Chapter 5726 | Financial Institutions Tax

Section 5726.01 | Definitions.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

As used in this chapter:

(A) "Affiliated group" means a group of two or more persons with fifty per cent or greater of the value of each person's ownership interests owned or controlled directly, indirectly, or constructively through related interests by common owners during all or any portion of the taxable year, and the common owners. "Affiliated group" includes, but is not limited to, any person eligible to be included in a consolidated elected taxpayer group under section 5751.011 of the Revised Code or a combined taxpayer group under section 5751.012 of the Revised Code.

(B) "Bank organization" means any of the following:

(1) A national bank organized and operating as a national bank association pursuant to the "National Bank Act," 13 Stat. 100 (1864), 12 U.S.C. 21, et seq.;

(2) A federal savings association or federal savings bank chartered under 12 U.S.C. 1464;

(3) A bank, banking association, trust company, savings and loan association, savings bank, or other banking institution that is organized or incorporated under the laws of the United States, any state, or a foreign country;

(4) Any corporation organized and operating pursuant to 12 U.S.C. 611, et seq.;

(5) Any agency or branch of a foreign bank, as those terms are defined in 12 U.S.C. 3101.

"Bank organization" does not include an institution organized under the "Federal Farm Loan Act," 39 Stat. 360 (1916), or a successor of such an institution, a company chartered under the "Farm Credit Act of 1933," 48 Stat. 257, or a successor of such a company, an association formed pursuant to 12 U.S.C. 2279c-1, an insurance company, or a credit union.

(C) "Call report" means the consolidated reports of condition and income prescribed by the federal financial institutions examination council that a person is required to file with a federal regulatory agency pursuant to 12 U.S.C. 161, 12 U.S.C. 324, or 12 U.S.C. 1817.

(D) "Captive finance company" means a person that derived at least seventy-five per cent of its gross income for the current taxable year and the two taxable years preceding the current taxable year from one or more of the following transactions:

(1) Financing transactions with members of its affiliated group;

(2) Financing transactions with or for customers of products manufactured or sold by a member of its affiliated group;

(3) Financing transactions with or for a distributor or franchisee that sells, leases, or services a product manufactured or sold by a member of the person's affiliated group;

(4) Financing transactions with or for a supplier to a member of the person's affiliated group in connection with the member's manufacturing business;

(5) Issuing bonds or other publicly traded debt instruments for the benefit of the affiliated group;

(6) Short-term or long-term investments whereby the person invests the cash reserves of the affiliated group and the affiliated group utilizes the proceeds from the investments.

For the purposes of division (D) of this section, "financing transaction" means making or selling loans, extending credit, leasing, earning or receiving subvention, including interest supplements and other support costs related thereto, or acquiring, selling, or servicing accounts receivable, notes, loans, leases, debt, or installment obligations that arise from the sale or lease of tangible personal property or the performance of services, and "gross income" has the same meaning as in section 61 of the Internal Revenue Code and includes income from transactions between the captive finance company and other members of its affiliated group.

A person that has not been in continuous existence for the two taxable years preceding the current taxable year qualifies as a "captive finance company" for purposes of division (D) of this section if the person derived at least seventy-five per cent of its gross income for the period of its existence from one or more of the transactions described in divisions (D)(1) to (6) of this section.

"Captive finance company" does not include a small dollar lender.

(E) "Credit union" means a nonprofit cooperative financial institution organized or chartered under the laws of this state, any other state, or the United States.

(F) "Diversified savings and loan holding company" has the same meaning as in 12 U.S.C. 1467a, as that section existed on January 1, 2012.

(G) "Document of creation" means the articles of incorporation of a corporation, articles of organization of a limited liability company, registration of a foreign limited liability company, certificate of limited partnership, registration of a foreign limited partnership, registration of a domestic or foreign limited liability partnership, or registration of a trade name.

(H) "Financial institution" means a bank organization, a holding company of a bank organization, or a nonbank financial organization, except when one of the following applies:

(1) If two or more such entities are consolidated for the purposes of filing an FR Y-9, "financial institution" means a group consisting of all entities that are consolidated in the FR Y-9.

(2) If two or more such entities are consolidated for the purposes of filing a call report, "financial institution" means a group consisting of all entities that are consolidated in the call report and that are not included in a group described in division (H)(1) of this section.

(3) If a bank organization is owned directly by a grandfathered unitary savings and loan holding company or directly or indirectly by an entity that was a grandfathered unitary savings and loan holding company on January 1, 2012, "financial institution" means a group consisting only of that bank organization and the entities consolidated in that bank organization's call report, notwithstanding division (H)(1) or (2) of this section.

"Financial institution" does not include a diversified savings and loan holding company, a grandfathered unitary savings and loan holding company, any entity that was a grandfathered unitary savings and loan holding company on January 1, 2012, or any entity that is not a bank organization or owned by a bank organization and that is owned directly or indirectly by an entity that was a grandfathered unitary savings and loan holding company on January 1, 2012.

(I) "FR Y-9" means the consolidated or parent-only financial statements that a holding company is required to file with the federal reserve board pursuant to 12 U.S.C. 1844. In the case of a holding company required to file both consolidated and parent-only financial statements, "FR Y-9" means the consolidated financial statements that the holding company is required to file. For purposes of division (H)(1) of this section, if a holding company is required to file a parent-only financial statement and not a consolidated financial statement, "FR Y-9" means the consolidated financial statement the company would file if it were required to do so by the federal reserve board.

(J) "Grandfathered unitary savings and loan holding company" means an entity described in 12 U.S.C. 1467a(c)(9)(C), as that section existed on December 31, 1999.

(K) "Gross receipts" means all items of income, without deduction for expenses. If the reporting person for a taxpayer is a holding company, "gross receipts" includes all items of income reported on the FR Y-9 filed by the holding company. If the reporting person for a taxpayer is a bank organization, "gross receipts" includes all items of income reported on the call report filed by the bank organization. If the reporting person for a taxpayer is a nonbank financial organization, "gross receipts" includes all items of income reported in accordance with generally accepted accounting principles.

(L) "Insurance company" means every corporation, association, and society engaged in the business of insurance of any character, or engaged in the business of entering into contracts substantially amounting to insurance of any character, or of indemnifying or guaranteeing against loss or damage, or acting as surety on bonds or undertakings. "Insurance company" also includes any health insuring corporation as defined in section 1751.01 of the Revised Code.

(M)(1) "Nonbank financial organization" means every person that is not a bank organization or a holding company of a bank organization and that engages in business primarily as a small dollar lender. "Nonbank financial organization" does not include an institution organized under the "Federal Farm Loan Act," 39 Stat. 360 (1916), or a successor of such an institution, an insurance company, a captive finance company, a credit union, an institution organized and operated exclusively for charitable purposes within the meaning of section 501(c)(3) of the Internal Revenue Code, or a person that facilitates or services one or more securitizations for a bank organization, a holding company of a bank organization, a captive finance company, or any member of the person's affiliated group.

(2) A person is engaged in business primarily as a small dollar lender if the person has, for the taxable year, gross income from the activities described in division (O) of this section that exceeds the person's gross income from all other activities. As used in division (M) of this section, "gross income" has the same meaning as in section 61 of the Internal Revenue Code, and income from transactions between the person and the other members of the affiliated group shall be eliminated, and any sales, exchanges, and other dispositions of commercial paper to persons outside the affiliated group produces gross income only to the extent the proceeds from such transactions exceed the affiliated group's basis in such commercial paper.

(N) "Reporting person" means one of the following:

(1) In the case of a financial institution described in division (H)(1) of this section, the top-tier holding company required to file an FR Y-9.

(2) In the case of a financial institution described in division (H)(2) or (3) of this section, the bank organization required to file the call report.

(3) In the case of a bank organization or nonbank financial organization that is not included in a group described in division (H)(1) or (2) of this section, the bank organization or nonbank financial organization.

