Bill Text: OH HB188 | 2013-2014 | 130th General Assembly | Introduced

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Bill Title: To change the computation of the income tax joint filer credit so that the credit results in joint filers paying the same amount of combined tax on a joint return as they would on separate returns.

Spectrum: Strong Partisan Bill (Republican 11-1)

Status: (Introduced - Dead) 2013-06-04 - To Ways and Means [HB188 Detail]

Download: Ohio-2013-HB188-Introduced.html

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As Introduced

130th General Assembly Regular Session 2013-2014

H. B. No. 188

Representative Becker 

Cosponsors: Representatives Butler, Brenner, Buchy, Adams, J., Young, Hood, Roegner, Maag, Terhar, Retherford, Reece 

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A BILL

To amend section 5747.05 of the Revised Code to

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change the computation of the income tax joint

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filer credit so that the credit results in joint

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filers paying the same amount of combined tax on a

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joint return as they would on separate returns.

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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That section 5747.05 of the Revised Code be	6
amended to read as follows:	7

Sec. 5747.05.  As used in this section, "income tax" includes	8
both a tax on net income and a tax measured by net income.	9

The following credits shall be allowed against the income tax	10
imposed by section 5747.02 of the Revised Code on individuals and	11
estates:	12

(A)(1) The amount of tax otherwise due under section 5747.02	13
of the Revised Code on such portion of the adjusted gross income	14
of any nonresident taxpayer that is not allocable to this state	15
pursuant to sections 5747.20 to 5747.23 of the Revised Code;	16

(2) The credit provided under this division shall not exceed	17
the portion of the total tax due under section 5747.02 of the	18
Revised Code that the amount of the nonresident taxpayer's	19
adjusted gross income not allocated to this state pursuant to	20
sections 5747.20 to 5747.23 of the Revised Code bears to the total	21
adjusted gross income of the nonresident taxpayer derived from all	22
sources everywhere.	23

(3) The tax commissioner may enter into an agreement with the	24
taxing authorities of any state or of the District of Columbia	25
that imposes an income tax to provide that compensation paid in	26
this state to a nonresident taxpayer shall not be subject to the	27
tax levied in section 5747.02 of the Revised Code so long as	28
compensation paid in such other state or in the District of	29
Columbia to a resident taxpayer shall likewise not be subject to	30
the income tax of such other state or of the District of Columbia.	31

(B) The lesser of division (B)(1) or (2) of this section:

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(1) The amount of tax otherwise due under section 5747.02 of	33
the Revised Code on such portion of the adjusted gross income of a	34
resident taxpayer that in another state or in the District of	35
Columbia is subjected to an income tax. The credit provided under	36
division (B)(1) of this section shall not exceed the portion of	37
the total tax due under section 5747.02 of the Revised Code that	38
the amount of the resident taxpayer's adjusted gross income	39
subjected to an income tax in the other state or in the District	40
of Columbia bears to the total adjusted gross income of the	41
resident taxpayer derived from all sources everywhere.	42

(2) The amount of income tax liability to another state or	43
the District of Columbia on the portion of the adjusted gross	44
income of a resident taxpayer that in another state or in the	45
District of Columbia is subjected to an income tax. The credit	46
provided under division (B)(2) of this section shall not exceed	47
the amount of tax otherwise due under section 5747.02 of the	48
Revised Code.	49

(3) If the credit provided under division (B) of this section	50
is affected by a change in either the portion of adjusted gross	51
income of a resident taxpayer subjected to an income tax in	52
another state or the District of Columbia or the amount of income	53
tax liability that has been paid to another state or the District	54
of Columbia, the taxpayer shall report the change to the tax	55
commissioner within sixty days of the change in such form as the	56
commissioner requires.	57

(a) In the case of an underpayment, the report shall be	58
accompanied by payment of any additional tax due as a result of	59
the reduction in credit together with interest on the additional	60
tax and is a return subject to assessment under section 5747.13 of	61
the Revised Code solely for the purpose of assessing any	62
additional tax due under this division, together with any	63
applicable penalty and interest. It shall not reopen the	64
computation of the taxpayer's tax liability under this chapter	65
from a previously filed return no longer subject to assessment	66
except to the extent that such liability is affected by an	67
adjustment to the credit allowed by division (B) of this section.	68

(b) In the case of an overpayment, an application for refund	69
may be filed under this division within the sixty-day period	70
prescribed for filing the report even if it is beyond the period	71
prescribed in section 5747.11 of the Revised Code if it otherwise	72
conforms to the requirements of such section. An application filed	73
under this division shall only claim refund of overpayments	74
resulting from an adjustment to the credit allowed by division (B)	75
of this section unless it is also filed within the time prescribed	76
in section 5747.11 of the Revised Code. It shall not reopen the	77
computation of the taxpayer's tax liability except to the extent	78
that such liability is affected by an adjustment to the credit	79
allowed by division (B) of this section.	80

(4) No credit shall be allowed under division (B) of this	81
section for income tax paid or accrued to another state or to the	82
District of Columbia if the taxpayer, when computing federal	83
adjusted gross income, has directly or indirectly deducted, or was	84
required to directly or indirectly deduct, the amount of that	85
income tax.	86

(C) For a taxpayer sixty-five years of age or older during	87
the taxable year, a credit for such year equal to fifty dollars	88
for each return required to be filed under section 5747.08 of the	89
Revised Code.	90

