As Introduced

130th General Assembly
Regular Session
2013-2014
H. B. No. 396


Representative Becker 

Cosponsors: Representatives Hood, Stebelton 

A BILL
To amend section 5747.08 of the Revised Code to allow 1
married couples to elect to file either separate 2
state tax returns or a joint state return, 3
irrespective of their federal filing status, and 4
to declare an emergency.5


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

       Section 1.  That section 5747.08 of the Revised Code be 6
amended to read as follows:7

       Sec. 5747.08.  An annual return with respect to the tax 8
imposed by section 5747.02 of the Revised Code and each tax 9
imposed under Chapter 5748. of the Revised Code shall be made by 10
every taxpayer for any taxable year for which the taxpayer is 11
liable for the tax imposed by that section or under that chapter, 12
unless the total credits allowed under divisions (E), (F), and (G) 13
of section 5747.05 of the Revised Code for the year are equal to 14
or exceed the tax imposed by section 5747.02 of the Revised Code, 15
in which case no return shall be required unless the taxpayer is 16
liable for a tax imposed pursuant to Chapter 5748. of the Revised 17
Code.18

       (A) If an individual is deceased, any return or notice 19
required of that individual under this chapter shall be made and 20
filed by that decedent's executor, administrator, or other person 21
charged with the property of that decedent.22

       (B) If an individual is unable to make a return or notice 23
required by this chapter, the return or notice required of that 24
individual shall be made and filed by the individual's duly 25
authorized agent, guardian, conservator, fiduciary, or other 26
person charged with the care of the person or property of that 27
individual.28

       (C) Returns or notices required of an estate or a trust shall 29
be made and filed by the fiduciary of the estate or trust.30

       (D)(1)(a) Except as otherwise provided in division (D)(1)(b) 31
of this section, any pass-through entity may file a single return 32
on behalf of one or more of the entity's investors other than an 33
investor that is a person subject to the tax imposed under section 34
5733.06 of the Revised Code. The single return shall set forth the 35
name, address, and social security number or other identifying 36
number of each of those pass-through entity investors and shall 37
indicate the distributive share of each of those pass-through 38
entity investor's income taxable in this state in accordance with 39
sections 5747.20 to 5747.231 of the Revised Code. Such 40
pass-through entity investors for whom the pass-through entity 41
elects to file a single return are not entitled to the exemption 42
or credit provided for by sections 5747.02 and 5747.022 of the 43
Revised Code; shall calculate the tax before business credits at 44
the highest rate of tax set forth in section 5747.02 of the 45
Revised Code for the taxable year for which the return is filed; 46
and are entitled to only their distributive share of the business 47
credits as defined in division (D)(2) of this section. A single 48
check drawn by the pass-through entity shall accompany the return 49
in full payment of the tax due, as shown on the single return, for 50
such investors, other than investors who are persons subject to 51
the tax imposed under section 5733.06 of the Revised Code.52

       (b)(i) A pass-through entity shall not include in such a 53
single return any investor that is a trust to the extent that any 54
direct or indirect current, future, or contingent beneficiary of 55
the trust is a person subject to the tax imposed under section 56
5733.06 of the Revised Code.57

       (ii) A pass-through entity shall not include in such a single 58
return any investor that is itself a pass-through entity to the 59
extent that any direct or indirect investor in the second 60
pass-through entity is a person subject to the tax imposed under 61
section 5733.06 of the Revised Code.62

       (c) Nothing in division (D) of this section precludes the tax 63
commissioner from requiring such investors to file the return and 64
make the payment of taxes and related interest, penalty, and 65
interest penalty required by this section or section 5747.02, 66
5747.09, or 5747.15 of the Revised Code. Nothing in division (D) 67
of this section precludes such an investor from filing the annual 68
return under this section, utilizing the refundable credit equal 69
to the investor's proportionate share of the tax paid by the 70
pass-through entity on behalf of the investor under division (J) 71
of this section, and making the payment of taxes imposed under 72
section 5747.02 of the Revised Code. Nothing in division (D) of 73
this section shall be construed to provide to such an investor or 74
pass-through entity any additional deduction or credit, other than 75
the credit provided by division (J) of this section, solely on 76
account of the entity's filing a return in accordance with this 77
section. Such a pass-through entity also shall make the filing and 78
payment of estimated taxes on behalf of the pass-through entity 79
investors other than an investor that is a person subject to the 80
tax imposed under section 5733.06 of the Revised Code.81

       (2) For the purposes of this section, "business credits" 82
means the credits listed in section 5747.98 of the Revised Code 83
excluding the following credits:84

       (a) The retirement credit under division (B) of section 85
5747.055 of the Revised Code;86

       (b) The senior citizen credit under division (C) of section 87
5747.05 of the Revised Code;88

