To amend section 5747.026 of the Revised Code to grant to all members of the National Guard and reserve components of the United States armed forces who have been called to active duty an extension of time in which to file income tax returns and pay income taxes and to increase the number of authorized participants in the Ohio National Guard Scholarship Program for the 2005 summer term.

Section 1. That section 5747.026 of the Revised Code be amended to read as follows:

Sec. 5747.026.  (A) For taxable years beginning on or after January 1, 2002, a member of the national guard or a member of a reserve component of the armed forces of the United States called to active or other duty under operation Iraqi freedom pursuant to an executive order issued by the president of the United States or an act of congress of the United States may apply to the tax commissioner for an extension for filing of the return and payment of taxes required under this chapter during the period of the member's duty service and for sixty days thereafter. The application shall be filed on or before the sixtieth day after the member's duty terminates. An applicant shall provide such evidence as the commissioner considers necessary to demonstrate eligibility for the extension.

(B)(1) If the commissioner determines that an applicant is qualified for an extension under this section, the commissioner shall enter into a contract with the applicant for the payment of the tax in installments that begin on the sixty-first day after the applicant's active duty under operation Iraqi freedom terminates. Except as provided in division (B)(3) of this section, the commissioner may prescribe such contract terms as the commissioner considers appropriate.

(2) If the commissioner determines that an applicant is qualified for an extension under this section, the applicant shall not be required to file any return, report, or other tax document before the sixty-first day after the applicant's active duty under operation Iraqi freedom terminates.

(3) Taxes paid pursuant to a contract entered into under division (B)(1) of this section are not delinquent. The tax commissioner shall not require any payments of penalties or interest in connection with such taxes.

(C)(1) Divisions (A) and (B) of this section do not apply to any taxable year for which a taxpayer receives an extension of time in which to file a federal income tax return or pay federal income tax under the Internal Revenue Code.

(2)(a) A taxpayer who is eligible for an extension under the Internal Revenue Code shall receive an extension of time in which to file any return, report, or other tax document described in this chapter and an extension of time in which to make any payment of taxes required under this chapter or Chapter 5748. of the Revised Code. The length of any extension granted under division (C)(2)(a) of this section shall be equal to the length of the corresponding extension that the taxpayer receives under the Internal Revenue Code.

(b) Taxes paid in accordance with division (C)(2)(a) of this section are not delinquent. The tax commissioner shall not require any payment of penalties or interest in connection with such taxes. The tax commissioner shall not include any period of extension granted under division (C)(2)(a) of this section in calculating the interest due on any unpaid tax.

(D) The tax commissioner shall adopt rules necessary to administer this section, including rules establishing the following:

(1) Forms and procedures by which applicants may apply for extensions;

(2) Criteria for eligibility;

(3) A schedule for repayment of deferred taxes.

Section 2. That existing section 5747.026 of the Revised Code is hereby repealed.

Section 3. Notwithstanding division (B)(1) of section 5919.34 of the Revised Code, the number of participants in the Ohio national guard scholarship program for the summer term occurring in the year 2005 is limited to the equivalent of one thousand full-time participants.