As Reported by the Senate Ways and Means and Economic Development Committee

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 

Senators Bacon, Schaffer 

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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, 1311.85, 1311.86, 1311.87,

3

1311.88, 3307.152, 3307.154, 3309.157, 3309.159,

4

5505.068, 5505.0610, 5703.052, 5703.053, 5703.70,

5

5707.03, 5709.76, 5711.22, 5713.03, 5725.02,

6

5725.14, 5725.16, 5725.26, 5725.33, 5733.01,

7

5733.02, 5733.021, 5733.06, 5747.01, 5747.98,

8

5751.01, 5751.011, 5751.012, and 5751.98, to enact

9

sections 5701.12, 5726.01 to 5726.04, 5726.041,

10

5726.05 to 5726.08, 5726.10, 5726.20, 5726.21,

11

5726.30 to 5726.33, 5726.36, 5726.40 to 5726.43,

12

5726.50 to 5726.57, 5726.98, 5726.99, 5747.65, and

13

5751.54 of the Revised Code, and to repeal Section

14

757.51 of Am. Sub. H.B. 487 of the 129th General

15

Assembly to impose a new tax on financial

16

institutions, effective January 1, 2014, to

17

provide that such institutions and dealers in

18

intangibles are no longer subject to the

19

corporation franchise tax or dealers in

20

intangibles tax after 2013, to require dealers in

21

intangibles that are not owned by a financial

22

institution to pay the commercial activity tax

23

after 2013 except for "small dollar lenders,"

24

which will become subject to the new financial

25

institutions tax, to make changes to the law

26

regarding commercial real estate broker liens, to

27

require county auditors to account for the impact

28

of police powers and other governmental actions in

29

the valuation of real property, and to accelerate

30

the application of provisions of Am. Sub. H.B. 487

31

of the 129th General Assembly affecting the

32

valuation of real property.

33

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

Section 1. That sections 122.17, 122.171, 122.85, 145.114,	34
145.116, 149.311, 150.01, 150.07, 150.10, 715.013, 742.114,	35
742.116, 1311.85, 1311.86, 1311.87, 1311.88, 3307.152, 3307.154,	36
3309.157, 3309.159, 5505.068, 5505.0610, 5703.052, 5703.053,	37
5703.70, 5707.03, 5709.76, 5711.22, 5713.03, 5725.02, 5725.14,	38
5725.16, 5725.26, 5725.33, 5733.01, 5733.02, 5733.021, 5733.06,	39
5747.01, 5747.98, 5751.01, 5751.011, 5751.012, and 5751.98 be	40
amended and sections 5701.12, 5726.01, 5726.02, 5726.03, 5726.04,	41
5726.041, 5726.05, 5726.06, 5726.07, 5726.08, 5726.10, 5726.20,	42
5726.21, 5726.30, 5726.31, 5726.32, 5726.33, 5726.36, 5726.40,	43
5726.41, 5726.42, 5726.43, 5726.50, 5726.51, 5726.52, 5726.53,	44
5726.54, 5726.55, 5726.56, 5726.57, 5726.98, 5726.99, 5747.65, and	45
5751.54 of the Revised Code be enacted to read as follows:	46

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

47

(1) "Income tax revenue" means the total amount withheld	48
under section 5747.06 of the Revised Code by the taxpayer during	49
the taxable year, or during the calendar year that includes the	50
tax period, from the compensation of each employee employed in the	51
project to the extent the employee's withholdings are not used to	52
determine the credit under section 122.171 of the Revised Code.	53
"Income tax revenue" excludes amounts withheld before the day the	54
taxpayer becomes eligible for the credit.	55

(2) "Baseline income tax revenue" means income tax revenue	56
except that the applicable withholding period is the twelve months	57
immediately preceding the date the tax credit authority approves	58
the taxpayer's application multiplied by the sum of one plus an	59
annual pay increase factor to be determined by the tax credit	60
authority. If the taxpayer becomes eligible for the credit after	61
the first day of the taxpayer's taxable year or after the first	62
day of the calendar year that includes the tax period, the	63
taxpayer's baseline income tax revenue for the first such taxable	64
or calendar year of credit eligibility shall be reduced in	65
proportion to the number of days during the taxable or calendar	66
year for which the taxpayer was not eligible for the credit. For	67
subsequent taxable or calendar years, "baseline income tax	68
revenue" equals the unreduced baseline income tax revenue for the	69
preceding taxable or calendar year multiplied by the sum of one	70
plus the pay increase factor.	71

(3) "Excess income tax revenue" means income tax revenue	72
minus baseline income tax revenue.	73

(B) The tax credit authority may make grants under this	74
section to foster job creation in this state. Such a grant shall	75
take the form of a refundable credit allowed against the tax	76
imposed by section 5725.18, 5726.02, 5729.03, 5733.06, or 5747.02	77
or levied under Chapter 5751. of the Revised Code. The credit	78
shall be claimed for the taxable years or tax periods specified in	79
the taxpayer's agreement with the tax credit authority under	80
division (D) of this section. With respect to taxes imposed under	81
section 5726.02, 5733.06, or 5747.02 or Chapter 5751. of the	82
Revised Code, the credit shall be claimed in the order required	83
under section 5726.98, 5733.98, 5747.98, or 5751.98 of the	84
Revised Code. The amount of the credit available for a taxable	85
year or for a calendar year that includes a tax period equals the	86
excess income tax revenue for that year multiplied by the	87
percentage specified in the agreement with the tax credit	88
authority. Any credit granted under this section against the tax	89
imposed by section 5733.06 or 5747.02 of the Revised Code, to the	90
extent not fully utilized against such tax for taxable years	91
ending prior to 2008, shall automatically be converted without any	92
action taken by the tax credit authority to a credit against the	93
tax levied under Chapter 5751. of the Revised Code for tax periods	94
beginning on or after July 1, 2008, provided that the person to	95
whom the credit was granted is subject to such tax. The converted	96
credit shall apply to those calendar years in which the remaining	97
taxable years specified in the agreement end.	98

(C) A taxpayer or potential taxpayer who proposes a project	99
to create new jobs in this state may apply to the tax credit	100
authority to enter into an agreement for a tax credit under this	101
section. The director of development services shall prescribe the	102
form of the application. After receipt of an application, the	103
authority may enter into an agreement with the taxpayer for a	104
credit under this section if it determines all of the following:	105

(1) The taxpayer's project will increase payroll and income	106
tax revenue;	107

(2) The taxpayer's project is economically sound and will	108
benefit the people of this state by increasing opportunities for	109
employment and strengthening the economy of this state;	110

(3) Receiving the tax credit is a major factor in the	111
taxpayer's decision to go forward with the project.	112

(D) An agreement under this section shall include all of the	113
following:	114

(1) A detailed description of the project that is the subject	115
of the agreement;	116

(2) The term of the tax credit, which shall not exceed	117
fifteen years, and the first taxable year, or first calendar year	118
that includes a tax period, for which the credit may be claimed;	119

(3) A requirement that the taxpayer shall maintain operations	120
at the project location for at least the greater of seven years or	121
the term of the credit plus three years;	122

(4) The percentage, as determined by the tax credit	123
authority, of excess income tax revenue that will be allowed as	124
the amount of the credit for each taxable year or for each	125
calendar year that includes a tax period;	126

(5) The pay increase factor to be applied to the taxpayer's	127
baseline income tax revenue;	128

(6) A requirement that the taxpayer annually shall report to	129
the director of development services employment, tax withholding,	130
investment, and other information the director needs to perform	131
the director's duties under this section;	132

(7) A requirement that the director of development services	133
annually review the information reported under division (D)(6) of	134
this section and verify compliance with the agreement; if the	135
taxpayer is in compliance, a requirement that the director issue a	136
certificate to the taxpayer stating that the information has been	137
verified and identifying the amount of the credit that may be	138
claimed for the taxable or calendar year;	139

(8) A provision providing that the taxpayer may not relocate	140
a substantial number of employment positions from elsewhere in	141
this state to the project location unless the director of	142
development services determines that the legislative authority of	143
the county, township, or municipal corporation from which the	144
employment positions would be relocated has been notified by the	145
taxpayer of the relocation.	146

For purposes of this section, the movement of an employment	147
position from one political subdivision to another political	148
subdivision shall be considered a relocation of an employment	149
position unless the employment position in the first political	150
subdivision is replaced.	151

(E) If a taxpayer fails to meet or comply with any condition	152
or requirement set forth in a tax credit agreement, the tax credit	153
authority may amend the agreement to reduce the percentage or term	154
of the tax credit. The reduction of the percentage or term may	155
take effect in the current taxable or calendar year.	156

(F) Projects that consist solely of point-of-final-purchase	157
retail facilities are not eligible for a tax credit under this	158
section. If a project consists of both point-of-final-purchase	159
retail facilities and nonretail facilities, only the portion of	160
the project consisting of the nonretail facilities is eligible for	161
a tax credit and only the excess income tax revenue from the	162
nonretail facilities shall be considered when computing the amount	163
of the tax credit. If a warehouse facility is part of a	164
point-of-final-purchase retail facility and supplies only that	165
facility, the warehouse facility is not eligible for a tax credit.	166
Catalog distribution centers are not considered	167
point-of-final-purchase retail facilities for the purposes of this	168
division, and are eligible for tax credits under this section.	169

(G) Financial statements and other information submitted to	170
the department of development services or the tax credit authority	171
by an applicant or recipient of a tax credit under this section,	172
and any information taken for any purpose from such statements or	173
information, are not public records subject to section 149.43 of	174
the Revised Code. However, the chairperson of the authority may	175
make use of the statements and other information for purposes of	176
issuing public reports or in connection with court proceedings	177
concerning tax credit agreements under this section. Upon the	178
request of the tax commissioner or, if the applicant or recipient	179
is an insurance company, upon the request of the superintendent of	180
insurance, the chairperson of the authority shall provide to the	181
commissioner or superintendent any statement or information	182
submitted by an applicant or recipient of a tax credit in	183
connection with the credit. The commissioner or superintendent	184
shall preserve the confidentiality of the statement or	185
information.	186

(H) A taxpayer claiming a credit under this section shall	187
submit to the tax commissioner or, if the taxpayer is an insurance	188
company, to the superintendent of insurance, a copy of the	189
director of development'sdevelopment services' certificate of	190
verification under division (D)(7) of this section with the	191
taxpayer's tax report or return for the taxable year or for the	192
calendar year that includes the tax period. Failure to submit a	193
copy of the certificate with the report or return does not	194
invalidate a claim for a credit if the taxpayer submits a copy of	195
the certificate to the commissioner or superintendent within sixty	196
days after the commissioner or superintendent requests it.	197

(I) The director of development services, after consultation	198
with the tax commissioner and the superintendent of insurance and	199
in accordance with Chapter 119. of the Revised Code, shall adopt	200
rules necessary to implement this section. The rules may provide	201
for recipients of tax credits under this section to be charged	202
fees to cover administrative costs of the tax credit program. The	203
fees collected shall be credited to the tax incentive programs	204
operating fund created in section 122.174 of the Revised Code. At	205
the time the director gives public notice under division (A) of	206
section 119.03 of the Revised Code of the adoption of the rules,	207
the director shall submit copies of the proposed rules to the	208
chairpersons of the standing committees on economic development in	209
the senate and the house of representatives.	210

(J) For the purposes of this section, a taxpayer may include	211
a partnership, a corporation that has made an election under	212
subchapter S of chapter one of subtitle A of the Internal Revenue	213
Code, or any other business entity through which income flows as a	214
distributive share to its owners. A partnership, S-corporation, or	215
other such business entity may elect to pass the credit received	216
under this section through to the persons to whom the income or	217
profit of the partnership, S-corporation, or other entity is	218
distributed. The election shall be made on the annual report	219
required under division (D)(6) of this section. The election	220
applies to and is irrevocable for the credit for which the report	221
is submitted. If the election is made, the credit shall be	222
apportioned among those persons in the same proportions as those	223
in which the income or profit is distributed.	224

(K) If the director of development services determines that a	225
taxpayer who has received a credit under this section is not	226
complying with the requirement under division (D)(3) of this	227
section, the director shall notify the tax credit authority of the	228
noncompliance. After receiving such a notice, and after giving the	229
taxpayer an opportunity to explain the noncompliance, the tax	230
credit authority may require the taxpayer to refund to this state	231
a portion of the credit in accordance with the following:	232

(1) If the taxpayer maintained operations at the project	233
location for a period less than or equal to the term of the	234
credit, an amount not exceeding one hundred per cent of the sum of	235
any credits allowed and received under this section;	236

(2) If the taxpayer maintained operations at the project	237
location for a period longer than the term of the credit, but less	238
than the greater of seven years or the term of the credit plus	239
three years, an amount not exceeding seventy-five per cent of the	240
sum of any credits allowed and received under this section.	241

In determining the portion of the tax credit to be refunded	242
to this state, the tax credit authority shall consider the effect	243
of market conditions on the taxpayer's project and whether the	244
taxpayer continues to maintain other operations in this state.	245
After making the determination, the authority shall certify the	246
amount to be refunded to the tax commissioner or superintendent of	247
insurance, as appropriate. If the amount is certified to the	248
commissioner, the commissioner shall make an assessment for that	249
amount against the taxpayer under Chapter 5726., 5733., 5747., or	250
5751. of the Revised Code. If the amount is certified to the	251
superintendent, the superintendent shall make an assessment for	252
that amount against the taxpayer under Chapter 5725. or 5729. of	253
the Revised Code. The time limitations on assessments under those	254
chapters do not apply to an assessment under this division, but	255
the commissioner or superintendent, as appropriate, shall make the	256
assessment within one year after the date the authority certifies	257
to the commissioner or superintendent the amount to be refunded.	258

(L) On or before the first day of August each year, the	259
director of development services shall submit a report to the	260
governor, the president of the senate, and the speaker of the	261
house of representatives on the tax credit program under this	262
section. The report shall include information on the number of	263
agreements that were entered into under this section during the	264
preceding calendar year, a description of the project that is the	265
subject of each such agreement, and an update on the status of	266
projects under agreements entered into before the preceding	267
calendar year.	268

(M) There is hereby created the tax credit authority, which	269
consists of the director of development services and four other	270
members appointed as follows: the governor, the president of the	271
senate, and the speaker of the house of representatives each shall	272
appoint one member who shall be a specialist in economic	273
development; the governor also shall appoint a member who is a	274
specialist in taxation. Of the initial appointees, the members	275
appointed by the governor shall serve a term of two years; the	276
members appointed by the president of the senate and the speaker	277
of the house of representatives shall serve a term of four years.	278
Thereafter, terms of office shall be for four years. Initial	279
appointments to the authority shall be made within thirty days	280
after January 13, 1993. Each member shall serve on the authority	281
until the end of the term for which the member was appointed.	282
Vacancies shall be filled in the same manner provided for original	283
appointments. Any member appointed to fill a vacancy occurring	284
prior to the expiration of the term for which the member's	285
predecessor was appointed shall hold office for the remainder of	286
that term. Members may be reappointed to the authority. Members of	287
the authority shall receive their necessary and actual expenses	288
while engaged in the business of the authority. The director of	289
development services shall serve as chairperson of the authority,	290
and the members annually shall elect a vice-chairperson from among	291
themselves. Three members of the authority constitute a quorum to	292
transact and vote on the business of the authority. The majority	293
vote of the membership of the authority is necessary to approve	294
any such business, including the election of the vice-chairperson.	295

The director of development services may appoint a	296
professional employee of the department of development services to	297
serve as the director's substitute at a meeting of the authority.	298
The director shall make the appointment in writing. In the absence	299
of the director from a meeting of the authority, the appointed	300
substitute shall serve as chairperson. In the absence of both the	301
director and the director's substitute from a meeting, the	302
vice-chairperson shall serve as chairperson.	303

(N) For purposes of the credits granted by this section	304
against the taxes imposed under sections 5725.18 and 5729.03 of	305
the Revised Code, "taxable year" means the period covered by the	306
taxpayer's annual statement to the superintendent of insurance.	307

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

308

(1) "Capital investment project" means a plan of investment	309
at a project site for the acquisition, construction, renovation,	310
or repair of buildings, machinery, or equipment, or for	311
capitalized costs of basic research and new product development	312
determined in accordance with generally accepted accounting	313
principles, but does not include any of the following:	314

(a) Payments made for the acquisition of personal property	315
through operating leases;	316

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

317

(c) Payments made to a related member as defined in section	318
5733.042 of the Revised Code or to a consolidated elected taxpayer	319
or a combined taxpayer as defined in section 5751.01 of the	320
Revised Code.	321

(2) "Eligible business" means a taxpayer and its related	322
members with Ohio operations satisfying all of the following:	323

(a) The taxpayer employs at least five hundred full-time	324
equivalent employees or has an annual payroll of at least	325
thirty-five million dollars at the time the tax credit authority	326
grants the tax credit under this section;	327

(b) The taxpayer makes or causes to be made payments for the	328
capital investment project of one of the following:	329

(i) If the taxpayer is engaged at the project site primarily	330
as a manufacturer, at least fifty million dollars in the aggregate	331
at the project site during a period of three consecutive calendar	332
years, including the calendar year that includes a day of the	333
taxpayer's taxable year or tax period with respect to which the	334
credit is granted;	335

(ii) If the taxpayer is engaged at the project site primarily	336
in significant corporate administrative functions, as defined by	337
the director of development services by rule, at least twenty	338
million dollars in the aggregate at the project site during a	339
period of three consecutive calendar years including the calendar	340
year that includes a day of the taxpayer's taxable year or tax	341
period with respect to which the credit is granted;	342

(iii) If the taxpayer is applying to enter into an agreement	343
for a tax credit authorized under division (B)(3) of this section,	344
at least five million dollars in the aggregate at the project site	345
during a period of three consecutive calendar years, including the	346
calendar year that includes a day of the taxpayer's taxable year	347
or tax period with respect to which the credit is granted.	348

(c) The taxpayer had a capital investment project reviewed	349
and approved by the tax credit authority as provided in divisions	350
(C), (D), and (E) of this section.	351

(3) "Full-time equivalent employees" means the quotient	352
obtained by dividing the total number of hours for which employees	353
were compensated for employment in the project by two thousand	354
eighty. "Full-time equivalent employees" shall exclude hours that	355
are counted for a credit under section 122.17 of the Revised Code.	356

(4) "Income tax revenue" means the total amount withheld	357
under section 5747.06 of the Revised Code by the taxpayer during	358
the taxable year, or during the calendar year that includes the	359
tax period, from the compensation of all employees employed in the	360
project whose hours of compensation are included in calculating	361
the number of full-time equivalent employees.	362

(5) "Manufacturer" has the same meaning as in section	363
5739.011 of the Revised Code.	364

(6) "Project site" means an integrated complex of facilities	365
in this state, as specified by the tax credit authority under this	366
section, within a fifteen-mile radius where a taxpayer is	367
primarily operating as an eligible business.	368

(7) "Related member" has the same meaning as in section	369
5733.042 of the Revised Code as that section existed on the	370
effective date of its amendment by Am. Sub. H.B. 215 of the 122nd	371
general assembly, September 29, 1997.	372

(8) "Taxable year" includes, in the case of a domestic or	373
foreign insurance company, the calendar year ending on the	374
thirty-first day of December preceding the day the superintendent	375
of insurance is required to certify to the treasurer of state	376
under section 5725.20 or 5729.05 of the Revised Code the amount of	377
taxes due from insurance companies.	378

(B) The tax credit authority created under section 122.17 of	379
the Revised Code may grant tax credits under this section for the	380
purpose of fostering job retention in this state. Upon application	381
by an eligible business and upon consideration of the	382
recommendation of the director of budget and management, tax	383
commissioner, the superintendent of insurance in the case of an	384
insurance company, and director of development services under	385
division (C) of this section, the tax credit authority may grant	386
the following credits against the tax imposed by section 5725.18,	387
5726.02, 5729.03, 5733.06, 5747.02, or 5751.02 of the Revised	388
Code:	389

(1) A nonrefundable credit to an eligible business;

390

(2) A refundable credit to an eligible business meeting the	391
following conditions, provided that the director of budget and	392
management, tax commissioner, superintendent of insurance in the	393
case of an insurance company, and director of development services	394
have recommended the granting of the credit to the tax credit	395
authority before July 1, 2011:	396

(a) The business retains at least one thousand full-time	397
equivalent employees at the project site.	398

(b) The business makes or causes to be made payments for a	399
capital investment project of at least twenty-five million dollars	400
in the aggregate at the project site during a period of three	401
consecutive calendar years, including the calendar year that	402
includes a day of the business' taxable year or tax period with	403
respect to which the credit is granted.	404

(c) In 2010, the business received a written offer of	405
financial incentives from another state of the United States that	406
the director determines to be sufficient inducement for the	407
business to relocate the business' operations from this state to	408
that state.	409

(3) A refundable credit to an eligible business with a total	410
annual payroll of at least twenty million dollars, provided that	411
the tax credit authority grants the tax credit on or after July 1,	412
2011, and before January 1, 2014.	413

The credits authorized in divisions (B)(1), (2), and (3) of	414
this section may be granted for a period up to fifteen taxable	415
years or, in the case of the tax levied by section 5751.02 of the	416
Revised Code, for a period of up to fifteen calendar years. The	417
credit amount for a taxable year or a calendar year that includes	418
the tax period for which a credit may be claimed equals the income	419
tax revenue for that year multiplied by the percentage specified	420
in the agreement with the tax credit authority. The percentage may	421
not exceed seventy-five per cent. The credit shall be claimed in	422
the order required under section 5725.98, 5726.98, 5729.98,	423
5733.98, 5747.98, or 5751.98 of the Revised Code. In determining	424
the percentage and term of the credit, the tax credit authority	425
shall consider both the number of full-time equivalent employees	426
and the value of the capital investment project. The credit amount	427
may not be based on the income tax revenue for a calendar year	428
before the calendar year in which the tax credit authority	429
specifies the tax credit is to begin, and the credit shall be	430
claimed only for the taxable years or tax periods specified in the	431
eligible business' agreement with the tax credit authority. In no	432
event shall the credit be claimed for a taxable year or tax period	433
terminating before the date specified in the agreement. Any credit	434
granted under this section against the tax imposed by section	435
5733.06 or 5747.02 of the Revised Code, to the extent not fully	436
utilized against such tax for taxable years ending prior to 2008,	437
shall automatically be converted without any action taken by the	438
tax credit authority to a credit against the tax levied under	439
Chapter 5751. of the Revised Code for tax periods beginning on or	440
after July 1, 2008, provided that the person to whom the credit	441
was granted is subject to such tax. The converted credit shall	442
apply to those calendar years in which the remaining taxable years	443
specified in the agreement end.	444

If a nonrefundable credit allowed under division (B)(1) of	445
this section for a taxable year or tax period exceeds the	446
taxpayer's tax liability for that year or period, the excess may	447
be carried forward for the three succeeding taxable or calendar	448
years, but the amount of any excess credit allowed in any taxable	449
year or tax period shall be deducted from the balance carried	450
forward to the succeeding year or period.	451

(C) A taxpayer that proposes a capital investment project to	452
retain jobs in this state may apply to the tax credit authority to	453
enter into an agreement for a tax credit under this section. The	454
director of development services shall prescribe the form of the	455
application. After receipt of an application, the authority shall	456
forward copies of the application to the director of budget and	457
management, the tax commissioner, the superintendent of insurance	458
in the case of an insurance company, and the director of	459
development services, each of whom shall review the application to	460
determine the economic impact the proposed project would have on	461
the state and the affected political subdivisions and shall submit	462
a summary of their determinations and recommendations to the	463
authority.	464

(D) Upon review and consideration of the determinations and	465
recommendations described in division (C) of this section, the tax	466
credit authority may enter into an agreement with the taxpayer for	467
a credit under this section if the authority determines all of the	468
following:	469

(1) The taxpayer's capital investment project will result in	470
the retention of employment in this state.	471

(2) The taxpayer is economically sound and has the ability to	472
complete the proposed capital investment project.	473

(3) The taxpayer intends to and has the ability to maintain	474
operations at the project site for at least the greater of (a) the	475
term of the credit plus three years, or (b) seven years.	476

(4) Receiving the credit is a major factor in the taxpayer's	477
decision to begin, continue with, or complete the project.	478

(5) If the taxpayer is applying to enter into an agreement	479
for a tax credit authorized under division (B)(3) of this section,	480
the taxpayer's capital investment project will be located in the	481
political subdivision in which the taxpayer maintains its	482
principal place of business.	483

(E) An agreement under this section shall include all of the	484
following:	485

(1) A detailed description of the project that is the subject	486
of the agreement, including the amount of the investment, the	487
period over which the investment has been or is being made, the	488
number of full-time equivalent employees at the project site, and	489
the anticipated income tax revenue to be generated.	490

(2) The term of the credit, the percentage of the tax credit,	491
the maximum annual value of tax credits that may be allowed each	492
year, and the first year for which the credit may be claimed.	493

(3) A requirement that the taxpayer maintain operations at	494
the project site for at least the greater of (a) the term of the	495
credit plus three years, or (b) seven years.	496

(4)(a) In the case of a credit granted under division (B)(1)	497
of this section, a requirement that the taxpayer retain at least	498
five hundred full-time equivalent employees at the project site	499
and within this state for the entire term of the credit, or a	500
requirement that the taxpayer maintain an annual payroll of at	501
least thirty-five million dollars for the entire term of the	502
credit;	503

(b) In the case of a credit granted under division (B)(2) of	504
this section, a requirement that the taxpayer retain at least one	505
thousand full-time equivalent employees at the project site and	506
within this state for the entire term of the credit;	507

(c) In the case of a credit granted under division (B)(3) of	508
this section, either of the following:	509

(i) A requirement that the taxpayer retain at least five	510
hundred full-time equivalent employees at the project site and	511
within this state for the entire term of the credit and a	512
requirement that the taxpayer maintain an annual payroll of at	513
least twenty million dollars for the entire term of the credit;	514

(ii) A requirement that the taxpayer maintain an annual	515
payroll of at least thirty-five million dollars for the entire	516
term of the credit.	517

(5) A requirement that the taxpayer annually report to the	518
director of development services employment, tax withholding,	519
capital investment, and other information the director needs to	520
perform the director's duties under this section.	521

(6) A requirement that the director of development services	522
annually review the annual reports of the taxpayer to verify the	523
information reported under division (E)(5) of this section and	524
compliance with the agreement. Upon verification, the director	525
shall issue a certificate to the taxpayer stating that the	526
information has been verified and identifying the amount of the	527
credit for the taxable year or calendar year that includes the tax	528
period. In determining the number of full-time equivalent	529
employees, no position shall be counted that is filled by an	530
employee who is included in the calculation of a tax credit under	531
section 122.17 of the Revised Code.	532

(7) A provision providing that the taxpayer may not relocate	533
a substantial number of employment positions from elsewhere in	534
this state to the project site unless the director of development	535
services determines that the taxpayer notified the legislative	536
authority of the county, township, or municipal corporation from	537
which the employment positions would be relocated.	538

For purposes of this section, the movement of an employment	539
position from one political subdivision to another political	540
subdivision shall be considered a relocation of an employment	541
position unless the movement is confined to the project site. The	542
transfer of an employment position from one political subdivision	543
to another political subdivision shall not be considered a	544
relocation of an employment position if the employment position in	545
the first political subdivision is replaced by another employment	546
position.	547

(8) A waiver by the taxpayer of any limitations periods	548
relating to assessments or adjustments resulting from the	549
taxpayer's failure to comply with the agreement.	550

(F) If a taxpayer fails to meet or comply with any condition	551
or requirement set forth in a tax credit agreement, the tax credit	552
authority may amend the agreement to reduce the percentage or term	553
of the credit. The reduction of the percentage or term may take	554
effect in the current taxable or calendar year.	555

(G) Financial statements and other information submitted to	556
the department of development services or the tax credit authority	557
by an applicant for or recipient of a tax credit under this	558
section, and any information taken for any purpose from such	559
statements or information, are not public records subject to	560
section 149.43 of the Revised Code. However, the chairperson of	561
the authority may make use of the statements and other information	562
for purposes of issuing public reports or in connection with court	563
proceedings concerning tax credit agreements under this section.	564
Upon the request of the tax commissioner, or the superintendent of	565
insurance in the case of an insurance company, the chairperson of	566
the authority shall provide to the commissioner or superintendent	567
any statement or other information submitted by an applicant for	568
or recipient of a tax credit in connection with the credit. The	569
commissioner or superintendent shall preserve the confidentiality	570
of the statement or other information.	571

(H) A taxpayer claiming a tax credit under this section shall	572
submit to the tax commissioner or, in the case of an insurance	573
company, to the superintendent of insurance, a copy of the	574
director of development'sdevelopment services' certificate of	575
verification under division (E)(6) of this section with the	576
taxpayer's tax report or return for the taxable year or for the	577
calendar year that includes the tax period. Failure to submit a	578
copy of the certificate with the report or return does not	579
invalidate a claim for a credit if the taxpayer submits a copy of	580
the certificate to the commissioner or superintendent within sixty	581
days after the commissioner or superintendent requests it.	582

(I) For the purposes of this section, a taxpayer may include	583
a partnership, a corporation that has made an election under	584
subchapter S of chapter one of subtitle A of the Internal Revenue	585
Code, or any other business entity through which income flows as a	586
distributive share to its owners. A partnership, S-corporation, or	587
other such business entity may elect to pass the credit received	588
under this section through to the persons to whom the income or	589
profit of the partnership, S-corporation, or other entity is	590
distributed. The election shall be made on the annual report	591
required under division (E)(5) of this section. The election	592
applies to and is irrevocable for the credit for which the report	593
is submitted. If the election is made, the credit shall be	594
apportioned among those persons in the same proportions as those	595
in which the income or profit is distributed.	596

(J) If the director of development services determines that a	597
taxpayer that received a tax credit undercertificate under	598
division (E)(6) of this section is not complying with the	599
requirement under division (E)(3) of this section, the director	600
shall notify the tax credit authority of the noncompliance. After	601
receiving such a notice, and after giving the taxpayer an	602
opportunity to explain the noncompliance, the authority may	603
terminate the agreement and require the taxpayer, or any related	604
member or members that claimed the tax credit under division (N)	605
of this section, to refund to the state all or a portion of the	606
credit claimed in previous years, as follows:	607

(1) If the taxpayer maintained operations at the project site	608
for less than or equal to the term of the credit, an amount not to	609
exceed one hundred per cent of the sum of any tax credits allowed	610
and received under this section.	611

(2) If the taxpayer maintained operations at the project site	612
longer than the term of the credit, but less than the greater of	613
(a) the term of the credit plus three years, or (b) seven years,	614
the amount required to be refunded shall not exceed seventy-five	615
per cent of the sum of any tax credits allowed and received under	616
this section.	617

In determining the portion of the credit to be refunded to	618
this state, the authority shall consider the effect of market	619
conditions on the taxpayer's project and whether the taxpayer	620
continues to maintain other operations in this state. After making	621
the determination, the authority shall certify the amount to be	622
refunded to the tax commissioner or the superintendent of	623
insurance. If the taxpayer, or any related member or members who	624
claimed the tax credit under division (N) of this section, is not	625
an insurance company, the commissioner shall make an assessment	626
for that amount against the taxpayer under Chapter 5726., 5733.,	627
5747., or 5751. of the Revised Code. If the taxpayer, or any	628
related member or members that claimed the tax credit under	629
division (N) of this section, is an insurance company, the	630
superintendent of insurance shall make an assessment under section	631
5725.222 or 5729.102 of the Revised Code. The time limitations on	632
assessments under those chapters and sections do not apply to an	633
assessment under this division, but the commissioner or	634
superintendent shall make the assessment within one year after the	635
date the authority certifies to the commissioner or superintendent	636
the amount to be refunded.	637

(K) The director of development services, after consultation	638
with the tax commissioner and the superintendent of insurance and	639
in accordance with Chapter 119. of the Revised Code, shall adopt	640
rules necessary to implement this section. The rules may provide	641
for recipients of tax credits under this section to be charged	642
fees to cover administrative costs of the tax credit program. The	643
fees collected shall be credited to the tax incentive programs	644
operating fund created in section 122.174 of the Revised Code. At	645
the time the director gives public notice under division (A) of	646
section 119.03 of the Revised Code of the adoption of the rules,	647
the director shall submit copies of the proposed rules to the	648
chairpersons of the standing committees on economic development in	649
the senate and the house of representatives.	650

(L) On or before the first day of August of each year, the	651
director of development services shall submit a report to the	652
governor, the president of the senate, and the speaker of the	653
house of representatives on the tax credit program under this	654
section. The report shall include information on the number of	655
agreements that were entered into under this section during the	656
preceding calendar year, a description of the project that is the	657
subject of each such agreement, and an update on the status of	658
projects under agreements entered into before the preceding	659
calendar year.	660

(M)(1) The aggregate amount of tax credits issued under	661
division (B)(1) of this section during any calendar year for	662
capital investment projects reviewed and approved by the tax	663
credit authority may not exceed the following amounts:	664

(a) For 2010, thirteen million dollars;

665

(b) For 2011 through 2023, the amount of the limit for the	666
preceding calendar year plus thirteen million dollars;	667

(c) For 2024 and each year thereafter, one hundred	668
ninety-five million dollars.	669

(2) The aggregate amount of tax credits authorized under	670
divisions (B)(2) and (3) of this section and allowed to be claimed	671
by taxpayers in any calendar year for capital improvement projects	672
reviewed and approved by the tax credit authority in 2011, 2012,	673
and 2013 combined shall not exceed twenty-five million dollars. An	674
amount equal to the aggregate amount of credits first authorized	675
in calendar year 2011, 2012, and 2013 may be claimed over the	676
ensuing period up to fifteen years, subject to the terms of	677
individual tax credit agreements.	678

The limitations in division (M) of this section do not apply	679
to credits for capital investment projects approved by the tax	680
credit authority before July 1, 2009.	681

(N) This division applies only to an eligible business that	682
is part of an affiliated group that includes a diversified savings	683
and loan holding company or a grandfathered unitary savings and	684
loan holding company, as those terms are defined in section	685
5726.01 of the Revised Code. Notwithstanding any contrary	686
provision of the agreement between such an eligible business and	687
the tax credit authority, any credit granted under this section	688
against the tax imposed by section 5725.18, 5729.03, 5733.06,	689
5747.02, or 5751.02 of the Revised Code to the eligible business,	690
at the election of the eligible business and without any action by	691
the tax credit authority, may be shared with any member or members	692
of the affiliated group that includes the eligible business, which	693
member or members may claim the credit against the taxes imposed	694
by section 5725.18, 5726.02, 5729.03, 5733.06, 5747.02, or 5751.02	695
of the Revised Code. Credits shall be claimed by the eligible	696
business in sequential order, as applicable, first claiming the	697
credits to the fullest extent possible against the tax that the	698
certificate holder is subject to, then against the tax imposed by,	699
sequentially, section 5729.03, 5725.18, 5747.02, 5751.02, and	700
lastly 5726.02 of the Revised Code. The credits may be allocated	701
among the members of the affiliated group in such manner as the	702
eligible business elects, but subject to the sequential order	703
required under this division. This division applies to credits	704
granted before, on, or after the effective date of H.B. 510 of the	705
129th general assembly. Credits granted before that effective date	706
that are shared and allocated under this division may be claimed	707
in those calendar years in which the remaining taxable years	708
specified in the agreement end.	709

As used in this division, "affiliated group" means a group of	710
two or more persons with fifty per cent or greater of the value of	711
each person's ownership interests owned or controlled directly,	712
indirectly, or constructively through related interests by common	713
owners during all or any portion of the taxable year, and the	714
common owners. "Affiliated group" includes, but is not limited to,	715
any person eligible to be included in a consolidated elected	716
taxpayer group under section 5751.011 of the Revised Code or a	717
combined taxpayer group under section 5751.012 of the Revised	718
Code.	719

Sec. 122.85. (A) As used in this section and in sections	720
5726.55, 5733.59 and, 5747.66, and 5751.54 of the Revised Code:	721

(1) "Tax credit-eligible production" means a motion picture	722
production certified by the director of development services under	723
division (B) of this section as qualifying the motion picture	724
company for a tax credit under section 5726.55, 5733.59 or,	725
5747.66, or 5751.54 of the Revised Code.	726

(2) "Certificate owner" means a motion picture company to	727
which a tax credit certificate is issued.	728

(3) "Motion picture company" means an individual,	729
corporation, partnership, limited liability company, or other form	730
of business association producing a motion picture.	731

(4) "Eligible production expenditures" means expenditures	732
made after June 30, 2009, for goods or services purchased and	733
consumed in this state by a motion picture company directly for	734
the production of a tax credit-eligible production.	735

"Eligible production expenditures" includes, but is not	736
limited to, expenditures for resident and nonresident cast and	737
crew wages, accommodations, costs of set construction and	738
operations, editing and related services, photography, sound	739
synchronization, lighting, wardrobe, makeup and accessories, film	740
processing, transfer, sound mixing, special and visual effects,	741
music, location fees, and the purchase or rental of facilities and	742
equipment.	743

(5) "Motion picture" means entertainment content created in	744
whole or in part within this state for distribution or exhibition	745
to the general public, including, but not limited to,	746
feature-length films; documentaries; long-form, specials,	747
miniseries, series, and interstitial television programming;	748
interactive web sites; sound recordings; videos; music videos;	749
interactive television; interactive games; videogamesvideo games;	750
commercials; any format of digital media; and any trailer, pilot,	751
video teaser, or demo created primarily to stimulate the sale,	752
marketing, promotion, or exploitation of future investment in	753
either a product or a motion picture by any means and media in any	754
digital media format, film, or videotape, provided the motion	755
picture qualifies as a motion picture. "Motion picture" does not	756
include any television program created primarily as news, weather,	757
or financial market reports, a production featuring current events	758
or sporting events, an awards show or other gala event, a	759
production whose sole purpose is fundraising, a long-form	760
production that primarily markets a product or service or in-house	761
corporate advertising or other similar productions, a production	762
for purposes of political advocacy, or any production for which	763
records are required to be maintained under 18 U.S.C. 2257 with	764
respect to sexually explicit content.	765

(B) For the purpose of encouraging and developing a strong	766
film industry in this state, the director of development services	767
may certify a motion picture produced by a motion picture company	768
as a tax credit-eligible production. In the case of a television	769
series, the director may certify the production of each episode of	770
the series as a separate tax credit-eligible production. A motion	771
picture company shall apply for certification of a motion picture	772
as a tax credit-eligible production on a form and in the manner	773
prescribed by the director. Each application shall include the	774
following information:	775

(1) The name and telephone number of the motion picture	776
production company;	777

(2) The name and telephone number of the company's contact	778
person;	779

(3) A list of the first preproduction date through the last	780
production date in Ohio;	781

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

782

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

783

(6) The total budgeted eligible production expenditures and	784
the percentage that amount is of the total production budget of	785
the motion picture;	786

(7) The total percentage of the motion picture being shot in	787
Ohio;	788

(8) The level of employment of cast and crew who reside in	789
Ohio;	790

(9) A synopsis of the script;

791

(10) The shooting script;

792

(11) A creative elements list that includes the names of the	793
principal cast and crew and the producer and director;	794

(12) Documentation of financial ability to undertake and	795
complete the motion picture;	796

(13) Estimated value of the tax credit based upon total	797
budgeted eligible production expenditures;	798

(14) Any other information considered necessary by the	799
director.	800

Within ninety days after certification of a motion picture as	801
a tax credit-eligible production, and any time thereafter upon the	802
director'sdirector of development services' request, the motion	803
picture company shall present to the director of development	804
sufficient evidence of reviewable progress. If the motion picture	805
company fails to present sufficient evidence, the director of	806
development may rescind the certification. Upon rescission, the	807
director shall notify the applicant that the certification has	808
been rescinded. Nothing in this section prohibits an applicant	809
whose tax credit-eligible production certification has been	810
rescinded from submitting a subsequent application for	811
certification.	812

(C)(1) A motion picture company whose motion picture has been	813
certified as a tax credit-eligible production may apply to the	814
director of development services on or after July 1, 2009, for a	815
refundable credit against the tax imposed by section 5726.02,	816
5733.06 or, 5747.02, or 5751.02 of the Revised Code. The director	817
in consultation with the tax commissioner shall prescribe the form	818
and manner of the application and the information or documentation	819
required to be submitted with the application.	820

The credit is determined as follows:

821

(a) If the total budgeted eligible production expenditures	822
stated in the application submitted under division (B) of this	823
section or the actual eligible production expenditures as finally	824
determined under division (D) of this section, whichever is least,	825
is less than or equal to three hundred thousand dollars, no credit	826
is allowed;	827

(b) If the total budgeted eligible production expenditures	828
stated in the application submitted under division (B) of this	829
section or the actual eligible production expenditures as finally	830
determined under division (D) of this section, whichever is least,	831
is greater than three hundred thousand dollars, the credit equals	832
the sum of the following, subject to the limitation in division	833
(C)(4) of this section:	834

(i) Twenty-five per cent of the least of such budgeted or	835
actual eligible expenditure amounts excluding budgeted or actual	836
eligible expenditures for resident cast and crew wages;	837

(ii) Thirty-five per cent of budgeted or actual eligible	838
expenditures for resident cast and crew wages.	839

(2) Except as provided in division (C)(4) of this section, if	840
the director of development services approves a motion picture	841
company's application for a credit, the director shall issue a tax	842
credit certificate to the company. The director in consultation	843
with the tax commissioner shall prescribe the form and manner of	844
issuing certificates. The director shall assign a unique	845
identifying number to each tax credit certificate and shall record	846
the certificate in a register devised and maintained by the	847
director for that purpose. The certificate shall state the amount	848
of the eligible production expenditures on which the credit is	849
based and the amount of the credit. Upon the issuance of a	850
certificate, the director shall certify to the tax commissioner	851
the name of the applicant, the amount of eligible production	852
expenditures shown on the certificate, and any other information	853
required by the rules adopted to administer this section.	854

(3) The amount of eligible production expenditures for which	855
a tax credit may be claimed is subject to inspection and	856
examination by the tax commissioner or employees of the	857
commissioner under section 5703.19 of the Revised Code and any	858
other applicable law. Once the eligible production expenditures	859
are finally determined under section 5703.19 of the Revised Code	860
and division (D) of this section, the credit amount is not subject	861
to adjustment unless the director determines an error was	862
committed in the computation of the credit amount.	863

(4) No tax credit certificate may be issued before the	864
completion of the tax credit-eligible production. For the fiscal	865
biennium beginning July 1, 2009, and ending June 30, 2011, not	866
more than thirty million dollars of tax credit may be allowed, of	867
which not more than ten million dollars of tax credit may be	868
allowed in the first year of the biennium. In succeeding fiscal	869
biennia, not more than twenty million dollars of tax credit may be	870
allowed per fiscal biennium, and not more than ten million dollars	871
may be allowed in the first year of the biennium. At any time, not	872
more than five million dollars of tax credit may be allowed per	873
tax credit-eligible production.	874

(D) A motion picture company whose motion picture has been	875
certified as a tax credit-eligible production shall engage, at the	876
company's expense, an independent certified public accountant to	877
examine the company's production expenditures to identify the	878
expenditures that qualify as eligible production expenditures. The	879
certified public accountant shall issue a report to the company	880
and to the director of development services certifying the	881
company's eligible production expenditures and any other	882
information required by the director. Upon receiving and examining	883
the report, the director may disallow any expenditure the director	884
determines is not an eligible production expenditure. If the	885
director disallows an expenditure, the director shall issue a	886
written notice to the motion picture production company stating	887
that the expenditure is disallowed and the reason for the	888
disallowance. Upon examination of the report and disallowance of	889
any expenditures, the director shall determine finally the lesser	890
of the total budgeted eligible production expenditures stated in	891
the application submitted under division (B) of this section or	892
the actual eligible production expenditures for the purpose of	893
computing the amount of the credit.	894

(E) No credit shall be allowed under section 5726.55, 5733.59	895
or, 5747.66, or 5751.54 of the Revised Code unless the director	896
has reviewed the report and made the determination prescribed by	897
division (D) of this section.	898

(F) This state reserves the right to refuse the use of this	899
state's name in the credits of any tax credit-eligible motion	900
picture production.	901

(G)(1) The director of development services in consultation	902
with the tax commissioner shall adopt rules for the administration	903
of this section, including rules setting forth and governing the	904
criteria for determining whether a motion picture production is a	905
tax credit-eligible production; activities that constitute the	906
production of a motion picture; reporting sufficient evidence of	907
reviewable progress; expenditures that qualify as eligible	908
production expenditures; a competitive process for approving	909
credits; and consideration of geographic distribution of credits.	910
The rules shall be adopted under Chapter 119. of the Revised Code.	911

(2) The director may require a reasonable application fee to	912
cover administrative costs of the tax credit program. The fees	913
collected shall be credited to the motion picture tax credit	914
program operating fund, which is hereby created in the state	915
treasury. The motion picture tax credit program operating fund	916
shall consist of all grants, gifts, fees, and contributions made	917
to the director of development for marketing and promotion of the	918
motion picture industry within this state. The director of	919
development shall use money in the fund to pay expenses related to	920
the administration of the Ohio film office and the credit	921
authorized by this section and sections 5726.55., 5733.59 and,	922
5747.66, and 5751.54 of the Revised Code.	923

Sec. 145.114.  (A) As used in this section and in section	924
145.116 of the Revised Code:	925

(1) "Agent" means a dealer, as defined in section 1707.01 of	926
the Revised Code, who is licensed under sections 1707.01 to	927
1707.45 of the Revised Code or under comparable laws of another	928
state or of the United States.	929

(2) "Minority business enterprise" has the same meaning as in	930
section 122.71 of the Revised Code.	931

(3) "Ohio-qualified agent" means an agent designated as such	932
by the public employees retirement board.	933

(4) "Ohio-qualified investment manager" means an investment	934
manager designated as such by the public employees retirement	935
board.	936

(5) "Principal place of business" means an office in which	937
the agent regularly provides securities or investment advisory	938
services and solicits, meets with, or otherwise communicates with	939
clients.	940

(B) The public employees retirement board shall, for the	941
purposes of this section, designate an agent as an Ohio-qualified	942
agent if the agent meets all of the following requirements:	943

(1) The agent is subject to taxation under Chapter 5725.,	944
5726., 5733., or 5747., or 5751. of the Revised Code;	945

(2) The agent is authorized to conduct business in this	946
state;	947

(3) The agent maintains a principal place of business in this	948
state and employs at least five residents of this state.	949

(C) The public employees retirement board shall adopt and	950
implement a written policy to establish criteria and procedures	951
used to select agents to execute securities transactions on behalf	952
of the retirement system. The policy shall address each of the	953
following:	954

(1) Commissions charged by the agent, both in the aggregate	955
and on a per share basis;	956

(2) The execution speed and trade settlement capabilities of	957
the agent;	958

(3) The responsiveness, reliability, and integrity of the	959
agent;	960

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

961

(5) Any special capabilities of the agent.

