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H. B. No. 227 As IntroducedAs Introduced
129th General Assembly | Regular Session | 2011-2012 |
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Cosponsors:
Representatives Garland, Ruhl, Stinziano, Schuring, Fedor, Williams, Martin, Phillips, Clyde, Weddington, O'Brien, Ashford, Fende, Antonio
A BILL
To amend sections 5747.08 and 5747.98 and to enact
sections 718.17, 3333.51, and 5747.81 of the
Revised Code to grant an income tax credit to
individuals who earn degrees in science,
technology, engineering, or math-based fields of
study and to authorize municipal corporations to
grant a credit to individuals qualifying for the
state credit.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 5747.08 and 5747.98 be amended and
sections 718.17, 3333.51, and 5747.81 of the Revised Code be
enacted to read as follows:
Sec. 718.17. The legislative authority of a municipal
corporation, by ordinance, may grant a credit against a tax
imposed on income to an individual who is subject to the tax and
who qualifies for a credit authorized under section 3333.51 of the
Revised Code. The legislative authority may establish credit
amounts and limits, refundability attributes, carry-forward
periods, and deferral periods and procedures other than as
prescribed in sections 3333.51 and 5747.81 of the Revised Code.
Sec. 3333.51. (A) As used in this section:
(1) "Approved field of study" means a field of study in the
natural sciences, technology, engineering, or mathematics that the
Ohio board of regents determines is associated with job creation
and retention in Ohio.
(2) "Institution of higher education" means all of the
following:
(a) An institution of higher education, as defined in section
3345.12 of the Revised Code;
(b) An institution authorized by the Ohio board of regents
under Chapter 1713. of the Revised Code to grant degrees and that
is accredited by the appropriate regional and professional
accrediting associations within whose jurisdiction it falls;
(c) Private career schools holding program authorizations
issued by the state board of career colleges and schools under
division (C) of section 3332.05 of the Revised Code;
(d) Private institutions exempt from regulation under Chapter
3332. of the Revised Code as prescribed in section 3333.046 of the
Revised Code;
(e) Any institution located outside Ohio designated as an
"institution of higher education" by the Ohio board of regents for
purposes of this section.
(B) For the purpose of developing and maintaining a highly
qualified workforce and thereby to improve the economic welfare of
all Ohioans, an individual who graduates on or after the effective
date of the enactment of this section from an institution of
higher education with a degree in an approved field of study is
allowed a credit against the tax imposed by section 5747.02 of the
Revised Code. Except as provided in division (C) of this section,
the credit shall equal five thousand dollars in the case of an
associate's degree; twenty thousand dollars in the case of a
baccalaureate degree; and thirty thousand dollars in the case of a
master's or doctoral degree. Except as otherwise provided in this
section, the individual shall claim one-tenth of the credit amount
for the individual's taxable year that includes the date of
graduation and one-tenth of the credit amount in each of the
succeeding nine consecutive taxable years for which the individual
is subject to the tax imposed by section 5747.02 of the Revised
Code. Evidence of graduation shall be retained for inspection by
the tax commissioner until the expiration of four years after the
end of the last taxable year the credit is taken.
(C)(1) An individual who has been allowed a credit for an
associate's or baccalaureate degree or both is allowed an
additional credit for the receipt of a more advanced degree from
an institution of higher education in an approved field of study.
The credit amount for the additional degree equals the credit
amount for the degree as provided in division (B) of this section
less the credit amount for the degree or degrees for which a
credit has previously been allowed. The credit shall be claimed
in the manner required under division (B) of this section.
(2) An individual who is allowed a credit under this section
may elect to defer the credit for each taxable year that includes
a date on which the individual is enrolled full time in an
institution of higher education to pursue a more advanced degree
in an approved field of study. Evidence of such enrollment shall
be retained for inspection by the tax commissioner until the
expiration of four years after the end of the last taxable year
the credit is taken.
(D) The Ohio board of regents shall identify institutions of
higher education and approved fields of study. In identifying
approved fields of study, the board shall give priority to those
related to information technology, power and propulsion, advanced
materials, instruments and controls, electronics, and
biotechnology and biosciences.