(O) "Small dollar lender" means any person engaged primarily in the business of loaning money to individuals, provided that the loan amounts do not exceed five thousand dollars and the duration of the loans do not exceed twelve months. A "small dollar lender" does not include a bank organization, credit union, or captive finance company.

(P) "Tax year" means the calendar year for which the tax levied under section 5726.02 of the Revised Code is required to be paid.

(Q) "Taxable year" means the calendar year preceding the year in which an annual report is required to be filed under section 5726.03 of the Revised Code.

(R) "Taxpayer" means a financial institution subject to the tax levied under section 5726.02 of the Revised Code.

(S) "Total equity capital" means the sum of the common stock at par value, perpetual preferred stock and related surplus, other surplus not related to perpetual preferred stock, retained earnings, accumulated other comprehensive income, treasury stock, unearned employee stock ownership plan shares, and other equity components of a financial institution. "Total equity capital" shall not include any noncontrolling (minority) interests as reported on an FR Y-9 or call report, unless such interests are in a bank organization or a bank holding company.

(T) "Total Ohio equity capital" means the portion of the total equity capital of a financial institution apportioned to Ohio pursuant to section 5726.05 of the Revised Code.

(U) "Holding company" does not include a diversified savings and loan holding company, a grandfathered unitary savings and loan holding company, any entity that was a grandfathered unitary savings and loan holding company on January 1, 2012, or any entity that is not a bank organization or owned by a bank organization and that is owned directly or indirectly by an entity that was a grandfathered unitary savings and loan holding company on January 1, 2012.

(V) "Securitization" means transferring one or more assets to one or more persons and subsequently issuing securities backed by the right to receive payment from the asset or assets so transferred.

(W) "De novo bank organization" means a bank organization that first began operations in the taxable year preceding the current tax year or in either of the two immediately preceding taxable years. For the purposes of this division, a bank organization "first began operations" on the day the bank organization was issued a charter, a certificate of authority to commence business, or the equivalent document enabling the bank organization to begin conducting business as a bank organization. A "de novo bank organization" does not include a bank organization formed by, acquired by, merged with, or converted by a taxpayer that filed and paid the tax under this chapter in any preceding calendar year.

Last updated August 8, 2023 at 11:17 AM

Section 5726.02 | Financial institution tax; purpose; amount.

• Effective: April 12, 2021
• Latest Legislation: House Bill 150 - 133rd General Assembly

(A) For the purpose of funding the needs of this state and its local governments, there is hereby levied a tax on each financial institution for the privilege of doing business in this state. A financial institution is subject to the tax imposed under this chapter for each calendar year that the financial institution conducts business as a financial institution in this state or otherwise has nexus in or with this state under the Constitution of the United States on the first day of January of that calendar year.

(B) The amount of tax a financial institution other than a de novo bank organization is required to pay under this chapter shall equal the greater of the minimum tax required under division (A)(1)(a) of section 5726.04 of the Revised Code or the amount by which the tax calculated under division (A)(1)(b) of that section exceeds any credits allowed against the tax. The amount of tax a de novo bank organization is required to pay under this chapter shall equal the amount by which the tax calculated under division (A)(2) of section 5726.04 of the Revised Code exceeds any credits allowed against the tax.

Section 5726.03 | Report; remittance.

• Effective: March 23, 2015
• Latest Legislation: House Bill 5 - 130th General Assembly

(A)(1) Annually, on or before the fifteenth day of October, the reporting person for each taxpayer shall make a report in writing to the tax commissioner, in such form as the commissioner prescribes, and shall remit to the commissioner the amount of tax shown to be due on the report. The remittance shall be made payable to the treasurer of state. The commissioner shall make available, on the official internet web site of the department of taxation, copies of the forms prescribed by the commissioner for the purpose of making the annual report.

(2) An annual report shall be signed by the president, vice-president, secretary, treasurer, general manager, superintendent, or managing agent in this state of the reporting person.

(3) An annual report shall contain the facts, figures, computations, and attachments that result in the determination of the amount of tax due from a taxpayer under this chapter.

(B)(1) In the case of a financial institution described in division (H)(1) of section 5726.01 of the Revised Code, the annual report filed for a taxable year shall list, and include information related to, each person includable in an FR Y-9 filed by the reporting person for that taxable year.

(2) In the case of a financial institution described in division (H)(2) or (3) of section 5726.01 of the Revised Code, the annual report for a taxable year shall list, and include information related to, each person includable in a call report filed by the reporting person for that taxable year.

(C)(1) The reporting person for a taxpayer shall remit each tax payment and, if required by the commissioner, file each annual or estimated tax report electronically. The commissioner may require reporting persons to use the Ohio business gateway as defined in section 718.01 of the Revised Code to file reports and remit the tax, or may provide another means for reporting persons to file and remit the tax electronically.

(2) The payment of taxes as provided in division (C) of this section shall not affect a taxpayer's obligation to file an annual report required under division (A) of this section.

(3) The reporting person for a taxpayer that is required to remit tax payments electronically under this section may apply to the tax commissioner, in the manner prescribed by the commissioner, to be excused from that requirement. The commissioner may excuse the taxpayer from the requirements of division (C) of this section for good cause.

(4) If the reporting person for a taxpayer that is required to remit tax payments or file reports electronically under this section fails to do so, the commissioner may impose a penalty not to exceed the following:

(a) For either of the first two reports the person so fails, five per cent of the amount of the payment that was required to be remitted;

(b) For the third and any subsequent reports the person so fails, ten per cent of the amount of the payment that was required to be remitted.

The penalty imposed under this section is in addition to any other penalty or charge imposed under this chapter and shall be considered as revenue arising from the tax levied under this chapter. A penalty may be collected by assessment in the manner prescribed by section 5726.20 of the Revised Code. The tax commissioner may abate all or a portion of such a penalty and may adopt rules governing such abatements.

Section 5726.04 | Amount of tax.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A)(1) The tax levied on a financial institution other than a de novo bank organization under this chapter shall be the greater of the following:

(a) A minimum tax equal to one thousand dollars;

(b) The product of the total Ohio equity capital of the financial institution, as determined under this section, multiplied by eight mills for each dollar of the first two hundred million dollars of total Ohio equity capital, by four mills for each dollar of total Ohio equity capital greater than two hundred million and less than one billion three hundred million dollars, and by two and one-half mills for each dollar of total Ohio equity capital equal to or greater than one billion three hundred million dollars.

(2) The tax levied on a de novo bank organization under this chapter shall equal the difference obtained by subtracting one million dollars from the amount of tax that would be calculated for the de novo bank organization under division (A)(1)(b) of this section, provided that if that difference is equal to or less than zero, no tax shall be due for the taxable year.

A de novo bank organization with no tax due for a taxable year pursuant to this division shall be considered a financial institution that "paid the tax imposed by section 5726.02 of the Revised Code based on" that taxable year for the purposes of division (E)(3) of section 5751.01 of the Revised Code.

(B) If the reporting person for a financial institution files an FR Y-9 or call report, the total equity capital of the financial institution shall equal the total equity capital shown on the reporting person's FR Y-9 or call report as of the end of the taxable year. The total equity capital of all other financial institutions shall be reported as of the end of the taxable year in accordance with generally accepted accounting principles.

(C) For the purposes of this section:

(1) "Total Ohio equity capital" means the product of (a) the total equity capital of a financial institution as of the end of a taxable year to the extent that the total equity capital does not exceed fourteen per cent of the financial institution's total assets multiplied by (b) the Ohio apportionment ratio calculated for the financial institution under section 5726.05 of the Revised Code.

