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Sub. H. B. No. 362 As Reported by the Senate Ways and Means and Economic Development Committee
As Reported by the Senate Ways and Means and Economic Development Committee
125th General Assembly | Regular Session | 2003-2004 |
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Representatives Hoops, Allen, Calvert, C. Evans, D. Evans, Flowers, Hartnett, Jerse, Martin, Miller, T. Patton, Peterson, Schmidt, Strahorn, Aslanides, Barrett, Brown, Callender, Chandler, Cirelli, Collier, DeBose, Domenick, Gilb, Hollister, McGregor, Niehaus, Olman, Otterman, Price, Schlichter, Seaver, Seitz, Slaby, D. Stewart, J. Stewart, Walcher
Senator Amstutz
A BILLTo amend sections 718.01, 718.02, 3318.05, 3318.052, 3318.08, 3318.44, 3770.07, 3770.10, 3770.12, 5705.192, 5705.21, 5733.04, 5733.42, and 5747.01 and to enact section 3770.121 of the Revised Code to permit school district permanent improvements levies imposed for a limited period of time to be renewed for a continuing period of time; to allow certain single member limited liability companies to elect to be separate taxpayers from their single members for purposes of municipal income taxation; to require under the municipal income tax law that a business add-back tax exempt stock options in the apportionment of its net profit among municipal corporations; to create an amnesty period for re-filing applications for exemption of real property that were dismissed due to case law; to change references regarding federal income tax law in the corporation franchise tax and income tax laws; to require the State Lottery Commission to allow a lottery prize winner who is being paid the prize award in installments to transfer, subject to certain restrictions, all or portions of the prize winner's outstanding prize award and to make other changes in the Lottery Law and the Lottery Prize Award Transfer Law; and to make changes to the distribution of the job training tax credit. BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 718.01, 718.02, 3318.05, 3318.052, 3318.08, 3318.44, 3770.07, 3770.10, 3770.12, 5705.192, 5705.21, 5733.04, 5733.42, and 5747.01 be amended and section 3770.121 of the Revised Code be enacted to read as follows:
Sec. 718.01. (A) As used in this chapter: (1) "Adjusted federal taxable income" means a C corporation's federal taxable income before net operating losses and special deductions as determined under the Internal Revenue Code, adjusted as follows: (a) Deduct intangible income to the extent included in federal taxable income. The deduction shall be allowed regardless of whether the intangible income relates to assets used in a trade or business or assets held for the production of income.
(b) Add an amount equal to five per cent of intangible income deducted under division (A)(1)(a) of this section, but excluding that portion of intangible income directly related to the sale, exchange, or other disposition of property described in section 1221 of the Internal Revenue Code;
(c) Add any losses allowed as a deduction in the computation of federal taxable income if the losses directly relate to the sale, exchange, or other disposition of an asset described in section 1221 or 1231 of the Internal Revenue Code; (d)(i) Except as provided in division (A)(1)(d)(ii) of this section, deduct income and gain included in federal taxable income to the extent the income and gain directly relate to the sale, exchange, or other disposition of an asset described in section 1221 or 1231 of the Internal Revenue Code;
(ii) Division (A)(1)(d)(i) of this section does not apply to the extent the income or gain is income or gain described in section 1245 or 1250 of the Internal Revenue Code.
(e) Add taxes on or measured by net income allowed as a deduction in the computation of federal taxable income;
(f) In the case of a real estate investment trust and regulated investment company, add all amounts with respect to dividends to, distributions to, or amounts set aside for or credited to the benefit of investors and allowed as a deduction in the computation of federal taxable income;
(g) If the taxpayer is not a C corporation and is not an individual, the taxpayer shall compute adjusted federal taxable income as if the taxpayer were a C corporation, except:
(i) Guaranteed payments and other similar amounts paid or accrued to a partner, former partner, member, or former member shall not be allowed as a deductible expense; and
(ii) Amounts paid or accrued to a qualified self-employed retirement plan with respect to an owner or owner-employee of the taxpayer, amounts paid or accrued to or for health insurance for an owner or owner-employee, and amounts paid or accrued to or for life insurance for an owner or owner-employee shall not be allowed as a deduction.
Nothing in division (A)(1) of this section shall be construed as allowing the taxpayer to add or deduct any amount more than once or shall be construed as allowing any taxpayer to deduct any amount paid to or accrued for purposes of federal self-employment tax.
Nothing in this chapter shall be construed as limiting or removing the ability of any municipal corporation to administer, audit, and enforce the provisions of its municipal income tax.
(2)
"Internal Revenue Code" means the Internal Revenue Code
of
1986, 100
Stat. 2085, 26 U.S.C. 1, as amended. (3)
"Schedule C" means internal revenue service schedule C
filed by a
taxpayer pursuant to the Internal Revenue Code. (4)
"Form 2106" means internal revenue service form 2106
filed by a taxpayer
pursuant to the Internal Revenue Code. (5)
"Intangible income" means income of any of the following
types: income
yield, interest, capital gains, dividends, or other income arising
from the ownership, sale,
exchange, or other disposition of
intangible property including, but not
limited to, investments,
deposits, money, or credits as those terms are
defined in Chapter
5701. of the Revised Code, and patents, copyrights, trademarks, tradenames, investments in real estate investment trusts, investments in regulated investment companies, and appreciation on deferred compensation. "Intangible income" does not include prizes, awards, or other income associated with any lottery winnings or other similar games of chance. (6) "S corporation" means a corporation that has made an
election under subchapter S of Chapter 1 of Subtitle A of the
Internal Revenue Code for its taxable year. (7) For taxable years beginning on or after January 1, 2004, "net profit" for a taxpayer other than an individual means adjusted federal taxable income and "net profit" for a taxpayer who is an individual means the individual's profit, other than amounts described in division (F) of this section, required to be reported on schedule C, schedule E, or schedule F. (8) "Taxpayer" means a person subject to a tax on income levied by a municipal corporation. "Taxpayer Except as provided in division (J) of this section, "taxpayer" does not include any person that is a disregarded entity or a qualifying subchapter S subsidiary for federal income tax purposes, but "taxpayer" includes any other person who owns the disregarded entity or qualifying subchapter S subsidiary. (9) "Taxable year" means the corresponding tax reporting period as prescribed for the taxpayer under the Internal Revenue Code. (10) "Tax administrator" means the individual charged with direct responsibility for administration of a tax on income levied by a municipal corporation and includes:
(a) The central collection agency and the regional income tax agency and their successors in interest, and other entities organized to perform functions similar to those performed by the central collection agency and the regional income tax agency;
(b) A municipal corporation acting as the agent of another municipal corporation; and
(c) Persons retained by a municipal corporation to administer a tax levied by the municipal corporation, but only if the municipal corporation does not compensate the person in whole or in part on a contingency basis.
(11) "Person" includes individuals, firms, companies, business trusts, estates, trusts, partnerships, limited liability companies, associations, corporations, governmental entities, and any other entity.
(12) "Schedule E" means internal revenue service schedule E filed by a taxpayer pursuant to the Internal Revenue Code.
(13) "Schedule F" means internal revenue service schedule F filed by a taxpayer pursuant to the Internal Revenue Code. (B) No municipal corporation
shall tax income at other than a uniform
rate. (C) No municipal corporation shall levy a tax on income at a
rate in excess
of one per cent without having obtained the
approval of the excess by a
majority of the electors of the
municipality voting on the question at a
general, primary, or
special election. The legislative authority of the
municipal
corporation shall file with the board of elections at least
seventy-five days before the day of the election a copy of the
ordinance
together with a resolution specifying the date the
election is to be held and
directing the board of elections to
conduct the election. The ballot shall be
in the following form:
"Shall the Ordinance providing for a ... per cent levy
on income
for (Brief description of the purpose of the proposed levy) be
passed?
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FOR THE INCOME TAX |
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AGAINST THE INCOME TAX |
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In the event of an affirmative vote, the proceeds of the
levy
may be used only for the specified purpose. (D)(1) Except as provided in division (E) or (F) of
this section, no municipal corporation shall exempt from
a tax on
income compensation for
personal services of individuals
over
eighteen years of age or the net profit
from a business or
profession. (2)(a) For taxable years beginning on or after January 1, 2004, no municipal corporation shall tax the net profit from a business or profession using any base other than the taxpayer's adjusted federal taxable income. (b) Division (D)(2)(a) of this section does not apply to any taxpayer required to file a return under section 5745.03 of the Revised Code or to the net profit from a sole proprietorship. (E) The legislative authority of a municipal corporation may, by ordinance or resolution, exempt from withholding and from a tax on income the following:
(1) Compensation arising from the sale, exchange, or other disposition of a stock option, the exercise of a stock option, or the sale, exchange, or other disposition of stock purchased under a stock option; or
(2) Compensation attributable to a nonqualified deferred compensation plan or program described in section 3121(v)(2)(C) of the Internal Revenue Code.
If
an individual's
taxable income includes income against
which the taxpayer has taken a
deduction for federal income tax
purposes as reportable on the taxpayer's form
2106, and against
which a like deduction has not been allowed by the municipal
corporation, the municipal corporation shall deduct from the
taxpayer's
taxable income an amount equal to the deduction shown
on such form allowable
against such income, to the extent not
otherwise so allowed as a deduction by
the municipal corporation. In the case of a taxpayer who has a net profit
from a business or
profession that is operated as a sole proprietorship, no
municipal
corporation may tax or use as the base for determining the amount
of
the net profit that shall be considered as having a taxable
situs in the
municipal corporation, an amount other than the net profit required to be reported by the taxpayer on schedule C or F from such sole proprietorship for the taxable year.
In the case of a taxpayer who has a net profit from rental activity required to be reported on schedule E, no municipal corporation may tax or use as the base for determining the amount of the net profit that shall be considered as having a taxable situs in the municipal corporation, an amount other than the net profit from rental activities required to be reported by the taxpayer on schedule E for the taxable year. (F) A municipal corporation shall not tax any of the
following: (1) The military pay or allowances of members of the armed
forces of the
United States and of members of their reserve
components, including the Ohio
national guard; (2) The income of religious, fraternal, charitable,
scientific, literary, or
educational institutions to the extent
that such income is derived from
tax-exempt real estate,
tax-exempt tangible or intangible property, or
tax-exempt
activities; (3) Except as otherwise provided in division (G) of this
section, intangible
income; (4) Compensation paid under section 3501.28 or 3501.36 of
the Revised Code to
a person serving as a precinct election
official, to the extent that such
compensation does not exceed one
thousand dollars annually. Such compensation
in excess of one
thousand dollars may be subjected to taxation by a municipal
corporation. A municipal corporation shall not require the payer
of such
compensation to withhold any tax from that compensation. (5) Compensation paid to an employee of a transit authority,
regional transit
authority, or regional transit commission created
under Chapter 306. of the
Revised Code for operating a transit bus
or other motor vehicle for the
authority or commission in or
through the municipal corporation, unless the
bus or vehicle is
operated on a regularly scheduled route, the operator is
subject
to such a tax by reason of residence or domicile in the municipal
corporation, or the headquarters of the authority or commission is
located
within the municipal corporation; (6) The income of a public utility, when that public utility
is
subject to the tax levied under section 5727.24 or 5727.30 of
the Revised
Code, except a municipal
corporation may tax the following, subject to
Chapter 5745. of the
Revised Code: (a) Beginning January 1, 2002, the income of an electric
company or combined company;
(b) Beginning January 1, 2004, the income of a telephone
company. As used in division (F)(6) of this section, "combined company," "electric
company," and "telephone company" have
the same meanings as in section 5727.01 of the Revised Code. (7) On and after January 1, 2003, items excluded from
federal gross income pursuant to section 107 of the Internal
Revenue Code; (8) On and after January 1, 2001, compensation paid to a
nonresident
individual to the extent prohibited under
section
718.011 of the Revised Code; (9)(a) Except as provided in division (F)(9)(b) and (c) of this section, an S
corporation
shareholder's distributive share of net
profits of the
S
corporation, other than any part of the
distributive share of
net
profits that represents
wages as defined in section 3121(a) of
the Internal Revenue Code or net earnings from self-employment as
defined in section 1402(a) of the Internal Revenue Code.
(b) If, pursuant to division (H) of former section 718.01 of the Revised Code as it existed before the effective date of the amendment of that section by H.B. 127 of the 125th General Assembly March 11,2004, a majority of the electors of a municipal corporation voted in favor of the question at an election held on November 4, 2003, the municipal corporation may continue after 2002 to tax an S corporation shareholder's distributive share of net profits of an S corporation.
(c) If, on December 6, 2002, a municipal corporation was imposing, assessing, and collecting a tax on an S corporation shareholder's distributive share of net profits of the S corporation to the extent the distributive share would be allocated or apportioned to this state under divisions (B)(1) and (2) of section 5733.05 of the Revised Code if the S corporation were a corporation subject to taxes imposed under Chapter 5733. of the Revised Code, the municipal corporation may continue to impose the tax on such distributive shares to the extent such shares would be so allocated or apportioned to this state only until December 31, 2004, unless a majority of the electors of the municipal corporation voting on the question of continuing to tax such shares after that date vote in favor of that question at an election held November 2, 2004. If a majority of those electors vote in favor of the question, the municipal corporation may continue after December 31, 2004, to impose the tax on such distributive shares only to the extent such shares would be so allocated or apportioned to this state. (d) For the purposes of division (D) of section 718.14 of the Revised Code, a municipal corporation shall be deemed to have elected to tax S corporation shareholders' distributive shares of net profits of the S corporation in the hands of the shareholders if a majority of the electors of a municipal corporation vote in favor of a question at an election held under division (F)(9)(b) or (c) of this section. The municipal corporation shall specify by ordinance or rule that the tax applies to the distributive share of a shareholder of an S corporation in the hands of the shareholder of the S corporation. (10) Employee compensation that is not "qualifying wages" as defined in section 718.03 of the Revised Code.
(G) Any municipal corporation that taxes any type of
intangible income on
March 29, 1988, pursuant to Section 3 of
Amended Substitute Senate Bill No.
238 of the 116th general
assembly, may continue to tax that type of income
after 1988 if a
majority of the electors of the municipal corporation voting
on
the question of whether to permit the taxation of that type of
intangible
income after 1988 vote in favor thereof at an election
held on November 8,
1988. (H) Nothing in this section or section 718.02 of the Revised
Code
shall authorize the levy of any tax on income that a
municipal
corporation is not
authorized to levy under existing
laws or shall require a municipal
corporation to allow a deduction
from taxable income for losses incurred from
a sole proprietorship
or partnership.
(I)(1) Nothing in this chapter prohibits a municipal corporation from allowing, by resolution or ordinance, a net operating loss carryforward.
(2) Nothing in this chapter requires a municipal corporation to allow a net operating loss carryforward.
(J)(1) A single member limited liability company that is a disregarded entity for federal tax purposes may elect to be a separate taxpayer from its single member in all Ohio municipal corporations in which it either filed as a separate taxpayer or did not file for its taxable year ending in 2003, if all of the following conditions are met:
(a) The limited liability company's single member is also a limited liability company;
(b) The limited liability company and its single member were formed and doing business in one or more Ohio municipal corporations for at least five years before January 1, 2004;
(c) Not later than December 31, 2004, the limited liability company and its single member each make an election to be treated as a separate taxpayer under division (J) of this section;
(d) The limited liability company was not formed for the purpose of evading or reducing Ohio municipal corporation income tax liability of the limited liability company or its single member;
(e) The Ohio municipal corporation that is the primary place of business of the sole member of the limited liability company consents to the election.
(2) For purposes of division (J)(1)(e) of this section, a municipal corporation is the primary place of business of a limited liability company if, for the limited liability company's taxable year ending in 2003, its income tax liability is greater in that municipal corporation than in any other municipal corporation in Ohio, and that tax liability to that municipal corporation for its taxable year ending in 2003 is at least four hundred thousand dollars.
