As Passed by the House

130th General Assembly Regular Session 2013-2014

Am. S. B. No. 28

Senator Obhof 

Cosponsors: Senators Hite, Schaffer, Tavares, Beagle, Coley, Faber, Hughes, Oelslager, Peterson, Sawyer, Seitz, Uecker 

Representatives Boose, Letson, Barnes, McClain, Patmon, Rogers, Sprague, Adams, J., Amstutz, Beck, Bishoff, Buchy, Conditt, Milkovich, O'Brien, Pillich, Scherer, Smith, Winburn Speaker Batchelder 

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A BILL

To amend sections 5701.11 and 5751.01 of the Revised

1

Code to expressly incorporate changes in the

2

Internal Revenue Code since December 20, 2012,

3

into Ohio law, to allow a distribution center to

4

qualify for the commercial activity tax exclusion

5

for receipts from sales to qualified distribution

6

centers if it does not currently meet the

7

exclusion requirements but expects to meet those

8

requirements within three years, and to declare an

9

emergency.

10

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

Section 1. That sections 5701.11 and 5751.01 of the Revised	11
Code be amended to read as follows:	12

Sec. 5701.11.  The effective date to which this section	13
refers is the effective date of this section as amended by H.B.	14
472S.B. 28 of the 129th130th general assembly.	15

(A)(1) Except as provided under division (A)(2) or (B) of	16
this section, any reference in Title LVII of the Revised Code to	17
the Internal Revenue Code, to the Internal Revenue Code "as	18
amended," to other laws of the United States, or to other laws of	19
the United States, "as amended," means the Internal Revenue Code	20
or other laws of the United States as they exist on the effective	21
date.	22

(2) This section does not apply to any reference in Title	23
LVII of the Revised Code to the Internal Revenue Code as of a date	24
certain specifying the day, month, and year, or to other laws of	25
the United States as of a date certain specifying the day, month,	26
and year.	27

(B)(1) For purposes of applying section 5733.04, 5745.01, or	28
5747.01 of the Revised Code to a taxpayer's taxable year ending	29
after March 7, 2011December 20, 2012, and before the effective	30
date, a taxpayer may irrevocably elect to incorporate the	31
provisions of the Internal Revenue Code or other laws of the	32
United States that are in effect for federal income tax purposes	33
for that taxable year if those provisions differ from the	34
provisions that, under division (A) of this section, would	35
otherwise apply. The filing by the taxpayer for that taxable year	36
of a report or return that incorporates the provisions of the	37
Internal Revenue Code or other laws of the United States	38
applicable for federal income tax purposes for that taxable year,	39
and that does not include any adjustments to reverse the effects	40
of any differences between those provisions and the provisions	41
that would otherwise apply, constitutes the making of an	42
irrevocable election under this division for that taxable year.	43

(2) Elections under prior versions of division (B)(1) of this	44
section remain in effect for the taxable years to which they	45
apply.	46

Sec. 5751.01.  As used in this chapter:

47

(A) "Person" means, but is not limited to, individuals,	48
combinations of individuals of any form, receivers, assignees,	49
trustees in bankruptcy, firms, companies, joint-stock companies,	50
business trusts, estates, partnerships, limited liability	51
partnerships, limited liability companies, associations, joint	52
ventures, clubs, societies, for-profit corporations, S	53
corporations, qualified subchapter S subsidiaries, qualified	54
subchapter S trusts, trusts, entities that are disregarded for	55
federal income tax purposes, and any other entities.	56

(B) "Consolidated elected taxpayer" means a group of two or	57
more persons treated as a single taxpayer for purposes of this	58
chapter as the result of an election made under section 5751.011	59
of the Revised Code.	60

(C) "Combined taxpayer" means a group of two or more persons	61
treated as a single taxpayer for purposes of this chapter under	62
section 5751.012 of the Revised Code.	63

(D) "Taxpayer" means any person, or any group of persons in	64
the case of a consolidated elected taxpayer or combined taxpayer	65
treated as one taxpayer, required to register or pay tax under	66
this chapter. "Taxpayer" does not include excluded persons.	67

(E) "Excluded person" means any of the following:

68

(1) Any person with not more than one hundred fifty thousand	69
dollars of taxable gross receipts during the calendar year.	70
Division (E)(1) of this section does not apply to a person that is	71
a member of a consolidated elected taxpayer;	72

(2) A public utility that paid the excise tax imposed by	73
section 5727.24 or 5727.30 of the Revised Code based on one or	74
more measurement periods that include the entire tax period under	75
this chapter, except that a public utility that is a combined	76
company is a taxpayer with regard to the following gross receipts:	77

(a) Taxable gross receipts directly attributed to a public	78
utility activity, but not directly attributed to an activity that	79
is subject to the excise tax imposed by section 5727.24 or 5727.30	80
of the Revised Code;	81

