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Am. Sub. S. B. No. 263 As Reported by the House Finance and Appropriations CommitteeAs Reported by the House Finance and Appropriations Committee
130th General Assembly | Regular Session | 2013-2014 |
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Senators Peterson, Beagle
Cosponsors:
Senators Jones, Obhof, Bacon, Patton, Schaffer, Hughes, Gardner, Burke, Coley, Balderson, Eklund, Faber, Jordan, LaRose, Manning, Oelslager, Schiavoni, Tavares, Uecker, Widener
Representatives Amstutz, Beck
A BILL
To amend sections 5703.05 and 5739.121 and to enact
section 5703.77 of the Revised Code to require the
Tax Commissioner to notify taxpayers of tax or fee
overpayments, to authorize the Commissioner to
either apply an overpayment to future tax
liabilities or issue a refund, to provide for a
sales tax deduction or refund for bad debts, and
to make an appropriation.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 5703.05 and 5739.121 be amended and
section 5703.77 of the Revised Code be enacted to read as follows:
Sec. 5703.05. All powers, duties, and functions of the
department of taxation are vested in and shall be performed by the
tax commissioner, which powers, duties, and functions shall
include, but shall not be limited to, the following:
(A) Prescribing all blank forms which the department is
authorized to prescribe, and to provide such forms and distribute
the same as required by law and the rules of the department.
(B) Exercising the authority provided by law, including
orders from bankruptcy courts, relative to remitting or refunding
taxes or assessments, including penalties and interest thereon,
illegally or erroneously assessed or collected, or for any other
reason overpaid, and in addition, the commissioner may on written
application of any person, firm, or corporation claiming to have
overpaid to the treasurer of state at any time within five years
prior to the making of such application any tax payable under any
law which the department of taxation is required to administer
which does not contain any provision for refund, or on the
commissioner's own motion investigate the facts and make in
triplicate a written statement of the commissioner's findings,
and, if the commissioner finds that there has been an overpayment,
issue in triplicate a certificate of abatement payable to the
taxpayer, the taxpayer's assigns, or legal representative which
shows the amount of the overpayment and the kind of tax overpaid.
One copy of such statement shall be entered on the journal of the
commissioner, one shall be certified to the attorney general, and
one certified copy shall be delivered to the taxpayer. All copies
of the certificate of abatement shall be transmitted to the
attorney general, and if the attorney general finds it to be
correct the attorney general shall so certify on each copy, and
deliver one copy to the taxpayer, one copy to the commissioner,
and the third copy to the treasurer of state. Except as provided
in section 5725.08 of the Revised Code, the taxpayer's copy of any
certificates of abatement may be tendered by the payee or
transferee thereof to the treasurer of state, or to the
commissioner on behalf of the treasurer, as payment, to the extent
of the amount thereof, of any tax payable to the treasurer of
state.
(C) Exercising the authority provided by law relative to
consenting to the compromise and settlement of tax claims;
(D) Exercising the authority provided by law relative to the
use of alternative tax bases by taxpayers in the making of
personal property tax returns;
(E) Exercising the authority provided by law relative to
authorizing the prepayment of taxes on retail sales of tangible
personal property or on the storage, use, or consumption of
personal property, and waiving the collection of such taxes from
the consumers;
(F) Exercising the authority provided by law to revoke
licenses;
(G) Maintaining a continuous study of the practical operation
of all taxation and revenue laws of the state, the manner in which
and extent to which such laws provide revenues for the support of
the state and its political subdivisions, the probable effect upon
such revenue of possible changes in existing laws, and the
possible enactment of measures providing for other forms of
taxation. For this purpose the commissioner may establish and
maintain a division of research and statistics, and may appoint
necessary employees who shall be in the unclassified civil
service; the results of such study shall be available to the
members of the general assembly and the public.
(H) Making all tax assessments, valuations, findings,
determinations, computations, and orders the department of
taxation is by law authorized and required to make and, pursuant
to time limitations provided by law, on the commissioner's own
motion, reviewing, redetermining, or correcting any tax
assessments, valuations, findings, determinations, computations,
or orders the commissioner has made, but the commissioner shall
not review, redetermine, or correct any tax assessment, valuation,
finding, determination, computation, or order which the
commissioner has made as to which an appeal or application for
rehearing, review, redetermination, or correction has been filed
with the board of tax appeals, unless such appeal or application
is withdrawn by the appellant or applicant or dismissed;
(I) Appointing not more than five deputy tax commissioners,
who, under such regulations as the rules of the department of
taxation prescribe, may act for the commissioner in the
performance of such duties as the commissioner prescribes in the
administration of the laws which the commissioner is authorized
and required to administer, and who shall serve in the
unclassified civil service at the pleasure of the commissioner,
but if a person who holds a position in the classified service is
appointed, it shall not affect the civil service status of such
person. The commissioner may designate not more than two of the
deputy commissioners to act as commissioner in case of the
absence, disability, or recusal of the commissioner or vacancy in
the office of commissioner. The commissioner may adopt rules
relating to the order of precedence of such designated deputy
commissioners and to their assumption and administration of the
office of commissioner.