Sec. 718.02. This section does not apply to taxpayers that are subject to and required to file reports under Chapter 5745. of the Revised
Code. (A) Except as otherwise provided in division (D) of this section, net profit from a
business or profession conducted both
within and without the
boundaries of a municipal corporation shall
be considered as
having a taxable situs in such municipal
corporation for purposes
of municipal income taxation in the same
proportion as the
average ratio of the following: (1) The average original cost of the real and tangible
personal property owned or used by the taxpayer in the business
or
profession in such municipal corporation during the taxable
period
to the average original cost of all of the real and
tangible
personal property owned or used by the taxpayer in the
business or
profession during the same period, wherever situated. As used in the preceding paragraph, real property shall
include property rented or leased by the taxpayer and the value
of
such property shall be determined by multiplying the annual
rental
thereon by eight; (2) Wages, salaries, and other compensation paid during
the
taxable period to persons employed in the business or
profession
for services performed in such municipal corporation
to wages,
salaries, and other compensation paid during the same
period to
persons employed in the business or profession,
wherever their
services are performed, excluding compensation
that is not taxable
by the municipal corporation under section 718.011 of the Revised
Code; (3) Gross receipts of the business or profession from
sales
made and services performed during the taxable period in
such
municipal corporation to gross receipts of the business or
profession during the same period from sales and services,
wherever made or performed. If the foregoing apportionment formula does not
produce an
equitable result, another basis may be substituted, under
uniform
regulations, so as to produce an equitable
result. (B) As used in division (A) of this section,
"sales made
in
a municipal corporation" mean: (1) All sales of tangible personal property
delivered within
such municipal corporation regardless of where
title passes if
shipped or delivered from a stock of goods within
such municipal
corporation; (2) All sales of tangible personal property
delivered within
such municipal corporation regardless of where
title passes even
though transported from a point outside such
municipal corporation
if the taxpayer is regularly engaged
through its own employees in
the solicitation or promotion of
sales within such municipal
corporation and the sales result from
such solicitation or
promotion; (3) All sales of tangible personal property
shipped from a
place within such municipal corporation to
purchasers outside such
municipal corporation regardless of where
title passes if the
taxpayer is not, through its own employees,
regularly engaged in
the solicitation or promotion of sales at
the place where delivery
is made.
(C) Except as otherwise provided in division (D) of this section, net profit from rental activity not constituting a business or profession shall be subject to tax only by the municipal corporation in which the property generating the net profit is located.
(D) This section does not apply to individuals who are residents of the municipal corporation and, except as otherwise provided in section 718.01 of the Revised Code, a municipal corporation may impose a tax on all income earned by residents of the municipal corporation to the extent allowed by the United States Constitution.
(E) If, in computing the taxpayer's adjusted federal taxable income, the taxpayer deducted any amount with respect to a stock option granted to an employee, and if the employee is not required to include in income any amount or any portion thereof because it is exempted from taxation under division (F)(10) of section 718.01 of the Revised Code and division (A)(2)(d) of section 718.03 of the Revised Code by a municipal corporation to which the taxpayer has apportioned a portion of its net profit, the taxpayer shall add the amount that is exempt from taxation to the taxpayer's net profit that was apportioned to that municipal corporation. In no case shall a taxpayer be required to add to its net profit that was apportioned to that municipal corporation any amount other than the amount upon which the employee would be required to pay tax were the amount related to the stock option not exempted from taxation. This division applies solely for the purpose of making an adjustment to the amount of a taxpayer's net profit that was apportioned to a municipal corporation under divisions (A) and (B) of this section.
Sec. 3318.05. The conditional approval of the Ohio school
facilities commission
for a project shall lapse and the amount
reserved
and encumbered for such project shall be released unless
the school district board accepts such conditional approval within
one
hundred twenty days following the date of certification of
the
conditional approval to the school district board and the electors
of the
school district vote favorably
on both of the propositions
described in divisions
(A) and (B) of this section
within one year
of the date of such certification, except that a
school district
described in division (C) of this section does not
need to submit
the proposition described in division (B) of this
section. The
propositions
described in divisions (A) and (B) of this section
shall be combined in a single proposal. If the
district board or
the district's electors fail to meet such requirements
and the
amount reserved and encumbered for the district's project is
released, the district shall be given first priority for project
funding as
such funds become available. (A) On the question of issuing bonds of the school
district
board, for the school district's portion of the basic project
cost, in
an amount equal to the school district's
portion
of the
basic project cost less the amount of the proceeds of any
securities authorized or to be authorized under division (J) of
section 133.06 of the
Revised Code and dedicated by the school
district board to payment
of the district's portion of the basic
project cost; and (B) On the question of levying a tax the proceeds of
which
shall be used to pay the cost of maintaining the
classroom
facilities included in the project. Such tax shall be at the rate
of
not less than one-half
mill for
each dollar of valuation for a
period of twenty-three
years, subject to any
extension approved
under section 3318.061 of the Revised
Code. (C) If a school district has in place a tax levied under
section
5705.21 of the Revised Code for general ongoing permanent
improvements for a continuing period of time
and the
proceeds of such tax can be used for maintenance, the
school district need not
levy
the additional tax required under
division (B) of this section,
provided the school district board
includes in the agreement entered into
under section 3318.08 of
the Revised Code provisions earmarking an amount from the
proceeds
of that
permanent improvement tax for maintenance of classroom
facilities
equivalent to the amount of the additional tax and for
the
equivalent number of years otherwise required under this
section. (D) Proceeds of the tax to be used for maintenance of
the
classroom facilities under either division (B) or (C)
of this
section shall be deposited into a separate fund established
by the
school district for such purpose.
Sec. 3318.052. At any time after the electors of a school
district have approved either or both a property tax levied under
section 5705.21 or 5705.218 of the Revised Code for the purpose of permanent improvements, including
general ongoing permanent improvements, or a school district income
tax levied under Chapter 5748. of the Revised Code, the proceeds of either of
which, pursuant to the ballot measures approved by the electors, are not so restricted that they cannot be used to pay the costs of a project or
maintaining classroom facilities, the school district board may: (A) Within one year following the date of the certification
of the conditional approval of the school district's classroom
facilities project by the Ohio school facilities commission, enter
into a written agreement with the commission, which may be part of
an agreement entered into under section 3318.08 of the Revised
Code, and in which the school district board covenants and agrees
to do one or both of the following: (1) Apply a specified amount of available proceeds
of that property tax levy, of that school district income tax, or
of securities issued under this section, or of proceeds from any
two or more of those sources, to pay all or part of the district's
portion of the basic project cost of its classroom facilities
project; (2) Apply available proceeds of either or both a
property tax levied under section 5705.21 or 5705.218 of the
Revised Code in effect for a continuing period of time, or of a
school district income tax levied under Chapter 5748. of the
Revised Code in effect for a continuing period of time to the
payment of costs of maintaining the classroom facilities. (B) Receive, as a credit against the amount of bonds
required under sections 3318.05 and 3318.06 of the Revised Code,
to be approved by the electors of the district and issued by the
district board for the district's portion of the basic project
cost of its classroom facilities project in order for the district
to receive state assistance for the project, an amount equal to
the specified amount that the district board covenants and agrees
with the commission to apply as set forth in division (A)(1) of
this section; (C) Receive, as a credit against the amount of the tax levy
required under sections 3318.05 and 3318.06 of the Revised Code,
to be approved by the electors of the district to pay the costs of
maintaining the classroom facilities in order to receive state
assistance for the classroom facilities project, an amount
equivalent to the specified amount of proceeds the school district
board covenants and agrees with the commission to apply as
referred to in division (A)(2) of this section; (D) Apply proceeds of either or both a school district
income tax levied under Chapter 5748. of the Revised Code that may
lawfully be used to pay the costs of a classroom facilities
project or of a tax levied under section 5705.21 or 5705.218 of
the Revised Code to the payment of debt charges on and financing
costs related to securities issued under this section; (E) Issue securities to provide moneys to pay all or part of
the district's portion of the basic project cost of its classroom
facilities project in accordance with an agreement entered into
under division (A) of this section. Securities issued under this
section shall be Chapter 133. securities and may be issued as
general obligation securities or issued in anticipation of a
school district income tax or as property tax anticipation notes
under section 133.24 of the Revised Code. The district board's
resolution authorizing the issuance and sale of general obligation
securities under this section shall conform to the applicable
requirements of section 133.22 or 133.23 of the Revised Code.
Securities issued under this section shall have principal payments
during each year after the year of issuance over a period of not
more than twenty-three years and, if so determined by the district
board, during the year of issuance. Securities issued under this
section shall not be included in the calculation of net
indebtedness of the district under section 133.06 of the Revised
Code, if the resolution of the district board authorizing their
issuance and sale includes covenants to appropriate annually from
lawfully available proceeds of a property tax levied under section
5705.21 or 5705.218 of the Revised Code or of a school district
income tax levied under Chapter 5748. of the Revised Code and to
continue to levy and collect the tax in amounts necessary to pay
the debt charges on and financing costs related to the securities
as they become due. No property tax levied under section 5705.21
or 5705.218 of the Revised Code and no school district income tax
levied under Chapter 5748. of the Revised Code that is pledged, or
that the school district board has covenanted to levy, collect,
and appropriate annually, to pay the debt charges on and financing
costs related to securities issued under this section shall be
repealed while those securities are outstanding. If such a tax is
reduced by the electors of the district or by the district board
while those securities are outstanding, the school district board
shall continue to levy and collect the tax under the authority of
the original election authorizing the tax at a rate in each year
that the board reasonably estimates will produce an amount in that
year equal to the debt charges on the securities in that year, except that in the case of a school district income tax that amount shall be rounded up to the nearest one-fourth of one per cent. No state moneys shall be released for a project to which this
section applies until the proceeds of the tax securities issued
under this section that are dedicated for the payment of the
district portion of the basic project cost of its classroom
facilities project are first deposited into the district's project
construction fund.
Sec. 3318.08.
Except in the case of a joint vocational
school district that receives assistance under sections 3318.40 to
3318.45 of the Revised Code, if the requisite favorable vote on
the
election is obtained, or if the school district board has
resolved
to apply
the proceeds of a property tax levy or the
proceeds of an
income tax, or a combination of proceeds from such
taxes, as
authorized in
section 3318.052 of the Revised Code, the
Ohio
school facilities commission, upon
certification to it of
either
the results of the election or
the resolution under section
3318.052 of the Revised Code, shall enter
into a written agreement
with the school district board for the
construction and sale of
the project. In the case of a joint vocational school
district that receives assistance under sections 3318.40 to
3318.45 of the Revised Code, if the school district board of
education and the school district electors have satisfied the
conditions prescribed in division (D)(1) of section 3318.41 of the
Revised Code, the commission shall enter into an agreement with
the school district board for the construction and sale of the
project. In either case, the agreement shall
include, but need not
be
limited to, the following provisions: (A) The sale and issuance of bonds or notes in
anticipation
thereof, as soon as practicable after the execution
of the
agreement, in an amount equal to the
school district's portion of
the basic
project cost, including any securities
authorized under division (J) of
section 133.06 of the Revised
Code and dedicated by the school
district board to payment of the
district's portion of the basic
project cost of the project; provided, that if at that time the
county treasurer
of each
county in which the school district is
located has not
commenced
the collection of taxes on the general
duplicate of real
and
public utility property for the year in
which the
controlling
board approved the project, the school
district board
shall
authorize the issuance of a first installment
of bond
anticipation
notes in an amount specified by the
agreement, which
amount shall
not exceed an amount necessary to
raise the net
bonded
indebtedness of the school district as of the
date of
the
controlling board's approval to within
five thousand
dollars of
the
required level of indebtedness for the preceding
year. In the
event that a first installment of bond anticipation
notes is
issued, the school district board shall, as soon as
practicable
after the county treasurer of each county in which the
school
district is located has commenced the collection of taxes
on the
general duplicate of real and public utility property for
the
year
in which the controlling board approved the project,
authorize the
issuance of a second and
final installment of bond
anticipation
notes or a first and final
issue of bonds. The combined value of the first and second
installment of
bond anticipation notes or the value of the first
and final issue
of bonds shall be equal to the
school district's portion of the
basic project cost. The proceeds of any such bonds shall be used
first
to
retire any bond anticipation notes. Otherwise, the
proceeds of
such bonds and of any bond anticipation notes, except
the premium
and accrued interest thereon, shall be deposited in
the school
district's project construction fund. In determining
the amount
of net bonded indebtedness for the purpose of fixing
the amount of an
issue of either bonds or bond anticipation notes,
gross
indebtedness shall be reduced by moneys in the bond
retirement
fund only to the extent of the moneys therein on the
first day of
the year preceding the year in which the controlling
board approved the
project. Should there be
a decrease in the tax
valuation of
the school district so that the amount of
indebtedness
that can
be incurred on the tax duplicates for the
year in which the
controlling board approved the project is
less
than the amount of the first installment of bond
anticipation
notes, there shall be paid from the school
district's project
construction fund to the school
district's
bond retirement fund to
be applied against such notes an amount
sufficient to cause the
net bonded indebtedness of the school district,
as of the first
day of the year following the year in which the
controlling board
approved the project,
to be within five thousand dollars of the
required level of
indebtedness for the year in which the
controlling board approved the project. The
maximum
amount of
indebtedness to be incurred by any school
district board as its
share of the cost of the project is either
an amount that will
cause its net bonded
indebtedness, as of the first
day of the year
following the year in which the controlling board
approved the
project, to be
within five thousand dollars of the required level
of
indebtedness,
or
an amount equal to the required percentage of
the basic project costs,
whichever is greater. All bonds and bond
anticipation notes
shall be issued in accordance with Chapter 133.
of the Revised
Code, and notes may be renewed as provided in
section 133.22 of
the Revised Code. (B) The transfer of such funds of the school district
board
available for the project, together with the proceeds of
the
sale
of the bonds or notes, except premium, accrued interest,
and
interest included in the amount of the issue, to the school
district's project construction fund; (C)
For all school districts except joint vocational school
districts that receive assistance under sections 3318.40 to
3318.45 of the Revised Code, the following provisions as
applicable: (1) If section 3318.052 of the Revised Code applies, the
earmarking of the
proceeds of a tax levied under section 5705.21
of the Revised Code for general ongoing permanent improvements
or
under
section 5705.218 of the Revised Code for the purpose of
permanent
improvements, or
the proceeds of a school district
income tax
levied under Chapter
5748. of the Revised Code, or the
proceeds
from a
combination of
those two taxes, in an amount to
pay all or
part of the service
charges on bonds issued to pay the
school
district portion of the
project and
an amount equivalent to all or
part of the tax
required under division
(B) of
section 3318.05 of
the Revised
Code; (2) If section 3318.052 of the Revised Code does not
apply,
either of
the following: (a) The levy of the tax authorized at the election for
the
payment of maintenance costs, as specified in
division (B) of
section 3318.05 of the Revised
Code; (b) If the school district electors have approved a
continuing
tax
for general ongoing
permanent improvements under
section 5705.21
of the Revised Code and that tax can be
used for maintenance, the
earmarking of an amount
of the proceeds from such tax for
maintenance of classroom facilities as
specified in division (B)
of
section 3318.05 of the Revised Code.
