Bill Text: OH HB74 | 2009-2010 | 128th General Assembly | Introduced

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Bill Title: Regarding limits on mandatory overtime for nurses, tuition reimbursement for nursing education, tax credits for nursing professors, and tax deductions for nurse aides.

Spectrum: Partisan Bill (Democrat 9-0)

Status: (Introduced - Dead) 2009-03-17 - To Healthcare Access & Affordability [HB74 Detail]

Download: Ohio-2009-HB74-Introduced.html

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As Introduced

128th General Assembly Regular Session 2009-2010

H. B. No. 74

Representative Weddington 

Cosponsors: Representatives Harris, Luckie, Winburn, Williams, S., Okey, Letson, Phillips, Chandler 

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A BILL

To amend sections 5747.01, 5747.08, and 5747.98 and

1

to enact sections 3727.18, 3727.181, 3727.182,

2

3727.183, 3727.184, 3727.185, 3727.186, 3727.187,

3

4723.11, 4723.111, and 5747.72 of the Revised Code

4

regarding limits on mandatory overtime for nurses,

5

tuition reimbursement for nursing education, tax

6

credits for nursing professors, and tax deductions

7

for nurse aides.

8

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

Section 1. That sections 5747.01, 5747.08, and 5747.98 be	9
amended and sections 3727.18, 3727.181, 3727.182, 3727.183,	10
3727.184, 3727.185, 3727.186, 3727.187, 4723.11, 4723.111, and	11
5747.72 of the Revised Code be enacted to read as follows:	12

Sec. 3727.18. As used in sections 3727.181 to 3727.183 of the	13
Revised Code:	14

(A) "Overtime" means an amount of time that is worked in	15
excess of an agreed upon, predetermined, regularly scheduled	16
full-time or part-time work week.	17

(B) "Registered nurse" and "licensed practical nurse" have	18
the same meanings as in section 4723.01 of the Revised Code.	19

Sec. 3727.181. No hospital shall directly or indirectly	20
require a registered nurse or licensed practical nurse to work	21
overtime as a condition of continued employment with the hospital.	22

Sec. 3727.182. Actions by a hospital that constitute	23
violations of section 3727.181 of the Revised Code include both of	24
the following:	25

(A) Terminating or proposing to terminate the employment of a	26
registered nurse or licensed practical nurse with the hospital	27
solely because the nurse chooses not to work overtime;	28

(B) Taking or proposing to take disciplinary or retaliatory	29
action against a registered nurse or licensed practical nurse	30
solely because the nurse chooses not to work overtime.	31

Sec. 3727.183. (A) Section 3727.181 of the Revised Code does	32
not prohibit any of the following:	33

(1) A registered nurse or licensed practical nurse from	34
voluntarily working overtime;	35

(2) A hospital from offering overtime to a registered nurse	36
or licensed practical nurse or permitting a registered nurse or	37
licensed practical nurse to work overtime when the nurse chooses;	38

(3) A hospital from requesting or scheduling a registered	39
nurse or licensed practical nurse to work overtime if the hospital	40
is experiencing a staffing shortage as a direct result of an	41
occasion or instance that has been publicly declared as an	42
emergency or disaster by the governor of this state or the	43
president of the United States.	44

(B) Section 3727.181 of the Revised Code does not affect any	45
conflicting provisions of labor agreements entered into by	46
employee organizations and employers with regard to the overtime a	47
registered nurse or licensed practical nurse is required to work	48
in a hospital.	49

Sec. 3727.184. (A) If the department of health determines	50
that a violation of section 3727.181 of the Revised Code may have	51
occurred, the department shall notify the hospital and afford the	52
hospital an opportunity for an adjudication conducted in	53
accordance with Chapter 119. of the Revised Code. If the hospital	54
fails to request an adjudication or the department determines	55
after conducting an adjudication that the violation has occurred,	56
the department shall impose a civil money penalty on the hospital	57
of not more than ten thousand dollars. If more than one violation	58
is involved, the department shall impose a separate civil money	59
penalty for each violation.	60