(J) Appointing and prescribing the duties of all other
employees of the department of taxation necessary in the
performance of the work of the department which the tax
commissioner is by law authorized and required to perform, and
creating such divisions or sections of employees as, in the
commissioner's judgment, is proper;
(K) Organizing the work of the department, which the
commissioner is by law authorized and required to perform, so
that, in the commissioner's judgment, an efficient and economical
administration of the laws will result;
(L) Maintaining a journal, which is open to public
inspection, in which the tax commissioner shall keep a record of
all final determinations of the commissioner;
(M) Adopting and promulgating, in the manner provided by
section 5703.14 of the Revised Code, all rules of the department,
including rules for the administration of sections 3517.16,
3517.17, and 5747.081 of the Revised Code;
(N) Destroying any or all returns or assessment certificates
in the manner authorized by law;
(O) Adopting rules, in accordance with division (B) of
section 325.31 of the Revised Code, governing the expenditure of
moneys from the real estate assessment fund under that division;
(P) Informing taxpayers in a timely manner to resolve credit
account balances as required by section 5703.77 of the Revised
Code.
Sec. 5703.77. (A) As used in this section:
(1) "Taxpayer" means a person subject to or previously
subject to a tax or fee, a person that remits a tax or fee, or a
person required to or previously required to withhold or collect
and remit a tax or fee on behalf of another person.
(2) "Tax or fee" means a tax or fee administered by the tax
commissioner.
(3) "Credit account balance" means the amount of a tax or fee
that a taxpayer remits to the state in excess of the amount
required to be remitted, after accounting for factors applicable
to the taxpayer such as accelerated payments, estimated payments,
tax credits, and tax credit balances that may be carried forward.
(4) "Tax debt" means an unpaid tax or fee or any unpaid
penalty, interest, or additional charge on such a tax or fee due
the state.
(B) As soon as practicable, but not later than sixty days
before the expiration of the period of time during which a
taxpayer may file a refund application for a tax or fee, the tax
commissioner shall review the taxpayer's accounts for the tax or
fee and notify the taxpayer of any credit account balance for
which the commissioner is required to issue a refund if the
taxpayer were to file a refund application for that balance,
regardless of whether the taxpayer files a refund application or
amended return with respect to that tax or fee. The notice shall
be made using contact information for the taxpayer on file with
the commissioner.
(C) Notwithstanding sections 128.47, 3734.905, 4307.05,
5726.30, 5727.28, 5727.42, 5727.91, 5728.061, 5735.122, 5736.08,
5739.07, 5739.104, 5741.10, 5743.05, 5743.53, 5747.11, 5749.08,
5751.08, 5753.06, and any other section of the Revised Code
governing refunds of taxes or fees, the commissioner may apply the
amount of any credit account balance for which the commissioner is
required to issue a refund if the taxpayer were to file a refund
application for that balance as a credit against the taxpayer's
liability for the tax or fee in the taxpayer's next reporting
period for that tax or fee or issue a refund of that credit
account balance to the taxpayer, subject to division (D) of this
section.
(D) Before issuing a refund to a taxpayer under division (C)
of this section, the tax commissioner shall withhold from that
refund the amount of any of the taxpayer's tax debt certified to
the attorney general under section 131.02 of the Revised Code and
the amount of the taxpayer's liability, if any, for a tax or fee.
The commissioner shall apply any amount withheld first in
satisfaction of the amount of the taxpayer's certified tax debt
and then in satisfaction of the taxpayer's liability.
(E) The tax commissioner may adopt rules to administer this
section.
Sec. 5739.121. (A) As used in this section, "bad:
(1) "Bad debt" means any debt that has become worthless or
uncollectible in the time period between a vendor's preceding
return and the present return, has been uncollected for at least
six months, and that may be claimed as a deduction pursuant to the
"Internal Revenue Code of 1954," 68A Stat. 50, 26 U.S.C. 166, as
amended, and regulations adopted pursuant thereto, or that could
be claimed as such a deduction if the vendor kept accounts on an
accrual basis. "Bad debt" does not include any interest or sales
tax on the purchase price, uncollectible amounts on property that
remains in the possession of the vendor until the full purchase
price is paid, expenses incurred in attempting to collect any
account receivable or for any portion of the debt recovered, and
repossessed property.
(2) "Lender" means a person or an affiliate, assignee, or
transferee of a person that owns a private label credit card
account, or an interest in a private label credit card receivable,
provided that interest was any of the following:
(a) Transferred from a third party;
(b) Purchased directly from a vendor that remitted tax
imposed under this chapter or from an affiliate of the vendor;
(c) Originated according to a written agreement between the
person and a vendor that remitted tax imposed under this chapter
or an affiliate of the vendor.
(3) "Private label credit card" means a charge card or credit
card on which the name or logo of a vendor appears.
(4) "Accounts or receivables bad debt" means the unpaid
balance on private label credit card accounts or receivables that
are bad debt and are charged off as uncollectible on the books of
a lender on or after July 1, 2014, and against which a deduction
or refund has not previously been taken or allowed, respectively,
under this section. For the purposes of division (A)(4) of this
section only, "bad debt" shall be determined without regard to
when the debt has become worthless or uncollectible relative to
the period between a vendor's returns, and the deductibility of
the debt for federal income tax purposes shall be determined with
respect to the lender instead of the vendor.