(D) For joint vocational school districts that receive
assistance under sections 3318.40 to 3318.45 of the Revised Code,
provision for deposit of school district moneys dedicated to
maintenance of the classroom facilities acquired under those
sections as prescribed in section 3318.43 of the Revised Code; (E) Dedication of any local donated contribution as
provided
for under section 3318.084 of the Revised Code, including
a
schedule for depositing such moneys applied as an offset of the
district's obligation to levy the tax described in division (B) of
section 3318.05 of the Revised Code as required under division
(D)(2) of section 3318.084 of the Revised Code; (F) Ownership of or interest in the project during the
period of
construction, which shall be divided between the
commission and the
school district board in proportion to their
respective
contributions to the school district's project
construction
fund; (G) Maintenance of the state's interest in the
project
until
any
obligations issued for the project under section 3318.26
of
the
Revised Code are no longer outstanding; (H) The insurance of the project by the school district
from
the time there is an insurable interest therein and so long
as the
state retains
any ownership or interest in the project
pursuant to
division
(F) of
this
section, in such amounts
and
against such
risks as the commission shall
require;
provided, that
the cost of
any required insurance until the
project is completed
shall be a
part of the basic project cost; (I) The certification by the director of budget and
management that funds are available and have been set aside to
meet the state's share of the basic project cost as approved
by
the controlling board pursuant to
either section 3318.04
or
division (B)(1) of section 3318.41 of the
Revised
Code; (J) Authorization of the school district board to
advertise
for and receive construction bids for the project, for
and on
behalf of the commission, and to award
contracts in the
name of
the state subject to approval by the commission; (K) Provisions for the disbursement of moneys from the
school district's project account upon issuance by the
commission
or the commission's designated representative of vouchers
for
work
done to
be certified to the commission by the treasurer
of the
school district board; (L) Disposal of any balance left in the school district's
project construction fund upon completion of the
project; (M) Limitations upon use of the project or any part of it
so
long as any obligations
issued to finance the project under
section 3318.26 of the Revised
Code are outstanding; (N) Provision for vesting the state's interest in the
project
to the school district board when the
obligations issued
to finance the project under section 3318.26 of the
Revised Code
are outstanding; (O) Provision for deposit of an executed copy of the
agreement in the office of the commission; (P) Provision for termination of the contract and release
of
the funds encumbered at the time of the conditional approval,
if
the proceeds of the sale of the bonds of the school district
board
are not paid into the school district's project
construction
fund
and if bids for the construction of
the project have not been
taken within such period after the
execution of the agreement as
may be fixed by the
commission; (Q) Provision for the school district to maintain the
project in
accordance with a plan approved by the commission; (R)(1) For all school districts except
a district
undertaking a
project under section 3318.38 of the Revised Code
or
a joint vocational school district undertaking a project under
sections 3318.40 to 3318.45 of the Revised Code,
provision
that
all
state funds reserved and
encumbered
to pay
the state
share of
the cost of the project
pursuant to
section
3318.03 of
the
Revised
Code be spent on the
construction
or
acquisition of
the project
prior to the
expenditure of any
funds
provided by the
school
district to pay
for its share of the
project cost, unless
the
school district
certifies to the
commission that expenditure
by
the school
district is
necessary to
maintain the tax-exempt
status
of notes
or bonds issued by the
school district to pay for
its
share of the
project cost
or to
comply with applicable
temporary
investment
periods or spending
exceptions to rebate as
provided
for under
federal law in regard
to those notes or bonds,
in which
cases, the
school district
may commit to
spend, or
spend, a
portion
of the funds it
provides; (2) For
a school
district undertaking a project
under section
3318.38 of the Revised Code
or a joint vocational
school district undertaking a project under sections 3318.40 to
3318.45 of the Revised Code, provision that the state funds
reserved and encumbered and the funds provided by the school
district to pay the basic project cost of any segment of the
project, or of the entire project if it is not divided into
segments, be spent on the construction and acquisition of the
project simultaneously in proportion to the state's and the school
district's respective shares of that basic project cost as
determined under section 3318.032 of the Revised Code
or, if the
district is a joint vocational school district, under section
3318.42 of the Revised Code. (S) A provision stipulating that the commission may
prohibit
the
district from proceeding with any project if the
commission
determines that
the site is not suitable for
construction
purposes. The commission may
perform soil tests in
its
determination of whether a site is appropriate for
construction
purposes. (T) A provision stipulating that, unless otherwise
authorized by the commission, any contingency
reserve portion of
the construction budget prescribed by the
commission shall be used
only to pay costs resulting from
unforeseen job conditions, to
comply with rulings regarding
building and other codes, to pay
costs related to design
clarifications or corrections to contract
documents, and to pay
the costs of settlements or judgments
related to the project as
provided under section 3318.086 of the
Revised Code; (U) Provision stipulating that for continued release of project funds the school district board shall comply with section 3313.41 of the Revised Code throughout the project and shall notify the department of education and the Ohio community school association when the board plans to dispose of facilities by sale under that section; (V) Provision that the commission shall not approve a contract for demolition of a facility until the school district board has complied with section 3313.41 of the Revised Code relative to that facility, unless demolition of that facility is to clear a site for construction of a replacement facility included in the district's project.
Sec. 3318.44. (A) A joint vocational school district board
of education may generate the school district's portion of the
basic project cost of its project under sections 3318.40 to
3318.45 of the Revised Code using any combination of the following
means if lawfully employed for the acquisition of classroom
facilities:
(1) The issuance of securities in accordance with Chapter
133. and section 3311.20 of the Revised Code;
(2) Local donated contributions as authorized under section
3318.084 of the Revised Code;
(3) A levy for permanent improvements under section 3311.21
or 5705.21 of the Revised Code;
(4) Bonds issued pursuant to division (B) of this
section.
(B) By resolution adopted by a majority of all its members,
a school district board in order to pay all or part of the school
district's portion of its basic project cost may apply the
proceeds of a tax levied under section 5705.21 of the Revised Code
to for general ongoing permanent improvements if the proceeds of that
levy lawfully may be used for general construction, renovation,
repair, or maintenance of classroom facilities to leverage bonds
adequate to pay all or part of the school district portion of the
basic project cost of the school district's project under sections
3318.40 to 3318.45 of the Revised Code or to generate an amount
equivalent to all or part of the amount required under section
3318.43 of the Revised Code to be used for maintenance of
classroom facilities acquired under the project. Bonds issued
under this division shall be Chapter 133. securities, but the
issuance of the bonds shall not be subject to a vote of the
electors of the school district as long as the tax proceeds
earmarked for payment of the service charges on the bonds may
lawfully be used for that purpose.
No state moneys shall be released for a project to which
this division applies until the proceeds of any bonds issued under
this division that are dedicated for payment of the school
district's portion of the basic project cost are first deposited
into the school district's project construction fund.
(C) A school district board of education may adopt a
resolution proposing that any of the following questions be
combined with a question specified in section 3318.45 of the
Revised Code:
(1) A bond issue question under section 133.18 of the
Revised Code;
(2) A tax levy question under section 3311.21 of the
Revised Code;
(3) A tax levy question under section 5705.21 of the
Revised Code.
Any question described in divisions (C)(1) to (3) of this
section that is combined with a question proposed under section
3318.45 of the Revised Code shall be for the purpose of either
paying for any permanent improvement, as defined in section 133.01
of the Revised Code, or generating operating revenue specifically
for the facilities acquired under the school district's project
under Chapter 3318. of the Revised Code or for both to the extent
such purposes are permitted by the sections of law under which
each is proposed.
(D) The board of education of a joint vocational school
district that receives assistance under this section may enter
into an agreement for joint issuance of bonds as provided for in
section 3318.085 of the Revised Code.
Sec. 3770.07. (A)(1) Except as provided in division (A)(2) of this section, 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 lottery
ticket, in a manner to be determined
by the state lottery
commission, within one hundred eighty days
after the date on
which the 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. (2) An eligible person serving on active military duty in any branch of the United States armed forces during a war or national emergency declared in accordance with federal law may submit a delayed claim for a lottery prize award. The eligible person shall do so by notifying the commission about the claim not later than the five hundred fortieth day after the date on which the prize award was announced if the lottery game is an on-line game or the date on which the lottery game closed if the lottery game is an instant game. (3) If no valid
claim to a lottery prize award is made within the
prescribed period,
the prize money, the cost of goods and
services awarded as
prizes, or, if goods or services awarded as prizes are
resold by the
commission, the proceeds from their sale shall be
returned to the
state lottery fund and distributed in accordance
with section
3770.06 of the Revised Code.
(4) As used in this division: (a) "Eligible person" means a person who is entitled to a lottery prize award and who falls into either of the following categories: (i) While on active military duty in this state, the person, as the result of a war or national emergency declared in accordance with federal law, is transferred out of this state before the one hundred eightieth day after the date on which the winner of the lottery prize award is selected. (ii) While serving in the reserve forces in this state, the person, as the result of a war or national emergency declared in accordance with federal law, is placed on active military duty and is transferred out of this state before the expiration of the one hundred eightieth day after the date on which the prize drawing occurs for an on-line game or before the expiration of the one hundred eightieth day following the close of an instant game as determined by the commission. (b) "Active military duty" means that a person is covered by the "Servicemembers Civil Relief Act," 117 Stat. 2835 (2003), 50 U.S.C. 501 et. seq., as amended, or the "Uniformed Services Employment and Reemployment Rights Act of 1994," 108 Stat. 3149, 38 U.S.C. 4301 et. seq., as amended. (B) If a
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 of the state lottery commission shall order that
payment be made to the order of the
legal guardian of
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
that prize
winner's family
legally responsible for
the care of
that prize
winner. (C) No right of any
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. (D)(1) No right of any
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; when a person is awarded a prize award to which another has claimed title, pursuant to the order of a federal bankruptcy court under Title 11 of the United States Code;
when the director
is
to make a payment pursuant to section
3770.071 or 3770.073 of the Revised
Code; or as provided in sections 3770.10
to 3770.14 of
the Revised
Code. (2) 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, as defined in section 3770.10 of the Revised Code. Upon the death of a prize winner,
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. (E) 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 an officer or employee of the commission or auditor
of state
living as a member
of the officer's or employee's household, nor
shall any such officer,
employee, blood relative, or spouse attempt to
claim a lottery prize
award. (F) The director may prohibit vendors to the commission and
their employees from being awarded a lottery prize award. (G) Upon the payment of
prize awards pursuant to this
section, the director and the
commission are discharged from all
further liability for their payment.
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 either the general division or the probate division of the
court of common pleas of the
county in which the prize winner or transferor resides, or, if the
prize winner or transferor is not a resident of this state, either the general division or the probate division of the court of common pleas 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) 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 (B) 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 federal bankruptcy court order or other court order under referred to in division (D)(1) 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 (D)(2) 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 that the transferee 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. 3770.12. A court of competent
jurisdiction shall approve
a
transfer of a lottery prize award only in a final order that is
based on express findings of the court. The court shall approve the transfer only if each of the following conditions that applies is met and is included in the court's express
findings: (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 received independent professional
advice
regarding the legal
and other implications of the
transfer. (C) 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.
(D) 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. (E) The transfer complies with all applicable requirements
of
the Revised Code and does not
contravene any applicable law statute or court order.
(F) 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.
(G) Any amounts described in division (F) 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. (H) Except as provided in divisions (F) and (G) 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.
(I) 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. For purposes of this division, any of a series of transfers of a lottery prize award that occur simultaneously as part of a single transaction shall not be considered to be a prior transfer of the lottery prize award within the twelve-month period immediately preceding the effective date of the proposed transfer, provided that the condition set forth in division (C) of this section is met.
If the court determines that all of the conditions in divisions (A) to (I) of this section that apply are met, the transfer of the lottery prize award shall be presumed to be fair and reasonable and in the best interests of the prize winner.
Sec. 3770.121. Any state lottery commission rules allowing lottery prize awards to be paid in installments also shall allow a prize winner who is being paid a prize award in that manner to transfer all or a portion of the remainder of the prize award, subject to each of the following conditions: (A) If each transfer is for less than one hundred per cent of the remainder of the prize award, the remainder of the prize award for each transfer must be five hundred thousand dollars or greater at the time of the transfer. If the lottery prize award is a lifetime prize, for each transfer the remainder of the minimum guaranteed prize to which the prize winner is entitled must be five hundred thousand dollars or greater at the time of the transfer. (B) Payments of the prize award transferred shall be subject to the withholding or deduction of any amounts that are required to be withheld or deducted under section 3119.80, 3119.81, 3121.02, 3121.03, 3123.06, 3770.071, or 5747.062 of the Revised Code. (C) The maximum number of transfers under this section with respect to any single prize award shall not exceed three unless a greater number has been specified by the commission in the rules.
Sec. 5705.192. (A) For the purposes of this section only,
"taxing authority" includes a township board of park commissioners
appointed
under section 511.18 of the Revised Code. (B) A taxing authority may propose to
replace an existing levy
that the taxing authority is authorized
to levy, regardless of the
section of the Revised Code under
which the authority is granted,
except a school district
emergency levy proposed pursuant to
sections 5705.194 to 5705.197
of the Revised Code. The taxing
authority may propose to replace
the existing levy in its entirety
at the rate at which it is
authorized to be levied; may propose to
replace a portion of the
existing levy at a lesser rate; or may
propose to replace the
existing levy in its entirety and increase
the rate at which it
is levied. If the taxing authority proposes
to replace an
existing levy, the proposed levy shall be called a
replacement
levy and shall be so designated on the ballot. A Except as otherwise provided in this division, a
replacement
levy shall be limited to the purpose of the existing
levy, and shall
appear separately on the ballot from, and shall not be
conjoined
with, the renewal of any other existing levy. The In the case of an existing school district levy imposed under section 5705.21 of the Revised Code for the purpose specified in division (F) of section 5705.19 of the Revised Code, the replacement for that existing levy may be for the same purpose or for the purpose of general permanent improvements as defined in section 5705.21 of the Revised Code.
The
resolution
proposing a replacement levy shall specify the purpose
of the
levy; its proposed rate expressed in mills; whether the
proposed
rate is the same as the rate of the existing levy, a
reduction,
or an increase; the extent of any reduction or increase
expressed
in mills; the first calendar year in which the levy will
be
due; and
the term of the levy, expressed in years or, if
applicable, that
it will be levied for a continuing period of
time. The sections of the Revised Code governing the maximum rate
and term of the existing levy, the contents of the resolution
that
proposed the levy, the adoption of the resolution, the
arrangements for the submission of the question of the levy, and
notice of the election also govern the respective provisions of
the proposal to replace the existing levy, except that the as provided in division (B)(1) or (2) of this section:
(1) In the case of an existing school district levy imposed under section 5705.21 of the Revised Code for the purpose specified in division (F) of section 5705.19 of the Revised Code that is to be replaced by a levy for general permanent improvements, the maximum term of the replacement levy is not limited to the term of the existing levy and may be for a continuing period of time. (2) The date
on
which the election is held shall be as follows: (1)(a) For the replacement of a levy with a fixed term of
years, the date of the general election held during the last year
the existing levy may be extended on the real and public utility
property tax list and duplicate, or the date of any election held
in the ensuing year;
(2)(b) For the replacement of a levy imposed for a continuing
period of time, the date of any election held in any year after
the year the levy to be replaced is first approved by the
electors, except that only one election on the question of
replacing the levy may be held during any calendar year.
The failure by the electors to approve a proposal to
replace
a levy imposed for a continuing period of time does not
terminate
the existing continuing levy. (B)(C) The form of the ballot at the election on the question
of a replacement levy shall be as follows:
"A replacement of a tax for the benefit of .......... (name
of subdivision or public library) for the purpose of ..........
(the purpose stated in the resolution) at a rate not exceeding
.......... mills for each one dollar of valuation, which amounts
to .......... (rate expressed in dollars and cents) for each one
hundred dollars in valuation, for .......... (number of years
levy
is to run, or that it will be levied for a continuous period
of
time)
|
|
FOR THE TAX LEVY |
|
|
|
AGAINST THE TAX LEVY |
" |
If the proposal is to replace an existing levy and increase
the rate of the existing levy, the form of the ballot shall be
changed by adding the words
".......... mills of an existing levy
and an increase of .......... mills, to constitute" after the
words
"a replacement of." If the proposal is to replace only a
portion of an existing levy, the form of the ballot shall be
changed by adding the words
"a portion of an existing levy, being
a reduction of .......... mills, to constitute" after the words
"a
replacement of." If the tax is to be placed on the tax list of the current tax
year, the
form of the ballot shall be modified by adding at the
end of the form the
phrase
", commencing in .......... (first year
the replacement tax is
to be
levied), first due in calendar year
.......... (first calendar year
in which the tax shall be due)." The question covered by the resolution shall be submitted
as
a separate proposition, but may be printed on the same ballot
with
any other proposition submitted at the same election, other
than
the election of officers. More than one such question may
be
submitted at the same election. (C)(D) Two existing levies, or any portion of those levies,
may
be combined into one replacement levy, so long as both of the
existing levies are for the same purpose and either both are due
to expire the same year or both are for a continuing period of
time. The question of combining all or portions of the two
existing levies into the replacement levy shall appear as one
ballot proposition before the electors. If the electors approve
the ballot proposition, all or the stated portions of the two
existing levies are replaced by one replacement levy.
(D)(E) A levy approved in excess of the ten-mill limitation
under this section shall be certified to the tax commissioner.