962

(D)(1) The board shall, at least annually, establish a policy	963
with the goal to increase utilization by the board of	964
Ohio-qualified agents for the execution of domestic equity and	965
fixed income trades on behalf of the retirement system, when an	966
Ohio-qualified agent offers quality, services, and safety	967
comparable to other agents otherwise available to the board and	968
meets the criteria established under division (C) of this section.	969

(2) The board shall review, at least annually, the	970
performance of the agents that execute securities transactions on	971
behalf of the board.	972

(3) The board shall determine whether an agent is an	973
Ohio-qualified agent, meets the criteria established by the board	974
pursuant to division (C) of this section, and offers quality,	975
services, and safety comparable to other agents otherwise	976
available to the board. The board's determination shall be final.	977

(E) The board shall, at least annually, submit to the Ohio	978
retirement study council a report containing the following	979
information:	980

(1) The name of each agent designated as an Ohio-qualified	981
agent under this section;	982

(2) The name of each agent that executes securities	983
transactions on behalf of the board;	984

(3) The amount of equity and fixed-income trades that are	985
executed by Ohio-qualified agents, expressed as a percentage of	986
all equity and fixed-income trades that are executed by agents on	987
behalf of the board;	988

(4) The compensation paid to Ohio-qualified agents, expressed	989
as a percentage of total compensation paid to all agents that	990
execute securities transactions on behalf of the board;	991

(5) The amount of equity and fixed-income trades that are	992
executed by agents that are minority business enterprises,	993
expressed as a percentage of all equity and fixed-income trades	994
that are executed by agents on behalf of the board;	995

(6) Any other information requested by the Ohio retirement	996
study council regarding the board's use of agents.	997

Sec. 145.116. (A) The public employees retirement board	998
shall, for the purposes of this section, designate an investment	999
manager as an Ohio-qualified investment manager if the investment	1000
manager meets all of the following requirements:	1001

(1) The investment manager is subject to taxation under	1002
Chapter 5725., 5726., 5733., or 5747., or 5751. of the Revised	1003
Code;	1004

(2) The investment manager meets one of the following	1005
requirements:	1006

(a) Has its corporate headquarters or principal place of	1007
business in this state;	1008

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

1009

(c) Has a principal place of business in this state and	1010
employs at least 20 residents of this state.	1011

(B)(1) The board shall, at least annually, establish a policy	1012
with the goal to increase utilization by the board of	1013
Ohio-qualified investment managers, when an Ohio-qualified	1014
investment manager offers quality, services, and safety comparable	1015
to other investment managers otherwise available to the board. The	1016
policy shall also provide for the following:	1017

(a) A process whereby the board can develop a list of	1018
Ohio-qualified investment managers and their investment products;	1019

(b) A process whereby the board can give public notice to	1020
Ohio-qualified investment managers of the board's search for an	1021
investment manager that includes the board's search criteria.	1022

(2) The board shall determine whether an investment manager	1023
is an Ohio-qualified investment manager and whether the investment	1024
manager offers quality, services, and safety comparable to other	1025
investment managers otherwise available to the board. The board's	1026
determination shall be final.	1027

(C) The board shall, at least annually, submit to the Ohio	1028
retirement study council a report containing the following	1029
information:	1030

(1) The name of each investment manager designated as an	1031
Ohio-qualified investment manager under this section;	1032

(2) The name of each investment manager with which the board	1033
contracts;	1034

(3) The amount of assets managed by Ohio-qualified investment	1035
managers, expressed as a percentage of the total assets held by	1036
the retirement system and as a percentage of assets managed by	1037
investment managers with which the board has contracted;	1038

(4) The compensation paid to Ohio-qualified investment	1039
managers, expressed as a percentage of total compensation paid to	1040
all investment managers with which the board has contracted;	1041

(5) Any other information requested by the Ohio retirement	1042
study council regarding the board's use of investment managers.	1043

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

1044

(1) "Historic building" means a building, including its	1045
structural components, that is located in this state and that is	1046
either individually listed on the national register of historic	1047
places under 16 U.S.C. 470a, located in a registered historic	1048
district, and certified by the state historic preservation officer	1049
as being of historic significance to the district, or is	1050
individually listed as aan historic landmark designated by a	1051
local government certified under 16 U.S.C. 470a(c).	1052

(2) "Qualified rehabilitation expenditures" means	1053
expenditures paid or incurred during the rehabilitation period,	1054
and before and after that period as determined under 26 U.S.C. 47,	1055
by an owner of aan historic building to rehabilitate the	1056
building. "Qualified rehabilitation expenditures" includes	1057
architectural or engineering fees paid or incurred in connection	1058
with the rehabilitation, and expenses incurred in the preparation	1059
of nomination forms for listing on the national register of	1060
historic places. "Qualified rehabilitation expenditures" does not	1061
include any of the following:	1062

(a) The cost of acquiring, expanding, or enlarging aan	1063
historic building;	1064

(b) Expenditures attributable to work done to facilities	1065
related to the building, such as parking lots, sidewalks, and	1066
landscaping;	1067

(c) New building construction costs.

1068

(3) "Owner" of aan historic building means a person holding	1069
the fee simple interest in the building. "Owner" does not include	1070
the state or a state agency, or any political subdivision as	1071
defined in section 9.23 of the Revised Code.	1072

(4) "Certificate owner" means the owner of aan historic	1073
building to which a rehabilitation tax credit certificate was	1074
issued under this section.	1075

(5) "Registered historic district" means aan historic	1076
district listed in the national register of historic places under	1077
16 U.S.C. 470a, aan historic district designated by a local	1078
government certified under 16 U.S.C. 470a(c), or a local historic	1079
district certified under 36 C.F.R. 67.8 and 67.9.	1080

(6) "Rehabilitation" means the process of repairing or	1081
altering aan historic building or buildings, making possible an	1082
efficient use while preserving those portions and features of the	1083
building and its site and environment that are significant to its	1084
historic, architectural, and cultural values.	1085

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

1086

(a) If the rehabilitation initially was not planned to be	1087
completed in stages, a period chosen by the owner not to exceed	1088
twenty-four months during which rehabilitation occurs;	1089

(b) If the rehabilitation initially was planned to be	1090
completed in stages, a period chosen by the owner not to exceed	1091
sixty months during which rehabilitation occurs. Each stage shall	1092
be reviewed as a phase of a rehabilitation as determined under 26	1093
C.F.R. 1.48-12 or a successor to that section.	1094

(8) "State historic preservation officer" or "officer" means	1095
the state historic preservation officer appointed by the governor	1096
under 16 U.S.C. 470a.	1097

(B) The owner of aan historic building may apply to the	1098
director of development services for a rehabilitation tax credit	1099
certificate for qualified rehabilitation expenditures paid or	1100
incurred after April 4, 2007, for rehabilitation of aan historic	1101
building. The form and manner of filing such applications shall be	1102
prescribed by rule of the director of development. Each	1103
application shall state the amount of qualified rehabilitation	1104
expenditures the applicant estimates will be paid or incurred. The	1105
director may require applicants to furnish documentation of such	1106
estimates.	1107

The director, after consultation with the tax commissioner	1108
and in accordance with Chapter 119. of the Revised Code, shall	1109
adopt rules that establish all of the following:	1110

(1) Forms and procedures by which applicants may apply for	1111
rehabilitation tax credit certificates;	1112

(2) Criteria for reviewing, evaluating, and approving	1113
applications for certificates within the limitations under	1114
division (D) of this section, criteria for assuring that the	1115
certificates issued encompass a mixture of high and low qualified	1116
rehabilitation expenditures, and criteria for issuing certificates	1117
under division (C)(3)(b) of this section;	1118

(3) Eligibility requirements for obtaining a certificate	1119
under this section;	1120

(4) The form of rehabilitation tax credit certificates;

1121

(5) Reporting requirements and monitoring procedures;

1122

(6) Procedures and criteria for conducting cost-benefit	1123
analyses of historic buildings that are the subjects of	1124
applications filed under this section. The purpose of a	1125
cost-benefit analysis shall be to determine whether rehabilitation	1126
of the historic building will result in a net revenue gain in	1127
state and local taxes once the building is used.	1128

(7) Any other rules necessary to implement and administer	1129
this section.	1130

(C) The director of development services shall review the	1131
applications with the assistance of the state historic	1132
preservation officer and determine whether all of the following	1133
criteria are met:	1134

(1) That the building that is the subject of the application	1135
is aan historic building and the applicant is the owner of the	1136
building;	1137

(2) That the rehabilitation will satisfy standards prescribed	1138
by the United States secretary of the interior under 16 U.S.C.	1139
470, et seq., as amended, and 36 C.F.R. 67.7 or a successor to	1140
that section;	1141

(3) That receiving a rehabilitation tax credit certificate	1142
under this section is a major factor in:	1143

(a) The applicant's decision to rehabilitate the historic	1144
building; or	1145

(b) To increase the level of investment in such	1146
rehabilitation.	1147

An applicant shall demonstrate to the satisfaction of the	1148
state historic preservation officer and director of development	1149
services that the rehabilitation will satisfy the standards	1150
described in division (C)(2) of this section before the applicant	1151
begins the physical rehabilitation of the historic building.	1152

(D)(1) If the director of development services determines	1153
that an application meets the criteria in divisions (C)(1), (2),	1154
and (3) of this section, the director shall conduct a cost-benefit	1155
analysis for the historic building that is the subject of the	1156
application to determine whether rehabilitation of the historic	1157
building will result in a net revenue gain in state and local	1158
taxes once the building is used. The director shall consider the	1159
results of the cost-benefit analysis in determining whether to	1160
approve the application. The director shall also consider the	1161
potential economic impact and the regional distributive balance of	1162
the credits throughout the state. The director may approve an	1163
application only after completion of the cost-benefit analysis.	1164

(2) A rehabilitation tax credit certificate shall not be	1165
issued for an amount greater than the estimated amount furnished	1166
by the applicant on the application for such certificate and	1167
approved by the director. The director shall not approve more than	1168
a total of sixty million dollars of rehabilitation tax credits per	1169
fiscal year but the director may reallocate unused tax credits	1170
from a prior fiscal year for new applicants and such reallocated	1171
credits shall not apply toward the dollar limit of this division.	1172

(3) For rehabilitations with a rehabilitation period not	1173
exceeding twenty-four months as provided in division (A)(7)(a) of	1174
this section, a rehabilitation tax credit certificate shall not be	1175
issued before the rehabilitation of the historic building is	1176
completed.	1177

(4) For rehabilitations with a rehabilitation period not	1178
exceeding sixty months as provided in division (A)(7)(b) of this	1179
section, a rehabilitation tax credit certificate shall not be	1180
issued before a stage of rehabilitation is completed. After all	1181
stages of rehabilitation are completed, if the director cannot	1182
determine that the criteria in division (C) of this section are	1183
satisfied for all stages of rehabilitations, the director shall	1184
certify this finding to the tax commissioner, and any	1185
rehabilitation tax credits received by the applicant shall be	1186
repaid by the applicant and may be collected by assessment as	1187
unpaid tax by the commissioner.	1188

(5) The director of development services shall require the	1189
applicant to provide a third-party cost certification by a	1190
certified public accountant of the actual costs attributed to the	1191
rehabilitation of the historic building when qualified	1192
rehabilitation expenditures exceed two hundred thousand dollars.	1193

If an applicant whose application is approved for receipt of	1194
a rehabilitation tax credit certificate fails to provide to the	1195
director of development sufficient evidence of reviewable	1196
progress, including a viable financial plan, copies of final	1197
construction drawings, and evidence that the applicant has	1198
obtained all historic approvals within twelve months after the	1199
date the applicant received notification of approval, and if the	1200
applicant fails to provide evidence to the director of development	1201
that the applicant has secured and closed on financing for the	1202
rehabilitation within eighteen months after receiving notification	1203
of approval, the director may rescind the approval of the	1204
application. The director shall notify the applicant if the	1205
approval has been rescinded. Credits that would have been	1206
available to an applicant whose approval was rescinded shall be	1207
available for other qualified applicants. Nothing in this division	1208
prohibits an applicant whose approval has been rescinded from	1209
submitting a new application for a rehabilitation tax credit	1210
certificate.	1211

(E) Issuance of a certificate represents a finding by the	1212
director of development services of the matters described in	1213
divisions (C)(1), (2), and (3) of this section only; issuance of a	1214
certificate does not represent a verification or certification by	1215
the director of the amount of qualified rehabilitation	1216
expenditures for which a tax credit may be claimed under section	1217
5725.151, 5725.34, 5726.52, 5729.17, 5733.47, or 5747.76 of the	1218
Revised Code. The amount of qualified rehabilitation expenditures	1219
for which a tax credit may be claimed is subject to inspection and	1220
examination by the tax commissioner or employees of the	1221
commissioner under section 5703.19 of the Revised Code and any	1222
other applicable law. Upon the issuance of a certificate, the	1223
director shall certify to the tax commissioner, in the form and	1224
manner requested by the tax commissioner, the name of the	1225
applicant, the amount of qualified rehabilitation expenditures	1226
shown on the certificate, and any other information required by	1227
the rules adopted under this section.	1228

(F)(1) On or before the first day of April each year, the	1229
director of development services and tax commissioner jointly	1230
shall submit to the president of the senate and the speaker of the	1231
house of representatives a report on the tax credit program	1232
established under this section and sections 5725.151, 5725.34,	1233
5726.52, 5729.17, 5733.47, and 5747.76 of the Revised Code. The	1234
report shall present an overview of the program and shall include	1235
information on the number of rehabilitation tax credit	1236
certificates issued under this section during the preceding fiscal	1237
year, an update on the status of each historic building for which	1238
an application was approved under this section, the dollar amount	1239
of the tax credits granted under sections 5725.151, 5725.34,	1240
5726.52, 5729.17, 5733.47, and 5747.76 of the Revised Code, and	1241
any other information the director and commissioner consider	1242
relevant to the topics addressed in the report.	1243

(2) On or before December 1, 2015, the director of	1244
development services and tax commissioner jointly shall submit to	1245
the president of the senate and the speaker of the house of	1246
representatives a comprehensive report that includes the	1247
information required by division (F)(1) of this section and a	1248
detailed analysis of the effectiveness of issuing tax credits for	1249
rehabilitating historic buildings. The report shall be prepared	1250
with the assistance of an economic research organization jointly	1251
chosen by the director and commissioner.	1252

(G) There is hereby created in the state treasury the	1253
historic rehabilitation tax credit operating fund. The director of	1254
development services is authorized to charge reasonable	1255
application and other fees in connection with the administration	1256
of tax credits authorized by this section and sections 5725.151,	1257
5725.34, 5726.52, 5729.17, 5733.44, and 5747.76 of the Revised	1258
Code. Any such fees collected shall be credited to the fund and	1259
used to pay reasonable costs incurred by the department of	1260
development services in administering this section and sections	1261
5725.151, 5725.34, 5726.52, 5729.17, 5733.44, and 5747.76 of the	1262
Revised Code.	1263

The Ohio historic preservation office is authorized to charge	1264
reasonable fees in connection with its review and approval of	1265
applications under this section. Any such fees collected shall be	1266
credited to the fund and used to pay administrative costs incurred	1267
by the Ohio historic preservation office pursuant to this section.	1268

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

1269

(1) "Authority" means the Ohio venture capital authority	1270
created under section 150.02 of the Revised Code.	1271

(2) "Issuer" means a port authority organized and existing	1272
under applicable provisions of Chapter 4582. of the Revised Code	1273
that, pursuant to an agreement entered into under division (E) of	1274
section 150.02 of the Revised Code, issues or issued obligations	1275
to fund one or more loans to the program fund.	1276

(3) "Lender" means any person that lends money to the program	1277
fund as provided in this chapter and includes any issuer and any	1278
trustee.	1279

(4) "Loss" means a loss incurred with respect to a lender's	1280
loan to the program fund. Such a loss is incurred only if and to	1281
the extent a program administrator fails to satisfy its	1282
obligations to the lender to make timely payments of principal or	1283
interest as provided in the loan agreement between the lender and	1284
the program administrator. "Loss" does not include either of the	1285
following:	1286

(a) Any loss incurred by the program fund, including a loss	1287
attributable to any investment made by a program administrator;	1288

(b) Any loss of the capital required to be provided by a	1289
program administrator, or income accruing to that capital, under	1290
the agreement entered into under division (B) of section 150.05 of	1291
the Revised Code.	1292

(5) "Ohio-based business enterprise" means a person that is	1293
engaged in business, that employs at least one individual on a	1294
full-time or part-time basis at a place of business in this state,	1295
including a person engaged in business if that person is a	1296
self-employed individual, and that is in the seed or early stage	1297
of business development requiring initial or early stage funding	1298
or is an established business enterprise developing new methods or	1299
technologies.	1300

(6) "Ohio-based venture capital fund" means a venture capital	1301
fund having its principal office in this state, where the majority	1302
of the fund's staff are employed and where at least one investment	1303
professional is employed who has at least five years of experience	1304
in venture capital investment.	1305

(7) "Program fund" means the fund created under section	1306
150.03 of the Revised Code.	1307

(8) "Research and development purposes" has the same meaning	1308
as used in Section 2p of Article VIII, Ohio Constitution, and	1309
includes the development of sites and facilities in this state for	1310
and in support of those research and development purposes.	1311

(9) "Trustee" means a trust company or a bank with corporate	1312
trust powers, in either case having a place of business in this	1313
state, being a taxpayer under Chapter 5707., 5725., 5726., 5727.,	1314
5729., 5733., or 5747 of the Revised Code at the time it may claim	1315
and receive a tax credit under division (E) of section 150.07 of	1316
the Revised Code, and acting in its capacity as a trustee pursuant	1317
to a trust agreement under which an issuer issues obligations to	1318
fund loans to the program fund.	1319

(B) The general assembly declares that its purpose in	1320
enacting Chapter 150. of the Revised Code is to increase the	1321
amount of private investment capital available in this state for	1322
Ohio-based business enterprises in the seed or early stages of	1323
business development and requiring initial or early stage funding,	1324
as well as established Ohio-based business enterprises developing	1325
new methods or technologies, including the promotion of research	1326
and development purposes, thereby increasing employment, creating	1327
additional wealth, and otherwise benefiting the economic welfare	1328
of the people of this state. Accordingly, it is the intention of	1329
the general assembly that the program fund make investments in	1330
support of Ohio-based business enterprises in accordance with the	1331
investment policy authorized and required under section 150.03 of	1332
the Revised Code, and that the Ohio venture capital authority	1333
focus its investment policy principally on venture capital funds	1334
investing in such Ohio-based business enterprises. The general	1335
assembly finds and determines that this chapter and the investment	1336
policy, and actions taken under and consistent therewith, will	1337
promote and implement the public purposes of Section 2p of Article	1338
VIII, Ohio Constitution.	1339

Sec. 150.07.  (A) For the purpose stated in section 150.01 of	1340
the Revised Code, the authority may authorize a lender to claim	1341
one of the refundable tax credits allowed under section 5707.031,	1342
5725.19, 5726.53, 5727.241, 5729.08, 5733.49, or 5747.80 of the	1343
Revised Code. The credits shall be authorized by a written	1344
contract with the lender. The contract shall specify the terms	1345
under which the lender may claim the credit, including the amount	1346
of loss, if any, the lender must incur before the lender may claim	1347
the credit; specify that the credit shall not exceed the amount of	1348
the loss; and specify that the lender may claim the credit only	1349
for a loss certified by a program administrator to the authority	1350
under the procedures prescribed under division (B)(6) of section	1351
150.05 of the Revised Code. The program administrator shall	1352
provide to the authority an estimate of the amount of tax credits,	1353
if any, that are likely, in the administrator's reasonable	1354
judgment, to be claimed by a lender during the current and next	1355
succeeding state fiscal years. The estimate shall be provided at	1356
the same time each year that the administrator is required to	1357
report the annual audit to the authority under section 150.05 of	1358
the Revised Code.	1359

(B) Tax credits may be authorized at any time after the	1360
authority establishes the investment policy under section 150.03	1361
of the Revised Code, but a tax credit so authorized may not be	1362
claimed before July 1, 2007, or after June 30, 2026, except, with	1363
respect to loans made from the proceeds of obligations issued	1364
under section 4582.71 of the Revised Code, a tax credit may not be	1365
claimed before July 1, 2012, or after June 30, 2036.	1366

(C)(1) Upon receiving certification of a lender's loss from a	1367
program administrator pursuant to the procedures in the investment	1368
policy, the authority shall issue a tax credit certificate to the	1369
lender, except as otherwise provided in division (D) of this	1370
section.	1371

(2) If the lender is a pass-through entity, as defined in	1372
section 5733.04 of the Revised Code, then each equity investor in	1373
the lender pass-through entity shall be entitled to claim one of	1374
the tax credits allowed under division (A) of this section for	1375
that equity investor's taxable year in which or with which ends	1376
the taxable year of the lender pass-through entity in an amount	1377
based on the equity investor's distributive or proportionate share	1378
of the credit amount set forth in the certificate issued by the	1379
authority. If all equity investors of the lender pass-through	1380
entity are not eligible to claim a credit against the same tax set	1381
forth in division (A) of this section, then each equity investor	1382
may elect to claim a credit against the tax to which the equity	1383
investor is subject to in an amount based on the equity investor's	1384
distributive or proportionate share of the credit amount set forth	1385
in the certificate issued by the authority.	1386

(3) The certificate shall state the amount of the credit and	1387
the calendar year under section 5707.031, 5725.19, 5727.241, or	1388
5729.08, the tax year under section 5726.53 or 5733.49, or the	1389
taxable year under section 5747.80 of the Revised Code for which	1390
the credit may be claimed. The authority, in conjunction with the	1391
tax commissioner, shall develop a system for issuing tax credit	1392
certificates for the purpose of verifying that any credit claimed	1393
is a credit issued under this section and is properly taken in the	1394
year specified in the certificate and in compliance with division	1395
(B) of this section.	1396

(D) The authority shall not, in any fiscal year, issue tax	1397
credit certificates under this section in a total amount exceeding	1398
twenty million dollars. The authority shall not issue tax credit	1399
certificates under this section in a total amount exceeding three	1400
hundred eighty million dollars.	1401

(E) Notwithstanding any other section of this chapter or any	1402
provision of Chapter 5707., 5725., 5726., 5727., 5729., 5733., or	1403
5747. of the Revised Code, if provided by the terms of an	1404
agreement entered into by the issuer and the authority under	1405
division (E) of section 150.02 of the Revised Code, and subject to	1406
the limitations of divisions (B) and (D) of this section, a	1407
trustee shall have the right, for the benefit of the issuer, to	1408
receive and claim the credits authorized under division (A) of	1409
this section solely for the purpose provided for in section 150.04	1410
of the Revised Code, and the trustee shall be entitled to file a	1411
tax return, an amended tax return, or an estimated tax return at	1412
such times as are permitted or required under the applicable	1413
provisions of Chapter 5707., 5725., 5726., 5727., 5729., 5733., or	1414
5747. of the Revised Code for the purpose of claiming credits	1415
issued to the trustee. The trustee shall receive the proceeds of	1416
such a tax credit for the benefit of the issuer, and shall apply	1417
the proceeds solely to satisfy a loss or restore a reserve as	1418
provided in section 150.04 of the Revised Code. Nothing in this	1419
section shall require a trustee to file a tax return under any	1420
chapter for any purpose other than claiming such credits if the	1421
trustee is not otherwise required to make such a filing.	1422

The general assembly may from time to time modify or repeal	1423
any of the taxes against which the credits authorized under	1424
division (A) of this section may be claimed, and may authorize	1425
those credits to be claimed for the purposes provided for in	1426
section 150.04 of the Revised Code with respect to any other tax	1427
imposed by this state; provided, that if any obligations issued	1428
under section 4582.71 of the Revised Code are then outstanding and	1429
such modification or repeal would have the effect of impairing any	1430
covenant made in or pursuant to an agreement under division (E) of	1431
section 150.02 of the Revised Code regarding the maintenance or	1432
restoration of reserves established and maintained with a trustee	1433
consistent with division (B)(2) of section 150.04 of the Revised	1434
Code and such agreement, the state shall provide other security to	1435
the extent necessary to avoid or offset the impairment of such	1436
covenant.	1437

Sec. 150.10.  (A) On the first day of January of the second	1438
year after the date of entering into an agreement under section	1439
150.05 of the Revised Code and of each ensuing year, the authority	1440
shall file with the clerk of the house of representatives, the	1441
clerk of the senate, and the chairpersons of the house and senate	1442
standing committees predominantly concerned with economic	1443
development a written report on the Ohio venture capital program.	1444
The report shall include all the following:	1445

(1) A description of the details of the investment policy	1446
established or modified in accordance with sections 150.03 and	1447
150.04 of the Revised Code;	1448

(2) The authority's assessment of the program's achievement	1449
of its purpose stated in section 150.01 of the Revised Code;	1450

(3) The value of tax credit certificates issued by the	1451
authority under section 150.07 of the Revised Code in each fiscal	1452
year ending on or before the preceding thirtieth day of June;	1453

(4) The amount of tax credits claimed pursuant to section	1454
5707.031, 5725.19, 5726.53, 5727.241, 5729.08, 5733.49, or 5747.80	1455
of the Revised Code, as to the respective taxes involved;	1456

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

1457

(6) The names of venture capital funds in which money from	1458
the program fund has been invested and the locations of their	1459
principal offices, and the names of the enterprises in which each	1460
of those venture capital funds has invested such money and the	1461
locations of those enterprises' principal offices;	1462

(7) Any recommendations for modifying the program to better	1463
achieve the purpose stated in section 150.01 of the Revised Code.	1464

(B) During each year that a report is issued under division	1465
(A) of this section, the chairperson of the authority, or another	1466
member of the authority designated by the chairperson as the	1467
authority's representative, shall be required to appear in person	1468
before the standing committees of the house and senate	1469
predominantly concerned with economic development to give	1470
testimony concerning the status of the Ohio venture capital	1471
program.	1472

Sec. 715.013. (A) Except as otherwise expressly authorized by	1473
the Revised Code, no municipal corporation shall levy a tax that	1474
is the same as or similar to a tax levied under Chapter 322.,	1475
3734., 3769., 4123., 4141., 4301., 4303., 4305., 4307., 4309.,	1476
5707., 5725., 5726., 5727., 5728., 5729., 5731., 5735., 5737.,	1477
5739., 5741., 5743., or 5749. of the Revised Code.	1478

(B) This section does not prohibit a municipal corporation	1479
from levying a tax on any of the following:	1480

(1) Amounts received for admission to any place;

1481

(2) The income of an electric company or combined company, as	1482
defined in section 5727.01 of the Revised Code;	1483

(3) On and after January 1, 2004, the income of a telephone	1484
company, as defined in section 5727.01 of the Revised Code.	1485

Sec. 742.114. (A) As used in this section and in section	1486
742.116 of the Revised Code:	1487

(1) "Agent" means a dealer, as defined in section 1707.01 of	1488
the Revised Code, who is licensed under sections 1707.01 to	1489
1707.45 of the Revised Code or under comparable laws of another	1490
state or of the United States.	1491

(2) "Minority business enterprise" has the same meaning as in	1492
section 122.71 of the Revised Code.	1493

(3) "Ohio-qualified agent" means an agent designated as such	1494
by the board of trustees of the fund.	1495

(4) "Ohio-qualified investment manager" means an investment	1496
manager designated as such by the board of trustees of the fund.	1497

(5) "Principal place of business" means an office in which	1498
the agent regularly provides securities or investment advisory	1499
services and solicits, meets with, or otherwise communicates with	1500
clients.	1501

(B) The board of trustees of the fund shall, for the purposes	1502
of this section, designate an agent as an Ohio-qualified agent if	1503
the agent meets all of the following requirements:	1504

(1) The agent is subject to taxation under Chapter 5725.,	1505
5726., 5733., or 5747., or 5751. of the Revised Code;	1506

(2) The agent is authorized to conduct business in this	1507
state;	1508

(3) The agent maintains a principal place of business in this	1509
state and employs at least five residents of this state.	1510

(C) The board shall adopt and implement a written policy to	1511
establish criteria and procedures used to select agents to execute	1512
securities transactions on behalf of the retirement system. The	1513
policy shall address each of the following:	1514

(1) Commissions charged by the agent, both in the aggregate	1515
and on a per share basis;	1516

(2) The execution speed and trade settlement capabilities of	1517
the agent;	1518

(3) The responsiveness, reliability, and integrity of the	1519
agent;	1520

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

1521

(5) Any special capabilities of the agent.

1522

(D)(1) The board shall, at least annually, establish a policy	1523
with the goal to increase utilization by the board of	1524
Ohio-qualified agents for the execution of domestic equity and	1525
fixed-income trades on behalf of the retirement system, when an	1526
Ohio-qualified agent offers quality, services, and safety	1527
comparable to other agents otherwise available to the board and	1528
meets the criteria established under division (C) of this section.	1529

(2) The board shall review, at least annually, the	1530
performance of the agents that execute securities transactions on	1531
behalf of the board.	1532

(3) The board shall determine whether an agent is an	1533
Ohio-qualified agent, meets the criteria established by the board	1534
pursuant to division (C) of this section, and offers quality,	1535
services, and safety comparable to other agents otherwise	1536
available to the board. The board's determination shall be final.	1537

(E) The board shall, at least annually, submit to the Ohio	1538
retirement study council a report containing the following	1539
information:	1540

(1) The name of each agent designated as an Ohio-qualified	1541
agent under this section;	1542

(2) The name of each agent that executes securities	1543
transactions on behalf of the board;	1544

(3) The amount of equity and fixed-income trades that are	1545
executed by Ohio-qualified agents, expressed as a percentage of	1546
all equity and fixed-income trades that are executed by agents on	1547
behalf of the board;	1548

(4) The compensation paid to Ohio-qualified agents, expressed	1549
as a percentage of total compensation paid to all agents that	1550
execute securities transactions on behalf of the board;	1551

(5) The amount of equity and fixed-income trades that are	1552
executed by agents that are minority business enterprises,	1553
expressed as a percentage of all equity and fixed-income trades	1554
that are executed by agents on behalf of the board;	1555

(6) Any other information requested by the Ohio retirement	1556
study council regarding the board's use of agents.	1557

Sec. 742.116. (A) The board of trustees of the pension fund	1558
shall, for the purposes of this section, designate an investment	1559
manager as an Ohio-qualified investment manager if the investment	1560
manager meets all of the following requirements:	1561

(1) The investment manager is subject to taxation under	1562
Chapter 5725., 5726., 5733., or 5747., or 5751. of the Revised	1563
Code;	1564

(2) The investment manager meets one of the following	1565
requirements:	1566

(a) Has its corporate headquarters or principal place of	1567
business in this state;	1568

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

1569

(c) Has a principal place of business in this state and	1570
employs at least 20 residents of this state.	1571

(B)(1) The board shall, at least annually, establish a policy	1572
with the goal to increase utilization by the board of	1573
Ohio-qualified investment managers, when an Ohio-qualified	1574
investment manager offers quality, services, and safety comparable	1575
to other investment managers otherwise available to the board. The	1576
policy shall also provide for the following:	1577

(a) A process whereby the board can develop a list of	1578
Ohio-qualified investment managers and their investment products;	1579

(b) A process whereby the board can give public notice to	1580
Ohio-qualified investment managers of the board's search for an	1581
investment manager that includes the board's search criteria.	1582

(2) The board shall determine whether an investment manager	1583
is an Ohio-qualified investment manager and whether the investment	1584
manager offers quality, services, and safety comparable to other	1585
investment managers otherwise available to the board. The board's	1586
determination shall be final.	1587

(C) The board shall, at least annually, submit to the Ohio	1588
retirement study council a report containing the following	1589
information:	1590

(1) The name of each investment manager designated as an	1591
Ohio-qualified investment manager under this section;	1592

(2) The name of each investment manager with which the board	1593
contracts;	1594

(3) The amount of assets managed by Ohio-qualified investment	1595
managers, expressed as a percentage of the total assets held by	1596
the retirement system and as a percentage of assets managed by	1597
investment managers with which the board has contracted;	1598

(4) The compensation paid to Ohio-qualified investment	1599
managers, expressed as a percentage of total compensation paid to	1600
all investment managers with which the board has contracted;	1601

(5) Any other information requested by the Ohio retirement	1602
study council regarding the board's use of investment managers.	1603

Sec. 1311.85.  As used in sections 1311.85 to 1311.93 of the	1604
Revised Code:	1605

(A) "Broker" means an individual, partnership, corporation,	1606
or association licensed as a real estate broker pursuant to	1607
Chapter 4735. of the Revised Code.	1608

(B) "Commercial real estate" means any parcel of real estate	1609
in this state other than real estate containing one to four	1610
residential units. "Commercial real estate" does not include	1611
single-family residential units such as condominiums, townhouses,	1612
manufactured housing, or homes in a subdivision when sold, leased,	1613
or otherwise conveyed on a unit-by-unit basis, even though these	1614
units may be a part of a larger building or parcel of real estate	1615
containing more than four residential units. "Commercial real	1616
estate" also does not include real estate owned by a public	1617
authority as defined in section 1311.25 of the Revised Code.	1618

(C) "Lien property" means any interest in commercial real	1619
estate against which a broker has a lien pursuant to sections	1620
1311.85 to 1311.93 of the Revised Code.	1621

(D) "Owner" means a person who has a legal or equitable	1622
interest in lien property and who enters into, or has previously	1623
entered into, a written contract with a broker for services	1624
related to purchasing, selling, leasing, or conveying any interest	1625
in the lien property.	1626

Sec. 1311.86.  (A) Any broker that enters into a written	1627
contract for services related to selling, leasing, or conveying	1628
any interest in commercial real estate has a lien on that	1629
commercial real estate. The lien is effective only if the contract	1630
for services is in writing and is signed by the broker or the	1631
broker's agent and the owner of the lien property or the owner's	1632
agent.	1633

(B) Any broker that enters into a written contract for	1634
services related to purchasing any interest in commercial real	1635
estate has a lien on any real estate purchased pursuant to that	1636
contract. The lien is effective only if the contract for services	1637
is in writing and is signed by the broker or the broker's agent	1638
and the owner of the lien property or the owner's agent.	1639

(C)(1) Only the broker named in the contract has a lien	1640
pursuant to this section and a lien is not available to any	1641
employee or independent contractor of the broker.	1642

(2) The amount of thea lien for services related to selling	1643
or conveying any interest in commercial real estate is limited to	1644
the amount due to the broker pursuant to the contract. If the	1645
amount due to the broker is payable in installments, a portion of	1646
which is due after conveyance, the amount of the lien is limited	1647
to the amount due to the broker prior to or upon conveyance.	1648

(3) The amount of a lien for services related to leasing any	1649
interest in commercial real estate is limited to the amount due to	1650
the broker pursuant to the contract. If the amount due to the	1651
broker is payable in installments, the amount of the lien is	1652
limited to the amount of all installment payments due to the	1653
broker over the life of the contract, minus the amount of any	1654
installment payments made under the contract prior to the time of	1655
the owner's default.	1656

(4) The amount of a lien for services related to purchasing	1657
any interest in commercial real estate is limited to the amount	1658
due to the broker pursuant to the contract. If the amount due to	1659
the broker is payable in installments, the amount of the lien is	1660
limited to the amount of all installment payments due to the	1661
broker over the life of the contract, minus the amount of any	1662
installment payments made under the contract prior to the time the	1663
lien is filed.	1664

(5) The lien is effective only against the interest in real	1665
estate that is the subject of the contract.	1666

Sec. 1311.87.  (A)(1) A lien established pursuant to section	1667
1311.86 of the Revised Code is perfected when both of the	1668
following have occurred:	1669

(a) The broker is entitled to a fee or commission under the	1670
contract.	1671

(b) The broker has met the requirements of division (B) of	1672
this section.	1673

(2) The lien is perfected as of the date the requirements of	1674
division (A)(1) of this section are met and does not relate back	1675
to an earlier date.	1676

(B) To perfect a lien pursuant to division (A)(1) of this	1677
section, a broker shall comply with all of the following:	1678

(1) The broker shall record a lien affidavit in the county	1679
recorder's office of the county in which the real estate is	1680
located. The recorder shall record on the affidavit the date and	1681
precise time the affidavit was presented for record, and shall	1682
record the affidavit. The recorder shall charge and collect the	1683
fees set forth in section 317.32 of the Revised Code for the	1684
recorder's services.	1685

(2)(a) The lien affidavit shall include the name of the	1686
broker who has the lien, the name of the owner of the lien	1687
property, a legal description of the lien property, the amount for	1688
which the lien is claimed, the date and a summary of the written	1689
contract on which the lien is based, and the real estate license	1690
number of the broker. The lien affidavit shall state that the	1691
information contained in the affidavit is true and accurate to the	1692
knowledge of the signator, be signed by the broker or the broker's	1693
agent, and be verified.	1694

(b) For purposes of division (B)(2)(a) of this section, a	1695
description that is sufficient to describe the lien property for	1696
the purpose of conveyance, or is contained in the instrument by	1697
which the owner took title, is a legal description.	1698

(3) A lien affidavit based on the conveyancesale of lien	1699
property shall be recorded prior to the conveyance of the	1700
property.	1701

(4)(a)A lien affidavit based on the purchase of lien	1702
property shall be recorded within ninety days after the conveyance	1703
of the property.	1704

(5) A lien affidavit based on a lease of lien property shall	1705
be recorded within thirtyninety days after the first rental	1706
payment is due unless the owner of the lien property has provided	1707
notice pursuant to division (B)(4)(b) of this section.	1708