Sec. 5747.08. An annual return with respect to the tax
imposed by section 5747.02 of the Revised Code and each tax
imposed under Chapter 5748. of the Revised Code shall be made by
every taxpayer for any taxable year for which the taxpayer is
liable for the tax imposed by that section or under that chapter,
unless the total credits allowed under divisions (E), (F), and (G)
of section 5747.05 of the Revised Code for the year are equal to
or exceed the tax imposed by section 5747.02 of the Revised Code,
in which case no return shall be required unless the taxpayer is
liable for a tax imposed pursuant to Chapter 5748. of the Revised
Code.
(A) If an individual is deceased, any return or notice
required of that individual under this chapter shall be made and
filed by that decedent's executor, administrator, or other person
charged with the property of that decedent.
(B) If an individual is unable to make a return or notice
required by this chapter, the return or notice required of that
individual shall be made and filed by the individual's duly
authorized agent, guardian, conservator, fiduciary, or other
person charged with the care of the person or property of that
individual.
(C) Returns or notices required of an estate or a trust shall
be made and filed by the fiduciary of the estate or trust.
(D)(1)(a) Except as otherwise provided in division (D)(1)(b)
of this section, any pass-through entity may file a single return
on behalf of one or more of the entity's investors other than an
investor that is a person subject to the tax imposed under section
5733.06 of the Revised Code. The single return shall set forth the
name, address, and social security number or other identifying
number of each of those pass-through entity investors and shall
indicate the distributive share of each of those pass-through
entity investor's income taxable in this state in accordance with
sections 5747.20 to 5747.231 of the Revised Code. Such
pass-through entity investors for whom the pass-through entity
elects to file a single return are not entitled to the exemption
or credit provided for by sections 5747.02 and 5747.022 of the
Revised Code; shall calculate the tax before business credits at
the highest rate of tax set forth in section 5747.02 of the
Revised Code for the taxable year for which the return is filed;
and are entitled to only their distributive share of the business
credits as defined in division (D)(2) of this section. A single
check drawn by the pass-through entity shall accompany the return
in full payment of the tax due, as shown on the single return, for
such investors, other than investors who are persons subject to
the tax imposed under section 5733.06 of the Revised Code.
(b)(i) A pass-through entity shall not include in such a
single return any investor that is a trust to the extent that any
direct or indirect current, future, or contingent beneficiary of
the trust is a person subject to the tax imposed under section
5733.06 of the Revised Code.
(ii) A pass-through entity shall not include in such a single
return any investor that is itself a pass-through entity to the
extent that any direct or indirect investor in the second
pass-through entity is a person subject to the tax imposed under
section 5733.06 of the Revised Code.
(c) Nothing in division (D) of this section precludes the tax
commissioner from requiring such investors to file the return and
make the payment of taxes and related interest, penalty, and
interest penalty required by this section or section 5747.02,
5747.09, or 5747.15 of the Revised Code. Nothing in division (D)
of this section shall be construed to provide to such an investor
or pass-through entity any additional deduction or credit, other
than the credit provided by division (J) of this section, solely
on account of the entity's filing a return in accordance with this
section. Such a pass-through entity also shall make the filing and
payment of estimated taxes on behalf of the pass-through entity
investors other than an investor that is a person subject to the
tax imposed under section 5733.06 of the Revised Code.
(2) For the purposes of this section, "business credits"
means the credits listed in section 5747.98 of the Revised Code
excluding the following credits:
(a) The retirement credit under division (B) of section
5747.055 of the Revised Code;
(b) The senior citizen credit under division (C) of section
5747.05 of the Revised Code;
(c) The lump sum distribution credit under division (D) of
section 5747.05 of the Revised Code;
(d) The dependent care credit under section 5747.054 of the
Revised Code;
(e) The lump sum retirement income credit under division (C)
of section 5747.055 of the Revised Code;
(f) The lump sum retirement income credit under division (D)
of section 5747.055 of the Revised Code;
(g) The lump sum retirement income credit under division (E)
of section 5747.055 of the Revised Code;
(h) The credit for displaced workers who pay for job training
under section 5747.27 of the Revised Code;
(i) The twenty-dollar personal exemption credit under section
5747.022 of the Revised Code;
(j) The joint filing credit under division (G) of section
5747.05 of the Revised Code;
(k) The nonresident credit under division (A) of section
5747.05 of the Revised Code;
(l) The credit for a resident's out-of-state income under
division (B) of section 5747.05 of the Revised Code;
(m) The low-income credit under section 5747.056 of the
Revised Code;
(n) The credit for graduates from institutions of higher
education in approved fields of study under section 5747.81 of the
Revised Code.
