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Sub. S. B. No. 226As Passed by the HouseAs Passed by the House
124th General Assembly | Regular Session | 2001-2002 |
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SENATORS Blessing, Robert Gardner, Goodman, Fingerhut, DiDonato, Mallory, Spada, Roberts
REPRESENTATIVES Clancy, Young, Schmidt, Otterman, Latell, Willamowski, Allen, Coates, Britton, Hoops
A BILL
To amend sections 3770.07, 3770.072, 5733.051,
5733.98, 5747.062, 5747.20, and 5747.98 and to
enact
sections
3770.10
to 3770.14 of the Revised
Code
to
permit the
transfer of a lottery prize
award upon
the prior
approval of a court and to
establish
procedures for
application for such
approval.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 3770.07, 3770.072, 5733.051,
5733.98, 5747.062, 5747.20, and 5747.98 be amended and
sections
3770.10, 3770.11, 3770.12, 3770.13, and 3770.14 of the
Revised
Code be enacted to
read as follows:
Sec. 3770.07. (A)(1) Lottery prize awards shall be claimed
by the holder of the winning lottery ticket, or by the executor
or
administrator, or the trustee of a trust, of the
estate of a
deceased holder of a winning
ticket, in a manner to be determined
by the state lottery
commission, within one hundred eighty days
after the date on
which such prize award was announced if the
lottery game is an
on-line game, and within one hundred eighty
days after the close
of the game if the lottery game is an instant
game. Except as
otherwise provided in division (B) of this
section, if no valid
claim to the prize award is made within the
prescribed period,
the prize money or the cost of goods and
services awarded as
prizes, or if such goods or services are
resold by the
commission, the proceeds from such sale, shall be
returned to the
state lottery fund and distributed in accordance
with section
3770.06 of the Revised Code. (2) If a
person entitled to a prize award
prize winner, as
defined in section 3770.10 of the Revised Code, is under eighteen
years of age, or is under some other legal disability, and the
prize money or the cost of goods or services awarded as a prize
exceeds one thousand dollars, the director shall order that
payment be made to the order of the legal guardian of
such
winning
ticket holder
that prize winner. If the amount of the prize money
or the
cost of
goods or services awarded as a prize is one
thousand
dollars or
less, the director may order that payment be
made to
the order of
the adult member, if any, of
such winning
ticket
holder's
that prize winner's family
legally responsible for
the care of
such winning
person
that prize winner. (3) No right of any
person
prize winner, as defined in
section 3770.10 of the Revised Code, to a prize award shall be the
subject of a security interest or used as collateral. (4)(a) No right of any
person
prize winner, as defined in
section 3770.10 of the Revised Code, to a prize award shall be
assignable, or subject to garnishment, attachment, execution,
withholding, or deduction, except as follows: as provided in
sections 3119.80, 3119.81, 3121.02, 3121.03, and
3123.06 of the
Revised Code; when the
payment is to be made to the executor or
administrator or the
trustee of a trust of the estate of a winning
ticket holder; when
the award of a prize is disputed, any person
may be awarded a
prize award to which another has claimed title,
pursuant to the
order of a court of competent jurisdiction;
or
when the director
is to make a payment pursuant to section
3770.071 of the Revised
Code; or as provided in sections 3770.10
to 3770.14 of
the Revised Code. (b) The commission shall adopt rules pursuant to section
3770.03
of the
Revised Code concerning the payment of prize awards
upon
the death of a prize winner. Upon the death of a prize
winner, as defined in section 3770.10 of the Revised Code,
the
remainder
of the prize winner's prize award, to the
extent it
is
not subject to a transfer agreement under sections
3770.10 to
3770.14 of the Revised Code, may be paid to the
executor,
administrator,
or trustee in the form of a discounted
lump sum
cash settlement. (5) No lottery prize award shall be awarded to or for any
officer or employee of the state lottery commission, any officer
or
employee of the auditor of state actively coordinating and
certifying
commission drawings, or any blood
relative or spouse of
such officer or employee of the commission or auditor
of state
living as a member
of such officer's or employee's household, nor
shall any such
employee, blood relative, or spouse attempt to
claim a lottery prize
award.
(6) The director may prohibit vendors to the commission and
their employees from being awarded a lottery prize award. (7) Upon the payment of
prize awards pursuant to this
section, the director and the
commission are discharged from all
further liability therefor. (B) The commission may adopt rules governing the
disbursement of unclaimed prize awards as all or part of the
prize
award in a lottery and may, pursuant to those rules,
conduct the
lottery and disburse any such unclaimed prize awards.