(b) Taxable gross receipts that cannot be directly attributed	82
to any activity, multiplied by a fraction whose numerator is the	83
taxable gross receipts described in division (E)(2)(a) of this	84
section and whose denominator is the total taxable gross receipts	85
that can be directly attributed to any activity;	86

(c) Except for any differences resulting from the use of an	87
accrual basis method of accounting for purposes of determining	88
gross receipts under this chapter and the use of the cash basis	89
method of accounting for purposes of determining gross receipts	90
under section 5727.24 of the Revised Code, the gross receipts	91
directly attributed to the activity of a natural gas company shall	92
be determined in a manner consistent with division (D) of section	93
5727.03 of the Revised Code.	94

As used in division (E)(2) of this section, "combined	95
company" and "public utility" have the same meanings as in section	96
5727.01 of the Revised Code.	97

(3) A financial institution, as defined in section 5726.01 of	98
the Revised Code, that paid the tax imposed by section 5726.02 of	99
the Revised Code based on one or more taxable years that include	100
the entire tax period under this chapter;	101

(4) A person directly or indirectly owned by one or more	102
financial institutions, as defined in section 5726.01 of the	103
Revised Code, that paid the tax imposed by section 5726.02 of the	104
Revised Code based on one or more taxable years that include the	105
entire tax period under this chapter.	106

For the purposes of division (E)(4) of this section, a person	107
owns another person under the following circumstances:	108

(a) In the case of corporations issuing capital stock, one	109
corporation owns another corporation if it owns fifty per cent or	110
more of the other corporation's capital stock with current voting	111
rights;	112

(b) In the case of a limited liability company, one person	113
owns the company if that person's membership interest, as defined	114
in section 1705.01 of the Revised Code, is fifty per cent or more	115
of the combined membership interests of all persons owning such	116
interests in the company;	117

(c) In the case of a partnership, trust, or other	118
unincorporated business organization other than a limited	119
liability company, one person owns the organization if, under the	120
articles of organization or other instrument governing the affairs	121
of the organization, that person has a beneficial interest in the	122
organization's profits, surpluses, losses, or distributions of	123
fifty per cent or more of the combined beneficial interests of all	124
persons having such an interest in the organization.	125

(5) A domestic insurance company or foreign insurance	126
company, as defined in section 5725.01 of the Revised Code, that	127
paid the insurance company premiums tax imposed by section 5725.18	128
or Chapter 5729. of the Revised Code, or an unauthorized insurance	129
company whose gross premiums are subject to tax under section	130
3905.36 of the Revised Code based on one or more measurement	131
periods that include the entire tax period under this chapter;	132

(6) A person that solely facilitates or services one or more	133
securitizations of phase-in-recovery property pursuant to a final	134
financing order as those terms are defined in section 4928.23 of	135
the Revised Code. For purposes of this division, "securitization"	136
means transferring one or more assets to one or more persons and	137
then issuing securities backed by the right to receive payment	138
from the asset or assets so transferred.	139

(7) Except as otherwise provided in this division, a	140
pre-income tax trust as defined in division (FF)(4) of section	141
5747.01 of the Revised Code and any pass-through entity of which	142
such pre-income tax trust owns or controls, directly, indirectly,	143
or constructively through related interests, more than five per	144
cent of the ownership or equity interests. If the pre-income tax	145
trust has made a qualifying pre-income tax trust election under	146
division (FF)(3) of section 5747.01 of the Revised Code, then the	147
trust and the pass-through entities of which it owns or controls,	148
directly, indirectly, or constructively through related interests,	149
more than five per cent of the ownership or equity interests,	150
shall not be excluded persons for purposes of the tax imposed	151
under section 5751.02 of the Revised Code.	152

(8) Nonprofit organizations or the state and its agencies,	153
instrumentalities, or political subdivisions.	154

(F) Except as otherwise provided in divisions (F)(2), (3),	155
and (4) of this section, "gross receipts" means the total amount	156
realized by a person, without deduction for the cost of goods sold	157
or other expenses incurred, that contributes to the production of	158
gross income of the person, including the fair market value of any	159
property and any services received, and any debt transferred or	160
forgiven as consideration.	161

(1) The following are examples of gross receipts:

162

(a) Amounts realized from the sale, exchange, or other	163
disposition of the taxpayer's property to or with another;	164

(b) Amounts realized from the taxpayer's performance of	165
services for another;	166

(c) Amounts realized from another's use or possession of the	167
taxpayer's property or capital;	168

(d) Any combination of the foregoing amounts.

