencing	4220
with the earliest years of the accumulation period.	4221

(7) Deduct the amount of wages and salaries, if any, not	4222
otherwise allowable as a deduction but that would have been	4223
allowable as a deduction in computing federal adjusted gross	4224
income for the taxable year, had the targeted jobs credit allowed	4225
and determined under sections 38, 51, and 52 of the Internal	4226
Revenue Code not been in effect.	4227

(8) Deduct any interest or interest equivalent on public	4228
obligations and purchase obligations to the extent that the	4229
interest or interest equivalent is included in federal adjusted	4230
gross income.	4231

(9) Add any loss or deduct any gain resulting from the sale,	4232
exchange, or other disposition of public obligations to the extent	4233
that the loss has been deducted or the gain has been included in	4234
computing federal adjusted gross income.	4235

(10) Deduct or add amounts, as provided under section 5747.70	4236
of the Revised Code, related to contributions to variable college	4237
savings program accounts made or tuition units purchased pursuant	4238
to Chapter 3334. of the Revised Code.	4239

(11)(a) Deduct, to the extent not otherwise allowable as a	4240
deduction or exclusion in computing federal or Ohio adjusted gross	4241
income for the taxable year, the amount the taxpayer paid during	4242
the taxable year for medical care insurance and qualified	4243
long-term care insurance for the taxpayer, the taxpayer's spouse,	4244
and dependents. No deduction for medical care insurance under	4245
division (A)(11) of this section shall be allowed either to any	4246
taxpayer who is eligible to participate in any subsidized health	4247
plan maintained by any employer of the taxpayer or of the	4248
taxpayer's spouse, or to any taxpayer who is entitled to, or on	4249
application would be entitled to, benefits under part A of Title	4250
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.	4251
301, as amended. For the purposes of division (A)(11)(a) of this	4252
section, "subsidized health plan" means a health plan for which	4253
the employer pays any portion of the plan's cost. The deduction	4254
allowed under division (A)(11)(a) of this section shall be the net	4255
of any related premium refunds, related premium reimbursements, or	4256
related insurance premium dividends received during the taxable	4257
year.	4258

(b) Deduct, to the extent not otherwise deducted or excluded	4259
in computing federal or Ohio adjusted gross income during the	4260
taxable year, the amount the taxpayer paid during the taxable	4261
year, not compensated for by any insurance or otherwise, for	4262
medical care of the taxpayer, the taxpayer's spouse, and	4263
dependents, to the extent the expenses exceed seven and one-half	4264
per cent of the taxpayer's federal adjusted gross income.	4265

(c) Deduct, to the extent not otherwise deducted or excluded	4266
in computing federal or Ohio adjusted gross income, any amount	4267
included in federal adjusted gross income under section 105 or not	4268
excluded under section 106 of the Internal Revenue Code solely	4269
because it relates to an accident and health plan for a person who	4270
otherwise would be a "qualifying relative" and thus a "dependent"	4271
under section 152 of the Internal Revenue Code but for the fact	4272
that the person fails to meet the income and support limitations	4273
under section 152(d)(1)(B) and (C) of the Internal Revenue Code.	4274

(d) For purposes of division (A)(11) of this section,	4275
"medical care" has the meaning given in section 213 of the	4276
Internal Revenue Code, subject to the special rules, limitations,	4277
and exclusions set forth therein, and "qualified long-term care"	4278
has the same meaning given in section 7702B(c) of the Internal	4279
Revenue Code. Solely for purposes of divisions (A)(11)(a) and (c)	4280
of this section, "dependent" includes a person who otherwise would	4281
be a "qualifying relative" and thus a "dependent" under section	4282
152 of the Internal Revenue Code but for the fact that the person	4283
fails to meet the income and support limitations under section	4284
152(d)(1)(B) and (C) of the Internal Revenue Code.	4285

(12)(a) Deduct any amount included in federal adjusted gross	4286
income solely because the amount represents a reimbursement or	4287
refund of expenses that in any year the taxpayer had deducted as	4288
an itemized deduction pursuant to section 63 of the Internal	4289
Revenue Code and applicable United States department of the	4290
treasury regulations. The deduction otherwise allowed under	4291
division (A)(12)(a) of this section shall be reduced to the extent	4292
the reimbursement is attributable to an amount the taxpayer	4293
deducted under this section in any taxable year.	4294

(b) Add any amount not otherwise included in Ohio adjusted	4295
gross income for any taxable year to the extent that the amount is	4296
attributable to the recovery during the taxable year of any amount	4297
deducted or excluded in computing federal or Ohio adjusted gross	4298
income in any taxable year.	4299

(13) Deduct any portion of the deduction described in section	4300
1341(a)(2) of the Internal Revenue Code, for repaying previously	4301
reported income received under a claim of right, that meets both	4302
of the following requirements:	4303

(a) It is allowable for repayment of an item that was	4304
included in the taxpayer's adjusted gross income for a prior	4305
taxable year and did not qualify for a credit under division (A)	4306
or (B) of section 5747.05 of the Revised Code for that year;	4307

(b) It does not otherwise reduce the taxpayer's adjusted	4308
gross income for the current or any other taxable year.	4309

(14) Deduct an amount equal to the deposits made to, and net	4310
investment earnings of, a medical savings account during the	4311
taxable year, in accordance with section 3924.66 of the Revised	4312
Code. The deduction allowed by division (A)(14) of this section	4313
does not apply to medical savings account deposits and earnings	4314
otherwise deducted or excluded for the current or any other	4315
taxable year from the taxpayer's federal adjusted gross income.	4316

(15)(a) Add an amount equal to the funds withdrawn from a	4317
medical savings account during the taxable year, and the net	4318
investment earnings on those funds, when the funds withdrawn were	4319
used for any purpose other than to reimburse an account holder	4320
for, or to pay, eligible medical expenses, in accordance with	4321
section 3924.66 of the Revised Code;	4322

(b) Add the amounts distributed from a medical savings	4323
account under division (A)(2) of section 3924.68 of the Revised	4324
Code during the taxable year.	4325

(16) Add any amount claimed as a credit under section	4326
5747.059 or 5747.65 of the Revised Code to the extent that such	4327
amount satisfies either of the following:	4328

(a) The amount was deducted or excluded from the computation	4329
of the taxpayer's federal adjusted gross income as required to be	4330
reported for the taxpayer's taxable year under the Internal	4331
Revenue Code;	4332

(b) The amount resulted in a reduction of the taxpayer's	4333
federal adjusted gross income as required to be reported for any	4334
of the taxpayer's taxable years under the Internal Revenue Code.	4335

(17) Deduct the amount contributed by the taxpayer to an	4336
individual development account program established by a county	4337
department of job and family services pursuant to sections 329.11	4338
to 329.14 of the Revised Code for the purpose of matching funds	4339
deposited by program participants. On request of the tax	4340
commissioner, the taxpayer shall provide any information that, in	4341
the tax commissioner's opinion, is necessary to establish the	4342
amount deducted under division (A)(17) of this section.	4343

(18) Beginning in taxable year 2001 but not for any taxable	4344
year beginning after December 31, 2005, if the taxpayer is married	4345
and files a joint return and the combined federal adjusted gross	4346
income of the taxpayer and the taxpayer's spouse for the taxable	4347
year does not exceed one hundred thousand dollars, or if the	4348
taxpayer is single and has a federal adjusted gross income for the	4349
taxable year not exceeding fifty thousand dollars, deduct amounts	4350
paid during the taxable year for qualified tuition and fees paid	4351
to an eligible institution for the taxpayer, the taxpayer's	4352
spouse, or any dependent of the taxpayer, who is a resident of	4353
this state and is enrolled in or attending a program that	4354
culminates in a degree or diploma at an eligible institution. The	4355
deduction may be claimed only to the extent that qualified tuition	4356
and fees are not otherwise deducted or excluded for any taxable	4357
year from federal or Ohio adjusted gross income. The deduction may	4358
not be claimed for educational expenses for which the taxpayer	4359
claims a credit under section 5747.27 of the Revised Code.	4360

(19) Add any reimbursement received during the taxable year	4361
of any amount the taxpayer deducted under division (A)(18) of this	4362
section in any previous taxable year to the extent the amount is	4363
not otherwise included in Ohio adjusted gross income.	4364

(20)(a)(i) Add five-sixths of the amount of depreciation	4365
expense allowed by subsection (k) of section 168 of the Internal	4366
Revenue Code, including the taxpayer's proportionate or	4367
distributive share of the amount of depreciation expense allowed	4368
by that subsection to a pass-through entity in which the taxpayer	4369
has a direct or indirect ownership interest.	4370

(ii) Add five-sixths of the amount of qualifying section 179	4371
depreciation expense, including a person's proportionate or	4372
distributive share of the amount of qualifying section 179	4373
depreciation expense allowed to any pass-through entity in which	4374
the person has a direct or indirect ownership. For the purposes of	4375
this division, "qualifying section 179 depreciation expense" means	4376
the difference between (I) the amount of depreciation expense	4377
directly or indirectly allowed to the taxpayer under section 179	4378
of the Internal Revenue Code, and (II) the amount of depreciation	4379
expense directly or indirectly allowed to the taxpayer under	4380
section 179 of the Internal Revenue Code as that section existed	4381
on December 31, 2002.	4382

The tax commissioner, under procedures established by the	4383
commissioner, may waive the add-backs related to a pass-through	4384
entity if the taxpayer owns, directly or indirectly, less than	4385
five per cent of the pass-through entity.	4386

(b) Nothing in division (A)(20) of this section shall be	4387
construed to adjust or modify the adjusted basis of any asset.	4388

(c) To the extent the add-back required under division	4389
(A)(20)(a) of this section is attributable to property generating	4390
nonbusiness income or loss allocated under section 5747.20 of the	4391
Revised Code, the add-back shall be sitused to the same location	4392
as the nonbusiness income or loss generated by the property for	4393
the purpose of determining the credit under division (A) of	4394
section 5747.05 of the Revised Code. Otherwise, the add-back shall	4395
be apportioned, subject to one or more of the four alternative	4396
methods of apportionment enumerated in section 5747.21 of the	4397
Revised Code.	4398

(d) For the purposes of division (A) of this section, net	4399
operating loss carryback and carryforward shall not include	4400
five-sixths of the allowance of any net operating loss deduction	4401
carryback or carryforward to the taxable year to the extent such	4402
loss resulted from depreciation allowed by section 168(k) of the	4403
Internal Revenue Code and by the qualifying section 179	4404
depreciation expense amount.	4405

(21)(a) If the taxpayer was required to add an amount under	4406
division (A)(20)(a) of this section for a taxable year, deduct	4407
one-fifth of the amount so added for each of the five succeeding	4408
taxable years.	4409

(b) If the amount deducted under division (A)(21)(a) of this	4410
section is attributable to an add-back allocated under division	4411
(A)(20)(c) of this section, the amount deducted shall be sitused	4412
to the same location. Otherwise, the add-back shall be apportioned	4413
using the apportionment factors for the taxable year in which the	4414
deduction is taken, subject to one or more of the four alternative	4415
methods of apportionment enumerated in section 5747.21 of the	4416
Revised Code.	4417

(c) No deduction is available under division (A)(21)(a) of	4418
this section with regard to any depreciation allowed by section	4419
168(k) of the Internal Revenue Code and by the qualifying section	4420
179 depreciation expense amount to the extent that such	4421
depreciation resulted in or increased a federal net operating loss	4422
carryback or carryforward to a taxable year to which division	4423
(A)(20)(d) of this section does not apply.	4424

(22) Deduct, to the extent not otherwise deducted or excluded	4425
in computing federal or Ohio adjusted gross income for the taxable	4426
year, the amount the taxpayer received during the taxable year as	4427
reimbursement for life insurance premiums under section 5919.31 of	4428
the Revised Code.	4429

(23) Deduct, to the extent not otherwise deducted or excluded	4430
in computing federal or Ohio adjusted gross income for the taxable	4431
year, the amount the taxpayer received during the taxable year as	4432
a death benefit paid by the adjutant general under section 5919.33	4433
of the Revised Code.	4434

(24) Deduct, to the extent included in federal adjusted gross	4435
income and not otherwise allowable as a deduction or exclusion in	4436
computing federal or Ohio adjusted gross income for the taxable	4437
year, military pay and allowances received by the taxpayer during	4438
the taxable year for active duty service in the United States	4439
army, air force, navy, marine corps, or coast guard or reserve	4440
components thereof or the national guard. The deduction may not be	4441
claimed for military pay and allowances received by the taxpayer	4442
while the taxpayer is stationed in this state.	4443