Any lottery
in which all or any part of the prize award is paid
from unclaimed
prize awards shall be conducted in accordance with
all of the
other requirements of this chapter, including, but not
limited to,
the time and proof requirements for claiming awards
and the
disposition of unclaimed prize awards when the prescribed
period
for claiming the award has passed. A prize award or any
part of a
prize award that is paid from an unclaimed prize award
shall not
be reapplied toward the satisfaction of the requirement
of
division (A) of section 3770.06 of the Revised Code that at
least
fifty per cent of the total revenues from ticket sales be
disbursed for monetary prize awards, if such unclaimed prize
award
was previously applied toward the satisfaction of that
requirement. On or before the last day of January and July each
year, the commission shall report to the general assembly the
gross sales and net profits the commission obtained from the
unclaimed prize awards in lotteries conducted pursuant to this
division during the preceding two calendar quarters, including
the
amount of money produced by the games funded by the unclaimed
prize awards and the total revenue accruing to the state from the
prize award lotteries conducted pursuant to this division. There is hereby established in the state treasury the
unclaimed lottery prizes fund, to which all unclaimed prize
awards
shall be transferred. Any interest
which
that accrues on the
amounts in the fund shall become a part of the fund and shall be
subject to any rules adopted by the commission governing the
disbursement of unclaimed prize awards.
Sec. 3770.072. (A) As used in this section, "prize winner,"
"transferee," and "transferor" have the same meanings as in
section 3770.10 of the Revised Code. (B) The state lottery commission shall deduct amounts from
lottery
prize awards and file returns in accordance with section
5747.062 of the
Revised Code and any rules adopted by the tax
commissioner pursuant to that
section.
This division also applies
to lottery prize award payments the commission remits to
transferees. (C)(1) Each transferee shall deduct and withhold from each
gross amount payable to each prize winner three and one-half per
cent of the gross amount payable prior to making any other
reduction required by this chapter. (2) With respect to amounts deducted and withheld pursuant to
division (C)(1) of this section, each transferee shall comply with
divisions (A)(2) to (4) of section 5747.062 of the Revised Code. (3) An employee of a corporation, limited liability company,
or business trust having control or supervision of or charged with
the responsibility of filing the report and making the payment
required by division (C) of this section and section 5747.062 of
the Revised Code, or an officer, member, manager, or trustee of a
corporation, limited liability company, or business trust who is
responsible for the execution of the corporation's, limited
liability company's, or business trust's fiscal responsibilities,
shall be personally liable for failure to file the report or pay
the amount due as required by division (C) of this section and
section 5747.062 of the Revised Code. The dissolution,
termination, or bankruptcy of a corporation, limited liability
company, or business trust does not discharge a responsible
officer's, member's, manager's, employee's, or trustee's liability
for a failure of the corporation, limited liability company, or
business trust to file returns or pay the amount due. (4)(a) The tax commissioner may make an assessment against
any person listed in division (C)(1) or (3) of this section for
any deficiency for any period. Section 5747.13 of the Revised Code
shall apply with respect to issuing assessments, filing petitions
for reassessments, conducting hearings, issuing final
determinations, making the assessment final, and filing the entry
that makes the assessment final. Section 5717.02 of the Revised
Code shall apply to appeals of the commissioner's final decision
in connection with assessments issued pursuant to division (C)(4)
of this section. (b) An assessment issued against any person listed in
division (C)(1) or (3) of this section shall not be considered
an
election of remedies or a bar to an assessment against any
other
person for the failure to comply with division (C)(1) of
this
section. No assessment shall be issued against any person who
is
so listed if the amount required to be withheld has been paid
by
another. (c) The assessment shall include interest at the rate per
annum prescribed by section 5703.47 of the Revised Code on
liability from the time the payment is due until the date of
assessment. Interest shall continue to accrue from the date of
assessment until the date the assessment is paid in full. Any
interest accruing subsequent to the date of the issuance of the
assessment shall be considered to be an additional deficiency for
which the tax commissioner may issue subsequent assessments. The
initial assessment and any subsequent assessments may include a
penalty in an amount not to exceed twice the applicable interest
charged under this division.