(B) On request of the department, the attorney general shall	61
bring and prosecute to judgment a civil action to collect any	62
civil money penalty imposed under division (A) of this section	63
that remains unpaid.	64

(C) All amounts collected under this section shall be	65
deposited into the state treasury to the credit of the general	66
operations fund created under section 3701.83 of the Revised Code	67
and shall be used solely for purposes of enforcing section	68
3727.181 of the Revised Code.	69

Sec. 3727.185. Through the attorney general or an appropriate	70
prosecuting attorney, the director of health may apply to the	71
court of common pleas of the county in which a hospital is located	72
for a temporary or permanent injunction restraining the hospital	73
from violating section 3727.181 of the Revised Code. On a showing	74
that the violation has occurred, the court shall grant an order	75
enjoining the violation.	76

Sec. 3727.186.  The remedies provided for in sections	77
3727.184 and 3727.185 of the Revised Code are in addition to all	78
penalties and other remedies available under this chapter or any	79
other provision of the Revised Code.	80

Sec. 3727.187. The department of health shall adopt rules as	81
the department considers necessary to implement sections 3727.18	82
and 3727.181 to 3727.186 of the Revised Code. The rules shall be	83
adopted in accordance with Chapter 119. of the Revised Code.	84

Sec. 4723.11. As used in this section and section 4723.111 of	85
the Revised Code:	86

(A) "Qualified nurse" means an individual who, after July 1,	87
2009, completed a board of nursing approved prelicensure nursing	88
education program from a private or public institution in this	89
state and holds a valid license to practice nursing as a	90
registered nurse in this state.	91

(B) "Prelicensure nursing education program" means the	92
post-secondary education leading to the degree or diploma required	93
by the board of nursing to be eligible to take the examination for	94
licensure as a registered nurse.	95

(C) "Hospital" means a hospital as defined in section 3727.01	96
of the Revised Code, or a similar institution operated by the	97
department of mental health.	98

(D) "Nursing education instructional costs" for a given	99
university means the annual cost of instructional and general fees	100
for enrollment in a prelicensure nursing education program.	101

(E) "Statewide average nursing education instructional costs"	102
means the calculated statewide average of the nursing education	103
instructional costs for all the state universities listed in	104
section 3345.011 of the Revised Code that offer prelicensure	105
nursing education programs, plus an estimated amount for the	106
annual purchase of necessary textbooks.	107

Sec. 4723.111. (A)(1) There is hereby established the nursing	108
education reimbursement program, which shall be administered by	109
the board of nursing. Under the program, any qualified nurse who	110
completes two years of full-time employment in a hospital in this	111
state shall be reimbursed for the lesser of the following:	112

(a) One year of statewide average nursing education	113
instructional costs, as calculated for the year in which the nurse	114
completed the prelicensure nursing education program;	115

(b) The average annual actual costs of the prelicensure	116
nursing education program instructional costs for the nurse,	117
documented in accordance with rules adopted pursuant to division	118
(B)(2) of this section, plus an estimated amount for the annual	119
purchase of necessary textbooks.	120

(2) Except as provided in division (A)(3) of this section,	121
for each additional year of full-time employment in a hospital in	122
this state, the nurse shall be reimbursed for one additional year	123
of instructional costs, the amount of reimbursement to be	124
determined in the same manner as under division (A)(1) of this	125
section.	126

(3) The maximum number of years of instructional costs for	127
which a nurse may be reimbursed under the program is the lesser of	128
the following:	129

(a) The number of years the nurse was enrolled as a full-time	130
student in a prelicensure nursing education program;	131

(b) Five years.

