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S. B. No. 135 As IntroducedAs Introduced
130th General Assembly | Regular Session | 2013-2014 |
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A BILL
To amend sections 5725.98, 5726.98, 5729.98, 5747.98,
and 5751.98 and to enact section 715.58 of the
Revised Code to authorize nonrefundable tax
credits for authorized donations to projects of
nonprofit entities and municipal agencies
providing community services.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 5725.98, 5726.98, 5729.98, 5747.98,
and 5751.98 be amended and section 715.58 of the Revised Code be
enacted to read as follows:
Sec. 715.58. (A) As used in this section:
(1) "Application year" means the calendar year beginning the
year following the calendar year in which a taxpayer applies for a
tax credit in the application period.
(2) "Application period" means the period between the
fifteenth day of September and the first day of October of each
year, as described in division (C)(3) of this section.
(3) "Authorized donation" means a donation of more than two
hundred fifty dollars made to a project approved and authorized by
the tax commissioner in accordance with division (C) of this
section.
(4) "Donation" means an unconditional gift of cash.
(5) "Pass-through entity" has the same meaning as in section
5733.04 of the Revised Code and includes a sole proprietorship.
(6) "Project" means a project or activity proposed by a
municipal corporation that involves providing, either directly or
through a neighborhood organization, neighborhood assistance, job
training or education, community services, crime prevention,
energy conservation, or construction or rehabilitation of dwelling
units for persons of low and moderate income in the state, or
donation of money to an open space acquisition fund of any
political subdivision of the state or any nonprofit land
conservation organization that meets the requirements of division
(B) of section 5301.69 of the Revised Code.
(7) "Taxpayer" means a person subject to a tax against which
a credit is allowed under this section.
(a) In the case of a domestic insurance company or a foreign
insurance company, the calendar year ending on the thirty-first
day of December next preceding the day the report or annual
statement is required to be returned under section 5725.18 or
5729.02 of the Revised Code;
(b) In the case of a financial institution subject to
taxation under Chapter 5726. of the Revised Code, the financial
institution's taxable year for the purposes of that chapter;
(c) In the case of a public utility, electric distribution
company, or natural gas distribution company, the calendar year;
(d) In the case of a pass-through entity the owners of which
are subject to taxation
under Chapter 5747. of the Revised Code,
the pass-through entity's taxable year for the purposes of that
chapter;
(e) In the case of a person subject to taxation under Chapter
5751. of the Revised Code, the calendar year.
(9) "Community services" means any type of counseling and
advice, emergency assistance, alcoholism prevention and treatment,
or medical care furnished to individuals or groups in the state.
(10) "Crime prevention" means any activity that aids in the
reduction of crime in the state.
(11) "Education" means any type of scholastic instruction or
scholarship assistance to any person who resides in the state.
(12) "Job training" means any type of instruction to any
person who resides in the state that enables the person to acquire
vocational skills to become employable or seek a higher grade of
employment.
(13) "Neighborhood" means any specific geographic area that
is experiencing problems endangering the area's economic viability
and stability.
(14) "Neighborhood assistance" means the furnishing of
financial assistance, labor, material, or technical advice to aid
in the physical improvement or rehabilitation of all or any part
of a neighborhood.
(15) "Neighborhood organization" means any organization
performing community services in the state that satisfies any of
the following:
(a) It is exempt from income taxation under the Internal
Revenue Code.
(b) It is designated as a community development corporation
by the United States government under Title VII of the Economic
Opportunity Act of 1964.
(c) It is incorporated as a charitable corporation or trust
under Chapter 1716. of the Revised Code, a community improvement
corporation under Chapter 1724. of the Revised Code, a charitable
organization described under section 5301.69 of the Revised Code,
or a community redevelopment corporation under Chapter 1728. of
the Revised Code.
(16) "Persons of low and moderate income" means persons
satisfying the criteria for designation as persons of low- and
moderate-income established by the housing finance agency pursuant
to section 175.01 of the Revised Code.
(B) A nonrefundable credit is allowed against the tax imposed
by section 5725.18, 5726.02, 5727.24, 5727.30, 5727.81, or
5727.811, the tax assessed under Chapter 5729., or the tax imposed
by section 5747.02 or 5751.03 of the Revised Code for a taxpayer
that makes an authorized donation or that is an equity owner of a
pass-through entity that makes an authorized donation. If a
pass-through entity claims a credit under this section, it may
apply the credit to the tax imposed under section 5751.03 of the
Revised Code, or its equity owners may apply the credit to the tax
imposed on them under section 5747.02 of the Revised Code, but the
credit for any authorized donation may not be applied to both of
those taxes.