(2) "Total assets" means:

(a) In the case of a financial institution described in division (H)(1) of section 5726.01 of the Revised Code, the total consolidated assets as shown on the reporting person's FR Y-9 as of the end of the taxable year;

(b) In the case of a financial institution described in division (H)(2) or (3) of section 5726.01 of the Revised Code, the total consolidated assets as shown on the reporting person's call report as of the end of the taxable year;

(c) In the case of all other financial institutions, the total consolidated assets of the financial institution as of the end of the taxable year in accordance with generally accepted accounting principles.

The tax commissioner may audit a reporting person's total assets to confirm the financial institution's actual total consolidated assets and may make any adjustments necessary.

(D) All payments received from the tax levied under this chapter shall be credited to the general revenue fund.

(E) The commissioner may adopt rules to provide additional guidance for the application of this section.

Last updated August 8, 2023 at 11:24 AM

Section 5726.05 | Apportionment factor.

• Effective: March 27, 2013
• Latest Legislation: House Bill 510 - 129th General Assembly

(A) An apportionment factor shall be used to determine the total Ohio equity capital of a financial institution. The factor shall be based upon the gross receipts generated by the financial institution.

(B) The apportionment factor is a fraction, the numerator of which is the total gross receipts of the financial institution in this state during the taxable year and the denominator of which is the total gross receipts of the financial institution everywhere during the taxable year. Gross receipts generated by a financial institution shall be sitused to this state in the proportion that the customers' benefit in this state with respect to the services received bears to the customers' benefit everywhere with respect to the services received. The physical location where the customer ultimately uses or receives the benefit of what was received shall be paramount in determining the proportion of the benefit in this state to the benefit everywhere. The method of calculating gross receipts for purposes of the denominator shall be the same as the method used in determining gross receipts for purposes of the numerator.

(C) The following are examples of gross receipts to be included in the numerator of the apportionment factor:

(1) Receipts from the lease, sublease, rental, or subrental of real property located in this state;

(2) Receipts from the lease, sublease, rental, or subrental of tangible personal property to the extent such property is used in this state;

(3) Interest, fees, penalties, or any other charge received from loans secured by real property located within this state;

(4) Interest, fees, penalties, or any other charge received from loans not secured by real property if the borrower is located in this state;

(5) The amount of net gains, but not less than zero, from the sale of loans secured by real property located in this state;

(6) The amount of net gains, but not less than zero, from the sale of loans not secured by real property if the borrower is located in this state;

(7) Interest, annual fees, penalties, or any other charges received from credit card receivables and from cardholders if the billing address of the cardholder is located in this state;

(8) The amount of net gains, but not less than zero, from the sale of credit card receivables if the billing address of the cardholder is located in this state;

(9) Reimbursement fees of a credit card issuer if the billing address of the cardholder is located in this state;

(10) Receipts from merchant discounts if the merchant is located in this state;

(11) Loan servicing fees derived from loans secured by real property located in this state;

(12) Loan servicing fees derived from loans not secured by real property if the borrower is located in this state;

(13) Loan servicing fees derived from servicing loans from other financial institutions if the borrower is located in this state;

(14) Receipts not otherwise listed herein if the payor of those receipts is located in this state.

(D)(1) Receipts from investment assets and activities and trading assets and activities, including interest and dividends, are in this state to the extent the financial institution's customer is in this state, which a financial institution may determine by electing to apply either the gross receipts factor calculated under division (B) of this section to the investment assets and activities and trading assets and activities or the method prescribed in division (D)(2) of this section. As used in division (D) of this section, "investment assets and activities and trading assets and activities" includes interest, dividends, and other income from assets and activities, including, but not limited to: investment securities; trading account assets; federal funds; securities purchased and sold under agreements to resell or repurchase; options; futures contracts; forward contracts; notional principal contracts such as swaps; equities; foreign currency transactions; and amounts in the matched book and in the arbitrage book, but excluding amounts otherwise sourced in this section.

(2) If a financial institution elects to apply the method prescribed in division (D)(2) of this section, each of the following apply:

(a) With respect to the investment and trading assets and activities, the gross receipts factor shall include the following:

(i) The amount by which interest from federal funds sold and securities purchased under resale agreements exceeds interest expense on federal funds purchased and securities sold under repurchase agreements.

(ii) The amount by which interest, dividends, gains, and other income from trading assets and activities, including, but not limited to, assets and activities in the matched book, in the arbitrage book, and foreign currency transactions, exceed amounts paid in lieu of interest, amounts paid in lieu of dividends, and losses from such assets and activities.

(b) The numerator of the gross receipts factor shall include interest, dividends, net gains, but not less than zero, and other income from investment assets and activities and from trading assets and activities that are attributable to this state as follows:

(i) The amount of interest, other than interest described in division (D)(2)(b)(ii) of this section, dividends, other than dividends described in that division, net gains, but not less than zero, and other income from investment assets and activities in the investment account to be attributed to this state and included in the numerator is determined by multiplying all such income from such assets and activities by a fraction, the numerator of which is the average value of such assets that are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the average value of all such assets.

(ii) The amount of interest from federal funds sold and purchased and from securities purchased under resale agreements and securities sold under repurchase agreements attributable to this state and included in the numerator is determined by multiplying the amount described in division (D)(2)(a)(i) of this section from such funds and such securities by a fraction, the numerator of which is the average value of federal funds sold and securities purchased under agreements to resell that are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the average value of all such funds and such securities.

(iii) The amount of interest, dividends, gains, and other income from trading assets and activities, including but not limited to assets and activities in the matched book, in the arbitrage book, and foreign currency transaction, but excluding amounts described in division (D)(2)(b)(i) or (ii) of this section, attributable to this state and included in the numerator is determined by multiplying the amount described in division (D)(2)(a)(ii) of this section by a fraction, the numerator of which is the average value of such trading assets that are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the average value of all such assets.

(3) For purposes of division (D)(2) of this section, average value shall be determined as follows:

(a)(i) The value of real property and tangible personal property owned by the taxpayer is the original cost or other basis of such property for federal income tax purposes without regard to depletion, depreciation, or amortization.

(ii) Loans are valued at their outstanding principal balance, without regard to any reserve for bad debts. If a loan is charged off in whole or in part for federal income tax purposes, the portion of the loan charged off is not outstanding. A specifically allocated reserve established pursuant to financial accounting guidelines that is treated as charged off for federal income tax purposes shall be treated as charged off for purposes of this section.

(iii) Credit card receivables are valued at their outstanding principal balance, without regard to any reserve for bad debts. If a credit card receivable is charged off in whole or in part for federal income tax purposes, the portion of the receivable charged off is not outstanding.

(b) The average value of property owned by the taxpayer is computed on an annual basis by adding the value of the property on the first day of the taxable year and the value on the last day of the taxable year and dividing the sum by two. If averaging on this basis does not properly reflect average value, the tax commissioner may require averaging on a more frequent basis. The taxpayer may elect to average on a more frequent basis. When averaging on a more frequent basis is required by the tax commissioner or is elected by the taxpayer, the same method of valuation must be used consistently by the taxpayer with respect to property within and without this state and on all subsequent returns unless the taxpayer receives prior permission from the tax commissioner or the tax commissioner requires a different method of determining value.

(E) A taxpayer's election under division (D)(1) of this section shall be in effect on all subsequent returns unless the taxpayer receives prior permission from the tax commissioner to use or the tax commissioner requires a different method.

(F) A taxpayer shall have the burden of proving that an investment asset or activity or trading asset or activity was properly assigned to a regular place of business outside of this state by demonstrating that the day-to-day decisions regarding the asset or activity occurred at a regular place of business outside this state. Where the day-to-day decisions regarding an investment asset or activity or trading asset or activity occur at more than one regular place of business and one such regular place of business is in this state and one such regular place of business is outside this state, such asset or activity shall be considered to be located at the regular place of business of the taxpayer where the investment or trading policies or guidelines with respect to the asset or activity are established. Unless the taxpayer demonstrates to the contrary, such policies and guidelines shall be presumed to be established at the commercial domicile of the taxpayer.