(25) Deduct, to the extent not otherwise allowable as a	4444
deduction or exclusion in computing federal or Ohio adjusted gross	4445
income for the taxable year and not otherwise compensated for by	4446
any other source, the amount of qualified organ donation expenses	4447
incurred by the taxpayer during the taxable year, not to exceed	4448
ten thousand dollars. A taxpayer may deduct qualified organ	4449
donation expenses only once for all taxable years beginning with	4450
taxable years beginning in 2007.	4451

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

4452

(a) "Human organ" means all or any portion of a human liver,	4453
pancreas, kidney, intestine, or lung, and any portion of human	4454
bone marrow.	4455

(b) "Qualified organ donation expenses" means travel	4456
expenses, lodging expenses, and wages and salary forgone by a	4457
taxpayer in connection with the taxpayer's donation, while living,	4458
of one or more of the taxpayer's human organs to another human	4459
being.	4460

(26) Deduct, to the extent not otherwise deducted or excluded	4461
in computing federal or Ohio adjusted gross income for the taxable	4462
year, amounts received by the taxpayer as retired military	4463
personnel pay for service in the United States army, navy, air	4464
force, coast guard, or marine corps or reserve components thereof,	4465
or the national guard, or received by the surviving spouse or	4466
former spouse of such a taxpayer under the survivor benefit plan	4467
on account of such a taxpayer's death. If the taxpayer receives	4468
income on account of retirement paid under the federal civil	4469
service retirement system or federal employees retirement system,	4470
or under any successor retirement program enacted by the congress	4471
of the United States that is established and maintained for	4472
retired employees of the United States government, and such	4473
retirement income is based, in whole or in part, on credit for the	4474
taxpayer's military service, the deduction allowed under this	4475
division shall include only that portion of such retirement income	4476
that is attributable to the taxpayer's military service, to the	4477
extent that portion of such retirement income is otherwise	4478
included in federal adjusted gross income and is not otherwise	4479
deducted under this section. Any amount deducted under division	4480
(A)(26) of this section is not included in a taxpayer's adjusted	4481
gross income for the purposes of section 5747.055 of the Revised	4482
Code. No amount may be deducted under division (A)(26) of this	4483
section on the basis of which a credit was claimed under section	4484
5747.055 of the Revised Code.	4485

(27) Deduct, to the extent not otherwise deducted or excluded	4486
in computing federal or Ohio adjusted gross income for the taxable	4487
year, the amount the taxpayer received during the taxable year	4488
from the military injury relief fund created in section 5101.98 of	4489
the Revised Code.	4490

(28) Deduct, to the extent not otherwise deducted or excluded	4491
in computing federal or Ohio adjusted gross income for the taxable	4492
year, the amount the taxpayer received as a veterans bonus during	4493
the taxable year from the Ohio department of veterans services as	4494
authorized by Section 2r of Article VIII, Ohio Constitution.	4495

(29) Deduct, to the extent not otherwise deducted or excluded	4496
in computing federal or Ohio adjusted gross income for the taxable	4497
year, any loss from wagering transactions that is allowed as an	4498
itemized deduction under section 165 of the Internal Revenue Code	4499
and that the taxpayer deducted in computing federal taxable	4500
income.	4501

(30) Deduct, to the extent not otherwise deducted or excluded	4502
in computing federal or Ohio adjusted gross income for the taxable	4503
year, any income derived from providing public services under a	4504
contract through a project owned by the state, as described in	4505
section 126.604 of the Revised Code or derived from a transfer	4506
agreement or from the enterprise transferred under that agreement	4507
under section 4313.02 of the Revised Code.	4508

(31) Deduct, to the extent not otherwise deducted or excluded	4509
in computing federal or Ohio adjusted gross income for the taxable	4510
year, Ohio college opportunity or federal Pell grant amounts	4511
received by the taxpayer or the taxpayer's spouse or dependent	4512
pursuant to section 3333.122 of the Revised Code or 20 U.S.C.	4513
1070a, et seq., and used to pay room or board furnished by the	4514
educational institution for which the grant was awarded at the	4515
institution's facilities, including meal plans administered by the	4516
institution. For the purposes of this division, receipt of a grant	4517
includes the distribution of a grant directly to an educational	4518
institution and the crediting of the grant to the enrollee's	4519
account with the institution.	4520

(B) "Business income" means income, including gain or loss,	4521
arising from transactions, activities, and sources in the regular	4522
course of a trade or business and includes income, gain, or loss	4523
from real property, tangible property, and intangible property if	4524
the acquisition, rental, management, and disposition of the	4525
property constitute integral parts of the regular course of a	4526
trade or business operation. "Business income" includes income,	4527
including gain or loss, from a partial or complete liquidation of	4528
a business, including, but not limited to, gain or loss from the	4529
sale or other disposition of goodwill.	4530

(C) "Nonbusiness income" means all income other than business	4531
income and may include, but is not limited to, compensation, rents	4532
and royalties from real or tangible personal property, capital	4533
gains, interest, dividends and distributions, patent or copyright	4534
royalties, or lottery winnings, prizes, and awards.	4535

(D) "Compensation" means any form of remuneration paid to an	4536
employee for personal services.	4537

(E) "Fiduciary" means a guardian, trustee, executor,	4538
administrator, receiver, conservator, or any other person acting	4539
in any fiduciary capacity for any individual, trust, or estate.	4540

(F) "Fiscal year" means an accounting period of twelve months	4541
ending on the last day of any month other than December.	4542

(G) "Individual" means any natural person.

4543

(H) "Internal Revenue Code" means the "Internal Revenue Code	4544
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.	4545

(I) "Resident" means any of the following, provided that	4546
division (I)(3) of this section applies only to taxable years of a	4547
trust beginning in 2002 or thereafter:	4548

(1) An individual who is domiciled in this state, subject to	4549
section 5747.24 of the Revised Code;	4550

(2) The estate of a decedent who at the time of death was	4551
domiciled in this state. The domicile tests of section 5747.24 of	4552
the Revised Code are not controlling for purposes of division	4553
(I)(2) of this section.	4554

(3) A trust that, in whole or part, resides in this state. If	4555
only part of a trust resides in this state, the trust is a	4556
resident only with respect to that part.	4557

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

4558

(a) A trust resides in this state for the trust's current	4559
taxable year to the extent, as described in division (I)(3)(d) of	4560
this section, that the trust consists directly or indirectly, in	4561
whole or in part, of assets, net of any related liabilities, that	4562
were transferred, or caused to be transferred, directly or	4563
indirectly, to the trust by any of the following:	4564

(i) A person, a court, or a governmental entity or	4565
instrumentality on account of the death of a decedent, but only if	4566
the trust is described in division (I)(3)(e)(i) or (ii) of this	4567
section;	4568

(ii) A person who was domiciled in this state for the	4569
purposes of this chapter when the person directly or indirectly	4570
transferred assets to an irrevocable trust, but only if at least	4571
one of the trust's qualifying beneficiaries is domiciled in this	4572
state for the purposes of this chapter during all or some portion	4573
of the trust's current taxable year;	4574

(iii) A person who was domiciled in this state for the	4575
purposes of this chapter when the trust document or instrument or	4576
part of the trust document or instrument became irrevocable, but	4577
only if at least one of the trust's qualifying beneficiaries is a	4578
resident domiciled in this state for the purposes of this chapter	4579
during all or some portion of the trust's current taxable year. If	4580
a trust document or instrument became irrevocable upon the death	4581
of a person who at the time of death was domiciled in this state	4582
for purposes of this chapter, that person is a person described in	4583
division (I)(3)(a)(iii) of this section.	4584

(b) A trust is irrevocable to the extent that the transferor	4585
is not considered to be the owner of the net assets of the trust	4586
under sections 671 to 678 of the Internal Revenue Code.	4587

(c) With respect to a trust other than a charitable lead	4588
trust, "qualifying beneficiary" has the same meaning as "potential	4589
current beneficiary" as defined in section 1361(e)(2) of the	4590
Internal Revenue Code, and with respect to a charitable lead trust	4591
"qualifying beneficiary" is any current, future, or contingent	4592
beneficiary, but with respect to any trust "qualifying	4593
beneficiary" excludes a person or a governmental entity or	4594
instrumentality to any of which a contribution would qualify for	4595
the charitable deduction under section 170 of the Internal Revenue	4596
Code.	4597

(d) For the purposes of division (I)(3)(a) of this section,	4598
the extent to which a trust consists directly or indirectly, in	4599
whole or in part, of assets, net of any related liabilities, that	4600
were transferred directly or indirectly, in whole or part, to the	4601
trust by any of the sources enumerated in that division shall be	4602
ascertained by multiplying the fair market value of the trust's	4603
assets, net of related liabilities, by the qualifying ratio, which	4604
shall be computed as follows:	4605

(i) The first time the trust receives assets, the numerator	4606
of the qualifying ratio is the fair market value of those assets	4607
at that time, net of any related liabilities, from sources	4608
enumerated in division (I)(3)(a) of this section. The denominator	4609
of the qualifying ratio is the fair market value of all the	4610
trust's assets at that time, net of any related liabilities.	4611

(ii) Each subsequent time the trust receives assets, a	4612
revised qualifying ratio shall be computed. The numerator of the	4613
revised qualifying ratio is the sum of (1) the fair market value	4614
of the trust's assets immediately prior to the subsequent	4615
transfer, net of any related liabilities, multiplied by the	4616
qualifying ratio last computed without regard to the subsequent	4617
transfer, and (2) the fair market value of the subsequently	4618
transferred assets at the time transferred, net of any related	4619
liabilities, from sources enumerated in division (I)(3)(a) of this	4620
section. The denominator of the revised qualifying ratio is the	4621
fair market value of all the trust's assets immediately after the	4622
subsequent transfer, net of any related liabilities.	4623

(iii) Whether a transfer to the trust is by or from any of	4624
the sources enumerated in division (I)(3)(a) of this section shall	4625
be ascertained without regard to the domicile of the trust's	4626
beneficiaries.	4627

(e) For the purposes of division (I)(3)(a)(i) of this	4628
section:	4629

(i) A trust is described in division (I)(3)(e)(i) of this	4630
section if the trust is a testamentary trust and the testator of	4631
that testamentary trust was domiciled in this state at the time of	4632
the testator's death for purposes of the taxes levied under	4633
Chapter 5731. of the Revised Code.	4634

(ii) A trust is described in division (I)(3)(e)(ii) of this	4635
section if the transfer is a qualifying transfer described in any	4636
of divisions (I)(3)(f)(i) to (vi) of this section, the trust is an	4637
irrevocable inter vivos trust, and at least one of the trust's	4638
qualifying beneficiaries is domiciled in this state for purposes	4639
of this chapter during all or some portion of the trust's current	4640
taxable year.	4641

(f) For the purposes of division (I)(3)(e)(ii) of this	4642
section, a "qualifying transfer" is a transfer of assets, net of	4643
any related liabilities, directly or indirectly to a trust, if the	4644
transfer is described in any of the following:	4645

(i) The transfer is made to a trust, created by the decedent	4646
before the decedent's death and while the decedent was domiciled	4647
in this state for the purposes of this chapter, and, prior to the	4648
death of the decedent, the trust became irrevocable while the	4649
decedent was domiciled in this state for the purposes of this	4650
chapter.	4651

(ii) The transfer is made to a trust to which the decedent,	4652
prior to the decedent's death, had directly or indirectly	4653
transferred assets, net of any related liabilities, while the	4654
decedent was domiciled in this state for the purposes of this	4655
chapter, and prior to the death of the decedent the trust became	4656
irrevocable while the decedent was domiciled in this state for the	4657
purposes of this chapter.	4658

(iii) The transfer is made on account of a contractual	4659
relationship existing directly or indirectly between the	4660
transferor and either the decedent or the estate of the decedent	4661
at any time prior to the date of the decedent's death, and the	4662
decedent was domiciled in this state at the time of death for	4663
purposes of the taxes levied under Chapter 5731. of the Revised	4664
Code.	4665

(iv) The transfer is made to a trust on account of a	4666
contractual relationship existing directly or indirectly between	4667
the transferor and another person who at the time of the	4668
decedent's death was domiciled in this state for purposes of this	4669
chapter.	4670

(v) The transfer is made to a trust on account of the will of	4671
a testator who was domiciled in this state at the time of the	4672
testator's death for purposes of the taxes levied under Chapter	4673
5731. of the Revised Code.	4674

(vi) The transfer is made to a trust created by or caused to	4675
be created by a court, and the trust was directly or indirectly	4676
created in connection with or as a result of the death of an	4677
individual who, for purposes of the taxes levied under Chapter	4678
5731. of the Revised Code, was domiciled in this state at the time	4679
of the individual's death.	4680

(g) The tax commissioner may adopt rules to ascertain the	4681
part of a trust residing in this state.	4682