(3) The election provided for under division (D) of this
section applies only to the taxable year for which the election is
made by the pass-through entity. Unless the tax commissioner
provides otherwise, this election, once made, is binding and
irrevocable for the taxable year for which the election is made.
Nothing in this division shall be construed to provide for any
deduction or credit that would not be allowable if a nonresident
pass-through entity investor were to file an annual return.
(4) If a pass-through entity makes the election provided for
under division (D) of this section, the pass-through entity shall
be liable for any additional taxes, interest, interest penalty, or
penalties imposed by this chapter if the tax commissioner finds
that the single return does not reflect the correct tax due by the
pass-through entity investors covered by that return. Nothing in
this division shall be construed to limit or alter the liability,
if any, imposed on pass-through entity investors for unpaid or
underpaid taxes, interest, interest penalty, or penalties as a
result of the pass-through entity's making the election provided
for under division (D) of this section. For the purposes of
division (D) of this section, "correct tax due" means the tax that
would have been paid by the pass-through entity had the single
return been filed in a manner reflecting the tax commissioner's
findings. Nothing in division (D) of this section shall be
construed to make or hold a pass-through entity liable for tax
attributable to a pass-through entity investor's income from a
source other than the pass-through entity electing to file the
single return.
(E) If a husband and wife file a joint federal income tax
return for a taxable year, they shall file a joint return under
this section for that taxable year, and their liabilities are
joint and several, but, if the federal income tax liability of
either spouse is determined on a separate federal income tax
return, they shall file separate returns under this section.
If either spouse is not required to file a federal income tax
return and either or both are required to file a return pursuant
to this chapter, they may elect to file separate or joint returns,
and, pursuant to that election, their liabilities are separate or
joint and several. If a husband and wife file separate returns
pursuant to this chapter, each must claim the taxpayer's own
exemption, but not both, as authorized under section 5747.02 of
the Revised Code on the taxpayer's own return.
(F) Each return or notice required to be filed under this
section shall contain the signature of the taxpayer or the
taxpayer's duly authorized agent and of the person who prepared
the return for the taxpayer, and shall include the taxpayer's
social security number. Each return shall be verified by a
declaration under the penalties of perjury. The tax commissioner
shall prescribe the form that the signature and declaration shall
take.
(G) Each return or notice required to be filed under this
section shall be made and filed as required by section 5747.04 of
the Revised Code, on or before the fifteenth day of April of each
year, on forms that the tax commissioner shall prescribe, together
with remittance made payable to the treasurer of state in the
combined amount of the state and all school district income taxes
shown to be due on the form, unless the combined amount shown to
be due is one dollar or less, in which case that amount need not
be remitted.
Upon good cause shown, the tax commissioner may extend the
period for filing any notice or return required to be filed under
this section and may adopt rules relating to extensions. If the
extension results in an extension of time for the payment of any
state or school district income tax liability with respect to
which the return is filed, the taxpayer shall pay at the time the
tax liability is paid an amount of interest computed at the rate
per annum prescribed by section 5703.47 of the Revised Code on
that liability from the time that payment is due without extension
to the time of actual payment. Except as provided in section
5747.132 of the Revised Code, in addition to all other interest
charges and penalties, all taxes imposed under this chapter or
Chapter 5748. of the Revised Code and remaining unpaid after they
become due, except combined amounts due of one dollar or less,
bear interest at the rate per annum prescribed by section 5703.47
of the Revised Code until paid or until the day an assessment is
issued under section 5747.13 of the Revised Code, whichever occurs
first.
If the tax commissioner considers it necessary in order to
ensure the payment of the tax imposed by section 5747.02 of the
Revised Code or any tax imposed under Chapter 5748. of the Revised
Code, the tax commissioner may require returns and payments to be
made otherwise than as provided in this section.
To the extent that any provision in this division conflicts
with any provision in section 5747.026 of the Revised Code, the
provision in that section prevails.