(G) If the apportionment provisions of this section do not fairly represent the extent of the taxpayer's business activity in this state, the taxpayer may request, or the tax commissioner may require or permit, an alternative method. Such a request must be made within any applicable statute of limitations set forth in this chapter.

(H) A financial institution's "gross receipts" for purposes of the calculation required by division (B) or (D) of this section shall be determined using the financial institution's method of accounting for income tax purposes. If a financial institution's method of accounting is changed for income tax purposes, its method of accounting for purposes of the calculation required by division (B) or (D) of this section shall be changed accordingly.

(I) The tax commissioner shall adopt administrative rules to provide additional guidance for the application of this section.

Section 5726.06 | Estimated tax reports.

• Effective: April 12, 2021
• Latest Legislation: House Bill 150 - 133rd General Assembly

(A) The reporting person for a taxpayer shall file estimated tax reports and remit the amount of tax estimated to be due for a tax year to the tax commissioner as follows:

(1) One-third of the estimated tax or the minimum tax required under division (A)(1)(a) of section 5726.04 of the Revised Code, if applicable and greater than one-third of the estimated tax, on or before the thirty-first day of January of the tax year;

(2) One-half of the amount by which the estimated tax exceeds the amount paid under division (A)(1) of this section on or before the thirty-first day of March of the tax year;

(3) One-half of the amount by which the estimated tax exceeds the amount paid under division (A)(1) of this section on or before the thirty-first day of May of the tax year.

(B)(1) The reporting person for a taxpayer shall remit the estimated tax electronically as provided in division (C) of section 5726.03 of the Revised Code. Remittance shall be made payable to the treasurer of state.

(2) The tax commissioner shall immediately forward to the treasurer of state all amounts received under this section, and the treasurer of state shall credit all payments of such estimated tax as provided in division (D) of section 5726.04 of the Revised Code.

(C)(1) If a taxpayer was not subject to the tax imposed by section 5726.02 of the Revised Code for the preceding tax year, "estimated tax" for purposes of division (A)(1) of this section means ninety per cent of the qualifying net tax for the tax year. If a taxpayer was subject to the tax for the preceding tax year, "estimated tax" for purposes of division (A)(1) of this section means the lesser of one hundred per cent of the taxpayer's qualifying net tax for the preceding tax year or ninety per cent of the qualifying net tax for the tax year.

(2) If the taxpayer did not file a report under section 5726.02 of the Revised Code for the tax year or failed to prepare and file the report in good faith for the tax year, "qualifying net tax" as used in division (C)(1) of this section for that tax year means the amount described in division (C)(2)(a) of this section. Otherwise, "qualifying net tax" as used in division (C)(1) of this section for that tax year means the lesser of the amount described in division (C)(2)(a) or (b) of this section.

(a) The tax imposed by section 5726.02 of the Revised Code for that tax year reduced by the credits listed in section 5726.98 of the Revised Code. If the credits exceed the total tax and the financial institution is not a de novo bank organization, the qualifying net tax is the minimum tax.

(b) The lesser of the tax shown on the report, prepared and filed in good faith, reduced by the credits shown on that report, or the tax shown on an amended report, prepared and filed in good faith, reduced by the credits shown on that amended report. If the credits shown exceed the total tax shown and the financial institution is not a de novo bank organization, the qualifying net tax is the minimum tax.

Section 5726.07 | Underpayment of estimated taxes.

• Effective: March 27, 2013
• Latest Legislation: House Bill 510 - 129th General Assembly

(A) In the case of an underpayment of estimated taxes required to be paid under section 5726.06 of the Revised Code, interest upon the amount of underpayment, calculated at the rate per annum prescribed by section 5703.47 of the Revised Code for the period of underpayment, shall be added to the tax due for the tax year for which the estimated tax is paid.

(B) The amount of underpayment upon which such interest is computed equals the amount by which division (B)(1) of this section exceeds division (B)(2) of this section.

(1) The amount of the estimated tax payment that would be required to be paid if the total estimated tax due were equal to the amount of tax shown to be due on the annual report filed for the tax year or, if no report was filed, the total amount of tax due for the tax year;

(2) The amount, if any, of the estimated tax that has been paid on or before the last day prescribed for such payment.

(C) The period of underpayment for which such interest is computed shall run from the date the estimated tax payment was required to be made to the date the payment is made.

For purposes of this section, a payment of estimated tax on any payment date shall be considered a payment of any previous underpayment only to the extent that such payment exceeds the amount of payment currently due.

Section 5726.10 | Enforcement of chapter.

• Effective: March 27, 2013
• Latest Legislation: House Bill 510 - 129th General Assembly

The tax commissioner shall enforce and administer this chapter. In addition to any other powers conferred upon the commissioner by law, the commissioner may do any of the following:

(A) Prescribe all forms required to be filed pursuant to this chapter;

(B) Promulgate such rules and regulations as the commissioner finds necessary to carry out this chapter;

(C) Appoint and employ such personnel as are necessary to carry out the duties imposed upon the commissioner by this chapter.

Section 5726.20 | Assessments.

• Effective: September 30, 2021
• Latest Legislation: House Bill 110 - 134th General Assembly

(A) The tax commissioner may make an assessment, based on any information in the commissioner's possession, against any person that fails to file a return or report or pay any tax as required by this chapter. The reporting person for a taxpayer shall file the annual report required under section 5726.03 of the Revised Code and remit the tax imposed by this chapter. Each person included in the annual report of the taxpayer is jointly and severally liable for the tax imposed by this chapter and any penalties and interest thereon. If the reporting person fails, for any reason, to file and remit any tax, the amount due may be collected by assessment against the reporting person and against any or all other persons required to be included in the annual report of the taxpayer as provided in section 5703.90 of the Revised Code. The commissioner shall make the assessment in the manner provided in this section. The commissioner shall give the person assessed written notice of the assessment as provided in section 5703.37 of the Revised Code. With the notice, the commissioner shall provide instructions on the manner in which to petition for reassessment and request a hearing with respect to the petition.

(B) No assessment shall be made or issued against a person under this section more than four years after the later of the final date the report subject to assessment was required to be filed or the date such report was filed. Such time limit may be extended if both the person and the commissioner consent in writing to the extension or if an agreement waiving or extending the time limit has been entered into pursuant to section 122.171 of the Revised Code. Any such extension shall extend the four-year time limit prescribed in division (A) of section 5726.30 of the Revised Code for the same period of time. There shall be no bar or limit to an assessment against a person that fails to file a report subject to assessment as required by this chapter, or that files a fraudulent report.

(C) Unless the person assessed, within sixty days after service of the notice of assessment, files with the tax commissioner, either in person or by certified mail, a written petition for reassessment signed by the person or the person's authorized agent having knowledge of the facts, the assessment shall become final, and the amount of the assessment is due and payable from the person assessed to the treasurer of state. A petition shall indicate the objections of the person assessed, but additional objections may be raised in writing if received by the commissioner prior to the date shown on the final determination. If a petition for reassessment has been properly filed, the commissioner shall proceed under section 5703.60 of the Revised Code.

(D)(1) After an assessment becomes final, if any portion of the assessment, including any accrued interest, remains unpaid, a certified copy of the tax commissioner's entry making the assessment final may be filed in the office of the clerk of the court of common pleas in the county in which the person resides or has its principal place of business in this state, or in the office of the clerk of court of common pleas of Franklin county.

(2) Immediately upon the filing of the entry, the clerk shall enter judgment for the state against the person assessed in the amount shown on the entry. The judgment may be filed by the clerk in a loose-leaf book entitled, "special judgments for the financial institution tax" and shall have the same effect as other judgments. Execution shall issue upon the judgment at the request of the tax commissioner, and all laws applicable to sales on execution shall apply to sales made under the judgment.

