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S. B. No. 58 As IntroducedAs Introduced
129th General Assembly | Regular Session | 2011-2012 |
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A BILL
To amend sections 5733.98 and 5747.98 and to enact
sections 5733.421 and 5747.391 of the Revised Code
to create a tax credit for the employment of
individuals who have been convicted of felonies.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 5733.98 and 5747.98 be amended and
sections 5733.421 and 5747.391 of the Revised Code be enacted to
read as follows:
Sec. 5733.421. (A) As used in this section:
(1) "Qualified reforming felon" means an individual who:
(a) Has been convicted of a felony under any statute of the
United States or any state;
(b) Was hired by a taxpayer within one year after the
conviction or, if sentenced to a term of incarceration, was hired
within one year after being released from incarceration; and
(c) Is a member of a family that, in the six months
immediately preceding the date of hiring, had an income that, on
an annual basis, would be seventy per cent or less of the most
recent lower living standard calculated by the federal bureau of
labor statistics.
(2) "Family" means an individual, an individual's spouse, and
children.
(3) "Wages" has the same meaning as in section 3306 of the
Internal Revenue Code.
(B)(1) Beginning in tax year 2011, a nonrefundable credit is
allowed against the tax imposed by section 5733.06 of the Revised
Code for the wages paid by a taxpayer to a qualified reforming
felon who works at least one hundred twenty hours for the taxpayer
during the taxpayer's taxable year. The amount of the credit shall
be calculated as follows:
(a) For each qualified reforming felon who works at least
four hundred hours during the taxable year, the credit equals
forty per cent of the wages paid to the qualified reforming felon,
but shall not exceed two thousand four hundred dollars per
qualified reforming felon.
(b) For each qualified reforming felon who works less than
four hundred hours but at least one hundred twenty hours during
the taxable year, the credit equals twenty-five per cent of the
wages paid to the qualified reforming felon, but shall not exceed
one thousand five hundred dollars per qualified reforming felon.
The credit shall be claimed in the order required under
section 5733.98 of the Revised Code. The credit, to the extent it
exceeds the taxpayer's tax liability for the tax year after
allowance for any other credits that precede the credit under that
section in that order, may be carried forward for the next five
succeeding tax years, but the amount of any excess credit allowed
in any such year shall be deducted from the balance carried
forward to the succeeding year.
(2) A taxpayer who received federally funded payments for
on-the-job training of a qualified reforming felon may not claim
the credit allowed under this section for any portion of the wages
paid to that qualified reforming felon.
(3) A taxpayer may not claim the credit allowed under this
section for any portion of the wages paid to a qualified reforming
felon for services that were the same as, or substantially similar
to, services that, but for a strike or lockout, would have been
performed by another employee.
(4) If a qualified reforming felon's employment is terminated
during the taxable year and the qualified reforming felon was
employed by the taxpayer for less than twelve months, the taxpayer
may not claim the full amount of the credit allowed under this
section unless the qualified reforming felon voluntarily
terminated employment; was unable to continue employment due to a
disability or death; or was terminated for cause. If a qualified
reforming felon's employment is terminated for any other reason,
the amount of the credit to which the taxpayer is entitled under
this section is reduced by a percentage equal to the percentage of
the taxable year that the qualified reforming felon was not
employed by the taxpayer.
(C) All files, statements, returns, reports, papers, or
documents of any kind relating to qualified reforming felons or
their families are not public records under section 149.43 of the
Revised Code.
Sec. 5733.98. (A) To provide a uniform procedure for
calculating the amount of tax imposed by section 5733.06 of the
Revised Code that is due under this chapter, a taxpayer shall
claim any credits to which it is entitled in the following order,
except as otherwise provided in section 5733.058 of the Revised
Code:
(1) For tax year 2005, the credit for taxes paid by a
qualifying pass-through entity allowed under section 5733.0611 of
the Revised Code;
(2) The credit allowed for financial institutions under
section 5733.45 of the Revised Code;
(3) The credit for qualifying affiliated groups under section
5733.068 of the Revised Code;
(4) The subsidiary corporation credit under section 5733.067
of the Revised Code;
(5) The savings and loan assessment credit under section
5733.063 of the Revised Code;
(6) The credit for recycling and litter prevention donations
under section 5733.064 of the Revised Code;
(7) The credit for employers that enter into agreements with
child day-care centers under section 5733.36 of the Revised Code;
(8) The credit for employers that reimburse employee child
care expenses under section 5733.38 of the Revised Code;
(9) The credit for maintaining railroad active grade crossing
warning devices under section 5733.43 of the Revised Code;
(10) The credit for purchases of lights and reflectors under
section 5733.44 of the Revised Code;
(11) The job retention credit under division (B) of section
5733.0610 of the Revised Code;
(12) The credit for tax years 2008 and 2009 for selling
alternative fuel under section 5733.48 of the Revised Code;
(13) The second credit for purchases of new manufacturing
machinery and equipment under section 5733.33 of the Revised Code;
(14) The job training credit under section 5733.42 of the
Revised Code;
(15) The credit for qualified research expenses under section
5733.351 of the Revised Code;
(16) The enterprise zone credit under section 5709.66 of the
Revised Code;
(17) The credit for the eligible costs associated with a
voluntary action under section 5733.34 of the Revised Code;
(18) The credit for employers that establish on-site child
day-care centers under section 5733.37 of the Revised Code;
(19) The ethanol plant investment credit under section
5733.46 of the Revised Code;
(20) The credit for employers that employ qualified reforming
felons under section 5733.421 of the Revised Code;
(21) The credit for purchases of qualifying grape production
property under section 5733.32 of the Revised Code;