The credit equals sixty per cent of the amount of the
authorized donation a taxpayer or pass-through entity makes in an
application year. The amount of the credit granted to a taxpayer
may not exceed seventy-five thousand dollars for an application
year; if the authorized donation is made by a pass-through entity
and the credit is to be applied against the tax imposed under
section 5747.02 of the Revised Code, the credit may not exceed the
taxpayer's distributive or proportionate share of seventy-five
thousand dollars.
The credit shall be claimed for the tax period in which the
authorized donation is made and shall be claimed in the order
required under section 5725.98, 5726.98, 5729.98, 5747.98, or
5751.98 of the Revised Code, except that an individual claiming a
distributive share of a credit as an owner of a pass-through
entity shall claim the credit for the taxpayer's taxable year that
includes the last day of the entity's taxable year in which the
donation was made. The amount of the credit may not exceed the tax
otherwise due after allowing for all other credits in that order.
Excess credit not used in the tax period during which the
authorized donation was made may be carried back and applied to
not more than two of the immediately preceding tax periods. If the
taxpayer is required to pay the tax imposed by section 5727.24 or
5727.30 of the Revised Code more frequently than once per calendar
year, or claims the credit against the tax imposed by section
5727.81 or 5727.811 of the Revised Code, the amount of the credit
allowed for a calendar year shall be claimed in substantially
equal amounts against each tax payment required during the year
and after the donation is made.
(C)(1) To qualify one or more projects as eligible to receive
a donation eligible for the tax credit provided by this section,
the legislative authority of a municipal corporation, on or before
the first day of July of each year, may deliver to the tax
commissioner a list of projects for which it seeks eligibility to
receive donations eligible for the credit provided by this
section. The list prepared by the legislative authority shall, for
each project, set forth all of the following:
(a) The objective or mission of the project;
(b) The neighborhood area to be served;
(c) Reasons why the project is needed;
(d) The estimated cost of the project;
(e) The suggested plan for implementing the project,
including the projected length of time the project will be
undertaken;
(f) The name and address of the agency designated by the
municipal corporation to oversee implementation of the project;
and
(g) Other information as the commissioner may prescribe.
The projected length of time a project will be undertaken
shall not exceed two consecutive years.
Before submitting the list to the tax commissioner, the
legislative authority shall hold at least one public hearing for
the purpose of discussing the programs to be included on the list
and receiving public testimony.
(2) Annually, on or before the first day of September, the
tax commissioner shall compile and post on the department of
taxation's web site a list of all projects submitted by municipal
corporations that are eligible to receive applications for
donations eligible to receive a credit under this section. The
list shall be organized by each municipal corporation that applied
and shall indicate the estimated cost of each project as shown on
the municipal corporation's list. Each year, the commissioner also
shall publish a copy of the list in paper form. The commissioner
shall update the list as necessary.
(3) To be eligible for a tax credit under this section, a
taxpayer must donate to one or more projects appearing on the list
prepared by the tax commissioner and apply to the commissioner on
a form prescribed by the commissioner. Applications shall be
submitted to the commissioner during the application period. The
commissioner shall forward a copy of the application to the agency
designated by the municipal corporation to oversee implementation
of the project.
The agency to which the commissioner has forwarded an
application shall approve or deny the application within thirty
days after receiving the application from the commissioner.
Failure of an agency to approve an application within that
thirty-day period constitutes denial of the application. After the
approval of the agency or the passing of the thirty-day period, an
application shall be approved or denied by the commissioner based
on the compliance of the proposed donation with the provisions of
this section.
The commissioner may approve an application only if it is
received by the commissioner during the application period and
only if it has been approved by the agency. After the commissioner
approves or denies an application, the commissioner shall issue
written notice of the commissioner's decision to the applicant by
ordinary mail within twenty days after reaching a decision. If the
commissioner approves an application, the commissioner shall
forward a copy of the commissioner's decision to the taxpayer
eligible to claim the credit. The commissioner shall consider and
approve applications in the order received.
The commissioner shall not approve an application for an
authorized donation to any project for any application period in
an amount that would cause the total authorized donations for that
project for the application period to exceed one hundred fifty
thousand dollars. If an application proposes a donation in an
amount that would cause the total authorized donations to the
project to exceed one hundred fifty thousand dollars, the
commissioner shall notify the applicant, and the applicant, in a
manner prescribed by the commissioner, may propose a donation to
the project in a lesser amount or propose a donation to another
project.