(3) If the assessment is not paid in its entirety within sixty days after the day the assessment was issued, the portion of the assessment consisting of tax due shall bear interest at the rate per annum prescribed by section 5703.47 of the Revised Code from the date the tax commissioner issues the assessment until the date the assessment is paid or until it is certified to the attorney general for collection under section 131.02 of the Revised Code, whichever comes first. If the unpaid portion of the assessment is certified to the attorney general for collection, the entire unpaid portion of the assessment shall bear interest at the rate per annum prescribed by section 5703.47 of the Revised Code from the date of certification until the date it is paid in its entirety. Interest shall be paid in the same manner as the tax and may be collected by the issuance of an assessment under this section.

(E) If the tax commissioner believes that collection of the tax imposed by this chapter will be jeopardized unless proceedings to collect or secure collection of the tax are instituted without delay, the commissioner may issue a jeopardy assessment against the person liable for the tax. Immediately upon the issuance of the jeopardy assessment, the commissioner shall file an entry with the clerk of the court of common pleas in the manner prescribed by division (D) of this section. Notice of the jeopardy assessment shall be served on the person assessed or the person's authorized agent in the manner provided in section 5703.37 of the Revised Code within five days of the filing of the entry with the clerk. The total amount assessed shall be immediately due and payable, unless the person assessed files a petition for reassessment in accordance with division (C) of this section and provides security in a form satisfactory to the commissioner and in an amount sufficient to satisfy the unpaid balance of the assessment. Full or partial payment of the assessment shall not prejudice the commissioner's consideration of the petition for reassessment.

(F) The tax commissioner shall immediately forward to the treasurer of state all amounts the commissioner receives under this section. Such amounts shall be considered as revenue arising from the tax imposed by this chapter.

(G) If the tax commissioner possesses information indicating that the amount of tax a taxpayer is required to pay under this chapter exceeds the amount the reporting person for the taxpayer paid, the tax commissioner may audit a sample of the taxpayer's gross receipts over a representative period of time to ascertain the amount of tax due, and may issue an assessment based on the audit. The tax commissioner shall make a good faith effort to reach agreement with the taxpayer in selecting a representative sample. The tax commissioner may apply a sampling method only if the commissioner has prescribed the method by rule.

(H) If the whereabouts of a person subject to this chapter is not known to the tax commissioner, the secretary of state is hereby deemed to be that person's agent for purposes of service of process or notice of any assessment, action, or proceedings instituted in this state against the person under this chapter. Such process or notice shall be served on such person by the commissioner or by an agent of the commissioner by leaving a true and attested copy of the process or notice at the office of the secretary of state at least fifteen days before the return day of such process or notice, and by sending a copy of the process or notice to such person by ordinary mail, with an endorsement thereon of the service upon the secretary of state, addressed to such person at the person's last known address.

Last updated August 4, 2021 at 3:34 PM

Section 5726.21 | Penalties.

• Effective: March 27, 2013
• Latest Legislation: House Bill 510 - 129th General Assembly

(A) In addition to any other penalty imposed by this chapter or Chapter 5703. of the Revised Code, the following penalties shall apply:

(1) If a taxpayer required to file any report under this chapter fails to make and file the report within the time prescribed, a penalty may be imposed not exceeding the greater of fifty dollars per month or fraction of a month, not to exceed five hundred dollars, or five per cent per month or fraction of a month, not to exceed fifty per cent of the tax required to be shown on the report, for each month or fraction of a month elapsing between the due date and the date on which the report is filed.

(2) If a taxpayer fails to pay the amount of tax required to be paid under this chapter, except for estimated tax under section 5726.06 of the Revised Code, by the dates prescribed in this chapter for payment, a penalty may be imposed not exceeding fifteen per cent of the delinquent payment.

(3) If a taxpayer files what purports to be a report required by this chapter that does not contain information upon which the substantial correctness of the report may be judged or contains information that on its face indicates that the report is substantially incorrect, and the filing of the report in that manner is due to a position that is frivolous or a desire that is apparent from the report to delay or impede the administration of the tax levied under this chapter, a penalty of up to five hundred dollars may be imposed.

(4) If a taxpayer makes a fraudulent attempt to evade the reporting or payment of the tax required to be shown on any report required under this chapter, a penalty may be imposed not exceeding the greater of one thousand dollars or one hundred per cent of the tax required to be shown on the report.

(5) If a taxpayer makes a false or fraudulent claim for a refund under this chapter, a penalty may be imposed not exceeding the greater of one thousand dollars or one hundred per cent of the claim.

(B) The tax commissioner may collect any penalty imposed by this section in the same manner as the tax levied under this chapter. Penalties so collected shall be considered as revenue arising from the tax levied under this chapter.

(C) For purposes of this section, the tax required to be shown on the report shall be reduced by the amount of any part of the tax paid on or before the date prescribed for filing the report.

(D) The tax commissioner may abate all or a portion of any penalties imposed under this section and may adopt rules governing such abatements.

Section 5726.30 | Refunds.

• Effective: April 3, 2023
• Latest Legislation: House Bill 66 - 134th General Assembly

(A) The tax commissioner shall refund amounts imposed under this chapter that a person overpaid, paid illegally or erroneously, or paid on an illegal or erroneous assessment. The person shall file an application for refund with the tax commissioner, on the form prescribed by the commissioner, within four years after the date of the illegal or erroneous payment, or within any additional period allowed under division (B) of section 5726.20 of the Revised Code. The applicant shall provide the amount of the requested refund along with the claimed reasons for, and documentation to support, the issuance of a refund.

For purposes of this division, a payment that an applicant made before the due date for filing the report to which the payment relates shall be deemed to have been made on the due date of the report.

(B) Upon the filing of a refund application, the tax commissioner shall determine the amount of refund to which the applicant is entitled. If the amount is not less than that claimed, the commissioner shall certify the amount to the director of budget and management and treasurer of state for payment from the tax refund fund created under section 5703.052 of the Revised Code. If the amount is less than that claimed, the commissioner shall proceed in accordance with section 5703.70 of the Revised Code.

(C)(1) Except as provided in division (C)(2) of this section, interest on a refund applied for under this section, computed at the rate provided for in section 5703.47 of the Revised Code, shall be allowed from the later of the date the amount was paid or the date the payment was due until the refund is paid.

(2) No interest shall be allowed under this section on an amount refunded to a person to the extent that the refund results from the allowance of a refundable credit against the tax imposed by section 5726.02 of the Revised Code.

Last updated March 9, 2023 at 1:55 PM

Section 5726.31 | Application of refund to debt to the state.

• Effective: March 27, 2013
• Latest Legislation: House Bill 510 - 129th General Assembly

As used in this section, "debt to this state" means unpaid taxes due the state, unpaid workers' compensation premiums due under section 4123.35 of the Revised Code, unpaid unemployment compensation contributions due under section 4141.25 of the Revised Code, unpaid unemployment compensation payments in lieu of contributions due under section 4141.241 of the Revised Code, unpaid claims certified under section 131.02 or 131.021 of the Revised Code, unpaid fees payable to the state or to the clerk of courts pursuant to section 4505.06 of the Revised Code or any unpaid charge, penalty, or interest arising from any of the foregoing.

If a person entitled to a refund under section 5726.30 of the Revised Code owes any debt to this state, the amount refundable may be applied in satisfaction of the debt. If the amount refundable is less than the amount of the debt, it may be applied in partial satisfaction of the debt. If the amount refundable is greater than the amount of the debt, the amount remaining after satisfaction of the debt shall be refunded. If the taxpayer has more than one such debt, any debt subject to section 5739.33 or division (G) of section 5747.07 of the Revised Code shall be satisfied first.

Except as provided in section 131.021 of the Revised Code, this section applies only to debts that have become final. For the purposes of this section, a debt becomes final when, under the applicable law, any time provided for petition for reassessment, request for reconsideration, or other appeal of the legality or validity of the amount giving rise to the debt expires without an appeal having been filed in the manner provided by law.