(J) "Nonresident" means an individual or estate that is not a	4683
resident. An individual who is a resident for only part of a	4684
taxable year is a nonresident for the remainder of that taxable	4685
year.	4686

(K) "Pass-through entity" has the same meaning as in section	4687
5733.04 of the Revised Code.	4688

(L) "Return" means the notifications and reports required to	4689
be filed pursuant to this chapter for the purpose of reporting the	4690
tax due and includes declarations of estimated tax when so	4691
required.	4692

(M) "Taxable year" means the calendar year or the taxpayer's	4693
fiscal year ending during the calendar year, or fractional part	4694
thereof, upon which the adjusted gross income is calculated	4695
pursuant to this chapter.	4696

(N) "Taxpayer" means any person subject to the tax imposed by	4697
section 5747.02 of the Revised Code or any pass-through entity	4698
that makes the election under division (D) of section 5747.08 of	4699
the Revised Code.	4700

(O) "Dependents" means dependents as defined in the Internal	4701
Revenue Code and as claimed in the taxpayer's federal income tax	4702
return for the taxable year or which the taxpayer would have been	4703
permitted to claim had the taxpayer filed a federal income tax	4704
return.	4705

(P) "Principal county of employment" means, in the case of a	4706
nonresident, the county within the state in which a taxpayer	4707
performs services for an employer or, if those services are	4708
performed in more than one county, the county in which the major	4709
portion of the services are performed.	4710

(Q) As used in sections 5747.50 to 5747.55 of the Revised	4711
Code:	4712

(1) "Subdivision" means any county, municipal corporation,	4713
park district, or township.	4714

(2) "Essential local government purposes" includes all	4715
functions that any subdivision is required by general law to	4716
exercise, including like functions that are exercised under a	4717
charter adopted pursuant to the Ohio Constitution.	4718

(R) "Overpayment" means any amount already paid that exceeds	4719
the figure determined to be the correct amount of the tax.	4720

(S) "Taxable income" or "Ohio taxable income" applies only to	4721
estates and trusts, and means federal taxable income, as defined	4722
and used in the Internal Revenue Code, adjusted as follows:	4723

(1) Add interest or dividends, net of ordinary, necessary,	4724
and reasonable expenses not deducted in computing federal taxable	4725
income, on obligations or securities of any state or of any	4726
political subdivision or authority of any state, other than this	4727
state and its subdivisions and authorities, but only to the extent	4728
that such net amount is not otherwise includible in Ohio taxable	4729
income and is described in either division (S)(1)(a) or (b) of	4730
this section:	4731

(a) The net amount is not attributable to the S portion of an	4732
electing small business trust and has not been distributed to	4733
beneficiaries for the taxable year;	4734

(b) The net amount is attributable to the S portion of an	4735
electing small business trust for the taxable year.	4736

(2) Add interest or dividends, net of ordinary, necessary,	4737
and reasonable expenses not deducted in computing federal taxable	4738
income, on obligations of any authority, commission,	4739
instrumentality, territory, or possession of the United States to	4740
the extent that the interest or dividends are exempt from federal	4741
income taxes but not from state income taxes, but only to the	4742
extent that such net amount is not otherwise includible in Ohio	4743
taxable income and is described in either division (S)(1)(a) or	4744
(b) of this section;	4745

(3) Add the amount of personal exemption allowed to the	4746
estate pursuant to section 642(b) of the Internal Revenue Code;	4747

(4) Deduct interest or dividends, net of related expenses	4748
deducted in computing federal taxable income, on obligations of	4749
the United States and its territories and possessions or of any	4750
authority, commission, or instrumentality of the United States to	4751
the extent that the interest or dividends are exempt from state	4752
taxes under the laws of the United States, but only to the extent	4753
that such amount is included in federal taxable income and is	4754
described in either division (S)(1)(a) or (b) of this section;	4755

(5) Deduct the amount of wages and salaries, if any, not	4756
otherwise allowable as a deduction but that would have been	4757
allowable as a deduction in computing federal taxable income for	4758
the taxable year, had the targeted jobs credit allowed under	4759
sections 38, 51, and 52 of the Internal Revenue Code not been in	4760
effect, but only to the extent such amount relates either to	4761
income included in federal taxable income for the taxable year or	4762
to income of the S portion of an electing small business trust for	4763
the taxable year;	4764

(6) Deduct any interest or interest equivalent, net of	4765
related expenses deducted in computing federal taxable income, on	4766
public obligations and purchase obligations, but only to the	4767
extent that such net amount relates either to income included in	4768
federal taxable income for the taxable year or to income of the S	4769
portion of an electing small business trust for the taxable year;	4770

(7) Add any loss or deduct any gain resulting from sale,	4771
exchange, or other disposition of public obligations to the extent	4772
that such loss has been deducted or such gain has been included in	4773
computing either federal taxable income or income of the S portion	4774
of an electing small business trust for the taxable year;	4775

(8) Except in the case of the final return of an estate, add	4776
any amount deducted by the taxpayer on both its Ohio estate tax	4777
return pursuant to section 5731.14 of the Revised Code, and on its	4778
federal income tax return in determining federal taxable income;	4779

(9)(a) Deduct any amount included in federal taxable income	4780
solely because the amount represents a reimbursement or refund of	4781
expenses that in a previous year the decedent had deducted as an	4782
itemized deduction pursuant to section 63 of the Internal Revenue	4783
Code and applicable treasury regulations. The deduction otherwise	4784
allowed under division (S)(9)(a) of this section shall be reduced	4785
to the extent the reimbursement is attributable to an amount the	4786
taxpayer or decedent deducted under this section in any taxable	4787
year.	4788

(b) Add any amount not otherwise included in Ohio taxable	4789
income for any taxable year to the extent that the amount is	4790
attributable to the recovery during the taxable year of any amount	4791
deducted or excluded in computing federal or Ohio taxable income	4792
in any taxable year, but only to the extent such amount has not	4793
been distributed to beneficiaries for the taxable year.	4794

(10) Deduct any portion of the deduction described in section	4795
1341(a)(2) of the Internal Revenue Code, for repaying previously	4796
reported income received under a claim of right, that meets both	4797
of the following requirements:	4798

(a) It is allowable for repayment of an item that was	4799
included in the taxpayer's taxable income or the decedent's	4800
adjusted gross income for a prior taxable year and did not qualify	4801
for a credit under division (A) or (B) of section 5747.05 of the	4802
Revised Code for that year.	4803

(b) It does not otherwise reduce the taxpayer's taxable	4804
income or the decedent's adjusted gross income for the current or	4805
any other taxable year.	4806

(11) Add any amount claimed as a credit under section	4807
5747.059 or 5747.65 of the Revised Code to the extent that the	4808
amount satisfies either of the following:	4809

(a) The amount was deducted or excluded from the computation	4810
of the taxpayer's federal taxable income as required to be	4811
reported for the taxpayer's taxable year under the Internal	4812
Revenue Code;	4813

(b) The amount resulted in a reduction in the taxpayer's	4814
federal taxable income as required to be reported for any of the	4815
taxpayer's taxable years under the Internal Revenue Code.	4816

(12) Deduct any amount, net of related expenses deducted in	4817
computing federal taxable income, that a trust is required to	4818
report as farm income on its federal income tax return, but only	4819
if the assets of the trust include at least ten acres of land	4820
satisfying the definition of "land devoted exclusively to	4821
agricultural use" under section 5713.30 of the Revised Code,	4822
regardless of whether the land is valued for tax purposes as such	4823
land under sections 5713.30 to 5713.38 of the Revised Code. If the	4824
trust is a pass-through entity investor, section 5747.231 of the	4825
Revised Code applies in ascertaining if the trust is eligible to	4826
claim the deduction provided by division (S)(12) of this section	4827
in connection with the pass-through entity's farm income.	4828

Except for farm income attributable to the S portion of an	4829
electing small business trust, the deduction provided by division	4830
(S)(12) of this section is allowed only to the extent that the	4831
trust has not distributed such farm income. Division (S)(12) of	4832
this section applies only to taxable years of a trust beginning in	4833
2002 or thereafter.	4834

(13) Add the net amount of income described in section 641(c)	4835
of the Internal Revenue Code to the extent that amount is not	4836
included in federal taxable income.	4837

(14) Add or deduct the amount the taxpayer would be required	4838
to add or deduct under division (A)(20) or (21) of this section if	4839
the taxpayer's Ohio taxable income were computed in the same	4840
manner as an individual's Ohio adjusted gross income is computed	4841
under this section. In the case of a trust, division (S)(14) of	4842
this section applies only to any of the trust's taxable years	4843
beginning in 2002 or thereafter.	4844

(T) "School district income" and "school district income tax"	4845
have the same meanings as in section 5748.01 of the Revised Code.	4846

(U) As used in divisions (A)(8), (A)(9), (S)(6), and (S)(7)	4847
of this section, "public obligations," "purchase obligations," and	4848
"interest or interest equivalent" have the same meanings as in	4849
section 5709.76 of the Revised Code.	4850

(V) "Limited liability company" means any limited liability	4851
company formed under Chapter 1705. of the Revised Code or under	4852
the laws of any other state.	4853

(W) "Pass-through entity investor" means any person who,	4854
during any portion of a taxable year of a pass-through entity, is	4855
a partner, member, shareholder, or equity investor in that	4856
pass-through entity.	4857

(X) "Banking day" has the same meaning as in section 1304.01	4858
of the Revised Code.	4859

(Y) "Month" means a calendar month.

4860

(Z) "Quarter" means the first three months, the second three	4861
months, the third three months, or the last three months of the	4862
taxpayer's taxable year.	4863

(AA)(1) "Eligible institution" means a state university or	4864
state institution of higher education as defined in section	4865
3345.011 of the Revised Code, or a private, nonprofit college,	4866
university, or other post-secondary institution located in this	4867
state that possesses a certificate of authorization issued by the	4868
Ohio board of regents pursuant to Chapter 1713. of the Revised	4869
Code or a certificate of registration issued by the state board of	4870
career colleges and schools under Chapter 3332. of the Revised	4871
Code.	4872

(2) "Qualified tuition and fees" means tuition and fees	4873
imposed by an eligible institution as a condition of enrollment or	4874
attendance, not exceeding two thousand five hundred dollars in	4875
each of the individual's first two years of post-secondary	4876
education. If the individual is a part-time student, "qualified	4877
tuition and fees" includes tuition and fees paid for the academic	4878
equivalent of the first two years of post-secondary education	4879
during a maximum of five taxable years, not exceeding a total of	4880
five thousand dollars. "Qualified tuition and fees" does not	4881
include:	4882

(a) Expenses for any course or activity involving sports,	4883
games, or hobbies unless the course or activity is part of the	4884
individual's degree or diploma program;	4885

(b) The cost of books, room and board, student activity fees,	4886
athletic fees, insurance expenses, or other expenses unrelated to	4887
the individual's academic course of instruction;	4888

(c) Tuition, fees, or other expenses paid or reimbursed	4889
through an employer, scholarship, grant in aid, or other	4890
educational benefit program.	4891

(BB)(1) "Modified business income" means the business income	4892
included in a trust's Ohio taxable income after such taxable	4893
income is first reduced by the qualifying trust amount, if any.	4894

(2) "Qualifying trust amount" of a trust means capital gains	4895
and losses from the sale, exchange, or other disposition of equity	4896
or ownership interests in, or debt obligations of, a qualifying	4897
investee to the extent included in the trust's Ohio taxable	4898
income, but only if the following requirements are satisfied:	4899

(a) The book value of the qualifying investee's physical	4900
assets in this state and everywhere, as of the last day of the	4901
qualifying investee's fiscal or calendar year ending immediately	4902
prior to the date on which the trust recognizes the gain or loss,	4903
is available to the trust.	4904

(b) The requirements of section 5747.011 of the Revised Code	4905
are satisfied for the trust's taxable year in which the trust	4906
recognizes the gain or loss.	4907

Any gain or loss that is not a qualifying trust amount is	4908
modified business income, qualifying investment income, or	4909
modified nonbusiness income, as the case may be.	4910

(3) "Modified nonbusiness income" means a trust's Ohio	4911
taxable income other than modified business income, other than the	4912
qualifying trust amount, and other than qualifying investment	4913
income, as defined in section 5747.012 of the Revised Code, to the	4914
extent such qualifying investment income is not otherwise part of	4915
modified business income.	4916

(4) "Modified Ohio taxable income" applies only to trusts,	4917
and means the sum of the amounts described in divisions (BB)(4)(a)	4918
to (c) of this section:	4919

(a) The fraction, calculated under section 5747.013, and	4920
applying section 5747.231 of the Revised Code, multiplied by the	4921
sum of the following amounts:	4922

(i) The trust's modified business income;