In
the first year of a levy approved under this section, the levy
shall be extended on the tax lists after the February settlement
succeeding the election at which the levy was
approved. If
the
levy is to be placed on the tax lists of the current year, as
specified in the resolution providing for its submission, the
result of the election shall be certified immediately after the
canvass by the board of elections to the taxing authority, which
shall forthwith make the necessary levy and certify it to the
county auditor, who shall extend it on the tax lists for
collection. After the first year, the levy shall be included in
the annual tax budget that is certified to the county budget
commission.
If notes are authorized to be issued in anticipation of the
proceeds of the existing levy, notes may be issued in
anticipation
of the proceeds of the replacement levy, and such
issuance is
subject to the terms and limitations governing the
issuance of
notes in anticipation of the proceeds of the existing
levy. This section does not authorize a tax to be levied in any
year after the year in which revenue is not needed for the
purpose
for which the tax is levied.
Sec. 5705.21. (A) At any time, the board of education of
any city, local, exempted village, cooperative education, or
joint vocational school district, by a vote of two-thirds of all
its members, may declare by resolution that the amount of taxes
which may be raised within the ten-mill limitation by levies on
the current tax duplicate will be insufficient to provide an
adequate amount for the necessary requirements of the school
district, that it is necessary to levy a tax in excess of such
limitation for one of the purposes specified in division (A),
(D), (F), (H), or (DD) of section 5705.19 of the Revised Code,
for general, on-going permanent improvements, for the
purpose
of operating a cultural center, or for the purpose of
providing education technology, and that the question
of such
additional tax levy shall be submitted to the electors of the
school district at a special election on a day to be specified in
the resolution. As used in this section, "cultural center" means a
freestanding building, separate from a public school building,
that is open to the public for educational, musical, artistic,
and cultural purposes. As used in this section,; "education technology" means, but is
not limited to, computer hardware, equipment, materials, and
accessories, equipment used for two-way audio or video, and
software; and "general permanent improvements" means permanent improvements without regard to the limitation of division (F) of section 5705.19 of the Revised Code that the improvements be a specific improvement or a class of improvements that may be included in a single bond issue.
The submission of questions to the electors under this
section is subject to the limitation on the number of election
dates established by section 5705.214 of the Revised Code. (B) Such resolution shall be confined to a single purpose
and shall specify the amount of the increase in rate that it is
necessary to levy, the purpose of the levy, and the
number of years
during which the increase in rate shall be in effect. The number
of years may be any number not exceeding five or, if the levy is
for current expenses of the district or for general, on-going
permanent improvements, for a continuing period of time. The
resolution shall specify the date of holding such election, which
shall not be earlier than seventy-five days after the adoption
and certification of the resolution and which shall be
consistent with the requirements of section 3501.01 of the
Revised Code. The The resolution may propose to renew one or more existing
levies imposed under this section or to increase or decrease a single levy
imposed under this section. If the board of education imposes one or more existing levies for the purpose specified in division (F) of section 5705.19 of the Revised Code, the resolution may propose to renew one or more of those existing levies, or to increase or decrease a single such existing levy, for the purpose of general permanent improvements. If If the resolution proposes to renew two or more existing levies,
the levies shall be levied for the same purpose. The resolution shall
identify those levies and the rates at which they are levied. The
resolution also shall specify that the existing levies shall not
be extended on the tax lists after the year preceding the year in which the
renewal
levy is first imposed, regardless of the years for which those
levies originally were authorized to be levied.
The resolution shall go into immediate effect upon
its passage, and no publication of the resolution shall be
necessary other than that provided for in the notice of election. A copy of
the resolution shall immediately after its
passing be
certified to the board of elections of the proper county in the
manner provided by section 5705.25 of the Revised Code, and that
section shall govern the arrangements for the submission of such
question and other matters concerning such election, to which
that section refers, except that such election shall be held on
the date specified in the resolution. Publication of notice of
such election shall be made in one or more newspapers of general
circulation in the county once a week for four consecutive weeks.
If a majority of the electors voting on the question so submitted
in an election vote in favor of the levy, the board of education
may make the necessary levy within the school district
at the additional rate, or at any lesser rate in excess of the
ten-mill limitation on the tax list, for the purpose stated in
the resolution. A levy for a continuing period of time may be
reduced pursuant to section 5705.261 of the Revised Code.
The tax levy shall be included in the next tax budget that is
certified to the county budget commission. (C)(1) After the approval of a levy on the current tax
list and duplicate for current expenses, for recreational
purposes, for community centers provided for in section 755.16 of
the Revised Code, or for a public library of the district and
prior to the time when the first tax collection from the
levy
can be made, the board of education may anticipate a fraction of
the proceeds of the levy and issue anticipation notes in a
principal amount not exceeding fifty per cent of the total
estimated proceeds of the levy to be collected during the first
year of the levy. (2) After the approval of a levy for general permanent improvements for a specified number of years, or for permanent
improvements having the purpose specified in division (F) of
section 5705.19 of the Revised Code, the board of education may
anticipate a fraction of the proceeds of the levy and issue
anticipation notes in a principal amount not exceeding fifty per
cent of the total estimated proceeds of the levy remaining to be
collected in each year over a period of five years after the
issuance of the notes. The notes shall be issued as provided in section 133.24 of
the Revised Code, shall have principal payments during each year
after the year of their issuance over a period not to exceed five
years, and may have a principal payment in the year of their
issuance. (3) After approval of a levy for general, on-going
permanent improvements for a continuing period of time, the board of education may anticipate a
fraction of the proceeds of the levy and issue anticipation
notes in a principal amount not exceeding fifty per cent of the
total estimated proceeds of the levy to be collected in each year
over a specified period of years, not exceeding ten, after the
issuance of the notes. The notes shall be issued as provided in section 133.24 of
the Revised Code, shall have principal payments during each year
after the year of their issuance over a period not to exceed ten
years, and may have a principal payment in the year of their
issuance.
Sec. 5733.04. As used in this chapter: (A) "Issued and outstanding shares of stock" applies to
nonprofit corporations, as provided in section 5733.01 of the
Revised Code, and includes, but is not limited to, membership
certificates and other instruments evidencing ownership of an
interest in such nonprofit corporations, and with respect to a
financial institution that does not have capital stock,
"issued
and outstanding shares of stock" includes, but is not limited to,
ownership interests of depositors in the capital employed in such
an institution. (B) "Taxpayer" means a corporation subject to the tax
imposed by section 5733.06 of the Revised Code. (C) "Resident" means a corporation organized under the
laws
of this state. (D) "Commercial domicile" means the principal place from
which the trade or business of the taxpayer is directed or
managed. (E) "Taxable year" means the
period prescribed by division
(A) of section 5733.031 of the Revised Code
upon
the net income of
which the value of the taxpayer's issued and
outstanding shares of
stock is determined
under division (B) of
section 5733.05 of the
Revised Code or the period prescribed
by division (A) of section
5733.031 of the Revised
Code that immediately precedes
the date as
of which the total value of the corporation is determined under
division
(A) or (C) of section 5733.05 of the Revised Code. (F) "Tax year" means the calendar year in and for which
the
tax imposed by section 5733.06 of the Revised Code
is required to
be paid. (G) "Internal Revenue Code" means the "Internal Revenue
Code
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended. (H) "Federal income tax" means the income tax imposed by
the
Internal Revenue Code. (I) Except as provided in section 5733.058 of the Revised
Code, "net
income" means the taxpayer's taxable income
before
operating loss deduction and special deductions, as
required to be
reported for the taxpayer's taxable year under the
Internal
Revenue Code, subject to the following adjustments: (1)(a) Deduct any net operating loss incurred in any
taxable
years ending in 1971 or thereafter, but exclusive of any
net
operating loss incurred in taxable years ending prior to
January
1, 1971. This deduction shall not be allowed in any tax
year
commencing before December 31, 1973, but shall be carried
over and
allowed in tax years commencing after December 31, 1973,
until
fully utilized in the next succeeding taxable year or years
in
which the taxpayer has net income, but in no case for more
than
the designated carryover period as described in division
(I)(1)(b)
of this section. The amount of such net operating
loss, as
determined under the allocation and apportionment
provisions of
section 5733.051 and division (B) of section
5733.05 of the
Revised Code for the year in which the net
operating loss occurs,
shall be deducted from net income, as
determined under the
allocation and apportionment provisions of
section 5733.051 and
division (B) of section 5733.05 of the
Revised Code, to the extent
necessary to reduce net income to
zero with the remaining unused
portion of the deduction, if any,
carried forward to the remaining
years of the designated
carryover period as described in division
(I)(1)(b) of this
section, or until fully utilized, whichever
occurs first. (b) For losses incurred in taxable years ending on or
before
December 31, 1981, the designated carryover period shall
be the
five consecutive taxable years after the taxable year in
which the
net operating loss occurred. For losses incurred in
taxable years
ending on or after January 1, 1982, and beginning before August 6,
1997, the designated
carryover
period shall be the fifteen
consecutive taxable years
after the
taxable year in which the net
operating loss occurs. For losses incurred in taxable years
beginning on or after August 6, 1997, the designated carryover
period shall be the twenty consecutive taxable years after the
taxable year in which the net operating loss occurs. (c) The tax commissioner may require a taxpayer to furnish
any information necessary to support a claim for deduction under
division (I)(1)(a) of this section and no deduction shall be
allowed unless the information is furnished. (2) Deduct any amount included in net income by
application
of section 78 or 951 of the Internal Revenue Code,
amounts
received for royalties, technical or other services
derived from
sources outside the United States, and dividends
received from a
subsidiary, associate, or affiliated corporation
that neither
transacts any substantial portion of its business
nor regularly
maintains any substantial portion of its assets
within the United
States. For purposes of determining net
foreign source income
deductible under division (I)(2) of this
section, the amount of
gross income from all such sources other
than
dividend income and
income derived by application of section 78 or 951 of the
Internal
Revenue Code shall be reduced by: (a) The amount of any reimbursed expenses for personal
services performed by employees of the taxpayer for the
subsidiary, associate, or affiliated corporation; (b) Ten per cent of the amount of royalty income and
technical assistance fees; (c) Fifteen per cent of the amount of
all
other income. The amounts described in divisions (I)(2)(a) to (c) of this
section are deemed to be the expenses attributable to the
production of deductible foreign source income unless the
taxpayer
shows, by clear and convincing evidence, less actual
expenses, or
the tax commissioner shows, by clear and convincing
evidence, more
actual expenses. (3) Add any loss or deduct any gain resulting from the
sale,
exchange, or other disposition of a capital asset, or an
asset
described in section 1231 of the Internal Revenue Code, to
the
extent that such loss or gain occurred prior to the first
taxable
year on which the tax provided for in section 5733.06 of
the
Revised Code is computed on the corporation's net income.
For
purposes of division (I)(3) of this section, the amount of
the
prior loss or gain shall be measured by the difference
between the
original cost or other basis of the asset and the
fair market
value as of the beginning of the first taxable year
on which the
tax provided for in section 5733.06 of the Revised
Code is
computed on the corporation's net income. At the option
of the
taxpayer, the amount of the prior loss or gain may be a
percentage
of the gain or loss, which percentage shall be
determined by
multiplying the gain or loss by a fraction, the
numerator of which
is the number of months from the acquisition
of the asset to the
beginning of the first taxable year on which
the fee provided in
section 5733.06 of the Revised Code is
computed on the
corporation's net income, and the denominator of
which is the
number of months from the acquisition of the asset
to the sale,
exchange, or other disposition of the asset.
The adjustments
described
in this division do not apply to any gain or loss where
the gain or loss
is recognized by a qualifying taxpayer, as
defined in section 5733.0510
of the Revised Code, with respect to
a qualifying taxable
event,
as defined in that section. (4) Deduct the dividend received deduction provided by
section 243 of the Internal Revenue Code. (5) Deduct any interest or interest equivalent on public
obligations and purchase obligations to the extent included in
federal taxable income. As used in divisions (I)(5) and (6) of
this section, "public obligations," "purchase obligations," and
"interest or interest equivalent" have the same meanings as in
section 5709.76 of the Revised Code. (6) Add any loss or deduct any gain resulting from the
sale,
exchange, or other disposition of public obligations to the
extent
included in federal taxable income. (7) To the extent not otherwise allowed, deduct any
dividends or distributions received by a taxpayer from a public
utility, excluding an electric company and a combined company, and, for tax years 2005 and thereafter, a telephone company, if the taxpayer owns at
least eighty per cent of the
issued and outstanding common stock
of the public utility. As used in
division (I)(7) of this
section, "public utility" means a
public utility as defined in
Chapter 5727. of the Revised
Code, whether or not the public
utility is doing business in the state. (8) To the extent not otherwise allowed, deduct any
dividends received by a taxpayer from an insurance company, if
the
taxpayer owns at least eighty per cent of the issued and
outstanding common stock of the insurance company. As used in
division (I)(8) of this section, "insurance company" means an
insurance company that is taxable under Chapter 5725. or
5729. of
the Revised Code. (9) Deduct expenditures for modifying existing buildings
or
structures to meet American national standards institute
standard
A-117.1-1961 (R-1971), as amended; provided, that no
deduction
shall be allowed to the extent that such deduction is
not
permitted under federal law or under rules of the tax
commissioner. Those deductions as are allowed may be taken over
a
period of five years. The tax commissioner shall adopt rules
under Chapter 119. of the Revised Code establishing reasonable
limitations on the extent that expenditures for modifying
existing
buildings or structures are attributable to the purpose
of making
the buildings or structures accessible to and usable by
physically
handicapped persons. (10) Deduct the amount of wages and salaries, if any, not
otherwise allowable as a deduction but that would have been
allowable as a deduction in computing federal taxable income
before operating loss deduction and special deductions for the
taxable year, had the targeted jobs credit allowed and determined
under sections 38, 51, and 52 of the Internal Revenue Code not
been in effect. (11) Deduct net interest income on obligations of the
United
States and its territories and possessions or of any
authority,
commission, or instrumentality of the United States to
the extent
the laws of the United States prohibit inclusion of
the net
interest for purposes of determining the value of the
taxpayer's
issued and outstanding shares of stock under division
(B) of
section 5733.05 of the Revised Code. As used in division
(I)(11)
of this section, "net interest" means interest net of any
expenses
taken on the federal income tax return that would not
have been
allowed under section 265 of the Internal Revenue Code
if the
interest were exempt from federal income tax. (12)(a) Except as set forth in division (I)(12)(d) of this
section, to the extent not included in computing the taxpayer's
federal taxable income before operating loss deduction and
special
deductions, add gains and deduct losses from direct or
indirect
sales, exchanges, or other dispositions, made by a
related entity
who is not a taxpayer, of the taxpayer's indirect,
beneficial, or
constructive investment in the stock or debt of
another entity,
unless the gain or loss has been included in
computing the
federal
taxable
income
before operating loss
deduction and special
deductions of another taxpayer with a more
closely related
investment in the stock or debt of the other
entity. The amount
of gain added or loss deducted shall not
exceed the product
obtained by multiplying such gain or loss by
the taxpayer's
proportionate share, directly, indirectly,
beneficially, or
constructively, of the outstanding stock of the
related entity
immediately prior to the direct or indirect sale,
exchange, or
other disposition. (b) Except as set forth in division (I)(12)(e) of this
section, to the extent not included in computing the taxpayer's
federal taxable income before operating loss deduction and
special
deductions, add gains and deduct losses from direct or
indirect
sales, exchanges, or other dispositions made by a
related entity
who is not a taxpayer, of intangible property
other than stock,
securities, and debt, if such property was
owned, or used in whole
or in part, at any time prior to or at
the time of the sale,
exchange, or disposition by either the
taxpayer or by a related
entity that was a taxpayer at any time
during the related entity's
ownership or use of such property,
unless the gain or loss has
been included in computing the
federal taxable
income
before
operating loss deduction and
special deductions of another
taxpayer with a more closely
related ownership or use of such
intangible property. The
amount of gain added or loss deducted
shall not exceed the
product obtained by multiplying such gain or
loss by the
taxpayer's proportionate share, directly, indirectly,
beneficially, or constructively, of the outstanding stock of the
related entity immediately prior to the direct or indirect sale,
exchange, or other disposition. (c) As used in division (I)(12) of this section, "related
entity" means those entities described in divisions (I)(12)(c)(i)
to (iii) of this section: (i) An individual stockholder, or a member of the
stockholder's family enumerated in section 318 of the Internal
Revenue Code, if the stockholder and the members of the
stockholder's family own, directly, indirectly, beneficially, or
constructively, in the aggregate, at least fifty per cent of the
value of the taxpayer's outstanding stock; (ii) A stockholder, or a stockholder's partnership,
estate,
trust, or corporation, if the stockholder and the
stockholder's
partnerships, estates, trusts, and corporations own
directly,
indirectly, beneficially, or constructively, in the
aggregate, at
least fifty per cent of the value of the taxpayer's
outstanding
stock; (iii) A corporation, or a party related to the corporation
in a manner that would require an attribution of stock from the
corporation to the party or from the party to the corporation
under division (I)(12)(c)(iv) of this section, if the taxpayer
owns, directly, indirectly, beneficially, or constructively, at
least fifty per cent of the value of the corporation's
outstanding
stock. (iv) The attribution rules of section 318 of the Internal
Revenue Code apply for purposes of determining whether the
ownership requirements in divisions (I)(12)(c)(i) to (iii) of
this
section have been met. (d) For purposes of the adjustments required by division
(I)(12)(a) of this section, the term "investment in the stock or
debt of another entity" means only those investments where the
taxpayer and the taxpayer's related entities directly,
indirectly,
beneficially, or constructively own, in the
aggregate, at any time
during the twenty-four month period
commencing one year prior to
the direct or indirect sale,
exchange, or other disposition of
such investment at least fifty
per cent or more of the value of
either the outstanding stock or
such debt of such other entity. (e)
For purposes of the adjustments required by division
(I)(12)(b) of this section, the term "related entity" excludes
all
of the following: (i) Foreign corporations as defined in section 7701 of the
Internal Revenue Code; (ii) Foreign partnerships as defined in section 7701 of
the
Internal Revenue Code; (iii) Corporations, partnerships, estates, and trusts
created or organized in or under the laws of the Commonwealth of
Puerto Rico or any possession of the United States; (iv) Foreign estates and foreign trusts as defined in
section 7701 of the Internal Revenue Code. The exclusions described in divisions (I)(12)(e)(i) to (iv)
of this section do not apply if the corporation, partnership,
estate, or trust is described in
any one of divisions
(C)(1) to
(5) of section 5733.042 of the Revised Code. (f) Nothing in division (I)(12) of this section shall
require or permit a taxpayer to add any gains or deduct any
losses
described in divisions (I)(12)(f)(i) and (ii) of this
section: (i) Gains or losses recognized for federal income tax
purposes by an individual, estate, or trust without regard to the
attribution rules described in division (I)(12)(c) of this
section; (ii) A related entity's gains or losses described in
division (I)(12)(b)
of this section if the taxpayer's ownership of
or use of such
intangible property was limited to a period not
exceeding nine
months and was attributable to a transaction or a
series of
transactions executed in accordance with the election or
elections
made by the taxpayer or a related entity pursuant to
section 338
of the Internal Revenue Code. (13) Any adjustment required by section 5733.042 of the
Revised Code. (14) Add any amount claimed as a
credit under section
5733.0611 of the
Revised
Code to the extent that such
amount
satisfies either of the following: (a) It was deducted or excluded from the computation of the
corporation's
taxable income before operating loss deduction and
special
deductions as required to be reported for the
corporation's
taxable year under the Internal
Revenue
Code; (b) It resulted in a reduction of the corporation's taxable
income
before operating loss deduction and special deductions as
required to be reported for any of the corporation's taxable
years
under the Internal
Revenue
Code. (15) Deduct the amount contributed by
the taxpayer to an
individual development account program
established by a county
department of job and family
services pursuant to
sections 329.11
to 329.14 of the
Revised
Code for the purpose of
matching funds
deposited by program participants. On request of
the tax
commissioner, the taxpayer shall provide any information
that, in
the tax commissioner's opinion, is necessary to
establish the
amount deducted under division
(I)(15) of this section. (16) Any adjustment required by section 5733.0510 or 5733.0511 of the
Revised Code.