(b) If the owner has provided the broker with written notice	1709
of the intended date for signing the lease, which is served on the	1710
broker no later than ten days prior to the intended date of	1711
signing the lease either by personal delivery or by certified	1712
mail, return receipt requested, the broker shall record the lien	1713
affidavit before that date.	1714

(5)a default by the owner in the payment of an amount due	1715
under a written contract for services related to leasing the lien	1716
property.	1717

(6) On the day the lien affidavit is recorded, the broker	1718
shall provide a copy of the lien affidavit to the owner of the	1719
lien property and, where a contract for the sale or other	1720
conveyance of the lien property has been entered into, to the	1721
prospective transferee, where known, either by personal delivery	1722
or by certified mail, return receipt requested.	1723

(C) Initial leases, lease renewals, and expansions of the	1724
space leased shall be treated as separate leases for purposes of	1725
division (B)(5) of this section.	1726

Sec. 1311.88.  (A) To commence proceedings to enforce a lien,	1727
a broker shall comply with all of the following:	1728

(1) The broker shall file a complaint in the common pleas	1729
court in the county where the lien property is located.	1730

(2)(a) The complaint shall be filed within one yeartwo years	1731
following the recording of the lien affidavit as provided in	1732
division (B) of section 1311.87 of the Revised Code.	1733

(b) Failure to file a complaint within the time specified in	1734
this division extinguishes the lien, in which case no subsequent	1735
lien affidavit may be recorded for the same claim and the claim	1736
may not be asserted in any proceeding under this section.	1737

(3) A complaint shall identify the contract upon which the	1738
lien is based and the date of the contract, describe the services	1739
performed by the broker pursuant to the contract, specify the	1740
unpaid amounts due to the broker pursuant to the contract, specify	1741
the address of the lien property, and have a copy of the contract	1742
attached.	1743

(4) The broker shall name as defendants in the complaint all	1744
parties that have a legal or equitable interest in the lien	1745
property of whom the broker has knowledge.	1746

(B)(1) The owner may demand that the broker commence a suit	1747
to enforce a broker's lien by serving a written notice of demand	1748
on the broker by personal delivery or by certified mail, return	1749
receipt requested.	1750

(2) If the broker does not commence the suit or file the	1751
answer demanded within twenty-eight days after receipt of the	1752
notice of demand, the lien is extinguished.	1753

(C) In an action based on a broker's lien, a court may assess	1754
the nonprevailing parties with costs and reasonable attorney's	1755
fees incurred by the prevailing parties. The court shall equitably	1756
apportion the assessed costs and attorney's fees among all	1757
responsible nonprevailing parties.	1758

Sec. 3307.152. (A) As used in this section and in section	1759
3307.154 of the Revised Code:	1760

(1) "Agent" means a dealer, as defined in section 1707.01 of	1761
the Revised Code, who is licensed under sections 1707.01 to	1762
1707.45 of the Revised Code or under comparable laws of another	1763
state or of the United States.	1764

(2) "Minority business enterprise" has the same meaning as in	1765
section 122.71 of the Revised Code.	1766

(3) "Ohio-qualified agent" means an agent designated as such	1767
by the state teachers retirement board.	1768

(4) "Ohio-qualified investment manager" means an investment	1769
manager designated as such by the state teachers retirement board.	1770

(5) "Principal place of business" means an office in which	1771
the agent regularly provides securities or investment advisory	1772
services and solicits, meets with, or otherwise communicates with	1773
clients.	1774

(B) The state teachers retirement board shall, for the	1775
purposes of this section, designate an agent as an Ohio-qualified	1776
agent if the agent meets all of the following requirements:	1777

(1) The agent is subject to taxation under Chapter 5725.,	1778
5726., 5733., or 5747., or 5751. of the Revised Code.	1779

(2) The agent is authorized to conduct business in this	1780
state.	1781

(3) The agent maintains a principal place of business in this	1782
state and employs at least five residents of this state.	1783

(C) The state teachers retirement board shall adopt and	1784
implement a written policy to establish criteria and procedures	1785
used to select agents to execute securities transactions on behalf	1786
of the retirement system. The policy shall address each of the	1787
following:	1788

(a)(1) Commissions charged by the agent, both in the	1789
aggregate and on a per share basis;	1790

(b)(2) The execution speed and trade settlement capabilities	1791
of the agent;	1792

(c)(3) The responsiveness, reliability, and integrity of the	1793
agent;	1794

(d)(4) The nature and value of research provided by the	1795
agent;	1796

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

1797

(D)(1) The board shall, at least annually, establish a policy	1798
with the goal to increase utilization by the board of	1799
Ohio-qualified agents for the execution of domestic equity and	1800
fixed income trades on behalf of the retirement system, when an	1801
Ohio-qualified agent offers quality, services, and safety	1802
comparable to other agents otherwise available to the board and	1803
meets the criteria established under division (C) of this section.	1804

(2) The board shall review, at least annually, the	1805
performance of the agents that execute securities transactions on	1806
behalf of the board.	1807

(3) The board shall determine whether an agent is an	1808
Ohio-qualified agent, meets the criteria established by the board	1809
pursuant to division (C) of this section, and offers quality,	1810
services, and safety comparable to other agents otherwise	1811
available to the board. The board's determination shall be final.	1812

(E) The board shall, at least annually, submit to the Ohio	1813
retirement study council a report containing the following	1814
information:	1815

(1) The name of each agent designated as an Ohio-qualified	1816
agent under this section;	1817

(2) The name of each agent that executes securities	1818
transactions on behalf of the board;	1819

(3) The amount of equity and fixed-income trades that are	1820
executed by Ohio-qualified agents, expressed as a percentage of	1821
all equity and fixed-income trades that are executed by agents on	1822
behalf of the board;	1823

(4) The compensation paid to Ohio-qualified agents, expressed	1824
as a percentage of total compensation paid to all agents that	1825
execute securities transactions on behalf of the board;	1826

(5) The amount of equity and fixed-income trades that are	1827
executed by agents that are minority business enterprises,	1828
expressed as a percentage of all equity and fixed-income trades	1829
that are executed by agents on behalf of the board;	1830

(6) Any other information requested by the Ohio retirement	1831
study council regarding the board's use of agents.	1832

Sec. 3307.154. (A) The state teachers retirement board shall,	1833
for the purposes of this section, designate an investment manager	1834
as an Ohio-qualified investment manager if the investment manager	1835
meets all of the following requirements:	1836

(1) The investment manager is subject to taxation under	1837
Chapter 5725., 5726., 5733., or 5747., or 5751. of the Revised	1838
Code.	1839

(2) The investment manager meets one of the following	1840
requirements:	1841

(a) Has its corporate headquarters or principal place of	1842
business in this state;	1843

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

1844

(c) Has a principal place of business in this state and	1845
employs at least twenty residents of this state.	1846

(B)(1) The board shall, at least annually, establish a policy	1847
with the goal to increase utilization by the board of	1848
Ohio-qualified investment managers, when an Ohio-qualified	1849
investment manager offers quality, services, and safety comparable	1850
to other investment managers otherwise available to the board. The	1851
policy shall also provide for the following:	1852

(a) A process whereby the board can develop a list of	1853
Ohio-qualified investment managers and their investment products;	1854

(b) A process whereby the board can give public notice to	1855
Ohio-qualified investment managers of the board's search for an	1856
investment manager that includes the board's search criteria.	1857

(2) The board shall determine whether an investment manager	1858
is an Ohio-qualified investment manager and whether the investment	1859
manager offers quality, services, and safety comparable to other	1860
investment managers otherwise available to the board. The board's	1861
determination shall be final.	1862

(C) The board shall, at least annually, submit to the Ohio	1863
retirement study council a report containing the following	1864
information:	1865

(1) The name of each investment manager designated as an	1866
Ohio-qualified investment manager under this section;	1867

(2) The name of each investment manager with which the board	1868
contracts;	1869

(3) The amount of assets managed by Ohio-qualified investment	1870
managers, expressed as a percentage of the total assets held by	1871
the retirement system and as a percentage of assets managed by	1872
investment managers with which the board has contracted;	1873

(4) The compensation paid to Ohio-qualified investment	1874
managers, expressed as a percentage of total compensation paid to	1875
all investment managers with which the board has contracted;	1876

(5) Any other information requested by the Ohio retirement	1877
study council regarding the board's use of investment managers.	1878

Sec. 3309.157. (A) As used in this section and in section	1879
3309.159 of the Revised Code:	1880

(1) "Agent" means a dealer, as defined in section 1707.01 of	1881
the Revised Code, who is licensed under sections 1707.01 to	1882
1707.45 of the Revised Code or under comparable laws of another	1883
state or of the United States.	1884

(2) "Minority business enterprise" has the same meaning as in	1885
section 122.71 of the Revised Code.	1886

(3) "Ohio-qualified agent" means an agent designated as such	1887
by the school employees retirement board.	1888

(4) "Ohio-qualified investment manager" means an investment	1889
manager designated as such by the school employees retirement	1890
board.	1891

(5) "Principal place of business" means an office in which	1892
the agent regularly provides securities or investment advisory	1893
services and solicits, meets with, or otherwise communicates with	1894
clients.	1895

(B) The school employees retirement board shall, for the	1896
purposes of this section, designate an agent as an Ohio-qualified	1897
agent if the agent meets all of the following requirements:	1898

(1) The agent is subject to taxation under Chapter 5725.,	1899
5726., 5733., or 5747., or 5751. of the Revised Code.	1900

(2) The agent is authorized to conduct business in this	1901
state.	1902

(3) The agent maintains a principal place of business in this	1903
state and employeesemploys at least five residents of this state.	1904

(C) The school employees retirement board shall adopt and	1905
implement a written policy to establish criteria and procedures	1906
used to select agents to execute securities transactions on behalf	1907
of the retirement system. The policy shall address each of the	1908
following:	1909

(a)(1) Commissions charged by the agent, both in the	1910
aggregate and on a per share basis;	1911

(b)(2) The execution speed and trade settlement capabilities	1912
of the agent;	1913

(c)(3) The responsiveness, reliability, and integrity of the	1914
agent;	1915

(d)(4) The nature and value of research provided by the	1916
agent;	1917

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

1918

(D)(1) The board shall, at least annually, establish a policy	1919
with the goal to increase utilization by the board of	1920
Ohio-qualified agents for the execution of domestic equity and	1921
fixed income trades on behalf of the retirement system, when an	1922
Ohio-qualified agent offers quality, services, and safety	1923
comparable to other agents otherwise available to the board and	1924
meets the criteria established under division (C) of this section.	1925

(2) The board shall review, at least annually, the	1926
performance of the agents that execute securities transactions on	1927
behalf of the board.	1928

(3) The board shall determine whether an agent is an	1929
Ohio-qualified agent, meets the criteria established by the board	1930
pursuant to division (C) of this section, and offers quality,	1931
services, and safety comparable to other agents otherwise	1932
available to the board. The board's determination shall be final.	1933

(E) The board shall, at least annually, submit to the Ohio	1934
retirement study council a report containing the following	1935
information:	1936

(1) The name of each agent designated as an Ohio-qualified	1937
agent under this section;	1938

(2) The name of each agent that executes securities	1939
transactions on behalf of the board;	1940

(3) The amount of equity and fixed-income trades that are	1941
executed by Ohio-qualified agents, expressed as a percentage of	1942
all equity and fixed-income trades that are executed by agents on	1943
behalf of the board;	1944

(4) The compensation paid to Ohio-qualified agents, expressed	1945
as a percentage of total compensation paid to all agents that	1946
execute securities transactions on behalf of the board;	1947

(5) The amount of equity and fixed-income trades that are	1948
executed by agents that are minority business enterprises,	1949
expressed as a percentage of all equity and fixed-income trades	1950
that are executed by agents on behalf of the board;	1951

(6) Any other information requested by the Ohio retirement	1952
study council regarding the board's use of agents.	1953

Sec. 3309.159. (A) The school employees retirement board	1954
shall, for the purposes of this section, designate an investment	1955
manager as an Ohio-qualified investment manager if the investment	1956
manager meets all of the following requirements:	1957

(1) The investment manager is subject to taxation under	1958
Chapter 5725., 5726., 5733., or 5747., or 5751. of the Revised	1959
Code.	1960

(2) The investment manager meets one of the following	1961
requirements:	1962

(a) Has its corporate headquarters or principal place of	1963
business in this state;	1964

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

1965

(c) Has a principal place of business in this state and	1966
employs at least 20twenty residents of this state.	1967

(B)(1) The board shall, at least annually, establish a policy	1968
with the goal to increase utilization by the board of	1969
Ohio-qualified investment managers, when an Ohio-qualified	1970
investment manager offers quality, services, and safety comparable	1971
to other investment managers otherwise available to the board. The	1972
policy shall also provide for the following:	1973

(a) A process whereby the board can develop a list of	1974
Ohio-qualified investment managers and their investment products;	1975

(b) A process whereby the board can give public notice to	1976
Ohio-qualified investment managers of the board's search for an	1977
investment manager that includes the board's search criteria.	1978

(2) The board shall determine whether an investment manager	1979
is an Ohio-qualified investment manager and whether the investment	1980
manager offers quality, services, and safety comparable to other	1981
investment managers otherwise available to the board. The board's	1982
determination shall be final.	1983

(C) The board shall, at least annually, submit to the Ohio	1984
retirement study council a report containing the following	1985
information:	1986

(1) The name of each investment manager designated as an	1987
Ohio-qualified investment manager under this section;	1988

(2) The name of each investment manager with which the board	1989
contracts;	1990

(3) The amount of assets managed by Ohio-qualified investment	1991
managers, expressed as a percentage of the total assets held by	1992
the retirement system and as a percentage of assets managed by	1993
investment managers with which the board has contracted;	1994

(4) The compensation paid to Ohio-qualified investment	1995
managers, expressed as a percentage of total compensation paid to	1996
all investment managers with which the board has contracted;	1997

(5) Any other information requested by the Ohio retirement	1998
study council regarding the board's use of investment managers.	1999

Sec. 5505.068. (A) As used in this section and in section	2000
5505.0610 of the Revised Code:	2001

(1) "Agent" means a dealer, as defined in section 1707.01 of	2002
the Revised Code, who is licensed under sections 1707.01 to	2003
1707.45 of the Revised Code or under comparable laws of another	2004
state or of the United States.	2005

(2) "Minority business enterprise" has the same meaning as in	2006
section 122.71 of the Revised Code.	2007

(3) "Ohio-qualified agent" means an agent designated as such	2008
by the state highway patrol retirement board.	2009

(4) "Ohio-qualified investment manager" means an investment	2010
manager designated as such by the state highway patrol retirement	2011
board.	2012

(5) "Principal place of business" means an office in which	2013
the agent regularly provides securities or investment advisory	2014
services and solicits, meets with, or otherwise communicates with	2015
clients.	2016

(B) The state highway patrol retirement board shall, for the	2017
purposes of this section, designate an agent as an Ohio-qualified	2018
agent if the agent meets all of the following requirements:	2019

(1) The agent is subject to taxation under Chapter 5725.,	2020
5726., 5733., or 5747., or 5751. of the Revised Code.	2021

(2) The agent is authorized to conduct business in this	2022
state;	2023

(3) The agent maintains a principal place of business in this	2024
state and employs at least five residents of this state.	2025

(C) The state highway patrol retirement board shall adopt and	2026
implement a written policy to establish criteria and procedures	2027
used to select agents to execute securities transactions on behalf	2028
of the retirement system. The policy shall address each of the	2029
following:	2030

(1) Commissions charged by the agent, both in the aggregate	2031
and on a per share basis;	2032

(2) The execution speed and trade settlement capabilities of	2033
the agent;	2034

(3) The responsiveness, reliability, and integrity of the	2035
agent;	2036

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

2037

(5) Any special capabilities of the agent.

2038

(D)(1) The board shall, at least annually, establish a policy	2039
with the goal to increase utilization by the board of	2040
Ohio-qualified agents for the execution of domestic equity and	2041
fixed income trades on behalf of the retirement system, when an	2042
Ohio-qualified agent offers quality, services, and safety	2043
comparable to other agents otherwise available to the board and	2044
meets the criteria established under division (C) of this section.	2045

(2) The board shall review, at least annually, the	2046
performance of the agents that execute securities transactions on	2047
behalf of the board.	2048

(3) The board shall determine whether an agent is an	2049
Ohio-qualified agent, meets the criteria established by the board	2050
pursuant to division (C) of this section, and offers quality,	2051
services, and safety comparable to other agents otherwise	2052
available to the board. The board's determination shall be final.	2053

(E) The board shall, at least annually, submit to the Ohio	2054
retirement study council a report containing the following	2055
information:	2056

(1) The name of each agent designated as an Ohio-qualified	2057
agent under this section;	2058

(2) The name of each agent that executes securities	2059
transactions on behalf of the board;	2060

(3) The amount of equity and fixed-income trades that are	2061
executed by Ohio-qualified agents, expressed as a percentage of	2062
all equity and fixed-income trades that are executed by agents on	2063
behalf of the board;	2064

(4) The compensation paid to Ohio-qualified agents, expressed	2065
as a percentage of total compensation paid to all agents that	2066
execute securities transactions on behalf of the board;	2067

(5) The amount of equity and fixed-income trades that are	2068
executed by agents that are minority business enterprises,	2069
expressed as a percentage of all equity and fixed-income trades	2070
that are executed by agents on behalf of the board;	2071

(6) Any other information requested by the Ohio retirement	2072
study council regarding the board's use of agents.	2073

Sec. 5505.0610. (A) The state highway patrol retirement board	2074
shall, for the purposes of this section, designate an investment	2075
manager as an Ohio-qualified investment manager if the investment	2076
manager meets all of the following requirements:	2077

(1) The investment manager is subject to taxation under	2078
Chapter 5725., 5726., 5733., or 5747., or 5751. of the Revised	2079
Code.	2080

(2) The investment manager meets one of the following	2081
requirements:	2082

(a) Has its corporate headquarters or principal place of	2083
business in this state;	2084

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

2085

(c) Has a principal place of business in this state and	2086
employs at least 20twenty residents of this state.	2087

(B)(1) The board shall, at least annually, establish a policy	2088
with the goal to increase utilization by the board of	2089
Ohio-qualified investment managers, when an Ohio-qualified	2090
investment manager offers quality, services, and safety comparable	2091
to other investment managers otherwise available to the board. The	2092
policy shall also provide for the following:	2093

(a) A process whereby the board can develop a list of	2094
Ohio-qualified investment managers and their investment products;	2095

(b) A process whereby the board can give public notice to	2096
Ohio-qualified investment managers of the board's search for an	2097
investment manager that includes the board's search criteria.	2098

(2) The board shall determine whether an investment manager	2099
is an Ohio-qualified investment manager and whether the investment	2100
manager offers quality, services, and safety comparable to other	2101
investment managers otherwise available to the board. The board's	2102
determination shall be final.	2103

(C) The board shall, at least annually, submit to the Ohio	2104
retirement study council a report containing the following	2105
information:	2106

(1) The name of each investment manager designated as an	2107
Ohio-qualified investment manager under this section;	2108

(2) The name of each investment manager with which the board	2109
contracts;	2110

(3) The amount of assets managed by Ohio-qualified investment	2111
managers, expressed as a percentage of the total assets held by	2112
the retirement system and as a percentage of assets managed by	2113
investment managers with which the board has contracted;	2114

(4) The compensation paid to Ohio-qualified investment	2115
managers, expressed as a percentage of total compensation paid to	2116
all investment managers with which the board has contracted;	2117

(5) Any other information requested by the Ohio retirement	2118
study council regarding the board's use of investment managers.	2119

Sec. 5701.12.  (A) The effective date to which this section	2120
refers is the effective date of this section as enacted by H.B.	2121
510 of the 129th general assembly.	2122

(B) Any reference in Title LVII to "consolidated reports of	2123
condition and income" or "call report" means the consolidated	2124
reports of condition and income as those reports existed on the	2125
effective date.	2126

(C) Any reference in Title LVII to "FR Y-9" or "Y-9" means	2127
the FR Y-9 financial statements as those financial statements	2128
existed on the effective date.	2129

(D) This section does not apply to any reference in Title	2130
LVII of the Revised Code to "consolidated reports of condition and	2131
income," "call report," "FR Y-9," or "Y-9" as of a date certain	2132
specifying the day, month, and year.	2133

Sec. 5703.052.  (A) There is hereby created in the state	2134
treasury the tax refund fund, from which refunds shall be paid for	2135
taxes illegally or erroneously assessed or collected, or for any	2136
other reason overpaid, that are levied by Chapter 4301., 4305.,	2137
5726., 5728., 5729., 5733., 5735., 5739., 5741., 5743., 5747.,	2138
5748., 5749., 5751., or 5753. and sections 3737.71, 3905.35,	2139
3905.36, 4303.33, 5707.03, 5725.18, 5727.28, 5727.38, 5727.81, and	2140
5727.811 of the Revised Code. Refunds for fees illegally or	2141
erroneously assessed or collected, or for any other reason	2142
overpaid, that are levied by sections 3734.90 to 3734.9014 of the	2143
Revised Code also shall be paid from the fund. Refunds for amounts	2144
illegally or erroneously assessed or collected by the tax	2145
commissioner, or for any other reason overpaid, that are due under	2146
section 1509.50 of the Revised Code shall be paid from the fund.	2147
However, refunds for taxes levied under section 5739.101 of the	2148
Revised Code shall not be paid from the tax refund fund, but shall	2149
be paid as provided in section 5739.104 of the Revised Code.	2150

(B)(1) Upon certification by the tax commissioner to the	2151
treasurer of state of a tax refund, a fee refund, or an other	2152
amount refunded, or by the superintendent of insurance of a	2153
domestic or foreign insurance tax refund, the treasurer of state	2154
shall place the amount certified to the credit of the fund. The	2155
certified amount transferred shall be derived from current	2156
receipts of the same tax, fee, or other amount from which the	2157
refund arose. If current receipts from the tax, fee, or other	2158
amount from which the refund arose are inadequate to make the	2159
transfer of the amount so certified, the treasurer of state shall	2160
transfer such certified amount from current receipts of the sales	2161
tax levied by section 5739.02 of the Revised Code.	2162

(2) When the treasurer of state provides for the payment of a	2163
refund of a tax, fee, or other amount from the current receipts of	2164
the sales tax, and the refund is for a tax, fee, or other amount	2165
that is not levied by the state, the tax commissioner shall	2166
recover the amount of that refund from the next distribution of	2167
that tax, fee, or other amount that otherwise would be made to the	2168
taxing jurisdiction. If the amount to be recovered would exceed	2169
twenty-five per cent of the next distribution of that tax, fee, or	2170
other amount, the commissioner may spread the recovery over more	2171
than one future distribution, taking into account the amount to be	2172
recovered and the amount of the anticipated future distributions.	2173
In no event may the commissioner spread the recovery over a period	2174
to exceed twenty-four months.	2175

Sec. 5703.053.  As used in this section, "postal service"	2176
means the United States postal service.	2177

An application to the tax commissioner for a tax refund under	2178
section 4307.05, 4307.07, 5726.30, 5727.28, 5727.91, 5728.061,	2179
5735.122, 5735.13, 5735.14, 5735.141, 5735.142, 5739.07, 5741.10,	2180
5743.05, 5743.53, 5745.11, 5749.08, or 5751.08 of the Revised Code	2181
or division (B) of section 5703.05 of the Revised Code, or a fee	2182
refunded under section 3734.905 of the Revised Code, that is	2183
received after the last day for filing under such section shall be	2184
considered to have been filed in a timely manner if:	2185

(A) The application is delivered by the postal service and	2186
the earliest postal service postmark on the cover in which the	2187
application is enclosed is not later than the last day for filing	2188
the application;	2189

(B) The application is delivered by the postal service, the	2190
only postmark on the cover in which the application is enclosed	2191
was affixed by a private postal meter, the date of that postmark	2192
is not later than the last day for filing the application, and the	2193
application is received within seven days of such last day; or	2194

(C) The application is delivered by the postal service, no	2195
postmark date was affixed to the cover in which the application is	2196
enclosed or the date of the postmark so affixed is not legible,	2197
and the application is received within seven days of the last day	2198
for making the application.	2199

Sec. 5703.70. (A) On the filing of an application for refund	2200
under section 3734.905, 4307.05, 4307.07, 5726.30, 5727.28,	2201
5727.91, 5728.061, 5733.12, 5735.122, 5735.13, 5735.14, 5735.141,	2202
5735.142, 5735.18, 5739.07, 5739.071, 5739.104, 5741.10, 5743.05,	2203
5743.53, 5749.08, 5751.08, or 5753.06 of the Revised Code, or an	2204
application for compensation under section 5739.061 of the Revised	2205
Code, if the tax commissioner determines that the amount of the	2206
refund or compensation to which the applicant is entitled is less	2207
than the amount claimed in the application, the commissioner shall	2208
give the applicant written notice by ordinary mail of the amount.	2209
The notice shall be sent to the address shown on the application	2210
unless the applicant notifies the commissioner of a different	2211
address. The applicant shall have sixty days from the date the	2212
commissioner mails the notice to provide additional information to	2213
the commissioner or request a hearing, or both.	2214

(B) If the applicant neither requests a hearing nor provides	2215
additional information to the tax commissioner within the time	2216
prescribed by division (A) of this section, the commissioner shall	2217
take no further action, and the refund or compensation amount	2218
denied becomes final.	2219

(C)(1) If the applicant requests a hearing within the time	2220
prescribed by division (A) of this section, the tax commissioner	2221
shall assign a time and place for the hearing and notify the	2222
applicant of such time and place, but the commissioner may	2223
continue the hearing from time to time as necessary. After the	2224
hearing, the commissioner may make such adjustments to the refund	2225
or compensation as the commissioner finds proper, and shall issue	2226
a final determination thereon.	2227

(2) If the applicant does not request a hearing, but provides	2228
additional information, within the time prescribed by division (A)	2229
of this section, the commissioner shall review the information,	2230
make such adjustments to the refund or compensation as the	2231
commissioner finds proper, and issue a final determination	2232
thereon.	2233

(3) The commissioner shall serve a copy of the final	2234
determination made under division (C)(1) or (2) of this section on	2235
the applicant in the manner provided in section 5703.37 of the	2236
Revised Code, and the decision is final, subject to appeal under	2237
section 5717.02 of the Revised Code.	2238

(D) The tax commissioner shall certify to the director of	2239
budget and management and treasurer of state for payment from the	2240
tax refund fund created by section 5703.052 of the Revised Code,	2241
the amount of the refund to be refunded under division (B) or (C)	2242
of this section. The commissioner also shall certify to the	2243
director and treasurer of state for payment from the general	2244
revenue fund the amount of compensation to be paid under division	2245
(B) or (C) of this section.	2246

Sec. 5707.03.  Annual taxes are hereby levied on the kinds of	2247
intangible property, enumerated in this section, on the intangible	2248
property tax list in the office of the treasurer of state at the	2249
following rates:	2250

(A) On investments, five per cent of income yield or of	2251
income as provided by section 5711.10 of the Revised Code for the	2252
1983, 1984, and 1985 return years and no tax for subsequent return	2253
years;	2254

(B) On unproductive investments, two mills on the dollar for	2255
the 1983, 1984, and 1985 return years and no tax for subsequent	2256
return years;	2257

(C) On deposits, one and three-eighths mills on the dollar	2258
for the 1982 and 1983 return years and no tax for subsequent	2259
return years;	2260

(D) On shares of, and capital employed by, dealers in	2261
intangibles, eight mills on the dollar for return years prior to	2262
2014 and no tax under this section for subsequent return years;	2263

(E) On money, credits, and all other taxable intangibles,	2264
three mills on the dollar for the 1983, 1984, and 1985 return	2265
years and no tax for subsequent return years.	2266

The object and distribution of such taxes shall be as	2267
provided in section 5725.24 of the Revised Code.	2268

Sec. 5709.76.  (A) All of the following are exempt from taxes	2269
levied by the state and its subdivisions:	2270

(1) Public obligations;

2271

(2) Interest or interest equivalent on public obligations and	2272
on purchase obligations;	2273

(3) The transfer, and any profit made on the sale, exchange,	2274
or other disposition, of public obligations.	2275

(B) The exemptions granted by division (A) of this section	2276
apply to public obligations and purchase obligations issued,	2277
incurred, or entered into before, on, or after the effective date	2278
of this sectionMarch 29, 1988, but only for taxable years ending	2279
on or after the later of July 1, 1988, or the effective date of	2280
this sectionMarch 29, 1988.	2281

(C) This section supplements, and does not restrict, limit,	2282
or impair, any exemption from taxation otherwise provided for in	2283
the Ohio Constitution, the Revised Code, or other laws.	2284

(D) As used in this section:

2285

(1) "Fractionalized interests in purchase obligations" means	2286
participations, shares, or other instruments or agreements,	2287
separate from the purchase obligations themselves, evidencing	2288
ownership of interests in purchase obligations or of rights to	2289
receive payments of, or on account of, principal or interest or	2290
their equivalents payable by or on behalf of the state or a	2291
subdivision pursuant to purchase obligations, and does not include	2292
interests or shares in qualified investment trusts.	2293

(2) "Interest or interest equivalent" means those payments or	2294
portions of payments, however denominated, that constitute or	2295
represent consideration for forbearing the collection of money, or	2296
for deferring the receipt of payment of money to a future time, as	2297
determined for federal income tax purposes, and includes those	2298
portions of a qualified investment trust's distributions to its	2299
shareholders or beneficial owners, whether distributed or deemed	2300
distributed in cash or in trust shares or interests, that are	2301
attributable to the trust's receipt of interest or interest	2302
equivalent.	2303

(3) "Internal Revenue Code" has the same meaning as in	2304
division (H) of section 5747.01 of the Revised Code.	2305

(4) "Qualified investment trust" or "trust" means a unit	2306
investment trust, grantor trust, or regulated investment company,	2307
if at all times at least fifty per cent of the value of the total	2308
assets of the trust or company consists of public securities or	2309
purchase obligations, or similar obligations of other states or	2310
their subdivisions.	2311

(5) "Public obligations" means public securities,	2312
fractionalized interests in purchase obligations, and any	2313
obligation or evidence of obligation to pay interest or interest	2314
equivalent on public securities or on fractionalized interests in	2315
purchase obligations, and does not include purchase obligations.	2316

(6) "Public securities" means bonds, notes, certificates of	2317
indebtedness, commercial paper, and other instruments in writing	2318
issued by the state or a subdivision, or by any nonprofit	2319
corporation authorized to issue public securities for or on behalf	2320
of the state or a subdivision, to evidence the obligation of the	2321
state, subdivision, or nonprofit corporation to repay money	2322
borrowed by, or to pay at any future time other money obligations	2323
of, the state, subdivision, or nonprofit corporation, and does not	2324
include purchase obligations. Public securities may be in the form	2325
of either certificated securities or uncertificated securities, as	2326
those terms are defined in section 1308.01 of the Revised Code.	2327

(7) "Purchase obligations" means interest-bearing obligations	2328
of the state or a subdivision to make payments under installment	2329
sale, lease, lease purchase, or similar types of agreements.	2330

(8) "Regulated investment company" means a regulated	2331
investment company as defined in section 851 of the Internal	2332
Revenue Code.	2333

(9) "State" means the state, state officers, and state	2334
agencies, including commissions, institutions, boards, agencies,	2335
authorities, or other instrumentalities.	2336

(10) "Subdivision" means any local taxing authority,	2337
political or governmental subdivision, body corporate and politic,	2338
or other local public or governmental entity in the state, any	2339
combination or consortium of two or more of those subdivisions,	2340
and any public division, district, commission, authority,	2341
department, board, officer, or institution of any one or more of	2342
those subdivisions.	2343

(11) "Taxes" means any direct or indirect taxes, including	2344
income, ad valorem, transfer, and excise taxes, and including the	2345
tax on the net income measure of the issued and outstanding shares	2346
of a corporation under Chapter 5733. of the Revised Code. "Taxes"	2347
does not mean any of the following:	2348

(a) The tax on the net worth measure of the issued and	2349
outstanding shares of corporations and financial institutions	2350
under Chapter 5733. of the Revised Code;	2351

(b) The tax on the value of the gross estate under Chapter	2352
5731. of the Revised Code;	2353

(c) The tax on the value of the capital and surplus of a	2354
domestic insurance company under Chapter 5725. of the Revised	2355
Code;	2356

(d) The tax on the shares of and capital employed by dealers	2357
in intangibles under Chapter 5725. and section 5707.03 of the	2358
Revised Code;	2359

(e) The tax levied on the basis of the total equity capital	2360
of financial institutions under Chapter 5726. of the Revised Code.	2361

Sec. 5711.22.  (A) Deposits not taxed at the source shall be	2362
listed and assessed at their amount in dollars on the day they are	2363
required to be listed. Moneys shall be listed and assessed at the	2364
amount thereof in dollars on hand on the day that they are	2365
required to be listed. In listing investments, the amount of the	2366
income yield of each for the calendar year next preceding the date	2367
of listing shall, except as otherwise provided in this chapter, be	2368
stated in dollars and cents and the assessment thereof shall be at	2369
the amount of such income yield; but any property defined as	2370
investments in either division (A) or (B) of section 5701.06 of	2371
the Revised Code that has not been outstanding for the full	2372
calendar year next preceding the date of listing, except shares of	2373
stock of like kind as other shares of the same corporation	2374
outstanding for the full calendar year next preceding the date of	2375
listing, or which has yielded no income during such calendar year	2376
shall be listed and assessed as unproductive investments, at their	2377
true value in money on the day that such investments are required	2378
to be listed.	2379

Credits and other taxable intangibles shall be listed and	2380
assessed at their true value in money on the day as of which the	2381
same are required to be listed.	2382

Shares of stock of a bank holding company, as defined in	2383
Title 12 U.S.C.A., section 1841, that are required to be listed	2384
for taxation under this division and upon which dividends were	2385
paid during the year of their issuance, which dividends are	2386
subject to taxation under the provisions of Chapter 5747. of the	2387
Revised Code, shall be exempt from the intangibles tax for the	2388
year immediately succeeding their issuance. If such shares bear	2389
dividends the first calendar year after their issuance, which	2390
dividends are subject to taxation under the provisions of Chapter	2391
5747. of the Revised Code, it shall be deemed that the	2392
nondelinquent intangible property tax pursuant to division (A) of	2393
section 5707.04 of the Revised Code was paid on those dividends	2394
paid that first calendar year after the issuance of the shares.	2395

(B) For tax years before tax year 2009, boilers, machinery,	2396
equipment, and personal property the true value of which is	2397
determined under division (B) of section 5711.21 of the Revised	2398
Code shall be listed and assessed at an amount equal to the sum of	2399
the products determined under divisions (B)(1), (2), and (3) of	2400
this section:	2401

(1) Multiply the portion of the true value determined under	2402
division (B)(1) of section 5711.21 of the Revised Code by the	2403
assessment rate for the tax year in division (G) of this section;	2404

(2) Multiply the portion of the true value determined under	2405
division (B)(2) of section 5711.21 of the Revised Code by the	2406
assessment rate in section 5727.111 of the Revised Code that is	2407
applicable to the production equipment of an electric company;	2408

(3) Multiply the portion of the true value determined under	2409
division (B)(3) of section 5711.21 of the Revised Code by the	2410
assessment rate in section 5727.111 of the Revised Code that is	2411
applicable to the property of an electric company that is not	2412
production equipment.	2413

(C) For tax years before tax year 2009, personal property	2414
leased to a public utility or interexchange telecommunications	2415
company as defined in section 5727.01 of the Revised Code and used	2416
directly in the rendition of a public utility service as defined	2417
in division (P) of section 5739.01 of the Revised Code shall be	2418
listed and assessed at the same percentage of true value in money	2419
that such property is required to be assessed by section 5727.111	2420
of the Revised Code if owned by the public utility or	2421
interexchange telecommunications company.	2422

(D)(1) Merchandise or an agricultural product shipped from	2423
outside this state and held in this state in a warehouse or a	2424
place of storage without further manufacturing or processing and	2425
for storage only and for shipment outside this state, but that	2426
does not qualify as "not used in business in this state" under	2427
division (B)(1) or (2) of section 5701.08 of the Revised Code, is	2428
nevertheless not used in business in this state for property tax	2429
purposes.	2430

(2) Merchandise or an agricultural product owned by a	2431
qualified out-of-state person shipped from outside this state and	2432
held in this state in a public warehouse without further	2433
manufacturing or processing and for temporary storage only and for	2434
shipment inside this state, but that does not qualify as "not used	2435
in business in this state" under division (B)(1) or (2) of section	2436
5701.08 of the Revised Code, is nevertheless not used in business	2437
in this state for property tax purposes.	2438

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

2439

(a) "Qualified out-of-state person" means a person that does	2440
not own, lease, or use property, other than merchandise or an	2441
agricultural product described in this division, in this state,	2442
and does not have employees, agents, or representatives in this	2443
state;	2444

(b) "Public warehouse" means a warehouse in this state that	2445
is not subject to the control of or under the supervision of the	2446
owner of the merchandise or agricultural product stored in it, or	2447
staffed by the owner's employees, and from which the property is	2448
to be shipped inside this state.	2449

(E) Personal property valued pursuant to section 5711.15 of	2450
the Revised Code and personal property required to be listed on	2451
the average basis by division (B) of section 5711.16 of the	2452
Revised Code, except property described in division (D) of this	2453
section, business fixtures, and furniture not held for sale in the	2454
course of business, shall be listed and assessed at twenty-three	2455
per cent of its true value in money for tax year 2005 and at the	2456
percentage of such true value specified in division (G) of this	2457
section for tax year 2006 and each tax year thereafter.	2458

(F) All manufacturing equipment as defined in section 5711.16	2459
of the Revised Code shall be listed and assessed at the following	2460
percentage of its true value in money:	2461

(1) For all such property not previously used in business in	2462
this state by the owner thereof, or by related member or	2463
predecessor of the owner, other than as inventory, before January	2464
1, 2005, zero per cent of true value;	2465

(2) For all other such property, at the percentage of true	2466
value specified in division (G) of this section for tax year 2005	2467
and each tax year thereafter.	2468

(G) Unless otherwise provided by law, all other personal	2469
property used in business that has not been legally regarded as an	2470
improvement on land and considered in arriving at the value of the	2471
real property assessed for taxation shall be listed and assessed	2472
at the following percentages of true value in money:	2473

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

2474

(2) For tax year 2006, eighteen and three-fourths per cent of	2475
true value;	2476

(3) For tax year 2007, twelve and one-half per cent of true	2477
value;	2478

(4) For tax year 2008, six and one-fourth per cent of true	2479
value;	2480

(5) For tax year 2009 and each tax year thereafter, zero per	2481
cent of true value.	2482

(H)(1) For tax year 2007 and thereafter, all personal	2483
property used by a telephone company, telegraph company, or	2484
interexchange telecommunications company shall be listed as	2485
provided in this chapter and assessed at the following percentages	2486
of true value in money:	2487

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

2488

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

2489

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

2490

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

2491

(e) For tax year 2011 and each tax year thereafter, zero per	2492
cent of true value.	2493

(2) The property owned by a telephone, telegraph, or	2494
telecommunications company shall be apportioned to each	2495
appropriate taxing district as provided in section 5727.15 of the	2496
Revised Code.	2497

(I) During and after the tax year in which the assessment	2498
rate equals zero per cent, the property described in division (E),	2499
(F), (G), or (H) of this section shall not be listed for taxation.	2500

(J) Divisions (E), (F), (G), and (H) of this section apply to	2501
the property of a person described in divisions (E)(3) to (10),	2502
(4), and (5) of section 5751.01 of the Revised Code. Division (J)	2503
of this section does not prevent the application of the exemption	2504
of property from taxation under section 5725.25 or 5725.26 of the	2505
Revised Code.	2506

Sec. 5713.03.  The county auditor, from the best sources of	2507
information available, shall determine, as nearly as practicable,	2508
the true value of the fee simple estate, as if unencumbered but	2509
subject to any effects from the exercise of police powers or from	2510
other governmental actions, of each separate tract, lot, or parcel	2511
of real property and of buildings, structures, and improvements	2512
located thereon and the current agricultural use value of land	2513
valued for tax purposes in accordance with section 5713.31 of the	2514
Revised Code, in every district, according to the rules prescribed	2515
by this chapter and section 5715.01 of the Revised Code, and in	2516
accordance with the uniform rules and methods of valuing and	2517
assessing real property as adopted, prescribed, and promulgated by	2518
the tax commissioner. The auditor shall determine the taxable	2519
value of all real property by reducing its true or current	2520
agricultural use value by the percentage ordered by the	2521
commissioner. In determining the true value of any tract, lot, or	2522
parcel of real estate under this section, if such tract, lot, or	2523
parcel has been the subject of an arm's length sale between a	2524
willing seller and a willing buyer within a reasonable length of	2525
time, either before or after the tax lien date, the auditor may	2526
consider the sale price of such tract, lot, or parcel to be the	2527
true value for taxation purposes. However, the sale price in an	2528
arm's length transaction between a willing seller and a willing	2529
buyer shall not be considered the true value of the property sold	2530
if subsequent to the sale:	2531

(A) The tract, lot, or parcel of real estate loses value due	2532
to some casualty;	2533

(B) An improvement is added to the property. Nothing in this	2534
section or section 5713.01 of the Revised Code and no rule adopted	2535
under section 5715.01 of the Revised Code shall require the county	2536
auditor to change the true value in money of any property in any	2537
year except a year in which the tax commissioner is required to	2538
determine under section 5715.24 of the Revised Code whether the	2539
property has been assessed as required by law.	2540

The county auditor shall adopt and use a real property record	2541
approved by the commissioner for each tract, lot, or parcel of	2542
real property, setting forth the true and taxable value of land	2543
and, in the case of land valued in accordance with section 5713.31	2544
of the Revised Code, its current agricultural use value, the	2545
number of acres of arable land, permanent pasture land, woodland,	2546
and wasteland in each tract, lot, or parcel. The auditor shall	2547
record pertinent information and the true and taxable value of	2548
each building, structure, or improvement to land, which value	2549
shall be included as a separate part of the total value of each	2550
tract, lot, or parcel of real property.	2551