       (c) The lump sum distribution credit under division (D) of 89
section 5747.05 of the Revised Code;90

       (d) The dependent care credit under section 5747.054 of the 91
Revised Code;92

       (e) The lump sum retirement income credit under division (C) 93
of section 5747.055 of the Revised Code;94

       (f) The lump sum retirement income credit under division (D) 95
of section 5747.055 of the Revised Code;96

       (g) The lump sum retirement income credit under division (E) 97
of section 5747.055 of the Revised Code;98

       (h) The credit for displaced workers who pay for job training 99
under section 5747.27 of the Revised Code;100

       (i) The twenty-dollar personal exemption credit under section 101
5747.022 of the Revised Code;102

       (j) The joint filing credit under division (G) of section 103
5747.05 of the Revised Code;104

       (k) The nonresident credit under division (A) of section 105
5747.05 of the Revised Code;106

       (l) The credit for a resident's out-of-state income under 107
division (B) of section 5747.05 of the Revised Code;108

       (m) The low-income credit under section 5747.056 of the 109
Revised Code;110

       (n) The earned income tax credit under section 5747.71 of the 111
Revised Code.112

       (3) The election provided for under division (D) of this 113
section applies only to the taxable year for which the election is 114
made by the pass-through entity. Unless the tax commissioner 115
provides otherwise, this election, once made, is binding and 116
irrevocable for the taxable year for which the election is made. 117
Nothing in this division shall be construed to provide for any 118
deduction or credit that would not be allowable if a nonresident 119
pass-through entity investor were to file an annual return.120

       (4) If a pass-through entity makes the election provided for 121
under division (D) of this section, the pass-through entity shall 122
be liable for any additional taxes, interest, interest penalty, or 123
penalties imposed by this chapter if the tax commissioner finds 124
that the single return does not reflect the correct tax due by the 125
pass-through entity investors covered by that return. Nothing in 126
this division shall be construed to limit or alter the liability, 127
if any, imposed on pass-through entity investors for unpaid or 128
underpaid taxes, interest, interest penalty, or penalties as a 129
result of the pass-through entity's making the election provided 130
for under division (D) of this section. For the purposes of 131
division (D) of this section, "correct tax due" means the tax that 132
would have been paid by the pass-through entity had the single 133
return been filed in a manner reflecting the commissioner's 134
findings. Nothing in division (D) of this section shall be 135
construed to make or hold a pass-through entity liable for tax 136
attributable to a pass-through entity investor's income from a 137
source other than the pass-through entity electing to file the 138
single return.139

       (E) If a husband and wife file a joint federal income tax 140
return for a taxable year, they shallmay elect to file a joint 141
return or separate returns under this section for that taxable 142
year, and, pursuant to that election, their liabilities are 143
separate if they file separate returns or joint and several, but,144
if they file a joint return. If the federal income tax liability 145
of either spouse is determined on a separate federal income tax 146
return, they shall file separate returns under this section.147

       Ifor if either spouse is not required to file a federal 148
income tax return and either or both are required to file a return 149
pursuant to this chapter, they may elect to file separate or joint 150
returns, and, pursuant to that election, their liabilities are 151
separate or joint and several. If a husband and wife file separate 152
returns pursuant to this chapter, each must claim the taxpayer's 153
own exemption, but not both, as authorized under section 5747.02 154
of the Revised Code on the taxpayer's own return.155

       (F) Each return or notice required to be filed under this 156
section shall contain the signature of the taxpayer or the 157
taxpayer's duly authorized agent and of the person who prepared 158
the return for the taxpayer, and shall include the taxpayer's 159
social security number. Each return shall be verified by a 160
declaration under the penalties of perjury. The tax commissioner 161
shall prescribe the form that the signature and declaration shall 162
take.163

       (G) Each return or notice required to be filed under this 164
section shall be made and filed as required by section 5747.04 of 165
the Revised Code, on or before the fifteenth day of April of each 166
year, on forms that the tax commissioner shall prescribe, together 167
with remittance made payable to the treasurer of state in the 168
combined amount of the state and all school district income taxes 169
shown to be due on the form.170

       Upon good cause shown, the commissioner may extend the period 171
for filing any notice or return required to be filed under this 172
section and may adopt rules relating to extensions. If the 173
extension results in an extension of time for the payment of any 174
state or school district income tax liability with respect to 175
which the return is filed, the taxpayer shall pay at the time the 176
tax liability is paid an amount of interest computed at the rate 177
per annum prescribed by section 5703.47 of the Revised Code on 178
that liability from the time that payment is due without extension 179
to the time of actual payment. Except as provided in section 180
5747.132 of the Revised Code, in addition to all other interest 181
charges and penalties, all taxes imposed under this chapter or 182
Chapter 5748. of the Revised Code and remaining unpaid after they 183
become due, except combined amounts due of one dollar or less, 184
bear interest at the rate per annum prescribed by section 5703.47 185
of the Revised Code until paid or until the day an assessment is 186
issued under section 5747.13 of the Revised Code, whichever occurs 187
first.188