(17)(a)(i) Add five-sixths of the amount of depreciation
expense allowed under subsection (k) of section 168 of the
Internal Revenue Code, including a person's proportionate or
distributive share of the amount of depreciation expense allowed
by that subsection to
any pass-through entity in which the person
has direct or indirect
ownership. (ii) Add five-sixths of the amount of qualifying section 179 depreciation expense, including a person's proportionate or distributive share of the amount of qualifying section 179 depreciation expense allowed to any pass-through entity in which the person has a direct or indirect ownership. For the purposes of this division, "qualifying section 179 depreciation expense" means the difference between (I) the amount of depreciation expense directly or indirectly allowed to the taxpayer under section 179 of the Internal Revenue Code, and (II) the amount of depreciation expense directly or indirectly allowed to the taxpayer under section 179 of the Internal Revenue Code as that section existed on December 31, 2002. The tax commissioner, under
procedures established by the commissioner, may waive the add-backs
related to a pass-through entity if the person owns, directly or
indirectly, less than five per cent of the pass-through entity. (b) Nothing in division (I)(17) of this section shall be
construed to adjust or modify the adjusted basis of any asset. (c) To the extent the add-back is attributable to property
generating income or loss allocable under section 5733.051 of the
Revised Code, the add-back shall be allocated to the same location
as the income or loss generated by that property. Otherwise, the
add-back shall be apportioned, subject to division (B)(2)(d) of
section 5733.05 of the Revised Code. (18)(a) If a person is required to make the add-back under
division (I)(17)(a) of this section for a tax year, the person
shall deduct one-fifth of the amount added back for each of the
succeeding five tax years. (b) If the amount deducted under division (I)(18)(a) of
this
section is attributable to an add-back allocated under
division
(I)(17)(c) of this section, the amount deducted shall be
allocated
to the same location. Otherwise, the amount shall be
apportioned
using the apportionment factors for the taxable year
in which the
deduction is taken, subject to division (B)(2)(d) of
section
5733.05 of the Revised Code. (J) Any Except as otherwise expressly provided or clearly appearing from the context, any term used in this chapter has the same meaning as
when used in a comparable context in the laws of the United States
relating to federal income taxes unless a different meaning is
clearly required. Any reference in this chapter to the Internal
Revenue Code includes other laws of the United States relating to
federal income taxes. (K) "Financial institution" has the meaning given by
section
5725.01 of the Revised Code
but does not include a production
credit association as
described in 85 Stat. 597, 12
U.S.C.A.
2091. (L)(1) A
"qualifying holding company" is any corporation
satisfying all of the following requirements: (a) Subject to divisions
(L)(2) and (3) of this section,
the
net book value of the corporation's intangible assets is
greater
than or equal to ninety per cent of the net book value of
all of
its assets and at least fifty per cent of the net book
value of
all of its assets represents direct or indirect
investments in the
equity of, loans and advances to, and
accounts receivable due from
related members; (b) At least ninety per cent of the
corporation's gross
income for the taxable year is attributable
to the following: (i) The maintenance, management, ownership, acquisition,
use, and
disposition of its intangible property, its
aircraft the
use of which is not subject to regulation under 14
C.F.R.
part 121
or part 135, and any real property described in
division
(L)(2)(c)
of this section; (ii) The collection and distribution
of income from such
property. (c) The corporation is not a
financial institution on the
last day of the taxable year
ending prior to the first day
of the
tax year; (d) The corporation's related members
make a good faith and
reasonable effort to make timely and fully
the adjustments
required by division
(C)(2) of section 5733.05 of
the Revised
Code
and to pay timely and fully all uncontested taxes, interest,
penalties, and other fees and charges imposed under this chapter; (e) Subject to division
(L)(4) of this section, the
corporation elects to be treated as a qualifying holding company
for the tax year. A corporation otherwise satisfying divisions
(L)(1)(a)
to (e)
of this section that does not elect
to be a qualifying holding
company is not a qualifying holding
company for the purposes of
this chapter. (2)(a)(i) For
purposes of making the ninety per cent
computation under
division
(L)(1)(a)
of this section, the net book
value of the corporation's assets
shall not include the net book
value of aircraft or real
property described in division
(L)(1)(b)(i)
of this section. (ii) For purposes of making the fifty
per cent computation
under division
(L)(1)(a)
of this section, the net book value of
assets shall include the
net book value of aircraft or real
property described in
division
(L)(1)(b)(i)
of this section. (b)(i) As used in division (L) of
this section, "intangible
asset" includes, but is not limited
to, the corporation's direct
interest in each pass-through
entity only if at all times during
the corporation's taxable
year ending prior to the first day of
the tax year the
corporation's and the corporation's related
members' combined
direct and indirect interests in the capital or
profits of such
pass-through entity do not exceed fifty per cent.
If the
corporation's interest in the pass-through entity is an
intangible asset for that taxable year, then the distributive
share of any income from the pass-through entity shall be
income
from an intangible asset for that taxable year. (ii) If a corporation's and the
corporation's related
members' combined direct and indirect
interests in the capital or
profits of a pass-through entity
exceed fifty per cent at any time
during the corporation's
taxable year ending prior to the first
day of the tax year,
"intangible asset" does not include the
corporation's direct
interest in the pass-through entity, and the
corporation shall
include in its assets its proportionate share of
the assets of
any such pass-through entity and shall include in
its gross
income its distributive share of the gross income of
such
pass-through entity in the same form as was earned by the
pass-through
entity. (iii) A pass-through entity's direct
or indirect
proportionate share of any other pass-through
entity's assets
shall be included for the purpose of computing
the corporation's
proportionate share of the pass-through
entity's assets under
division
(L)(2)(b)(ii)
of this section, and such pass-through
entity's distributive share of any
other pass-through entity's
gross income shall be included for purposes of computing the
corporation's distributive share of the pass-through entity's
gross income under division
(L)(2)(b)(ii)
of this section. (c) For the purposes of divisions
(L)(1)(b)(i), (1)(b)(ii),
(2)(a)(i), and
(2)(a)(ii) of this
section, real property is
described in division
(L)(2)(c)
of this section only if all of the
following conditions are
present at all times during the taxable
year ending prior to the
first day of the tax year: (i) The real property serves as the
headquarters of the
corporation's trade or business, or is the
place from which the
corporation's trade or business is
principally managed or
directed; (ii) Not more than ten per cent of
the value of the real
property and not more than ten per cent of the square
footage of
the building or buildings that are part of the real property is
used, made available, or occupied for the purpose of providing,
acquiring,
transferring, selling, or
disposing of tangible
property or services in the normal course
of business to persons
other than related
members, the corporation's employees and their
families, and
such related members' employees and their families. (d) As used in division (L) of this section, "related
member" has the same
meaning as in division (A)(6)
of section
5733.042 of the
Revised
Code without regard to division
(B) of
that section. (3) The percentages described in division
(L)(1)(a)
of this
section shall be equal to the quarterly average of
those
percentages as calculated during the corporation's taxable
year
ending prior to the first day of the
tax year. (4) With respect to the election described in division
(L)(1)(e)
of this section: (a) The election need not accompany a
timely filed report; (b) The election need not accompany the report; rather,
the
election may accompany a subsequently filed but timely
application
for refund and timely
amended report, or a subsequently filed but
timely petition for
reassessment; (c) The election is not
irrevocable; (d) The election applies only to the
tax year specified by
the corporation; (e) The corporation's related members comply with division
(L)(1)(d) of this section. Nothing in division
(L)(4) of this section shall be
construed
to extend any statute of limitations set forth in this
chapter. (M) "Qualifying
controlled group" means two or more
corporations that
satisfy the ownership and control requirements
of division
(A) of section 5733.052 of the
Revised
Code. (N) "Limited liability company" means any limited
liability
company formed under Chapter 1705. of the Revised
Code or under
the laws of any other state. (O) "Pass-through entity" means
a corporation that has made
an election
under subchapter S of Chapter 1 of Subtitle
A of the
Internal
Revenue
Code
for its taxable year under that code, or a
partnership, limited
liability company, or any other person, other
than an
individual, trust, or estate, if the partnership, limited
liability company, or other person is not classified for federal
income tax purposes as an association taxed as a
corporation. (P) "Electric company," "combined company," and "telephone company" have the same
meanings as in section 5727.01
of the Revised Code. (Q) "Business income" means income arising from transactions, activities, and sources in the regular course of a trade or business and includes income from real property, tangible personal property, and intangible personal property if the acquisition, rental, management, and disposition of the property constitute integral parts of the regular course of a trade or business operation. "Business income" includes income, including gain or loss, from a partial or complete liquidation of a business, including, but not limited to, gain or loss from the sale or other disposition of goodwill.
(R) "Nonbusiness income" means all income other than business income. Sec. 5733.42. (A) As used in this section: (1)
"Eligible training program" means a program to provide
job
skills to eligible employees who are unable effectively to
function on the job due to skill deficiencies or who would
otherwise be displaced because of their skill deficiencies or
inability to use new technology, or to provide job skills to
eligible employees that enable them to perform other job duties
for the
taxpayer. Eligible training programs do
not include
executive, management, or personal
enrichment training programs,
or training programs intended
exclusively for personal career
development. (2)
"Eligible employee" means an individual who is employed
in this state by a taxpayer and has been so employed by the same
taxpayer for at least one
hundred eighty consecutive days before
the day an application for the credit is filed under
this section.
"Eligible employee" does not include
any employee for which a
credit is claimed pursuant to division
(A)(5) of section
5709.65
of the Revised Code for all or any part of the same year, an
employee who is not a full-time employee, or executive or
managerial personnel except for the immediate supervisors of
nonexecutive, nonmanagerial personnel. (3)
"Eligible training costs" means: (a) Direct instructional costs, such as instructor
salaries,
materials and supplies, textbooks and manuals, videotapes, and
other
instructional media and training equipment
used exclusively
for the purpose of training eligible employees; (b) Wages paid to eligible employees for time devoted
exclusively
to an eligible training
program during normal paid
working hours. (4)
"Full-time employee" means an individual who is employed
for
consideration for at least thirty-five hours per week, or who
renders any
other standard of service generally accepted by custom
or specified by
contract as full-time employment. (5)
"Partnership" includes a limited liability company
formed
under
Chapter 1705. of the Revised Code or under the laws
of
another state, provided that
the company is not classified for
federal income tax purposes as an
association taxable as a
corporation. (B) There is hereby allowed
a nonrefundable credit against
the tax imposed
by section 5733.06 of the Revised Code
for
taxpayers for which a tax credit certificate is issued under
division (C) of this section.
The credit may
be claimed for
tax
years 2004,
2005, and 2006.
The amount of the
credit for
tax year
2004 shall equal one-half of the
average
of
the eligible
training costs
paid or incurred by the taxpayer
during
calendar
years
1999, 2000, and 2001, not to
exceed
one thousand dollars
for each
eligible employee on
account of
whom eligible training
costs were
paid or
incurred by
the taxpayer during those calendar
years.
The amount of the
credit for tax year 2005 shall equal
one-half of the average of
the eligible training costs paid or
incurred by the taxpayer
during calendar years 2002, 2003, and
2004, not to exceed one
thousand dollars for each eligible
employee on account of whom
eligible training costs were paid or
incurred by the taxpayer
during those calendar years. The amount
of the credit for tax
year 2006 shall equal one-half of the
average of the eligible
training costs paid or incurred by the
taxpayer during calendar
years 2003, 2004, and 2005, not to exceed
one thousand dollars for
each eligible employee on account of whom
eligible training costs
were paid or incurred by the taxpayer
during those calendar years.
The credit claimed by a
taxpayer each
tax
year
shall not exceed
one hundred thousand dollars. (C) A taxpayer who proposes to conduct an eligible training
program may apply to the director of job and family services
for a
tax credit certificate under this section.
The taxpayer may apply
for such a certificate for
tax years 2004, 2005, and 2006,
subject to
division
(L) of this section.
The
director shall
prescribe the form of
the
application, which shall
require a
detailed description of the
proposed training program.