169

(2) "Gross receipts" excludes the following amounts:

170

(a) Interest income except interest on credit sales;

171

(b) Dividends and distributions from corporations, and	172
distributive or proportionate shares of receipts and income from a	173
pass-through entity as defined under section 5733.04 of the	174
Revised Code;	175

(c) Receipts from the sale, exchange, or other disposition of	176
an asset described in section 1221 or 1231 of the Internal Revenue	177
Code, without regard to the length of time the person held the	178
asset. Notwithstanding section 1221 of the Internal Revenue Code,	179
receipts from hedging transactions also are excluded to the extent	180
the transactions are entered into primarily to protect a financial	181
position, such as managing the risk of exposure to (i) foreign	182
currency fluctuations that affect assets, liabilities, profits,	183
losses, equity, or investments in foreign operations; (ii)	184
interest rate fluctuations; or (iii) commodity price fluctuations.	185
As used in division (F)(2)(c) of this section, "hedging	186
transaction" has the same meaning as used in section 1221 of the	187
Internal Revenue Code and also includes transactions accorded	188
hedge accounting treatment under statement of financial accounting	189
standards number 133 of the financial accounting standards board.	190
For the purposes of division (F)(2)(c) of this section, the actual	191
transfer of title of real or tangible personal property to another	192
entity is not a hedging transaction.	193

(d) Proceeds received attributable to the repayment,	194
maturity, or redemption of the principal of a loan, bond, mutual	195
fund, certificate of deposit, or marketable instrument;	196

(e) The principal amount received under a repurchase	197
agreement or on account of any transaction properly characterized	198
as a loan to the person;	199

(f) Contributions received by a trust, plan, or other	200
arrangement, any of which is described in section 501(a) of the	201
Internal Revenue Code, or to which Title 26, Subtitle A, Chapter	202
1, Subchapter (D) of the Internal Revenue Code applies;	203

(g) Compensation, whether current or deferred, and whether in	204
cash or in kind, received or to be received by an employee, former	205
employee, or the employee's legal successor for services rendered	206
to or for an employer, including reimbursements received by or for	207
an individual for medical or education expenses, health insurance	208
premiums, or employee expenses, or on account of a dependent care	209
spending account, legal services plan, any cafeteria plan	210
described in section 125 of the Internal Revenue Code, or any	211
similar employee reimbursement;	212

(h) Proceeds received from the issuance of the taxpayer's own	213
stock, options, warrants, puts, or calls, or from the sale of the	214
taxpayer's treasury stock;	215

(i) Proceeds received on the account of payments from	216
insurance policies, except those proceeds received for the loss of	217
business revenue;	218

(j) Gifts or charitable contributions received; membership	219
dues received by trade, professional, homeowners', or condominium	220
associations; and payments received for educational courses,	221
meetings, meals, or similar payments to a trade, professional, or	222
other similar association; and fundraising receipts received by	223
any person when any excess receipts are donated or used	224
exclusively for charitable purposes;	225

(k) Damages received as the result of litigation in excess of	226
amounts that, if received without litigation, would be gross	227
receipts;	228

(l) Property, money, and other amounts received or acquired	229
by an agent on behalf of another in excess of the agent's	230
commission, fee, or other remuneration;	231

(m) Tax refunds, other tax benefit recoveries, and	232
reimbursements for the tax imposed under this chapter made by	233
entities that are part of the same combined taxpayer or	234
consolidated elected taxpayer group, and reimbursements made by	235
entities that are not members of a combined taxpayer or	236
consolidated elected taxpayer group that are required to be made	237
for economic parity among multiple owners of an entity whose tax	238
obligation under this chapter is required to be reported and paid	239
entirely by one owner, pursuant to the requirements of sections	240
5751.011 and 5751.012 of the Revised Code;	241

(n) Pension reversions;

242

(o) Contributions to capital;

243

(p) Sales or use taxes collected as a vendor or an	244
out-of-state seller on behalf of the taxing jurisdiction from a	245
consumer or other taxes the taxpayer is required by law to collect	246
directly from a purchaser and remit to a local, state, or federal	247
tax authority;	248

(q) In the case of receipts from the sale of cigarettes or	249
tobacco products by a wholesale dealer, retail dealer,	250
distributor, manufacturer, or seller, all as defined in section	251
5743.01 of the Revised Code, an amount equal to the federal and	252
state excise taxes paid by any person on or for such cigarettes or	253
tobacco products under subtitle E of the Internal Revenue Code or	254
Chapter 5743. of the Revised Code;	255

(r) In the case of receipts from the sale of motor fuel by a	256
licensed motor fuel dealer, licensed retail dealer, or licensed	257
permissive motor fuel dealer, all as defined in section 5735.01 of	258
the Revised Code, an amount equal to federal and state excise	259
taxes paid by any person on such motor fuel under section 4081 of	260
the Internal Revenue Code or Chapter 5735. of the Revised Code;	261

(s) In the case of receipts from the sale of beer or	262
intoxicating liquor, as defined in section 4301.01 of the Revised	263
Code, by a person holding a permit issued under Chapter 4301. or	264
4303. of the Revised Code, an amount equal to federal and state	265
excise taxes paid by any person on or for such beer or	266
intoxicating liquor under subtitle E of the Internal Revenue Code	267
or Chapter 4301. or 4305. of the Revised Code;	268