Sec. 3770.10. As used in sections
3770.07 and 3770.10 to
3770.14 of the
Revised Code: (A) "Court of competent jurisdiction" means the probate
court of the
county in which the prize winner resides, or, if the
prize winner is not a resident of this state, the probate court of
Franklin county or a federal court
having jurisdiction over the
lottery prize award. (B) "Discounted present value" means the
present value
of
the future payments of a lottery prize award that is determined
by
discounting those
payments to the present, using the most
recently
published
applicable federal rate for determining the
present
value of an annuity as issued by the
United
States
internal
revenue service and assuming daily compounding. (C) "Independent professional advice" means the
advice of an
attorney, a certified public accountant, an
actuary, or any other
licensed professional adviser if all of
the following apply: (1) The prize winner has engaged the services of the
licensed
professional adviser to render advice concerning the
legal
and other implications of a transfer of the lottery prize
award. (2) The licensed professional adviser is not affiliated
in
any manner with or compensated in any manner by the
transferee of
the
lottery prize award. (3) The compensation of the licensed professional adviser
is
not affected by whether or not a
transfer of a lottery prize
award
occurs. (D) "Prize winner" means any person that holds the right to
receive all or any part of a lottery prize award as a result of
being any of the following: (1) A person who is a claimant under division (A)(1) of
section 3770.07 of the Revised Code; (2) A person who is entitled to a prize award and who is
under a legal disability as described in division (A)(2) of
section 3770.07 of the Revised Code; (3) A person who was awarded a prize award to which another
has claimed title by a court order under division (A)(4)(a) of
section 3770.07 of the Revised Code; (4) A person who is receiving payments upon the death of a
prize winner as provided in division (A)(4)(b) of section 3770.07
of the Revised Code. (E) "Transfer" means any form of sale, assignment, or
redirection of payment of all or any part of a lottery prize
award
for
consideration. (F) "Transfer agreement" means an agreement that is complete
and valid, and that
provides
for the transfer of all or any part
of a lottery prize award
from a transferor to a transferee. A
transfer agreement
is incomplete and invalid unless the
agreement
contains both of
the following: (1) A statement, signed by the transferor under penalties of
perjury, that the transferor irrevocably agrees that the
transferor is subject to the tax imposed by Chapter 5733. or 5747.
of the Revised Code with respect to gain or income which the
transferor will recognize in connection with the transfer. If the
transferor is a pass-through entity, as defined in section 5733.04
of the Revised Code, each investor in the pass-through entity
shall also sign under penalties of perjury a statement that the
investor irrevocably agrees that the investor is subject to the
tax imposed by Chapter 5733. or 5747. of the Revised Code with
respect to gain or income which the transferor and the investor
will recognize in connection with the transfer. (2) A statement, signed by the transferee, that the
transferee irrevocably agrees that the transferee is subject to
the withholding requirements imposed by division (C) of section
3770.072 of the Revised Code and is subject to the tax imposed by
Chapter 5733. or 5747. of the Revised Code with respect to gain
or
income which the transferee will recognize in connection with
lottery prize awards to be received as a result of the transfer.
If the transferee is a pass-through entity, as defined in section
5733.04 of the Revised Code, each investor in the pass-through
entity shall also sign under penalties of perjury a statement
setting forth that the investor irrevocably agrees that the
investor is subject to the withholding requirements imposed by
division (C) of section 3770.072 of the Revised Code and is
subject to the tax imposed by Chapter 5733. or 5747. of the
Revised Code with respect to gain or income which the transferee
and the investor will recognize in connection with lottery prize
awards to be received as a result of the transfer. (G) "Transferee" means a party acquiring or proposing to
acquire
all or any part of a lottery prize award through a
transfer.
(H) "Transferor" means either a prize winner or a transferee
in an
earlier transfer whose interest is acquired by or is sought
to be
acquired by a transferee or a new transferee through a
transfer.
Sec. 3770.11. Prior to the date
on which a prize winner
becomes
obligated under a transfer
agreement, the transferee shall
provide
to the prize winner a disclosure statement, in boldface
type of
the
minimum size of fourteen points, setting forth all of
the
following: (A) The amounts and due
dates of the lottery prize award
payments
that would be transferred under the transfer agreement; (B) The aggregate amount
of the lottery prize award payments
described in division
(A) of this section; (C) The discounted present value of the lottery prize award
payments
described
in division (A) of
this section, calculated as
of the date the disclosure statement is provided to the
prize
winner, and the amount
of the applicable
federal
rate used in
determining
the discounted
present value; (D) The gross amount payable to the prize winner in
exchange
for or as consideration for the transfer of the lottery
prize
award
payments described in division (A) of this section,
including the annual rate of discount to present value used to
determine the gross amount payable to the prize winner, assuming
daily compounding and funding on the date of the transfer
agreement; (E) An itemized listing
of all brokers' commissions, service
charges, application fees,
processing fees, closing costs, filing
fees, administrative
fees, legal fees, notary fees, and other
commissions, fees,
costs, expenses, and charges payable by the
prize winner
or deductible from the gross amount otherwise payable
to the
prize winner as described in division
(D) of this section; (F) The net amount payable to the prize winner after
deduction
from the gross amount payable to the prize winner as
described in
division
(D) of this section of all commissions,
fees, costs,
expenses, and
charges described in division (E) of
this section; (G)(1) The quotient, expressed as a percentage,
obtained by
dividing the net amount payable to the prize winner as
described
in
division (F) of
this section by the discounted present value of
the payments
described in division (C) of
this section.