Sec. 5725.02. TheFor report years prior to 2014, the	2552
cashier or other principal accounting officer of each bank, the	2553
secretary or other principal accounting officer of each other	2554
incorporated financial institution, and the manager or owner of	2555
each unincorporated financial institution shall return to the	2556
department of taxation between the first and second Mondays of	2557
March, annually, a report exhibiting in detail, and under	2558
appropriate heads, the resources and liabilities of such	2559
institution at the close of business on the thirty-first day of	2560
December next preceding.	2561

The report of each financial institution shall also show the	2562
aggregate balances of the taxable deposits of its depositors in	2563
each county in which the institution maintained an office for the	2564
receipt of deposits, at the end of business on the day fixed by	2565
the tax commissioner pursuant to section 5725.05 of the Revised	2566
Code. The report shall show also the names and addresses of all	2567
depositors whose deposits were wholly withdrawn from such	2568
institution between the day so fixed and the date on which notice	2569
of the fixing was received by such institution, or if no such	2570
notice was received, then between the day fixed and the first day	2571
of January next following, and the amount of taxable deposits of	2572
each such depositerdepositor on the day fixed.	2573

Sec. 5725.14. (A) As used in this section and section 5725.15	2574
of the Revised Code:	2575

(1) "Billing address" of a customer means one of the	2576
following:	2577

(a) The customer's address as set forth in any notice,	2578
statement, bill, or similar acknowledgment shall be presumed to be	2579
the address where the customer is located with respect to the	2580
transaction for which the dealer issued the notice, statement,	2581
bill, or acknowledgment.	2582

(b) If the dealer issues any notice, statement, bill, or	2583
similar acknowledgment electronically to an address other than a	2584
street address or post office box address or if the dealer does	2585
not issue such a notice, statement, bill, or acknowledgment, the	2586
customer's street address as set forth in the records of the	2587
dealer at the time of the transaction shall be presumed to be the	2588
address where the customer is located.	2589

(2) "Commissions" includes but is not limited to brokerage	2590
commissions, asset management fees, and similar fees charged in	2591
the regular course of business to a customer for the maintenance	2592
and management of the customer's account.	2593

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

2594

(a) In the case of a dealer in intangibles principally	2595
engaged in the business of lending money or discounting loans, the	2596
aggregate amount of loans effected or discounted;	2597

(b) In the case of a dealer in intangibles principally	2598
engaged in the business of selling or buying stocks, bonds, or	2599
other similar securities either on the dealer's own account or as	2600
agent for another, the aggregate amount of all commissions	2601
charged.	2602

(B) Each dealer in intangibles shall return to the tax	2603
commissioner between the first and second Mondays of March,	2604
annually for return years prior to 2014, a report exhibiting in	2605
detail, and under appropriate heads, the dealer's resources and	2606
liabilities at the close of business on the thirty-first day of	2607
December next preceding. In the case of an unincorporated dealer	2608
in intangibles, such report shall also exhibit the amount or value	2609
as of the date of conversion of all property within the year	2610
preceding the date of listing, and on or after the first day of	2611
November converted into bonds or other securities not taxed to the	2612
extent such nontaxable bonds or securities may be shown in the	2613
dealer's resources on such date, without deduction for	2614
indebtedness created in the purchase of such nontaxable bonds or	2615
securities.	2616

If a dealer in intangibles maintains separate business	2617
offices, whether within this state only or within and without this	2618
state, the report shall also show the gross receipts from business	2619
done at each such office during the year ending on the	2620
thirty-first day of December next preceding.	2621

For the purposes of this section and section 5725.15 of the	2622
Revised Code, business is considered done at an office when it	2623
originates at such office, but the receipts from business	2624
originating at one office and consummated at another office shall	2625
be divided equitably between such offices.	2626

(C) For the purposes of this section and section 5725.15 of	2627
the Revised Code, in the case of a dealer in intangibles	2628
principally engaged in the business of selling or buying stocks,	2629
bonds, or other similar securities either on the dealer's own	2630
account or as agent for another, the dealer's capital, surplus,	2631
and undivided profits employed in this state shall bear the same	2632
ratio to the dealer's total capital, surplus, and undivided	2633
profits employed everywhere as the amount described in division	2634
(C)(1) of this section bears to the amount described in division	2635
(C)(2) of this section:	2636

(1) The sum of the commissions earned during the year covered	2637
by the report from transactions with respect to brokerage accounts	2638
owned by customers having billing addresses in this state;	2639

(2) The sum of the commissions earned during that year from	2640
transactions with respect to brokerage accounts owned by all of	2641
the dealer's customers.	2642

(D) An incorporated dealer in intangibles which owns or	2643
controls fifty-one per cent or more of the common stock of another	2644
incorporated dealer in intangibles may, under uniform regulations	2645
prescribed by the tax commissioner, make a consolidated return for	2646
the purpose of sections 5725.01 to 5725.26, inclusive, of the	2647
Revised Code. In such case the parent corporation making such	2648
return is not required to include in its resources any of the	2649
stocks, securities, or other obligations of its subsidiary	2650
dealers, nor permitted to include in its liabilities any of its	2651
own securities or other obligations belonging to its subsidiaries.	2652

Sec. 5725.16.  On or before the first Monday of May, annually	2653
for return years prior to 2014, the tax commissioner shall certify	2654
to the treasurer of state the assessment of the shares or property	2655
representing capital, or apportionment of either, of each dealer	2656
in intangibles doing business in the state, showing separately the	2657
amount representing capital employed in each county.	2658

The treasurer of state shall place the amounts certified on	2659
the intangible property tax list in histhe treasurer of state's	2660
office in the names of the dealers represented by those	2661
certificates.	2662

Any certificate of abatement issued pursuant to section	2663
5703.05 of the Revised Code for the overpayment of the tax on	2664
shares or property representing capital of a dealer in intangibles	2665
may be tendered by the payee or transferee thereof to the	2666
treasurer of state as payment for any taxes allocable to the	2667
county in which the claim for overpayment arose.	2668

Sec. 5725.26.  The real estate of a financial institution or	2669
dealer in intangibles shall be taxed in the place where it is	2670
located, the same as the real estate of persons is taxed, but the	2671
taxes provided for in Chapters 5725. and, 5726., 5733., and 5751.	2672
of the Revised Code, shall be in lieu of all other taxes on the	2673
other property and assets of such institution or dealer, except	2674
personal property taxable under Chapter 5711. of the Revised Code	2675
and leased, or held for the purpose of leasing, to others if the	2676
owner or lessor of the property acquired it for the sole purpose	2677
of leasing it to others.	2678

For reports required to be filed under section 5725.14 of the	2679
Revised Code in 2003 and thereafter, nothing in this section shall	2680
be construed to exempt the property of any dealer in intangibles	2681
under section 5725.13 of the Revised Code from the tax imposed	2682
under section 5707.03 of the Revised Code.	2683

Sec. 5725.33.  (A) Except as otherwise provided in this	2684
section, terms used in this section have the same meaning as	2685
section 45D of the Internal Revenue Code, any related proposed,	2686
temporary or final regulations promulgated under the Internal	2687
Revenue Code, any rules or guidance of the internal revenue	2688
service or the United States department of the treasury, and any	2689
related rules or guidance issued by the community development	2690
financial institutions fund of the United States department of the	2691
treasury, as such law, regulations, rules, and guidance exist on	2692
the effective date of the enactment of this section by H.B. 1 of	2693
the 128th general assemblyOctober 16, 2009.	2694

As used in this section:

2695

(1) "Adjusted purchase price" means the amount paid for	2696
qualified equity investments multiplied by the qualified	2697
low-income community investments made by the issuer in projects	2698
located in this state as a percentage of the total amount of	2699
qualified low-income community investments made by the issuer in	2700
projects located in all states on the credit allowance date during	2701
the applicable tax year, subject to divisions (B)(1) and (2) of	2702
this section.	2703

(2) "Applicable percentage" means zero per cent for each of	2704
the first two credit allowance dates, seven per cent for the third	2705
credit allowance date, and eight per cent for the four following	2706
credit allowance dates.	2707

(3) "Credit allowance date" means the date, on or after	2708
January 1, 2010, a qualified equity investment is made and each of	2709
the six anniversary dates thereafter. For qualified equity	2710
investments made after the effective date of this sectionOctober	2711
16, 2009, but before January 1, 2010, the initial credit allowance	2712
date is January 1, 2010, and each of the six anniversary dates	2713
thereafter is on the first day of January of each year.	2714

(4) "Qualified active low-income community business" excludes	2715
any business that derives or projects to derive fifteen per cent	2716
or more of annual revenue from the rental or sale of real	2717
property, except any business that is a special purpose entity	2718
principally owned by a principal user of that property formed	2719
solely for the purpose of renting, either directly or indirectly,	2720
or selling real property back to such principal user if such	2721
principal user does not derive fifteen per cent or more of its	2722
gross annual revenue from the rental or sale of real property.	2723

(5) "Qualified community development entity" includes only	2724
entities:	2725

(a) That have entered into an allocation agreement with the	2726
community development financial institutions fund of the United	2727
States department of the treasury with respect to credits	2728
authorized by section 45D of the Internal Revenue Code;	2729

(b) Whose service area includes any portion of this state;	2730
and	2731

(c) That will designate an equity investment in such entities	2732
as a qualified equity investment for purposes of both section 45D	2733
of the Internal Revenue Code and this section.	2734

(6) "Qualified equity investment" is limited to an equity	2735
investment in a qualified community development entity that:	2736

(a) Is acquired after the effective date of the enactment of	2737
this sectionOctober 16, 2009, at its original issuance solely in	2738
exchange for cash;	2739

(b) Has at least eighty-five per cent of its cash purchase	2740
price used by the qualified community development entity to make	2741
qualified low-income community investments, provided that in the	2742
seventh year after a qualified equity investment is made, only	2743
seventy-five per cent of such cash purchase price must be used by	2744
the qualified community development entity to make qualified	2745
low-income community investments; and	2746

(c) Is designated by the issuer as a qualified equity	2747
investment.	2748

"Qualified equity investment" includes any equity investment	2749
that would, but for division (A)(6)(a) of this section, be a	2750
qualified equity investment in the hands of the taxpayer if such	2751
investment was a qualified equity investment in the hands of a	2752
prior holder.	2753

(B) There is hereby allowed a nonrefundable credit against	2754
the tax imposed by section 5725.18 of the Revised Code for an	2755
insurance company holding a qualified equity investment on the	2756
credit allowance date occurring in the calendar year for which the	2757
tax is due. The credit shall equal the applicable percentage of	2758
the adjusted purchase price of qualified low-income community	2759
investments, subject to divisions (B)(1) and (2) of this section:	2760

(1) For the purpose of calculating the amount of qualified	2761
low-income community investments held by a qualified community	2762
development entity, an investment shall be considered held by a	2763
qualified community development entity even if the investment has	2764
been sold or repaid, provided that, at any time before the seventh	2765
anniversary of the issuance of the qualified equity investment,	2766
the qualified community development entity reinvests an amount	2767
equal to the capital returned to or received or recovered by the	2768
qualified community development entity from the original	2769
investment, exclusive of any profits realized and costs incurred	2770
in the sale or repayment, in another qualified low-income	2771
community investment within twelve months of the receipt of such	2772
capital. If the qualified low-income community investment is sold	2773
or repaid after the sixth anniversary of the issuance of the	2774
qualified equity investment, the qualified low-income community	2775
investment shall be considered held by the qualfiedqualified	2776
community development entity through the seventh anniversary of	2777
the qualified equity investment's issuance.	2778

(2) The qualified low-income community investment made in	2779
this state shall equal the sum of the qualified low-income	2780
community investments in each qualified active low-income	2781
community business in this state, not to exceed two million five	2782
hundred sixty-four thousand dollars, in which the qualified	2783
community development entity invests, including such investments	2784
in any such businesses in this state related to that qualified	2785
active low-income community business through majority ownership or	2786
control.	2787

The credit shall be claimed in the order prescribed by	2788
section 5725.98 of the Revised Code. If the amount of the credit	2789
exceeds the amount of tax otherwise due after deducting all other	2790
credits in that order, the excess may be carried forward and	2791
applied to the tax due for not more than four ensuing years.	2792

By claiming a tax credit under this section, an insurance	2793
company waives its rights under section 5725.222 of the Revised	2794
Code with respect to the time limitation for the assessment of	2795
taxes as it relates to credits claimed that later become subject	2796
to recapture under division (E) of this section.	2797

(C) The amount of qualified equity investments on the basis	2798
of which credits may be claimed under this section and sections	2799
5726.54, 5729.16, and 5733.58 of the Revised Code shall not exceed	2800
the amount, estimated by the director of development, that would	2801
cause the total amount of credits allowed each fiscal year to	2802
exceed ten million dollars, computed without regard to the	2803
potential for taxpayers to carry tax credits forward to later	2804
years.	2805

(D) If any amount of the federal tax credit allowed for a	2806
qualified equity investment for which a credit was received under	2807
this section is recaptured under section 45D of the Internal	2808
Revenue Code, or if the director of development services	2809
determines that an investment for which a tax credit is claimed	2810
under this section is not a qualified equity investment or that	2811
the proceeds of an investment for which a tax credit is claimed	2812
under this section are used to make qualified low-income community	2813
investments other than in a qualified active low-income community	2814
business, all or a portion of the credit received on account of	2815
that investment shall be paid by the insurance company that	2816
received the credit to the superintendent of insurance. The amount	2817
to be recovered shall be determined by the director of development	2818
services pursuant to rules adopted under division (E) of this	2819
section. The director shall certify any amount due under this	2820
division to the superintendent of insurance, and the	2821
superintendent shall notify the treasurer of state of the amount	2822
due. Upon notification, the treasurer shall invoice the insurance	2823
company for the amount due. The amount due is payable not later	2824
than thirty days after the date the treasurer invoices the	2825
insurance company. The amount due shall be considered to be tax	2826
due under section 5725.18 of the Revised Code, and may be	2827
collected by assessment without regard to the time limitations	2828
imposed under section 5725.222 of the Revised Code for the	2829
assessment of taxes by the superintendent. All amounts collected	2830
under this division shall be credited as revenue from the tax	2831
levied under section 5725.18 of the Revised Code.	2832

(E) The tax credits authorized under this section and	2833
sections 5726.54, 5729.16, and 5733.58 of the Revised Code shall	2834
be administered by the department of development services. The	2835
director of development services, in consultation with the tax	2836
commissioner and the superintendent of insurance, pursuant to	2837
Chapter 119. of the Revised Code, shall adopt rules for the	2838
administration of this section and sections 5726.54, 5729.16, and	2839
5733.58 of the Revised Code. The rules shall provide for	2840
determining the recovery of credits under division (D) of this	2841
section, division (D) of sectionand under sections 5726.54,	2842
5729.16, and section 5733.58 of the Revised Code, including	2843
prorating the amount of the credit to be recovered on any	2844
reasonable basis, the manner in which credits may be allocated	2845
among claimants, and the amount of any application or other fees	2846
to be charged in connection with a recovery.	2847

(F) There is hereby created in the state treasury the new	2848
markets tax credit operating fund. The director of development	2849
services is authorized to charge reasonable application and other	2850
fees in connection with the administration of tax credits	2851
authorized by this section and sections 5726.54, 5729.16, and	2852
5733.58 of the Revised Code. Any such fees collected shall be	2853
credited to the fund. The director of development services shall	2854
use money in the fund to pay expenses related to the	2855
administration of tax credits authorized under sections 5725.33,	2856
5726.54, 5729.16, and 5733.58 of the Revised Code.	2857

Sec. 5726.01. As used in this chapter:

2858

(A) "Affiliated group" means a group of two or more persons	2859
with fifty per cent or greater of the value of each person's	2860
ownership interests owned or controlled directly, indirectly, or	2861
constructively through related interests by common owners during	2862
all or any portion of the taxable year, and the common owners.	2863
"Affiliated group" includes, but is not limited to, any person	2864
eligible to be included in a consolidated elected taxpayer group	2865
under section 5751.011 of the Revised Code or a combined taxpayer	2866
group under section 5751.012 of the Revised Code.	2867

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

2868

(1) A national bank organized and operating as a national	2869
bank association pursuant to the "National Bank Act," 13 Stat. 100	2870
(1864), 12 U.S.C. 21, et seq.;	2871

(2) A federal savings association or federal savings bank	2872
chartered under 12 U.S.C. 1464;	2873

(3) A bank, banking association, trust company, savings and	2874
loan association, savings bank, or other banking institution that	2875
is organized or incorporated under the laws of the United States,	2876
any state, or a foreign country;	2877

(4) Any corporation organized and operating pursuant to 12	2878
U.S.C. 611, et seq.;	2879

(5) Any agency or branch of a foreign bank, as those terms	2880
are defined in 12 U.S.C. 3101;	2881

(6) An entity licensed as a small business investment company	2882
under the "Small Business Investment Act of 1958," 72 Stat. 689,	2883
15 U.S.C. 661, et seq.;	2884

(7) A company chartered under the "Farm Credit Act of 1933,"	2885
48 Stat. 257, or a successor of such a company.	2886

"Bank organization" does not include an institution organized	2887
under the "Federal Farm Loan Act," 39 Stat. 360 (1916), or a	2888
successor of such an institution, an insurance company, or a	2889
credit union.	2890

(C) "Call report" means the consolidated reports of condition	2891
and income prescribed by the federal financial institutions	2892
examination council that a person is required to file with a	2893
federal regulatory agency pursuant to 12 U.S.C. 161, 12 U.S.C.	2894
324, or 12 U.S.C. 1817.	2895

(D) "Captive finance company" means a person that derived at	2896
least seventy-five per cent of its gross income for the current	2897
taxable year and the two taxable years preceding the current	2898
taxable year from one or more of the following transactions:	2899

(1) Financing transactions with members of its affiliated	2900
group;	2901

(2) Financing transactions with or for customers of products	2902
manufactured or sold by a member of its affiliated group;	2903

(3) Financing transactions with or for a distributor or	2904
franchisee that sells, leases, or services a product manufactured	2905
or sold by a member of the person's affiliated group;	2906

(4) Financing transactions with or for a supplier to a member	2907
of the person's affiliated group in connection with the member's	2908
manufacturing business;	2909

(5) Issuing bonds or other publicly traded debt instruments	2910
for the benefit of the affiliated group;	2911

(6) Short-term or long-term investments whereby the person	2912
invests the cash reserves of the affiliated group and the	2913
affiliated group utilizes the proceeds from the investments.	2914

For the purposes of division (D) of this section, "financing	2915
transaction" means making or selling loans, extending credit,	2916
leasing, earning or receiving subvention, including interest	2917
supplements and other support costs related thereto, or acquiring,	2918
selling, or servicing accounts receivable, notes, loans, leases,	2919
debt, or installment obligations that arise from the sale or lease	2920
of tangible personal property or the performance of services, and	2921
"gross income" has the same meaning as in section 61 of the	2922
Internal Revenue Code and includes income from transactions	2923
between the captive finance company and other members of its	2924
affiliated group.	2925

A person that has not been in continuous existence for the	2926
two taxable years preceding the current taxable year qualifies as	2927
a "captive finance company" for purposes of division (D) of this	2928
section if the person derived at least seventy-five per cent of	2929
its gross income for the period of its existence from one or more	2930
of the transactions described in divisions (D)(1) to (6) of this	2931
section.	2932

"Captive finance company" does not include a small dollar	2933
lender.	2934

(e) "Credit union" means a nonprofit cooperative financial	2935
institution organized or chartered under the laws of this state,	2936
any other state, or the United States.	2937

(F) "Diversified savings and loan holding company" has the	2938
same meaning as in 12 U.S.C. 1467a, as that section existed on	2939
January 1, 2012.	2940

(G) "Document of creation" means the articles of	2941
incorporation of a corporation, articles of organization of a	2942
limited liability company, registration of a foreign limited	2943
liability company, certificate of limited partnership,	2944
registration of a foreign limited partnership, registration of a	2945
domestic or foreign limited liability partnership, or registration	2946
of a trade name.	2947

(H) "Financial institution" means a bank organization, a	2948
holding company of a bank organization, or a nonbank financial	2949
organization, except when one of the following applies:	2950

(1) If two or more such entities are consolidated for the	2951
purposes of filing an FR Y-9, "financial institution" means a	2952
group consisting of all entities that are included in the FR Y-9.	2953

(2) If two or more such entities are consolidated for the	2954
purposes of filing a call report, "financial institution" means a	2955
group consisting of all entities that are included in the call	2956
report and that are not included in a group described in division	2957
(H)(1) of this section.	2958

(3) If a bank organization is owned directly by a	2959
grandfathered unitary savings and loan holding company, "financial	2960
institution" means a group consisting only of that bank	2961
organization and the entities included in that bank organization's	2962
call report, notwithstanding division (H)(1) or (2) of this	2963
section.	2964

"Financial institution" does not include a diversified	2965
savings and loan holding company or a grandfathered unitary	2966
savings and loan holding company.	2967

(I) "FR Y-9" means the consolidated or parent-only financial	2968
statements that a holding company is required to file with the	2969
federal reserve board pursuant to 12 U.S.C. 1844. In the case of a	2970
holding company required to file both consolidated and parent-only	2971
financial statements, "FR Y-9" means the consolidated financial	2972
statements that the holding company is required to file.	2973

(J) "Grandfathered unitary savings and loan holding company"	2974
means an entity described in 12 U.S.C. 1467a(c)(9)(C), as that	2975
section existed on December 31, 1999.	2976

(K) "Gross receipts" means all items of income, without	2977
deduction for expenses. If the reporting person for a taxpayer is	2978
a holding company, "gross receipts" includes all items of income	2979
reported on the FR Y-9 filed by the holding company. If the	2980
reporting person for a taxpayer is a bank organization, "gross	2981
receipts" includes all items of income reported on the call report	2982
filed by the bank organization. If the reporting person for a	2983
taxpayer is a nonbank financial organization, "gross receipts"	2984
includes all items of income reported in accordance with generally	2985
accepted accounting principles.	2986

(L) "Insurance company" means every corporation, association,	2987
and society engaged in the business of insurance of any character,	2988
or engaged in the business of entering into contracts	2989
substantially amounting to insurance of any character, or of	2990
indemnifying or guaranteeing against loss or damage, or acting as	2991
surety on bonds or undertakings. "Insurance company" also includes	2992
any health insuring corporation as defined in section 1751.01 of	2993
the Revised Code.	2994

(M)(1) "Nonbank financial organization" means every person	2995
that is not a bank organization or a holding company of a bank	2996
organization and that engages in business primarily as a small	2997
dollar lender. "Nonbank financial organization" does not include	2998
an institution organized under the "Federal Farm Loan Act," 39	2999
Stat. 360 (1916), or a successor of such an institution, an	3000
insurance company, a captive finance company, a credit union, an	3001
institution organized and operated exclusively for charitable	3002
purposes within the meaning of section 501(c)(3) of the Internal	3003
Revenue Code, or a person that facilitates or services one or more	3004
securitizations for a bank organization, a holding company of a	3005
bank organization, a captive finance company, or any member of the	3006
person's affiliated group.	3007

(2) A person is engaged in business primarily as a small	3008
dollar lender if the person has, for the taxable year, gross	3009
income from the activities described in division (O) of this	3010
section that exceeds the person's gross income from all other	3011
activities. As used in division (M) of this section, "gross	3012
income" has the same meaning as in section 61 of the Internal	3013
Revenue Code, and income from transactions between the person and	3014
the other members of the affiliated group shall be eliminated, and	3015
any sales, exchanges, and other dispositions of commercial paper	3016
to persons outside the affiliated group produces gross income only	3017
to the extent the proceeds from such transactions exceed the	3018
affiliated group's basis in such commercial paper.	3019

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

3020

(1) In the case of a financial institution described in	3021
division (H)(1) of this section, the top-tier holding company	3022
required to file an FR Y-9.	3023

(2) In the case of a financial institution described in	3024
division (H)(2) or (3) of this section, the bank organization	3025
required to file the call report.	3026

(3) In the case of a bank organization or nonbank financial	3027
organization that is not included in a group described in division	3028
(H)(1) or (2) of this section, the bank organization or nonbank	3029
financial organization.	3030

(O) "Small dollar lender" means any person engaged primarily	3031
in the business of loaning money to individuals, provided that the	3032
loan amounts do not exceed five thousand dollars and the duration	3033
of the loans do not exceed twenty-four months. A "small dollar	3034
lender" does not include a bank organization, credit union, or	3035
captive finance company.	3036

(P) "Tax year" means the calendar year for which the tax	3037
levied under section 5726.02 of the Revised Code is required to be	3038
paid.	3039

(Q) "Taxable year" means the calendar year preceding the year	3040
in which an annual report is required to be filed under section	3041
5726.03 of the Revised Code.	3042

(R) "Taxpayer" means a financial institution subject to the	3043
tax levied under section 5726.02 of the Revised Code.	3044

(S) "Total equity capital" means the sum of the common stock	3045
at par value, perpetual preferred stock and related surplus, other	3046
surplus not related to perpetual preferred stock, retained	3047
earnings, accumulated other comprehensive income, treasury stock,	3048
unearned employee stock ownership plan shares, and other equity	3049
components of a financial institution. "Total equity capital"	3050
shall not include any noncontrolling (minority) interests as	3051
reported on an FR Y-9 or call report, unless such interests are in	3052
a bank organization or a bank holding company.	3053

(T) "Total Ohio equity capital" means the portion of the	3054
total equity capital of a financial institution apportioned to	3055
Ohio pursuant to section 5726.05 of the Revised Code.	3056

(U) "Holding company" does not include a diversified savings	3057
and loan holding company or a grandfathered unitary savings and	3058
loan holding company.	3059

(V) "Securitization" means transferring one or more assets to	3060
one or more persons and subsequently issuing securities backed by	3061
the right to receive payment from the asset or assets so	3062
transferred.	3063

Sec. 5726.02. (A) For the purpose of funding the needs of	3064
this state and its local governments beginning with the tax year	3065
that commences on January 1, 2014, and continuing for every tax	3066
year thereafter, there is hereby levied a tax on each financial	3067
institution for the privilege of doing business in this state. A	3068
financial institution is subject to the tax imposed under this	3069
chapter for each calendar year that the financial institution	3070
conducts business as a financial institution in this state or	3071
otherwise has nexus in or with this state under the Constitution	3072
of the United States on the first day of January of that calendar	3073
year.	3074

(B) The amount of tax a financial institution is required to	3075
pay under this chapter shall equal the greater of the minimum tax	3076
required under division (A)(1) of section 5726.04 of the Revised	3077
Code or the amount by which the tax calculated under division	3078
(A)(2) of that section exceeds any credits allowed against the	3079
tax.	3080

Sec. 5726.03. (A)(1) Annually, on or before the fifteenth day	3081
of October, the reporting person for each taxpayer shall make a	3082
report in writing to the tax commissioner, in such form as the	3083
commissioner prescribes, and shall remit to the commissioner the	3084
amount of tax shown to be due on the report. The remittance shall	3085
be made payable to the treasurer of state. The commissioner shall	3086
make available, on the official internet web site of the	3087
department of taxation, copies of the forms prescribed by the	3088
commissioner for the purpose of making the annual report.	3089

(2) An annual report shall be signed by the president,	3090
vice-president, secretary, treasurer, general manager,	3091
superintendent, or managing agent in this state of the reporting	3092
person.	3093

(3) An annual report shall contain the facts, figures,	3094
computations, and attachments that result in the determination of	3095
the amount of tax due from a taxpayer under this chapter.	3096

(B)(1) In the case of a financial institution described in	3097
division (H)(1) of section 5726.01 of the Revised Code, the annual	3098
report filed for a taxable year shall list, and include	3099
information related to, each person includable in an FR Y-9 filed	3100
by the reporting person for that taxable year.	3101

(2) In the case of a financial institution described in	3102
division (H)(2) or (3) of section 5726.01 of the Revised Code, the	3103
annual report for a taxable year shall list, and include	3104
information related to, each person includable in a call report	3105
filed by the reporting person for that taxable year.	3106

(C)(1) The reporting person for a taxpayer shall remit each	3107
tax payment and, if required by the commissioner, file each annual	3108
or estimated tax report electronically. The commissioner may	3109
require reporting persons to use the Ohio business gateway as	3110
defined in section 718.051 of the Revised Code to file reports and	3111
remit the tax, or may provide another means for reporting persons	3112
to file and remit the tax electronically.	3113

(2) The payment of taxes as provided in division (C) of this	3114
section shall not affect a taxpayer's obligation to file an annual	3115
report required under division (A) of this section.	3116

(3) The reporting person for a taxpayer that is required to	3117
remit tax payments electronically under this section may apply to	3118
the tax commissioner, in the manner prescribed by the	3119
commissioner, to be excused from that requirement. The	3120
commissioner may excuse the taxpayer from the requirements of	3121
division (C) of this section for good cause.	3122

(4) If the reporting person for a taxpayer that is required	3123
to remit tax payments or file reports electronically under this	3124
section fails to do so, the commissioner may impose a penalty not	3125
to exceed the following:	3126

(a) For either of the first two reports the person so fails,	3127
five per cent of the amount of the payment that was required to be	3128
remitted;	3129

(b) For the third and any subsequent reports the person so	3130
fails, ten per cent of the amount of the payment that was required	3131
to be remitted.	3132

The penalty imposed under this section is in addition to any	3133
other penalty or charge imposed under this chapter and shall be	3134
considered as revenue arising from the tax levied under this	3135
chapter. A penalty may be collected by assessment in the manner	3136
prescribed by section 5726.20 of the Revised Code. The tax	3137
commissioner may abate all or a portion of such a penalty and may	3138
adopt rules governing such abatements.	3139

Sec. 5726.04. (A) The tax levied on a financial institution	3140
under this chapter shall be the greater of the following:	3141

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

3142

(2) The product of the total Ohio equity capital of the	3143
financial institution, as determined under this section,	3144
multiplied by eight mills for each dollar of the first two hundred	3145
million dollars of total Ohio equity capital, by four mills for	3146
each dollar of total Ohio equity capital greater than two hundred	3147
million and less than one billion three hundred million one	3148
dollars, and by two and one-half mills for each dollar of total	3149
Ohio equity capital in excess of one billion three hundred million	3150
dollars.	3151

(B) If the reporting person for a financial institution files	3152
an FR Y-9 or call report, the total equity capital of the	3153
financial institution shall equal the total equity capital shown	3154
on the reporting person's FR Y-9 or call report as of the end of	3155
the taxable year. The total equity capital of all other financial	3156
institutions shall be reported as of the end of the taxable year	3157
in accordance with generally accepted accounting principles.	3158

(C) For the purposes of this section, "total Ohio equity	3159
capital" means the product of the total equity capital of a	3160
financial institution as of the end of a taxable year multiplied	3161
by the Ohio apportionment ratio calculated for the financial	3162
institution under section 5726.05 of the Revised Code, except as	3163
provided in section 5726.041 of the Revised Code.	3164

(D) All payments received from the tax levied under this	3165
chapter shall be credited to the general revenue fund.	3166

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

3167

(a) "First target tax amount" means two hundred million	3168
dollars.	3169

(b) "Second target tax amount" means one hundred six per cent	3170
of the first target tax amount or, if applicable, the first target	3171
tax amount as adjusted under division (E)(2) or (3) of this	3172
section.	3173

(c) "Amount of taxes collected" means the amount of taxes	3174
received by the tax commissioner from the tax levied under this	3175
chapter for a tax year, less any amounts refunded to taxpayers for	3176
the same tax year.	3177

(2) If, for the tax year beginning on January 1, 2014, the	3178
total amount of taxes collected from all taxpayers under this	3179
chapter is greater than one hundred ten per cent of the first	3180
target tax amount, the tax commissioner shall decrease each tax	3181
rate provided in division (A)(2) of this section by a percentage	3182
equal to the percentage by which the amount of taxes collected	3183
exceeded the first target tax amount.	3184

(3) If, for the tax year beginning on January 1, 2014, the	3185
total amount of taxes collected from all taxpayers under this	3186
chapter is less than ninety per cent of the first target tax	3187
amount, the tax commissioner shall increase the tax rate for each	3188
dollar of total Ohio equity capital in excess of one billion three	3189
hundred million dollars as provided in division (A)(2) of this	3190
section by a percentage equal to the difference of (a) the	3191
percentage by which the first target tax amount exceeded the	3192
amount of taxes collected minus (b) ten per cent of the first	3193
target tax amount.	3194

(4) If, for the tax year beginning on January 1, 2016, the	3195
total amount of taxes collected from all taxpayers under this	3196
chapter is greater than one hundred ten per cent of the second	3197
target tax amount, the tax commissioner shall decrease each tax	3198
rate in effect on January 1, 2016, by a percentage equal to the	3199
percentage by which the amount of taxes collected exceeded the	3200
second target tax amount.	3201

(5) If, for the tax year beginning on January 1, 2016, the	3202
total amount of taxes collected from all taxpayers under this	3203
chapter is less than ninety per cent of the second target tax	3204
amount, the tax commissioner shall increase the tax rate for each	3205
dollar of total Ohio equity capital in excess of one billion three	3206
hundred million dollars as provided in division (A)(2) of this	3207
section by a percentage equal to the difference of (a) the	3208
percentage by which the second target tax amount exceeded the	3209
amount of taxes collected minus (b) ten per cent of the second	3210
target tax amount.	3211

(6) Tax rates adjusted pursuant to division (E)(2), (3), (4),	3212
or (5) of this section shall be rounded to the nearest one-tenth	3213
of one mill per dollar. The tax commissioner shall publish the new	3214
tax rates by journal entry and provide notice of the new tax rates	3215
to taxpayers. The new tax rates adjusted pursuant to division	3216
(E)(2) or (3) of this section shall apply to tax years beginning	3217
on or after January 1, 2015. The new tax rates adjusted pursuant	3218
to division (E)(4) or (5) of this section shall apply to tax years	3219
beginning on or after January 1, 2017.	3220

Sec. 5726.041.  (A) As used in this section, "Ohio-qualified	3221
real estate investment trust" means a real estate investment trust	3222
that is traded on a public stock exchange and that was traded on a	3223
public stock exchange on January 1, 2012.	3224

(B) For the purpose of computing the total Ohio equity	3225
capital under division (C) of section 5726.04 of the Revised Code	3226
for a financial institution the total equity capital of which	3227
includes investments in an Ohio-qualified real estate investment	3228
trust, the following amounts shall be subtracted for the tax year	3229
specified:	3230

(1) For tax year 2014, eighty per cent of the institution's	3231
investment in an Ohio-qualified real estate investment trust as of	3232
January 1, 2012;	3233

(2) For tax year 2015, sixty per cent of the institution's	3234
investment in an Ohio-qualified real estate investment trust as of	3235
January 1, 2012;	3236

(3) For tax year 2016, forty per cent of the institution's	3237
investment in an Ohio-qualified real estate investment trust as of	3238
January 1, 2012;	3239

(4) For tax year 2017, twenty per cent of the institution's	3240
investment in an Ohio-qualified real estate investment trust as of	3241
January 1, 2012.	3242

For tax years after tax year 2017, no deduction is allowed	3243
for an investment in an Ohio-qualified real estate investment	3244
trust.	3245

(C) For the purpose of computing the apportionment factor	3246
under section 5726.05 of the Revised Code for a financial	3247
institution the total equity capital of which includes investments	3248
in an Ohio-qualified real estate investment trust, the following	3249
amounts shall be subtracted from both the numerator and	3250
denominator of the apportionment factor fraction for the tax year	3251
specified:	3252

(1) For tax year 2014, eighty per cent of the gross receipts	3253
from an Ohio-qualified real estate investment trust;	3254

(2) For tax year 2015, sixty per cent of the gross receipts	3255
from an Ohio-qualified real estate investment trust;	3256

(3) For tax year 2016, forty per cent of the gross receipts	3257
from an Ohio-qualified real estate investment trust;	3258

(4) For tax year 2017, twenty per cent of the gross receipts	3259
from an Ohio-qualified real estate investment trust.	3260

For tax years after tax year 2017, no deduction is allowed	3261
from the apportionment factor fraction for gross receipts from an	3262
Ohio-qualified real estate investment trust.	3263

Sec. 5726.05. (A) An apportionment factor shall be used to	3264
determine the total Ohio equity capital of a financial	3265
institution. The factor shall be based upon the gross receipts	3266
generated by the financial institution.	3267

(B) The apportionment factor is a fraction, the numerator of	3268
which is the total gross receipts of the financial institution in	3269
this state during the taxable year and the denominator of which is	3270
the total gross receipts of the financial institution everywhere	3271
during the taxable year. Gross receipts generated by a financial	3272
institution shall be sitused to this state in the proportion that	3273
the customers' benefit in this state with respect to the services	3274
received bears to the customers' benefit everywhere with respect	3275
to the services received. The physical location where the customer	3276
ultimately uses or receives the benefit of what was received shall	3277
be paramount in determining the proportion of the benefit in this	3278
state to the benefit everywhere. The method of calculating gross	3279
receipts for purposes of the denominator shall be the same as the	3280
method used in determining gross receipts for purposes of the	3281
numerator.	3282

(C) The following are examples of gross receipts to be	3283
included in the numerator of the apportionment factor:	3284

(1) Receipts from the lease, sublease, rental, or subrental	3285
of real property located in this state;	3286

(2) Receipts from the lease, sublease, rental, or subrental	3287
of tangible personal property to the extent such property is used	3288
in this state;	3289

(3) Interest, fees, penalties, or any other charge received	3290
from loans secured by real property located within this state;	3291

(4) Interest, fees, penalties, or any other charge received	3292
from loans not secured by real property if the borrower is located	3293
in this state;	3294

(5) The amount of net gains, but not less than zero, from the	3295
sale of loans secured by real property located in this state;	3296

(6) The amount of net gains, but not less than zero, from the	3297
sale of loans not secured by real property if the borrower is	3298
located in this state;	3299

(7) Interest, annual fees, penalties, or any other charges	3300
received from credit card receivables and from cardholders if the	3301
billing address of the cardholder is located in this state;	3302

(8) The amount of net gains, but not less than zero, from the	3303
sale of credit card receivables if the billing address of the	3304
cardholder is located in this state;	3305

(9) Reimbursement fees of a credit card issuer if the billing	3306
address of the cardholder is located in this state;	3307

(10) Receipts from merchant discounts if the merchant is	3308
located in this state;	3309

(11) Loan servicing fees derived from loans secured by real	3310
property located in this state;	3311

(12) Loan servicing fees derived from loans not secured by	3312
real property if the borrower is located in this state;	3313

(13) Loan servicing fees derived from servicing loans from	3314
other financial institutions if the borrower is located in this	3315
state;	3316

(14) Receipts not otherwise listed herein if the payor of	3317
those receipts is located in this state.	3318

(D)(1) Receipts from investment assets and activities and	3319
trading assets and activities, including interest and dividends,	3320
are in this state to the extent the financial institution's	3321
customer is in this state, which a financial institution may	3322
determine by electing to apply either the gross receipts factor	3323
calculated under division (B) of this section to the investment	3324
assets and activities and trading assets and activities or the	3325
method prescribed in division (D)(2) of this section. As used in	3326
division (D) of this section, "investment assets and activities	3327
and trading assets and activities" includes interest, dividends,	3328
and other income from assets and activities, including, but not	3329
limited to: investment securities; trading account assets; federal	3330
funds; securities purchased and sold under agreements to resell or	3331
repurchase; options; futures contracts; forward contracts;	3332
notional principal contracts such as swaps; equities; foreign	3333
currency transactions; and amounts in the matched book and in the	3334
arbitrage book, but excluding amounts otherwise sourced in this	3335
section.	3336

(2) If a financial institution elects to apply the method	3337
prescribed in division (D)(2) of this section, each of the	3338
following apply:	3339

(a) With respect to the investment and trading assets and	3340
activities, the gross receipts factor shall include the following:	3341

(i) The amount by which interest from federal funds sold and	3342
securities purchased under resale agreements exceeds interest	3343
expense on federal funds purchased and securities sold under	3344
repurchase agreements.	3345

(ii) The amount by which interest, dividends, gains, and	3346
other income from trading assets and activities, including, but	3347
not limited to, assets and activities in the matched book, in the	3348
arbitrage book, and foreign currency transactions, exceed amounts	3349
paid in lieu of interest, amounts paid in lieu of dividends, and	3350
losses from such assets and activities.	3351

(b) The numerator of the gross receipts factor shall include	3352
interest, dividends, net gains, but not less than zero, and other	3353
income from investment assets and activities and from trading	3354
assets and activities that are attributable to this state as	3355
follows:	3356

(i) The amount of interest, other than interest described in	3357
division (D)(2)(b)(ii) of this section, dividends, other than	3358
dividends described in that division, net gains, but not less than	3359
zero, and other income from investment assets and activities in	3360
the investment account to be attributed to this state and included	3361
in the numerator is determined by multiplying all such income from	3362
such assets and activities by a fraction, the numerator of which	3363
is the average value of such assets that are properly assigned to	3364
a regular place of business of the taxpayer within this state and	3365
the denominator of which is the average value of all such assets.	3366

(ii) The amount of interest from federal funds sold and	3367
purchased and from securities purchased under resale agreements	3368
and securities sold under repurchase agreements attributable to	3369
this state and included in the numerator is determined by	3370
multiplying the amount described in division (D)(2)(a)(i) of this	3371
section from such funds and such securities by a fraction, the	3372
numerator of which is the average value of federal funds sold and	3373
securities purchased under agreements to resell that are properly	3374
assigned to a regular place of business of the taxpayer within	3375
this state and the denominator of which is the average value of	3376
all such funds and such securities.	3377

(iii) The amount of interest, dividends, gains, and other	3378
income from trading assets and activities, including but not	3379
limited to assets and activities in the matched book, in the	3380
arbitrage book, and foreign currency transaction, but excluding	3381
amounts described in division (D)(2)(b)(i) or (ii) of this	3382
section, attributable to this state and included in the numerator	3383
is determined by multiplying the amount described in division	3384
(D)(2)(a)(ii) of this section by a fraction, the numerator of	3385
which is the average value of such trading assets that are	3386
properly assigned to a regular place of business of the taxpayer	3387
within this state and the denominator of which is the average	3388
value of all such assets.	3389

(3) For purposes of division (D)(2) of this section, average	3390
value shall be determined as follows:	3391

(a)(i) The value of real property and tangible personal	3392
property owned by the taxpayer is the original cost or other basis	3393
of such property for federal income tax purposes without regard to	3394
depletion, depreciation, or amortization.	3395