4923

(ii) The trust's qualifying investment income, as defined in	4924
section 5747.012 of the Revised Code, but only to the extent the	4925
qualifying investment income does not otherwise constitute	4926
modified business income and does not otherwise constitute a	4927
qualifying trust amount.	4928

(b) The qualifying trust amount multiplied by a fraction, the	4929
numerator of which is the sum of the book value of the qualifying	4930
investee's physical assets in this state on the last day of the	4931
qualifying investee's fiscal or calendar year ending immediately	4932
prior to the day on which the trust recognizes the qualifying	4933
trust amount, and the denominator of which is the sum of the book	4934
value of the qualifying investee's total physical assets	4935
everywhere on the last day of the qualifying investee's fiscal or	4936
calendar year ending immediately prior to the day on which the	4937
trust recognizes the qualifying trust amount. If, for a taxable	4938
year, the trust recognizes a qualifying trust amount with respect	4939
to more than one qualifying investee, the amount described in	4940
division (BB)(4)(b) of this section shall equal the sum of the	4941
products so computed for each such qualifying investee.	4942

(c)(i) With respect to a trust or portion of a trust that is	4943
a resident as ascertained in accordance with division (I)(3)(d) of	4944
this section, its modified nonbusiness income.	4945

(ii) With respect to a trust or portion of a trust that is	4946
not a resident as ascertained in accordance with division	4947
(I)(3)(d) of this section, the amount of its modified nonbusiness	4948
income satisfying the descriptions in divisions (B)(2) to (5) of	4949
section 5747.20 of the Revised Code, except as otherwise provided	4950
in division (BB)(4)(c)(ii) of this section. With respect to a	4951
trust or portion of a trust that is not a resident as ascertained	4952
in accordance with division (I)(3)(d) of this section, the trust's	4953
portion of modified nonbusiness income recognized from the sale,	4954
exchange, or other disposition of a debt interest in or equity	4955
interest in a section 5747.212 entity, as defined in section	4956
5747.212 of the Revised Code, without regard to division (A) of	4957
that section, shall not be allocated to this state in accordance	4958
with section 5747.20 of the Revised Code but shall be apportioned	4959
to this state in accordance with division (B) of section 5747.212	4960
of the Revised Code without regard to division (A) of that	4961
section.	4962

If the allocation and apportionment of a trust's income under	4963
divisions (BB)(4)(a) and (c) of this section do not fairly	4964
represent the modified Ohio taxable income of the trust in this	4965
state, the alternative methods described in division (C) of	4966
section 5747.21 of the Revised Code may be applied in the manner	4967
and to the same extent provided in that section.	4968

(5)(a) Except as set forth in division (BB)(5)(b) of this	4969
section, "qualifying investee" means a person in which a trust has	4970
an equity or ownership interest, or a person or unit of government	4971
the debt obligations of either of which are owned by a trust. For	4972
the purposes of division (BB)(2)(a) of this section and for the	4973
purpose of computing the fraction described in division (BB)(4)(b)	4974
of this section, all of the following apply:	4975

(i) If the qualifying investee is a member of a qualifying	4976
controlled group on the last day of the qualifying investee's	4977
fiscal or calendar year ending immediately prior to the date on	4978
which the trust recognizes the gain or loss, then "qualifying	4979
investee" includes all persons in the qualifying controlled group	4980
on such last day.	4981

(ii) If the qualifying investee, or if the qualifying	4982
investee and any members of the qualifying controlled group of	4983
which the qualifying investee is a member on the last day of the	4984
qualifying investee's fiscal or calendar year ending immediately	4985
prior to the date on which the trust recognizes the gain or loss,	4986
separately or cumulatively own, directly or indirectly, on the	4987
last day of the qualifying investee's fiscal or calendar year	4988
ending immediately prior to the date on which the trust recognizes	4989
the qualifying trust amount, more than fifty per cent of the	4990
equity of a pass-through entity, then the qualifying investee and	4991
the other members are deemed to own the proportionate share of the	4992
pass-through entity's physical assets which the pass-through	4993
entity directly or indirectly owns on the last day of the	4994
pass-through entity's calendar or fiscal year ending within or	4995
with the last day of the qualifying investee's fiscal or calendar	4996
year ending immediately prior to the date on which the trust	4997
recognizes the qualifying trust amount.	4998

(iii) For the purposes of division (BB)(5)(a)(iii) of this	4999
section, "upper level pass-through entity" means a pass-through	5000
entity directly or indirectly owning any equity of another	5001
pass-through entity, and "lower level pass-through entity" means	5002
that other pass-through entity.	5003

An upper level pass-through entity, whether or not it is also	5004
a qualifying investee, is deemed to own, on the last day of the	5005
upper level pass-through entity's calendar or fiscal year, the	5006
proportionate share of the lower level pass-through entity's	5007
physical assets that the lower level pass-through entity directly	5008
or indirectly owns on the last day of the lower level pass-through	5009
entity's calendar or fiscal year ending within or with the last	5010
day of the upper level pass-through entity's fiscal or calendar	5011
year. If the upper level pass-through entity directly and	5012
indirectly owns less than fifty per cent of the equity of the	5013
lower level pass-through entity on each day of the upper level	5014
pass-through entity's calendar or fiscal year in which or with	5015
which ends the calendar or fiscal year of the lower level	5016
pass-through entity and if, based upon clear and convincing	5017
evidence, complete information about the location and cost of the	5018
physical assets of the lower pass-through entity is not available	5019
to the upper level pass-through entity, then solely for purposes	5020
of ascertaining if a gain or loss constitutes a qualifying trust	5021
amount, the upper level pass-through entity shall be deemed as	5022
owning no equity of the lower level pass-through entity for each	5023
day during the upper level pass-through entity's calendar or	5024
fiscal year in which or with which ends the lower level	5025
pass-through entity's calendar or fiscal year. Nothing in division	5026
(BB)(5)(a)(iii) of this section shall be construed to provide for	5027
any deduction or exclusion in computing any trust's Ohio taxable	5028
income.	5029

(b) With respect to a trust that is not a resident for the	5030
taxable year and with respect to a part of a trust that is not a	5031
resident for the taxable year, "qualifying investee" for that	5032
taxable year does not include a C corporation if both of the	5033
following apply:	5034

(i) During the taxable year the trust or part of the trust	5035
recognizes a gain or loss from the sale, exchange, or other	5036
disposition of equity or ownership interests in, or debt	5037
obligations of, the C corporation.	5038

(ii) Such gain or loss constitutes nonbusiness income.

5039

(6) "Available" means information is such that a person is	5040
able to learn of the information by the due date plus extensions,	5041
if any, for filing the return for the taxable year in which the	5042
trust recognizes the gain or loss.	5043

(CC) "Qualifying controlled group" has the same meaning as in	5044
section 5733.04 of the Revised Code.	5045

(DD) "Related member" has the same meaning as in section	5046
5733.042 of the Revised Code.	5047

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

5048

(a) "Qualifying person" means any person other than a	5049
qualifying corporation.	5050

(b) "Qualifying corporation" means any person classified for	5051
federal income tax purposes as an association taxable as a	5052
corporation, except either of the following:	5053

(i) A corporation that has made an election under subchapter	5054
S, chapter one, subtitle A, of the Internal Revenue Code for its	5055
taxable year ending within, or on the last day of, the investor's	5056
taxable year;	5057

(ii) A subsidiary that is wholly owned by any corporation	5058
that has made an election under subchapter S, chapter one,	5059
subtitle A of the Internal Revenue Code for its taxable year	5060
ending within, or on the last day of, the investor's taxable year.	5061

(2) For the purposes of this chapter, unless expressly stated	5062
otherwise, no qualifying person indirectly owns any asset directly	5063
or indirectly owned by any qualifying corporation.	5064

(FF) For purposes of this chapter and Chapter 5751. of the	5065
Revised Code:	5066

(1) "Trust" does not include a qualified pre-income tax	5067
trust.	5068

(2) A "qualified pre-income tax trust" is any pre-income tax	5069
trust that makes a qualifying pre-income tax trust election as	5070
described in division (FF)(3) of this section.	5071

(3) A "qualifying pre-income tax trust election" is an	5072
election by a pre-income tax trust to subject to the tax imposed	5073
by section 5751.02 of the Revised Code the pre-income tax trust	5074
and all pass-through entities of which the trust owns or controls,	5075
directly, indirectly, or constructively through related interests,	5076
five per cent or more of the ownership or equity interests. The	5077
trustee shall notify the tax commissioner in writing of the	5078
election on or before April 15, 2006. The election, if timely	5079
made, shall be effective on and after January 1, 2006, and shall	5080
apply for all tax periods and tax years until revoked by the	5081
trustee of the trust.	5082

(4) A "pre-income tax trust" is a trust that satisfies all of	5083
the following requirements:	5084

(a) The document or instrument creating the trust was	5085
executed by the grantor before January 1, 1972;	5086

(b) The trust became irrevocable upon the creation of the	5087
trust; and	5088

(c) The grantor was domiciled in this state at the time the	5089
trust was created.	5090

Sec. 5747.65.  There is hereby allowed a refundable credit	5091
against the tax imposed under section 5747.02 of the Revised Code.	5092
The amount of the credit shall equal the taxpayer's proportionate	5093
share of the lesser of either the tax due or the tax paid for the	5094
tax imposed by section 5726.02 of the Revised Code by a	5095
pass-through entity for the pass-through entity's taxable year	5096
ending in the taxpayer's taxable year.	5097

The taxpayer shall claim the credit for the taxpayer's	5098
taxable year that includes the last day of the pass-through	5099
entity's taxable year. For purposes of making tax payments under	5100
this chapter, taxes equal to the amount of the credit shall be	5101
considered to be paid by the taxpayer on the day the pass-through	5102
entity pays to the treasurer of state the amount due for the tax	5103
imposed by section 5726.02 of the Revised Code.	5104

In claiming the credit and determining the taxpayer's	5105
proportionate share of the tax due and the tax paid by a	5106
pass-through entity, the taxpayer shall follow the concepts set	5107
forth in subchapters J and K of the Internal Revenue Code.	5108

The credit shall be claimed in the order required under	5109
section 5747.98 of the Revised Code. If the amount of the credit	5110
exceeds the amount of tax otherwise due under section 5747.02 of	5111
the Revised Code after deduction of all other credits in that	5112
order, the taxpayer is entitled to a refund of the excess.	5113

Sec. 5747.98.  (A) To provide a uniform procedure for	5114
calculating the amount of tax due under section 5747.02 of the	5115
Revised Code, a taxpayer shall claim any credits to which the	5116
taxpayer is entitled in the following order:	5117

(1) The retirement income credit under division (B) of	5118
section 5747.055 of the Revised Code;	5119

(2) The senior citizen credit under division (C) of section	5120
5747.05 of the Revised Code;	5121

(3) The lump sum distribution credit under division (D) of	5122
section 5747.05 of the Revised Code;	5123

(4) The dependent care credit under section 5747.054 of the	5124
Revised Code;	5125

(5) The lump sum retirement income credit under division (C)	5126
of section 5747.055 of the Revised Code;	5127

(6) The lump sum retirement income credit under division (D)	5128
of section 5747.055 of the Revised Code;	5129

(7) The lump sum retirement income credit under division (E)	5130
of section 5747.055 of the Revised Code;	5131

(8) The low-income credit under section 5747.056 of the	5132
Revised Code;	5133

(9) The credit for displaced workers who pay for job training	5134
under section 5747.27 of the Revised Code;	5135

(10) The campaign contribution credit under section 5747.29	5136
of the Revised Code;	5137

(11) The twenty-dollar personal exemption credit under	5138
section 5747.022 of the Revised Code;	5139

(12) The joint filing credit under division (G) of section	5140
5747.05 of the Revised Code;	5141

(13) The nonresident credit under division (A) of section	5142
5747.05 of the Revised Code;	5143

(14) The credit for a resident's out-of-state income under	5144
division (B) of section 5747.05 of the Revised Code;	5145

(15) The credit for employers that enter into agreements with	5146
child day-care centers under section 5747.34 of the Revised Code;	5147

(16) The credit for employers that reimburse employee child	5148
care expenses under section 5747.36 of the Revised Code;	5149

(17) The credit for adoption of a minor child under section	5150
5747.37 of the Revised Code;	5151

(18) The credit for purchases of lights and reflectors under	5152
section 5747.38 of the Revised Code;	5153

(19) The nonrefundable job retention credit under division	5154
(B) of section 5747.058 of the Revised Code;	5155

(20) The credit for selling alternative fuel under section	5156
5747.77 of the Revised Code;	5157

(21) The second credit for purchases of new manufacturing	5158
machinery and equipment and the credit for using Ohio coal under	5159
section 5747.31 of the Revised Code;	5160