(2) Solely for purposes of division (G)(1) of this section,
"net amount payable" does not include taxes required to be
withheld under division (C)(1) of section 3770.072 of the Revised
Code.
Sec. 3770.12. A court of competent
jurisdiction may approve
a
transfer of a lottery prize award only in a final order that is
based on the express findings of the court,
and the express
findings shall
include all of the following: (A) If the transferor is a prize winner, the transferee has
provided to the prize winner a
disclosure
statement that complies
with section 3770.11 of the
Revised
Code, and the prize winner has
confirmed the prize winner's
receipt of the
disclosure statement,
as evidenced by the
prize winner's notarized signature on a
copy
of the disclosure
statement. (B) If the transferor is a prize winner, the prize winner has
established that the transfer is
fair and reasonable
and in the
best interests of the prize winner. (C) If the transferor is a prize winner, the prize winner
has received independent professional
advice
regarding the legal
and other implications of the
transfer. (D) The transferee has given written notice of the
transferee's
name, address, and taxpayer identification number to
the state lottery commission and has filed a copy
of that notice
with the court
in which the application for approval of the
transfer was filed.
(E) The transferee is a trust, limited partnership, general
partnership, corporation, professional association, limited
liability company, or other entity that is qualified to do
business in this state and meets the registration requirements for
that type of entity under Title XVII of the Revised Code. (F) The transfer complies with all applicable requirements
of
the Revised Code and does not
contravene any applicable law.
(G) The transfer does not include or cover the amounts of
the lottery prize award that are required to be withheld or
deducted pursuant to section 3119.80, 3119.81, 3121.02, 3121.03,
3123.06, 3770.071, or 3770.072 of the Revised Code.
(H) Any amounts described in division (G) of this section
that are required to be withheld or deducted, as of the date of
the court order, will be offset by the commission first against
remaining payments due the transferor and then against payments
due the transferee. (I) Except as provided in divisions (G) and (H) of this
section, that the transferor's interest in each and all of the
future payments from a particular lottery prize award is to be
paid to a single transferee, or, if the payments from the lottery
prize award are to be directed from the state lottery commission
to multiple transferees,
the commission has promulgated rules
under section
3770.03 of the Revised Code permitting transfers to
multiple
transferees, and the transfer is consistent with those
rules.
(J) If the lottery prize award has been transferred within
twelve months immediately preceding the effective date of the
proposed transfer, the state lottery commission has not objected
to the proposed transfer. The court shall presume that the
requirements of this division are met unless the commission
notifies the court in writing before the hearing on the
application for transfer, or through counsel at that hearing, that
a transfer of the same lottery prize award has been made within
that twelve-month period and that the commission objects to a
subsequent transfer within that twelve-month period. The court
shall find that the requirements of this division are not met if
the commission provides notice of a prior transfer of the same
lottery prize award within that twelve-month period and its
objection to the proposed transfer, unless the transferor or
transferee shows by clear and convincing evidence that no previous
transfer of the same lottery prize award occurred within that
twelve-month period.
Sec. 3770.13. (A) A transferee shall file an application
under
sections 3770.10 to 3770.14 of the Revised Code for the
approval
in advance of a transfer of a lottery prize award in
a
court of
competent jurisdiction. (B) The following procedures shall apply to an application
for
the approval in advance by a court of
a transfer of a lottery
prize award under division (A) of this section: (1) Upon the filing of the application, the court
shall set
a
date, time, and place for a hearing on the application and shall
notify
the
transferee and transferor of the date, time, and place
of the hearing. (2) Not less than thirty days prior to the date set by the
court
for the hearing on an application filed pursuant to this
section, the
transferee shall file with the court
and shall serve
on the state lottery commission, in the manner
prescribed in the
Rules of Civil Procedure for the
service of
process, a notice of
the proposed transfer and
the application for
its approval in
advance. The notice shall include all of
the
following: (a) A copy of the application; (b) A copy of the transfer agreement or, if the transferor
is not a prize winner, a redacted copy of the transfer agreement
that discloses sufficient information to allow the commission and
the court to determine the validity of the transfer agreement; (c) If the transferor is a prize winner, a copy of the
disclosure statement provided by the
transferee pursuant to
section 3770.11 of the Revised Code and
signed by the prize winner
pursuant to division (A) of section
3770.12 of the Revised Code;
(d) The amounts and due dates of the lottery prize award
payments that will be transferred under the transfer agreement; (e) Notification of the date, time, and place of the
hearing
on the application; (f) The complete name, address, and taxpayer identification
number of the transferee. (3) The commission shall not be required to appear in or be
named as a party to a hearing on the application, but may
intervene as of right in the proceeding. (4) At the conclusion of the hearing on an application under
this
section, the court
may grant or deny the approval of the
transfer. The court
shall enter its order accordingly. If the
court
grants the approval of the transfer, it shall include
in its
order all of the express findings specified in section 3770.12 of
the
Revised Code. If the court denies the
approval of the
transfer, it shall include in its order the
reasons for the
denial. (5) An order of the court made under division
(B)(4) of this
section is a final and appealable order.