(H) If any report, claim, statement, or other document
required to be filed, or any payment required to be made, within a
prescribed period or on or before a prescribed date under this
chapter is delivered after that period or that date by United
States mail to the agency, officer, or office with which the
report, claim, statement, or other document is required to be
filed, or to which the payment is required to be made, the date of
the postmark stamped on the cover in which the report, claim,
statement, or other document, or payment is mailed shall be deemed
to be the date of delivery or the date of payment.
If a payment is required to be made by electronic funds
transfer pursuant to section 5747.072 of the Revised Code, the
payment is considered to be made when the payment is received by
the treasurer of state or credited to an account designated by the
treasurer of state for the receipt of tax payments.
"The date of the postmark" means, in the event there is more
than one date on the cover, the earliest date imprinted on the
cover by the United States postal service.
(I) The amounts withheld by the employer pursuant to section
5747.06 of the Revised Code shall be allowed to the recipient of
the compensation as credits against payment of the appropriate
taxes imposed on the recipient by section 5747.02 and under
Chapter 5748. of the Revised Code.
(J) If, in accordance with division (D) of this section, a
pass-through entity elects to file a single return and if any
investor is required to file the return and make the payment of
taxes required by this chapter on account of the investor's other
income that is not included in a single return filed by a
pass-through entity, the investor is entitled to a refundable
credit equal to the investor's proportionate share of the tax paid
by the pass-through entity on behalf of the investor. The investor
shall claim the credit for the investor's taxable year in which or
with which ends the taxable year of the pass-through entity.
Nothing in this chapter shall be construed to allow any credit
provided in this chapter to be claimed more than once. For the
purposes of computing any interest, penalty, or interest penalty,
the investor shall be deemed to have paid the refundable credit
provided by this division on the day that the pass-through entity
paid the estimated tax or the tax giving rise to the credit.
(K) The tax commissioner shall ensure that each return
required to be filed under this section includes a box that the
taxpayer may check to authorize a paid tax preparer who prepared
the return to communicate with the department of taxation about
matters pertaining to the return. The return or instructions
accompanying the return shall indicate that by checking the box
the taxpayer authorizes the department of taxation to contact the
preparer concerning questions that arise during the processing of
the return and authorizes the preparer only to provide the
department with information that is missing from the return, to
contact the department for information about the processing of the
return or the status of the taxpayer's refund or payments, and to
respond to notices about mathematical errors, offsets, or return
preparation that the taxpayer has received from the department and
has shown to the preparer.
(L) The tax commissioner shall permit individual taxpayers to
instruct the department of taxation to cause any refund of
overpaid taxes to be deposited directly into a checking account,
savings account, or an individual retirement account or individual
retirement annuity, or preexisting college savings plan or program
account offered by the Ohio tuition trust authority under Chapter
3334. of the Revised Code, as designated by the taxpayer, when the
taxpayer files the annual return required by this section
electronically.
(M) The tax commissioner may adopt rules to administer this
section.
Sec. 5747.81. A taxpayer who qualifies for the credit
authorized under section 3333.51 of the Revised Code is allowed a
nonrefundable credit against the tax imposed by section 5747.02
of the Revised Code. The credit shall be claimed as provided in
section 3333.51 of the Revised Code and in the order required
under section 5747.98 of the Revised Code. The amount of credit
claimed for a taxable year shall not exceed the tax otherwise due
after allowing for all preceding credits in that order. If the
amount of credit allowed for a taxable year exceeds the tax
otherwise due, the excess may be carried forward to the next
taxable year. Excess credit allowed in a taxable year shall be
deducted from the balance carried forward to the ensuing taxable
year. If a credit may not be claimed for a taxable year, excess
credit carried forward from a previous year may not be claimed.