132

(B) The board of nursing shall adopt rules under Chapter	133
119. of the Revised Code for the reimbursement of qualified nurses	134
under the program. The rules shall provide for all of the	135
following:	136

(1) The annual calculation of the statewide average nursing	137
education instructional costs for that year;	138

(2) Requirements for qualified nurses to document their	139
completion of a prelicensure nursing education program at a	140
private or public institution in this state, the number of years	141
in which they were enrolled in such a program, and the average	142
cost of instructional and general fees and textbooks for the	143
years in which they were enrolled;	144

(3) Requirements for qualified nurses to document their	145
full-time employment by hospitals in this state;	146

(4) Application procedures and deadlines for filing for	147
reimbursement under the program.	148

Sec. 5747.01.  Except as otherwise expressly provided or	149
clearly appearing from the context, any term used in this chapter	150
that is not otherwise defined in this section has the same meaning	151
as when used in a comparable context in the laws of the United	152
States relating to federal income taxes or if not used in a	153
comparable context in those laws, has the same meaning as in	154
section 5733.40 of the Revised Code. Any reference in this chapter	155
to the Internal Revenue Code includes other laws of the United	156
States relating to federal income taxes.	157

As used in this chapter:

158

(A) "Adjusted gross income" or "Ohio adjusted gross income"	159
means federal adjusted gross income, as defined and used in the	160
Internal Revenue Code, adjusted as provided in this section:	161

(1) Add interest or dividends on obligations or securities of	162
any state or of any political subdivision or authority of any	163
state, other than this state and its subdivisions and authorities.	164

(2) Add interest or dividends on obligations of any	165
authority, commission, instrumentality, territory, or possession	166
of the United States to the extent that the interest or dividends	167
are exempt from federal income taxes but not from state income	168
taxes.	169

(3) Deduct interest or dividends on obligations of the United	170
States and its territories and possessions or of any authority,	171
commission, or instrumentality of the United States to the extent	172
that the interest or dividends are included in federal adjusted	173
gross income but exempt from state income taxes under the laws of	174
the United States.	175

(4) Deduct disability and survivor's benefits to the extent	176
included in federal adjusted gross income.	177

(5) Deduct benefits under Title II of the Social Security Act	178
and tier 1 railroad retirement benefits to the extent included in	179
federal adjusted gross income under section 86 of the Internal	180
Revenue Code.	181

(6) In the case of a taxpayer who is a beneficiary of a trust	182
that makes an accumulation distribution as defined in section 665	183
of the Internal Revenue Code, add, for the beneficiary's taxable	184
years beginning before 2002, the portion, if any, of such	185
distribution that does not exceed the undistributed net income of	186
the trust for the three taxable years preceding the taxable year	187
in which the distribution is made to the extent that the portion	188
was not included in the trust's taxable income for any of the	189
trust's taxable years beginning in 2002 or thereafter.	190
"Undistributed net income of a trust" means the taxable income of	191
the trust increased by (a)(i) the additions to adjusted gross	192
income required under division (A) of this section and (ii) the	193
personal exemptions allowed to the trust pursuant to section	194
642(b) of the Internal Revenue Code, and decreased by (b)(i) the	195
deductions to adjusted gross income required under division (A) of	196
this section, (ii) the amount of federal income taxes attributable	197
to such income, and (iii) the amount of taxable income that has	198
been included in the adjusted gross income of a beneficiary by	199
reason of a prior accumulation distribution. Any undistributed net	200
income included in the adjusted gross income of a beneficiary	201
shall reduce the undistributed net income of the trust commencing	202
with the earliest years of the accumulation period.	203

(7) Deduct the amount of wages and salaries, if any, not	204
otherwise allowable as a deduction but that would have been	205
allowable as a deduction in computing federal adjusted gross	206
income for the taxable year, had the targeted jobs credit allowed	207
and determined under sections 38, 51, and 52 of the Internal	208
Revenue Code not been in effect.	209

(8) Deduct any interest or interest equivalent on public	210
obligations and purchase obligations to the extent that the	211
interest or interest equivalent is included in federal adjusted	212
gross income.	213

(9) Add any loss or deduct any gain resulting from the sale,	214
exchange, or other disposition of public obligations to the extent	215
that the loss has been deducted or the gain has been included in	216
computing federal adjusted gross income.	217