(D) A taxpayer sixty-five years of age or older during the	91
taxable year who has received a lump-sum distribution from a	92
pension, retirement, or profit-sharing plan in the taxable year	93
may elect to receive a credit under this division in lieu of the	94
credit to which the taxpayer is entitled under division (C) of	95
this section. A taxpayer making such election shall receive a	96
credit for the taxable year equal to fifty dollars times the	97
taxpayer's expected remaining life as shown by annuity tables	98
issued under the provisions of the Internal Revenue Code and in	99
effect for the calendar year which includes the last day of the	100
taxable year. A taxpayer making an election under this division is	101
not entitled to the credit authorized under division (C) of this	102
section in subsequent taxable years except that if such election	103
was made prior to July 1, 1983, the taxpayer is entitled to	104
one-half the credit authorized under such division in subsequent	105
taxable years but may not make another election under this	106
division.	107

(E) A taxpayer who is not sixty-five years of age or older	108
during the taxable year who has received a lump-sum distribution	109
from a pension, retirement, or profit-sharing plan in a taxable	110
year ending on or before July 31, 1991, may elect to take a credit	111
against the tax otherwise due under this chapter for such year	112
equal to fifty dollars times the expected remaining life of a	113
taxpayer sixty-five years of age as shown by annuity tables issued	114
under the provisions of the Internal Revenue Code and in effect	115
for the calendar year which includes the last day of the taxable	116
year. A taxpayer making an election under this division is not	117
entitled to a credit under division (C) or (D) of this section in	118
any subsequent year except that if such election was made prior to	119
July 1, 1983, the taxpayer is entitled to one-half the credit	120
authorized under division (C) of this section in subsequent years	121
but may not make another election under this division. No taxpayer	122
may make an election under this division for a taxable year ending	123
on or after August 1, 1991.	124

(F) A taxpayer making an election under either division (D)	125
or (E) of this section may make only one such election in the	126
taxpayer's lifetime.	127

(G)(1) On a joint return filed by a husband and wife, each of	128
whom had adjusted gross income of at least five hundred dollars,	129
exclusive of interest, dividends and distributions, royalties,	130
rent, and capital gains, a nonrefundable credit equal to the	131
percentage shown in the table contained in this division of the	132
amount of tax duedifference of the amount of tax shown to be due	133
on the joint return minus the husband's and wife's minimum	134
combined amount of tax, after allowing for any other credit that	135
precedes the credit under this division in the order required	136
under section 5747.98 of the Revised Code.	137

(2) The credit to which a taxpayer is entitled under this	138
division in any taxable year is the percentage shown in column B	139
that corresponds with the taxpayer's adjusted gross income, less	140
exemptions for the taxable year:	141

A.

B.

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IF THE ADJUSTED GROSS INCOME, LESS EXEMPTIONS, FOR THE TAX YEAR IS:

THE CREDIT FOR THE TAXABLE YEAR IS:

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$25,000 or less		20%		144
More than $25,000 but not more than $50,000		15%		145
More than $50,000 but not more than $75,000		10%		146
More than $75,000		5%		147

(3) The credit allowed under this division shall not exceed	148
six hundred fifty dollars in any taxable yearAs used in this	149
division:	150

(a) "Minimum combined amount of tax" means the sum of the tax	151
that would be due on the husband's and wife's returns if the	152
husband and wife filed separate returns, notwithstanding division	153
(E) of section 5747.08 of the Revised Code, if the husband and	154
wife made all adjustments and claimed all credits to which the	155
husband and wife would be required or allowed to make or claim on	156
each separate return. For the purpose of calculating "minimum	157
combined amount of tax," adjustments or credits that could be	158
taken or claimed by either the husband or wife on the husband's or	159
wife's separate return shall be claimed by each spouse in a manner	160
that would result in the least combined tax due.	161

(b) "Adjustment" means a deduction taken on a federal income	162
tax return that is included in the computation of the husband's or	163
the wife's federal adjusted gross income or an addition or	164
deduction described in division (A) of section 5747.01 of the	165
Revised Code and allowed to the husband or wife.	166

(c) "Credit" means any credit described in section 5747.98 of	167
the Revised Code.	168

(H) No claim for credit under this section shall be allowed	169
unless the claimant furnishes such supporting information as the	170
tax commissioner prescribes by rules. Each credit under this	171
section shall be claimed in the order required under section	172
5747.98 of the Revised Code.	173

(I) An individual who is a resident for part of a taxable	174
year and a nonresident for the remainder of the taxable year is	175
allowed the credits under divisions (A) and (B) of this section in	176
accordance with rules prescribed by the tax commissioner. In no	177
event shall the same income be subject to both credits.	178

(J) The credit allowed under division (A) of this section	179
shall be calculated based upon the amount of tax due under section	180
5747.02 of the Revised Code after subtracting any other credits	181
that precede the credit under that division in the order required	182
under section 5747.98 of the Revised Code. The credit allowed	183
under division (B) of this section shall be calculated based upon	184
the amount of tax due under section 5747.02 of the Revised Code	185
after subtracting any other credits that precede the credit under	186
that division in the order required under section 5747.98 of the	187
Revised Code.	188

(K) No credit shall be allowed under division (B) of this	189
section unless the taxpayer furnishes such proof as the tax	190
commissioner shall require that the income tax liability has been	191
paid to another state or the District of Columbia.	192

(L) No credit shall be allowed under division (B) of this	193
section for compensation that is not subject to the income tax of	194
another state or the District of Columbia as the result of an	195
agreement entered into by the tax commissioner under division	196
(A)(3) of this section.	197

Section 2.  That existing section 5747.05 of the Revised Code	198
is hereby repealed.	199

Section 3. The amendment by this act of section 5747.05 of	200
the Revised Code applies to taxable years beginning on or after	201
January 1, 2013.	202