The
director may require applicants to
remit an application fee
with
each application filed with the
director. The fee shall not
exceed
the reasonable and necessary
expenses incurred by the
director in
receiving, reviewing, and
approving such applications
and issuing tax credit
certificates.
Proceeds
from fees shall be
used solely for the purpose of
receiving,
reviewing, and approving
such applications and issuing
such certificates.
After receipt of an application, the
director shall authorize
a credit under this section
by issuing a tax credit
certificate,
in the form prescribed by the director, if
the director determines
all of the following:
(1) The proposed training program is an eligible training
program
under this section; (2) The proposed training program is economically sound
and
will
benefit the people of this state by improving workforce
skills and
strengthening the economy of this state; (3) Receiving the tax credit is a major factor in the
taxpayer's
decision to go forward with the training program; (4) Authorization of the credit is consistent with
division
(H)
of this section. The credit also is allowed for a taxpayer that is a partner
in a
partnership that pays or incurs eligible training costs.
Such
a taxpayer
shall determine the taxpayer's credit amount in
the
manner prescribed by
division (K) of this section. (D) If the director of job and family services denies an
application for a
tax credit certificate, the director shall send
notice of the denial and the
reason for denial to the applicant by
certified mail, return receipt
requested. If the director
determines that an
authorized
training program, as actually
conducted, fails to meet the requirements of
this section or to
comply with any condition set forth in the
authorization, the
director may reduce the amount of the
tax credit previously
granted.
If the director reduces a
tax credit, the director shall
send notice of the reduction and the reason
for the reduction to
the taxpayer by certified mail, return receipt requested,
and
shall certify the reduction to the tax
commissioner or, in the
case of the reduction of a credit
claimed by an insurance company,
the superintendent of insurance. The tax
commissioner or
superintendent of insurance shall reduce the credit
that may be
claimed by the taxpayer accordingly. Within sixty days after
receiving a notice of denial or notice of reduction of the tax
credit, an
applicant or taxpayer may request, in writing, a
hearing before the director
to review the denial or reduction.
Within sixty days after receiving a
request that is filed within
the prescribed time, the director shall hold such
a hearing at a
location to be determined by the director. Within thirty days
after the hearing is adjourned, the director shall issue a
redetermination
affirming, reversing, or modifying the denial or
reduction of the tax credit
and send notice of the redetermination
to the applicant or taxpayer by
certified mail, return receipt
requested, and shall issue a notice of the
redetermination to the
tax commissioner or superintendent of insurance. If an
applicant
or taxpayer is aggrieved by the director's redetermination, the
applicant or taxpayer may appeal the redetermination to the board
of tax
appeals in the manner prescribed by section 5717.02 of the
Revised Code. (E) A taxpayer to which a tax credit certificate is
issued
shall retain records indicating the eligible training costs it
pays or
incurs for the eligible training program for which the
certificate is issued
for four years following the end of the tax
year
for which the credit is claimed. Such records shall be open
to inspection by
the
director of
job and family services upon the
director's request during business hours. Financial statements and other information submitted
by an
applicant to the director of job and family services
for a tax
credit under this
section, and any information taken for any
purpose from such
statements or information, are not public
records subject to
section 149.43 of the Revised Code. However,
the director
of job and family services, the tax
commissioner, or
superintendent of insurance
may make use of the statements and
other information for purposes of issuing
public reports or in
connection with court proceedings
concerning tax credits allowed
under this section and sections 5725.31,
5729.07, and 5747.39 of
the Revised Code. (F) The director of job and family services, in
accordance
with Chapter
119. of the Revised Code, shall adopt rules necessary
to
implement
this section and sections 5725.31, 5729.07, and
5747.39 of the Revised Code. The
rules shall be adopted after
consultation with the tax
commissioner and the superintendent of
insurance. At the
time the director gives public notice under
division (A) of section 119.03 of the
Revised Code of the adoption
of the
rules, the director shall submit copies of the proposed
rules to the
chairpersons and ranking minority members of the
standing committees in
the senate and the house of representatives
to which legislation on economic
development matters are
customarily referred. (G) On or before the thirtieth day of September of 2001,
2003,
2004,
2005, and 2006, the director of job and
family
services
shall submit a report to the governor, the
president
of
the
senate, and the speaker of the house of
representatives on
the
tax
credit program under this section and
sections 5725.31,
5729.07,
and 5747.39 of the Revised Code. The
report shall
include
information on the number of training
programs that were
authorized under those sections during the
preceding calendar
year,
a description of each authorized training
program, the
dollar
amounts of the credits granted, and an
estimate of the
impact of
the credits on the economy of this
state. (H) The aggregate amount of credits authorized under this
section and sections 5725.31, 5729.07, and 5747.39 of the Revised
Code
shall not exceed twenty million dollars per calendar year.
No
more than ten
million dollars in credits per calendar year
shall
be authorized for persons engaged primarily in
manufacturing.
No
less than five million dollars in credits per
calendar year
shall
be set aside for persons engaged primarily
in
activities other
than manufacturing and having fewer than five
hundred employees.
Subject to such limits, the director of job and family services shall adopt a rule under division (F) of this section that establishes criteria and procedures for distribution of the credits shall be
authorized for applicants
meeting the requirements of this section
in the order in which
they submit complete and accurate
applications. (I) A nonrefundable credit allowed under
this section shall
be claimed in the order required under section 5733.98
of the
Revised Code. (J) The taxpayer may carry forward any credit amount in
excess of
its tax due after allowing for any other credits that
precede the
credit under this section in the order required under
section
5733.98 of the Revised Code. The excess
credit may be
carried forward
for three years following the tax year for which
it is
first claimed under this section. (K) A taxpayer that is a
partner in a partnership on the
last day of the third calendar year of the
three-year period
during which the
partnership pays or incurs eligible training
costs may claim a credit under
this section for the tax year
immediately following that calendar year. The
amount of a
partner's credit
equals the partner's interest in the partnership
on the last day of such
calendar year multiplied by the credit
available to the partnership as
computed by the partnership. (L) The director of job and family services
shall not
authorize any credits under this
section and sections 5725.31,
5729.07, and 5747.39 of the Revised Code for eligible
training
costs paid or incurred after December
31,
2005.
Sec. 5747.01. Except as otherwise expressly provided or
clearly appearing from the context, any term used in this chapter
has the same meaning as when used in a comparable context in the
Internal Revenue Code, and all other statutes laws of the United
States
relating to federal income taxes. Any reference in this chapter to the Internal Revenue Code includes other laws of the United States relating to federal income taxes. (A) "Adjusted gross income" or "Ohio adjusted gross
income"
means
federal adjusted gross income, as defined and used in the
Internal
Revenue Code, adjusted as provided in this section: (1) Add interest or dividends on obligations or securities
of any state or of any political subdivision or authority of any
state, other than this state and its subdivisions and authorities. (2) Add interest or dividends on obligations of any
authority, commission, instrumentality, territory, or possession
of the United States
to the extent that
the interest or dividends
are exempt from federal income taxes
but
not from state income
taxes. (3) Deduct interest or dividends on obligations of the
United States and its territories and possessions or of any
authority, commission, or instrumentality of the United States to
the extent
that the interest or dividends are included in federal
adjusted gross income but exempt
from state income taxes under the
laws of the United States. (4) Deduct disability and survivor's benefits to the
extent
included in federal adjusted gross income. (5) Deduct benefits under Title II of the Social Security
Act and tier 1 railroad retirement benefits to the extent
included
in federal adjusted gross income under section 86 of the
Internal
Revenue Code. (6)
In the case of a taxpayer who is a beneficiary of
a
trust that makes an accumulation distribution as defined in
section 665 of the Internal Revenue Code,
add, for the
beneficiary's taxable years
beginning before 2002 or after 2004,
the portion, if
any, of
such distribution
that does not exceed the
undistributed
net
income of the trust for
the three taxable years
preceding the
taxable year in which the
distribution is made
to
the extent that the portion was not included in the trust's
taxable income for any of the trust's taxable years beginning in
2002, 2003, or 2004.
"Undistributed
net
income of a trust" means
the taxable income of
the trust
increased
by (a)(i) the additions
to adjusted gross
income
required under
division (A) of this
section and (ii) the
personal
exemptions
allowed to the trust
pursuant to section
642(b) of the
Internal
Revenue Code, and
decreased by (b)(i) the
deductions to
adjusted
gross income
required under division (A) of
this
section,
(ii) the
amount of
federal income taxes attributable
to
such
income, and
(iii) the
amount of taxable income that has
been
included in the
adjusted
gross income of a beneficiary by
reason
of a prior
accumulation
distribution. Any undistributed
net
income included
in the
adjusted gross income of a beneficiary
shall reduce the
undistributed net income of the trust commencing
with the earliest
years of the accumulation period. (7) Deduct the amount of wages and salaries, if any, not
otherwise allowable as a deduction but that would have been
allowable as a deduction in computing federal adjusted gross
income for the taxable year, had the targeted jobs credit allowed
and determined under sections 38, 51, and 52 of the Internal
Revenue Code not been in effect. (8) Deduct any interest or interest equivalent on public
obligations and purchase obligations to the extent
that the
interest or interest equivalent is included in
federal adjusted
gross income. (9) Add any loss or deduct any gain resulting from the
sale,
exchange, or other disposition of public obligations to the
extent
that the loss has been deducted or the gain has been
included in
computing federal adjusted gross income. (10)
Deduct or add amounts, as provided under section
5747.70 of the
Revised
Code, related to contributions to variable
college savings program
accounts made or tuition credits purchased
pursuant to Chapter
3334. of the Revised Code. (11)(a) Deduct, to the extent not otherwise allowable as a
deduction or
exclusion in computing federal or Ohio adjusted gross
income for the taxable
year, the amount the taxpayer paid during
the taxable year for medical care
insurance and qualified
long-term care insurance for the taxpayer, the
taxpayer's spouse,
and dependents. No deduction for medical care insurance
under
division (A)(11) of this section shall be allowed either to any
taxpayer
who is eligible to participate in any subsidized health
plan maintained by any
employer of the taxpayer or of the
taxpayer's spouse, or to any taxpayer who
is entitled to, or on
application would be entitled to, benefits under part A of Title
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.
301, as amended. For the purposes of division (A)(11)(a) of this
section, "subsidized health plan" means a health plan for which
the employer pays any portion of the plan's cost. The deduction
allowed under division (A)(11)(a) of this section shall be the net
of any related premium refunds, related premium reimbursements, or
related insurance premium dividends received during the taxable
year. (b) Deduct, to the extent not otherwise deducted or excluded
in
computing federal or Ohio adjusted gross income during the
taxable
year, the amount the taxpayer paid during the taxable
year, not
compensated for by any insurance or otherwise, for
medical care of
the taxpayer, the taxpayer's spouse, and
dependents, to the extent
the expenses exceed seven and one-half
per cent of the taxpayer's
federal adjusted gross income. (c) For purposes of division (A)(11) of this section,
"medical
care" has the meaning given in section 213 of the
Internal Revenue
Code, subject to the special rules, limitations,
and exclusions
set forth therein, and "qualified long-term care"
has the same
meaning given in section 7702(B)(b) of the Internal
Revenue Code. (12)(a) Deduct any amount included in federal adjusted gross
income solely because the amount represents a reimbursement or
refund of expenses that in any year the taxpayer had
deducted as
an itemized deduction pursuant to section 63 of the
Internal
Revenue Code and applicable United States
department of the
treasury regulations.
The deduction otherwise allowed under
division (A)(12)(a) of this section shall be reduced to the extent
the reimbursement is attributable to an amount the taxpayer
deducted under this section in any taxable year. (b) Add any amount not otherwise included in Ohio adjusted
gross
income for any taxable year to the extent that the amount is
attributable to the recovery during the taxable year of any amount
deducted or excluded in computing federal or Ohio adjusted gross
income in any taxable year. (13) Deduct any portion of the deduction described in
section 1341(a)(2) of the Internal Revenue Code, for repaying
previously reported income received under a claim of right, that
meets both of the following requirements: (a) It is allowable for repayment of an item that was
included in the taxpayer's adjusted gross income for a prior
taxable year and did not qualify for a credit under division (A)
or (B) of section 5747.05 of the Revised Code for that year; (b) It does not otherwise reduce the taxpayer's adjusted
gross income for the current or any other taxable year. (14) Deduct an amount equal to the deposits made to, and
net
investment earnings of, a medical savings account during the
taxable year,
in accordance with section 3924.66 of the Revised
Code. The deduction
allowed by division (A)(14) of this section
does not apply to medical
savings account deposits and earnings
otherwise deducted or excluded for the
current or any other
taxable year from the taxpayer's federal adjusted gross
income. (15)(a) Add an amount equal to the funds withdrawn from a
medical
savings account during the taxable year, and the net
investment earnings on
those funds, when the funds withdrawn were
used for any purpose other than to
reimburse an account holder
for, or to pay, eligible medical expenses, in
accordance with
section 3924.66 of the Revised Code; (b) Add the amounts distributed from a medical savings
account
under division (A)(2) of section 3924.68 of the Revised
Code during the
taxable year. (16) Add any amount claimed as a credit under section
5747.059 of the Revised
Code to the extent that such amount
satisfies either of the following: (a) The amount was deducted or excluded from the computation
of the
taxpayer's federal adjusted gross income as required to be
reported for the
taxpayer's taxable year under the Internal
Revenue Code; (b) The amount resulted in a reduction of the taxpayer's
federal adjusted
gross income as required to be reported for any
of the taxpayer's taxable
years under the Internal Revenue Code. (17) Deduct the amount contributed by the taxpayer to an
individual development account program established by a county
department of
job and family services pursuant to sections 329.11
to
329.14 of the Revised Code for
the purpose of matching funds
deposited by program participants. On request
of
the tax
commissioner, the taxpayer shall provide any information that, in
the
tax commissioner's opinion, is necessary to establish the
amount deducted
under
division (A)(17) of this section. (18) Beginning in taxable year 2001, if the taxpayer is
married
and files a joint return and the
combined federal adjusted
gross income of the taxpayer and the taxpayer's
spouse for the
taxable year does not exceed one hundred thousand dollars, or
if
the taxpayer is single and has a federal adjusted gross income for
the
taxable
year not exceeding fifty thousand dollars, deduct
amounts paid during the
taxable year for qualified tuition and
fees paid to an eligible institution
for the taxpayer, the
taxpayer's spouse, or any dependent of the taxpayer, who
is a
resident of this state and is enrolled in or attending a program
that
culminates in a degree or diploma at an eligible institution.
The deduction
may be claimed only to the extent that qualified
tuition and fees are not
otherwise deducted or excluded for any
taxable year from federal or
Ohio adjusted gross income. The
deduction
may not be claimed for educational expenses for which
the taxpayer claims a
credit under section 5747.27 of the Revised
Code. (19) Add any reimbursement received during the taxable year
of any amount
the taxpayer deducted under division (A)(18) of this
section in any
previous taxable year to the extent the amount is
not otherwise included in
Ohio adjusted gross income.
(20)(a)(i) Add five-sixths of the amount of depreciation
expense allowed by subsection (k) of section 168 of the Internal
Revenue Code, including the taxpayer's proportionate or
distributive share of the amount of depreciation expense allowed
by that subsection to a pass-through entity in which the taxpayer
has a direct or indirect ownership interest. (ii) Add five-sixths of the amount of qualifying section 179 depreciation expense, including a person's proportionate or distributive share of the amount of qualifying section 179 depreciation expense allowed to any pass-through entity in which the person has a direct or indirect ownership. For the purposes of this division, "qualifying section 179 depreciation expense" means the difference between (I) the amount of depreciation expense directly or indirectly allowed to the taxpayer under section 179 of the Internal Revenue Code, and (II) the amount of depreciation expense directly or indirectly allowed to the taxpayer under section 179 of the Internal Revenue Code as that section existed on December 31, 2002.