(21)(22) The export sales credit under section 5733.069 of
the Revised Code;
(22)(23) The credit for research and development and
technology transfer investors under section 5733.35 of the Revised
Code;
(23)(24) The enterprise zone credits under section 5709.65 of
the Revised Code;
(24)(25) The credit for using Ohio coal under section 5733.39
of the Revised Code;
(25)(26) The credit for purchases of qualified low-income
community investments under section 5733.58 of the Revised Code;
(26)(27) The credit for small telephone companies under
section 5733.57 of the Revised Code;
(27)(28) The credit for eligible nonrecurring 9-1-1 charges
under section 5733.55 of the Revised Code;
(28)(29) For tax year 2005, the credit for providing programs
to aid the communicatively impaired under division (A) of section
5733.56 of the Revised Code;
(29)(30) The research and development credit under section
5733.352 of the Revised Code;
(30)(31) For tax years 2006 and subsequent tax years, the
credit for taxes paid by a qualifying pass-through entity allowed
under section 5733.0611 of the Revised Code;
(31)(32) The refundable credit for rehabilitating a historic
building under section 5733.47 of the Revised Code;
(32)(33) The refundable jobs creation credit under division
(A) of section 5733.0610 of the Revised Code;
(33)(34) The refundable credit for tax withheld under
division (B)(2) of section 5747.062 of the Revised Code;
(34)(35) The refundable credit under section 5733.49 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;
(35)(36) For tax years 2006, 2007, and 2008, the refundable
credit allowable under division (B) of section 5733.56 of the
Revised Code;
(36)(37) The refundable motion picture production credit
under section 5733.59 of the Revised Code.
(B) For any credit except the credits enumerated in divisions
(A)(31)(32) to (36)(37) of this section, the amount of the credit
for a tax year shall not exceed the tax due after allowing for any
other credit that precedes it in the order required under this
section. Any excess amount of a particular credit may be carried
forward if authorized under the section creating that credit.
Sec. 5747.391. (A) As used in this section:
(1) "Pass-through entity" has the same meaning as in section
5733.04 of the Revised Code and includes a sole proprietorship.
(2) "Qualified reforming felon" means an individual who:
(a) Has been convicted of a felony under any statute of the
United States or any state;
(b) Was hired by a pass-through entity within one year after
the conviction or, if sentenced to a term of incarceration, was
hired within one year after being released from incarceration; and
(c) Is a member of a family that, in the six months
immediately preceding the date of hiring, had an income that, on
an annual basis, would be seventy per cent or less of the most
recent lower living standard calculated by the federal bureau of
labor statistics.
(3) "Family" means an individual, an individual's spouse, and
children.
(4) "Wages" has the same meaning as in section 3306 of the
Internal Revenue Code.
(B)(1) For taxable years beginning in 2011 or thereafter, a
nonrefundable credit is allowed against the tax imposed by section
5747.02 of the Revised Code for the wages paid by a pass-through
entity to a qualified reforming felon who works at least one
hundred twenty hours for the pass-through entity during the
entity's taxable year ending in or with the taxpayer's taxable
year. The amount of the credit shall be calculated as follows:
(a) For each qualified reforming felon who works at least
four hundred hours during the entity's taxable year, the credit
equals forty per cent of the wages paid to the qualified reforming
felon, but shall not exceed two thousand four hundred dollars per
qualified reforming felon.
(b) For each qualified reforming felon who works less than
four hundred hours but at least one hundred twenty hours during
the entity's taxable year, the credit equals twenty-five per cent
of the wages paid to the qualified reforming felon, but shall not
exceed one thousand five hundred dollars per qualified reforming
felon.
The amount of a taxpayer's credit is the taxpayer's
proportionate share of the credit distributed by the pass-through
entity. The credit shall be claimed in the order required under
section 5747.98 of the Revised Code. The credit, to the extent it
exceeds the taxpayer's tax liability for the taxable year after
allowance for any other credits that precede the credit under that
section in that order, may be carried forward for the next five
succeeding taxable years, but the amount of any excess credit
allowed in any such year shall be deducted from the balance
carried forward to the succeeding year.
(2) A taxpayer may not claim the credit allowed under this
section for any portion of the wages paid to a qualified reforming
felon for whom the pass-through entity received federally funded
payments for on-the-job training.
(3) A taxpayer may not claim the credit allowed under this
section for any portion of the wages paid to a qualified reforming
felon for services that were the same as, or substantially similar
to, services that, but for a strike or lockout, would have been
performed by another employee.
(4) If a qualified reforming felon's employment is terminated
during the pass-through entity's taxable year ending in or with
the taxpayer's taxable year and the qualified reforming felon was
employed by the pass-through entity for less than twelve months, a
taxpayer may not claim the full amount of the credit allowed under
this section unless the qualified reforming felon voluntarily
terminated employment; was unable to continue employment due to a
disability or death; or was terminated for cause. If a qualified
reforming felon's employment is terminated for any other reason,
the amount of the credit to which the taxpayer is entitled under
this section is reduced by a percentage equal to the percentage of
the taxable year that the qualified reforming felon was not
employed by the pass-through entity.
(C) All files, statements, returns, reports, papers, or
documents of any kind relating to qualified reforming felons or
their families are not public records under section 149.43 of the
Revised Code.
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 employers that employ qualified reforming
felons under section 5747.391 of the Revised Code;
(28) The credit for purchases of qualifying grape production
property under section 5747.28 of the Revised Code;
(28)(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 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 5733.98 and 5747.98 of the
Revised Code are hereby repealed.
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