(ii) Loans are valued at their outstanding principal balance,	3396
without regard to any reserve for bad debts. If a loan is charged	3397
off in whole or in part for federal income tax purposes, the	3398
portion of the loan charged off is not outstanding. A specifically	3399
allocated reserve established pursuant to financial accounting	3400
guidelines that is treated as charged off for federal income tax	3401
purposes shall be treated as charged off for purposes of this	3402
section.	3403

(iii) Credit card receivables are valued at their outstanding	3404
principal balance, without regard to any reserve for bad debts. If	3405
a credit card receivable is charged off in whole or in part for	3406
federal income tax purposes, the portion of the receivable charged	3407
off is not outstanding.	3408

(b) The average value of property owned by the taxpayer is	3409
computed on an annual basis by adding the value of the property on	3410
the first day of the taxable year and the value on the last day of	3411
the taxable year and dividing the sum by two. If averaging on this	3412
basis does not properly reflect average value, the tax	3413
commissioner may require averaging on a more frequent basis. The	3414
taxpayer may elect to average on a more frequent basis. When	3415
averaging on a more frequent basis is required by the tax	3416
commissioner or is elected by the taxpayer, the same method of	3417
valuation must be used consistently by the taxpayer with respect	3418
to property within and without this state and on all subsequent	3419
returns unless the taxpayer receives prior permission from the tax	3420
commissioner or the tax commissioner requires a different method	3421
of determining value.	3422

(E) A taxpayer's election under division (D)(1) of this	3423
section shall be in effect on all subsequent returns unless the	3424
taxpayer receives prior permission from the tax commissioner to	3425
use or the tax commissioner requires a different method.	3426

(F) A taxpayer shall have the burden of proving that an	3427
investment asset or activity or trading asset or activity was	3428
properly assigned to a regular place of business outside of this	3429
state by demonstrating that the day-to-day decisions regarding the	3430
asset or activity occurred at a regular place of business outside	3431
this state. Where the day-to-day decisions regarding an investment	3432
asset or activity or trading asset or activity occur at more than	3433
one regular place of business and one such regular place of	3434
business is in this state and one such regular place of business	3435
is outside this state, such asset or activity shall be considered	3436
to be located at the regular place of business of the taxpayer	3437
where the investment or trading policies or guidelines with	3438
respect to the asset or activity are established. Unless the	3439
taxpayer demonstrates to the contrary, such policies and	3440
guidelines shall be presumed to be established at the commercial	3441
domicile of the taxpayer.	3442

(G) If the apportionment provisions of this section do not	3443
fairly represent the extent of the taxpayer's business activity in	3444
this state, the taxpayer may request, or the tax commissioner may	3445
require or permit, an alternative method. Such a request must be	3446
made within any applicable statute of limitations set forth in	3447
this chapter.	3448

(H) A financial institution's "gross receipts" for purposes	3449
of the calculation required by division (B) or (D) of this section	3450
shall be determined using the financial institution's method of	3451
accounting for income tax purposes. If a financial institution's	3452
method of accounting is changed for income tax purposes, its	3453
method of accounting for purposes of the calculation required by	3454
division (B) or (D) of this section shall be changed accordingly.	3455

(I) The tax commissioner shall adopt administrative rules to	3456
provide additional guidance for the application of this section.	3457

Sec. 5726.06. (A) The reporting person for a taxpayer shall	3458
file estimated tax reports and remit the amount of tax estimated	3459
to be due for a tax year to the tax commissioner as follows:	3460

(1) The minimum tax required under division (A)(1) of section	3461
5726.04 of the Revised Code or one-third of the estimated tax,	3462
whichever is greater, on or before the thirty-first day of January	3463
of the tax year;	3464

(2) One-half of the amount by which the estimated tax exceeds	3465
the amount paid under division (A)(1) of this section on or before	3466
the thirty-first day of March of the tax year;	3467

(3) One-half of the amount by which the estimated tax exceeds	3468
the amount paid under division (A)(1) of this section on or before	3469
the thirty-first day of May of the tax year.	3470

(B)(1) The reporting person for a taxpayer shall remit the	3471
estimated tax electronically as provided in division (C) of	3472
section 5726.03 of the Revised Code. Remittance shall be made	3473
payable to the treasurer of state.	3474

(2) The tax commissioner shall immediately forward to the	3475
treasurer of state all amounts received under this section, and	3476
the treasurer of state shall credit all payments of such estimated	3477
tax as provided in division (D) of section 5726.04 of the Revised	3478
Code.	3479

(C)(1) If a taxpayer was not subject to the tax imposed by	3480
section 5726.02 of the Revised Code for the preceding tax year,	3481
"estimated tax" for purposes of division (A)(1) of this section	3482
means ninety per cent of the qualifying net tax for the tax year.	3483
If a taxpayer was subject to the tax for the preceding tax year,	3484
"estimated tax" for purposes of division (A)(1) of this section	3485
means the lesser of one hundred per cent of the taxpayer's	3486
qualifying net tax for the preceding tax year or ninety per cent	3487
of the qualifying net tax for the tax year.	3488

(2) If the taxpayer did not file a report under section	3489
5726.02 of the Revised Code for the tax year or failed to prepare	3490
and file the report in good faith for the tax year, "qualifying	3491
net tax" as used in division (C)(1) of this section for that tax	3492
year means the amount described in division (C)(2)(a) of this	3493
section. Otherwise, "qualifying net tax" as used in division	3494
(C)(1) of this section for that tax year means the lesser of the	3495
amount described in division (C)(2)(a) or (b) of this section.	3496

(a) The tax imposed by section 5726.02 of the Revised Code	3497
for that tax year reduced by the credits listed in section 5726.98	3498
of the Revised Code. If the credits exceed the total tax, the	3499
qualifying net tax is the minimum tax.	3500

(b) The lesser of the tax shown on the report, prepared and	3501
filed in good faith, reduced by the credits shown on that report,	3502
or the tax shown on an amended report, prepared and filed in good	3503
faith, reduced by the credits shown on that amended report. If the	3504
credits shown exceed the total tax shown, the qualifying net tax	3505
is the minimum tax.	3506

Sec. 5726.07. (A) In the case of an underpayment of estimated	3507
taxes required to be paid under section 5726.06 of the Revised	3508
Code, interest upon the amount of underpayment, calculated at the	3509
rate per annum prescribed by section 5703.47 of the Revised Code	3510
for the period of underpayment, shall be added to the tax due for	3511
the tax year for which the estimated tax is paid.	3512

(B) The amount of underpayment upon which such interest is	3513
computed equals the amount by which division (B)(1) of this	3514
section exceeds division (B)(2) of this section.	3515

(1) The amount of the estimated tax payment that would be	3516
required to be paid if the total estimated tax due were equal to	3517
the amount of tax shown to be due on the annual report filed for	3518
the tax year or, if no report was filed, the total amount of tax	3519
due for the tax year;	3520

(2) The amount, if any, of the estimated tax that has been	3521
paid on or before the last day prescribed for such payment.	3522

(C) The period of underpayment for which such interest is	3523
computed shall run from the date the estimated tax payment was	3524
required to be made to the date the payment is made.	3525

For purposes of this section, a payment of estimated tax on	3526
any payment date shall be considered a payment of any previous	3527
underpayment only to the extent that such payment exceeds the	3528
amount of payment currently due.	3529

Sec. 5726.08. Except as otherwise provided in this section,	3530
if any report, claim, statement, or other document required to be	3531
filed, or any payment required to be made, within a prescribed	3532
period or on or before a prescribed date under this chapter is,	3533
after such period or date, delivered by United States mail to the	3534
agency, officer, or office with which such report, claim,	3535
statement, or other document is required to be filed, or to which	3536
such payment is required to be made, the date of the postmark	3537
stamped on the cover in which such report, claim, statement, or	3538
other document, or payment is mailed shall be deemed the date of	3539
delivery or the date of payment.	3540

If a payment is made electronically, the payment is	3541
considered to be made when the payment is received by the	3542
treasurer of state or credited to an account designated by the	3543
treasurer of state for the receipt of tax payments.	3544

As used in this section, "the date of the postmark" means, in	3545
the event there is more than one date on the cover, the earliest	3546
date imprinted on the cover by the post office.	3547

Sec. 5726.10. The tax commissioner shall enforce and	3548
administer this chapter. In addition to any other powers conferred	3549
upon the commissioner by law, the commissioner may do any of the	3550
following:	3551

(A) Prescribe all forms required to be filed pursuant to this	3552
chapter;	3553

(B) Promulgate such rules and regulations as the commissioner	3554
finds necessary to carry out this chapter;	3555

(C) Appoint and employ such personnel as are necessary to	3556
carry out the duties imposed upon the commissioner by this	3557
chapter.	3558

Sec. 5726.20. (A) The tax commissioner may make an	3559
assessment, based on any information in the commissioner's	3560
possession, against any person that fails to file a return or	3561
report or pay any tax as required by this chapter. The reporting	3562
person for a taxpayer shall file the annual report required under	3563
section 5726.02 of the Revised Code and remit the tax imposed by	3564
this chapter. Each person included in the annual report of the	3565
taxpayer is jointly and severally liable for the tax imposed by	3566
this chapter and any penalties and interest thereon. If the	3567
reporting person fails, for any reason, to file and remit any tax,	3568
the amount due may be collected by assessment against the	3569
reporting person and against any or all other persons required to	3570
be included in the annual report of the taxpayer in the manner	3571
provided by this section. The commissioner shall give the person	3572
assessed written notice of the assessment as provided in section	3573
5703.37 of the Revised Code. With the notice, the commissioner	3574
shall provide instructions on the manner in which to petition for	3575
reassessment and request a hearing with respect to the petition.	3576

(B) No assessment shall be made or issued against a person	3577
under this section more than four years after the later of the	3578
final date the report subject to assessment was required to be	3579
filed or the date such report was filed. Such time limit may be	3580
extended if both the person and the commissioner consent in	3581
writing to the extension or if an agreement waiving or extending	3582
the time limit has been entered into pursuant to section 122.171	3583
of the Revised Code. Any such extension shall extend the four-year	3584
time limit prescribed in division (A) of section 5726.30 of the	3585
Revised Code for the same period of time. There shall be no bar or	3586
limit to an assessment against a person that fails to file a	3587
report subject to assessment as required by this chapter, or that	3588
files a fraudulent report.	3589

(C) Unless the person assessed, within sixty days after	3590
service of the notice of assessment, files with the tax	3591
commissioner, either in person or by certified mail, a written	3592
petition for reassessment signed by the person or the person's	3593
authorized agent having knowledge of the facts, the assessment	3594
shall become final, and the amount of the assessment is due and	3595
payable from the person assessed to the treasurer of state. A	3596
petition shall indicate the objections of the person assessed, but	3597
additional objections may be raised in writing if received by the	3598
commissioner prior to the date shown on the final determination.	3599
If a petition for reassessment has been properly filed, the	3600
commissioner shall proceed under section 5703.60 of the Revised	3601
Code.	3602

(D)(1) After an assessment becomes final, if any portion of	3603
the assessment, including any accrued interest, remains unpaid, a	3604
certified copy of the tax commissioner's entry making the	3605
assessment final may be filed in the office of the clerk of the	3606
court of common pleas in the county in which the person resides or	3607
has its principal place of business in this state, or in the	3608
office of the clerk of court of common pleas of Franklin county.	3609

(2) Immediately upon the filing of the entry, the clerk shall	3610
enter judgment for the state against the person assessed in the	3611
amount shown on the entry. The judgment may be filed by the clerk	3612
in a loose-leaf book entitled, "special judgments for the	3613
financial institution tax" and shall have the same effect as other	3614
judgments. Execution shall issue upon the judgment at the request	3615
of the tax commissioner, and all laws applicable to sales on	3616
execution shall apply to sales made under the judgment.	3617

(3) The portion of the assessment not paid within sixty days	3618
after the day the assessment was issued shall bear interest at the	3619
rate per annum prescribed by section 5703.47 of the Revised Code	3620
from the date the tax commissioner issues the assessment until the	3621
date the assessment is paid. Interest shall be paid in the same	3622
manner as the tax and may be collected by the issuance of an	3623
assessment under this section.	3624

(E) If the tax commissioner believes that collection of the	3625
tax imposed by this chapter will be jeopardized unless proceedings	3626
to collect or secure collection of the tax are instituted without	3627
delay, the commissioner may issue a jeopardy assessment against	3628
the person liable for the tax. Immediately upon the issuance of	3629
the jeopardy assessment, the commissioner shall file an entry with	3630
the clerk of the court of common pleas in the manner prescribed by	3631
division (D) of this section. Notice of the jeopardy assessment	3632
shall be served on the person assessed or the person's authorized	3633
agent in the manner provided in section 5703.37 of the Revised	3634
Code within five days of the filing of the entry with the clerk.	3635
The total amount assessed shall be immediately due and payable,	3636
unless the person assessed files a petition for reassessment in	3637
accordance with division (C) of this section and provides security	3638
in a form satisfactory to the commissioner and in an amount	3639
sufficient to satisfy the unpaid balance of the assessment. Full	3640
or partial payment of the assessment shall not prejudice the	3641
commissioner's consideration of the petition for reassessment.	3642

(F) The tax commissioner shall immediately forward to the	3643
treasurer of state all amounts the commissioner receives under	3644
this section. Such amounts shall be considered as revenue arising	3645
from the tax imposed by this chapter.	3646

(G) If the tax commissioner possesses information indicating	3647
that the amount of tax a taxpayer is required to pay under this	3648
chapter exceeds the amount the reporting person for the taxpayer	3649
paid, the tax commissioner may audit a sample of the taxpayer's	3650
gross receipts over a representative period of time to ascertain	3651
the amount of tax due, and may issue an assessment based on the	3652
audit. The tax commissioner shall make a good faith effort to	3653
reach agreement with the taxpayer in selecting a representative	3654
sample. The tax commissioner may apply a sampling method only if	3655
the commissioner has prescribed the method by rule.	3656

(H) If the whereabouts of a person subject to this chapter is	3657
not known to the tax commissioner, the secretary of state is	3658
hereby deemed to be that person's agent for purposes of service of	3659
process or notice of any assessment, action, or proceedings	3660
instituted in this state against the person under this chapter.	3661
Such process or notice shall be served on such person by the	3662
commissioner or by an agent of the commissioner by leaving a true	3663
and attested copy of the process or notice at the office of the	3664
secretary of state at least fifteen days before the return day of	3665
such process or notice, and by sending a copy of the process or	3666
notice to such person by ordinary mail, with an endorsement	3667
thereon of the service upon the secretary of state, addressed to	3668
such person at the person's last known address.	3669

Sec. 5726.21. (A) In addition to any other penalty imposed by	3670
this chapter or Chapter 5703. of the Revised Code, the following	3671
penalties shall apply:	3672

(1) If a taxpayer required to file any report under this	3673
chapter fails to make and file the report within the time	3674
prescribed, a penalty may be imposed not exceeding the greater of	3675
fifty dollars per month or fraction of a month, not to exceed five	3676
hundred dollars, or five per cent per month or fraction of a	3677
month, not to exceed fifty per cent of the tax required to be	3678
shown on the report, for each month or fraction of a month	3679
elapsing between the due date and the date on which the report is	3680
filed.	3681

(2) If a taxpayer fails to pay the amount of tax required to	3682
be paid under this chapter, except for estimated tax under section	3683
5726.06 of the Revised Code, by the dates prescribed in this	3684
chapter for payment, a penalty may be imposed not exceeding	3685
fifteen per cent of the delinquent payment.	3686

(3) If a taxpayer files what purports to be a report required	3687
by this chapter that does not contain information upon which the	3688
substantial correctness of the report may be judged or contains	3689
information that on its face indicates that the report is	3690
substantially incorrect, and the filing of the report in that	3691
manner is due to a position that is frivolous or a desire that is	3692
apparent from the report to delay or impede the administration of	3693
the tax levied under this chapter, a penalty of up to five hundred	3694
dollars may be imposed.	3695

(4) If a taxpayer makes a fraudulent attempt to evade the	3696
reporting or payment of the tax required to be shown on any report	3697
required under this chapter, a penalty may be imposed not	3698
exceeding the greater of one thousand dollars or one hundred per	3699
cent of the tax required to be shown on the report.	3700

(5) If a taxpayer makes a false or fraudulent claim for a	3701
refund under this chapter, a penalty may be imposed not exceeding	3702
the greater of one thousand dollars or one hundred per cent of the	3703
claim.	3704

(B) The tax commissioner may collect any penalty imposed by	3705
this section in the same manner as the tax levied under this	3706
chapter. Penalties so collected shall be considered as revenue	3707
arising from the tax levied under this chapter.	3708

(C) For purposes of this section, the tax required to be	3709
shown on the report shall be reduced by the amount of any part of	3710
the tax paid on or before the date prescribed for filing the	3711
report.	3712

(D) The tax commissioner may abate all or a portion of any	3713
penalties imposed under this section and may adopt rules governing	3714
such abatements.	3715

Sec. 5726.30. (A) The tax commissioner shall refund the	3716
amount of taxes imposed under this chapter that a person overpaid,	3717
paid illegally or erroneously, or paid on an illegal or erroneous	3718
assessment. The person shall file an application for refund with	3719
the tax commissioner, on the form prescribed by the commissioner,	3720
within four years after the date of the illegal or erroneous	3721
payment of the tax, or within any additional period allowed under	3722
division (B) of section 5726.20 of the Revised Code. The applicant	3723
shall provide the amount of the requested refund along with the	3724
claimed reasons for, and documentation to support, the issuance of	3725
a refund.	3726

For purposes of this division, a payment that an applicant	3727
made before the due date for filing the report to which the	3728
payment relates shall be deemed to have been made on the due date	3729
of the report.	3730

(B) Upon the filing of a refund application, the tax	3731
commissioner shall determine the amount of refund to which the	3732
applicant is entitled. If the amount is not less than that	3733
claimed, the commissioner shall certify the amount to the director	3734
of budget and management and treasurer of state for payment from	3735
the tax refund fund created under section 5703.052 of the Revised	3736
Code. If the amount is less than that claimed, the commissioner	3737
shall proceed in accordance with section 5703.70 of the Revised	3738
Code.	3739

(C)(1) Except as provided in division (C)(2) of this section,	3740
interest on a refund applied for under this section, computed at	3741
the rate provided for in section 5703.47 of the Revised Code,	3742
shall be allowed from the later of the date the tax was paid or	3743
the date the tax payment was due until the refund is paid.	3744

(2) No interest shall be allowed under this section on an	3745
amount refunded to a person to the extent that the refund results	3746
from the allowance of a refundable credit against the tax imposed	3747
by section 5726.02 of the Revised Code.	3748

Sec. 5726.31. As used in this section, "debt to this state"	3749
means unpaid taxes due the state, unpaid workers' compensation	3750
premiums due under section 4123.35 of the Revised Code, unpaid	3751
unemployment compensation contributions due under section 4141.25	3752
of the Revised Code, unpaid unemployment compensation payments in	3753
lieu of contributions due under section 4141.241 of the Revised	3754
Code, unpaid claims certified under section 131.02 or 131.021 of	3755
the Revised Code, unpaid fees payable to the state or to the clerk	3756
of courts pursuant to section 4505.06 of the Revised Code or any	3757
unpaid charge, penalty, or interest arising from any of the	3758
foregoing.	3759

If a person entitled to a refund under section 5726.30 of the	3760
Revised Code owes any debt to this state, the amount refundable	3761
may be applied in satisfaction of the debt. If the amount	3762
refundable is less than the amount of the debt, it may be applied	3763
in partial satisfaction of the debt. If the amount refundable is	3764
greater than the amount of the debt, the amount remaining after	3765
satisfaction of the debt shall be refunded. If the taxpayer has	3766
more than one such debt, any debt subject to section 5739.33 or	3767
division (G) of section 5747.07 of the Revised Code shall be	3768
satisfied first.	3769

Except as provided in section 131.021 of the Revised Code,	3770
this section applies only to debts that have become final. For the	3771
purposes of this section, a debt becomes final when, under the	3772
applicable law, any time provided for petition for reassessment,	3773
request for reconsideration, or other appeal of the legality or	3774
validity of the amount giving rise to the debt expires without an	3775
appeal having been filed in the manner provided by law.	3776

The tax commissioner may charge each respective agency of the	3777
state for the commissioner's cost in applying refunds to debts due	3778
to the state and may charge the attorney general for the	3779
commissioner's cost in applying refunds to certified claims. The	3780
commissioner may promulgate rules to implement this section.	3781

The commissioner may, with the consent of the reporting	3782
person for a taxpayer, provide for the crediting of the amount of	3783
any refund due to the taxpayer under this chapter for a tax year	3784
against the tax due for any succeeding tax year.	3785

Sec. 5726.32.  If any tax due under this chapter is not paid	3786
on or before the date prescribed for its payment, interest shall	3787
be assessed, collected, and paid, in the same manner as the tax,	3788
upon such unpaid amount at the rate per annum prescribed by	3789
section 5703.47 of the Revised Code from the date prescribed for	3790
the payment of the tax until the date the tax is paid or the date	3791
an assessment is issued under section 5726.20 of the Revised Code,	3792
whichever is earlier. Interest so collected shall be considered as	3793
revenue arising from the tax imposed by this chapter.	3794

Sec. 5726.33. (A) As used in this section, "qualifying refund	3795
overpayment" means an amount received by a taxpayer in excess of a	3796
refund claimed or a request for payment made by the reporting	3797
person for the taxpayer on a return, report, or other document	3798
filed with the tax commissioner.	3799

(B) A taxpayer is not liable for any interest or penalty with	3800
respect to the repayment of a qualifying refund overpayment if the	3801
reporting person for the taxpayer pays the entire amount of the	3802
qualifying refund overpayment to the commissioner not later than	3803
thirty days after the taxpayer receives an assessment for the	3804
amount. If the reporting person does not pay the entire amount of	3805
the overpayment to the commissioner within the time prescribed by	3806
this section, interest shall accrue on the amount of the	3807
deficiency pursuant to section 5726.32 of the Revised Code from	3808
the date the commissioner issues the assessment until the date the	3809
deficiency is paid.	3810

Sec. 5726.36. (A) A person shall notify the tax commissioner	3811
when the person is no longer subject to the tax imposed by this	3812
chapter.	3813

(B) If the ownership structure of a financial institution	3814
changes such that a person is no longer includable in the annual	3815
report of the financial institution, the reporting person for the	3816
financial institution shall notify the commissioner of the change	3817
when the reporting person files its next annual report or in	3818
writing prior to the due date of that report.	3819

Sec. 5726.40. If a person, wherever organized, doing business	3820
in this state or owning or issuing all or part of the entity's	3821
capital or property in this state, and required by law to file any	3822
report or return or to pay any tax or fee under Title LVII of the	3823
Revised Code, fails or neglects to make such report or return or	3824
to pay any such tax or fee for ninety days after the time	3825
prescribed by law for making such report or return or for paying	3826
such tax or fee, the tax commissioner shall certify such fact to	3827
the secretary of state. The secretary of state shall thereupon	3828
cancel the document of creation authorizing the person to do	3829
business in this state. Upon such cancellation, all of the powers,	3830
privileges, and franchises conferred upon that person by its	3831
document of creation shall cease, subject to section 1701.88 of	3832
the Revised Code. The secretary of state shall immediately notify	3833
the person of the action taken by the secretary, and shall also	3834
forward for filing a certificate of the action so taken to the	3835
county recorder of the county in which the principal place of	3836
business of the person in this state is located. No fee shall be	3837
charged for the filing.	3838

Sec. 5726.41. No person shall exercise, or attempt to	3839
exercise, any powers, privileges, or franchises under the person's	3840
document of creation after the document is canceled pursuant to	3841
section 5726.40 of the Revised Code. A penalty of one hundred	3842
dollars shall be imposed for each day a violation of this section	3843
occurs, up to a maximum penalty of five thousand dollars.	3844

Sec. 5726.42. (A)(1) A person whose document of creation has	3845
been canceled by the secretary of state pursuant to section	3846
5726.40 the Revised Code shall be reinstated and again entitled to	3847
exercise its rights, privileges, and franchises in this state upon	3848
compliance with all of the following:	3849

(a) Filing with the secretary of state a certificate from the	3850
tax commissioner that the person has complied with all the	3851
requirements of law as to tax reports and paid all taxes, fees, or	3852
penalties due thereon for every year of delinquency;	3853

(b) Payment to the secretary of state of any additional fees	3854
and penalties required to be paid to the secretary of state;	3855

(c) Payment to the secretary of state of an additional fee of	3856
ten dollars.	3857

Upon the person's compliance with this division, the	3858
secretary of state shall cancel the entry of cancellation filed	3859
under section 5726.40 of the Revised Code.	3860

(2) If a reinstatement is not made within one year from the	3861
date of cancellation of the document of creation, and if it	3862
appears that a document of creation has been issued to a person of	3863
the same or similar name as the applicant for reinstatement, the	3864
secretary of state shall require, as a condition prerequisite to	3865
such reinstatement, that the applicant amend its document of	3866
creation by changing the applicant's name.	3867

(B) Any officer, shareholder, creditor, or receiver of a	3868
person may at any time take all steps required by this section to	3869
effect a reinstatement.	3870

(C) The rights, privileges, and franchises of a person whose	3871
document of creation has been reinstated in accordance with this	3872
section are subject to section 1701.922 of the Revised Code.	3873

(D) Notwithstanding a violation of section 5726.41 of the	3874
Revised Code, upon reinstatement of a person's document of	3875
creation in accordance with this section, neither section 5726.40	3876
nor section 5726.41 of the Revised Code shall be applied to	3877
invalidate the exercise or attempt to exercise any right,	3878
privilege, or franchise on behalf of the person by an officer,	3879
agent, or employee of the person after cancellation and prior to	3880
the reinstatement of the document of creation, if the conditions	3881
set forth in divisions (B)(1)(a) and (b) of section 1701.922 of	3882
the Revised Code are met.	3883

Sec. 5726.43. If any financial institution fails to make and	3884
file any return or report required under this chapter, or to pay	3885
the penalties provided by law for failure to make and file such	3886
reports or returns, for a period of ninety days after the time	3887
prescribed by law, the attorney general, on the request of the tax	3888
commissioner, shall commence an action in quo warranto in the	3889
court of appeals of the county in which the reporting person for	3890
the financial institution has its principal place of business in	3891
this state to forfeit and annul the privileges and franchises of	3892
each person included in the annual report of the financial	3893
institution. If the court is satisfied that any such financial	3894
institution is in default, it shall render judgment ousting each	3895
person included in the annual report of the financial institution	3896
from the exercise of its privileges and franchises within this	3897
state, and shall otherwise proceed as provided in sections 2733.01	3898
to 2733.39 of the Revised Code.	3899

Sec. 5726.50. (A) A taxpayer may claim a refundable tax	3900
credit against the tax imposed under this chapter for each person	3901
included in the annual report of the taxpayer that is granted a	3902
credit by the tax credit authority under section 122.17 or	3903
division (B)(2) or (3) of section 122.171 of the Revised Code.	3904
Such a credit shall not be claimed for any tax year following the	3905
calendar year in which a relocation of employment positions occurs	3906
in violation of an agreement entered into under section 122.171 of	3907
the Revised Code. For the purpose of making tax payments under	3908
this chapter, taxes equal to the amount of the refundable credit	3909
shall be considered to be paid on the first day of the tax year.	3910

(B) A taxpayer may claim a nonrefundable tax credit against	3911
the tax imposed under this chapter for each person included in the	3912
annual report of the taxpayer that is granted a credit by the tax	3913
credit authority under division (B)(1) of section 122.171 of the	3914
Revised Code. A taxpayer may claim against the tax imposed by this	3915
chapter any unused portion of the credits authorized under	3916
division (B) of section 5733.0610 of the Revised Code.	3917

(C) The credits authorized in divisions (A) and (B) of this	3918
section shall be claimed in the order required under section	3919
5726.98 of the Revised Code. If the amount of a credit authorized	3920
in division (A) of this section exceeds the tax otherwise due	3921
under section 5726.02 of the Revised Code after deducting all	3922
other credits preceding the credit in the order prescribed in	3923
section 5726.98 of the Revised Code, the excess shall be refunded	3924
to the taxpayer.	3925

Sec. 5726.51. A taxpayer may claim a nonrefundable credit	3926
against the tax imposed under this chapter for each bank	3927
organization that is organized under Title XI of the Revised Code	3928
and included in the annual report of the taxpayer. The credit	3929
shall equal the sum of the annual assessments such bank	3930
organizations paid during the taxable year to the division of	3931
financial institutions pursuant to Title XI of the Revised Code	3932
and the schedule of fees published by the division. A taxpayer may	3933
claim against the tax imposed by this chapter any unused portion	3934
of the credits authorized under section 5733.063 of the Revised	3935
Code.	3936

The credit authorized by this section shall be claimed in the	3937
order required under section 5726.98 of the Revised Code. The	3938
credit shall not be allowed unless there is filed with the	3939
taxpayer's annual report a document certified by the division of	3940
financial institutions verifying the amount of state annual	3941
assessment fees and federal supervisory fees paid by the bank	3942
organizations during the taxable year.	3943

Sec. 5726.52. (A) As used in this section, "certificate	3944
owner" has the same meaning as in section 149.311 of the Revised	3945
Code.	3946

(B) A taxpayer may claim a refundable credit against the tax	3947
imposed by this chapter for each person included in the annual	3948
report of a taxpayer that is a certificate owner of a	3949
rehabilitation tax credit certificate issued under section 149.311	3950
of the Revised Code. The credit shall equal twenty-five per cent	3951
of the dollar amount indicated on each certificate, but shall not	3952
exceed five million dollars for each certificate.	3953

The credit shall be claimed for the calendar year specified	3954
in the certificate and in the order required under section 5726.98	3955
of the Revised Code. If the credit exceeds the amount of tax	3956
otherwise due in that year, the excess shall be refunded to the	3957
taxpayer, provided that, if any amount of the credit is refunded,	3958
the sum of the amount refunded and the amount applied to reduce	3959
the tax otherwise due in that year shall not exceed three million	3960
dollars. The taxpayer may carry forward any balance of the credit	3961
in excess of the amount claimed in that year for not more than	3962
five ensuing years, and shall deduct any amount claimed in any	3963
such year from the amount claimed in an ensuing year. A taxpayer	3964
may claim against the tax imposed by this chapter any unused	3965
portion of the credit authorized under section 5725.151 of the	3966
Revised Code, but only to the extent of the five-year carry	3967
forward period authorized by that section.	3968

(C) A taxpayer claiming a credit under this section shall	3969
retain the rehabilitation tax credit certificate for four years	3970
following the end of the year to which the credit was applied, and	3971
shall make the certificate available for inspection by the tax	3972
commissioner upon the request of the commissioner during that	3973
period.	3974

Sec. 5726.53. A taxpayer may claim a refundable credit	3975
against the tax imposed by this chapter for each person included	3976
in the annual report of the taxpayer that was issued a tax credit	3977
certificate by the Ohio venture capital authority under section	3978
150.07 of the Revised Code. The amount of the credit shall equal	3979
the amount specified in the tax credit certificate. The credit	3980
shall be claimed for the tax year specified in the tax credit	3981
certificate. The taxpayer shall claim the credit in the order	3982
required under section 5726.98 of the Revised Code. If the credit	3983
amount exceeds the tax otherwise due under section 5726.02 of the	3984
Revised Code after deducting all other credits preceding the	3985
credit in the order prescribed in section 5726.98 of the Revised	3986
Code, the excess shall be refunded to the taxpayer.	3987

Sec. 5726.54. (A) Any term used in this section has the same	3988
meaning as in section 5725.33 of the Revised Code.	3989

(B) A taxpayer may claim a nonrefundable credit against the	3990
tax imposed by this chapter for each person included in the annual	3991
report of the taxpayer that holds a qualified equity investment on	3992
a credit allowance date occurring in the calendar year immediately	3993
preceding the tax year for which the tax is due. The credit shall	3994
be computed in the same manner prescribed for the computation of	3995
credits allowed under section 5725.33 of the Revised Code.	3996

By claiming a tax credit under this section, a taxpayer	3997
waives its rights under section 5726.20 of the Revised Code with	3998
respect to the time limitation for the assessment of taxes as it	3999
relates to credits claimed under this section that later become	4000
subject to recapture under division (D) of this section.	4001

A taxpayer may claim against the tax imposed by this chapter	4002
any unused portion of the credits authorized under sections	4003
5725.33 and 5733.58 of the Revised Code, but only to the extent of	4004
the remaining carry forward period authorized by those sections.	4005

The credit shall be claimed in the order prescribed by	4006
section 5726.98 of the Revised Code. If the amount of the credit	4007
exceeds the amount of tax otherwise due after deducting all other	4008
credits preceding the credit in the order prescribed in section	4009
5726.98 of the Revised Code, the excess may be carried forward for	4010
not more than four ensuing tax years.	4011

(C) The total amount of qualified equity investments on the	4012
basis of which credits may be claimed under this section and	4013
sections 5725.33, 5729.16, and 5733.58 of the Revised Code is	4014
subject to the limitation of division (C) of section 5725.33 of	4015
the Revised Code.	4016

(D) If any amount of the federal tax credit allowed for a	4017
qualified equity investment for which a credit was received under	4018
this section is recaptured under section 45D of the Internal	4019
Revenue Code, or if the director of development services	4020
determines that an investment for which a tax credit is claimed	4021
under this section is not a qualified equity investment or that	4022
the proceeds of an investment for which a tax credit is claimed	4023
under this section are used to make qualified low-income community	4024
investments other than in a qualified active low-income community	4025
business, all or a portion of the credit received on account of	4026
that investment shall be paid by the taxpayer that received the	4027
credit to the tax commissioner. The amount to be recovered shall	4028
be determined by the director pursuant to rules adopted under	4029
section 5725.33 of the Revised Code. The director shall certify	4030
any amount due under this division to the tax commissioner, and	4031
the commissioner shall notify the taxpayer of the amount due. The	4032
amount due is payable not later than thirty days after the day the	4033
commissioner issues the notice. The amount due shall be considered	4034
to be tax due under section 5726.02 of the Revised Code, and may	4035
be collected by assessment without regard to the limitations	4036
imposed under section 5726.20 of the Revised Code for the	4037
assessment of taxes by the commissioner. All amounts collected	4038
under this division shall be credited as revenue from the tax	4039
levied under section 5726.02 of the Revised Code.	4040

Sec. 5726.55. (A) Any term used in this section has the same	4041
meaning as in section 122.85 of the Revised Code.	4042

(B) A taxpayer may claim a refundable credit against the tax	4043
imposed under this chapter for each person included in the annual	4044
report of the taxpayer that is a certificate owner of a tax credit	4045
certificate issued under section 122.85 of the Revised Code. The	4046
credit shall be claimed for the taxable year in which the	4047
certificate is issued by the director of development services. The	4048
credit amount equals the amount stated in the certificate. The	4049
credit shall be claimed in the order required under section	4050
5726.98 of the Revised Code. If the credit amount exceeds the tax	4051
otherwise due under section 5726.02 of the Revised Code after	4052
deducting all other credits preceding the credit in the order	4053
prescribed in section 5726.98 of the Revised Code, the excess	4054
shall be refunded to the taxpayer.	4055

(C) Nothing in this section shall allow a taxpayer to claim	4056
more than one credit per tax credit-eligible production.	4057

Sec. 5726.56. (A) As used in this section, "qualified	4058
research expenses" has the same meaning as in section 41 of the	4059
Internal Revenue Code.	4060

(B) A taxpayer may claim a nonrefundable credit against the	4061
tax imposed under this chapter equal to seven per cent of the	4062
excess of (1) the qualified research expenses incurred by the	4063
taxpayer in this state in a taxable year over (2) the average	4064
annual qualified research expenses incurred by the taxpayer in	4065
this state in the three previous taxable years. For the purposes	4066
of this division, "qualified research expenses incurred by the	4067
taxpayer" includes the qualified research expenses incurred by all	4068
persons included in the annual report of the taxpayer and by any	4069
insurance company subject to the tax levied under section 5725.18	4070
or Chapter 5729. of the Revised Code that has more than fifty per	4071
cent of its ownership interests directly or indirectly owned or	4072
controlled by a person included in the annual report of the	4073
taxpayer, even though such an insurance company is not subject to	4074
the tax imposed under this chapter.	4075

(C) A taxpayer shall claim the credit allowed under this	4076
section in the order prescribed by section 5726.98 of the Revised	4077
Code. If the amount of the credit exceeds the amount of tax	4078
otherwise due after deducting all other credits preceding the	4079
credit in the order prescribed in section 5726.98 of the Revised	4080
Code, the excess may be carried forward for not more than seven	4081
ensuing tax years. The amount of the excess credit claimed in any	4082
such year shall be deducted from the balance carried forward to	4083
the next tax year.	4084

(D) A taxpayer may claim against the tax imposed under this	4085
chapter any unused portion of a credit authorized under section	4086
5733.351 of the Revised Code but only to the extent of the	4087
remaining portion of the seven-year carry-forward period	4088
authorized by that section.	4089

Sec. 5726.57. (A) As used in this section, "qualifying dealer	4090
in intangibles" means a dealer in intangibles that is a member of	4091
a qualifying controlled group of which a financial institution is	4092
also a member on the first day of the financial institution's tax	4093
year.	4094

(B) For tax year 2014 there is hereby allowed to each	4095
financial institution a nonrefundable credit against the tax	4096
imposed by section 5726.02 of the Revised Code. The amount of the	4097
credit shall be computed in accordance with division (C) of this	4098
section. The credit shall be claimed in the order prescribed by	4099
section 5726.98 of the Revised Code. The credit shall not exceed	4100
the amount of tax otherwise due under section 5726.02 of the	4101
Revised Code after deducting any other credits that precede the	4102
credit claimed under this section in that order.	4103

(C) Subject to division (D) of this section, the amount of	4104
the credit equals the lesser of the amount described in division	4105
(C)(1) of this section or in division (C)(2) of this section.	4106

(1) The amount of tax that a qualifying dealer in intangibles	4107
paid under Chapter 5707. of the Revised Code during the calendar	4108
year immediately preceding the financial institution's tax year.	4109
Such amount shall be reduced, but not below zero, by any refunds	4110
of such tax received by the qualifying dealer in intangibles under	4111
Chapter 5703. of the Revised Code during that calendar year.	4112

(2) The product of the amounts described in divisions	4113
(C)(2)(a) to (c) of this section.	4114

(a) The cost of the financial institution's direct investment	4115
in the capital stock of the qualifying dealer in intangibles	4116
calculated on the last day of the financial institution's taxable	4117
year immediately preceding the tax year;	4118

(b) The ratio described in section 5725.15 of the Revised	4119
Code for the calendar year immediately preceding the financial	4120
institution's tax year;	4121

(c) The tax rate imposed under division (D) of section	4122
5707.03 of the Revised Code for the calendar year immediately	4123
preceding the financial institution's tax year.	4124

(D)(1) The principles and concepts described in section	4125
5733.057 of the Revised Code shall apply in determining whether a	4126
dealer in intangibles is a member of a qualifying controlled group	4127
of which the financial institution also is a member and to	4128
ascertain the cost of the financial institution's direct	4129
investment in the capital stock of the qualifying dealer in	4130
intangibles.	4131

(2) Notwithstanding section 5703.56 of the Revised Code to	4132
the contrary, a financial institution claiming the credit provided	4133
by this section has the burden to establish by a preponderance of	4134
the evidence that the doctrines enumerated in that section would	4135
not apply to deny to the financial institution all or a part of	4136
the credit otherwise provided by this section.	4137

Sec. 5726.98. (A) To provide a uniform procedure for	4138
calculating the amount of tax due under section 5726.02 of the	4139
Revised Code, a taxpayer shall claim any credits to which the	4140
taxpayer is entitled under this chapter in the following order:	4141

(1) The bank organization assessment credit under section	4142
5726.51 of the Revised Code;	4143

(2) The nonrefundable job retention credit under division (B)	4144
of section 5726.50 of the Revised Code;	4145

(3) The nonrefundable credit for purchases of qualified	4146
low-income community investments under section 5726.54 of the	4147
Revised Code;	4148

(4) The nonrefundable credit for qualified research expenses	4149
under section 5726.56 of the Revised Code;	4150

(5) The nonrefundable credit for qualifying dealer in	4151
intangibles taxes under section 5726.57 of the Revised Code.	4152

(6) The refundable credit for rehabilitating an historic	4153
building under section 5726.52 of the Revised Code;	4154

(7) The refundable job retention or job creation credit under	4155
division (A) of section 5726.50 of the Revised Code;	4156

(8) The refundable credit under section 5726.53 of the	4157
Revised Code for losses on loans made under the Ohio venture	4158
capital program under sections 150.01 to 150.10 of the Revised	4159
Code;	4160

(9) The refundable motion picture production credit under	4161
section 5726.55 of the Revised Code.	4162

(B) For any credit except the refundable credits enumerated	4163
in this section, the amount of the credit for a taxable year shall	4164
not exceed the tax due after allowing for any other credit that	4165
precedes it in the order required under this section. Any excess	4166
amount of a particular credit may be carried forward if authorized	4167
under the section creating that credit. Nothing in this chapter	4168
shall be construed to allow a taxpayer to claim, directly or	4169
indirectly, a credit more than once for a taxable year.	4170

Sec. 5726.99. Whoever violates section 5726.41 of the Revised	4171
Code shall be fined not less than one hundred dollars or more than	4172
one thousand dollars.	4173

Sec. 5733.01.  (A) The tax provided by this chapter for	4174
domestic corporations shall be the amount charged against each	4175
corporation organized for profit under the laws of this state and	4176
each nonprofit corporation organized pursuant to Chapter 1729. of	4177
the Revised Code, except as provided in sections 5733.09 and	4178
5733.10 of the Revised Code, for the privilege of exercising its	4179
franchise during the calendar year in which that amount is	4180
payable, and the tax provided by this chapter for foreign	4181
corporations shall be the amount charged against each corporation	4182
organized for profit and each nonprofit corporation organized or	4183
operating in the same or similar manner as nonprofit corporations	4184
organized under Chapter 1729. of the Revised Code, under the laws	4185
of any state or country other than this state, except as provided	4186
in sections 5733.09 and 5733.10 of the Revised Code, for the	4187
privilege of doing business in this state, owning or using a part	4188
or all of its capital or property in this state, holding a	4189
certificate of compliance with the laws of this state authorizing	4190
it to do business in this state, or otherwise having nexus in or	4191
with this state under the Constitution of the United States,	4192
during the calendar year in which that amount is payable.	4193