(22) The job training credit under section 5747.39 of the	5161
Revised Code;	5162

(23) The enterprise zone credit under section 5709.66 of the	5163
Revised Code;	5164

(24) The credit for the eligible costs associated with a	5165
voluntary action under section 5747.32 of the Revised Code;	5166

(25) The credit for employers that establish on-site child	5167
day-care centers under section 5747.35 of the Revised Code;	5168

(26) The ethanol plant investment credit under section	5169
5747.75 of the Revised Code;	5170

(27) The credit for purchases of qualifying grape production	5171
property under section 5747.28 of the Revised Code;	5172

(28) The small business investment credit under section	5173
5747.81 of the Revised Code;	5174

(29) The credit for research and development and technology	5175
transfer investors under section 5747.33 of the Revised Code;	5176

(30) The enterprise zone credits under section 5709.65 of the	5177
Revised Code;	5178

(31) The research and development credit under section	5179
5747.331 of the Revised Code;	5180

(32) The credit for rehabilitating a historic building under	5181
section 5747.76 of the Revised Code;	5182

(33) The refundable credit for rehabilitating a historic	5183
building under section 5747.76 of the Revised Code;	5184

(34) The refundable jobs creation credit or job retention	5185
credit under division (A) of section 5747.058 of the Revised Code;	5186

(35) The refundable credit for taxes paid by a qualifying	5187
entity granted under section 5747.059 of the Revised Code;	5188

(36) The refundable credits for taxes paid by a qualifying	5189
pass-through entity granted under division (J) of section 5747.08	5190
of the Revised Code;	5191

(37) The refundable credit for tax withheld under division	5192
(B)(1) of section 5747.062 of the Revised Code;	5193

(38) The refundable credit for tax withheld under section	5194
5747.063 of the Revised Code;	5195

(39) The refundable credit under section 5747.80 of the	5196
Revised Code for losses on loans made to the Ohio venture capital	5197
program under sections 150.01 to 150.10 of the Revised Code;	5198

(40) The refundable motion picture production credit under	5199
section 5747.66 of the Revised Code;	5200

(41) The refundable credit for financial institution taxes	5201
paid by a pass-through entity granted under section 5747.65 of the	5202
Revised Code.	5203

(B) For any credit, except the refundable credits enumerated	5204
in this section and the credit granted under division (I) of	5205
section 5747.08 of the Revised Code, the amount of the credit for	5206
a taxable year shall not exceed the tax due after allowing for any	5207
other credit that precedes it in the order required under this	5208
section. Any excess amount of a particular credit may be carried	5209
forward if authorized under the section creating that credit.	5210
Nothing in this chapter shall be construed to allow a taxpayer to	5211
claim, directly or indirectly, a credit more than once for a	5212
taxable year.	5213

Sec. 5751.01.  As used in this chapter:

5214

(A) "Person" means, but is not limited to, individuals,	5215
combinations of individuals of any form, receivers, assignees,	5216
trustees in bankruptcy, firms, companies, joint-stock companies,	5217
business trusts, estates, partnerships, limited liability	5218
partnerships, limited liability companies, associations, joint	5219
ventures, clubs, societies, for-profit corporations, S	5220
corporations, qualified subchapter S subsidiaries, qualified	5221
subchapter S trusts, trusts, entities that are disregarded for	5222
federal income tax purposes, and any other entities.	5223

(B) "Consolidated elected taxpayer" means a group of two or	5224
more persons treated as a single taxpayer for purposes of this	5225
chapter as the result of an election made under section 5751.011	5226
of the Revised Code.	5227

(C) "Combined taxpayer" means a group of two or more persons	5228
treated as a single taxpayer for purposes of this chapter under	5229
section 5751.012 of the Revised Code.	5230

(D) "Taxpayer" means any person, or any group of persons in	5231
the case of a consolidated elected taxpayer or combined taxpayer	5232
treated as one taxpayer, required to register or pay tax under	5233
this chapter. "Taxpayer" does not include excluded persons.	5234

(E) "Excluded person" means any of the following:

5235

(1) Any person with not more than one hundred fifty thousand	5236
dollars of taxable gross receipts during the calendar year.	5237
Division (E)(1) of this section does not apply to a person that is	5238
a member of a consolidated elected taxpayer;	5239

(2) A public utility that paid the excise tax imposed by	5240
section 5727.24 or 5727.30 of the Revised Code based on one or	5241
more measurement periods that include the entire tax period under	5242
this chapter, except that a public utility that is a combined	5243
company is a taxpayer with regard to the following gross receipts:	5244

(a) Taxable gross receipts directly attributed to a public	5245
utility activity, but not directly attributed to an activity that	5246
is subject to the excise tax imposed by section 5727.24 or 5727.30	5247
of the Revised Code;	5248

(b) Taxable gross receipts that cannot be directly attributed	5249
to any activity, multiplied by a fraction whose numerator is the	5250
taxable gross receipts described in division (E)(2)(a) of this	5251
section and whose denominator is the total taxable gross receipts	5252
that can be directly attributed to any activity;	5253

(c) Except for any differences resulting from the use of an	5254
accrual basis method of accounting for purposes of determining	5255
gross receipts under this chapter and the use of the cash basis	5256
method of accounting for purposes of determining gross receipts	5257
under section 5727.24 of the Revised Code, the gross receipts	5258
directly attributed to the activity of a natural gas company shall	5259
be determined in a manner consistent with division (D) of section	5260
5727.03 of the Revised Code.	5261

As used in division (E)(2) of this section, "combined	5262
company" and "public utility" have the same meanings as in section	5263
5727.01 of the Revised Code.	5264

(3) A financial institution, as defined in section 5725.01	5265
5726.01 of the Revised Code, that paid the corporation franchise	5266
tax charged by division (D) ofimposed by section 5733.065726.02	5267
of the Revised Code based on one or more taxable years that	5268
include the entire tax period under this chapter;	5269

(4) A dealer in intangibles, as defined in section 5725.01 of	5270
the Revised Code, that paid the dealer in intangibles tax levied	5271
by division (D) of section 5707.03 of the Revised Code based on	5272
one or more measurement periods that include the entire tax period	5273
under this chapter;	5274

(5) A financial holding company as defined in the "Bank	5275
Holding Company Act," 12 U.S.C. 1841(p);	5276

(6) A bank holding company as defined in the "Bank Holding	5277
Company Act," 12 U.S.C. 1841(a);	5278

(7) A savings and loan holding company as defined in the	5279
"Home Owners Loan Act," 12 U.S.C. 1467a(a)(1)(D) that is engaging	5280
only in activities or investments permissible for a financial	5281
holding company under 12 U.S.C. 1843(k);	5282

(8) A person directly or indirectly owned by one or more	5283
financial institutions, financial holding companies, bank holding	5284
companies, or savings and loan holding companies described in	5285
division (E)(3), (5), (6), or (7) of this section that is engaged	5286
in activities permissible for a financial holding company under 12	5287
U.S.C. 1843(k), except that any such person held pursuant to	5288
merchant banking authority under 12 U.S.C. 1843(k)(4)(H) or 12	5289
U.S.C. 1843(k)(4)(I) is not an excluded person, or a person	5290
directly or indirectly owned by one or more insurance companies	5291
described in division (E)(9) of this section that is authorized to	5292
do the business of insurance in this state.A person directly or	5293
indirectly owned by one or more financial institutions, as defined	5294
in section 5726.01 of the Revised Code, that paid the tax imposed	5295
by section 5726.02 of the Revised Code based on one or more	5296
taxable years that include the entire tax period under this	5297
chapter.	5298

For the purposes of division (E)(8)(4) of this section, a	5299
person owns another person under the following circumstances:	5300

(a) In the case of corporations issuing capital stock, one	5301
corporation owns another corporation if it owns fifty per cent or	5302
more of the other corporation's capital stock with current voting	5303
rights;	5304

(b) In the case of a limited liability company, one person	5305
owns the company if that person's membership interest, as defined	5306
in section 1705.01 of the Revised Code, is fifty per cent or more	5307
of the combined membership interests of all persons owning such	5308
interests in the company;	5309

(c) In the case of a partnership, trust, or other	5310
unincorporated business organization other than a limited	5311
liability company, one person owns the organization if, under the	5312
articles of organization or other instrument governing the affairs	5313
of the organization, that person has a beneficial interest in the	5314
organization's profits, surpluses, losses, or distributions of	5315
fifty per cent or more of the combined beneficial interests of all	5316
persons having such an interest in the organization;	5317

(d) In the case of multiple ownership, the ownership	5318
interests of more than one person may be aggregated to meet the	5319
fifty per cent ownership tests in this division only when each	5320
such owner is described in division (E)(3), (5), (6), or (7) of	5321
this section and is engaged in activities permissible for a	5322
financial holding company under 12 U.S.C. 1843(k) or is a person	5323
directly or indirectly owned by one or more insurance companies	5324
described in division (E)(9) of this section that is authorized to	5325
do the business of insurance in this state.	5326

(9)(5) A domestic insurance company or foreign insurance	5327
company, as defined in section 5725.01 of the Revised Code, that	5328
paid the insurance company premiums tax imposed by section 5725.18	5329
or Chapter 5729. of the Revised Code based on one or more	5330
measurement periods that include the entire tax period under this	5331
chapter;	5332

(10) A person that solely facilitates or services one or more	5333
securitizations or similar transactions for any person described	5334
in division (E)(3), (5), (6), (7), (8), or (9) of this section.	5335
For purposes of this division, "securitization" means transferring	5336
one or more assets to one or more persons and then issuing	5337
securities backed by the right to receive payment from the asset	5338
or assets so transferred.	5339

(11)(6) Except as otherwise provided in this division, a	5340
pre-income tax trust as defined in division (FF)(4) of section	5341
5747.01 of the Revised Code and any pass-through entity of which	5342
such pre-income tax trust owns or controls, directly, indirectly,	5343
or constructively through related interests, more than five per	5344
cent of the ownership or equity interests. If the pre-income tax	5345
trust has made a qualifying pre-income tax trust election under	5346
division (FF)(3) of section 5747.01 of the Revised Code, then the	5347
trust and the pass-through entities of which it owns or controls,	5348
directly, indirectly, or constructively through related interests,	5349
more than five per cent of the ownership or equity interests,	5350
shall not be excluded persons for purposes of the tax imposed	5351
under section 5751.02 of the Revised Code.	5352

(12)(7) Nonprofit organizations or the state and its	5353
agencies, instrumentalities, or political subdivisions.	5354

(F) Except as otherwise provided in divisions (F)(2), (3),	5355
and (4) of this section, "gross receipts" means the total amount	5356
realized by a person, without deduction for the cost of goods sold	5357
or other expenses incurred, that contributes to the production of	5358
gross income of the person, including the fair market value of any	5359
property and any services received, and any debt transferred or	5360
forgiven as consideration.	5361

(1) The following are examples of gross receipts:

5362

(a) Amounts realized from the sale, exchange, or other	5363
disposition of the taxpayer's property to or with another;	5364

(b) Amounts realized from the taxpayer's performance of	5365
services for another;	5366

(c) Amounts realized from another's use or possession of the	5367
taxpayer's property or capital;	5368

(d) Any combination of the foregoing amounts.