Sec. 3770.14. (A) Upon receipt of a court order issued under
section 3770.13 of the Revised Code, the transferee shall provide
a certified copy of the court order to the director
of the state
lottery commission. Not later than ten days after receipt of the
certified copy of
the court order, the director shall acknowledge
to the transferee in writing the commission's intent to comply
with the court order in making future payments.
(B) The director shall make payments of the lottery prize
award
to the transferee designated in the certified copy
of
the
court order and in accordance with the prize payment schedule
established when the prize was claimed. The director may charge a
processing
fee, in
an amount determined by the commission by rule
pursuant to
section
3770.03 of the Revised Code, to cover any
direct or indirect costs
associated
with making the prize award
payments in accordance with that prize payment schedule. (C) Upon payment of the lottery prize award pursuant to
this section, the director and the commission are discharged from
all further liability therefor.
Sec. 5733.051. Subject to section 5733.0510 of the Revised
Code, net
income of a corporation subject to the
tax imposed by
section 5733.06 of the Revised Code shall be
allocated and
apportioned to this state as follows: (A) Net rents and royalties from real property located in
this state are allocable to this state;. (B) Net rents and royalties from tangible personal
property,
to the extent such property is utilized in this state,
are
allocable to this state if the taxpayer is otherwise subject
to
the tax imposed by section
5733.06 of the Revised Code;. (C) Capital gains and losses from the sale or other
disposition of real property located in this state are allocable
to this state;. (D) Capital gains and losses from the sale or other
disposition of tangible personal property are allocable to this
state if the property had a situs in this state at the time of
sale and the taxpayer is otherwise subject to the tax imposed by
section 5733.06 of the Revised Code;. (E) Capital gains and losses from the sale or other
disposition of intangible property which may produce income
enumerated in division (F) of this section are allocable on the
same basis as set forth in
such
that division. Capital gains and
losses from the sale or other disposition of all other intangible
property are apportionable under division
(H)(I) of this section. (F) Dividends or distributions which are not otherwise
deducted or excluded from net income, other than dividends or
distributions from a domestic international sales corporation,
are
allocable to this state in accordance with the ratio of the
book
value of the physical assets of the payor of the dividends
or
distributions located in this state divided by the book value
of
the total physical assets of the payor located everywhere.
Dividends or distributions received from a domestic international
sales corporation, or from a payor the location of whose physical
assets is unavailable to the taxpayer, are apportionable under
division
(H)(I) of this section. (G) Patent and copyright royalties and technical
assistance
fees, not representing the principal source of gross
receipts of
the taxpayer, are allocable to this state to the
extent that the
activity of the payor thereof giving rise to the
payment takes
place in this state. If the location of the
payor's activity is
unavailable to the taxpayer, such royalties
and fees are
apportionable under division
(H)(I) of this section. (H)
The amounts described in division (B)(5) of section
5747.20 of the Revised Code are allocable to this state. (I) Any other net income, from sources other than those
enumerated in divisions (A) to
(G)(H) of this section, is
apportionable to this state on the basis of the mechanism
provided
in division (B)(2) of section 5733.05 of the Revised
Code.