(B) A corporation is subject to the tax imposed by section	4194
5733.06 of the Revised Code for each calendar year prior to 2014	4195
that it is so organized, doing business, owning or using a part or	4196
all of its capital or property, holding a certificate of	4197
compliance, or otherwise having nexus in or with this state under	4198
the Constitution of the United States, on the first day of January	4199
of that calendar year. No credit authorized by this chapter may be	4200
claimed for tax year 2014 or any tax year thereafter.	4201

(C) Any corporation subject to this chapter that is not	4202
subject to the federal income tax shall file its returns and	4203
compute its tax liability as required by this chapter in the same	4204
manner as if that corporation were subject to the federal income	4205
tax.	4206

(D) For purposes of this chapter, a federally chartered	4207
financial institution shall be deemed to be organized under the	4208
laws of the state within which its principal office is located.	4209

(E) For purposes of this chapter, any person, as defined in	4210
section 5701.01 of the Revised Code, shall be treated as a	4211
corporation if the person is classified for federal income tax	4212
purposes as an association taxable as a corporation, and an equity	4213
interest in the person shall be treated as capital stock of the	4214
person.	4215

(F) For the purposes of this chapter, "disregarded entity"	4216
has the same meaning as in division (D) of section 5745.01 of the	4217
Revised Code.	4218

(1) A person's interest in a disregarded entity, whether held	4219
directly or indirectly, shall be treated as the person's ownership	4220
of the assets and liabilities of the disregarded entity, and the	4221
income, including gain or loss, shall be included in the person's	4222
net income under this chapter.	4223

(2) Any sale, exchange, or other disposition of the person's	4224
interest in the disregarded entity, whether held directly or	4225
indirectly, shall be treated as a sale, exchange, or other	4226
disposition of the person's share of the disregarded entity's	4227
underlying assets or liabilities, and the gain or loss from such	4228
sale, exchange, or disposition shall be included in the person's	4229
net income under this chapter.	4230

(3) The disregarded entity's payroll, property, and sales	4231
factors shall be included in the person's factors.	4232

(G) The tax a corporation is required to pay under this	4233
chapter shall be as follows:	4234

(1)(a) For financial institutions, the greater of the minimum	4235
payment required under division (E) of section 5733.06 of the	4236
Revised Code or the difference between all taxes charged the	4237
financial institution under this chapter, without regard to	4238
division (G)(2) of this section, less any credits allowable	4239
against such tax.	4240

(b) A corporation satisfying the description in division	4241
(E)(5), (6), (7), (8), or (10) of section 5751.01 of the Revised	4242
Code, as that section existed before its amendment by H.B. 510 of	4243
the 129th general assembly, that is not a financial institution,	4244
insurance company, or dealer in intangibles is subject to the	4245
taxes imposed under this chapter as a corporation and not subject	4246
to tax as a financial institution, and shall pay the greater of	4247
the minimum payment required under division (E) of section 5733.06	4248
of the Revised Code or the difference between all the taxes	4249
charged under this chapter, without regard to division (G)(2) of	4250
this section, less any credits allowable against such tax.	4251

(2) For all corporations other than those persons described	4252
in division (G)(1)(a) or (b) of this section, the amount under	4253
division (G)(2)(a) of this section applicable to the tax year	4254
specified less the amount under division (G)(2)(b) of this	4255
section:	4256

(a)(i) For tax year 2005, the greater of the minimum payment	4257
required under division (E) of section 5733.06 of the Revised Code	4258
or the difference between all taxes charged the corporation under	4259
this chapter and any credits allowable against such tax;	4260

(ii) For tax year 2006, the greater of the minimum payment	4261
required under division (E) of section 5733.06 of the Revised Code	4262
or four-fifths of the difference between all taxes charged the	4263
corporation under this chapter and any credits allowable against	4264
such tax, except the qualifying pass-through entity tax credit	4265
described in division (A)(30) and the refundable credits described	4266
in divisions (A)(31) to (35) of section 5733.98 of the Revised	4267
Code;	4268

(iii) For tax year 2007, the greater of the minimum payment	4269
required under division (E) of section 5733.06 of the Revised Code	4270
or three-fifths of the difference between all taxes charged the	4271
corporation under this chapter and any credits allowable against	4272
such tax, except the qualifying pass-through entity tax credit	4273
described in division (A)(30) and the refundable credits described	4274
in divisions (A)(31) to (35) of section 5733.98 of the Revised	4275
Code;	4276

(iv) For tax year 2008, the greater of the minimum payment	4277
required under division (E) of section 5733.06 of the Revised Code	4278
or two-fifths of the difference between all taxes charged the	4279
corporation under this chapter and any credits allowable against	4280
such tax, except the qualifying pass-through entity tax credit	4281
described in division (A)(30) and the refundable credits described	4282
in divisions (A)(31) to (35) of section 5733.98 of the Revised	4283
Code;	4284

(v) For tax year 2009, the greater of the minimum payment	4285
required under division (E) of section 5733.06 of the Revised Code	4286
or one-fifth of the difference between all taxes charged the	4287
corporation under this chapter and any credits allowable against	4288
such tax, except the qualifying pass-through entity tax credit	4289
described in division (A)(30) and the refundable credits described	4290
in divisions (A)(31), (32), (33), and (34) of section 5733.98 of	4291
the Revised Code;	4292

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

4293

(b) A corporation shall subtract from the amount calculated	4294
under division (G)(2)(a)(ii), (iii), (iv), or (v) of this section	4295
any qualifying pass-through entity tax credit described in	4296
division (A)(30) and any refundable credits described in divisions	4297
(A)(31) to (35) of section 5733.98 of the Revised Code to which	4298
the corporation is entitled. Any unused qualifying pass-through	4299
entity tax credit is not refundable.	4300

(c) For the purposes of computing the amount of a credit that	4301
may be carried forward to a subsequent tax year under division	4302
(G)(2) of this section, a credit is utilized against the tax for a	4303
tax year to the extent the credit applies against the tax for that	4304
tax year, even if the difference is then multiplied by the	4305
applicable fraction under division (G)(2)(a) of this section.	4306

(3) Nothing in division (G) of this section eliminates or	4307
reduces the tax imposed by section 5733.41 of the Revised Code on	4308
a qualifying pass-through entity.	4309

Sec. 5733.02.  Annually, for tax years prior to tax year	4310
2014, between the first day of January and the thirty-first day of	4311
March or on or before the date as extended under section 5733.13	4312
of the Revised Code, each taxpayer shall make a report in writing	4313
to the tax commissioner in such form as the tax commissioner	4314
prescribes, and shall remit to the commissioner, with the	4315
remittance made payable to the treasurer of state, the amount of	4316
the tax as shown to be due by such report less the amount paid for	4317
the year on a declaration of estimated tax report filed by the	4318
taxpayer as provided by section 5733.021 of the Revised Code.	4319
Remittance shall be made in the form prescribed by the	4320
commissioner, including electronic funds transfer if required by	4321
section 5733.022 of the Revised Code.	4322

The commissioner shall furnish corporations, on request,	4323
copies of the forms prescribed by the commissioner for the purpose	4324
of making such report. A domestic corporation shall not dissolve,	4325
and a foreign corporation shall not withdraw or retire from	4326
business in Ohio, on or after the first day of January in any year	4327
prior to 2014 without making a franchise tax report to the	4328
commissioner and paying or securing the tax charged for the year	4329
in which such dissolution or withdrawal occurs.	4330

The annual corporation report shall be signed by the	4331
president, vice-president, secretary, treasurer, general manager,	4332
superintendent, or managing agent in this state of such	4333
corporation. If a domestic corporation has not completed its	4334
organization, its annual report shall be signed by one of its	4335
incorporators.	4336

The report shall contain the facts, figures, computations,	4337
and attachments that result in the tax charged by this chapter and	4338
determined in the manner provided within the chapter.	4339

Sec. 5733.021.  (A) Each taxpayer that does not in January of	4340
any year prior to 2014 file the report and make the payment	4341
required by section 5733.02 of the Revised Code shall make and	4342
file a declaration of estimated tax report for the tax year.	4343

The declaration of estimated tax report shall be filed with	4344
the tax commissioner on or before the last day of January in such	4345
form as prescribed by the tax commissioner, and shall reflect an	4346
estimate of the total amount due under this chapter for the tax	4347
year.	4348

(B) A taxpayer required to file a declaration of estimated	4349
tax report shall make remittance of such estimated tax to the tax	4350
commissioner as follows:	4351

(1) The entire estimated tax at the time of filing the	4352
declaration of estimated tax report, if such estimated tax is not	4353
in excess of the minimum tax as provided in section 5733.06 of the	4354
Revised Code;	4355

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

4356

(a) One-third of the estimated tax at the time of filing the	4357
declaration of estimated tax report;	4358

(b) Two-thirds of the estimated tax on or before the last day	4359
of March of the tax year, if the report required by section	4360
5733.02 of the Revised Code is filed on or before the last day of	4361
March of the tax year.	4362

(3) If the estimated tax is in excess of the minimum tax, and	4363
an extension of time for filing the report required by section	4364
5733.02 of the Revised Code has been granted pursuant to section	4365
5733.13 of the Revised Code:	4366

(a) One-third of the estimated tax at the time of filing the	4367
declaration of estimated tax report;	4368

(b) One-third of the estimated tax on or before the last day	4369
of March of the tax year;	4370

(c) One-third of the estimated tax on or before the last day	4371
of May of the tax year.	4372

Remittance of the estimated tax shall be made payable to the	4373
treasurer of state and shall be made in the form prescribed by the	4374
tax commissioner, including electronic funds transfer if required	4375
by section 5733.022 of the Revised Code.	4376

The tax commissioner shall immediately forward to the	4377
treasurer of state all amounts received under this section, and	4378
the treasurer of state shall credit all payments of such estimated	4379
tax as provided in section 5733.12 of the Revised Code.	4380

(C)(1)(a) For any period of delinquency ending prior to the	4381
first day of June of the tax year, the penalty under division	4382
(A)(2) of section 5733.28 of the Revised Code may be imposed only	4383
on the delinquent portion of the estimated tax required to be paid	4384
under divisions (B)(2)(a) and (b) and (B)(3)(a) and (b) of this	4385
section.	4386

(b) If the taxpayer was not subject to tax for the	4387
immediately preceding tax year, "estimated tax" for purposes of	4388
division (C)(1) of this section is ninety per cent of the	4389
qualifying net tax for the tax year. If the taxpayer was subject	4390
to the tax for the immediately preceding tax year, "estimated tax"	4391
for purposes of division (C)(1) of this section is the lesser of	4392
one hundred per cent of the qualifying net tax for the immediately	4393
preceding tax year or ninety per cent of the qualifying net tax	4394
for the tax year.	4395

(2)(a) For any period of delinquency commencing the first day	4396
of June of the tax year and concluding on the extended due date	4397
pursuant to section 5733.13 of the Revised Code, the penalty under	4398
division (A)(2) of section 5733.28 of the Revised Code may be	4399
imposed only on the delinquent portion of the estimated tax	4400
required to be paid under division (B)(3)(c) of this section.	4401

(b) For purposes of division (C)(2) of this section,	4402
"estimated tax" is ninety per cent of the qualifying net tax for	4403
the tax year.	4404

(3) If the taxpayer did not file a report under section	4405
5733.02 of the Revised Code for the tax year or failed to prepare	4406
and file the report in good faith for the tax year, "qualifying	4407
net tax" as used in division (C) of this section for that tax year	4408
means the amount described in division (C)(3)(a) of this section.	4409
Otherwise, "qualifying net tax" as used in division (C) of this	4410
section for that tax year means the lesser of the amount described	4411
in division (C)(3)(a) or (b) of this section:	4412

(a) The tax imposed by sections 5733.06, 5733.065, and	4413
5733.066 of the Revised Code for that tax year reduced by the	4414
credits listed in section 5733.98 of the Revised Code. If the	4415
credits exceed the total tax, the qualifying net tax is the	4416
minimum tax.	4417

(b) The lesser of the tax shown on the report, prepared and	4418
filed in good faith, reduced by the credits shown on that report,	4419
or the tax shown on an amended report, prepared and filed in good	4420
faith, reduced by the credits shown on that amended report. If the	4421
credits shown exceed the total tax shown, the qualifying net tax	4422
is the minimum tax.	4423

Sec. 5733.06. TheFor tax years prior to tax year 2014, the	4424
tax hereby charged each corporation subject to this chapter shall	4425
be the greater of the sum of divisions (A) and (B) of this	4426
section, after the reduction, if any, provided by division (J) of	4427
this section, or division (C) of this section, after the	4428
reduction, if any, provided by division (J) of this section,	4429
except that the tax hereby charged each financial institution	4430
subject to this chapter shall be the amount computed under	4431
division (D) of this section:	4432

(A) Except as set forth in division (F) of this section, five	4433
and one-tenth per cent upon the first fifty thousand dollars of	4434
the value of the taxpayer's issued and outstanding shares of stock	4435
as determined under division (B) of section 5733.05 of the Revised	4436
Code;	4437

(B) Except as set forth in division (F) of this section,	4438
eight and one-half per cent upon the value so determined in excess	4439
of fifty thousand dollars; or	4440

(C)(1) Except as otherwise provided under division (G) of	4441
this section, four mills times that portion of the value of the	4442
issued and outstanding shares of stock as determined under	4443
division (C) of section 5733.05 of the Revised Code. For the	4444
purposes of division (C) of this section, division (C)(2) of	4445
section 5733.065, and division (C) of section 5733.066 of the	4446
Revised Code, the value of the issued and outstanding shares of	4447
stock of an eligible corporation for tax year 2003 through tax	4448
year 2007, or of a qualifiedqualifying holding company, is zero.	4449

(2) As used in division (C) of this section, "eligible	4450
corporation" means a person treated as a corporation for federal	4451
income tax purposes that meets all of the following criteria:	4452

(a) The corporation conducts business for an entire taxable	4453
year as a qualified trade or business as defined by division (C)	4454
of section 122.15 of the Revised Code.	4455

(b) The corporation uses more than fifty per cent of the	4456
corporation's assets, based on net book value, that are located in	4457
Ohio solely to conduct activities that constitute a qualified	4458
trade or business as defined by section 122.15 of the Revised	4459
Code.	4460

(c) The corporation has been formed or organized not more	4461
than three years before the report required to be filed by section	4462
5733.02 of the Revised Code is due, without regard to any	4463
extensions.	4464

(d) The corporation is not a related member, as defined in	4465
section 5733.042 of the Revised Code, at any time during the	4466
taxable year with respect to another person treated as a	4467
corporation for federal income tax purposes. A corporation is not	4468
a related member if during the entire taxable year at least	4469
seventy-five per cent of the corporation's stock is owned directly	4470
or through a pass-through entity by individuals, estates, and	4471
grantor trusts, and the individuals, estates, and grantor trusts	4472
do not directly or indirectly own more than twenty per cent of the	4473
value of another person treated as a corporation for federal	4474
income tax purposes that is conducting a qualified trade or	4475
business.	4476

(D) The tax charged each financial institution subject to	4477
this chapter shall be that portion of the value of the issued and	4478
outstanding shares of stock as determined under division (A) of	4479
section 5733.05 of the Revised Code, multiplied by the following	4480
amounts:	4481

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

4482

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

4483

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

4484

(E) No tax shall be charged from any corporation that has	4485
been adjudicated bankrupt, or for which a receiver has been	4486
appointed, or that has made a general assignment for the benefit	4487
of creditors, except for the portion of the then current tax year	4488
during which the tax commissioner finds such corporation had the	4489
power to exercise its corporate franchise unimpaired by such	4490
proceedings or act. The minimum payment for each corporation shall	4491
be as follows:	4492

(1) One thousand dollars in the case of a corporation having	4493
gross receipts for the taxable year equal to at least five million	4494
dollars from activities within or outside this state or in the	4495
case of a corporation employing at least three hundred employees	4496
at some time during the taxable year within or outside this state;	4497

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

4498

The tax charged to corporations under this chapter for the	4499
privilege of engaging in business in this state, which is an	4500
excise tax levied on the value of the issued and outstanding	4501
shares of stock, shall in no manner be construed as prohibiting or	4502
otherwise limiting the powers of municipal corporations, joint	4503
economic development zones created under section 715.691 of the	4504
Revised Code, and joint economic development districts created	4505
under section 715.70 or 715.71 or sections 715.72 to 715.81 of the	4506
Revised Code in this state to impose an income tax on the income	4507
of such corporations.	4508

(F) If two or more taxpayers satisfy the ownership or control	4509
requirements of division (A) of section 5733.052 of the Revised	4510
Code, each such taxpayer shall substitute "the taxpayer's pro-rata	4511
amount" for "fifty thousand dollars" in divisions (A) and (B) of	4512
this section. For purposes of this division, "the taxpayer's	4513
pro-rata amount" is an amount that, when added to the other such	4514
taxpayers' pro-rata amounts, does not exceed fifty thousand	4515
dollars. For the purpose of making that computation, the	4516
taxpayer's pro-rata amount shall not be less than zero. Nothing in	4517
this division derogates from or eliminates the requirement to make	4518
the alternative computation of tax under division (C) of this	4519
section.	4520

(G) The tax liability of any corporation under division (C)	4521
of this section shall not exceed one hundred fifty thousand	4522
dollars.	4523

(H)(1) For the purposes of division (H) of this section,	4524
"exiting corporation" means a corporation that satisfies all of	4525
the following conditions:	4526

(a) The corporation had nexus with or in this state under the	4527
Constitution of the United States during any portion of a calendar	4528
year;	4529

(b) The corporation was not a corporation described in	4530
division (A) of section 5733.01 of the Revised Code on the first	4531
day of January immediately following that calendar year;	4532

(c) The corporation was not a financial institution on the	4533
first day of January immediately following that calendar year;	4534

(d) If the corporation was a transferor as defined in section	4535
5733.053 of the Revised Code, the corporation's transferee was not	4536
required to add to the transferee's net income the income of the	4537
transferor pursuant to division (B) of that section;	4538

(e) During any portion of that calendar year, or any portion	4539
of the immediately preceding calendar year, the corporation had	4540
net income that was not included in a report filed by the	4541
corporation or its transferee pursuant to section 5733.02,	4542
5733.021, 5733.03, 5733.031, or 5733.053 of the Revised Code;	4543

(f) The corporation would have been subject to the tax	4544
computed under divisions (A), (B), (C), (F), and (G) of this	4545
section if the corporation is assumed to be a corporation	4546
described in division (A) of section 5733.01 of the Revised Code	4547
on the first day of January immediately following the calendar	4548
year to which division (H)(1)(a) of this section refers.	4549

(2) For the purposes of division (H) of this section,	4550
"unreported net income" means net income that was not previously	4551
included in a report filed pursuant to section 5733.02, 5733.021,	4552
5733.03, 5733.031, or 5733.053 of the Revised Code and that was	4553
realized or recognized during the calendar year to which division	4554
(H)(1) of this section refers or the immediately preceding	4555
calendar year.	4556

(3) Each exiting corporation shall pay a tax computed by	4557
first allocating and apportioning the unreported net income	4558
pursuant to division (B) of section 5733.05 and section 5733.051	4559
and, if applicable, section 5733.052 of the Revised Code. The	4560
exiting corporation then shall compute the tax due on its	4561
unreported net income allocated and apportioned to this state by	4562
applying divisions (A), (B), and (F) of this section to that	4563
income.	4564

(4) Divisions (C) and (G) of this section, division (D)(2) of	4565
section 5733.065, and division (C) of section 5733.066 of the	4566
Revised Code do not apply to an exiting corporation, but exiting	4567
corporations are subject to every other provision of this chapter.	4568

(5) Notwithstanding division (B) of section 5733.01 or	4569
sections 5733.02, 5733.021, and 5733.03 of the Revised Code to the	4570
contrary, each exiting corporation shall report and pay the tax	4571
due under division (H) of this section on or before the	4572
thirty-first day of May immediately following the calendar year to	4573
which division (H)(1)(a) of this section refers. The exiting	4574
corporation shall file that report on the form most recently	4575
prescribed by the tax commissioner for the purposes of complying	4576
with sections 5733.02 and 5733.03 of the Revised Code. Upon	4577
request by the corporation, the tax commissioner may extend the	4578
date for filing the report.	4579

(6) If, on account of the application of section 5733.053 of	4580
the Revised Code, net income is subject to the tax imposed by	4581
divisions (A) and (B) of this section, such income shall not be	4582
subject to the tax imposed by division (H)(3) of this section.	4583

(7) The amendments made to division (H) of this section by	4584
Am. Sub. S.B. 287 of the 123rd general assembly do not apply to	4585
any transfer, as defined in section 5733.053 of the Revised Code,	4586
for which negotiations began prior to January 1, 2001, and that	4587
was commenced in and completed during calendar year 2001, unless	4588
the taxpayer makes an election prior to December 31, 2001, to	4589
apply those amendments.	4590

(8) The tax commissioner may adopt rules governing division	4591
(H) of this section.	4592

(I) Any reference in the Revised Code to "the tax imposed by	4593
section 5733.06 of the Revised Code" or "the tax due under section	4594
5733.06 of the Revised Code" includes the taxes imposed under	4595
sections 5733.065 and 5733.066 of the Revised Code.	4596

(J)(1) Division (J) of this section applies solely to a	4597
combined company. Section 5733.057 of the Revised Code shall apply	4598
when calculating the adjustments required by division (J) of this	4599
section.	4600

(2) Subject to division (J)(4) of this section, the total tax	4601
calculated in divisions (A) and (B) of this section shall be	4602
reduced by an amount calculated by multiplying such tax by a	4603
fraction, the numerator of which is the total taxable gross	4604
receipts attributed to providing public utility activity other	4605
than as an electric company under section 5727.03 of the Revised	4606
Code for the year upon which the taxable gross receipts are	4607
measured immediately preceding the tax year, and the denominator	4608
of which is the total gross receipts from all sources for the year	4609
upon which the taxable gross receipts are measured immediately	4610
preceding the tax year. Nothing herein shall be construed to	4611
exclude from the denominator any item of income described in	4612
section 5733.051 of the Revised Code.	4613

(3) Subject to division (J)(4) of this section, the total tax	4614
calculated in division (C) of this section shall be reduced by an	4615
amount calculated by multiplying such tax by the fraction	4616
described in division (J)(2) of this section.	4617

(4) In no event shall the reduction provided by division	4618
(J)(2) or (J)(3) of this section exceed the amount of the excise	4619
tax paid in accordance with section 5727.38 of the Revised Code,	4620
for the year upon which the taxable gross receipts are measured	4621
immediately preceding the tax year.	4622

Sec. 5747.01.  Except as otherwise expressly provided or	4623
clearly appearing from the context, any term used in this chapter	4624
that is not otherwise defined in this section has the same meaning	4625
as when used in a comparable context in the laws of the United	4626
States relating to federal income taxes or if not used in a	4627
comparable context in those laws, has the same meaning as in	4628
section 5733.40 of the Revised Code. Any reference in this chapter	4629
to the Internal Revenue Code includes other laws of the United	4630
States relating to federal income taxes.	4631

As used in this chapter:

4632

(A) "Adjusted gross income" or "Ohio adjusted gross income"	4633
means federal adjusted gross income, as defined and used in the	4634
Internal Revenue Code, adjusted as provided in this section:	4635

(1) Add interest or dividends on obligations or securities of	4636
any state or of any political subdivision or authority of any	4637
state, other than this state and its subdivisions and authorities.	4638

(2) Add interest or dividends on obligations of any	4639
authority, commission, instrumentality, territory, or possession	4640
of the United States to the extent that the interest or dividends	4641
are exempt from federal income taxes but not from state income	4642
taxes.	4643

(3) Deduct interest or dividends on obligations of the United	4644
States and its territories and possessions or of any authority,	4645
commission, or instrumentality of the United States to the extent	4646
that the interest or dividends are included in federal adjusted	4647
gross income but exempt from state income taxes under the laws of	4648
the United States.	4649

(4) Deduct disability and survivor's benefits to the extent	4650
included in federal adjusted gross income.	4651

(5) Deduct benefits under Title II of the Social Security Act	4652
and tier 1 railroad retirement benefits to the extent included in	4653
federal adjusted gross income under section 86 of the Internal	4654
Revenue Code.	4655

(6) In the case of a taxpayer who is a beneficiary of a trust	4656
that makes an accumulation distribution as defined in section 665	4657
of the Internal Revenue Code, add, for the beneficiary's taxable	4658
years beginning before 2002, the portion, if any, of such	4659
distribution that does not exceed the undistributed net income of	4660
the trust for the three taxable years preceding the taxable year	4661
in which the distribution is made to the extent that the portion	4662
was not included in the trust's taxable income for any of the	4663
trust's taxable years beginning in 2002 or thereafter.	4664
"Undistributed net income of a trust" means the taxable income of	4665
the trust increased by (a)(i) the additions to adjusted gross	4666
income required under division (A) of this section and (ii) the	4667
personal exemptions allowed to the trust pursuant to section	4668
642(b) of the Internal Revenue Code, and decreased by (b)(i) the	4669
deductions to adjusted gross income required under division (A) of	4670
this section, (ii) the amount of federal income taxes attributable	4671
to such income, and (iii) the amount of taxable income that has	4672
been included in the adjusted gross income of a beneficiary by	4673
reason of a prior accumulation distribution. Any undistributed net	4674
income included in the adjusted gross income of a beneficiary	4675
shall reduce the undistributed net income of the trust commencing	4676
with the earliest years of the accumulation period.	4677

(7) Deduct the amount of wages and salaries, if any, not	4678
otherwise allowable as a deduction but that would have been	4679
allowable as a deduction in computing federal adjusted gross	4680
income for the taxable year, had the targeted jobs credit allowed	4681
and determined under sections 38, 51, and 52 of the Internal	4682
Revenue Code not been in effect.	4683

(8) Deduct any interest or interest equivalent on public	4684
obligations and purchase obligations to the extent that the	4685
interest or interest equivalent is included in federal adjusted	4686
gross income.	4687

(9) Add any loss or deduct any gain resulting from the sale,	4688
exchange, or other disposition of public obligations to the extent	4689
that the loss has been deducted or the gain has been included in	4690
computing federal adjusted gross income.	4691

(10) Deduct or add amounts, as provided under section 5747.70	4692
of the Revised Code, related to contributions to variable college	4693
savings program accounts made or tuition units purchased pursuant	4694
to Chapter 3334. of the Revised Code.	4695

(11)(a) Deduct, to the extent not otherwise allowable as a	4696
deduction or exclusion in computing federal or Ohio adjusted gross	4697
income for the taxable year, the amount the taxpayer paid during	4698
the taxable year for medical care insurance and qualified	4699
long-term care insurance for the taxpayer, the taxpayer's spouse,	4700
and dependents. No deduction for medical care insurance under	4701
division (A)(11) of this section shall be allowed either to any	4702
taxpayer who is eligible to participate in any subsidized health	4703
plan maintained by any employer of the taxpayer or of the	4704
taxpayer's spouse, or to any taxpayer who is entitled to, or on	4705
application would be entitled to, benefits under part A of Title	4706
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.	4707
301, as amended. For the purposes of division (A)(11)(a) of this	4708
section, "subsidized health plan" means a health plan for which	4709
the employer pays any portion of the plan's cost. The deduction	4710
allowed under division (A)(11)(a) of this section shall be the net	4711
of any related premium refunds, related premium reimbursements, or	4712
related insurance premium dividends received during the taxable	4713
year.	4714

(b) Deduct, to the extent not otherwise deducted or excluded	4715
in computing federal or Ohio adjusted gross income during the	4716
taxable year, the amount the taxpayer paid during the taxable	4717
year, not compensated for by any insurance or otherwise, for	4718
medical care of the taxpayer, the taxpayer's spouse, and	4719
dependents, to the extent the expenses exceed seven and one-half	4720
per cent of the taxpayer's federal adjusted gross income.	4721

(c) Deduct, to the extent not otherwise deducted or excluded	4722
in computing federal or Ohio adjusted gross income, any amount	4723
included in federal adjusted gross income under section 105 or not	4724
excluded under section 106 of the Internal Revenue Code solely	4725
because it relates to an accident and health plan for a person who	4726
otherwise would be a "qualifying relative" and thus a "dependent"	4727
under section 152 of the Internal Revenue Code but for the fact	4728
that the person fails to meet the income and support limitations	4729
under section 152(d)(1)(B) and (C) of the Internal Revenue Code.	4730

(d) For purposes of division (A)(11) of this section,	4731
"medical care" has the meaning given in section 213 of the	4732
Internal Revenue Code, subject to the special rules, limitations,	4733
and exclusions set forth therein, and "qualified long-term care"	4734
has the same meaning given in section 7702B(c) of the Internal	4735
Revenue Code. Solely for purposes of divisions (A)(11)(a) and (c)	4736
of this section, "dependent" includes a person who otherwise would	4737
be a "qualifying relative" and thus a "dependent" under section	4738
152 of the Internal Revenue Code but for the fact that the person	4739
fails to meet the income and support limitations under section	4740
152(d)(1)(B) and (C) of the Internal Revenue Code.	4741

(12)(a) Deduct any amount included in federal adjusted gross	4742
income solely because the amount represents a reimbursement or	4743
refund of expenses that in any year the taxpayer had deducted as	4744
an itemized deduction pursuant to section 63 of the Internal	4745
Revenue Code and applicable United States department of the	4746
treasury regulations. The deduction otherwise allowed under	4747
division (A)(12)(a) of this section shall be reduced to the extent	4748
the reimbursement is attributable to an amount the taxpayer	4749
deducted under this section in any taxable year.	4750

(b) Add any amount not otherwise included in Ohio adjusted	4751
gross income for any taxable year to the extent that the amount is	4752
attributable to the recovery during the taxable year of any amount	4753
deducted or excluded in computing federal or Ohio adjusted gross	4754
income in any taxable year.	4755

(13) Deduct any portion of the deduction described in section	4756
1341(a)(2) of the Internal Revenue Code, for repaying previously	4757
reported income received under a claim of right, that meets both	4758
of the following requirements:	4759

(a) It is allowable for repayment of an item that was	4760
included in the taxpayer's adjusted gross income for a prior	4761
taxable year and did not qualify for a credit under division (A)	4762
or (B) of section 5747.05 of the Revised Code for that year;	4763

(b) It does not otherwise reduce the taxpayer's adjusted	4764
gross income for the current or any other taxable year.	4765

(14) Deduct an amount equal to the deposits made to, and net	4766
investment earnings of, a medical savings account during the	4767
taxable year, in accordance with section 3924.66 of the Revised	4768
Code. The deduction allowed by division (A)(14) of this section	4769
does not apply to medical savings account deposits and earnings	4770
otherwise deducted or excluded for the current or any other	4771
taxable year from the taxpayer's federal adjusted gross income.	4772

(15)(a) Add an amount equal to the funds withdrawn from a	4773
medical savings account during the taxable year, and the net	4774
investment earnings on those funds, when the funds withdrawn were	4775
used for any purpose other than to reimburse an account holder	4776
for, or to pay, eligible medical expenses, in accordance with	4777
section 3924.66 of the Revised Code;	4778

(b) Add the amounts distributed from a medical savings	4779
account under division (A)(2) of section 3924.68 of the Revised	4780
Code during the taxable year.	4781

(16) Add any amount claimed as a credit under section	4782
5747.059 or 5747.65 of the Revised Code to the extent that such	4783
amount satisfies either of the following:	4784

(a) The amount was deducted or excluded from the computation	4785
of the taxpayer's federal adjusted gross income as required to be	4786
reported for the taxpayer's taxable year under the Internal	4787
Revenue Code;	4788

(b) The amount resulted in a reduction of the taxpayer's	4789
federal adjusted gross income as required to be reported for any	4790
of the taxpayer's taxable years under the Internal Revenue Code.	4791

(17) Deduct the amount contributed by the taxpayer to an	4792
individual development account program established by a county	4793
department of job and family services pursuant to sections 329.11	4794
to 329.14 of the Revised Code for the purpose of matching funds	4795
deposited by program participants. On request of the tax	4796
commissioner, the taxpayer shall provide any information that, in	4797
the tax commissioner's opinion, is necessary to establish the	4798
amount deducted under division (A)(17) of this section.	4799

(18) Beginning in taxable year 2001 but not for any taxable	4800
year beginning after December 31, 2005, if the taxpayer is married	4801
and files a joint return and the combined federal adjusted gross	4802
income of the taxpayer and the taxpayer's spouse for the taxable	4803
year does not exceed one hundred thousand dollars, or if the	4804
taxpayer is single and has a federal adjusted gross income for the	4805
taxable year not exceeding fifty thousand dollars, deduct amounts	4806
paid during the taxable year for qualified tuition and fees paid	4807
to an eligible institution for the taxpayer, the taxpayer's	4808
spouse, or any dependent of the taxpayer, who is a resident of	4809
this state and is enrolled in or attending a program that	4810
culminates in a degree or diploma at an eligible institution. The	4811
deduction may be claimed only to the extent that qualified tuition	4812
and fees are not otherwise deducted or excluded for any taxable	4813
year from federal or Ohio adjusted gross income. The deduction may	4814
not be claimed for educational expenses for which the taxpayer	4815
claims a credit under section 5747.27 of the Revised Code.	4816

(19) Add any reimbursement received during the taxable year	4817
of any amount the taxpayer deducted under division (A)(18) of this	4818
section in any previous taxable year to the extent the amount is	4819
not otherwise included in Ohio adjusted gross income.	4820

(20)(a)(i) Add five-sixths of the amount of depreciation	4821
expense allowed by subsection (k) of section 168 of the Internal	4822
Revenue Code, including the taxpayer's proportionate or	4823
distributive share of the amount of depreciation expense allowed	4824
by that subsection to a pass-through entity in which the taxpayer	4825
has a direct or indirect ownership interest.	4826

(ii) Add five-sixths of the amount of qualifying section 179	4827
depreciation expense, including a person's proportionate or	4828
distributive share of the amount of qualifying section 179	4829
depreciation expense allowed to any pass-through entity in which	4830
the person has a direct or indirect ownership. For the purposes of	4831
this division, "qualifying section 179 depreciation expense" means	4832
the difference between (I) the amount of depreciation expense	4833
directly or indirectly allowed to the taxpayer under section 179	4834
of the Internal Revenue Code, and (II) the amount of depreciation	4835
expense directly or indirectly allowed to the taxpayer under	4836
section 179 of the Internal Revenue Code as that section existed	4837
on December 31, 2002.	4838

The tax commissioner, under procedures established by the	4839
commissioner, may waive the add-backs related to a pass-through	4840
entity if the taxpayer owns, directly or indirectly, less than	4841
five per cent of the pass-through entity.	4842

(b) Nothing in division (A)(20) of this section shall be	4843
construed to adjust or modify the adjusted basis of any asset.	4844

(c) To the extent the add-back required under division	4845
(A)(20)(a) of this section is attributable to property generating	4846
nonbusiness income or loss allocated under section 5747.20 of the	4847
Revised Code, the add-back shall be sitused to the same location	4848
as the nonbusiness income or loss generated by the property for	4849
the purpose of determining the credit under division (A) of	4850
section 5747.05 of the Revised Code. Otherwise, the add-back shall	4851
be apportioned, subject to one or more of the four alternative	4852
methods of apportionment enumerated in section 5747.21 of the	4853
Revised Code.	4854

(d) For the purposes of division (A) of this section, net	4855
operating loss carryback and carryforward shall not include	4856
five-sixths of the allowance of any net operating loss deduction	4857
carryback or carryforward to the taxable year to the extent such	4858
loss resulted from depreciation allowed by section 168(k) of the	4859
Internal Revenue Code and by the qualifying section 179	4860
depreciation expense amount.	4861

(21)(a) If the taxpayer was required to add an amount under	4862
division (A)(20)(a) of this section for a taxable year, deduct	4863
one-fifth of the amount so added for each of the five succeeding	4864
taxable years.	4865

(b) If the amount deducted under division (A)(21)(a) of this	4866
section is attributable to an add-back allocated under division	4867
(A)(20)(c) of this section, the amount deducted shall be sitused	4868
to the same location. Otherwise, the add-back shall be apportioned	4869
using the apportionment factors for the taxable year in which the	4870
deduction is taken, subject to one or more of the four alternative	4871
methods of apportionment enumerated in section 5747.21 of the	4872
Revised Code.	4873

(c) No deduction is available under division (A)(21)(a) of	4874
this section with regard to any depreciation allowed by section	4875
168(k) of the Internal Revenue Code and by the qualifying section	4876
179 depreciation expense amount to the extent that such	4877
depreciation resulted in or increased a federal net operating loss	4878
carryback or carryforward to a taxable year to which division	4879
(A)(20)(d) of this section does not apply.	4880

(22) Deduct, to the extent not otherwise deducted or excluded	4881
in computing federal or Ohio adjusted gross income for the taxable	4882
year, the amount the taxpayer received during the taxable year as	4883
reimbursement for life insurance premiums under section 5919.31 of	4884
the Revised Code.	4885

(23) Deduct, to the extent not otherwise deducted or excluded	4886
in computing federal or Ohio adjusted gross income for the taxable	4887
year, the amount the taxpayer received during the taxable year as	4888
a death benefit paid by the adjutant general under section 5919.33	4889
of the Revised Code.	4890

(24) Deduct, to the extent included in federal adjusted gross	4891
income and not otherwise allowable as a deduction or exclusion in	4892
computing federal or Ohio adjusted gross income for the taxable	4893
year, military pay and allowances received by the taxpayer during	4894
the taxable year for active duty service in the United States	4895
army, air force, navy, marine corps, or coast guard or reserve	4896
components thereof or the national guard. The deduction may not be	4897
claimed for military pay and allowances received by the taxpayer	4898
while the taxpayer is stationed in this state.	4899

(25) Deduct, to the extent not otherwise allowable as a	4900
deduction or exclusion in computing federal or Ohio adjusted gross	4901
income for the taxable year and not otherwise compensated for by	4902
any other source, the amount of qualified organ donation expenses	4903
incurred by the taxpayer during the taxable year, not to exceed	4904
ten thousand dollars. A taxpayer may deduct qualified organ	4905
donation expenses only once for all taxable years beginning with	4906
taxable years beginning in 2007.	4907

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

4908

(a) "Human organ" means all or any portion of a human liver,	4909
pancreas, kidney, intestine, or lung, and any portion of human	4910
bone marrow.	4911

(b) "Qualified organ donation expenses" means travel	4912
expenses, lodging expenses, and wages and salary forgone by a	4913
taxpayer in connection with the taxpayer's donation, while living,	4914
of one or more of the taxpayer's human organs to another human	4915
being.	4916

(26) Deduct, to the extent not otherwise deducted or excluded	4917
in computing federal or Ohio adjusted gross income for the taxable	4918
year, amounts received by the taxpayer as retired military	4919
personnel pay for service in the United States army, navy, air	4920
force, coast guard, or marine corps or reserve components thereof,	4921
or the national guard, or received by the surviving spouse or	4922
former spouse of such a taxpayer under the survivor benefit plan	4923
on account of such a taxpayer's death. If the taxpayer receives	4924
income on account of retirement paid under the federal civil	4925
service retirement system or federal employees retirement system,	4926
or under any successor retirement program enacted by the congress	4927
of the United States that is established and maintained for	4928
retired employees of the United States government, and such	4929
retirement income is based, in whole or in part, on credit for the	4930
taxpayer's military service, the deduction allowed under this	4931
division shall include only that portion of such retirement income	4932
that is attributable to the taxpayer's military service, to the	4933
extent that portion of such retirement income is otherwise	4934
included in federal adjusted gross income and is not otherwise	4935
deducted under this section. Any amount deducted under division	4936
(A)(26) of this section is not included in a taxpayer's adjusted	4937
gross income for the purposes of section 5747.055 of the Revised	4938
Code. No amount may be deducted under division (A)(26) of this	4939
section on the basis of which a credit was claimed under section	4940
5747.055 of the Revised Code.	4941

(27) Deduct, to the extent not otherwise deducted or excluded	4942
in computing federal or Ohio adjusted gross income for the taxable	4943
year, the amount the taxpayer received during the taxable year	4944
from the military injury relief fund created in section 5101.98 of	4945
the Revised Code.	4946

(28) Deduct, to the extent not otherwise deducted or excluded	4947
in computing federal or Ohio adjusted gross income for the taxable	4948
year, the amount the taxpayer received as a veterans bonus during	4949
the taxable year from the Ohio department of veterans services as	4950
authorized by Section 2r of Article VIII, Ohio Constitution.	4951

(29) Deduct, to the extent not otherwise deducted or excluded	4952
in computing federal or Ohio adjusted gross income for the taxable	4953
year, any loss from wagering transactions that is allowed as an	4954
itemized deduction under section 165 of the Internal Revenue Code	4955
and that the taxpayer deducted in computing federal taxable	4956
income.	4957

(30) Deduct, to the extent not otherwise deducted or excluded	4958
in computing federal or Ohio adjusted gross income for the taxable	4959
year, any income derived from providing public services under a	4960
contract through a project owned by the state, as described in	4961
section 126.604 of the Revised Code or derived from a transfer	4962
agreement or from the enterprise transferred under that agreement	4963
under section 4313.02 of the Revised Code.	4964

(31) Deduct, to the extent not otherwise deducted or excluded	4965
in computing federal or Ohio adjusted gross income for the taxable	4966
year, Ohio college opportunity or federal Pell grant amounts	4967
received by the taxpayer or the taxpayer's spouse or dependent	4968
pursuant to section 3333.122 of the Revised Code or 20 U.S.C.	4969
1070a, et seq., and used to pay room or board furnished by the	4970
educational institution for which the grant was awarded at the	4971
institution's facilities, including meal plans administered by the	4972
institution. For the purposes of this division, receipt of a grant	4973
includes the distribution of a grant directly to an educational	4974
institution and the crediting of the grant to the enrollee's	4975
account with the institution.	4976

(B) "Business income" means income, including gain or loss,	4977
arising from transactions, activities, and sources in the regular	4978
course of a trade or business and includes income, gain, or loss	4979
from real property, tangible property, and intangible property if	4980
the acquisition, rental, management, and disposition of the	4981
property constitute integral parts of the regular course of a	4982
trade or business operation. "Business income" includes income,	4983
including gain or loss, from a partial or complete liquidation of	4984
a business, including, but not limited to, gain or loss from the	4985
sale or other disposition of goodwill.	4986

(C) "Nonbusiness income" means all income other than business	4987
income and may include, but is not limited to, compensation, rents	4988
and royalties from real or tangible personal property, capital	4989
gains, interest, dividends and distributions, patent or copyright	4990
royalties, or lottery winnings, prizes, and awards.	4991

(D) "Compensation" means any form of remuneration paid to an	4992
employee for personal services.	4993

(E) "Fiduciary" means a guardian, trustee, executor,	4994
administrator, receiver, conservator, or any other person acting	4995
in any fiduciary capacity for any individual, trust, or estate.	4996

(F) "Fiscal year" means an accounting period of twelve months	4997
ending on the last day of any month other than December.	4998

(G) "Individual" means any natural person.