5369

(2) "Gross receipts" excludes the following amounts:

5370

(a) Interest income except interest on credit sales;

5371

(b) Dividends and distributions from corporations, and	5372
distributive or proportionate shares of receipts and income from a	5373
pass-through entity as defined under section 5733.04 of the	5374
Revised Code;	5375

(c) Receipts from the sale, exchange, or other disposition of	5376
an asset described in section 1221 or 1231 of the Internal Revenue	5377
Code, without regard to the length of time the person held the	5378
asset. Notwithstanding section 1221 of the Internal Revenue Code,	5379
receipts from hedging transactions also are excluded to the extent	5380
the transactions are entered into primarily to protect a financial	5381
position, such as managing the risk of exposure to (i) foreign	5382
currency fluctuations that affect assets, liabilities, profits,	5383
losses, equity, or investments in foreign operations; (ii)	5384
interest rate fluctuations; or (iii) commodity price fluctuations.	5385
As used in division (F)(2)(c) of this section, "hedging	5386
transaction" has the same meaning as used in section 1221 of the	5387
Internal Revenue Code and also includes transactions accorded	5388
hedge accounting treatment under statement of financial accounting	5389
standards number 133 of the financial accounting standards board.	5390
For the purposes of division (F)(2)(c) of this section, the actual	5391
transfer of title of real or tangible personal property to another	5392
entity is not a hedging transaction.	5393

(d) Proceeds received attributable to the repayment,	5394
maturity, or redemption of the principal of a loan, bond, mutual	5395
fund, certificate of deposit, or marketable instrument;	5396

(e) The principal amount received under a repurchase	5397
agreement or on account of any transaction properly characterized	5398
as a loan to the person;	5399

(f) Contributions received by a trust, plan, or other	5400
arrangement, any of which is described in section 501(a) of the	5401
Internal Revenue Code, or to which Title 26, Subtitle A, Chapter	5402
1, Subchapter (D) of the Internal Revenue Code applies;	5403

(g) Compensation, whether current or deferred, and whether in	5404
cash or in kind, received or to be received by an employee, former	5405
employee, or the employee's legal successor for services rendered	5406
to or for an employer, including reimbursements received by or for	5407
an individual for medical or education expenses, health insurance	5408
premiums, or employee expenses, or on account of a dependent care	5409
spending account, legal services plan, any cafeteria plan	5410
described in section 125 of the Internal Revenue Code, or any	5411
similar employee reimbursement;	5412

(h) Proceeds received from the issuance of the taxpayer's own	5413
stock, options, warrants, puts, or calls, or from the sale of the	5414
taxpayer's treasury stock;	5415

(i) Proceeds received on the account of payments from	5416
insurance policies, except those proceeds received for the loss of	5417
business revenue;	5418

(j) Gifts or charitable contributions received; membership	5419
dues received by trade, professional, homeowners', or condominium	5420
associations; and payments received for educational courses,	5421
meetings, meals, or similar payments to a trade, professional, or	5422
other similar association; and fundraising receipts received by	5423
any person when any excess receipts are donated or used	5424
exclusively for charitable purposes;	5425

(k) Damages received as the result of litigation in excess of	5426
amounts that, if received without litigation, would be gross	5427
receipts;	5428

(l) Property, money, and other amounts received or acquired	5429
by an agent on behalf of another in excess of the agent's	5430
commission, fee, or other remuneration;	5431

(m) Tax refunds, other tax benefit recoveries, and	5432
reimbursements for the tax imposed under this chapter made by	5433
entities that are part of the same combined taxpayer or	5434
consolidated elected taxpayer group, and reimbursements made by	5435
entities that are not members of a combined taxpayer or	5436
consolidated elected taxpayer group that are required to be made	5437
for economic parity among multiple owners of an entity whose tax	5438
obligation under this chapter is required to be reported and paid	5439
entirely by one owner, pursuant to the requirements of sections	5440
5751.011 and 5751.012 of the Revised Code;	5441

(n) Pension reversions;

5442

(o) Contributions to capital;

5443

(p) Sales or use taxes collected as a vendor or an	5444
out-of-state seller on behalf of the taxing jurisdiction from a	5445
consumer or other taxes the taxpayer is required by law to collect	5446
directly from a purchaser and remit to a local, state, or federal	5447
tax authority;	5448

(q) In the case of receipts from the sale of cigarettes or	5449
tobacco products by a wholesale dealer, retail dealer,	5450
distributor, manufacturer, or seller, all as defined in section	5451
5743.01 of the Revised Code, an amount equal to the federal and	5452
state excise taxes paid by any person on or for such cigarettes or	5453
tobacco products under subtitle E of the Internal Revenue Code or	5454
Chapter 5743. of the Revised Code;	5455

(r) In the case of receipts from the sale of motor fuel by a	5456
licensed motor fuel dealer, licensed retail dealer, or licensed	5457
permissive motor fuel dealer, all as defined in section 5735.01 of	5458
the Revised Code, an amount equal to federal and state excise	5459
taxes paid by any person on such motor fuel under section 4081 of	5460
the Internal Revenue Code or Chapter 5735. of the Revised Code;	5461

(s) In the case of receipts from the sale of beer or	5462
intoxicating liquor, as defined in section 4301.01 of the Revised	5463
Code, by a person holding a permit issued under Chapter 4301. or	5464
4303. of the Revised Code, an amount equal to federal and state	5465
excise taxes paid by any person on or for such beer or	5466
intoxicating liquor under subtitle E of the Internal Revenue Code	5467
or Chapter 4301. or 4305. of the Revised Code;	5468

(t) Receipts realized by a new motor vehicle dealer or used	5469
motor vehicle dealer, as defined in section 4517.01 of the Revised	5470
Code, from the sale or other transfer of a motor vehicle, as	5471
defined in that section, to another motor vehicle dealer for the	5472
purpose of resale by the transferee motor vehicle dealer, but only	5473
if the sale or other transfer was based upon the transferee's need	5474
to meet a specific customer's preference for a motor vehicle;	5475

(u) Receipts from a financial institution described in	5476
division (E)(3) of this section for services provided to the	5477
financial institution in connection with the issuance, processing,	5478
servicing, and management of loans or credit accounts, if such	5479
financial institution and the recipient of such receipts have at	5480
least fifty per cent of their ownership interests owned or	5481
controlled, directly or constructively through related interests,	5482
by common owners;	5483

(v) Receipts realized from administering anti-neoplastic	5484
drugs and other cancer chemotherapy, biologicals, therapeutic	5485
agents, and supportive drugs in a physician's office to patients	5486
with cancer;	5487

(w) Funds received or used by a mortgage broker that is not a	5488
dealer in intangibles, other than fees or other consideration,	5489
pursuant to a table-funding mortgage loan or warehouse-lending	5490
mortgage loan. Terms used in division (F)(2)(w) of this section	5491
have the same meanings as in section 1322.01 of the Revised Code,	5492
except "mortgage broker" means a person assisting a buyer in	5493
obtaining a mortgage loan for a fee or other consideration paid by	5494
the buyer or a lender, or a person engaged in table-funding or	5495
warehouse-lending mortgage loans that are first lien mortgage	5496
loans.	5497

(x) Property, money, and other amounts received by a	5498
professional employer organization, as defined in section 4125.01	5499
of the Revised Code, from a client employer, as defined in that	5500
section, in excess of the administrative fee charged by the	5501
professional employer organization to the client employer;	5502

(y) In the case of amounts retained as commissions by a	5503
permit holder under Chapter 3769. of the Revised Code, an amount	5504
equal to the amounts specified under that chapter that must be	5505
paid to or collected by the tax commissioner as a tax and the	5506
amounts specified under that chapter to be used as purse money;	5507

(z) Qualifying distribution center receipts.

5508

(i) For purposes of division (F)(2)(z) of this section:

5509

(I) "Qualifying distribution center receipts" means receipts	5510
of a supplier from qualified property that is delivered to a	5511
qualified distribution center, multiplied by a quantity that	5512
equals one minus the Ohio delivery percentage.	5513

(II) "Qualified property" means tangible personal property	5514
delivered to a qualified distribution center that is shipped to	5515
that qualified distribution center solely for further shipping by	5516
the qualified distribution center to another location in this	5517
state or elsewhere. "Further shipping" includes storing and	5518
repackaging such property into smaller or larger bundles, so long	5519
as such property is not subject to further manufacturing or	5520
processing.	5521

(III) "Qualified distribution center" means a warehouse or	5522
other similar facility in this state that, for the qualifying	5523
year, is operated by a person that is not part of a combined	5524
taxpayer group and that has a qualifying certificate. However, all	5525
warehouses or other similar facilities that are operated by	5526
persons in the same taxpayer group and that are located within one	5527
mile of each other shall be treated as one qualified distribution	5528
center.	5529

(IV) "Qualifying year" means the calendar year to which the	5530
qualifying certificate applies.	5531

(V) "Qualifying period" means the period of the first day of	5532
July of the second year preceding the qualifying year through the	5533
thirtieth day of June of the year preceding the qualifying year.	5534

(VI) "Qualifying certificate" means the certificate issued by	5535
the tax commissioner after the operator of a distribution center	5536
files an annual application with the commissioner. The application	5537
and annual fee shall be filed and paid for each qualified	5538
distribution center on or before the first day of September before	5539
the qualifying year or within forty-five days after the	5540
distribution center opens, whichever is later.	5541

The applicant must substantiate to the commissioner's	5542
satisfaction that, for the qualifying period, all persons	5543
operating the distribution center have more than fifty per cent of	5544
the cost of the qualified property shipped to a location such that	5545
it would be sitused outside this state under the provisions of	5546
division (E) of section 5751.033 of the Revised Code. The	5547
applicant must also substantiate that the distribution center	5548
cumulatively had costs from its suppliers equal to or exceeding	5549
five hundred million dollars during the qualifying period. (For	5550
purposes of division (F)(2)(z)(i)(VI) of this section, "supplier"	5551
excludes any person that is part of the consolidated elected	5552
taxpayer group, if applicable, of the operator of the qualified	5553
distribution center.) The commissioner may require the applicant	5554
to have an independent certified public accountant certify that	5555
the calculation of the minimum thresholds required for a qualified	5556
distribution center by the operator of a distribution center has	5557
been made in accordance with generally accepted accounting	5558
principles. The commissioner shall issue or deny the issuance of a	5559
certificate within sixty days after the receipt of the	5560
application. A denial is subject to appeal under section 5717.02	5561
of the Revised Code. If the operator files a timely appeal under	5562
section 5717.02 of the Revised Code, the operator shall be granted	5563
a qualifying certificate, provided that the operator is liable for	5564
any tax, interest, or penalty upon amounts claimed as qualifying	5565
distribution center receipts, other than those receipts exempt	5566
under division (C)(1) of section 5751.011 of the Revised Code,	5567
that would have otherwise not been owed by its suppliers if the	5568
qualifying certificate was valid.	5569

(VII) "Ohio delivery percentage" means the proportion of the	5570
total property delivered to a destination inside Ohio from the	5571
qualified distribution center during the qualifying period	5572
compared with total deliveries from such distribution center	5573
everywhere during the qualifying period.	5574

(ii) If the distribution center is new and was not open for	5575
the entire qualifying period, the operator of the distribution	5576
center may request that the commissioner grant a qualifying	5577
certificate. If the certificate is granted and it is later	5578
determined that more than fifty per cent of the qualified property	5579
during that year was not shipped to a location such that it would	5580
be sitused outside of this state under the provisions of division	5581
(E) of section 5751.033 of the Revised Code or if it is later	5582
determined that the person that operates the distribution center	5583
had average monthly costs from its suppliers of less than forty	5584
million dollars during that year, then the operator of the	5585
distribution center shall be liable for any tax, interest, or	5586
penalty upon amounts claimed as qualifying distribution center	5587
receipts, other than those receipts exempt under division (C)(1)	5588
of section 5751.011 of the Revised Code, that would have not	5589
otherwise been owed by its suppliers during the qualifying year if	5590
the qualifying certificate was valid. (For purposes of division	5591
(F)(2)(z)(ii) of this section, "supplier" excludes any person that	5592
is part of the consolidated elected taxpayer group, if applicable,	5593
of the operator of the qualified distribution center.)	5594

(iii) When filing an application for a qualifying certificate	5595
under division (F)(2)(z)(i)(VI) of this section, the operator of a	5596
qualified distribution center also shall provide documentation, as	5597
the commissioner requires, for the commissioner to ascertain the	5598
Ohio delivery percentage. The commissioner, upon issuing the	5599
qualifying certificate, also shall certify the Ohio delivery	5600
percentage. The operator of the qualified distribution center may	5601
appeal the commissioner's certification of the Ohio delivery	5602
percentage in the same manner as an appeal is taken from the	5603
denial of a qualifying certificate under division (F)(2)(z)(i)(VI)	5604
of this section.	5605

Within thirty days after all appeals have been exhausted, the	5606
operator of the qualified distribution center shall notify the	5607
affected suppliers of qualified property that such suppliers are	5608
required to file, within sixty days after receiving notice from	5609
the operator of the qualified distribution center, amended reports	5610
for the impacted calendar quarter or quarters or calendar year,	5611
whichever the case may be. Any additional tax liability or tax	5612
overpayment shall be subject to interest but shall not be subject	5613
to the imposition of any penalty so long as the amended returns	5614
are timely filed. The supplier of tangible personal property	5615
delivered to the qualified distribution center shall include in	5616
its report of taxable gross receipts the receipts from the total	5617
sales of property delivered to the qualified distribution center	5618
for the calendar quarter or calendar year, whichever the case may	5619
be, multiplied by the Ohio delivery percentage for the qualifying	5620
year. Nothing in division (F)(2)(z)(iii) of this section shall be	5621
construed as imposing liability on the operator of a qualified	5622
distribution center for the tax imposed by this chapter arising	5623
from any change to the Ohio delivery percentage.	5624