The tax
commissioner, under procedures established by the commissioner,
may waive the add-backs related to a pass-through entity if the
taxpayer owns, directly or indirectly, less than five per cent of
the pass-through entity. (b) Nothing in division (A)(20) of this section shall be
construed to adjust or modify the adjusted basis of any asset. (c) To the extent the add-back required under division
(A)(20)(a) of this section is attributable to property generating
nonbusiness income or loss allocated under section 5747.20 of the
Revised Code, the add-back shall be sitused to the same location
as the nonbusiness income or loss generated by the property for
the purpose of determining the credit under division (A) of
section 5747.05 of the Revised Code. Otherwise, the add-back
shall be apportioned, subject to one or more of the four
alternative methods of apportionment enumerated in section 5747.21
of the Revised Code. (d) For the purposes of division (A) of this section, net operating loss carryback and carryforward shall not include five-sixths of the allowance of any net operating loss deduction carryback or carryforward to the taxable year to the extent such loss resulted from depreciation allowed by section 168(k) of the Internal Revenue Code and by the qualifying section 179 depreciation expense amount. (21)(a) If the taxpayer was required to add an amount under
division (A)(20)(a) of this section for a taxable year, deduct
one-fifth of the amount so added for each of the five succeeding
taxable years. (b) If the amount deducted under division (A)(21)(a) of
this
section is attributable to an add-back allocated under
division
(A)(20)(c) of this section, the amount deducted shall be
sitused
to the same location. Otherwise, the add-back shall be
apportioned using the apportionment factors for the taxable year
in which the deduction is taken, subject to one or more of the
four alternative methods of apportionment enumerated in section
5747.21 of the Revised Code. (c) No deduction is available under division (A)(21)(a) of this section with regard to any depreciation allowed by section 168(k) of the Internal Revenue Code and by the qualifying section 179 depreciation expense amount to the extent that such depreciation resulted in or increased a federal net operating loss carryback or carryforward to a taxable year to which division (A)(20)(d) of this section does not apply. (B) "Business income" means income, including gain or loss,
arising from
transactions, activities, and sources in the regular
course of a
trade or business and includes income, gain, or loss
from
real property, tangible
property, and
intangible
property if
the acquisition, rental,
management, and
disposition
of the
property constitute integral
parts of the
regular course of
a
trade or business operation.
"Business income"
includes income,
including gain or loss, from a
partial or
complete liquidation of
a business, including, but not
limited to,
gain or loss from the
sale or other disposition of
goodwill. (C) "Nonbusiness income" means all income other than
business income and may include, but is not limited to,
compensation, rents and royalties from real or tangible personal
property, capital gains, interest, dividends and distributions,
patent or copyright royalties, or lottery winnings, prizes, and
awards. (D) "Compensation" means any form of remuneration paid to
an
employee for personal services. (E) "Fiduciary" means a guardian, trustee, executor,
administrator, receiver, conservator, or any other person acting
in any fiduciary capacity for any individual, trust, or estate. (F) "Fiscal year" means an accounting period of twelve
months ending on the last day of any month other than December. (G) "Individual" means any natural person. (H) "Internal Revenue Code" means the "Internal Revenue
Code
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended. (I) "Resident" means
any of the following, provided that
division (I)(3) of this section applies only to taxable years of a
trust beginning in 2002, 2003, or 2004: (1) An individual who is domiciled in this state, subject
to
section 5747.24 of the Revised Code; (2) The estate of a decedent who at the time of death
was
domiciled in this state. The domicile tests of section
5747.24 of
the Revised Code and any election under section
5747.25 of the
Revised Code are not controlling for purposes of
division (I)(2)
of this section.
(3)
A
trust that, in whole or part, resides in this state.
If
only part of a trust resides in this state, the trust is a
resident only with respect to that part. For the purposes of
division (I)(3) of this section: (a) A trust resides in this state
for the trust's current
taxable year to
the extent, as described in division (I)(3)(d) of
this section, that
the trust consists directly or indirectly,
in whole or
in part,
of assets, net of any related
liabilities, that were
transferred, or caused to be transferred,
directly or indirectly,
to the trust by any of the following:
(i) A person, a court, or a governmental
entity or instrumentality on account of the death of a decedent, but only if the trust is described in division (I)(3)(e)(i)
or (ii) of this section; (ii) A person who
was domiciled in this state
for the purposes of
this chapter when the person directly or indirectly transferred
assets to an irrevocable trust, but only if at least one of the
trust's qualifying beneficiaries is domiciled in this state for
the purposes of this chapter during all or some portion of the
trust's current taxable year; (iii) A person who was domiciled in this state
for the
purposes of this chapter when the trust
document or instrument
or
part of the trust
document or instrument became irrevocable, but
only if at least
one
of
the trust's qualifying beneficiaries is a resident domiciled in
this state for the purposes of
this chapter
during all or some
portion of the trust's current taxable year.
(b) A trust is
irrevocable to
the extent that the transferor is not
considered to
be the owner
of the net assets of the trust under sections 671 to
678 of the
Internal
Revenue Code. (c) With respect to a trust other than a charitable lead
trust, "qualifying beneficiary" has the same meaning as "potential
current beneficiary" as defined in section 1361(e)(2) of the
Internal Revenue Code, and with respect to a charitable lead trust
"qualifying beneficiary" is any current, future, or contingent
beneficiary, but with respect to any trust "qualifying
beneficiary" excludes a person or a governmental entity or
instrumentality to any of which a contribution would qualify for
the charitable deduction under section 170 of the Internal Revenue
Code.
(d) For the purposes of division (I)(3)(a) of this section,
the extent to which a trust consists directly or indirectly, in
whole or in part, of assets, net of any related liabilities, that
were transferred directly or indirectly, in whole or part, to the
trust by any of the sources enumerated in that division shall be
ascertained by multiplying the fair market value of the trust's
assets, net of related liabilities, by the qualifying ratio, which
shall be computed as follows:
(i) The first time the trust receives assets, the numerator
of the qualifying ratio is the fair market value of those assets
at that time, net of any related liabilities, from sources
enumerated in division (I)(3)(a) of this section. The denominator
of the qualifying ratio is the fair market value of all the
trust's assets at that time, net of any related liabilities.
(ii) Each subsequent time the trust receives assets, a
revised qualifying ratio shall be computed. The numerator of the
revised qualifying ratio is the sum of (1) the fair market value
of the trust's assets immediately prior to the subsequent
transfer, net of any related liabilities, multiplied by the
qualifying ratio last computed without regard to the subsequent
transfer, and (2) the fair market value of the subsequently
transferred assets at the time transferred, net of any related
liabilities, from sources enumerated in division (I)(3)(a) of this
section. The denominator of the revised qualifying ratio is the
fair market value of all the trust's assets immediately after the
subsequent transfer, net of any related liabilities.
(e) For the purposes of division (I)(3)(a)(i) of this
section:
(i) A trust is described in division (I)(3)(e)(i) of this
section if the trust is a testamentary trust and the testator of
that testamentary trust was domiciled in this state at the time of
the testator's death for purposes of the taxes levied under
Chapter 5731. of the Revised Code.
(ii) A trust is described in division (I)(3)(e)(ii) of this
section if the transfer is a qualifying transfer described in any
of divisions (I)(3)(f)(i) to (vi) of this section, the trust is an
irrevocable inter vivos trust, and at least one of the trust's
qualifying beneficiaries is domiciled in this state for purposes
of this chapter during all or some portion of the trust's current
taxable year.
(f) For the purposes of division (I)(3)(e)(ii) of this
section, a "qualifying transfer" is a transfer of assets, net of
any related liabilities, directly or indirectly to a trust, if the
transfer is described in any of the following:
(i) The transfer is made to a trust, created by the
decedent before the decedent's death and while the decedent was
domiciled in this state for the purposes of this chapter, and,
prior to the death of the decedent, the trust became irrevocable
while the decedent was domiciled in this state for the purposes of
this chapter.
(ii) The transfer is made to a trust to which the decedent,
prior to the decedent's death, had directly or indirectly
transferred assets, net of any related liabilities, while the
decedent was domiciled in this state for the purposes of this
chapter, and prior to the death of the decedent the trust became
irrevocable while the decedent was domiciled in this state for the
purposes of this chapter.
(iii) The transfer is made on account of a contractual
relationship existing directly or indirectly between the
transferor and either the decedent or the estate of the decedent
at any time prior to the date of the decedent's death, and the
decedent was domiciled in this state at the time of death for
purposes of the taxes levied under Chapter 5731. of the Revised
Code.
(iv) The transfer is made to a trust on account of a
contractual relationship existing directly or indirectly between
the transferor and another person who at the time of the
decedent's death was domiciled in this state for purposes of this
chapter.
(v) The transfer is made to a trust on account of the will
of a testator.
(vi) The transfer is made to a trust created by or caused
to be created by a court, and the trust was directly or indirectly
created in connection with or as a result of the death of an
individual who, for purposes of the taxes levied under Chapter
5731. of the Revised Code, was domiciled in this state at the time
of the individual's death. (g) The tax commissioner may adopt rules to ascertain the
part
of
a trust residing in this state. (J) "Nonresident" means an individual or estate that is
not
a resident. An individual who is a resident for only part of
a
taxable year is a nonresident for the remainder of that taxable
year. (K) "Pass-through entity" has the same meaning as in section
5733.04 of the
Revised Code. (L) "Return" means the notifications and reports required
to
be filed pursuant to this chapter for the purpose of reporting
the
tax due and includes declarations of estimated tax when so
required. (M) "Taxable year" means the calendar year or the
taxpayer's
fiscal year ending during the calendar year, or
fractional part
thereof, upon which the adjusted gross income is
calculated
pursuant to this chapter. (N) "Taxpayer" means any person subject to the tax imposed
by section 5747.02 of the Revised Code or any pass-through entity
that
makes the election under division (D) of section 5747.08 of
the Revised Code. (O) "Dependents" means dependents as defined in the
Internal
Revenue Code and as claimed in the taxpayer's federal
income tax
return for the taxable year or which the taxpayer
would have been
permitted to claim had the taxpayer filed a
federal income
tax
return. (P) "Principal county of employment" means, in the case of
a
nonresident, the county within the state in which a taxpayer
performs services for an employer or, if those services are
performed in more than one county, the county in which the major
portion of the services are performed. (Q) As used in sections 5747.50 to 5747.55 of the Revised
Code: (1) "Subdivision" means any county, municipal corporation,
park district, or township. (2) "Essential local government purposes" includes all
functions that any subdivision is required by general law to
exercise, including like functions that are exercised under a
charter adopted pursuant to the Ohio Constitution. (R) "Overpayment" means any amount already paid that
exceeds
the figure determined to be the correct amount of the
tax. (S) "Taxable income"
or "Ohio taxable income" applies
only
to estates
and
trusts,
and means
federal
taxable income, as
defined and used in the
Internal
Revenue Code,
adjusted as
follows: (1) Add interest or dividends, net of ordinary, necessary,
and reasonable expenses not deducted in computing federal taxable
income, on obligations or securities
of any state or of any
political subdivision or authority of any
state, other than this
state and its subdivisions and
authorities, but only to the
extent that such net amount is not otherwise includible in Ohio
taxable income and is described in either division (S)(1)(a) or
(b) of this section:
(a) The net amount is not attributable to the S portion of
an electing small business trust and has not been distributed to
beneficiaries for the taxable year;
(b) The net amount is attributable to the S portion of an
electing small business trust for the taxable year. (2) Add interest or dividends, net of ordinary, necessary,
and reasonable expenses not deducted in computing federal taxable
income, on obligations of any
authority, commission,
instrumentality, territory, or possession
of the United States
to
the extent that
the interest or dividends are exempt from federal
income taxes
but
not from state income taxes, but only to the
extent that such net amount is not otherwise includible in Ohio
taxable income and is described in either division (S)(1)(a) or
(b) of this section; (3) Add the amount of personal exemption allowed to the
estate pursuant to section 642(b) of the Internal Revenue Code; (4) Deduct interest or dividends, net of related expenses
deducted in computing federal taxable income, on obligations of
the
United States and its territories and possessions or of any
authority, commission, or instrumentality of the United States
to
the extent
that
the interest or dividends are exempt from state
taxes under the laws of the United
States, but only to the extent
that such amount is included in federal taxable income and is
described in either division (S)(1)(a) or (b) of this section; (5) Deduct the amount of wages and salaries, if any, not
otherwise allowable as a deduction but that would have been
allowable as a deduction in computing federal taxable income for
the taxable year, had the targeted jobs credit allowed under
sections 38, 51, and 52 of the Internal Revenue Code not been in
effect, but only to the extent such amount relates either to
income included in federal taxable income for the taxable year or
to income of the S portion of an electing small business trust for
the taxable year; (6) Deduct any interest or interest equivalent, net of
related expenses deducted in computing federal taxable income, on
public
obligations and purchase obligations, but only to the
extent
that such net amount relates either to income included in
federal taxable income
for the taxable year or to income of the S
portion of an electing small business trust for the taxable year; (7) Add any loss or deduct any gain resulting from sale,
exchange, or other disposition of public obligations to the
extent
that such loss has been deducted or such gain has been
included in
computing either federal taxable income
or income of the S portion
of an electing small business trust for the taxable year; (8) Except in the case of the final return of an estate,
add
any amount deducted by the taxpayer on both its Ohio estate
tax
return pursuant to section 5731.14 of the Revised Code, and
on its
federal income tax return in determining
federal taxable income; (9)(a) Deduct any amount included in federal taxable income
solely because the amount represents a reimbursement or refund of
expenses that in a previous year the decedent had deducted as an
itemized deduction pursuant to section 63 of the Internal Revenue
Code and applicable treasury regulations.
The deduction otherwise
allowed under division (S)(9)(a) of this section shall be reduced
to the extent the reimbursement is attributable to an amount the
taxpayer or decedent deducted under this section in any taxable
year. (b) Add any amount not otherwise included in Ohio taxable
income
for any taxable year to the extent that the amount is
attributable
to the recovery during the taxable year of any amount
deducted or
excluded in computing federal or Ohio taxable income
in any
taxable year, but only to the extent such amount has not
been distributed
to beneficiaries for the taxable year. (10) Deduct any portion of the deduction described in
section 1341(a)(2) of the Internal Revenue Code, for repaying
previously reported income received under a claim of right, that
meets both of the following requirements: (a) It is allowable for repayment of an item that was
included in the taxpayer's taxable income or the decedent's
adjusted gross income for a prior taxable year and did not
qualify
for a credit under division (A) or (B) of section 5747.05
of the
Revised Code for that year. (b) It does not otherwise reduce the taxpayer's taxable
income or the decedent's adjusted gross income for the current or
any other taxable year. (11) Add any amount claimed as a credit under section
5747.059
of the Revised Code to the extent that the amount
satisfies
either of the following: (a) The amount was deducted or excluded from the computation
of the
taxpayer's federal taxable income as required to be
reported for the
taxpayer's taxable year under the Internal
Revenue Code; (b) The amount resulted in a reduction in the taxpayer's
federal taxable
income as required to be reported for any of the
taxpayer's taxable years
under the Internal Revenue Code.
(12) Deduct any amount, net of related expenses deducted in
computing federal taxable income, that a trust is required to
report
as
farm income on its federal income tax return, but only
if the
assets of the trust include at least ten acres of land
satisfying
the definition of "land devoted exclusively to
agricultural use"
under section 5713.30 of the Revised Code,
regardless of whether
the land is valued for tax purposes as such
land under sections
5713.30 to 5713.38 of the Revised Code.
If the
trust is a
pass-though entity investor, section 5747.231 of the
Revised Code
applies in ascertaining if the trust is eligible to
claim the
deduction provided by division (S)(12) of this section
in
connection with the pass-through entity's farm income.
Except for farm income attributable to the S portion of an
electing small business trust, the deduction provided by division
(S)(12) of this section is allowed only to the extent that the
trust has not distributed such farm income.