4999

(H) "Internal Revenue Code" means the "Internal Revenue Code	5000
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.	5001

(I) "Resident" means any of the following, provided that	5002
division (I)(3) of this section applies only to taxable years of a	5003
trust beginning in 2002 or thereafter:	5004

(1) An individual who is domiciled in this state, subject to	5005
section 5747.24 of the Revised Code;	5006

(2) The estate of a decedent who at the time of death was	5007
domiciled in this state. The domicile tests of section 5747.24 of	5008
the Revised Code are not controlling for purposes of division	5009
(I)(2) of this section.	5010

(3) A trust that, in whole or part, resides in this state. If	5011
only part of a trust resides in this state, the trust is a	5012
resident only with respect to that part.	5013

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

5014

(a) A trust resides in this state for the trust's current	5015
taxable year to the extent, as described in division (I)(3)(d) of	5016
this section, that the trust consists directly or indirectly, in	5017
whole or in part, of assets, net of any related liabilities, that	5018
were transferred, or caused to be transferred, directly or	5019
indirectly, to the trust by any of the following:	5020

(i) A person, a court, or a governmental entity or	5021
instrumentality on account of the death of a decedent, but only if	5022
the trust is described in division (I)(3)(e)(i) or (ii) of this	5023
section;	5024

(ii) A person who was domiciled in this state for the	5025
purposes of this chapter when the person directly or indirectly	5026
transferred assets to an irrevocable trust, but only if at least	5027
one of the trust's qualifying beneficiaries is domiciled in this	5028
state for the purposes of this chapter during all or some portion	5029
of the trust's current taxable year;	5030

(iii) A person who was domiciled in this state for the	5031
purposes of this chapter when the trust document or instrument or	5032
part of the trust document or instrument became irrevocable, but	5033
only if at least one of the trust's qualifying beneficiaries is a	5034
resident domiciled in this state for the purposes of this chapter	5035
during all or some portion of the trust's current taxable year. If	5036
a trust document or instrument became irrevocable upon the death	5037
of a person who at the time of death was domiciled in this state	5038
for purposes of this chapter, that person is a person described in	5039
division (I)(3)(a)(iii) of this section.	5040

(b) A trust is irrevocable to the extent that the transferor	5041
is not considered to be the owner of the net assets of the trust	5042
under sections 671 to 678 of the Internal Revenue Code.	5043

(c) With respect to a trust other than a charitable lead	5044
trust, "qualifying beneficiary" has the same meaning as "potential	5045
current beneficiary" as defined in section 1361(e)(2) of the	5046
Internal Revenue Code, and with respect to a charitable lead trust	5047
"qualifying beneficiary" is any current, future, or contingent	5048
beneficiary, but with respect to any trust "qualifying	5049
beneficiary" excludes a person or a governmental entity or	5050
instrumentality to any of which a contribution would qualify for	5051
the charitable deduction under section 170 of the Internal Revenue	5052
Code.	5053

(d) For the purposes of division (I)(3)(a) of this section,	5054
the extent to which a trust consists directly or indirectly, in	5055
whole or in part, of assets, net of any related liabilities, that	5056
were transferred directly or indirectly, in whole or part, to the	5057
trust by any of the sources enumerated in that division shall be	5058
ascertained by multiplying the fair market value of the trust's	5059
assets, net of related liabilities, by the qualifying ratio, which	5060
shall be computed as follows:	5061

(i) The first time the trust receives assets, the numerator	5062
of the qualifying ratio is the fair market value of those assets	5063
at that time, net of any related liabilities, from sources	5064
enumerated in division (I)(3)(a) of this section. The denominator	5065
of the qualifying ratio is the fair market value of all the	5066
trust's assets at that time, net of any related liabilities.	5067

(ii) Each subsequent time the trust receives assets, a	5068
revised qualifying ratio shall be computed. The numerator of the	5069
revised qualifying ratio is the sum of (1) the fair market value	5070
of the trust's assets immediately prior to the subsequent	5071
transfer, net of any related liabilities, multiplied by the	5072
qualifying ratio last computed without regard to the subsequent	5073
transfer, and (2) the fair market value of the subsequently	5074
transferred assets at the time transferred, net of any related	5075
liabilities, from sources enumerated in division (I)(3)(a) of this	5076
section. The denominator of the revised qualifying ratio is the	5077
fair market value of all the trust's assets immediately after the	5078
subsequent transfer, net of any related liabilities.	5079

(iii) Whether a transfer to the trust is by or from any of	5080
the sources enumerated in division (I)(3)(a) of this section shall	5081
be ascertained without regard to the domicile of the trust's	5082
beneficiaries.	5083

(e) For the purposes of division (I)(3)(a)(i) of this	5084
section:	5085

(i) A trust is described in division (I)(3)(e)(i) of this	5086
section if the trust is a testamentary trust and the testator of	5087
that testamentary trust was domiciled in this state at the time of	5088
the testator's death for purposes of the taxes levied under	5089
Chapter 5731. of the Revised Code.	5090

(ii) A trust is described in division (I)(3)(e)(ii) of this	5091
section if the transfer is a qualifying transfer described in any	5092
of divisions (I)(3)(f)(i) to (vi) of this section, the trust is an	5093
irrevocable inter vivos trust, and at least one of the trust's	5094
qualifying beneficiaries is domiciled in this state for purposes	5095
of this chapter during all or some portion of the trust's current	5096
taxable year.	5097

(f) For the purposes of division (I)(3)(e)(ii) of this	5098
section, a "qualifying transfer" is a transfer of assets, net of	5099
any related liabilities, directly or indirectly to a trust, if the	5100
transfer is described in any of the following:	5101

(i) The transfer is made to a trust, created by the decedent	5102
before the decedent's death and while the decedent was domiciled	5103
in this state for the purposes of this chapter, and, prior to the	5104
death of the decedent, the trust became irrevocable while the	5105
decedent was domiciled in this state for the purposes of this	5106
chapter.	5107

(ii) The transfer is made to a trust to which the decedent,	5108
prior to the decedent's death, had directly or indirectly	5109
transferred assets, net of any related liabilities, while the	5110
decedent was domiciled in this state for the purposes of this	5111
chapter, and prior to the death of the decedent the trust became	5112
irrevocable while the decedent was domiciled in this state for the	5113
purposes of this chapter.	5114

(iii) The transfer is made on account of a contractual	5115
relationship existing directly or indirectly between the	5116
transferor and either the decedent or the estate of the decedent	5117
at any time prior to the date of the decedent's death, and the	5118
decedent was domiciled in this state at the time of death for	5119
purposes of the taxes levied under Chapter 5731. of the Revised	5120
Code.	5121

(iv) The transfer is made to a trust on account of a	5122
contractual relationship existing directly or indirectly between	5123
the transferor and another person who at the time of the	5124
decedent's death was domiciled in this state for purposes of this	5125
chapter.	5126

(v) The transfer is made to a trust on account of the will of	5127
a testator who was domiciled in this state at the time of the	5128
testator's death for purposes of the taxes levied under Chapter	5129
5731. of the Revised Code.	5130

(vi) The transfer is made to a trust created by or caused to	5131
be created by a court, and the trust was directly or indirectly	5132
created in connection with or as a result of the death of an	5133
individual who, for purposes of the taxes levied under Chapter	5134
5731. of the Revised Code, was domiciled in this state at the time	5135
of the individual's death.	5136

(g) The tax commissioner may adopt rules to ascertain the	5137
part of a trust residing in this state.	5138

(J) "Nonresident" means an individual or estate that is not a	5139
resident. An individual who is a resident for only part of a	5140
taxable year is a nonresident for the remainder of that taxable	5141
year.	5142

(K) "Pass-through entity" has the same meaning as in section	5143
5733.04 of the Revised Code.	5144

(L) "Return" means the notifications and reports required to	5145
be filed pursuant to this chapter for the purpose of reporting the	5146
tax due and includes declarations of estimated tax when so	5147
required.	5148

(M) "Taxable year" means the calendar year or the taxpayer's	5149
fiscal year ending during the calendar year, or fractional part	5150
thereof, upon which the adjusted gross income is calculated	5151
pursuant to this chapter.	5152

(N) "Taxpayer" means any person subject to the tax imposed by	5153
section 5747.02 of the Revised Code or any pass-through entity	5154
that makes the election under division (D) of section 5747.08 of	5155
the Revised Code.	5156

(O) "Dependents" means dependents as defined in the Internal	5157
Revenue Code and as claimed in the taxpayer's federal income tax	5158
return for the taxable year or which the taxpayer would have been	5159
permitted to claim had the taxpayer filed a federal income tax	5160
return.	5161

(P) "Principal county of employment" means, in the case of a	5162
nonresident, the county within the state in which a taxpayer	5163
performs services for an employer or, if those services are	5164
performed in more than one county, the county in which the major	5165
portion of the services are performed.	5166

(Q) As used in sections 5747.50 to 5747.55 of the Revised	5167
Code:	5168

(1) "Subdivision" means any county, municipal corporation,	5169
park district, or township.	5170

(2) "Essential local government purposes" includes all	5171
functions that any subdivision is required by general law to	5172
exercise, including like functions that are exercised under a	5173
charter adopted pursuant to the Ohio Constitution.	5174

(R) "Overpayment" means any amount already paid that exceeds	5175
the figure determined to be the correct amount of the tax.	5176

(S) "Taxable income" or "Ohio taxable income" applies only to	5177
estates and trusts, and means federal taxable income, as defined	5178
and used in the Internal Revenue Code, adjusted as follows:	5179

(1) Add interest or dividends, net of ordinary, necessary,	5180
and reasonable expenses not deducted in computing federal taxable	5181
income, on obligations or securities of any state or of any	5182
political subdivision or authority of any state, other than this	5183
state and its subdivisions and authorities, but only to the extent	5184
that such net amount is not otherwise includible in Ohio taxable	5185
income and is described in either division (S)(1)(a) or (b) of	5186
this section:	5187

(a) The net amount is not attributable to the S portion of an	5188
electing small business trust and has not been distributed to	5189
beneficiaries for the taxable year;	5190

(b) The net amount is attributable to the S portion of an	5191
electing small business trust for the taxable year.	5192

(2) Add interest or dividends, net of ordinary, necessary,	5193
and reasonable expenses not deducted in computing federal taxable	5194
income, on obligations of any authority, commission,	5195
instrumentality, territory, or possession of the United States to	5196
the extent that the interest or dividends are exempt from federal	5197
income taxes but not from state income taxes, but only to the	5198
extent that such net amount is not otherwise includible in Ohio	5199
taxable income and is described in either division (S)(1)(a) or	5200
(b) of this section;	5201

(3) Add the amount of personal exemption allowed to the	5202
estate pursuant to section 642(b) of the Internal Revenue Code;	5203

(4) Deduct interest or dividends, net of related expenses	5204
deducted in computing federal taxable income, on obligations of	5205
the United States and its territories and possessions or of any	5206
authority, commission, or instrumentality of the United States to	5207
the extent that the interest or dividends are exempt from state	5208
taxes under the laws of the United States, but only to the extent	5209
that such amount is included in federal taxable income and is	5210
described in either division (S)(1)(a) or (b) of this section;	5211

(5) Deduct the amount of wages and salaries, if any, not	5212
otherwise allowable as a deduction but that would have been	5213
allowable as a deduction in computing federal taxable income for	5214
the taxable year, had the targeted jobs credit allowed under	5215
sections 38, 51, and 52 of the Internal Revenue Code not been in	5216
effect, but only to the extent such amount relates either to	5217
income included in federal taxable income for the taxable year or	5218
to income of the S portion of an electing small business trust for	5219
the taxable year;	5220

(6) Deduct any interest or interest equivalent, net of	5221
related expenses deducted in computing federal taxable income, on	5222
public obligations and purchase obligations, but only to the	5223
extent that such net amount relates either to income included in	5224
federal taxable income for the taxable year or to income of the S	5225
portion of an electing small business trust for the taxable year;	5226

(7) Add any loss or deduct any gain resulting from sale,	5227
exchange, or other disposition of public obligations to the extent	5228
that such loss has been deducted or such gain has been included in	5229
computing either federal taxable income or income of the S portion	5230
of an electing small business trust for the taxable year;	5231

(8) Except in the case of the final return of an estate, add	5232
any amount deducted by the taxpayer on both its Ohio estate tax	5233
return pursuant to section 5731.14 of the Revised Code, and on its	5234
federal income tax return in determining federal taxable income;	5235

(9)(a) Deduct any amount included in federal taxable income	5236
solely because the amount represents a reimbursement or refund of	5237
expenses that in a previous year the decedent had deducted as an	5238
itemized deduction pursuant to section 63 of the Internal Revenue	5239
Code and applicable treasury regulations. The deduction otherwise	5240
allowed under division (S)(9)(a) of this section shall be reduced	5241
to the extent the reimbursement is attributable to an amount the	5242
taxpayer or decedent deducted under this section in any taxable	5243
year.	5244

(b) Add any amount not otherwise included in Ohio taxable	5245
income for any taxable year to the extent that the amount is	5246
attributable to the recovery during the taxable year of any amount	5247
deducted or excluded in computing federal or Ohio taxable income	5248
in any taxable year, but only to the extent such amount has not	5249
been distributed to beneficiaries for the taxable year.	5250

(10) Deduct any portion of the deduction described in section	5251
1341(a)(2) of the Internal Revenue Code, for repaying previously	5252
reported income received under a claim of right, that meets both	5253
of the following requirements:	5254

(a) It is allowable for repayment of an item that was	5255
included in the taxpayer's taxable income or the decedent's	5256
adjusted gross income for a prior taxable year and did not qualify	5257
for a credit under division (A) or (B) of section 5747.05 of the	5258
Revised Code for that year.	5259

(b) It does not otherwise reduce the taxpayer's taxable	5260
income or the decedent's adjusted gross income for the current or	5261
any other taxable year.	5262

(11) Add any amount claimed as a credit under section	5263
5747.059 or 5747.65 of the Revised Code to the extent that the	5264
amount satisfies either of the following:	5265

(a) The amount was deducted or excluded from the computation	5266
of the taxpayer's federal taxable income as required to be	5267
reported for the taxpayer's taxable year under the Internal	5268
Revenue Code;	5269

(b) The amount resulted in a reduction in the taxpayer's	5270
federal taxable income as required to be reported for any of the	5271
taxpayer's taxable years under the Internal Revenue Code.	5272

(12) Deduct any amount, net of related expenses deducted in	5273
computing federal taxable income, that a trust is required to	5274
report as farm income on its federal income tax return, but only	5275
if the assets of the trust include at least ten acres of land	5276
satisfying the definition of "land devoted exclusively to	5277
agricultural use" under section 5713.30 of the Revised Code,	5278
regardless of whether the land is valued for tax purposes as such	5279
land under sections 5713.30 to 5713.38 of the Revised Code. If the	5280
trust is a pass-through entity investor, section 5747.231 of the	5281
Revised Code applies in ascertaining if the trust is eligible to	5282
claim the deduction provided by division (S)(12) of this section	5283
in connection with the pass-through entity's farm income.	5284

Except for farm income attributable to the S portion of an	5285
electing small business trust, the deduction provided by division	5286
(S)(12) of this section is allowed only to the extent that the	5287
trust has not distributed such farm income. Division (S)(12) of	5288
this section applies only to taxable years of a trust beginning in	5289
2002 or thereafter.	5290

(13) Add the net amount of income described in section 641(c)	5291
of the Internal Revenue Code to the extent that amount is not	5292
included in federal taxable income.	5293

(14) Add or deduct the amount the taxpayer would be required	5294
to add or deduct under division (A)(20) or (21) of this section if	5295
the taxpayer's Ohio taxable income were computed in the same	5296
manner as an individual's Ohio adjusted gross income is computed	5297
under this section. In the case of a trust, division (S)(14) of	5298
this section applies only to any of the trust's taxable years	5299
beginning in 2002 or thereafter.	5300

(T) "School district income" and "school district income tax"	5301
have the same meanings as in section 5748.01 of the Revised Code.	5302

(U) As used in divisions (A)(8), (A)(9), (S)(6), and (S)(7)	5303
of this section, "public obligations," "purchase obligations," and	5304
"interest or interest equivalent" have the same meanings as in	5305
section 5709.76 of the Revised Code.	5306

(V) "Limited liability company" means any limited liability	5307
company formed under Chapter 1705. of the Revised Code or under	5308
the laws of any other state.	5309

(W) "Pass-through entity investor" means any person who,	5310
during any portion of a taxable year of a pass-through entity, is	5311
a partner, member, shareholder, or equity investor in that	5312
pass-through entity.	5313

(X) "Banking day" has the same meaning as in section 1304.01	5314
of the Revised Code.	5315

(Y) "Month" means a calendar month.

5316

(Z) "Quarter" means the first three months, the second three	5317
months, the third three months, or the last three months of the	5318
taxpayer's taxable year.	5319

(AA)(1) "Eligible institution" means a state university or	5320
state institution of higher education as defined in section	5321
3345.011 of the Revised Code, or a private, nonprofit college,	5322
university, or other post-secondary institution located in this	5323
state that possesses a certificate of authorization issued by the	5324
Ohio board of regents pursuant to Chapter 1713. of the Revised	5325
Code or a certificate of registration issued by the state board of	5326
career colleges and schools under Chapter 3332. of the Revised	5327
Code.	5328

(2) "Qualified tuition and fees" means tuition and fees	5329
imposed by an eligible institution as a condition of enrollment or	5330
attendance, not exceeding two thousand five hundred dollars in	5331
each of the individual's first two years of post-secondary	5332
education. If the individual is a part-time student, "qualified	5333
tuition and fees" includes tuition and fees paid for the academic	5334
equivalent of the first two years of post-secondary education	5335
during a maximum of five taxable years, not exceeding a total of	5336
five thousand dollars. "Qualified tuition and fees" does not	5337
include:	5338

(a) Expenses for any course or activity involving sports,	5339
games, or hobbies unless the course or activity is part of the	5340
individual's degree or diploma program;	5341

(b) The cost of books, room and board, student activity fees,	5342
athletic fees, insurance expenses, or other expenses unrelated to	5343
the individual's academic course of instruction;	5344

(c) Tuition, fees, or other expenses paid or reimbursed	5345
through an employer, scholarship, grant in aid, or other	5346
educational benefit program.	5347

(BB)(1) "Modified business income" means the business income	5348
included in a trust's Ohio taxable income after such taxable	5349
income is first reduced by the qualifying trust amount, if any.	5350

(2) "Qualifying trust amount" of a trust means capital gains	5351
and losses from the sale, exchange, or other disposition of equity	5352
or ownership interests in, or debt obligations of, a qualifying	5353
investee to the extent included in the trust's Ohio taxable	5354
income, but only if the following requirements are satisfied:	5355

(a) The book value of the qualifying investee's physical	5356
assets in this state and everywhere, as of the last day of the	5357
qualifying investee's fiscal or calendar year ending immediately	5358
prior to the date on which the trust recognizes the gain or loss,	5359
is available to the trust.	5360

(b) The requirements of section 5747.011 of the Revised Code	5361
are satisfied for the trust's taxable year in which the trust	5362
recognizes the gain or loss.	5363

Any gain or loss that is not a qualifying trust amount is	5364
modified business income, qualifying investment income, or	5365
modified nonbusiness income, as the case may be.	5366

(3) "Modified nonbusiness income" means a trust's Ohio	5367
taxable income other than modified business income, other than the	5368
qualifying trust amount, and other than qualifying investment	5369
income, as defined in section 5747.012 of the Revised Code, to the	5370
extent such qualifying investment income is not otherwise part of	5371
modified business income.	5372

(4) "Modified Ohio taxable income" applies only to trusts,	5373
and means the sum of the amounts described in divisions (BB)(4)(a)	5374
to (c) of this section:	5375

(a) The fraction, calculated under section 5747.013, and	5376
applying section 5747.231 of the Revised Code, multiplied by the	5377
sum of the following amounts:	5378

(i) The trust's modified business income;

5379

(ii) The trust's qualifying investment income, as defined in	5380
section 5747.012 of the Revised Code, but only to the extent the	5381
qualifying investment income does not otherwise constitute	5382
modified business income and does not otherwise constitute a	5383
qualifying trust amount.	5384

(b) The qualifying trust amount multiplied by a fraction, the	5385
numerator of which is the sum of the book value of the qualifying	5386
investee's physical assets in this state on the last day of the	5387
qualifying investee's fiscal or calendar year ending immediately	5388
prior to the day on which the trust recognizes the qualifying	5389
trust amount, and the denominator of which is the sum of the book	5390
value of the qualifying investee's total physical assets	5391
everywhere on the last day of the qualifying investee's fiscal or	5392
calendar year ending immediately prior to the day on which the	5393
trust recognizes the qualifying trust amount. If, for a taxable	5394
year, the trust recognizes a qualifying trust amount with respect	5395
to more than one qualifying investee, the amount described in	5396
division (BB)(4)(b) of this section shall equal the sum of the	5397
products so computed for each such qualifying investee.	5398

(c)(i) With respect to a trust or portion of a trust that is	5399
a resident as ascertained in accordance with division (I)(3)(d) of	5400
this section, its modified nonbusiness income.	5401

(ii) With respect to a trust or portion of a trust that is	5402
not a resident as ascertained in accordance with division	5403
(I)(3)(d) of this section, the amount of its modified nonbusiness	5404
income satisfying the descriptions in divisions (B)(2) to (5) of	5405
section 5747.20 of the Revised Code, except as otherwise provided	5406
in division (BB)(4)(c)(ii) of this section. With respect to a	5407
trust or portion of a trust that is not a resident as ascertained	5408
in accordance with division (I)(3)(d) of this section, the trust's	5409
portion of modified nonbusiness income recognized from the sale,	5410
exchange, or other disposition of a debt interest in or equity	5411
interest in a section 5747.212 entity, as defined in section	5412
5747.212 of the Revised Code, without regard to division (A) of	5413
that section, shall not be allocated to this state in accordance	5414
with section 5747.20 of the Revised Code but shall be apportioned	5415
to this state in accordance with division (B) of section 5747.212	5416
of the Revised Code without regard to division (A) of that	5417
section.	5418

If the allocation and apportionment of a trust's income under	5419
divisions (BB)(4)(a) and (c) of this section do not fairly	5420
represent the modified Ohio taxable income of the trust in this	5421
state, the alternative methods described in division (C) of	5422
section 5747.21 of the Revised Code may be applied in the manner	5423
and to the same extent provided in that section.	5424

(5)(a) Except as set forth in division (BB)(5)(b) of this	5425
section, "qualifying investee" means a person in which a trust has	5426
an equity or ownership interest, or a person or unit of government	5427
the debt obligations of either of which are owned by a trust. For	5428
the purposes of division (BB)(2)(a) of this section and for the	5429
purpose of computing the fraction described in division (BB)(4)(b)	5430
of this section, all of the following apply:	5431

(i) If the qualifying investee is a member of a qualifying	5432
controlled group on the last day of the qualifying investee's	5433
fiscal or calendar year ending immediately prior to the date on	5434
which the trust recognizes the gain or loss, then "qualifying	5435
investee" includes all persons in the qualifying controlled group	5436
on such last day.	5437

(ii) If the qualifying investee, or if the qualifying	5438
investee and any members of the qualifying controlled group of	5439
which the qualifying investee is a member on the last day of the	5440
qualifying investee's fiscal or calendar year ending immediately	5441
prior to the date on which the trust recognizes the gain or loss,	5442
separately or cumulatively own, directly or indirectly, on the	5443
last day of the qualifying investee's fiscal or calendar year	5444
ending immediately prior to the date on which the trust recognizes	5445
the qualifying trust amount, more than fifty per cent of the	5446
equity of a pass-through entity, then the qualifying investee and	5447
the other members are deemed to own the proportionate share of the	5448
pass-through entity's physical assets which the pass-through	5449
entity directly or indirectly owns on the last day of the	5450
pass-through entity's calendar or fiscal year ending within or	5451
with the last day of the qualifying investee's fiscal or calendar	5452
year ending immediately prior to the date on which the trust	5453
recognizes the qualifying trust amount.	5454

(iii) For the purposes of division (BB)(5)(a)(iii) of this	5455
section, "upper level pass-through entity" means a pass-through	5456
entity directly or indirectly owning any equity of another	5457
pass-through entity, and "lower level pass-through entity" means	5458
that other pass-through entity.	5459

An upper level pass-through entity, whether or not it is also	5460
a qualifying investee, is deemed to own, on the last day of the	5461
upper level pass-through entity's calendar or fiscal year, the	5462
proportionate share of the lower level pass-through entity's	5463
physical assets that the lower level pass-through entity directly	5464
or indirectly owns on the last day of the lower level pass-through	5465
entity's calendar or fiscal year ending within or with the last	5466
day of the upper level pass-through entity's fiscal or calendar	5467
year. If the upper level pass-through entity directly and	5468
indirectly owns less than fifty per cent of the equity of the	5469
lower level pass-through entity on each day of the upper level	5470
pass-through entity's calendar or fiscal year in which or with	5471
which ends the calendar or fiscal year of the lower level	5472
pass-through entity and if, based upon clear and convincing	5473
evidence, complete information about the location and cost of the	5474
physical assets of the lower pass-through entity is not available	5475
to the upper level pass-through entity, then solely for purposes	5476
of ascertaining if a gain or loss constitutes a qualifying trust	5477
amount, the upper level pass-through entity shall be deemed as	5478
owning no equity of the lower level pass-through entity for each	5479
day during the upper level pass-through entity's calendar or	5480
fiscal year in which or with which ends the lower level	5481
pass-through entity's calendar or fiscal year. Nothing in division	5482
(BB)(5)(a)(iii) of this section shall be construed to provide for	5483
any deduction or exclusion in computing any trust's Ohio taxable	5484
income.	5485

(b) With respect to a trust that is not a resident for the	5486
taxable year and with respect to a part of a trust that is not a	5487
resident for the taxable year, "qualifying investee" for that	5488
taxable year does not include a C corporation if both of the	5489
following apply:	5490

(i) During the taxable year the trust or part of the trust	5491
recognizes a gain or loss from the sale, exchange, or other	5492
disposition of equity or ownership interests in, or debt	5493
obligations of, the C corporation.	5494

(ii) Such gain or loss constitutes nonbusiness income.

5495

(6) "Available" means information is such that a person is	5496
able to learn of the information by the due date plus extensions,	5497
if any, for filing the return for the taxable year in which the	5498
trust recognizes the gain or loss.	5499

(CC) "Qualifying controlled group" has the same meaning as in	5500
section 5733.04 of the Revised Code.	5501

(DD) "Related member" has the same meaning as in section	5502
5733.042 of the Revised Code.	5503

(EE)(1) For the purposes of division (EE) of this section:

5504

(a) "Qualifying person" means any person other than a	5505
qualifying corporation.	5506

(b) "Qualifying corporation" means any person classified for	5507
federal income tax purposes as an association taxable as a	5508
corporation, except either of the following:	5509

(i) A corporation that has made an election under subchapter	5510
S, chapter one, subtitle A, of the Internal Revenue Code for its	5511
taxable year ending within, or on the last day of, the investor's	5512
taxable year;	5513

(ii) A subsidiary that is wholly owned by any corporation	5514
that has made an election under subchapter S, chapter one,	5515
subtitle A of the Internal Revenue Code for its taxable year	5516
ending within, or on the last day of, the investor's taxable year.	5517

(2) For the purposes of this chapter, unless expressly stated	5518
otherwise, no qualifying person indirectly owns any asset directly	5519
or indirectly owned by any qualifying corporation.	5520

(FF) For purposes of this chapter and Chapter 5751. of the	5521
Revised Code:	5522

(1) "Trust" does not include a qualified pre-income tax	5523
trust.	5524

(2) A "qualified pre-income tax trust" is any pre-income tax	5525
trust that makes a qualifying pre-income tax trust election as	5526
described in division (FF)(3) of this section.	5527

(3) A "qualifying pre-income tax trust election" is an	5528
election by a pre-income tax trust to subject to the tax imposed	5529
by section 5751.02 of the Revised Code the pre-income tax trust	5530
and all pass-through entities of which the trust owns or controls,	5531
directly, indirectly, or constructively through related interests,	5532
five per cent or more of the ownership or equity interests. The	5533
trustee shall notify the tax commissioner in writing of the	5534
election on or before April 15, 2006. The election, if timely	5535
made, shall be effective on and after January 1, 2006, and shall	5536
apply for all tax periods and tax years until revoked by the	5537
trustee of the trust.	5538

(4) A "pre-income tax trust" is a trust that satisfies all of	5539
the following requirements:	5540

(a) The document or instrument creating the trust was	5541
executed by the grantor before January 1, 1972;	5542

(b) The trust became irrevocable upon the creation of the	5543
trust; and	5544

(c) The grantor was domiciled in this state at the time the	5545
trust was created.	5546

Sec. 5747.65.  There is hereby allowed a refundable credit	5547
against the tax imposed under section 5747.02 of the Revised Code.	5548
The amount of the credit shall equal the taxpayer's proportionate	5549
share of the lesser of either the tax due or the tax paid for the	5550
tax imposed by section 5726.02 of the Revised Code by a	5551
pass-through entity for the pass-through entity's taxable year	5552
ending in the taxpayer's taxable year.	5553

The taxpayer shall claim the credit for the taxpayer's	5554
taxable year that includes the last day of the pass-through	5555
entity's taxable year. For purposes of making tax payments under	5556
this chapter, taxes equal to the amount of the credit shall be	5557
considered to be paid by the taxpayer on the day the pass-through	5558
entity pays to the treasurer of state the amount due for the tax	5559
imposed by section 5726.02 of the Revised Code.	5560

In claiming the credit and determining the taxpayer's	5561
proportionate share of the tax due and the tax paid by a	5562
pass-through entity, the taxpayer shall follow the concepts set	5563
forth in subchapters J and K of the Internal Revenue Code.	5564

The credit shall be claimed in the order required under	5565
section 5747.98 of the Revised Code. If the amount of the credit	5566
exceeds the amount of tax otherwise due under section 5747.02 of	5567
the Revised Code after deduction of all other credits in that	5568
order, the taxpayer is entitled to a refund of the excess.	5569

Sec. 5747.98.  (A) To provide a uniform procedure for	5570
calculating the amount of tax due under section 5747.02 of the	5571
Revised Code, a taxpayer shall claim any credits to which the	5572
taxpayer is entitled in the following order:	5573

(1) The retirement income credit under division (B) of	5574
section 5747.055 of the Revised Code;	5575

(2) The senior citizen credit under division (C) of section	5576
5747.05 of the Revised Code;	5577

(3) The lump sum distribution credit under division (D) of	5578
section 5747.05 of the Revised Code;	5579

(4) The dependent care credit under section 5747.054 of the	5580
Revised Code;	5581

(5) The lump sum retirement income credit under division (C)	5582
of section 5747.055 of the Revised Code;	5583

(6) The lump sum retirement income credit under division (D)	5584
of section 5747.055 of the Revised Code;	5585

(7) The lump sum retirement income credit under division (E)	5586
of section 5747.055 of the Revised Code;	5587

(8) The low-income credit under section 5747.056 of the	5588
Revised Code;	5589

(9) The credit for displaced workers who pay for job training	5590
under section 5747.27 of the Revised Code;	5591

(10) The campaign contribution credit under section 5747.29	5592
of the Revised Code;	5593

(11) The twenty-dollar personal exemption credit under	5594
section 5747.022 of the Revised Code;	5595

(12) The joint filing credit under division (G) of section	5596
5747.05 of the Revised Code;	5597

(13) The nonresident credit under division (A) of section	5598
5747.05 of the Revised Code;	5599

(14) The credit for a resident's out-of-state income under	5600
division (B) of section 5747.05 of the Revised Code;	5601

(15) The credit for employers that enter into agreements with	5602
child day-care centers under section 5747.34 of the Revised Code;	5603

(16) The credit for employers that reimburse employee child	5604
care expenses under section 5747.36 of the Revised Code;	5605

(17) The credit for adoption of a minor child under section	5606
5747.37 of the Revised Code;	5607

(18) The credit for purchases of lights and reflectors under	5608
section 5747.38 of the Revised Code;	5609

(19) The nonrefundable job retention credit under division	5610
(B) of section 5747.058 of the Revised Code;	5611

(20) The credit for selling alternative fuel under section	5612
5747.77 of the Revised Code;	5613

(21) The second credit for purchases of new manufacturing	5614
machinery and equipment and the credit for using Ohio coal under	5615
section 5747.31 of the Revised Code;	5616

(22) The job training credit under section 5747.39 of the	5617
Revised Code;	5618

(23) The enterprise zone credit under section 5709.66 of the	5619
Revised Code;	5620

(24) The credit for the eligible costs associated with a	5621
voluntary action under section 5747.32 of the Revised Code;	5622

(25) The credit for employers that establish on-site child	5623
day-care centers under section 5747.35 of the Revised Code;	5624

(26) The ethanol plant investment credit under section	5625
5747.75 of the Revised Code;	5626

(27) The credit for purchases of qualifying grape production	5627
property under section 5747.28 of the Revised Code;	5628

(28) The small business investment credit under section	5629
5747.81 of the Revised Code;	5630

(29) The credit for research and development and technology	5631
transfer investors under section 5747.33 of the Revised Code;	5632

(30) The enterprise zone credits under section 5709.65 of the	5633
Revised Code;	5634

(31) The research and development credit under section	5635
5747.331 of the Revised Code;	5636

(32) The credit for rehabilitating a historic building under	5637
section 5747.76 of the Revised Code;	5638

(33) The refundable credit for rehabilitating a historic	5639
building under section 5747.76 of the Revised Code;	5640

(34) The refundable jobs creation credit or job retention	5641
credit under division (A) of section 5747.058 of the Revised Code;	5642

(35) The refundable credit for taxes paid by a qualifying	5643
entity granted under section 5747.059 of the Revised Code;	5644

(36) The refundable credits for taxes paid by a qualifying	5645
pass-through entity granted under division (J) of section 5747.08	5646
of the Revised Code;	5647

(37) The refundable credit for tax withheld under division	5648
(B)(1) of section 5747.062 of the Revised Code;	5649

(38) The refundable credit for tax withheld under section	5650
5747.063 of the Revised Code;	5651

(39) The refundable credit under section 5747.80 of the	5652
Revised Code for losses on loans made to the Ohio venture capital	5653
program under sections 150.01 to 150.10 of the Revised Code;	5654

(40) The refundable motion picture production credit under	5655
section 5747.66 of the Revised Code;	5656

(41) The refundable credit for financial institution taxes	5657
paid by a pass-through entity granted under section 5747.65 of the	5658
Revised Code.	5659

(B) For any credit, except the refundable credits enumerated	5660
in this section and the credit granted under division (I) of	5661
section 5747.08 of the Revised Code, the amount of the credit for	5662
a taxable year shall not exceed the tax due after allowing for any	5663
other credit that precedes it in the order required under this	5664
section. Any excess amount of a particular credit may be carried	5665
forward if authorized under the section creating that credit.	5666
Nothing in this chapter shall be construed to allow a taxpayer to	5667
claim, directly or indirectly, a credit more than once for a	5668
taxable year.	5669

Sec. 5751.01.  As used in this chapter:

5670

(A) "Person" means, but is not limited to, individuals,	5671
combinations of individuals of any form, receivers, assignees,	5672
trustees in bankruptcy, firms, companies, joint-stock companies,	5673
business trusts, estates, partnerships, limited liability	5674
partnerships, limited liability companies, associations, joint	5675
ventures, clubs, societies, for-profit corporations, S	5676
corporations, qualified subchapter S subsidiaries, qualified	5677
subchapter S trusts, trusts, entities that are disregarded for	5678
federal income tax purposes, and any other entities.	5679

(B) "Consolidated elected taxpayer" means a group of two or	5680
more persons treated as a single taxpayer for purposes of this	5681
chapter as the result of an election made under section 5751.011	5682
of the Revised Code.	5683

(C) "Combined taxpayer" means a group of two or more persons	5684
treated as a single taxpayer for purposes of this chapter under	5685
section 5751.012 of the Revised Code.	5686

(D) "Taxpayer" means any person, or any group of persons in	5687
the case of a consolidated elected taxpayer or combined taxpayer	5688
treated as one taxpayer, required to register or pay tax under	5689
this chapter. "Taxpayer" does not include excluded persons.	5690

(E) "Excluded person" means any of the following:

5691

(1) Any person with not more than one hundred fifty thousand	5692
dollars of taxable gross receipts during the calendar year.	5693
Division (E)(1) of this section does not apply to a person that is	5694
a member of a consolidated elected taxpayer;	5695

(2) A public utility that paid the excise tax imposed by	5696
section 5727.24 or 5727.30 of the Revised Code based on one or	5697
more measurement periods that include the entire tax period under	5698
this chapter, except that a public utility that is a combined	5699
company is a taxpayer with regard to the following gross receipts:	5700

(a) Taxable gross receipts directly attributed to a public	5701
utility activity, but not directly attributed to an activity that	5702
is subject to the excise tax imposed by section 5727.24 or 5727.30	5703
of the Revised Code;	5704

(b) Taxable gross receipts that cannot be directly attributed	5705
to any activity, multiplied by a fraction whose numerator is the	5706
taxable gross receipts described in division (E)(2)(a) of this	5707
section and whose denominator is the total taxable gross receipts	5708
that can be directly attributed to any activity;	5709

(c) Except for any differences resulting from the use of an	5710
accrual basis method of accounting for purposes of determining	5711
gross receipts under this chapter and the use of the cash basis	5712
method of accounting for purposes of determining gross receipts	5713
under section 5727.24 of the Revised Code, the gross receipts	5714
directly attributed to the activity of a natural gas company shall	5715
be determined in a manner consistent with division (D) of section	5716
5727.03 of the Revised Code.	5717

As used in division (E)(2) of this section, "combined	5718
company" and "public utility" have the same meanings as in section	5719
5727.01 of the Revised Code.	5720

(3) A financial institution, as defined in section 5725.01	5721
5726.01 of the Revised Code, that paid the corporation franchise	5722
tax charged by division (D) ofimposed by section 5733.065726.02	5723
of the Revised Code based on one or more taxable years that	5724
include the entire tax period under this chapter;	5725

(4) A dealer in intangibles, as defined in section 5725.01 of	5726
the Revised Code, that paid the dealer in intangibles tax levied	5727
by division (D) of section 5707.03 of the Revised Code based on	5728
one or more measurement periods that include the entire tax period	5729
under this chapter;	5730

(5) A financial holding company as defined in the "Bank	5731
Holding Company Act," 12 U.S.C. 1841(p);	5732

(6) A bank holding company as defined in the "Bank Holding	5733
Company Act," 12 U.S.C. 1841(a);	5734

(7) A savings and loan holding company as defined in the	5735
"Home Owners Loan Act," 12 U.S.C. 1467a(a)(1)(D) that is engaging	5736
only in activities or investments permissible for a financial	5737
holding company under 12 U.S.C. 1843(k);	5738

(8) A person directly or indirectly owned by one or more	5739
financial institutions, financial holding companies, bank holding	5740
companies, or savings and loan holding companies described in	5741
division (E)(3), (5), (6), or (7) of this section that is engaged	5742
in activities permissible for a financial holding company under 12	5743
U.S.C. 1843(k), except that any such person held pursuant to	5744
merchant banking authority under 12 U.S.C. 1843(k)(4)(H) or 12	5745
U.S.C. 1843(k)(4)(I) is not an excluded person, or a person	5746
directly or indirectly owned by one or more insurance companies	5747
described in division (E)(9) of this section that is authorized to	5748
do the business of insurance in this state.A person directly or	5749
indirectly owned by one or more financial institutions, as defined	5750
in section 5726.01 of the Revised Code, that paid the tax imposed	5751
by section 5726.02 of the Revised Code based on one or more	5752
taxable years that include the entire tax period under this	5753
chapter.	5754

For the purposes of division (E)(8)(4) of this section, a	5755
person owns another person under the following circumstances:	5756

(a) In the case of corporations issuing capital stock, one	5757
corporation owns another corporation if it owns fifty per cent or	5758
more of the other corporation's capital stock with current voting	5759
rights;	5760

(b) In the case of a limited liability company, one person	5761
owns the company if that person's membership interest, as defined	5762
in section 1705.01 of the Revised Code, is fifty per cent or more	5763
of the combined membership interests of all persons owning such	5764
interests in the company;	5765

(c) In the case of a partnership, trust, or other	5766
unincorporated business organization other than a limited	5767
liability company, one person owns the organization if, under the	5768
articles of organization or other instrument governing the affairs	5769
of the organization, that person has a beneficial interest in the	5770
organization's profits, surpluses, losses, or distributions of	5771
fifty per cent or more of the combined beneficial interests of all	5772
persons having such an interest in the organization;	5773

(d) In the case of multiple ownership, the ownership	5774
interests of more than one person may be aggregated to meet the	5775
fifty per cent ownership tests in this division only when each	5776
such owner is described in division (E)(3), (5), (6), or (7) of	5777
this section and is engaged in activities permissible for a	5778
financial holding company under 12 U.S.C. 1843(k) or is a person	5779
directly or indirectly owned by one or more insurance companies	5780
described in division (E)(9) of this section that is authorized to	5781
do the business of insurance in this state.	5782

(9)(5) A domestic insurance company or foreign insurance	5783
company, as defined in section 5725.01 of the Revised Code, that	5784
paid the insurance company premiums tax imposed by section 5725.18	5785
or Chapter 5729. of the Revised Code, or an unauthorized insurance	5786
company whose gross premiums are subject to tax under section	5787
3905.36 of the Revised Code based on one or more measurement	5788
periods that include the entire tax period under this chapter;	5789

(10)(6) A person that solely facilitates or services one or	5790
more securitizations or similar transactions for any person	5791
described in division (E)(3), (5), (6), (7), (8), or (9) of this	5792
section, or a person that solely facilitates or services one or	5793
more securitizations of phase-in-recovery property pursuant to a	5794
final financing order as those terms are defined in section	5795
4928.23 of the Revised Code. For purposes of this division,	5796
"securitization" means transferring one or more assets to one or	5797
more persons and then issuing securities backed by the right to	5798
receive payment from the asset or assets so transferred.	5799

(11)(7) Except as otherwise provided in this division, a	5800
pre-income tax trust as defined in division (FF)(4) of section	5801
5747.01 of the Revised Code and any pass-through entity of which	5802
such pre-income tax trust owns or controls, directly, indirectly,	5803
or constructively through related interests, more than five per	5804
cent of the ownership or equity interests. If the pre-income tax	5805
trust has made a qualifying pre-income tax trust election under	5806
division (FF)(3) of section 5747.01 of the Revised Code, then the	5807
trust and the pass-through entities of which it owns or controls,	5808
directly, indirectly, or constructively through related interests,	5809
more than five per cent of the ownership or equity interests,	5810
shall not be excluded persons for purposes of the tax imposed	5811
under section 5751.02 of the Revised Code.	5812

(12)(8) Nonprofit organizations or the state and its	5813
agencies, instrumentalities, or political subdivisions.	5814

(F) Except as otherwise provided in divisions (F)(2), (3),	5815
and (4) of this section, "gross receipts" means the total amount	5816
realized by a person, without deduction for the cost of goods sold	5817
or other expenses incurred, that contributes to the production of	5818
gross income of the person, including the fair market value of any	5819
property and any services received, and any debt transferred or	5820
forgiven as consideration.	5821

(1) The following are examples of gross receipts:

5822

(a) Amounts realized from the sale, exchange, or other	5823
disposition of the taxpayer's property to or with another;	5824

(b) Amounts realized from the taxpayer's performance of	5825
services for another;	5826

(c) Amounts realized from another's use or possession of the	5827
taxpayer's property or capital;	5828

(d) Any combination of the foregoing amounts.