(t) Receipts realized by a new motor vehicle dealer or used	269
motor vehicle dealer, as defined in section 4517.01 of the Revised	270
Code, from the sale or other transfer of a motor vehicle, as	271
defined in that section, to another motor vehicle dealer for the	272
purpose of resale by the transferee motor vehicle dealer, but only	273
if the sale or other transfer was based upon the transferee's need	274
to meet a specific customer's preference for a motor vehicle;	275

(u) Receipts from a financial institution described in	276
division (E)(3) of this section for services provided to the	277
financial institution in connection with the issuance, processing,	278
servicing, and management of loans or credit accounts, if such	279
financial institution and the recipient of such receipts have at	280
least fifty per cent of their ownership interests owned or	281
controlled, directly or constructively through related interests,	282
by common owners;	283

(v) Receipts realized from administering anti-neoplastic	284
drugs and other cancer chemotherapy, biologicals, therapeutic	285
agents, and supportive drugs in a physician's office to patients	286
with cancer;	287

(w) Funds received or used by a mortgage broker that is not a	288
dealer in intangibles, other than fees or other consideration,	289
pursuant to a table-funding mortgage loan or warehouse-lending	290
mortgage loan. Terms used in division (F)(2)(w) of this section	291
have the same meanings as in section 1322.01 of the Revised Code,	292
except "mortgage broker" means a person assisting a buyer in	293
obtaining a mortgage loan for a fee or other consideration paid by	294
the buyer or a lender, or a person engaged in table-funding or	295
warehouse-lending mortgage loans that are first lien mortgage	296
loans.	297

(x) Property, money, and other amounts received by a	298
professional employer organization, as defined in section 4125.01	299
of the Revised Code, from a client employer, as defined in that	300
section, in excess of the administrative fee charged by the	301
professional employer organization to the client employer;	302

(y) In the case of amounts retained as commissions by a	303
permit holder under Chapter 3769. of the Revised Code, an amount	304
equal to the amounts specified under that chapter that must be	305
paid to or collected by the tax commissioner as a tax and the	306
amounts specified under that chapter to be used as purse money;	307

(z) Qualifying distribution center receipts.

308

(i) For purposes of division (F)(2)(z) of this section:

309

(I) "Qualifying distribution center receipts" means receipts	310
of a supplier from qualified property that is delivered to a	311
qualified distribution center, multiplied by a quantity that	312
equals one minus the Ohio delivery percentage. If the qualified	313
distribution center is a refining facility, "supplier" includes	314
all dealers, brokers, processors, sellers, vendors, cosigners, and	315
distributors of qualified property.	316

(II) "Qualified property" means tangible personal property	317
delivered to a qualified distribution center that is shipped to	318
that qualified distribution center solely for further shipping by	319
the qualified distribution center to another location in this	320
state or elsewhere or, in the case of gold, silver, platinum, or	321
palladium delivered to a refining facility solely for refining to	322
a grade and fineness acceptable for delivery to a registered	323
commodities exchange. "Further shipping" includes storing and	324
repackaging property into smaller or larger bundles, so long as	325
the property is not subject to further manufacturing or	326
processing. "Refining" is limited to extracting impurities from	327
gold, silver, platinum, or palladium through smelting or some	328
other process at a refining facility.	329

(III) "Qualified distribution center" means a warehouse, a	330
facility similar to a warehouse, or a refining facility in this	331
state that, for the qualifying year, is operated by a person that	332
is not part of a combined taxpayer group and that has a qualifying	333
certificate. All warehouses or facilities similar to warehouses	334
that are operated by persons in the same taxpayer group and that	335
are located within one mile of each other shall be treated as one	336
qualified distribution center. All refining facilities that are	337
operated by persons in the same taxpayer group and that are	338
located in the same or adjacent counties may be treated as one	339
qualified distribution center.	340

(IV) "Qualifying year" means the calendar year to which the	341
qualifying certificate applies.	342

(V) "Qualifying period" means the period of the first day of	343
July of the second year preceding the qualifying year through the	344
thirtieth day of June of the year preceding the qualifying year.	345

(VI) "Qualifying certificate" means the certificate issued by	346
the tax commissioner after the operator of a distribution center	347
files an annual application with the commissioner. The application	348
and annual fee shall be filed and paid for each qualified	349
distribution center on or before the first day of September before	350
the qualifying year or within forty-five days after the	351
distribution center opens, whichever is later.	352