(5) "Affiliate" means any person that is a member of an
affiliated group or that would be a member of an affiliated group
if the person was a corporation.
(6) "Affiliated group" has the same meaning as in section
1504 of the Internal Revenue Code.
(B) In computing taxable receipts for purposes of this
chapter, a vendor may deduct the amount of bad debts. The Except
as provided in division (F) of this section, the amount deducted
must be charged off as uncollectible on the books of the vendor. A
deduction may be claimed only with respect to bad debts on which
the taxes pursuant to sections 5739.10 and 5739.12 of the Revised
Code were paid in a preceding tax period. If the vendor's business
consists of taxable and nontaxable transactions, the deduction
shall equal the full amount of the debt if the debt is documented
as a taxable transaction in the vendor's records. If no such
documentation is available, the maximum deduction on any bad debt
shall equal the amount of the bad debt multiplied by the quotient
obtained by dividing the sales taxed pursuant to this chapter
during the preceding calendar year by all sales during the
preceding calendar year, whether taxed or not. If a consumer or
other person pays all or part of a bad debt with respect to which
a vendor claimed a deduction under this section, the vendor shall
be liable for the amount of taxes deducted in connection with that
portion of the debt for which payment is received and shall remit
such taxes in the vendor's next payment to the tax commissioner.
(C) Any claim for a bad debt deduction under this section
shall be supported by such evidence as the tax commissioner by
rule requires. The commissioner shall review any change in the
rate of taxation applicable to any taxable sales by a vendor
claiming a deduction pursuant to this section and adopt rules for
altering the deduction in the event of such a change in order to
ensure that the deduction on any bad debt does not result in the
vendor claiming the deduction recovering any more or less than the
taxes imposed on the sale that constitutes the bad debt.
(D) In any reporting period in which the amount of bad debt
exceeds the amount of taxable sales for the period, the vendor may
file a refund claim for any tax collected on the bad debt in
excess of the tax reported on the return. The refund claim shall
be filed in the manner provided in section 5739.07 of the Revised
Code, except that the claim may be filed within four years of the
due date of the return on which the bad debt first could have been
claimed.
(E) When the filing responsibilities of a vendor have been
assumed by a certified service provider, the certified service
provider shall claim the bad debt allowance provided by this
section on behalf of the vendor. The certified service provider
shall credit or refund to the vendor the full amount of any bad
debt allowance or refund.
(F) No person other than the vendor in the transaction that
generated the bad debt or, as provided in division (E) of this
section, a certified service provider, may claim the bad debt
allowance provided by this section (1) A vendor may deduct on a
return or obtain a refund of tax remitted by the vendor on
accounts or receivables bad debt.
A vendor taking a deduction or claiming a refund under
division (F)(1) of this section shall include all credit sale
transactions outstanding in the account or receivable at the time
the account or receivable is charged off as uncollectible on the
books of a lender in calculating the deduction or refund,
regardless of the date on which the credit sale transaction
occurs.
(2) The deduction or refund authorized under division (F)(1)
of this section may be taken or obtained by the vendor only on the
basis of accounts or receivables bad debt from purchases from the
vendor whose name or logo appears on the private label credit card
or from purchases from any of the vendor's affiliates or
franchisees.
(3) A vendor taking a deduction or receiving a refund under
division (F)(1) of this section shall maintain books, records, or
other documents verifying the accounts or receivables bad debt,
which shall be open to inspection by the commissioner upon
request.
(4) If the vendor collects in whole or part any accounts or
receivables bad debt on the basis of which the vendor took a
deduction or received a refund under division (F) of this section,
the vendor shall include the amount collected in the vendor's
first return filed after the collection and pay tax on the portion
of that amount with respect to which the vendor took the deduction
or received a refund.
For the purpose of calculating the amount of tax to remit
under division (F)(4) of this section, the vendor shall allocate
payments made by the holder of a private label credit card on the
holder's accounts based on the agreement between the account
holder and the vendor or lender.
(G) The tax commissioner may adopt rules necessary to
administer this section.
Section 2. That existing sections 5703.05 and 5739.121 of
the Revised Code are hereby repealed.
Section 3. All appropriation items in this act are
appropriated out of any moneys in the state treasury to the credit
of the designated fund that are not otherwise appropriated. For
all appropriations made in this act, the amounts in the first
column are for fiscal year 2014 and the amounts in the second
column are for fiscal year 2015. The appropriations made in this
act are in addition to any other appropriations made for the FY
2014-FY 2015 biennium.
TAX DEPARTMENT OF TAXATION
GRF |
110321 |
|
Operating Expenses |
|
$ |
0 |
|
$ |
682,000 |
|
|
TOTAL GRF General Revenue Fund
| |
$ |
0 |
|
$ |
682,000 |
|
|
TOTAL ALL BUDGET FUND GROUPS
| |
$ |
0 |
|
$ |
682,000 |
|
|
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