Sec. 5747.98. (A) To provide a uniform procedure for
calculating the amount of tax due under section 5747.02 of the
Revised Code, a taxpayer shall claim any credits to which the
taxpayer is entitled in the following order:
(1) The retirement income credit under division (B) of
section 5747.055 of the Revised Code;
(2) The senior citizen credit under division (C) of section
5747.05 of the Revised Code;
(3) The lump sum distribution credit under division (D) of
section 5747.05 of the Revised Code;
(4) The dependent care credit under section 5747.054 of the
Revised Code;
(5) The lump sum retirement income credit under division (C)
of section 5747.055 of the Revised Code;
(6) The lump sum retirement income credit under division (D)
of section 5747.055 of the Revised Code;
(7) The lump sum retirement income credit under division (E)
of section 5747.055 of the Revised Code;
(8) The low-income credit under section 5747.056 of the
Revised Code;
(9) The credit for displaced workers who pay for job training
under section 5747.27 of the Revised Code;
(10) The campaign contribution credit under section 5747.29
of the Revised Code;
(11) The twenty-dollar personal exemption credit under
section 5747.022 of the Revised Code;
(12) The joint filing credit under division (G) of section
5747.05 of the Revised Code;
(13) The nonresident credit under division (A) of section
5747.05 of the Revised Code;
(14) The credit for a resident's out-of-state income under
division (B) of section 5747.05 of the Revised Code;
(15) The credit for employers that enter into agreements with
child day-care centers under section 5747.34 of the Revised Code;
(16) The credit for employers that reimburse employee child
care expenses under section 5747.36 of the Revised Code;
(17) The credit for adoption of a minor child under section
5747.37 of the Revised Code;
(18) The credit for purchases of lights and reflectors under
section 5747.38 of the Revised Code;
(19) The job retention credit under division (B) of section
5747.058 of the Revised Code;
(20) The credit for selling alternative fuel under section
5747.77 of the Revised Code;
(21) The second credit for purchases of new manufacturing
machinery and equipment and the credit for using Ohio coal under
section 5747.31 of the Revised Code;
(22) The job training credit under section 5747.39 of the
Revised Code;
(23) The enterprise zone credit under section 5709.66 of the
Revised Code;
(24) The credit for the eligible costs associated with a
voluntary action under section 5747.32 of the Revised Code;
(25) The credit for employers that establish on-site child
day-care centers under section 5747.35 of the Revised Code;
(26) The ethanol plant investment credit under section
5747.75 of the Revised Code;
(27) The credit for purchases of qualifying grape production
property under section 5747.28 of the Revised Code;
(28) The credit for graduates from institutions of higher
education in approved fields of study under section 5747.81 of the
Revised Code;
(29) The export sales credit under section 5747.057 of the
Revised Code;
(29)(30) The credit for research and development and
technology transfer investors under section 5747.33 of the Revised
Code;
(30)(31) The enterprise zone credits under section 5709.65 of
the Revised Code;
(31)(32) The research and development credit under section
5747.331 of the Revised Code;
(32)(33) The credit for rehabilitating a historic building
under section 5747.76 of the Revised Code;
(33)(34) The refundable credit for rehabilitating a historic
building under section 5747.76 of the Revised Code;
(34)(35) The refundable jobs creation credit under division
(A) of section 5747.058 of the Revised Code;
(35)(36) The refundable credit for taxes paid by a qualifying
entity granted under section 5747.059 of the Revised Code;
(36)(37) The refundable credits for taxes paid by a
qualifying pass-through entity granted under division (J) of
section 5747.08 of the Revised Code;
(37)(38) The refundable credit for tax withheld under
division (B)(1) of section 5747.062 of the Revised Code;
(38)(39) The refundable credit for tax withheld under section
5747.063 of the Revised Code;
(39)(40) The refundable credit under section 5747.80 of the
Revised Code for losses on loans made to the Ohio venture capital
program under sections 150.01 to 150.10 of the Revised Code;
(40)(41) The refundable motion picture production credit
under section 5747.66 of the Revised Code.
(B) For any nonrefundable credit, except the refundable
credits enumerated in this section and the credit granted under
division (I) of section 5747.08 of the Revised Code, the amount of
the credit for a taxable year shall not exceed the tax due after
allowing for any other credit that precedes it in the order
required under this section. Any excess amount of a particular
credit may be carried forward if authorized under the section
creating that credit. Nothing in this chapter shall be construed
to allow a taxpayer to claim, directly or indirectly, a credit
more than once for a taxable year.
Section 2. That existing sections 5747.08 and 5747.98 of the
Revised Code are hereby repealed.
Section 3. Section 5747.08 of the Revised Code is presented
in this act as a composite of the section as amended by both Sub.
S.B. 155 and Am. Sub. S.B. 194 of the 128th General Assembly. The
General Assembly, applying the principle stated in division (B) of
section 1.52 of the Revised Code that amendments are to be
harmonized if reasonably capable of simultaneous operation, finds
that the composite is the resulting version of the section in
effect prior to the effective date of the section as presented in
this act.
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