(iv) In the case where the distribution center is new and not	5625
open for the entire qualifying period, the operator shall make a	5626
good faith estimate of an Ohio delivery percentage for use by	5627
suppliers in their reports of taxable gross receipts for the	5628
remainder of the qualifying period. The operator of the facility	5629
shall disclose to the suppliers that such Ohio delivery percentage	5630
is an estimate and is subject to recalculation. By the due date of	5631
the next application for a qualifying certificate, the operator	5632
shall determine the actual Ohio delivery percentage for the	5633
estimated qualifying period and proceed as provided in division	5634
(F)(2)(z)(iii) of this section with respect to the calculation and	5635
recalculation of the Ohio delivery percentage. The supplier is	5636
required to file, within sixty days after receiving notice from	5637
the operator of the qualified distribution center, amended reports	5638
for the impacted calendar quarter or quarters or calendar year,	5639
whichever the case may be. Any additional tax liability or tax	5640
overpayment shall be subject to interest but shall not be subject	5641
to the imposition of any penalty so long as the amended returns	5642
are timely filed.	5643

(v) Qualifying certificates and Ohio delivery percentages	5644
issued by the commissioner shall be open to public inspection and	5645
shall be timely published by the commissioner. A supplier relying	5646
in good faith on a certificate issued under this division shall	5647
not be subject to tax on the qualifying distribution center	5648
receipts under division (F)(2)(z) of this section. A person	5649
receiving a qualifying certificate is responsible for paying the	5650
tax, interest, and penalty upon amounts claimed as qualifying	5651
distribution center receipts that would not otherwise have been	5652
owed by the supplier if the qualifying certificate were available	5653
when it is later determined that the qualifying certificate should	5654
not have been issued because the statutory requirements were in	5655
fact not met.	5656

(vi) The annual fee for a qualifying certificate shall be one	5657
hundred thousand dollars for each qualified distribution center.	5658
If a qualifying certificate is not issued, the annual fee is	5659
subject to refund after the exhaustion of all appeals provided for	5660
in division (F)(2)(z)(i)(VI) of this section. The fee imposed	5661
under this division may be assessed in the same manner as the tax	5662
imposed under this chapter. The first one hundred thousand dollars	5663
of the annual application fees collected each calendar year shall	5664
be credited to the commercial activity tax administrative fund.	5665
The remainder of the annual application fees collected shall be	5666
distributed in the same manner required under section 5751.20 of	5667
the Revised Code.	5668

(vii) The tax commissioner may require that adequate security	5669
be posted by the operator of the distribution center on appeal	5670
when the commissioner disagrees that the applicant has met the	5671
minimum thresholds for a qualified distribution center as set	5672
forth in divisions (F)(2)(z)(i)(VI) and (F)(2)(z)(ii) of this	5673
section.	5674

(aa) Receipts of an employer from payroll deductions relating	5675
to the reimbursement of the employer for advancing moneys to an	5676
unrelated third party on an employee's behalf;	5677

(bb) Cash discounts allowed and taken;

5678

(cc) Returns and allowances;

5679

(dd) Bad debts from receipts on the basis of which the tax	5680
imposed by this chapter was paid in a prior quarterly tax payment	5681
period. For the purpose of this division, "bad debts" means any	5682
debts that have become worthless or uncollectible between the	5683
preceding and current quarterly tax payment periods, have been	5684
uncollected for at least six months, and that may be claimed as a	5685
deduction under section 166 of the Internal Revenue Code and the	5686
regulations adopted under that section, or that could be claimed	5687
as such if the taxpayer kept its accounts on the accrual basis.	5688
"Bad debts" does not include repossessed property, uncollectible	5689
amounts on property that remains in the possession of the taxpayer	5690
until the full purchase price is paid, or expenses in attempting	5691
to collect any account receivable or for any portion of the debt	5692
recovered;	5693

(ee) Any amount realized from the sale of an account	5694
receivable to the extent the receipts from the underlying	5695
transaction giving rise to the account receivable were included in	5696
the gross receipts of the taxpayer;	5697

(ff) Any receipts directly attributed to providing public	5698
services pursuant to sections 126.60 to 126.605 of the Revised	5699
Code, or any receipts directly attributed to a transfer agreement	5700
or to the enterprise transferred under that agreement under	5701
section 4313.02 of the Revised Code.	5702

(gg) Any receipts for which the tax imposed by this chapter	5703
is prohibited by the Constitution or laws of the United States or	5704
the Constitution of Ohio.	5705

(hh)(i) As used in this division:

5706

(I) "Qualified uranium receipts" means receipts from the	5707
sale, exchange, lease, loan, production, processing, or other	5708
disposition of uranium within a uranium enrichment zone certified	5709
by the tax commissioner under division (F)(2)(hh)(ii) of this	5710
section. "Qualified uranium receipts" does not include any	5711
receipts with a situs in this state outside a uranium enrichment	5712
zone certified by the tax commissioner under division	5713
(F)(2)(hh)(ii) of this section.	5714

(II) "Uranium enrichment zone" means all real property that	5715
is part of a uranium enrichment facility licensed by the United	5716
States nuclear regulatory commission and that was or is owned or	5717
controlled by the United States department of energy or its	5718
successor.	5719

(ii) Any person that owns, leases, or operates real or	5720
tangible personal property constituting or located within a	5721
uranium enrichment zone may apply to the tax commissioner to have	5722
the uranium enrichment zone certified for the purpose of excluding	5723
qualified uranium receipts under division (F)(2)(hh) of this	5724
section. The application shall include such information that the	5725
tax commissioner prescribes. Within sixty days after receiving the	5726
application, the tax commissioner shall certify the zone for that	5727
purpose if the commissioner determines that the property qualifies	5728
as a uranium enrichment zone as defined in division (F)(2)(hh) of	5729
this section, or, if the tax commissioner determines that the	5730
property does not qualify, the commissioner shall deny the	5731
application or request additional information from the applicant.	5732
If the tax commissioner denies an application, the commissioner	5733
shall state the reasons for the denial. The applicant may appeal	5734
the denial of an application to the board of tax appeals pursuant	5735
to section 5717.02 of the Revised Code. If the applicant files a	5736
timely appeal, the tax commissioner shall conditionally certify	5737
the applicant's property. The conditional certification shall	5738
expire when all of the applicant's appeals are exhausted. Until	5739
final resolution of the appeal, the applicant shall retain the	5740
applicant's records in accordance with section 5751.12 of the	5741
Revised Code, notwithstanding any time limit on the preservation	5742
of records under that section.	5743

(ii) Amounts realized by licensed motor fuel dealers or	5744
licensed permissive motor fuel dealers from the exchange of	5745
petroleum products, including motor fuel, between such dealers,	5746
provided that delivery of the petroleum products occurs at a	5747
refinery, terminal, pipeline, or marine vessel and that the	5748
exchanging dealers agree neither dealer shall require monetary	5749
compensation from the other for the value of the exchanged	5750
petroleum products other than such compensation for differences in	5751
product location or grade. Division (F)(2)(ii) of this section	5752
does not apply to amounts realized as a result of differences in	5753
location or grade of exchanged petroleum products or from	5754
handling, lubricity, dye, or other additive injections fees,	5755
pipeline security fees, or similar fees. As used in this division,	5756
"motor fuel," "licensed motor fuel dealer," "licensed permissive	5757
motor fuel dealer," and "terminal" have the same meanings as in	5758
section 5735.01 of the Revised Code.	5759

(hh)(jj) In the case of amounts collected by a licensed	5760
casino operator from casino gaming, amounts in excess of the	5761
casino operator's gross casino revenue. In this division, "casino	5762
operator" and "casino gaming" have the meanings defined in section	5763
3772.01 of the Revised Code, and "gross casino revenue" has the	5764
meaning defined in section 5753.01 of the Revised Code.	5765

(3) In the case of a taxpayer when acting as a real estate	5766
broker, "gross receipts" includes only the portion of any fee for	5767
the service of a real estate broker, or service of a real estate	5768
salesperson associated with that broker, that is retained by the	5769
broker and not paid to an associated real estate salesperson or	5770
another real estate broker. For the purposes of this division,	5771
"real estate broker" and "real estate salesperson" have the same	5772
meanings as in section 4735.01 of the Revised Code.	5773

(4) A taxpayer's method of accounting for gross receipts for	5774
a tax period shall be the same as the taxpayer's method of	5775
accounting for federal income tax purposes for the taxpayer's	5776
federal taxable year that includes the tax period. If a taxpayer's	5777
method of accounting for federal income tax purposes changes, its	5778
method of accounting for gross receipts under this chapter shall	5779
be changed accordingly.	5780

(G) "Taxable gross receipts" means gross receipts sitused to	5781
this state under section 5751.033 of the Revised Code.	5782

(H) A person has "substantial nexus with this state" if any	5783
of the following applies. The person:	5784

(1) Owns or uses a part or all of its capital in this state;

5785

(2) Holds a certificate of compliance with the laws of this	5786
state authorizing the person to do business in this state;	5787

(3) Has bright-line presence in this state;

5788

(4) Otherwise has nexus with this state to an extent that the	5789
person can be required to remit the tax imposed under this chapter	5790
under the Constitution of the United States.	5791

(I) A person has "bright-line presence" in this state for a	5792
reporting period and for the remaining portion of the calendar	5793
year if any of the following applies. The person:	5794

(1) Has at any time during the calendar year property in this	5795
state with an aggregate value of at least fifty thousand dollars.	5796
For the purpose of division (I)(1) of this section, owned property	5797
is valued at original cost and rented property is valued at eight	5798
times the net annual rental charge.	5799

(2) Has during the calendar year payroll in this state of at	5800
least fifty thousand dollars. Payroll in this state includes all	5801
of the following:	5802

(a) Any amount subject to withholding by the person under	5803
section 5747.06 of the Revised Code;	5804

(b) Any other amount the person pays as compensation to an	5805
individual under the supervision or control of the person for work	5806
done in this state; and	5807

(c) Any amount the person pays for services performed in this	5808
state on its behalf by another.	5809

(3) Has during the calendar year taxable gross receipts of at	5810
least five hundred thousand dollars.	5811

(4) Has at any time during the calendar year within this	5812
state at least twenty-five per cent of the person's total	5813
property, total payroll, or total gross receipts.	5814

(5) Is domiciled in this state as an individual or for	5815
corporate, commercial, or other business purposes.	5816

(J) "Tangible personal property" has the same meaning as in	5817
section 5739.01 of the Revised Code.	5818

(K) "Internal Revenue Code" means the Internal Revenue Code	5819
of 1986, 100 Stat. 2085, 26 U.S.C. 1, as amended. Any term used in	5820
this chapter that is not otherwise defined has the same meaning as	5821
when used in a comparable context in the laws of the United States	5822
relating to federal income taxes unless a different meaning is	5823
clearly required. Any reference in this chapter to the Internal	5824
Revenue Code includes other laws of the United States relating to	5825
federal income taxes.	5826

(L) "Calendar quarter" means a three-month period ending on	5827
the thirty-first day of March, the thirtieth day of June, the	5828
thirtieth day of September, or the thirty-first day of December.	5829

(M) "Tax period" means the calendar quarter or calendar year	5830
on the basis of which a taxpayer is required to pay the tax	5831
imposed under this chapter.	5832

(N) "Calendar year taxpayer" means a taxpayer for which the	5833
tax period is a calendar year.	5834

(O) "Calendar quarter taxpayer" means a taxpayer for which	5835
the tax period is a calendar quarter.	5836

(P) "Agent" means a person authorized by another person to	5837
act on its behalf to undertake a transaction for the other,	5838
including any of the following:	5839

(1) A person receiving a fee to sell financial instruments;

5840

(2) A person retaining only a commission from a transaction	5841
with the other proceeds from the transaction being remitted to	5842
another person;	5843

(3) A person issuing licenses and permits under section	5844
1533.13 of the Revised Code;	5845

(4) A lottery sales agent holding a valid license issued	5846
under section 3770.05 of the Revised Code;	5847

(5) A person acting as an agent of the division of liquor	5848
control under section 4301.17 of the Revised Code.	5849

(Q) "Received" includes amounts accrued under the accrual	5850
method of accounting.	5851

(R) "Reporting person" means a person in a consolidated	5852
elected taxpayer or combined taxpayer group that is designated by	5853
that group to legally bind the group for all filings and tax	5854
liabilities and to receive all legal notices with respect to	5855
matters under this chapter, or, for the purposes of section	5856
5751.04 of the Revised Code, a separate taxpayer that is not a	5857
member of such a group.	5858

Sec. 5751.011.  (A) A group of two or more persons may elect	5859
to be a consolidated elected taxpayer for the purposes of this	5860
chapter if the group satisfies all of the following requirements:	5861

(1) The group elects to include all persons, including	5862
persons enumerated in divisions (E)(2) to (10)(5) of section	5863
5751.01 of the Revised Code, having at least eighty per cent, or	5864
having at least fifty per cent, of the value of their ownership	5865
interests owned or controlled, directly or constructively through	5866
related interests, by common owners during all or any portion of	5867
the tax period, together with the common owners.	5868

A group making its initial election on the basis of the	5869
eighty per cent ownership test may change its election so that its	5870
consolidated elected taxpayer group is formed on the basis of the	5871
fifty per cent ownership test if all of the following are	5872
satisfied:	5873

(a) When the initial election was made, the group did not	5874
have any persons satisfying the fifty per cent ownership test;	5875

(b) One or more of the persons in the initial group	5876
subsequently acquires ownership interests in a person such that	5877
the fifty per cent ownership test is satisfied, the eighty per	5878
cent ownership test is not satisfied, and the acquired person	5879
would be required to be included in a combined taxpayer group	5880
under section 5751.012 of the Revised Code;	5881

(c) The group requests the change in a written request to the	5882
tax commissioner on or before the due date for filing the first	5883
return due under section 5751.051 of the Revised Code after the	5884
date of the acquisition;	5885

(d) The group has not previously changed its election.