Sec. 5733.98. (A) To provide a uniform procedure for
calculating the amount of tax imposed by section 5733.06 of the
Revised Code
that is due under this chapter, a taxpayer
shall
claim any credits to which it is entitled in the following order,
except as otherwise provided in section 5733.058 of the Revised
Code: (1) The credit for taxes paid by a qualifying pass-through
entity allowed
under section 5733.0611 of the Revised Code; (2) The credit allowed for financial institutions under
section 5733.45 of the Revised Code;
(3) The credit for qualifying affiliated groups under
section
5733.068 of the Revised Code; (4) The subsidiary corporation credit under section
5733.067
of the Revised Code; (5) The savings and loan assessment credit under section
5733.063 of the Revised Code; (6) The credit for recycling and litter prevention
donations
under section
5733.064 of the Revised Code; (7) The credit for employers that enter into
agreements with
child day-care centers under section 5733.36 of the
Revised Code; (8) The credit for employers that reimburse employee child
day-care
expenses under section 5733.38 of the Revised
Code; (9) The credit for maintaining railroad active grade
crossing
warning
devices under section 5733.43 of the Revised
Code; (10) The credit for purchases of lights and reflectors under
section
5733.44 of the Revised Code; (11) The job retention credit under division (B) of section
5733.0610 of the Revised Code; (12) The credit for manufacturing investments under section
5733.061 of the Revised Code; (13) The credit for purchases of new manufacturing
machinery
and equipment under section 5733.31 or section 5733.311
of the
Revised Code; (14) The second credit for purchases of new
manufacturing
machinery and equipment under
section 5733.33 of the
Revised Code; (15) The job training credit under section 5733.42 of
the
Revised
Code; (16) The credit for qualified research expenses under
section 5733.351 of
the Revised Code; (17) The enterprise zone credit under section 5709.66 of
the
Revised Code; (18) The credit for the eligible costs associated with a
voluntary action under section 5733.34
of the Revised Code; (19) The credit for employers that establish on-site
child
day-care under section 5733.37 of the Revised
Code; (20)
The ethanol plant investment credit under section
5733.46 of the Revised Code; (21) The credit for purchases of qualifying grape
production
property under section 5733.32 of the Revised Code; (22) The export sales credit under section 5733.069 of
the
Revised Code; (23) The credit for research and development and
technology
transfer investors under section 5733.35 of the Revised
Code; (24) The enterprise zone credits under section 5709.65
of
the
Revised Code; (25) The credit for using Ohio coal under section
5733.39
of
the
Revised Code; (26) The refundable jobs creation credit under
division
(A)
of section
5733.0610 of the Revised Code; (27) The refundable credit for tax withheld under division
(B)(2) of section 5747.062 of the Revised Code. (B) For any credit except the refundable
jobs creation
credit
credits enumerated in this section, the amount of the
credit for a tax year shall not exceed
the tax due after allowing
for any other credit that precedes it
in the order required under
this section. Any excess amount of a
particular credit may be
carried forward if authorized under the
section creating that
credit.
Sec. 5747.062. As used in this section, "transferee" has the
same meaning as in section 3770.10 of the Revised Code, and
"recipient" includes a transferee. (A)(1) The state lottery commission shall: (1) Deduct
deduct and withhold from each lottery prize award
payment that exceeds five thousand dollars an amount equal to
three and one-half per cent of the payment, prior to making any
other reduction required by Chapter 3770. of the Revised Code;.
(2) On or before the tenth banking day of each month,
the
state lottery commission, and each transferee required to deduct
and withhold amounts pursuant to section 3770.072 of the Revised
Code, shall file
a return and remit to the tax commissioner all
amounts deducted
and withheld pursuant to this section during the
preceding month. (3) On or before the thirty-first day of January of each
year,
the state lottery commission, and each transferee required
to deduct and withhold amounts pursuant to section 3770.072 of the
Revised Code, shall file with the commissioner an annual return,
in the form
prescribed by the tax commissioner, indicating the
total amount
deducted and withheld pursuant to this section during
the
preceding calendar year. At the time of filing that return,
the
state lottery commission
or transferee shall remit any amount
deducted and
withheld during the preceding calendar year that was
not
previously remitted. (4)
Issue
The state lottery commission, and each transferee
required to deduct and withhold amounts pursuant to section
3770.072 of the Revised Code, shall issue to each
recipient of a
lottery prize award from
which the commission
person with respect
to whom tax has
been deducted and withheld
tax
by the commission
or transferee pursuant to
this section during the preceding
calendar year, an information
return in the form prescribed by
rule of the commissioner. (B)
Amounts
(1) Division (B)(1) of this section does not
apply to persons classified for federal income tax purposes as
associations taxable as corporations. Amounts withheld pursuant to this section shall be
treated as
a credit against
any
the tax imposed
upon the recipient of
the
lottery prize award pursuant to section 5747.02
of the Revised
Code
upon the lottery prize award recipient, upon a beneficiary of
such a recipient, or upon any investor in such a recipient if the
recipient is a pass-through entity or disregarded entity, and
shall be
treated as paid by the recipient, beneficiary, or
investor on the date on which those
amounts are deducted and
withheld
by the commission. The credit
shall be
is a refundable
credit, applicable after subtracting all
other credits to which
the recipient may be entitled pursuant to
this chapter
and shall
be claimed in the order required under section 5747.98 of the
Revised Code. The credit is available to the recipient,
beneficiary, or investor even if the commission or transferee does
not remit to the tax commissioner the amount withheld. (2) Division (B)(2) of this section applies only to persons
classified for federal income tax purposes as associations taxable
as corporations. Amount withheld pursuant to this section shall be treated as
a credit against the tax imposed pursuant to section 5733.06 of
the Revised Code for the tax year immediately following the date
on which those amounts are deducted and withheld, upon the lottery
prize award recipient, upon a beneficiary of such a recipient, or
upon an investor in such a recipient if the recipient is a
pass-through entity or disregarded entity, and shall be treated as
paid by the recipient, beneficiary, or investor on the date on
which those amounts are deducted and withheld. The credit is a
refundable credit and shall be claimed in the order required under
section 5733.98 of the Revised Code. The credit is available to
the recipient, beneficiary, or investor even if the commission or
transferee does not remit to the tax commissioner the amount
withheld. (3) Nothing in division (B)(1) or (2) of this section shall
be construed to allow more than one person to claim the credit for
any portion of each amount deducted and withheld. (C) Failure of the commission
or any transferee to deduct
and withhold the
required amounts from lottery prize awards or to
remit amounts
withheld as required by this section
and section
3770.072 of the Revised Code shall not relieve a
recipient of a
lottery prize award
taxpayer described in division (B) of this
section from liability for the tax
imposed by section
5733.06 or
5747.02 of the Revised Code.