       If the commissioner considers it necessary in order to ensure 189
the payment of the tax imposed by section 5747.02 of the Revised 190
Code or any tax imposed under Chapter 5748. of the Revised Code, 191
the commissioner may require returns and payments to be made 192
otherwise than as provided in this section.193

       To the extent that any provision in this division conflicts 194
with any provision in section 5747.026 of the Revised Code, the 195
provision in that section prevails.196

       (H) If any report, claim, statement, or other document 197
required to be filed, or any payment required to be made, within a 198
prescribed period or on or before a prescribed date under this 199
chapter is delivered after that period or that date by United 200
States mail to the agency, officer, or office with which the 201
report, claim, statement, or other document is required to be 202
filed, or to which the payment is required to be made, the date of 203
the postmark stamped on the cover in which the report, claim, 204
statement, or other document, or payment is mailed shall be deemed 205
to be the date of delivery or the date of payment.206

       If a payment is required to be made by electronic funds 207
transfer pursuant to section 5747.072 of the Revised Code, the 208
payment is considered to be made when the payment is received by 209
the treasurer of state or credited to an account designated by the 210
treasurer of state for the receipt of tax payments.211

       "The date of the postmark" means, in the event there is more 212
than one date on the cover, the earliest date imprinted on the 213
cover by the United States postal service.214

       (I) The amounts withheld by an employer pursuant to section 215
5747.06 of the Revised Code, a casino operator pursuant to section 216
5747.063 of the Revised Code, or a lottery sales agent pursuant to 217
section 5747.064 of the Revised Code shall be allowed to the 218
recipient of the compensation casino winnings, or lottery prize 219
award as credits against payment of the appropriate taxes imposed 220
on the recipient by section 5747.02 and under Chapter 5748. of the 221
Revised Code.222

       (J) If a pass-through entity elects to file a single return 223
under division (D) of this section and if any investor is required 224
to file the annual return and make the payment of taxes required 225
by this chapter on account of the investor's other income that is 226
not included in a single return filed by a pass-through entity or 227
any other investor elects to file the annual return, the investor 228
is entitled to a refundable credit equal to the investor's 229
proportionate share of the tax paid by the pass-through entity on 230
behalf of the investor. The investor shall claim the credit for 231
the investor's taxable year in which or with which ends the 232
taxable year of the pass-through entity. Nothing in this chapter 233
shall be construed to allow any credit provided in this chapter to 234
be claimed more than once. For the purpose of computing any 235
interest, penalty, or interest penalty, the investor shall be 236
deemed to have paid the refundable credit provided by this 237
division on the day that the pass-through entity paid the 238
estimated tax or the tax giving rise to the credit.239

       (K) The tax commissioner shall ensure that each return 240
required to be filed under this section includes a box that the 241
taxpayer may check to authorize a paid tax preparer who prepared 242
the return to communicate with the department of taxation about 243
matters pertaining to the return. The return or instructions 244
accompanying the return shall indicate that by checking the box 245
the taxpayer authorizes the department of taxation to contact the 246
preparer concerning questions that arise during the processing of 247
the return and authorizes the preparer only to provide the 248
department with information that is missing from the return, to 249
contact the department for information about the processing of the 250
return or the status of the taxpayer's refund or payments, and to 251
respond to notices about mathematical errors, offsets, or return 252
preparation that the taxpayer has received from the department and 253
has shown to the preparer.254

       (L) The tax commissioner shall permit individual taxpayers to 255
instruct the department of taxation to cause any refund of 256
overpaid taxes to be deposited directly into a checking account, 257
savings account, or an individual retirement account or individual 258
retirement annuity, or preexisting college savings plan or program 259
account offered by the Ohio tuition trust authority under Chapter 260
3334. of the Revised Code, as designated by the taxpayer, when the 261
taxpayer files the annual return required by this section 262
electronically.263

       (M) The tax commissioner may adopt rules to administer this 264
section.265

       Section 2.  That existing section 5747.08 of the Revised Code 266
is hereby repealed.267

       Section 3.  The amendment by this act of section 5747.08 of 268
the Revised Code applies to taxable years beginning in 2013 or 269
thereafter.270

       Section 4.  This act is hereby declared an emergency measure 271
necessary for the immediate preservation of the public peace, 272
health, and safety. The reason for such necessity is to enable 273
taxpayers to take advantage of the changes made in the act when 274
filing their income tax returns for the 2013 taxable year. 275
Therefore, this act takes immediate effect.276