5886

At the election of the group, all entities that are not	5887
incorporated or formed under the laws of a state or of the United	5888
States and that meet the consolidated elected ownership test shall	5889
either be included in the group or all shall be excluded from the	5890
group. If, at the time of registration, the group does not include	5891
any such entities that meet the consolidated elected ownership	5892
test, the group shall elect to either include or exclude the newly	5893
acquired entities before the due date of the first return due	5894
after the date of the acquisition.	5895

Each group shall notify the tax commissioner of the foregoing	5896
elections before the due date of the return for the period in	5897
which the election becomes binding. If fifty per cent of the value	5898
of a person's ownership interests is owned or controlled by each	5899
of two consolidated elected taxpayer groups formed under the fifty	5900
per cent ownership or control test, that person is a member of	5901
each group for the purposes of this section, and each group shall	5902
include in the group's taxable gross receipts fifty per cent of	5903
that person's taxable gross receipts. Otherwise, all of that	5904
person's taxable gross receipts shall be included in the taxable	5905
gross receipts of the consolidated elected taxpayer group of which	5906
the person is a member. In no event shall the ownership or control	5907
of fifty per cent of the value of a person's ownership interests	5908
by two otherwise unrelated groups form the basis for consolidating	5909
the groups into a single consolidated elected taxpayer group or	5910
permit any exclusion under division (C) of this section of taxable	5911
gross receipts between members of the two groups. Division (A)(3)	5912
of this section applies with respect to the elections described in	5913
this division.	5914

(2) The group makes the election to be treated as a	5915
consolidated elected taxpayer in the manner prescribed under	5916
division (D) of this section.	5917

(3) Subject to review and audit by the tax commissioner, the	5918
group agrees that all of the following apply:	5919

(a) The group shall file reports as a single taxpayer for at	5920
least the next eight calendar quarters following the election so	5921
long as at least two or more of the members of the group meet the	5922
requirements of division (A)(1) of this section.	5923

(b) Before the expiration of the eighth such calendar	5924
quarter, the group shall notify the commissioner if it elects to	5925
cancel its designation as a consolidated elected taxpayer. If the	5926
group does not so notify the tax commissioner, the election	5927
remains in effect for another eight calendar quarters.	5928

(c) If, at any time during any of those eight calendar	5929
quarters following the election, a former member of the group no	5930
longer meets the requirements under division (A)(1) of this	5931
section, that member shall report and pay the tax imposed under	5932
this chapter separately, as a member of a combined taxpayer, or,	5933
if the former member satisfies such requirements with respect to	5934
another consolidated elected group, as a member of that	5935
consolidated elected group.	5936

(d) The group agrees to the application of division (B) of	5937
this section.	5938

(B) A group of persons making the election under this section	5939
shall report and pay tax on all of the group's taxable gross	5940
receipts even if substantial nexus with this state does not exist	5941
for one or more persons in the group.	5942

(C)(1)(a) Members of a consolidated elected taxpayer group	5943
shall exclude gross receipts among persons included in the	5944
consolidated elected taxpayer group.	5945

(b) Subject to divisions (C)(1)(c) and (C)(2) of this	5946
section, nothing in this section shall have the effect of	5947
requiring a consolidated elected taxpayer group to include gross	5948
receipts received by a person enumerated in divisions (E)(2) to	5949
(10)(5) of section 5751.01 of the Revised Code if that person is a	5950
member of the group pursuant to the elections made by the group	5951
under division (A)(1) of this section.	5952

(c)(i) As used in division (C)(1)(c) of this section, "dealer	5953
transfer" means a transfer of property that satisfies both of the	5954
following: (I) the property is directly transferred by any means	5955
from one member of the group to another member of the group that	5956
is a dealer in intangibles but is not a qualifying dealer as	5957
defined in section 5707.031 of the Revised Code; and (II) the	5958
property is subsequently delivered by the dealer in intangibles to	5959
a person that is not a member of the group.	5960

(ii) In the event of a dealer transfer, a consolidated	5961
elected taxpayer group shall not exclude, under division (C) of	5962
this section, gross receipts from the transfer described in	5963
division (C)(1)(c)(i)(I) of this section.	5964

(2) Gross receipts related to the sale or transmission of	5965
electricity through the use of an intermediary regional	5966
transmission organization approved by the federal energy	5967
regulatory commission shall be excluded from taxable gross	5968
receipts under division (C)(1) of this section if all other	5969
requirements of that division are met, even if the receipts are	5970
from and to the same member of the group.	5971

(D) To make the election to be a consolidated elected	5972
taxpayer, a group of persons shall notify the tax commissioner of	5973
the election in the manner prescribed by the commissioner and pay	5974
the commissioner a registration fee equal to the lesser of two	5975
hundred dollars or twenty dollars for each person in the group. No	5976
additional fee shall be imposed for the addition of new members to	5977
the group once the group has remitted a fee in the amount of two	5978
hundred dollars. The election shall be made and the fee paid	5979
before the beginning of the first calendar quarter to which the	5980
election applies. The fee shall be collected and used in the same	5981
manner as provided in section 5751.04 of the Revised Code.	5982

The election shall be made on a form prescribed by the tax	5983
commissioner for that purpose and shall be signed by one or more	5984
individuals with authority, separately or together, to make a	5985
binding election on behalf of all persons in the group.	5986

Any person acquired or formed after the filing of the	5987
registration shall be included in the group if the person meets	5988
the requirements of division (A)(1) of this section, and the group	5989
shall notify the tax commissioner of any additions to the group	5990
with the next tax return it files with the commissioner.	5991

Sec. 5751.012.  (A) All persons, other than persons	5992
enumerated in divisions (E)(2) to (10)(5) of section 5751.01 of	5993
the Revised Code, having more than fifty per cent of the value of	5994
their ownership interest owned or controlled, directly or	5995
constructively through related interests, by common owners during	5996
all or any portion of the tax period, together with the common	5997
owners, shall be members of a combined taxpayer if those persons	5998
are not members of a consolidated elected taxpayer pursuant to an	5999
election under section 5751.011 of the Revised Code.	6000

(B) A combined taxpayer shall register, file returns, and pay	6001
taxes under this chapter as a single taxpayer.	6002

(C) A combined taxpayer shall neither exclude taxable gross	6003
receipts between its members nor from others that are not members.	6004

(D) A combined taxpayer shall pay to the tax commissioner a	6005
registration fee equal to the lesser of two hundred dollars or	6006
twenty dollars for each person in the group. No additional fee	6007
shall be imposed for the addition of new members to the group once	6008
the group has remitted a fee in the amount of two hundred dollars.	6009
The fee shall be timely paid before the later of the beginning of	6010
the first calendar quarter or November 15, 2005. The fee shall be	6011
collected and used in the same manner as provided in section	6012
5751.04 of the Revised Code.	6013

Any person acquired or formed after the filing of the	6014
registration shall be included in the group if the person meets	6015
the requirements of division (A) of this section, and the group	6016
must notify the tax commissioner of any additions with the next	6017
quarterly tax return it files with the commissioner.	6018

Sec. 5751.54.  (A) Any term used in this section has the same	6019
meaning as in section 122.85 of the Revised Code.	6020

(B) There is allowed a refundable credit against the tax	6021
imposed by section 5751.02 of the Revised Code for any person that	6022
is the certificate owner of a tax credit certificate issued under	6023
section 122.85 of the Revised Code. The credit shall be claimed	6024
for the tax period in which the certificate is issued by the	6025
director of development services. The credit amount equals the	6026
amount stated in the certificate. The credit shall be claimed in	6027
the order required under section 5751.98 of the Revised Code. If	6028
the credit amount exceeds the tax otherwise due under section	6029
5751.02 of the Revised Code after deducting all other credits in	6030
that order, the excess shall be refunded.	6031

(C) Nothing in this section allows a person to claim more	6032
than one credit per tax credit-eligible production.	6033

Sec. 5751.98.  (A) To provide a uniform procedure for	6034
calculating the amount of tax due under this chapter, a taxpayer	6035
shall claim any credits to which it is entitled in the following	6036
order:	6037

(1) The nonrefundable jobs retention credit under division	6038
(B) of section 5751.50 of the Revised Code;	6039

(2) The nonrefundable credit for qualified research expenses	6040
under division (B) of section 5751.51 of the Revised Code;	6041

(3) The nonrefundable credit for a borrower's qualified	6042
research and development loan payments under division (B) of	6043
section 5751.52 of the Revised Code;	6044

(4) The nonrefundable credit for calendar years 2010 to 2029	6045
for unused net operating losses under division (B) of section	6046
5751.53 of the Revised Code;	6047

(5) The refundable motion picture production credit for	6048
calendar year 2030 for unused net operating losses under division	6049
(C) of section 5751.535751.54 of the Revised Code;	6050

(6) The refundable jobs creation credit or job retention	6051
credit under division (A) of section 5751.50 of the Revised Code;	6052

(7) The refundable credit for calendar year 2030 for unused	6053
net operating losses under division (C) of section 5751.53 of the	6054
Revised Code.	6055

(B) For any credit except the refundable credits enumerated	6056
in this section, the amount of the credit for a tax period shall	6057
not exceed the tax due after allowing for any other credit that	6058
precedes it in the order required under this section. Any excess	6059
amount of a particular credit may be carried forward if authorized	6060
under the section creating the credit.	6061

Section 2.  That existing sections 122.17, 122.171, 122.85,	6062
145.114, 145.116, 149.311, 150.01, 150.07, 150.10, 715.013,	6063
742.114, 742.116, 3307.152, 3307.154, 3309.157, 3309.159,	6064
5505.068, 5505.0610, 5703.052, 5703.053, 5703.70, 5707.03,	6065
5709.76, 5711.22, 5725.02, 5725.14, 5725.16, 5725.26, 5725.33,	6066
5733.01, 5733.02, 5733.021, 5733.06, 5747.01, 5747.98, 5751.01,	6067
5751.011, 5751.012, and 5751.98 of the Revised Code are hereby	6068
repealed.	6069

Section 3. The amendment by this act of division (E) of	6070
section 5751.01 and sections 5751.011 and 5751.012 of the Revised	6071
Code applies to tax periods beginning on or after January 1, 2014.	6072

Section 4. (A) The Tax Commissioner shall not assess or hold	6073
liable for the failure to report or pay the tax imposed by section	6074
5751.02 of the Revised Code for any tax periods ending before	6075
January 1, 2014, a corporation or any other person directly or	6076
indirectly owned by one or more insurance companies that are	6077
subject to the tax imposed by section 5725.18 or Chapter 5729. of	6078
the Revised Code, provided the corporation, but not the other	6079
person or persons, so owned by the insurance company or companies	6080
reported and paid the tax imposed by section 5733.06 of the	6081
Revised Code and not the tax imposed by section 5751.02 of the	6082
Revised Code for taxable periods before January 1, 2014.	6083

(B) For the purposes of this section, division (E)(8)(a),(b),	6084
or (c) of section 5751.01 of the Revised Code as that section	6085
existed before January 1, 2014, shall apply in determining whether	6086
a person is directly or indirectly owned.	6087

Section 5. The General Assembly, applying the principle	6088
stated in division (B) of section 1.52 of the Revised Code that	6089
amendments are to be harmonized if reasonably capable of	6090
simultaneous operation, finds that the following sections,	6091
presented in this act as composites of the sections as amended by	6092
the acts indicated, are the resulting versions of the sections in	6093
effect prior to the effective date of the sections as presented in	6094
this act:	6095

Section 5747.01 of the Revised Code as amended by both Am.	6096
Sub. H.B. 153 and Am. H.B. 167 of the 129th General Assembly.	6097

Section 5751.01 of the Revised Code as amended by both Am.	6098
Sub. H.B. 153 and Sub. H.B. 277 of the 129th General Assembly.	6099