Division (S)(12) of
this
section applies only to taxable years of a trust beginning
in
2002, 2003, or 2004. (13) Add the net amount of income described in section 641(c)
of the Internal Revenue Code to the extent that amount is not
included in federal taxable income. (14) Add or deduct the amount the taxpayer would be
required
to add or deduct under division (A)(20) or (21) of this
section if
the taxpayer's
Ohio taxable income were computed in the same
manner as
an individual's
Ohio adjusted gross income is computed
under
this
section. In the case of a trust, division (S)(14) of
this
section
applies only to any of the trust's taxable years
beginning
in
2002, 2003, or 2004. (T) "School district income" and "school district income
tax" have the same meanings as in section 5748.01 of the Revised
Code. (U) As used in divisions (A)(8), (A)(9), (S)(6), and
(S)(7)
of this section, "public obligations," "purchase
obligations," and
"interest or interest equivalent" have the same
meanings as in
section 5709.76 of the Revised Code. (V) "Limited liability company" means any limited
liability
company formed under Chapter 1705. of the Revised Code
or under
the laws of any other state. (W) "Pass-through entity investor" means any person who,
during any portion
of a taxable year of a pass-through entity, is
a partner, member, shareholder,
or
equity investor in that
pass-through
entity. (X) "Banking day" has the same meaning as in section 1304.01
of the Revised
Code. (Y) "Month" means a calendar month. (Z) "Quarter" means the first three months, the second three
months, the
third three months, or the last three months of the
taxpayer's taxable year. (AA)(1) "Eligible institution" means a state university or
state
institution of higher education as defined in section
3345.011 of the Revised Code, or a
private, nonprofit college,
university, or other post-secondary institution
located in this
state that possesses a certificate of authorization issued by
the
Ohio board of regents pursuant to Chapter 1713. of the Revised
Code or a
certificate of registration issued by the state board of
career colleges and schools under Chapter 3332. of the Revised
Code. (2) "Qualified tuition and fees" means tuition and fees
imposed by an
eligible institution as a condition of enrollment or
attendance, not exceeding
two thousand five hundred dollars in
each of the individual's first two years
of post-secondary
education. If the individual is a part-time student,
"qualified
tuition and fees" includes tuition and fees paid for the academic
equivalent of the first two years of post-secondary education
during a maximum
of five taxable years, not exceeding a total of
five thousand dollars.
"Qualified tuition and fees" does not
include: (a) Expenses for any course or activity involving sports,
games,
or hobbies unless the course or activity is part of the
individual's degree or
diploma program; (b) The cost of books, room and board, student activity
fees,
athletic fees, insurance expenses, or other expenses
unrelated to the
individual's academic course of instruction; (c) Tuition, fees, or other expenses paid or reimbursed
through
an employer, scholarship, grant in aid, or other
educational benefit program. (BB)(1) "Modified business
income" means the business income
included in a trust's
Ohio taxable
income after such taxable
income is
first reduced by the
qualifying
trust amount, if any. (2) "Qualifying
trust amount" of a trust means capital gains
and
losses from the sale, exchange, or other disposition of equity
or
ownership
interests in, or debt obligations of, a
qualifying
investee to the extent included in the trust's
Ohio
taxable income, but
only if the
following requirements are satisfied:
(a) The book value of the qualifying
investee's
physical assets in this state and everywhere, as of the last day
of the qualifying investee's fiscal or calendar year ending
immediately prior to the date on which the trust recognizes the
gain or loss, is available to the trust.
(b) The requirements of section 5747.011 of the Revised Code
are satisfied for the trust's taxable year in which the trust
recognizes the gain or loss.
Any gain or loss that is not a qualifying trust amount is
modified business income, qualifying investment income, or
modified nonbusiness income, as the
case may be.
(3) "Modified nonbusiness income" means a trust's
Ohio
taxable
income other than modified business income, other than
the
qualifying
trust amount, and other than qualifying investment
income, as defined in section 5747.012 of the Revised Code, to the
extent such qualifying investment income is not otherwise part of
modified business income.
(4) "Modified
Ohio taxable income" applies only to trusts,
and
means the sum of the
amounts described in divisions
(BB)(4)(a) to (c) of this section:
(a)
The fraction,
calculated under section 5747.013, and applying
section 5747.231 of the Revised Code, multiplied by the sum of the following amounts:
(i) The trust's modified business income;
(ii) The trust's qualifying investment income, as defined
in section 5747.012 of the Revised Code, but only to the extent
the qualifying investment income does not otherwise constitute
modified business income and does not otherwise constitute a
qualifying trust amount.
(b) The qualifying
trust amount multiplied by
a
fraction, the numerator of which is the sum of the
book value of
the
qualifying investee's physical assets in this state
on the last day of the qualifying
investee's fiscal or calendar year ending immediately prior to the
day on which the trust recognizes the qualifying trust amount, and
the denominator of which is the sum of the book value of the
qualifying investee's total physical assets everywhere
on the last day of the qualifying investee's
fiscal or calendar year ending immediately prior to the day on
which the trust recognizes the qualifying trust amount.
If, for a
taxable year, the trust
recognizes a qualifying
trust amount
with
respect to more than one
qualifying investee, the amount
described
in division (BB)(4)(b)
of this section shall equal the
sum of the
products so computed
for each such qualifying
investee.
(c)(i) With respect to a trust or
portion of a trust that is a resident as ascertained in accordance
with division (I)(3)(d) of this section, its modified nonbusiness
income.
(ii) With respect to a trust or portion of a trust that is
not a resident as ascertained in accordance with division
(I)(3)(d) of this section, the amount of its modified nonbusiness
income satisfying the descriptions in divisions (B)(2) to (5) of
section 5747.20 of the Revised Code.
If the allocation and apportionment of a trust's income
under
divisions (BB)(4)(a) and (c) of this section do not fairly
represent the modified
Ohio taxable income of the trust in this
state,
the alternative methods described in division (C) of
section
5747.21 of the Revised Code may be applied in the manner
and to
the same extent provided in that section.
(5)(a) Except as set forth in division
(BB)(5)(b) of this section, "qualifying investee" means a person
in which a trust
has an equity or ownership interest, or a person
or unit of
government the debt obligations of either of which are
owned by a
trust.
For the purposes of division (BB)(2)(a) of this
section and for the purpose of computing the fraction described in
division (BB)(4)(b) of this section, all of the following apply:
(i) If the qualifying investee is a member of a qualifying
controlled group on the last day of the qualifying investee's
fiscal or calendar year ending immediately prior to the date on
which the trust recognizes the gain or loss, then "qualifying
investee" includes all persons in the qualifying controlled group
on such last day.
(ii) If the qualifying investee, or if the qualifying
investee and any members of the
qualifying controlled group of
which the qualifying investee is a
member on the last day of the
qualifying investee's fiscal or
calendar year ending immediately
prior to the date on which the
trust recognizes the gain or loss,
separately or cumulatively own,
directly or indirectly, on the
last day of the qualifying
investee's fiscal or calendar year
ending immediately prior to the
date on which the trust recognizes
the qualifying trust amount, more
than fifty per cent of the
equity of a pass-through entity, then
the qualifying investee and
the other members are deemed to own
the proportionate share of the
pass-through entity's physical
assets which the pass-through
entity directly or indirectly owns
on the last day of the
pass-through entity's calendar or fiscal
year ending within or
with the last day of the qualifying
investee's fiscal or calendar
year ending immediately prior to the
date on which the trust
recognizes the qualifying trust amount.
(iii) For the purposes of division (BB)(5)(a)(iii) of this
section, "upper level
pass-through entity" means a pass-through
entity directly or
indirectly owning any equity of another
pass-through entity, and
"lower level pass-through
entity" means
that other pass-through entity.
An upper level pass-through entity, whether or not it is
also a qualifying investee, is deemed to own, on the last day of
the upper level pass-through entity's calendar or fiscal year, the
proportionate share of the lower level pass-through entity's
physical assets that the lower level pass-through entity directly
or indirectly owns on the last day of the lower level pass-through
entity's calendar or fiscal year ending within or with the last
day of the upper level pass-through entity's fiscal or calendar
year. If the upper level pass-through entity directly and
indirectly owns less than fifty per cent of the equity of the
lower level pass-through entity on each day of the upper level
pass-through entity's calendar or fiscal year in which or with
which ends the calendar or fiscal year of the lower level
pass-through entity and if, based upon clear and convincing
evidence, complete information about the location and cost of the
physical assets of the lower pass-through entity is not available
to the upper level pass-through entity, then solely for purposes
of ascertaining if a gain or loss constitutes a qualifying trust
amount, the upper level pass-through entity shall be deemed as
owning no equity of the lower level pass-through entity for each
day during the upper level pass-through entity's calendar or
fiscal year in which or with which ends the lower level
pass-through entity's calendar or fiscal year. Nothing in
division (BB)(5)(a)(iii) of this section shall be construed to
provide for any deduction or
exclusion in computing any trust's
Ohio taxable income. (b) With respect to a trust that is not a resident for the
taxable year and with respect to a part of a trust that is not a
resident for the taxable year, "qualifying investee" for that
taxable year does not include a C corporation if both of the
following apply: (i) During the taxable year the trust or part of the trust
recognizes a gain or loss from the sale, exchange, or other
disposition of equity or ownership interests in, or debt
obligations of, the C corporation. (ii) Such gain or loss constitutes nonbusiness income.
(6) "Available" means information is such that a person
is able to learn of the information by the due date plus
extensions, if any, for filing the return for the taxable year in
which the trust recognizes the gain or loss.
(CC) "Qualifying controlled group" has the same meaning as
in section 5733.04 of the Revised Code.
(DD) "Related member" has the same meaning as in section
5733.042 of the Revised Code.
(EE) Any term used in this chapter that is not otherwise
defined in
this section and that is not used in a comparable
context in the
Internal Revenue Code and other statutes of the
United States relating to federal income taxes has the same
meaning as in section 5733.40 of the Revised Code.
Section 2. That existing sections 718.01, 718.02, 3318.05, 3318.052, 3318.08, 3318.44, 3770.07, 3770.10, 3770.12, 5705.192, 5705.21, 5733.04, 5733.42, and 5747.01 of the Revised Code are hereby repealed.
Section 3. (A) This section is intended to mitigate the unintended consequences of Cleveland Clinic Foundation v. Wilkins, 103 Ohio St.3d 382, 816 N.E. 2d 224 (2004), by providing remedial legislation to address the large volume of applications for exemption of property that the Tax Commissioner dismissed because of the decision in that case.
(B) As used in this section:
(1) "Eligible years" means those tax years for which taxes, penalties, and interest could have been properly remitted or abated and the property placed on the tax exempt list under a previous application for exemption of property that was dismissed as explained in division (A) of this section.
(2) "Qualified property" means real property that satisfies the qualifications for tax exemption under any section of the Revised Code and for which an application for exemption of property was dismissed by the Tax Commissioner as explained in division (A) of this section.
(3) "Subdivision," "taxing authority," and "taxing unit" have the same meanings as in section 5705.01 of the Revised Code.
(C) Notwithstanding section 5713.081 of the Revised Code, when qualified property has not received a tax exemption, remission, or abatement because of failure to comply with Chapter 5713. or section 5715.27 of the Revised Code, the current owner of the qualified property at any time on or before July 1, 2005, may file with the Tax Commissioner an application requesting that the property be placed on the tax exempt list and that all paid or unpaid taxes, penalties, and interest on the property be abated or remitted for the eligible years. The application shall be filed on the form prescribed by the Commissioner under section 5715.27 of the Revised Code. The owner shall attach to the application a copy of the Commissioner's final determination dismissing the previous application for exemption of the qualified property, along with the county treasurer's certificate required by division (E) of this section. Failure to attach the Commissioner's final determination dismissing the previous application for exemption of the qualified property and the treasurer's certificate shall result in dismissal of the application filed under this division.
(D) The county auditor shall notify the county treasurer to hold any tax payments for eligible years in a special fund pending a decision by the Commissioner on an application filed under this section. While such application is pending, no subdivision or other taxing unit is entitled to an advance payment of such moneys under section 321.34 of the Revised Code. After the Commissioner issues a decision, the county auditor shall either refund the taxes, penalties, and interest to the applicant if remission is granted, or distribute the taxes, penalties, and interest to the proper taxing authorities if the remission is denied.
(E) An applicant under this section shall obtain a certificate from the county treasurer that determines whether all taxes, penalties, and interest that were levied for all tax years that are not eligible years and all special assessments charged against the property have been paid in full. If that is not so, the county treasurer shall issue a certificate to that effect listing the tax years for which taxes, penalties, interest, and special assessments remain unpaid.
(F)(1) Upon receipt of an application under this section, the Tax Commissioner shall determine if the applicant and the applicant's qualified property meets the qualifications for tax exemption and the qualifications set forth in this section. If these qualifications are met, the Commissioner shall issue an order directing that the property be placed on the tax exempt list of the county and that all paid or unpaid taxes, penalties, and interest for every year the property met the qualifications for exemption be abated. If the Commissioner finds that the property is not entitled to tax exemption and to the abatement of paid or unpaid taxes, penalties, and interest for any of the years for which the current owner claims an exemption or abatement, the Commissioner shall order the county treasurer of the county in which the property is located to collect all taxes, penalties, and interest due on the property for those years in accordance with law. If the Commissioner finds that the property is now being used for a purpose that would foreclose its right to tax exemption, the Commissioner shall issue an order denying the application.
(2)(a) If the Tax Commissioner determines the qualified property satisfies the requirements for exemption, the Commissioner shall remit such taxes, penalties, and interest for the eligible years, but only with the consent of the taxing authority of the subdivision or other taxing unit to which such taxes, penalties, and interest are owed. For purposes of this section, a taxing authority has given consent if the taxing authority has not passed a resolution, on a form prescribed by the Commissioner, and filed it with the county auditor on or before February 15, 2005, stating its objection to the remission of such taxes, penalties, and interest. On or before January 15, 2005, the county auditor of each county shall notify each subdivision or taxing unit in the county of the enactment of this section and of the requirement that a taxing authority may file an objection to the remission of taxes, penalties, and interest with the county auditor on or before February 15, 2005. If the taxing authority of a subdivision or taxing unit withholds its consent, the applicant shall pay all the outstanding taxes, penalties, and interest owed to that subdivision or taxing unit, except for those taxes, penalties, and interest that are included in the three-year remission period under division (A) of section 5713.081 of the Revised Code. Tax payments for eligible years for which consent has not been obtained shall not be considered unpaid taxes for purposes of establishing jurisdiction to consider an application under this section.
(b) Consent given under division (F)(2)(a) of this section does not apply to the year an application is filed under this section and to the three-year remission period under division (A) of section 5713.081 of the Revised Code. The applicant retains the right to apply for those years under that section with or without the consent of the applicable subdivisions or taxing units.
(c) The county auditor shall maintain a record of all taxing authorities that have withheld consent under this section. After the Tax Commissioner's decision is issued for each of the eligible years for which exemption and remission or abatement was requested, the county auditor shall either refund, remit, or abate taxes for which consent has been given, and shall distribute to the appropriate subdivision or other taxing unit those taxes for which consent was withheld.
Section 4. The amendments by this act of section 5705.21 of the Revised Code changing the designation of levies for "general, ongoing permanent improvements" to levies for "general permanent improvements" and defining "general permanent improvements" do not change the purpose for which such levies are imposed or may be imposed. Those amendments are intended only to change the name by which such levies shall be referred to in the Revised Code and in resolutions, election notices, and ballot forms.
For the purposes of renewing or replacing an existing levy for the purpose of "general, ongoing permanent improvements" that is in effect on the effective date of this act, a renewal or replacement levy for the purpose of "general permanent improvements" shall be considered to be a levy for the same purpose as the existing levy.
Section 5. (A) Except as provided in division (B) of this section, the amendment by this act of sections 5733.04 and 5747.01 of the Revised Code, which updates references to federal income tax laws and thereby incorporates recent changes to those laws, first applies to taxable years ending on or after the effective date of those sections, as amended by this act.
(B) A taxpayer may irrevocably elect to apply section 5733.04 or 5747.01 of the Revised Code, as amended by this act, to the taxpayer's taxable year ending in 2004. The filing of a return or report by the taxpayer for that taxable year that incorporates the amendments to those sections by this act without adjustments to reverse the effects of those amendments constitutes the making of an irrevocable election under this section.
Section 6. The amendment by this act of sections 718.01, 718.02, 5733.04, and 5747.01 of the Revised Code and the enactment of Sections 3, 5, and 6 of this act provide for or are essential to implementation of a tax levy. Therefore, under Ohio Constitution, Article II, Section 1d, those sections as amended or enacted by this act are not subject to the referendum and go into immediate effect when this act becomes law.
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