The applicant must substantiate to the commissioner's	353
satisfaction that, for the qualifying period, all persons	354
operating the distribution center have more than fifty per cent of	355
the cost of the qualified property shipped to a location such that	356
it would be sitused outside this state under the provisions of	357
division (E) of section 5751.033 of the Revised Code. The	358
applicant must also substantiate that the distribution center	359
cumulatively had costs from its suppliers equal to or exceeding	360
five hundred million dollars during the qualifying period. (For	361
purposes of division (F)(2)(z)(i)(VI) of this section, "supplier"	362
excludes any person that is part of the consolidated elected	363
taxpayer group, if applicable, of the operator of the qualified	364
distribution center.) The commissioner may require the applicant	365
to have an independent certified public accountant certify that	366
the calculation of the minimum thresholds required for a qualified	367
distribution center by the operator of a distribution center has	368
been made in accordance with generally accepted accounting	369
principles. The commissioner shall issue or deny the issuance of a	370
certificate within sixty days after the receipt of the	371
application. A denial is subject to appeal under section 5717.02	372
of the Revised Code. If the operator files a timely appeal under	373
section 5717.02 of the Revised Code, the operator shall be granted	374
a qualifying certificate, provided that the operator is liable for	375
any tax, interest, or penalty upon amounts claimed as qualifying	376
distribution center receipts, other than those receipts exempt	377
under division (C)(1) of section 5751.011 of the Revised Code,	378
that would have otherwise not been owed by its suppliers if the	379
qualifying certificate was valid.	380

(VII) "Ohio delivery percentage" means the proportion of the	381
total property delivered to a destination inside Ohio from the	382
qualified distribution center during the qualifying period	383
compared with total deliveries from such distribution center	384
everywhere during the qualifying period.	385

(VIII) "Refining facility" means one or more buildings	386
located in a county in the Appalachian region of this state as	387
defined by section 107.21 of the Revised Code and utilized for	388
refining or smelting gold, silver, platinum, or palladium to a	389
grade and fineness acceptable for delivery to a registered	390
commodities exchange.	391

(IX) "Registered commodities exchange" means a board of	392
trade, such as New York mercantile exchange, inc. or commodity	393
exchange, inc., designated as a contract market by the commodity	394
futures trading commission under the "Commodity Exchange Act," 7	395
U.S.C. 1 et seq., as amended.	396

(ii)(I) If the distribution center is new and was not open	397
for the entire qualifying period, the operator of the distribution	398
center may request that the commissioner grant a qualifying	399
certificate. If the certificate is granted and it is later	400
determined that more than fifty per cent of the qualified property	401
during that year was not shipped to a location such that it would	402
be sitused outside of this state under the provisions of division	403
(E) of section 5751.033 of the Revised Code or if it is later	404
determined that the person that operates the distribution center	405
had average monthly costs from its suppliers of less than forty	406
million dollars during that year, then the operator of the	407
distribution center shall be liable for any tax, interest, or	408
penalty upon amounts claimed as qualifying distribution center	409
receipts, other than those receipts exempt under division (C)(1)	410
of section 5751.011 of the Revised Code, that would have not	411
otherwise been owed by its suppliers during the qualifying year if	412
the qualifying certificate was validpay a penalty for that year	413
equal to five hundred thousand dollars. (For purposes of division	414
(F)(2)(z)(ii) of this section, "supplier" excludes any person that	415
is part of the consolidated elected taxpayer group, if applicable,	416
of the operator of the qualified distribution center.)	417

(II) The commissioner may grant a qualifying certificate to a	418
distribution center that does not qualify as a qualified	419
distribution center for an entire qualifying period if the	420
operator of the distribution center demonstrates that the business	421
operations of the distribution center have changed or will change	422
such that the distribution center will qualify as a qualified	423
distribution center within thirty-six months after the date the	424
operator first applies for a certificate. If, at the end of that	425
thirty-six-month period, the business operations of the	426
distribution center have not changed such that the distribution	427
center qualifies as a qualified distribution center, the operator	428
of the distribution center shall pay a penalty equal to five	429
hundred thousand dollars for each year that the distribution	430
center received a certificate but did not qualify as a qualified	431
distribution center. For each year the distribution center	432
receives a certificate under division (F)(2)(z)(ii)(II) of this	433
section, the distribution center shall pay all applicable fees	434
required under division (F)(2)(z) of this section and shall submit	435
an updated business plan showing the progress the distribution	436
center made toward qualifying as a qualified distribution center	437
during the preceding year.	438

(III) An operator may appeal the imposition of a penalty	439
imposed under division (F)(2)(z)(ii)(I) or (II) of this section as	440
provided in section 5717.02 of the Revised Code.	441

(iii) When filing an application for a qualifying certificate	442
under division (F)(2)(z)(i)(VI) of this section, the operator of a	443
qualified distribution center also shall provide documentation, as	444
the commissioner requires, for the commissioner to ascertain the	445
Ohio delivery percentage. The commissioner, upon issuing the	446
qualifying certificate, also shall certify the Ohio delivery	447
percentage. The operator of the qualified distribution center may	448
appeal the commissioner's certification of the Ohio delivery	449
percentage in the same manner as an appeal is taken from the	450
denial of a qualifying certificate under division (F)(2)(z)(i)(VI)	451
of this section.	452