The tax commissioner may charge each respective agency of the state for the commissioner's cost in applying refunds to debts due to the state and may charge the attorney general for the commissioner's cost in applying refunds to certified claims. The commissioner may promulgate rules to implement this section.

The commissioner may, with the consent of the reporting person for a taxpayer, provide for the crediting of the amount of any refund due to the taxpayer under this chapter for a tax year against the tax due for any succeeding tax year.

Section 5726.32 | Interest on unpaid taxes.

• Effective: March 27, 2013
• Latest Legislation: House Bill 510 - 129th General Assembly

If any tax due under this chapter is not paid on or before the date prescribed for its payment, interest shall be assessed, collected, and paid, in the same manner as the tax, upon such unpaid amount at the rate per annum prescribed by section 5703.47 of the Revised Code from the date prescribed for the payment of the tax until the date the tax is paid or the date an assessment is issued under section 5726.20 of the Revised Code, whichever is earlier. Interest so collected shall be considered as revenue arising from the tax imposed by this chapter.

Section 5726.33 | Interest or penalty on qualifying refund overpayment.

• Effective: March 27, 2013
• Latest Legislation: House Bill 510 - 129th General Assembly

(A) As used in this section, "qualifying refund overpayment" means an amount received by a taxpayer in excess of a refund claimed or a request for payment made by the reporting person for the taxpayer on a return, report, or other document filed with the tax commissioner.

(B) A taxpayer is not liable for any interest or penalty with respect to the repayment of a qualifying refund overpayment if the reporting person for the taxpayer pays the entire amount of the qualifying refund overpayment to the commissioner not later than thirty days after the taxpayer receives an assessment for the amount. If the reporting person does not pay the entire amount of the overpayment to the commissioner within the time prescribed by this section, interest shall accrue on the amount of the deficiency pursuant to section 5726.32 of the Revised Code from the date the commissioner issues the assessment until the date the deficiency is paid.

Section 5726.36 | Notification of changes in ownership or applicability of chapter.

• Effective: March 27, 2013
• Latest Legislation: House Bill 510 - 129th General Assembly

(A) A person shall notify the tax commissioner when the person is no longer subject to the tax imposed by this chapter.

(B) If the ownership structure of a financial institution changes such that a person is no longer includable in the annual report of the financial institution, the reporting person for the financial institution shall notify the commissioner of the change when the reporting person files its next annual report or in writing prior to the due date of that report.

Section 5726.40 | Cancellation of authority to to business in Ohio.

• Effective: March 27, 2013
• Latest Legislation: House Bill 510 - 129th General Assembly

If a person, wherever organized, doing business in this state or owning or issuing all or part of the entity's capital or property in this state, and required by law to file any report or return or to pay any tax or fee under Title LVII of the Revised Code, fails or neglects to make such report or return or to pay any such tax or fee for ninety days after the time prescribed by law for making such report or return or for paying such tax or fee, the tax commissioner shall certify such fact to the secretary of state. The secretary of state shall thereupon cancel the document of creation authorizing the person to do business in this state. Upon such cancellation, all of the powers, privileges, and franchises conferred upon that person by its document of creation shall cease, subject to section 1701.88 of the Revised Code. The secretary of state shall immediately notify the person of the action taken by the secretary, and shall also forward for filing a certificate of the action so taken to the county recorder of the county in which the principal place of business of the person in this state is located. No fee shall be charged for the filing.

Section 5726.41 | Penalty for continuing after cancellation.

• Effective: March 27, 2013
• Latest Legislation: House Bill 510 - 129th General Assembly

No person shall exercise, or attempt to exercise, any powers, privileges, or franchises under the person's document of creation after the document is canceled pursuant to section 5726.40 of the Revised Code. A penalty of one hundred dollars shall be imposed for each day a violation of this section occurs, up to a maximum penalty of five thousand dollars.

Section 5726.42 | Reinstatement.

• Effective: March 27, 2013
• Latest Legislation: House Bill 510 - 129th General Assembly

(A)(1) A person whose document of creation has been canceled by the secretary of state pursuant to section 5726.40 the Revised Code shall be reinstated and again entitled to exercise its rights, privileges, and franchises in this state upon compliance with all of the following:

(a) Filing with the secretary of state a certificate from the tax commissioner that the person has complied with all the requirements of law as to tax reports and paid all taxes, fees, or penalties due thereon for every year of delinquency;

(b) Payment to the secretary of state of any additional fees and penalties required to be paid to the secretary of state;

(c) Payment to the secretary of state of an additional fee of ten dollars.

Upon the person's compliance with this division, the secretary of state shall cancel the entry of cancellation filed under section 5726.40 of the Revised Code.

(2) If a reinstatement is not made within one year from the date of cancellation of the document of creation, and if it appears that a document of creation has been issued to a person of the same or similar name as the applicant for reinstatement, the secretary of state shall require, as a condition prerequisite to such reinstatement, that the applicant amend its document of creation by changing the applicant's name.

(B) Any officer, shareholder, creditor, or receiver of a person may at any time take all steps required by this section to effect a reinstatement.

(C) The rights, privileges, and franchises of a person whose document of creation has been reinstated in accordance with this section are subject to section 1701.922 of the Revised Code.

(D) Notwithstanding a violation of section 5726.41 of the Revised Code, upon reinstatement of a person's document of creation in accordance with this section, neither section 5726.40 nor section 5726.41 of the Revised Code shall be applied to invalidate the exercise or attempt to exercise any right, privilege, or franchise on behalf of the person by an officer, agent, or employee of the person after cancellation and prior to the reinstatement of the document of creation, if the conditions set forth in divisions (B)(1)(a) and (b) of section 1701.922 of the Revised Code are met.

Section 5726.43 | Quo warranto action.

• Effective: March 27, 2013
• Latest Legislation: House Bill 510 - 129th General Assembly

If any financial institution fails to make and file any return or report required under this chapter, or to pay the penalties provided by law for failure to make and file such reports or returns, for a period of ninety days after the time prescribed by law, the attorney general, on the request of the tax commissioner, shall commence an action in quo warranto in the court of appeals of the county in which the reporting person for the financial institution has its principal place of business in this state to forfeit and annul the privileges and franchises of each person included in the annual report of the financial institution. If the court is satisfied that any such financial institution is in default, it shall render judgment ousting each person included in the annual report of the financial institution from the exercise of its privileges and franchises within this state, and shall otherwise proceed as provided in sections 2733.01 to 2733.39 of the Revised Code.

Section 5726.50 | Tax credits for job creation.

• Effective: March 27, 2020
• Latest Legislation: House Bill 197 - 133rd General Assembly

(A) A taxpayer may claim a refundable tax credit against the tax imposed under this chapter for each person included in the annual report of the taxpayer that is granted a credit by the tax credit authority under section 122.17 or former division (B)(2) or (3) of section 122.171 of the Revised Code as those divisions existed before September 29, 2015. Such a credit shall not be claimed for any tax year following the calendar year in which a relocation of employment positions occurs in violation of an agreement entered into under section 122.17 or 122.171 of the Revised Code. For the purpose of making tax payments under this chapter, taxes equal to the amount of the refundable credit shall be considered to be paid on the first day of the tax year.

(B) A taxpayer may claim a nonrefundable tax credit against the tax imposed under this chapter for each person included in the annual report of the taxpayer that is granted a nonrefundable credit by the tax credit authority under division (B) of section 122.171 of the Revised Code. A taxpayer may claim against the tax imposed by this chapter any unused portion of the credits authorized under division (B) of section 5733.0610 of the Revised Code.

(C) The credits authorized in divisions (A) and (B) of this section shall be claimed in the order required under section 5726.98 of the Revised Code. If the amount of a credit authorized in division (A) of this section exceeds the tax otherwise due under section 5726.02 of the Revised Code after deducting all other credits preceding the credit in the order prescribed in section 5726.98 of the Revised Code, the excess shall be refunded to the taxpayer.