(4) If a project is to be undertaken over more than one year,
the applicant for authorized donations shall indicate in the
application the amount of the donation to be made in each
application year, and the amounts so indicated shall be applied to
the annual credit limit under division (E) of this section for the
corresponding application year.
(5) The tax commissioner may charge a reasonable fee for the
filing of an application under division (C)(3) of this section to
defray the costs of processing the application and administering
this section.
(6) The commissioner may remove a project from the list
created by the commissioner under this section if the project
fails to satisfy the requirements of a project as defined in
division (A)(6) of this section.
(D) No tax credit shall be granted to any person under this
section unless the person furnishes evidence to the commissioner
that the amount of funds the person expended for charitable
purposes and for the support of organizations eligible for
assistance under this section in the year for which the credit is
claimed equals or exceeds the amount the person expended for such
purposes in the immediately preceding year.
(E) The total amount of credits that may be claimed under
this section in any year shall not exceed five million dollars.
If, for any year, all of the applications submitted to the tax
commissioner pursuant to this section claim tax credits in excess
of that amount, the commissioner, on or before the fifteenth day
of November each year, shall prorate the amounts of tax credits in
proportion to each taxpayer's authorized donation amount.
(F) A single neighborhood organization may propose multiple
projects, but may not receive more than one hundred fifty thousand
dollars in authorized donations during an application year.
(G) If the total funds donated in any year by any taxpayer in
a project in which a neighborhood organization is involved exceeds
twenty-five thousand dollars, the organization, upon completion of
the project, shall engage an independent public accountant to
audit the finances of the project and file the audit report with
the municipal corporation or agency overseeing the project. The
accountant's report shall verify whether the organization's
expenditures were made in accordance with the project as proposed
and approved by the commissioner. The municipal corporation or
agency shall forward each audit to the commissioner.
The tax commissioner shall review each audit report for
evidence of fraud or embezzlement. If the commissioner discovers
evidence of fraud or embezzlement, the commissioner shall report
the commissioner's findings to the county prosecutor of the county
in which the project is located. If the commissioner finds
evidence of unsound or irregular financial practice in relation to
generally accepted accounting standards, the commissioner may make
any projects in which the audited organization is involved
ineligible to receive authorized donations.
(H) The commissioner may adopt rules to implement this
section.
Sec. 5725.98. (A) To provide a uniform procedure for
calculating the amount of tax imposed by section 5725.18 of the
Revised Code that is due under this chapter, a taxpayer shall
claim any credits and offsets against tax liability to which it is
entitled in the following order:
(1) The credit for an insurance company or insurance company
group under section 5729.031 of the Revised Code;
(2) The credit for eligible employee training costs under
section 5725.31 of the Revised Code;
(3) The nonrefundable credit for authorized donations under
section 715.58 of the Revised Code;
(4) The credit for purchasers of qualified low-income
community investments under section 5725.33 of the Revised Code;
(4)(5) The nonrefundable job retention credit under division
(B)(1) of section 122.171 of the Revised Code;
(5)(6) The offset of assessments by the Ohio life and health
insurance guaranty association permitted by section 3956.20 of the
Revised Code;
(6)(7) The refundable credit for rehabilitating a historic
building under section 5725.34 of the Revised Code.
(7)(8) The refundable credit for Ohio job retention under
division (B)(2) or (3) of section 122.171 of the Revised Code;
(8)(9) The refundable credit for Ohio job creation under
section 5725.32 of the Revised Code;
(9)(10) The refundable credit under section 5725.19 of the
Revised Code for losses on loans made under the Ohio venture
capital program under sections 150.01 to 150.10 of the Revised
Code.
(B) For any credit except the refundable credits enumerated
in this section, 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.