Within thirty days after all appeals have been exhausted, the	453
operator of the qualified distribution center shall notifyprovide	454
the commissioner with a list of all affected suppliers of	455
qualified property. The commissioner shall notify all such	456
suppliers that suchthe suppliers are required to file, within	457
sixty days after receiving the notice from the operator of the	458
qualified distribution center, amended reports for the impacted	459
affected calendar quarter or quarters or calendar year, whichever	460
the case may be. Any additional tax liability or tax overpayment	461
shall be subject to interest but shall not be subject to the	462
imposition of any penalty so long as the amended returns are	463
timely filed. The supplier of tangible personal property delivered	464
to the qualified distribution center shall include in its report	465
of taxable gross receipts the receipts from the total sales of	466
property delivered to the qualified distribution center for the	467
calendar quarter or calendar year, whichever the case may be,	468
multiplied by the Ohio delivery percentage for the qualifying	469
year. Nothing in division (F)(2)(z)(iii) of this section shall be	470
construed as imposing liability on the operator of a qualified	471
distribution center for the tax imposed by this chapter arising	472
from any change to the Ohio delivery percentage.	473

(iv)(I) In the case where the distribution center is new and	474
not open for the entire qualifying period, the operator shall make	475
a good faith estimate of an Ohio delivery percentage for use by	476
suppliers in their reports of taxable gross receipts for the	477
remainder of the qualifying period. The operator of the facility	478
shall disclose to the suppliers that such Ohio delivery percentage	479
is an estimate and is subject to recalculation. By the due date of	480
the next application for a qualifying certificate, the operator	481
shall determine the actual Ohio delivery percentage for the	482
estimated qualifying period and proceed as provided in division	483
(F)(2)(z)(iii) of this section with respect to the calculation and	484
recalculation of the Ohio delivery percentage. The supplier is	485
required to file, within sixty days after receiving notice from	486
the operator of the qualified distribution center, amended reports	487
for the impacted calendar quarter or quarters or calendar year,	488
whichever the case may be. Any additional tax liability or tax	489
overpayment shall be subject to interest but shall not be subject	490
to the imposition of any penalty so long as the amended returns	491
are timely filed.	492

(II) The operator of a distribution center that receives a	493
qualifying certificate under division (F)(2)(ii)(II) of this	494
section shall make a good faith estimate of the Ohio delivery	495
percentage that the operator estimates will apply to the	496
distribution center at the end of the thirty-six-month period	497
after the operator first applied for a qualifying certificate	498
under that division. The result of the estimate shall be	499
multiplied by a factor of one and seventy-five one-hundredths. The	500
product of that calculation shall be the Ohio delivery percentage	501
used by suppliers in their reports of taxable gross receipts for	502
each qualifying year that the distribution center receives a	503
qualifying certificate under division (F)(2)(ii)(II) of this	504
section, except that, if the product is less than five per cent,	505
the Ohio delivery percentage used shall be five per cent and that,	506
if the product exceeds forty-nine per cent, the Ohio delivery	507
percentage used shall be forty-nine per cent.	508

(v) Qualifying certificates and Ohio delivery percentages	509
issued by the commissioner shall be open to public inspection and	510
shall be timely published by the commissioner. A supplier relying	511
in good faith on a certificate issued under this division shall	512
not be subject to tax on the qualifying distribution center	513
receipts under division (F)(2)(z) of this section. A person	514
receiving a qualifying certificate is responsibleliable for	515
paying the tax, interest, and penalty upon amounts claimed as	516
qualifying distribution center receipts that would not otherwise	517
have been owed by the supplier if the qualifying certificate were	518
available when it is later determined that the qualifying	519
certificatea penalty equal to five hundred thousand dollars for	520
each year the person received a certificate that should not have	521
been issued because the statutory requirements were in fact not	522
met.	523

(vi) The annual fee for a qualifying certificate shall be one	524
hundred thousand dollars for each qualified distribution center.	525
If a qualifying certificate is not issued, the annual fee is	526
subject to refund after the exhaustion of all appeals provided for	527
in division (F)(2)(z)(i)(VI) of this section. The fee imposed	528
under this division may be assessed in the same manner as the tax	529
imposed under this chapter. The first one hundred thousand dollars	530
of the annual application fees collected each calendar year shall	531
be credited to the revenue enhancement fund. The remainder of the	532
annual application fees collected shall be distributed in the same	533
manner required under section 5751.20 of the Revised Code.	534

(vii) The tax commissioner may require that adequate security	535
be posted by the operator of the distribution center on appeal	536
when the commissioner disagrees that the applicant has met the	537
minimum thresholds for a qualified distribution center as set	538
forth in divisions (F)(2)(z)(i)(VI) and (F)(2)(z)(ii) of this	539
section.	540

(aa) Receipts of an employer from payroll deductions relating	541
to the reimbursement of the employer for advancing moneys to an	542
unrelated third party on an employee's behalf;	543

(bb) Cash discounts allowed and taken;

544

(cc) Returns and allowances;