Section 5726.52 | Tax credit for historic building rehabilitation.

• Effective: March 27, 2013
• Latest Legislation: House Bill 510 - 129th General Assembly

(A) As used in this section, "certificate owner" has the same meaning as in section 149.311 of the Revised Code.

(B) A taxpayer may claim a refundable credit against the tax imposed by this chapter for each person included in the annual report of a taxpayer that is a certificate owner of a rehabilitation tax credit certificate issued under section 149.311 of the Revised Code. The credit shall equal twenty-five per cent of the dollar amount indicated on each certificate, but shall not exceed five million dollars for each certificate.

The credit shall be claimed for the calendar year specified in the certificate and in the order required under section 5726.98 of the Revised Code. If the credit exceeds the amount of tax otherwise due in that year, the excess shall be refunded to the taxpayer, provided that, if any amount of the credit is refunded, the sum of the amount refunded and the amount applied to reduce the tax otherwise due in that year shall not exceed three million dollars. The taxpayer may carry forward any balance of the credit in excess of the amount claimed in that year for not more than five ensuing years, and shall deduct any amount claimed in any such year from the amount claimed in an ensuing year. A taxpayer may claim against the tax imposed by this chapter any unused portion of the credit authorized under section 5725.151 of the Revised Code, but only to the extent of the five-year carry forward period authorized by that section.

(C) A taxpayer claiming a credit under this section shall retain the rehabilitation tax credit certificate for four years following the end of the year to which the credit was applied, and shall make the certificate available for inspection by the tax commissioner upon the request of the commissioner during that period.

Section 5726.53 | Tax credit for venture capital loan loss.

• Effective: March 27, 2013
• Latest Legislation: House Bill 510 - 129th General Assembly

A taxpayer may claim a refundable credit against the tax imposed by this chapter for each person included in the annual report of the taxpayer that was issued a tax credit certificate by the Ohio venture capital authority under section 150.07 of the Revised Code. The amount of the credit shall equal the amount specified in the tax credit certificate. The credit shall be claimed for the tax year specified in the tax credit certificate. The taxpayer shall claim the credit in the order required under section 5726.98 of the Revised Code. If the credit amount exceeds the tax otherwise due under section 5726.02 of the Revised Code after deducting all other credits preceding the credit in the order prescribed in section 5726.98 of the Revised Code, the excess shall be refunded to the taxpayer.

Section 5726.54 | New markets tax credit.

• Effective: September 29, 2015
• Latest Legislation: House Bill 64 - 131st General Assembly

(A) Any term used in this section has the same meaning as in section 5725.33 of the Revised Code.

(B) A taxpayer may claim a nonrefundable credit against the tax imposed by this chapter for each person included in the annual report of the taxpayer that holds a qualified equity investment on a credit allowance date occurring in the calendar year immediately preceding the tax year for which the tax is due. The credit shall be computed in the same manner prescribed for the computation of credits allowed under section 5725.33 of the Revised Code.

By claiming a tax credit under this section, a taxpayer waives its rights under section 5726.20 of the Revised Code with respect to the time limitation for the assessment of taxes as it relates to credits claimed under this section that later become subject to recapture under division (D) of this section.

A taxpayer may claim against the tax imposed by this chapter any unused portion of the credits authorized under sections 5725.33 and 5733.58 of the Revised Code, but only to the extent of the remaining carry forward period authorized by those sections.

The credit shall be claimed in the order prescribed by section 5726.98 of the Revised Code. If the amount of the credit exceeds the amount of tax otherwise due after deducting all other credits preceding the credit in the order prescribed in section 5726.98 of the Revised Code, the excess may be carried forward for not more than four ensuing tax years.

(C) The total amount of qualified equity investments on the basis of which credits may be claimed under this section and sections 5725.33, 5729.16, and 5733.58 of the Revised Code is subject to the limitation of division (C) of section 5725.33 of the Revised Code.

(D) If any amount of a federal tax credit allowed for a qualified equity investment for which a credit was received under this section is recaptured under section 45D of the Internal Revenue Code, or if the director of development services determines that an investment for which a tax credit is claimed under this section is not a qualified equity investment or that the proceeds of an investment for which a tax credit is claimed under this section are used to make qualified low-income community investments other than in a qualified active low-income community business in this state, all or a portion of the credit received on account of that investment shall be paid by the taxpayer that received the credit to the tax commissioner. The amount to be recovered shall be determined by the director pursuant to rules adopted under section 5725.33 of the Revised Code. The director shall certify any amount due under this division to the tax commissioner, and the commissioner shall notify the taxpayer of the amount due. The amount due is payable not later than thirty days after the day the commissioner issues the notice. The amount due shall be considered to be tax due under section 5726.02 of the Revised Code, and may be collected by assessment without regard to the limitations imposed under section 5726.20 of the Revised Code for the assessment of taxes by the commissioner. All amounts collected under this division shall be credited as revenue from the tax levied under section 5726.02 of the Revised Code.

Section 5726.55 | Motion picture production tax credit.

• Effective: March 27, 2013
• Latest Legislation: House Bill 510 - 129th General Assembly

(A) Any term used in this section has the same meaning as in section 122.85 of the Revised Code.

(B) A taxpayer may claim a refundable credit against the tax imposed under this chapter for each person included in the annual report of the taxpayer that is a certificate owner of a tax credit certificate issued under section 122.85 of the Revised Code. The credit shall be claimed for the taxable year in which the certificate is issued by the director of development services. The credit amount equals the amount stated in the certificate. The credit shall be claimed in the order required under section 5726.98 of the Revised Code. If the credit amount exceeds the tax otherwise due under section 5726.02 of the Revised Code after deducting all other credits preceding the credit in the order prescribed in section 5726.98 of the Revised Code, the excess shall be refunded to the taxpayer.

(C) Nothing in this section shall allow a taxpayer to claim more than one credit per tax credit-eligible production.

Section 5726.56 | Research and development tax credit.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) As used in this section, "qualified research expenses" has the same meaning as in section 41 of the Internal Revenue Code.

(B) A taxpayer may claim a nonrefundable credit against the tax imposed under this chapter equal to seven per cent of the excess of (1) the qualified research expenses incurred by the taxpayer in this state in a taxable year over (2) the average annual qualified research expenses incurred by the taxpayer in this state in the three previous taxable years. For the purposes of this division, "qualified research expenses incurred by the taxpayer" includes the qualified research expenses incurred by all persons included in the annual report of the taxpayer and by any insurance company subject to the tax levied under section 5725.18 or Chapter 5729. of the Revised Code that has more than fifty per cent of its ownership interests directly or indirectly owned or controlled by a person included in the annual report of the taxpayer, even though such an insurance company is not subject to the tax imposed under this chapter.

(C) A taxpayer shall claim the credit allowed under this section in the order prescribed by section 5726.98 of the Revised Code. If the amount of the credit exceeds the amount of tax otherwise due after deducting all other credits preceding the credit in the order prescribed in section 5726.98 of the Revised Code, the excess may be carried forward for not more than seven ensuing tax years. The amount of the excess credit claimed in any such year shall be deducted from the balance carried forward to the next tax year.

(D) A taxpayer may claim against the tax imposed under this chapter any unused portion of a credit authorized under section 5733.351 of the Revised Code but only to the extent of the remaining portion of the seven-year carry-forward period authorized by that section.

(E) In the case of a taxpayer that includes more than one person, each person in the financial institution group shall separately calculate the credit claimed under this section using the qualified research expenses incurred by that person on a form prescribed by the tax commissioner, which shall be used by the taxpayer to claim the credit.