(10) Deduct or add amounts, as provided under section	218
5747.70 of the Revised Code, related to contributions to variable	219
college savings program accounts made or tuition units purchased	220
pursuant to Chapter 3334. of the Revised Code.	221

(11)(a) Deduct, to the extent not otherwise allowable as a	222
deduction or exclusion in computing federal or Ohio adjusted gross	223
income for the taxable year, the amount the taxpayer paid during	224
the taxable year for medical care insurance and qualified	225
long-term care insurance for the taxpayer, the taxpayer's spouse,	226
and dependents. No deduction for medical care insurance under	227
division (A)(11) of this section shall be allowed either to any	228
taxpayer who is eligible to participate in any subsidized health	229
plan maintained by any employer of the taxpayer or of the	230
taxpayer's spouse, or to any taxpayer who is entitled to, or on	231
application would be entitled to, benefits under part A of Title	232
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.	233
301, as amended. For the purposes of division (A)(11)(a) of this	234
section, "subsidized health plan" means a health plan for which	235
the employer pays any portion of the plan's cost. The deduction	236
allowed under division (A)(11)(a) of this section shall be the net	237
of any related premium refunds, related premium reimbursements, or	238
related insurance premium dividends received during the taxable	239
year.	240

(b) Deduct, to the extent not otherwise deducted or excluded	241
in computing federal or Ohio adjusted gross income during the	242
taxable year, the amount the taxpayer paid during the taxable	243
year, not compensated for by any insurance or otherwise, for	244
medical care of the taxpayer, the taxpayer's spouse, and	245
dependents, to the extent the expenses exceed seven and one-half	246
per cent of the taxpayer's federal adjusted gross income.	247

(c) For purposes of division (A)(11) of this section,	248
"medical care" has the meaning given in section 213 of the	249
Internal Revenue Code, subject to the special rules, limitations,	250
and exclusions set forth therein, and "qualified long-term care"	251
has the same meaning given in section 7702B(c) of the Internal	252
Revenue Code.	253

(12)(a) Deduct any amount included in federal adjusted gross	254
income solely because the amount represents a reimbursement or	255
refund of expenses that in any year the taxpayer had deducted as	256
an itemized deduction pursuant to section 63 of the Internal	257
Revenue Code and applicable United States department of the	258
treasury regulations. The deduction otherwise allowed under	259
division (A)(12)(a) of this section shall be reduced to the extent	260
the reimbursement is attributable to an amount the taxpayer	261
deducted under this section in any taxable year.	262

(b) Add any amount not otherwise included in Ohio adjusted	263
gross income for any taxable year to the extent that the amount is	264
attributable to the recovery during the taxable year of any amount	265
deducted or excluded in computing federal or Ohio adjusted gross	266
income in any taxable year.	267

(13) Deduct any portion of the deduction described in section	268
1341(a)(2) of the Internal Revenue Code, for repaying previously	269
reported income received under a claim of right, that meets both	270
of the following requirements:	271

(a) It is allowable for repayment of an item that was	272
included in the taxpayer's adjusted gross income for a prior	273
taxable year and did not qualify for a credit under division (A)	274
or (B) of section 5747.05 of the Revised Code for that year;	275

(b) It does not otherwise reduce the taxpayer's adjusted	276
gross income for the current or any other taxable year.	277

(14) Deduct an amount equal to the deposits made to, and net	278
investment earnings of, a medical savings account during the	279
taxable year, in accordance with section 3924.66 of the Revised	280
Code. The deduction allowed by division (A)(14) of this section	281
does not apply to medical savings account deposits and earnings	282
otherwise deducted or excluded for the current or any other	283
taxable year from the taxpayer's federal adjusted gross income.	284

(15)(a) Add an amount equal to the funds withdrawn from a	285
medical savings account during the taxable year, and the net	286
investment earnings on those funds, when the funds withdrawn were	287
used for any purpose other than to reimburse an account holder	288
for, or to pay, eligible medical expenses, in accordance with	289
section 3924.66 of the Revised Code;	290