545

(dd) Bad debts from receipts on the basis of which the tax	546
imposed by this chapter was paid in a prior quarterly tax payment	547
period. For the purpose of this division, "bad debts" means any	548
debts that have become worthless or uncollectible between the	549
preceding and current quarterly tax payment periods, have been	550
uncollected for at least six months, and that may be claimed as a	551
deduction under section 166 of the Internal Revenue Code and the	552
regulations adopted under that section, or that could be claimed	553
as such if the taxpayer kept its accounts on the accrual basis.	554
"Bad debts" does not include repossessed property, uncollectible	555
amounts on property that remains in the possession of the taxpayer	556
until the full purchase price is paid, or expenses in attempting	557
to collect any account receivable or for any portion of the debt	558
recovered;	559

(ee) Any amount realized from the sale of an account	560
receivable to the extent the receipts from the underlying	561
transaction giving rise to the account receivable were included in	562
the gross receipts of the taxpayer;	563

(ff) Any receipts directly attributed to providing public	564
services pursuant to sections 126.60 to 126.605 of the Revised	565
Code, or any receipts directly attributed to a transfer agreement	566
or to the enterprise transferred under that agreement under	567
section 4313.02 of the Revised Code.	568

(gg)(i) As used in this division:

569

(I) "Qualified uranium receipts" means receipts from the	570
sale, exchange, lease, loan, production, processing, or other	571
disposition of uranium within a uranium enrichment zone certified	572
by the tax commissioner under division (F)(2)(gg)(ii) of this	573
section. "Qualified uranium receipts" does not include any	574
receipts with a situs in this state outside a uranium enrichment	575
zone certified by the tax commissioner under division	576
(F)(2)(gg)(ii) of this section.	577

(II) "Uranium enrichment zone" means all real property that	578
is part of a uranium enrichment facility licensed by the United	579
States nuclear regulatory commission and that was or is owned or	580
controlled by the United States department of energy or its	581
successor.	582

(ii) Any person that owns, leases, or operates real or	583
tangible personal property constituting or located within a	584
uranium enrichment zone may apply to the tax commissioner to have	585
the uranium enrichment zone certified for the purpose of excluding	586
qualified uranium receipts under division (F)(2)(gg) of this	587
section. The application shall include such information that the	588
tax commissioner prescribes. Within sixty days after receiving the	589
application, the tax commissioner shall certify the zone for that	590
purpose if the commissioner determines that the property qualifies	591
as a uranium enrichment zone as defined in division (F)(2)(gg) of	592
this section, or, if the tax commissioner determines that the	593
property does not qualify, the commissioner shall deny the	594
application or request additional information from the applicant.	595
If the tax commissioner denies an application, the commissioner	596
shall state the reasons for the denial. The applicant may appeal	597
the denial of an application to the board of tax appeals pursuant	598
to section 5717.02 of the Revised Code. If the applicant files a	599
timely appeal, the tax commissioner shall conditionally certify	600
the applicant's property. The conditional certification shall	601
expire when all of the applicant's appeals are exhausted. Until	602
final resolution of the appeal, the applicant shall retain the	603
applicant's records in accordance with section 5751.12 of the	604
Revised Code, notwithstanding any time limit on the preservation	605
of records under that section.	606

(hh) Amounts realized by licensed motor fuel dealers or	607
licensed permissive motor fuel dealers from the exchange of	608
petroleum products, including motor fuel, between such dealers,	609
provided that delivery of the petroleum products occurs at a	610
refinery, terminal, pipeline, or marine vessel and that the	611
exchanging dealers agree neither dealer shall require monetary	612
compensation from the other for the value of the exchanged	613
petroleum products other than such compensation for differences in	614
product location or grade. Division (F)(2)(hh) of this section	615
does not apply to amounts realized as a result of differences in	616
location or grade of exchanged petroleum products or from	617
handling, lubricity, dye, or other additive injections fees,	618
pipeline security fees, or similar fees. As used in this division,	619
"motor fuel," "licensed motor fuel dealer," "licensed permissive	620
motor fuel dealer," and "terminal" have the same meanings as in	621
section 5735.01 of the Revised Code.	622

(ii) In the case of amounts collected by a licensed casino	623
operator from casino gaming, amounts in excess of the casino	624
operator's gross casino revenue. In this division, "casino	625
operator" and "casino gaming" have the meanings defined in section	626
3772.01 of the Revised Code, and "gross casino revenue" has the	627
meaning defined in section 5753.01 of the Revised Code.	628

(jj) Any receipts for which the tax imposed by this chapter	629
is prohibited by the constitution or laws of the United States or	630
the constitution of this state.	631

(3) In the case of a taxpayer when acting as a real estate	632
broker, "gross receipts" includes only the portion of any fee for	633
the service of a real estate broker, or service of a real estate	634
salesperson associated with that broker, that is retained by the	635
broker and not paid to an associated real estate salesperson or	636
another real estate broker. For the purposes of this division,	637
"real estate broker" and "real estate salesperson" have the same	638
meanings as in section 4735.01 of the Revised Code.	639

(4) A taxpayer's method of accounting for gross receipts for	640
a tax period shall be the same as the taxpayer's method of	641
accounting for federal income tax purposes for the taxpayer's	642
federal taxable year that includes the tax period. If a taxpayer's	643
method of accounting for federal income tax purposes changes, its	644
method of accounting for gross receipts under this chapter shall	645
be changed accordingly.	646