5829

(2) "Gross receipts" excludes the following amounts:

5830

(a) Interest income except interest on credit sales;

5831

(b) Dividends and distributions from corporations, and	5832
distributive or proportionate shares of receipts and income from a	5833
pass-through entity as defined under section 5733.04 of the	5834
Revised Code;	5835

(c) Receipts from the sale, exchange, or other disposition of	5836
an asset described in section 1221 or 1231 of the Internal Revenue	5837
Code, without regard to the length of time the person held the	5838
asset. Notwithstanding section 1221 of the Internal Revenue Code,	5839
receipts from hedging transactions also are excluded to the extent	5840
the transactions are entered into primarily to protect a financial	5841
position, such as managing the risk of exposure to (i) foreign	5842
currency fluctuations that affect assets, liabilities, profits,	5843
losses, equity, or investments in foreign operations; (ii)	5844
interest rate fluctuations; or (iii) commodity price fluctuations.	5845
As used in division (F)(2)(c) of this section, "hedging	5846
transaction" has the same meaning as used in section 1221 of the	5847
Internal Revenue Code and also includes transactions accorded	5848
hedge accounting treatment under statement of financial accounting	5849
standards number 133 of the financial accounting standards board.	5850
For the purposes of division (F)(2)(c) of this section, the actual	5851
transfer of title of real or tangible personal property to another	5852
entity is not a hedging transaction.	5853

(d) Proceeds received attributable to the repayment,	5854
maturity, or redemption of the principal of a loan, bond, mutual	5855
fund, certificate of deposit, or marketable instrument;	5856

(e) The principal amount received under a repurchase	5857
agreement or on account of any transaction properly characterized	5858
as a loan to the person;	5859

(f) Contributions received by a trust, plan, or other	5860
arrangement, any of which is described in section 501(a) of the	5861
Internal Revenue Code, or to which Title 26, Subtitle A, Chapter	5862
1, Subchapter (D) of the Internal Revenue Code applies;	5863

(g) Compensation, whether current or deferred, and whether in	5864
cash or in kind, received or to be received by an employee, former	5865
employee, or the employee's legal successor for services rendered	5866
to or for an employer, including reimbursements received by or for	5867
an individual for medical or education expenses, health insurance	5868
premiums, or employee expenses, or on account of a dependent care	5869
spending account, legal services plan, any cafeteria plan	5870
described in section 125 of the Internal Revenue Code, or any	5871
similar employee reimbursement;	5872

(h) Proceeds received from the issuance of the taxpayer's own	5873
stock, options, warrants, puts, or calls, or from the sale of the	5874
taxpayer's treasury stock;	5875

(i) Proceeds received on the account of payments from	5876
insurance policies, except those proceeds received for the loss of	5877
business revenue;	5878

(j) Gifts or charitable contributions received; membership	5879
dues received by trade, professional, homeowners', or condominium	5880
associations; and payments received for educational courses,	5881
meetings, meals, or similar payments to a trade, professional, or	5882
other similar association; and fundraising receipts received by	5883
any person when any excess receipts are donated or used	5884
exclusively for charitable purposes;	5885

(k) Damages received as the result of litigation in excess of	5886
amounts that, if received without litigation, would be gross	5887
receipts;	5888

(l) Property, money, and other amounts received or acquired	5889
by an agent on behalf of another in excess of the agent's	5890
commission, fee, or other remuneration;	5891

(m) Tax refunds, other tax benefit recoveries, and	5892
reimbursements for the tax imposed under this chapter made by	5893
entities that are part of the same combined taxpayer or	5894
consolidated elected taxpayer group, and reimbursements made by	5895
entities that are not members of a combined taxpayer or	5896
consolidated elected taxpayer group that are required to be made	5897
for economic parity among multiple owners of an entity whose tax	5898
obligation under this chapter is required to be reported and paid	5899
entirely by one owner, pursuant to the requirements of sections	5900
5751.011 and 5751.012 of the Revised Code;	5901

(n) Pension reversions;

5902

(o) Contributions to capital;

5903

(p) Sales or use taxes collected as a vendor or an	5904
out-of-state seller on behalf of the taxing jurisdiction from a	5905
consumer or other taxes the taxpayer is required by law to collect	5906
directly from a purchaser and remit to a local, state, or federal	5907
tax authority;	5908

(q) In the case of receipts from the sale of cigarettes or	5909
tobacco products by a wholesale dealer, retail dealer,	5910
distributor, manufacturer, or seller, all as defined in section	5911
5743.01 of the Revised Code, an amount equal to the federal and	5912
state excise taxes paid by any person on or for such cigarettes or	5913
tobacco products under subtitle E of the Internal Revenue Code or	5914
Chapter 5743. of the Revised Code;	5915

(r) In the case of receipts from the sale of motor fuel by a	5916
licensed motor fuel dealer, licensed retail dealer, or licensed	5917
permissive motor fuel dealer, all as defined in section 5735.01 of	5918
the Revised Code, an amount equal to federal and state excise	5919
taxes paid by any person on such motor fuel under section 4081 of	5920
the Internal Revenue Code or Chapter 5735. of the Revised Code;	5921

(s) In the case of receipts from the sale of beer or	5922
intoxicating liquor, as defined in section 4301.01 of the Revised	5923
Code, by a person holding a permit issued under Chapter 4301. or	5924
4303. of the Revised Code, an amount equal to federal and state	5925
excise taxes paid by any person on or for such beer or	5926
intoxicating liquor under subtitle E of the Internal Revenue Code	5927
or Chapter 4301. or 4305. of the Revised Code;	5928

(t) Receipts realized by a new motor vehicle dealer or used	5929
motor vehicle dealer, as defined in section 4517.01 of the Revised	5930
Code, from the sale or other transfer of a motor vehicle, as	5931
defined in that section, to another motor vehicle dealer for the	5932
purpose of resale by the transferee motor vehicle dealer, but only	5933
if the sale or other transfer was based upon the transferee's need	5934
to meet a specific customer's preference for a motor vehicle;	5935

(u) Receipts from a financial institution described in	5936
division (E)(3) of this section for services provided to the	5937
financial institution in connection with the issuance, processing,	5938
servicing, and management of loans or credit accounts, if such	5939
financial institution and the recipient of such receipts have at	5940
least fifty per cent of their ownership interests owned or	5941
controlled, directly or constructively through related interests,	5942
by common owners;	5943

(v) Receipts realized from administering anti-neoplastic	5944
drugs and other cancer chemotherapy, biologicals, therapeutic	5945
agents, and supportive drugs in a physician's office to patients	5946
with cancer;	5947

(w) Funds received or used by a mortgage broker that is not a	5948
dealer in intangibles, other than fees or other consideration,	5949
pursuant to a table-funding mortgage loan or warehouse-lending	5950
mortgage loan. Terms used in division (F)(2)(w) of this section	5951
have the same meanings as in section 1322.01 of the Revised Code,	5952
except "mortgage broker" means a person assisting a buyer in	5953
obtaining a mortgage loan for a fee or other consideration paid by	5954
the buyer or a lender, or a person engaged in table-funding or	5955
warehouse-lending mortgage loans that are first lien mortgage	5956
loans.	5957

(x) Property, money, and other amounts received by a	5958
professional employer organization, as defined in section 4125.01	5959
of the Revised Code, from a client employer, as defined in that	5960
section, in excess of the administrative fee charged by the	5961
professional employer organization to the client employer;	5962

(y) In the case of amounts retained as commissions by a	5963
permit holder under Chapter 3769. of the Revised Code, an amount	5964
equal to the amounts specified under that chapter that must be	5965
paid to or collected by the tax commissioner as a tax and the	5966
amounts specified under that chapter to be used as purse money;	5967

(z) Qualifying distribution center receipts.

5968

(i) For purposes of division (F)(2)(z) of this section:

5969

(I) "Qualifying distribution center receipts" means receipts	5970
of a supplier from qualified property that is delivered to a	5971
qualified distribution center, multiplied by a quantity that	5972
equals one minus the Ohio delivery percentage.	5973

(II) "Qualified property" means tangible personal property	5974
delivered to a qualified distribution center that is shipped to	5975
that qualified distribution center solely for further shipping by	5976
the qualified distribution center to another location in this	5977
state or elsewhere. "Further shipping" includes storing and	5978
repackaging such property into smaller or larger bundles, so long	5979
as such property is not subject to further manufacturing or	5980
processing.	5981

(III) "Qualified distribution center" means a warehouse or	5982
other similar facility in this state that, for the qualifying	5983
year, is operated by a person that is not part of a combined	5984
taxpayer group and that has a qualifying certificate. However, all	5985
warehouses or other similar facilities that are operated by	5986
persons in the same taxpayer group and that are located within one	5987
mile of each other shall be treated as one qualified distribution	5988
center.	5989

(IV) "Qualifying year" means the calendar year to which the	5990
qualifying certificate applies.	5991

(V) "Qualifying period" means the period of the first day of	5992
July of the second year preceding the qualifying year through the	5993
thirtieth day of June of the year preceding the qualifying year.	5994

(VI) "Qualifying certificate" means the certificate issued by	5995
the tax commissioner after the operator of a distribution center	5996
files an annual application with the commissioner. The application	5997
and annual fee shall be filed and paid for each qualified	5998
distribution center on or before the first day of September before	5999
the qualifying year or within forty-five days after the	6000
distribution center opens, whichever is later.	6001

The applicant must substantiate to the commissioner's	6002
satisfaction that, for the qualifying period, all persons	6003
operating the distribution center have more than fifty per cent of	6004
the cost of the qualified property shipped to a location such that	6005
it would be sitused outside this state under the provisions of	6006
division (E) of section 5751.033 of the Revised Code. The	6007
applicant must also substantiate that the distribution center	6008
cumulatively had costs from its suppliers equal to or exceeding	6009
five hundred million dollars during the qualifying period. (For	6010
purposes of division (F)(2)(z)(i)(VI) of this section, "supplier"	6011
excludes any person that is part of the consolidated elected	6012
taxpayer group, if applicable, of the operator of the qualified	6013
distribution center.) The commissioner may require the applicant	6014
to have an independent certified public accountant certify that	6015
the calculation of the minimum thresholds required for a qualified	6016
distribution center by the operator of a distribution center has	6017
been made in accordance with generally accepted accounting	6018
principles. The commissioner shall issue or deny the issuance of a	6019
certificate within sixty days after the receipt of the	6020
application. A denial is subject to appeal under section 5717.02	6021
of the Revised Code. If the operator files a timely appeal under	6022
section 5717.02 of the Revised Code, the operator shall be granted	6023
a qualifying certificate, provided that the operator is liable for	6024
any tax, interest, or penalty upon amounts claimed as qualifying	6025
distribution center receipts, other than those receipts exempt	6026
under division (C)(1) of section 5751.011 of the Revised Code,	6027
that would have otherwise not been owed by its suppliers if the	6028
qualifying certificate was valid.	6029

(VII) "Ohio delivery percentage" means the proportion of the	6030
total property delivered to a destination inside Ohio from the	6031
qualified distribution center during the qualifying period	6032
compared with total deliveries from such distribution center	6033
everywhere during the qualifying period.	6034

(ii) If the distribution center is new and was not open for	6035
the entire qualifying period, the operator of the distribution	6036
center may request that the commissioner grant a qualifying	6037
certificate. If the certificate is granted and it is later	6038
determined that more than fifty per cent of the qualified property	6039
during that year was not shipped to a location such that it would	6040
be sitused outside of this state under the provisions of division	6041
(E) of section 5751.033 of the Revised Code or if it is later	6042
determined that the person that operates the distribution center	6043
had average monthly costs from its suppliers of less than forty	6044
million dollars during that year, then the operator of the	6045
distribution center shall be liable for any tax, interest, or	6046
penalty upon amounts claimed as qualifying distribution center	6047
receipts, other than those receipts exempt under division (C)(1)	6048
of section 5751.011 of the Revised Code, that would have not	6049
otherwise been owed by its suppliers during the qualifying year if	6050
the qualifying certificate was valid. (For purposes of division	6051
(F)(2)(z)(ii) of this section, "supplier" excludes any person that	6052
is part of the consolidated elected taxpayer group, if applicable,	6053
of the operator of the qualified distribution center.)	6054

(iii) When filing an application for a qualifying certificate	6055
under division (F)(2)(z)(i)(VI) of this section, the operator of a	6056
qualified distribution center also shall provide documentation, as	6057
the commissioner requires, for the commissioner to ascertain the	6058
Ohio delivery percentage. The commissioner, upon issuing the	6059
qualifying certificate, also shall certify the Ohio delivery	6060
percentage. The operator of the qualified distribution center may	6061
appeal the commissioner's certification of the Ohio delivery	6062
percentage in the same manner as an appeal is taken from the	6063
denial of a qualifying certificate under division (F)(2)(z)(i)(VI)	6064
of this section.	6065

Within thirty days after all appeals have been exhausted, the	6066
operator of the qualified distribution center shall notify the	6067
affected suppliers of qualified property that such suppliers are	6068
required to file, within sixty days after receiving notice from	6069
the operator of the qualified distribution center, amended reports	6070
for the impacted calendar quarter or quarters or calendar year,	6071
whichever the case may be. Any additional tax liability or tax	6072
overpayment shall be subject to interest but shall not be subject	6073
to the imposition of any penalty so long as the amended returns	6074
are timely filed. The supplier of tangible personal property	6075
delivered to the qualified distribution center shall include in	6076
its report of taxable gross receipts the receipts from the total	6077
sales of property delivered to the qualified distribution center	6078
for the calendar quarter or calendar year, whichever the case may	6079
be, multiplied by the Ohio delivery percentage for the qualifying	6080
year. Nothing in division (F)(2)(z)(iii) of this section shall be	6081
construed as imposing liability on the operator of a qualified	6082
distribution center for the tax imposed by this chapter arising	6083
from any change to the Ohio delivery percentage.	6084

(iv) In the case where the distribution center is new and not	6085
open for the entire qualifying period, the operator shall make a	6086
good faith estimate of an Ohio delivery percentage for use by	6087
suppliers in their reports of taxable gross receipts for the	6088
remainder of the qualifying period. The operator of the facility	6089
shall disclose to the suppliers that such Ohio delivery percentage	6090
is an estimate and is subject to recalculation. By the due date of	6091
the next application for a qualifying certificate, the operator	6092
shall determine the actual Ohio delivery percentage for the	6093
estimated qualifying period and proceed as provided in division	6094
(F)(2)(z)(iii) of this section with respect to the calculation and	6095
recalculation of the Ohio delivery percentage. The supplier is	6096
required to file, within sixty days after receiving notice from	6097
the operator of the qualified distribution center, amended reports	6098
for the impacted calendar quarter or quarters or calendar year,	6099
whichever the case may be. Any additional tax liability or tax	6100
overpayment shall be subject to interest but shall not be subject	6101
to the imposition of any penalty so long as the amended returns	6102
are timely filed.	6103

(v) Qualifying certificates and Ohio delivery percentages	6104
issued by the commissioner shall be open to public inspection and	6105
shall be timely published by the commissioner. A supplier relying	6106
in good faith on a certificate issued under this division shall	6107
not be subject to tax on the qualifying distribution center	6108
receipts under division (F)(2)(z) of this section. A person	6109
receiving a qualifying certificate is responsible for paying the	6110
tax, interest, and penalty upon amounts claimed as qualifying	6111
distribution center receipts that would not otherwise have been	6112
owed by the supplier if the qualifying certificate were available	6113
when it is later determined that the qualifying certificate should	6114
not have been issued because the statutory requirements were in	6115
fact not met.	6116

(vi) The annual fee for a qualifying certificate shall be one	6117
hundred thousand dollars for each qualified distribution center.	6118
If a qualifying certificate is not issued, the annual fee is	6119
subject to refund after the exhaustion of all appeals provided for	6120
in division (F)(2)(z)(i)(VI) of this section. The fee imposed	6121
under this division may be assessed in the same manner as the tax	6122
imposed under this chapter. The first one hundred thousand dollars	6123
of the annual application fees collected each calendar year shall	6124
be credited to the revenue enhancement fund. The remainder of the	6125
annual application fees collected shall be distributed in the same	6126
manner required under section 5751.20 of the Revised Code.	6127

(vii) The tax commissioner may require that adequate security	6128
be posted by the operator of the distribution center on appeal	6129
when the commissioner disagrees that the applicant has met the	6130
minimum thresholds for a qualified distribution center as set	6131
forth in divisions (F)(2)(z)(i)(VI) and (F)(2)(z)(ii) of this	6132
section.	6133

(aa) Receipts of an employer from payroll deductions relating	6134
to the reimbursement of the employer for advancing moneys to an	6135
unrelated third party on an employee's behalf;	6136

(bb) Cash discounts allowed and taken;

6137

(cc) Returns and allowances;

6138

(dd) Bad debts from receipts on the basis of which the tax	6139
imposed by this chapter was paid in a prior quarterly tax payment	6140
period. For the purpose of this division, "bad debts" means any	6141
debts that have become worthless or uncollectible between the	6142
preceding and current quarterly tax payment periods, have been	6143
uncollected for at least six months, and that may be claimed as a	6144
deduction under section 166 of the Internal Revenue Code and the	6145
regulations adopted under that section, or that could be claimed	6146
as such if the taxpayer kept its accounts on the accrual basis.	6147
"Bad debts" does not include repossessed property, uncollectible	6148
amounts on property that remains in the possession of the taxpayer	6149
until the full purchase price is paid, or expenses in attempting	6150
to collect any account receivable or for any portion of the debt	6151
recovered;	6152

(ee) Any amount realized from the sale of an account	6153
receivable to the extent the receipts from the underlying	6154
transaction giving rise to the account receivable were included in	6155
the gross receipts of the taxpayer;	6156

(ff) Any receipts directly attributed to providing public	6157
services pursuant to sections 126.60 to 126.605 of the Revised	6158
Code, or any receipts directly attributed to a transfer agreement	6159
or to the enterprise transferred under that agreement under	6160
section 4313.02 of the Revised Code.	6161

(gg)(i) As used in this division:

6162

(I) "Qualified uranium receipts" means receipts from the	6163
sale, exchange, lease, loan, production, processing, or other	6164
disposition of uranium within a uranium enrichment zone certified	6165
by the tax commissioner under division (F)(2)(gg)(ii) of this	6166
section. "Qualified uranium receipts" does not include any	6167
receipts with a situs in this state outside a uranium enrichment	6168
zone certified by the tax commissioner under division	6169
(F)(2)(gg)(ii) of this section.	6170

(II) "Uranium enrichment zone" means all real property that	6171
is part of a uranium enrichment facility licensed by the United	6172
States nuclear regulatory commission and that was or is owned or	6173
controlled by the United States department of energy or its	6174
successor.	6175

(ii) Any person that owns, leases, or operates real or	6176
tangible personal property constituting or located within a	6177
uranium enrichment zone may apply to the tax commissioner to have	6178
the uranium enrichment zone certified for the purpose of excluding	6179
qualified uranium receipts under division (F)(2)(gg) of this	6180
section. The application shall include such information that the	6181
tax commissioner prescribes. Within sixty days after receiving the	6182
application, the tax commissioner shall certify the zone for that	6183
purpose if the commissioner determines that the property qualifies	6184
as a uranium enrichment zone as defined in division (F)(2)(gg) of	6185
this section, or, if the tax commissioner determines that the	6186
property does not qualify, the commissioner shall deny the	6187
application or request additional information from the applicant.	6188
If the tax commissioner denies an application, the commissioner	6189
shall state the reasons for the denial. The applicant may appeal	6190
the denial of an application to the board of tax appeals pursuant	6191
to section 5717.02 of the Revised Code. If the applicant files a	6192
timely appeal, the tax commissioner shall conditionally certify	6193
the applicant's property. The conditional certification shall	6194
expire when all of the applicant's appeals are exhausted. Until	6195
final resolution of the appeal, the applicant shall retain the	6196
applicant's records in accordance with section 5751.12 of the	6197
Revised Code, notwithstanding any time limit on the preservation	6198
of records under that section.	6199

(hh) Amounts realized by licensed motor fuel dealers or	6200
licensed permissive motor fuel dealers from the exchange of	6201
petroleum products, including motor fuel, between such dealers,	6202
provided that delivery of the petroleum products occurs at a	6203
refinery, terminal, pipeline, or marine vessel and that the	6204
exchanging dealers agree neither dealer shall require monetary	6205
compensation from the other for the value of the exchanged	6206
petroleum products other than such compensation for differences in	6207
product location or grade. Division (F)(2)(hh) of this section	6208
does not apply to amounts realized as a result of differences in	6209
location or grade of exchanged petroleum products or from	6210
handling, lubricity, dye, or other additive injections fees,	6211
pipeline security fees, or similar fees. As used in this division,	6212
"motor fuel," "licensed motor fuel dealer," "licensed permissive	6213
motor fuel dealer," and "terminal" have the same meanings as in	6214
section 5735.01 of the Revised Code.	6215

(ii) In the case of amounts collected by a licensed casino	6216
operator from casino gaming, amounts in excess of the casino	6217
operator's gross casino revenue. In this division, "casino	6218
operator" and "casino gaming" have the meanings defined in section	6219
3772.01 of the Revised Code, and "gross casino revenue" has the	6220
meaning defined in section 5753.01 of the Revised Code.	6221

(jj) Any receipts for which the tax imposed by this chapter	6222
is prohibited by the constitution or laws of the United States or	6223
the constitution of this state.	6224

(3) In the case of a taxpayer when acting as a real estate	6225
broker, "gross receipts" includes only the portion of any fee for	6226
the service of a real estate broker, or service of a real estate	6227
salesperson associated with that broker, that is retained by the	6228
broker and not paid to an associated real estate salesperson or	6229
another real estate broker. For the purposes of this division,	6230
"real estate broker" and "real estate salesperson" have the same	6231
meanings as in section 4735.01 of the Revised Code.	6232

(4) A taxpayer's method of accounting for gross receipts for	6233
a tax period shall be the same as the taxpayer's method of	6234
accounting for federal income tax purposes for the taxpayer's	6235
federal taxable year that includes the tax period. If a taxpayer's	6236
method of accounting for federal income tax purposes changes, its	6237
method of accounting for gross receipts under this chapter shall	6238
be changed accordingly.	6239

(G) "Taxable gross receipts" means gross receipts sitused to	6240
this state under section 5751.033 of the Revised Code.	6241

(H) A person has "substantial nexus with this state" if any	6242
of the following applies. The person:	6243

(1) Owns or uses a part or all of its capital in this state;

6244

(2) Holds a certificate of compliance with the laws of this	6245
state authorizing the person to do business in this state;	6246

(3) Has bright-line presence in this state;

6247

(4) Otherwise has nexus with this state to an extent that the	6248
person can be required to remit the tax imposed under this chapter	6249
under the Constitution of the United States.	6250

(I) A person has "bright-line presence" in this state for a	6251
reporting period and for the remaining portion of the calendar	6252
year if any of the following applies. The person:	6253

(1) Has at any time during the calendar year property in this	6254
state with an aggregate value of at least fifty thousand dollars.	6255
For the purpose of division (I)(1) of this section, owned property	6256
is valued at original cost and rented property is valued at eight	6257
times the net annual rental charge.	6258

(2) Has during the calendar year payroll in this state of at	6259
least fifty thousand dollars. Payroll in this state includes all	6260
of the following:	6261

(a) Any amount subject to withholding by the person under	6262
section 5747.06 of the Revised Code;	6263

(b) Any other amount the person pays as compensation to an	6264
individual under the supervision or control of the person for work	6265
done in this state; and	6266

(c) Any amount the person pays for services performed in this	6267
state on its behalf by another.	6268

(3) Has during the calendar year taxable gross receipts of at	6269
least five hundred thousand dollars.	6270

(4) Has at any time during the calendar year within this	6271
state at least twenty-five per cent of the person's total	6272
property, total payroll, or total gross receipts.	6273

(5) Is domiciled in this state as an individual or for	6274
corporate, commercial, or other business purposes.	6275

(J) "Tangible personal property" has the same meaning as in	6276
section 5739.01 of the Revised Code.	6277

(K) "Internal Revenue Code" means the Internal Revenue Code	6278
of 1986, 100 Stat. 2085, 26 U.S.C. 1, as amended. Any term used in	6279
this chapter that is not otherwise defined has the same meaning as	6280
when used in a comparable context in the laws of the United States	6281
relating to federal income taxes unless a different meaning is	6282
clearly required. Any reference in this chapter to the Internal	6283
Revenue Code includes other laws of the United States relating to	6284
federal income taxes.	6285

(L) "Calendar quarter" means a three-month period ending on	6286
the thirty-first day of March, the thirtieth day of June, the	6287
thirtieth day of September, or the thirty-first day of December.	6288

(M) "Tax period" means the calendar quarter or calendar year	6289
on the basis of which a taxpayer is required to pay the tax	6290
imposed under this chapter.	6291

(N) "Calendar year taxpayer" means a taxpayer for which the	6292
tax period is a calendar year.	6293

(O) "Calendar quarter taxpayer" means a taxpayer for which	6294
the tax period is a calendar quarter.	6295

(P) "Agent" means a person authorized by another person to	6296
act on its behalf to undertake a transaction for the other,	6297
including any of the following:	6298

(1) A person receiving a fee to sell financial instruments;

6299

(2) A person retaining only a commission from a transaction	6300
with the other proceeds from the transaction being remitted to	6301
another person;	6302

(3) A person issuing licenses and permits under section	6303
1533.13 of the Revised Code;	6304

(4) A lottery sales agent holding a valid license issued	6305
under section 3770.05 of the Revised Code;	6306

(5) A person acting as an agent of the division of liquor	6307
control under section 4301.17 of the Revised Code.	6308

(Q) "Received" includes amounts accrued under the accrual	6309
method of accounting.	6310

(R) "Reporting person" means a person in a consolidated	6311
elected taxpayer or combined taxpayer group that is designated by	6312
that group to legally bind the group for all filings and tax	6313
liabilities and to receive all legal notices with respect to	6314
matters under this chapter, or, for the purposes of section	6315
5751.04 of the Revised Code, a separate taxpayer that is not a	6316
member of such a group.	6317

Sec. 5751.011.  (A) A group of two or more persons may elect	6318
to be a consolidated elected taxpayer for the purposes of this	6319
chapter if the group satisfies all of the following requirements:	6320

(1) The group elects to include all persons, including	6321
persons enumerated in divisions (E)(2) to (10)(5) of section	6322
5751.01 of the Revised Code, having at least eighty per cent, or	6323
having at least fifty per cent, of the value of their ownership	6324
interests owned or controlled, directly or constructively through	6325
related interests, by common owners during all or any portion of	6326
the tax period, together with the common owners.	6327

A group making its initial election on the basis of the	6328
eighty per cent ownership test may change its election so that its	6329
consolidated elected taxpayer group is formed on the basis of the	6330
fifty per cent ownership test if all of the following are	6331
satisfied:	6332

(a) When the initial election was made, the group did not	6333
have any persons satisfying the fifty per cent ownership test;	6334

(b) One or more of the persons in the initial group	6335
subsequently acquires ownership interests in a person such that	6336
the fifty per cent ownership test is satisfied, the eighty per	6337
cent ownership test is not satisfied, and the acquired person	6338
would be required to be included in a combined taxpayer group	6339
under section 5751.012 of the Revised Code;	6340

(c) The group requests the change in a written request to the	6341
tax commissioner on or before the due date for filing the first	6342
return due under section 5751.051 of the Revised Code after the	6343
date of the acquisition;	6344

(d) The group has not previously changed its election.

6345

At the election of the group, all entities that are not	6346
incorporated or formed under the laws of a state or of the United	6347
States and that meet the consolidated elected ownership test shall	6348
either be included in the group or all shall be excluded from the	6349
group. If, at the time of registration, the group does not include	6350
any such entities that meet the consolidated elected ownership	6351
test, the group shall elect to either include or exclude the newly	6352
acquired entities before the due date of the first return due	6353
after the date of the acquisition.	6354

Each group shall notify the tax commissioner of the foregoing	6355
elections before the due date of the return for the period in	6356
which the election becomes binding. If fifty per cent of the value	6357
of a person's ownership interests is owned or controlled by each	6358
of two consolidated elected taxpayer groups formed under the fifty	6359
per cent ownership or control test, that person is a member of	6360
each group for the purposes of this section, and each group shall	6361
include in the group's taxable gross receipts fifty per cent of	6362
that person's taxable gross receipts. Otherwise, all of that	6363
person's taxable gross receipts shall be included in the taxable	6364
gross receipts of the consolidated elected taxpayer group of which	6365
the person is a member. In no event shall the ownership or control	6366
of fifty per cent of the value of a person's ownership interests	6367
by two otherwise unrelated groups form the basis for consolidating	6368
the groups into a single consolidated elected taxpayer group or	6369
permit any exclusion under division (C) of this section of taxable	6370
gross receipts between members of the two groups. Division (A)(3)	6371
of this section applies with respect to the elections described in	6372
this division.	6373

(2) The group makes the election to be treated as a	6374
consolidated elected taxpayer in the manner prescribed under	6375
division (D) of this section.	6376

(3) Subject to review and audit by the tax commissioner, the	6377
group agrees that all of the following apply:	6378

(a) The group shall file reports as a single taxpayer for at	6379
least the next eight calendar quarters following the election so	6380
long as at least two or more of the members of the group meet the	6381
requirements of division (A)(1) of this section.	6382

(b) Before the expiration of the eighth such calendar	6383
quarter, the group shall notify the commissioner if it elects to	6384
cancel its designation as a consolidated elected taxpayer. If the	6385
group does not so notify the tax commissioner, the election	6386
remains in effect for another eight calendar quarters.	6387

(c) If, at any time during any of those eight calendar	6388
quarters following the election, a former member of the group no	6389
longer meets the requirements under division (A)(1) of this	6390
section, that member shall report and pay the tax imposed under	6391
this chapter separately, as a member of a combined taxpayer, or,	6392
if the former member satisfies such requirements with respect to	6393
another consolidated elected group, as a member of that	6394
consolidated elected group.	6395

(d) The group agrees to the application of division (B) of	6396
this section.	6397

(B) A group of persons making the election under this section	6398
shall report and pay tax on all of the group's taxable gross	6399
receipts even if substantial nexus with this state does not exist	6400
for one or more persons in the group.	6401

(C)(1)(a) Members of a consolidated elected taxpayer group	6402
shall exclude gross receipts among persons included in the	6403
consolidated elected taxpayer group.	6404

(b) Subject to divisions (C)(1)(c) and (C)(2) of this	6405
section, nothing in this section shall have the effect of	6406
requiring a consolidated elected taxpayer group to include gross	6407
receipts received by a person enumerated in divisions (E)(2) to	6408
(10)(5) of section 5751.01 of the Revised Code if that person is a	6409
member of the group pursuant to the elections made by the group	6410
under division (A)(1) of this section.	6411

(c)(i) As used in division (C)(1)(c) of this section, "dealer	6412
transfer" means a transfer of property that satisfies both of the	6413
following: (I) the property is directly transferred by any means	6414
from one member of the group to another member of the group that	6415
is a dealer in intangibles but is not a qualifying dealer as	6416
defined in section 5707.031 of the Revised Code; and (II) the	6417
property is subsequently delivered by the dealer in intangibles to	6418
a person that is not a member of the group.	6419

(ii) In the event of a dealer transfer, a consolidated	6420
elected taxpayer group shall not exclude, under division (C) of	6421
this section, gross receipts from the transfer described in	6422
division (C)(1)(c)(i)(I) of this section.	6423

(2) Gross receipts related to the sale or transmission of	6424
electricity through the use of an intermediary regional	6425
transmission organization approved by the federal energy	6426
regulatory commission shall be excluded from taxable gross	6427
receipts under division (C)(1) of this section if all other	6428
requirements of that division are met, even if the receipts are	6429
from and to the same member of the group.	6430

(D) To make the election to be a consolidated elected	6431
taxpayer, a group of persons shall notify the tax commissioner of	6432
the election in the manner prescribed by the commissioner and pay	6433
the commissioner a registration fee equal to the lesser of two	6434
hundred dollars or twenty dollars for each person in the group. No	6435
additional fee shall be imposed for the addition of new members to	6436
the group once the group has remitted a fee in the amount of two	6437
hundred dollars. The election shall be made and the fee paid	6438
before the beginning of the first calendar quarter to which the	6439
election applies. The fee shall be collected and used in the same	6440
manner as provided in section 5751.04 of the Revised Code.	6441

The election shall be made on a form prescribed by the tax	6442
commissioner for that purpose and shall be signed by one or more	6443
individuals with authority, separately or together, to make a	6444
binding election on behalf of all persons in the group.	6445

Any person acquired or formed after the filing of the	6446
registration shall be included in the group if the person meets	6447
the requirements of division (A)(1) of this section, and the group	6448
shall notify the tax commissioner of any additions to the group	6449
with the next tax return it files with the commissioner.	6450

Sec. 5751.012.  (A) All persons, other than persons	6451
enumerated in divisions (E)(2) to (10)(5) of section 5751.01 of	6452
the Revised Code, having more than fifty per cent of the value of	6453
their ownership interest owned or controlled, directly or	6454
constructively through related interests, by common owners during	6455
all or any portion of the tax period, together with the common	6456
owners, shall be members of a combined taxpayer if those persons	6457
are not members of a consolidated elected taxpayer pursuant to an	6458
election under section 5751.011 of the Revised Code.	6459

(B) A combined taxpayer shall register, file returns, and pay	6460
taxes under this chapter as a single taxpayer.	6461

(C) A combined taxpayer shall neither exclude taxable gross	6462
receipts between its members nor from others that are not members.	6463

(D) A combined taxpayer shall pay to the tax commissioner a	6464
registration fee equal to the lesser of two hundred dollars or	6465
twenty dollars for each person in the group. No additional fee	6466
shall be imposed for the addition of new members to the group once	6467
the group has remitted a fee in the amount of two hundred dollars.	6468
The fee shall be timely paid before the later of the beginning of	6469
the first calendar quarter or November 15, 2005. The fee shall be	6470
collected and used in the same manner as provided in section	6471
5751.04 of the Revised Code.	6472

Any person acquired or formed after the filing of the	6473
registration shall be included in the group if the person meets	6474
the requirements of division (A) of this section, and the group	6475
must notify the tax commissioner of any additions with the next	6476
quarterly tax return it files with the commissioner.	6477

Sec. 5751.54.  (A) Any term used in this section has the same	6478
meaning as in section 122.85 of the Revised Code.	6479

(B) There is allowed a refundable credit against the tax	6480
imposed by section 5751.02 of the Revised Code for any person that	6481
is the certificate owner of a tax credit certificate issued under	6482
section 122.85 of the Revised Code. The credit shall be claimed	6483
for the tax period in which the certificate is issued by the	6484
director of development services. The credit amount equals the	6485
amount stated in the certificate. The credit shall be claimed in	6486
the order required under section 5751.98 of the Revised Code. If	6487
the credit amount exceeds the tax otherwise due under section	6488
5751.02 of the Revised Code after deducting all other credits in	6489
that order, the excess shall be refunded.	6490

(C) Nothing in this section allows a person to claim more	6491
than one credit per tax credit-eligible production.	6492

Sec. 5751.98.  (A) To provide a uniform procedure for	6493
calculating the amount of tax due under this chapter, a taxpayer	6494
shall claim any credits to which it is entitled in the following	6495
order:	6496

(1) The nonrefundable jobs retention credit under division	6497
(B) of section 5751.50 of the Revised Code;	6498

(2) The nonrefundable credit for qualified research expenses	6499
under division (B) of section 5751.51 of the Revised Code;	6500

(3) The nonrefundable credit for a borrower's qualified	6501
research and development loan payments under division (B) of	6502
section 5751.52 of the Revised Code;	6503

(4) The nonrefundable credit for calendar years 2010 to 2029	6504
for unused net operating losses under division (B) of section	6505
5751.53 of the Revised Code;	6506

(5) The refundable motion picture production credit for	6507
calendar year 2030 for unused net operating losses under division	6508
(C) of section 5751.535751.54 of the Revised Code;	6509

(6) The refundable jobs creation credit or job retention	6510
credit under division (A) of section 5751.50 of the Revised Code;	6511

(7) The refundable credit for calendar year 2030 for unused	6512
net operating losses under division (C) of section 5751.53 of the	6513
Revised Code.	6514

(B) For any credit except the refundable credits enumerated	6515
in this section, the amount of the credit for a tax period shall	6516
not exceed the tax due after allowing for any other credit that	6517
precedes it in the order required under this section. Any excess	6518
amount of a particular credit may be carried forward if authorized	6519
under the section creating the credit.	6520

Section 2.  That existing sections 122.17, 122.171, 122.85,	6521
145.114, 145.116, 149.311, 150.01, 150.07, 150.10, 715.013,	6522
742.114, 742.116, 1311.85, 1311.86, 1311.87, 1311.88, 3307.152,	6523
3307.154, 3309.157, 3309.159, 5505.068, 5505.0610, 5703.052,	6524
5703.053, 5703.70, 5707.03, 5709.76, 5711.22, 5713.03, 5725.02,	6525
5725.14, 5725.16, 5725.26, 5725.33, 5733.01, 5733.02, 5733.021,	6526
5733.06, 5747.01, 5747.98, 5751.01, 5751.011, 5751.012, and	6527
5751.98 of the Revised Code are hereby repealed.	6528

Section 3. That section 757.51 of Am. Sub. H.B. 487 of the	6529
129th General Assembly is hereby repealed.	6530

Section 4. The amendment by this act of division (E) of	6531
section 5751.01 and sections 5751.011 and 5751.012 of the Revised	6532
Code applies to tax periods beginning on or after January 1, 2014	6533
except for a taxpayer that is a corporation or any other person	6534
directly or indirectly owned by one or more insurance companies	6535
subject to the tax imposed by section 5725.18 or Chapter 5729. of	6536
the Revised Code. For such taxpayers, the amendment by this act of	6537
division (E) of section 5751.01 and sections 5751.011 and 5751.012	6538
of the Revised Code applies to tax periods beginning on or after	6539
January 1, 2013.	6540

Section 5. (A) The Tax Commissioner shall not assess or hold	6541
liable for the failure to report or pay the tax imposed by section	6542
5751.02 of the Revised Code for any tax periods ending before	6543
January 1, 2013, a corporation or any other person directly or	6544
indirectly owned by one or more insurance companies that are	6545
subject to the tax imposed by section 5725.18 or Chapter 5729. of	6546
the Revised Code, provided the corporation, but not the other	6547
person or persons, so owned by the insurance company or companies	6548
reported and paid the tax imposed by section 5733.06 of the	6549
Revised Code and not the tax imposed by section 5751.02 of the	6550
Revised Code for taxable periods before January 1, 2013.	6551

(B) For the purposes of this section, division (E)(8)(a),(b),	6552
or (c) of section 5751.01 of the Revised Code as that section	6553
applied to tax periods ending before January 1, 2013, for a	6554
corporation or any other person directly or indirectly owned by	6555
one or more insurance companies that are subject to the tax	6556
imposed by section 5725.18 or Chapter 5729. of the Revised Code,	6557
shall apply in determining whether a person is directly or	6558
indirectly owned.	6559

Section 6. The General Assembly, applying the principle	6560
stated in division (B) of section 1.52 of the Revised Code that	6561
amendments are to be harmonized if reasonably capable of	6562
simultaneous operation, finds that the following sections,	6563
presented in this act as composites of the sections as amended by	6564
the acts indicated, are the resulting versions of the sections in	6565
effect prior to the effective date of the sections as presented in	6566
this act:	6567

Section 5747.01 of the Revised Code as amended by both Am.	6568
Sub. H.B. 153 and Am. H.B. 167 of the 129th General Assembly.	6569

Section 5751.01 of the Revised Code as amended by both Am.	6570
Sub. H.B. 508 and Am. Sub. S.B. 315 of the 129th General Assembly.	6571