Sec. 5747.20. This section applies solely for the purposes
of computing the
credit allowed under division
(A) of section
5747.05 of the Revised Code and computing income taxable in
this
state under division (D) of section 5747.08 of the Revised Code. All items of nonbusiness income or deduction
shall be
allocated in this state as follows: (A) All items of nonbusiness income or deduction taken
into
account in the computation of adjusted gross income for the
taxable year by a resident shall be allocated to this state. (B) All items of nonbusiness income or deduction taken
into
account in the computation of adjusted gross income for the
taxable year by a nonresident shall be allocated to this state as
follows: (1) All items of compensation paid to an individual for
personal services performed in this state who was a nonresident
at
the time of payment and all items of deduction directly
allocated
thereto shall be allocated to this state;. (2) All gains or losses from the sale of real property,
tangible personal property, or intangible property shall be
allocated as follows: (a) Capital gains or losses from the sale or other
transfer
of real property are allocable to this state if the
property is
located physically in this state. (b) Capital gains or losses from the sale or other
transfer
of tangible personal property are allocable to this
state if, at
the time of such sale or other transfer, the
property had its
physical location in this state. (c) Capital gains or losses from the sale or other
transfer
of intangible personal property are allocable to this
state if the
taxpayer's domicile was in
this state at the time of such sale or
other transfer. (3) All rents and royalties of real or tangible personal
property shall be allocated to this state as follows: (a) Rents and royalties derived from real property are
allocable to this state if the property is physically located in
this state. (b) Rents and royalties derived from tangible personal
property are allocable to this state to the extent that such
property is utilized in this state. The extent of utilization of tangible personal property in
a
state is determined by multiplying the rents or royalties
derived
from such property by a fraction, the numerator of which
is the
number of days of physical location of the property in
this state
during the rental or royalty period in the taxable
year and the
denominator of which is the number of days of
physical location of
the property everywhere during all rental or
royalty periods in
the taxable year. If the physical location of
the property during
the rental or royalty period is unknown or
unascertainable by the
nonresident, tangible personal property is
utilized in the state
in which the property was located at the
time the rental or
royalty payor obtained possession. (4) All patent and copyright royalties shall be allocated
to
this state to the extent the patent or copyright was utilized
by
the payor in this state. A patent is utilized in a state to the extent that it is
employed in production, fabrication, manufacturing, or other
processing in the state, or to the extent that a patented product
is produced in the state. If the basis of receipts from patent
royalties does not permit allocation to states or if the
accounting procedures do not reflect states of utilization, the
patent is utilized in this state if the
taxpayer's domicile was in
this state at the time such royalties
were paid or accrued. A copyright is utilized in a state to the extent that
printing or other publication originates in the state. If the
basis of receipts from copyright royalties does not permit
allocation to states or if the accounting procedures do not
reflect states of utilization, the copyright is utilized in this
state if the taxpayer's domicile was in this state at the time
such royalties were paid or accrued. (5)(a) All lottery prize awards paid by the state lottery
commission pursuant to Chapter 3770. of the Revised Code shall be
allocated to this state.
(b) All earnings, profit, income, and gain from the sale,
exchange, or other disposition of lottery prize awards paid or to
be paid to any person by the state lottery commission pursuant to
Chapter 3770. of the Revised Code shall be allocated to this
state. (c) All earnings, profit, income, and gain from the direct or
indirect ownership of lottery prize awards paid or to be paid to
any person by the state lottery commission pursuant to Chapter
3770. of the Revised Code shall be allocated to this state. (d) All earnings, profit, income, and gain from the direct or
indirect interest in any right in or to any lottery prize awards
paid or to be paid to any person by the state lottery commission
pursuant to Chapter 3770. of the Revised Code shall be allocated
to this state. (6) Any item of income or deduction which has been taken
into account in the computation of adjusted gross income for the
taxable year by a nonresident and which is not otherwise
specifically allocated or apportioned pursuant to sections
5747.20
to 5747.23 of the Revised Code, including, without
limitation,
interest, dividends and distributions, items of
income taken into
account under the provisions of sections 401 to
425 of the
Internal Revenue Code, and benefit payments received
by a
beneficiary of a supplemental unemployment trust which is
referred
to in section 501(C)(c)(17) of the Internal Revenue Code,
shall
not
be allocated to this state unless the
taxpayer's domicile was
in
this state at the time such income
was paid or accrued. (C) If an individual is a resident for part of the taxable
year and a nonresident for the remainder of the taxable year, all
items of nonbusiness income or deduction shall be allocated under
division (A) of this section for the part of the taxable year
that
the individual is a resident and under division (B) of this
section for the part of the taxable year that the individual is a
nonresident.