(G) "Taxable gross receipts" means gross receipts sitused to	647
this state under section 5751.033 of the Revised Code.	648

(H) A person has "substantial nexus with this state" if any	649
of the following applies. The person:	650

(1) Owns or uses a part or all of its capital in this state;

651

(2) Holds a certificate of compliance with the laws of this	652
state authorizing the person to do business in this state;	653

(3) Has bright-line presence in this state;

654

(4) Otherwise has nexus with this state to an extent that the	655
person can be required to remit the tax imposed under this chapter	656
under the Constitution of the United States.	657

(I) A person has "bright-line presence" in this state for a	658
reporting period and for the remaining portion of the calendar	659
year if any of the following applies. The person:	660

(1) Has at any time during the calendar year property in this	661
state with an aggregate value of at least fifty thousand dollars.	662
For the purpose of division (I)(1) of this section, owned property	663
is valued at original cost and rented property is valued at eight	664
times the net annual rental charge.	665

(2) Has during the calendar year payroll in this state of at	666
least fifty thousand dollars. Payroll in this state includes all	667
of the following:	668

(a) Any amount subject to withholding by the person under	669
section 5747.06 of the Revised Code;	670

(b) Any other amount the person pays as compensation to an	671
individual under the supervision or control of the person for work	672
done in this state; and	673

(c) Any amount the person pays for services performed in this	674
state on its behalf by another.	675

(3) Has during the calendar year taxable gross receipts of at	676
least five hundred thousand dollars.	677

(4) Has at any time during the calendar year within this	678
state at least twenty-five per cent of the person's total	679
property, total payroll, or total gross receipts.	680

(5) Is domiciled in this state as an individual or for	681
corporate, commercial, or other business purposes.	682

(J) "Tangible personal property" has the same meaning as in	683
section 5739.01 of the Revised Code.	684

(K) "Internal Revenue Code" means the Internal Revenue Code	685
of 1986, 100 Stat. 2085, 26 U.S.C. 1, as amended. Any term used in	686
this chapter that is not otherwise defined has the same meaning as	687
when used in a comparable context in the laws of the United States	688
relating to federal income taxes unless a different meaning is	689
clearly required. Any reference in this chapter to the Internal	690
Revenue Code includes other laws of the United States relating to	691
federal income taxes.	692

(L) "Calendar quarter" means a three-month period ending on	693
the thirty-first day of March, the thirtieth day of June, the	694
thirtieth day of September, or the thirty-first day of December.	695

(M) "Tax period" means the calendar quarter or calendar year	696
on the basis of which a taxpayer is required to pay the tax	697
imposed under this chapter.	698

(N) "Calendar year taxpayer" means a taxpayer for which the	699
tax period is a calendar year.	700

(O) "Calendar quarter taxpayer" means a taxpayer for which	701
the tax period is a calendar quarter.	702

(P) "Agent" means a person authorized by another person to	703
act on its behalf to undertake a transaction for the other,	704
including any of the following:	705

(1) A person receiving a fee to sell financial instruments;

706

(2) A person retaining only a commission from a transaction	707
with the other proceeds from the transaction being remitted to	708
another person;	709

(3) A person issuing licenses and permits under section	710
1533.13 of the Revised Code;	711

(4) A lottery sales agent holding a valid license issued	712
under section 3770.05 of the Revised Code;	713

(5) A person acting as an agent of the division of liquor	714
control under section 4301.17 of the Revised Code.	715

(Q) "Received" includes amounts accrued under the accrual	716
method of accounting.	717

(R) "Reporting person" means a person in a consolidated	718
elected taxpayer or combined taxpayer group that is designated by	719
that group to legally bind the group for all filings and tax	720
liabilities and to receive all legal notices with respect to	721
matters under this chapter, or, for the purposes of section	722
5751.04 of the Revised Code, a separate taxpayer that is not a	723
member of such a group.	724

Section 2. That existing sections 5701.11 and 5751.01 of the	725
Revised Code are hereby repealed.	726

Section 3. This act is hereby declared to be an emergency	727
measure necessary for the immediate preservation of the public	728
peace, health, and safety. The reason for such necessity is to	729
enable taxpayers to avoid making miscellaneous adjustments on	730
their 2012 tax returns that increase tax liabilities. Therefore,	731
this act shall go into immediate effect.	732

Section 4.  Section 5751.01 of the Revised Code is presented	733
in this act as a composite of the section as amended by both Am.	734
Sub. H.B. 472 and Am. Sub. H.B. 510 of the 129th General Assembly.	735
The General Assembly, applying the principle stated in division	736
(B) of section 1.52 of the Revised Code that amendments are to be	737
harmonized if reasonably capable of simultaneous operation, finds	738
that the composite is the resulting version of the section in	739
effect prior to the effective date of the section as presented in	740
this act.	741