Sec. 5726.98. (A) To provide a uniform procedure for
calculating the amount of tax due under section 5726.02 of the
Revised Code, a taxpayer shall claim any credits to which the
taxpayer is entitled under this chapter in the following order:
(1) The bank organization assessment credit under section
5726.51 of the Revised Code;
(2) The nonrefundable job retention credit under division (B)
of section 5726.50 of the Revised Code;
(3) The nonrefundable credit for authorized donations under
section 715.58 of the Revised Code;
(4) The nonrefundable credit for purchases of qualified
low-income community investments under section 5726.54 of the
Revised Code;
(4)(5) The nonrefundable credit for qualified research
expenses under section 5726.56 of the Revised Code;
(5)(6) The nonrefundable credit for qualifying dealer in
intangibles taxes under section 5726.57 of the Revised Code.;
(6)(7) The refundable credit for rehabilitating an historic
building under section 5726.52 of the Revised Code;
(7)(8) The refundable job retention or job creation credit
under division (A) of section 5726.50 of the Revised Code;
(8)(9) The refundable credit under section 5726.53 of the
Revised Code for losses on loans made under the Ohio venture
capital program under sections 150.01 to 150.10 of the Revised
Code;
(9)(10) The refundable motion picture production credit under
section 5726.55 of the Revised Code.
(B) For any credit except the refundable credits enumerated
in this section, 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.
Sec. 5729.98. (A) To provide a uniform procedure for
calculating the amount of tax due under this chapter, a taxpayer
shall claim any credits and offsets against tax liability to which
it is entitled in the following order:
(1) The credit for an insurance company or insurance company
group under section 5729.031 of the Revised Code;
(2) The credit for eligible employee training costs under
section 5729.07 of the Revised Code;
(3) The nonrefundable credit for authorized donations under
section 715.58 of the Revised Code;
(4) The credit for purchases of qualified low-income
community investments under section 5729.16 of the Revised Code;
(4)(5) The nonrefundable job retention credit under division
(B)(1) of section 122.171 of the Revised Code;
(5)(6) The offset of assessments by the Ohio life and health
insurance guaranty association against tax liability permitted by
section 3956.20 of the Revised Code;
(6)(7) The refundable credit for rehabilitating a historic
building under section 5729.17 of the Revised Code.
(7)(8) The refundable credit for Ohio job retention under
division (B)(2) or (3) of section 122.171 of the Revised Code;
(8)(9) The refundable credit for Ohio job creation under
section 5729.032 of the Revised Code;
(9)(10) The refundable credit under section 5729.08 of the
Revised Code for losses on loans made under the Ohio venture
capital program under sections 150.01 to 150.10 of the Revised
Code.
(B) For any credit except the refundable credits enumerated
in this section, 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.
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 nonrefundable 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 nonrefundable credit for authorized donations under
section 715.58 of the Revised Code;
(26) The credit for employers that establish on-site child
day-care centers under section 5747.35 of the Revised Code;
(26)(27) The ethanol plant investment credit under section
5747.75 of the Revised Code;
(27)(28) The credit for purchases of qualifying grape
production property under section 5747.28 of the Revised Code;
(28)(29) The small business investment credit under section
5747.81 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 or job retention
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 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;
(38)(39) 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.
Sec. 5751.98. (A) To provide a uniform procedure for
calculating the amount of tax due under this chapter, a taxpayer
shall claim any credits to which it is entitled in the following
order:
(1) The nonrefundable jobs retention credit under division
(B) of section 5751.50 of the Revised Code;
(2) The nonrefundable credit for qualified research expenses
under division (B) of section 5751.51 of the Revised Code;
(3) The nonrefundable credit for authorized donations under
section 715.58 of the Revised Code;
(4) The nonrefundable credit for a borrower's qualified
research and development loan payments under division (B) of
section 5751.52 of the Revised Code;
(4)(5) The nonrefundable credit for calendar years 2010 to
2029 for unused net operating losses under division (B) of section
5751.53 of the Revised Code;
(5)(6) The refundable motion picture production credit under
section 5751.54 of the Revised Code;
(6)(7) The refundable jobs creation credit or job retention
credit under division (A) of section 5751.50 of the Revised Code;
(7)(8) The refundable credit for calendar year 2030 for
unused net operating losses under division (C) of section 5751.53
of the Revised Code.
(B) For any credit except the refundable credits enumerated
in this section, the amount of the credit for a tax period 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 the credit.
Section 2. That existing sections 5725.98, 5726.98, 5729.98,
5747.98, and 5751.98 of the Revised Code are hereby repealed.
Section 3. If this act becomes effective before July 1 of
the current calendar year, projects may be submitted by municipal
corporations to the Tax Commissioner under section 715.58 of the
Revised Code on or before the first day of July of the current
calendar year. If this act becomes effective on or after July 1 of
the current calendar year, projects may be submitted by municipal
corporations to the Tax Commissioner on or before the first day of
July of the following calendar year.
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