Sec. 5747.98. (A) To provide a uniform procedure for
calculating the amount of tax due under section 5747.02 of the
Revised Code, a taxpayer shall claim any credits to which the
taxpayer is
entitled in the following order: (1) The retirement income credit under division (B) of
section 5747.055 of the Revised Code; (2) The senior citizen credit under division (C) of
section
5747.05 of the Revised Code; (3) The lump sum distribution credit under division (D) of
section 5747.05 of the Revised Code; (4) The dependent care credit under section 5747.054 of
the
Revised Code; (5) The lump sum retirement income credit under division
(C)
of section 5747.055 of the Revised Code; (6) The lump sum retirement income credit under division
(D)
of section 5747.055 of the Revised Code; (7) The lump sum retirement income credit under division
(E)
of section 5747.055 of the Revised Code; (8) The credit for displaced workers who pay for job
training under section 5747.27 of the Revised Code; (9) The campaign contribution credit under section
5747.29
of
the Revised Code; (10) The twenty-dollar personal exemption credit under
section 5747.022 of the Revised Code; (11) The joint filing credit under division (G) of
section
5747.05 of the Revised Code; (12) The nonresident credit under division (A) of
section
5747.05 of the Revised Code; (13) The credit for a resident's out-of-state income
under
division (B) of section 5747.05 of the Revised Code; (14) The credit for employers that enter
into agreements
with child day-care centers under section 5747.34 of the
Revised
Code; (15) The credit for employers that reimburse employee
child
day-care
expenses under section 5747.36 of the Revised Code; (16) The credit for adoption of a minor child under section
5747.37 of the Revised Code; (17) The credit for purchases of lights and reflectors under
section
5747.38 of the Revised Code; (18)
The job retention credit under division (B) of section
5747.058 of the Revised Code; (19) The credit for manufacturing investments under
section
5747.051 of the Revised Code; (20) The credit for purchases of new manufacturing
machinery
and equipment
under section 5747.26 or section 5747.261
of the
Revised Code; (21) The second credit for purchases of new
manufacturing
machinery and
equipment and the credit for using
Ohio coal under
section 5747.31 of the
Revised Code; (22) The job training credit under section 5747.39 of
the
Revised Code;
(23) The enterprise zone credit under section 5709.66 of
the
Revised Code; (24) The credit for the eligible costs associated with a
voluntary action
under section 5747.32 of the Revised Code; (25) The credit
for employers that establish on-site
child
day-care centers under section
5747.35 of the Revised Code; (26)
The ethanol plant investment credit under section
5747.75 of the Revised Code; (27) The credit for purchases of qualifying grape
production
property under section 5747.28 of the Revised Code; (28) The export sales credit under section 5747.057 of
the
Revised Code; (29) The credit for research and development and
technology
transfer investors under section 5747.33 of the Revised
Code; (30) The enterprise zone credits under
section 5709.65
of
the Revised Code; (31) The refundable jobs creation credit
under
division
(A)
of section
5747.058 of the Revised Code; (32) The refundable credit for taxes paid by a
qualifying
entity granted under section 5747.059 of the Revised
Code; (33) The refundable credits for taxes paid by a
qualifying
pass-through
entity granted under division (J) of
section 5747.08
of the Revised Code; (34) The refundable credit for tax withheld under division
(B)(1) of section 5747.062 of the Revised Code. (B) For any credit, except the refundable credits enumerated
in
divisions
(A)(31),
(32), and (33) of this
section
and
the
credit granted under division
(I) of section
5747.08 of
the
Revised Code, the amount of the credit
for a
taxable year
shall
not
exceed the tax due after allowing for any
other credit
that
precedes it in the order required under this
section. Any
excess
amount of a particular credit may be carried
forward if
authorized
under the section creating that credit.
Nothing in this
chapter
shall be construed to allow a taxpayer to
claim, directly
or
indirectly, a
credit more than once for a
taxable year.
Section 2. That existing sections 3770.07, 3770.072,
5733.051, 5733.98, 5747.062, 5747.20, and 5747.98 of the
Revised
Code
are hereby repealed.
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