A taxpayer may only claim the credit with respect to persons included in the financial institution group as of the thirty-first day of December of the taxable year in which the qualified research expenses are incurred. A taxpayer may only claim any excess credit carried forward under division (C) of this section with respect to persons included in that group as of the last day of the taxable year for which the return claiming the credit is filed.

(F) A taxpayer that claims a credit under this section shall retain records to substantiate the claim. Required records include those relating to any expenses used in calculating the credit and incurred in the current taxable year and in the three preceding taxable years.

The taxpayer shall retain the required records until the date that is four years after the due date for the return on which the credit was claimed or four years after the date the return was actually filed, whichever is later.

(G) The tax commissioner may audit a sample of the taxpayer's qualified research expenses over a representative period to ascertain the amount of tax credit the taxpayer may claim under this section and may issue an assessment under section 5726.20 of the Revised Code based on the audit. The commissioner shall make a good faith effort to reach an agreement with the taxpayer in selecting a representative sample. The commissioner is not, however, precluded from proceeding under this division if an agreement is not made.

Last updated August 8, 2023 at 11:32 AM

Section 5726.57 | Nonrefundable credit for qualifying dealers in intangibles.

• Effective: March 27, 2013
• Latest Legislation: House Bill 510 - 129th General Assembly

(A) As used in this section, "qualifying dealer in intangibles" means a dealer in intangibles that is a member of a qualifying controlled group of which a financial institution is also a member on the first day of the financial institution's tax year.

(B) For tax year 2014 there is hereby allowed to each financial institution a nonrefundable credit against the tax imposed by section 5726.02 of the Revised Code. The amount of the credit shall be computed in accordance with division (C) of this section. The credit shall be claimed in the order prescribed by section 5726.98 of the Revised Code. The credit shall not exceed the amount of tax otherwise due under section 5726.02 of the Revised Code after deducting any other credits that precede the credit claimed under this section in that order.

(C) Subject to division (D) of this section, the amount of the credit equals the lesser of the amount described in division (C)(1) of this section or in division (C)(2) of this section.

(1) The amount of tax that a qualifying dealer in intangibles paid under Chapter 5707. of the Revised Code during the calendar year immediately preceding the financial institution's tax year. Such amount shall be reduced, but not below zero, by any refunds of such tax received by the qualifying dealer in intangibles under Chapter 5703. of the Revised Code during that calendar year.

(2) The product of the amounts described in divisions (C)(2)(a) to (c) of this section.

(a) The cost of the financial institution's direct investment in the capital stock of the qualifying dealer in intangibles calculated on the last day of the financial institution's taxable year immediately preceding the tax year;

(b) The ratio described in section 5725.15 of the Revised Code for the calendar year immediately preceding the financial institution's tax year;

(c) The tax rate imposed under division (D) of section 5707.03 of the Revised Code for the calendar year immediately preceding the financial institution's tax year.

(D)(1) The principles and concepts described in section 5733.057 of the Revised Code shall apply in determining whether a dealer in intangibles is a member of a qualifying controlled group of which the financial institution also is a member and to ascertain the cost of the financial institution's direct investment in the capital stock of the qualifying dealer in intangibles.

(2) Notwithstanding section 5703.56 of the Revised Code to the contrary, a financial institution claiming the credit provided by this section has the burden to establish by a preponderance of the evidence that the doctrines enumerated in that section would not apply to deny to the financial institution all or a part of the credit otherwise provided by this section.

Section 5726.58 | State low-income housing tax credit.

• Effective: April 30, 2024
• Latest Legislation: House Bill 101 - 135th General Assembly

(A) Terms used in this section have the same meanings as in section 175.16 of the Revised Code.

(B) A taxpayer may claim a nonrefundable tax credit against the tax imposed under section 5726.02 of the Revised Code for each person included in the annual report of the taxpayer that is allocated a credit issued by the executive director of the Ohio housing finance agency under section 175.16 of the Revised Code. The credit equals the amount allocated to such person for the taxable year and reported by the designated reporter on the form prescribed by division (I) of section 175.16 of the Revised Code.

The credit authorized in this section shall be claimed in the order required under section 5726.98 of the Revised Code. If the amount of a credit exceeds the tax otherwise due under section 5726.02 of the Revised Code after deducting all other credits preceding the credit in the order prescribed in section 5726.98 of the Revised Code, the excess may be carried forward for not more than five ensuing tax years. The amount of the excess credit claimed in any such year shall be deducted from the balance carried forward to the next tax year.

No credit shall be claimed under this section to the extent the credit was claimed under section 5725.36, 5729.19, or 5747.83 of the Revised Code.

Last updated February 12, 2024 at 9:18 AM

Section 5726.59 | Film and theater capital improvement tax credit.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) Any term used in this section has the same meaning as in section 122.852 of the Revised Code.

(B) A taxpayer may claim a refundable credit against the tax imposed under this chapter for each person included in the annual report of the taxpayer that is a certificate owner of a tax credit certificate issued under section 122.852 of the Revised Code. The credit shall be claimed for the taxable year in which the certificate is issued by the director of development. The credit amount equals the amount stated on the certificate or the portion of that amount owned by the certificate owner. The credit shall be claimed in the order required under section 5726.98 of the Revised Code. If the credit amount exceeds the tax otherwise due under section 5726.02 of the Revised Code after deducting all other credits preceding the credit in the order prescribed in section 5726.98 of the Revised Code, the excess shall be refunded to the taxpayer.

Last updated August 31, 2023 at 5:01 PM

Section 5726.60 | Tax credit for single-family housing development.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) Terms used in this section have the same meanings as in section 175.17 of the Revised Code.

(B) A taxpayer may claim a nonrefundable tax credit against the tax imposed under this chapter for each person included in the annual report of the taxpayer that is allocated a credit issued by the executive director of the Ohio housing finance agency under section 175.17 of the Revised Code. The credit equals the amount allocated to such person for the taxable year as provided by the designated reporter on the form prescribed by division (H) of section 175.17 of the Revised Code.

The credit authorized in this section shall be claimed in the order required under section 5726.98 of the Revised Code. If the amount of a credit exceeds the tax otherwise due under section 5726.02 of the Revised Code after deducting all other credits preceding the credit in the order prescribed in section 5726.98 of the Revised Code, the excess may be carried forward for not more than five ensuing tax years. The amount of the excess credit claimed in any such year shall be deducted from the balance carried forward to the next tax year.

No credit shall be claimed under this section to the extent the credit was claimed under section 5725.37, 5729.20, or 5747.84 of the Revised Code.

Last updated August 31, 2023 at 5:01 PM

Section 5726.98 | Calculating tax due.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(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:

The nonrefundable job retention credit under division (B) of section 5726.50 of the Revised Code;

The nonrefundable credit for purchases of qualified low-income community investments under section 5726.54 of the Revised Code;

The nonrefundable credit for qualified research expenses under section 5726.56 of the Revised Code;

The nonrefundable credit for qualifying dealer in intangibles taxes under section 5726.57 of the Revised Code;

The nonrefundable Ohio low-income housing tax credit under section 5726.58 of the Revised Code;

The nonrefundable affordable single-family home credit under section 5726.60 of the Revised Code;

The nonrefundable welcome home Ohio (WHO) program credit under section 122.633 of the Revised Code;

The refundable credit for rehabilitating an historic building under section 5726.52 of the Revised Code;

The refundable job retention or job creation credit under division (A) of section 5726.50 of the Revised Code;

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;

The refundable motion picture and broadway theatrical production credit under section 5726.55 of the Revised Code;

The refundable credit for film and theater capital improvement projects under section 5726.59 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.

Last updated August 8, 2023 at 11:49 AM

Section 5726.99 | Minimum and maximum fines.

• Effective: March 27, 2013
• Latest Legislation: House Bill 510 - 129th General Assembly

Whoever violates section 5726.41 of the Revised Code shall be fined not less than one hundred dollars or more than one thousand dollars.