(b) Add the amounts distributed from a medical savings	291
account under division (A)(2) of section 3924.68 of the Revised	292
Code during the taxable year.	293

(16) Add any amount claimed as a credit under section	294
5747.059 of the Revised Code to the extent that such amount	295
satisfies either of the following:	296

(a) The amount was deducted or excluded from the computation	297
of the taxpayer's federal adjusted gross income as required to be	298
reported for the taxpayer's taxable year under the Internal	299
Revenue Code;	300

(b) The amount resulted in a reduction of the taxpayer's	301
federal adjusted gross income as required to be reported for any	302
of the taxpayer's taxable years under the Internal Revenue Code.	303

(17) Deduct the amount contributed by the taxpayer to an	304
individual development account program established by a county	305
department of job and family services pursuant to sections 329.11	306
to 329.14 of the Revised Code for the purpose of matching funds	307
deposited by program participants. On request of the tax	308
commissioner, the taxpayer shall provide any information that, in	309
the tax commissioner's opinion, is necessary to establish the	310
amount deducted under division (A)(17) of this section.	311

(18) Beginning in taxable year 2001 but not for any taxable	312
year beginning after December 31, 2005, if the taxpayer is married	313
and files a joint return and the combined federal adjusted gross	314
income of the taxpayer and the taxpayer's spouse for the taxable	315
year does not exceed one hundred thousand dollars, or if the	316
taxpayer is single and has a federal adjusted gross income for the	317
taxable year not exceeding fifty thousand dollars, deduct amounts	318
paid during the taxable year for qualified tuition and fees paid	319
to an eligible institution for the taxpayer, the taxpayer's	320
spouse, or any dependent of the taxpayer, who is a resident of	321
this state and is enrolled in or attending a program that	322
culminates in a degree or diploma at an eligible institution. The	323
deduction may be claimed only to the extent that qualified tuition	324
and fees are not otherwise deducted or excluded for any taxable	325
year from federal or Ohio adjusted gross income. The deduction may	326
not be claimed for educational expenses for which the taxpayer	327
claims a credit under section 5747.27 of the Revised Code.	328

(19) Add any reimbursement received during the taxable year	329
of any amount the taxpayer deducted under division (A)(18) of this	330
section in any previous taxable year to the extent the amount is	331
not otherwise included in Ohio adjusted gross income.	332

(20)(a)(i) Add five-sixths of the amount of depreciation	333
expense allowed by subsection (k) of section 168 of the Internal	334
Revenue Code, including the taxpayer's proportionate or	335
distributive share of the amount of depreciation expense allowed	336
by that subsection to a pass-through entity in which the taxpayer	337
has a direct or indirect ownership interest.	338

(ii) Add five-sixths of the amount of qualifying section 179	339
depreciation expense, including a person's proportionate or	340
distributive share of the amount of qualifying section 179	341
depreciation expense allowed to any pass-through entity in which	342
the person has a direct or indirect ownership. For the purposes of	343
this division, "qualifying section 179 depreciation expense" means	344
the difference between (I) the amount of depreciation expense	345
directly or indirectly allowed to the taxpayer under section 179	346
of the Internal Revenue Code, and (II) the amount of depreciation	347
expense directly or indirectly allowed to the taxpayer under	348
section 179 of the Internal Revenue Code as that section existed	349
on December 31, 2002.	350

The tax commissioner, under procedures established by the	351
commissioner, may waive the add-backs related to a pass-through	352
entity if the taxpayer owns, directly or indirectly, less than	353
five per cent of the pass-through entity.	354

(b) Nothing in division (A)(20) of this section shall be	355
construed to adjust or modify the adjusted basis of any asset.	356

(c) To the extent the add-back required under division	357
(A)(20)(a) of this section is attributable to property generating	358
nonbusiness income or loss allocated under section 5747.20 of the	359
Revised Code, the add-back shall be sitused to the same location	360
as the nonbusiness income or loss generated by the property for	361
the purpose of determining the credit under division (A) of	362
section 5747.05 of the Revised Code. Otherwise, the add-back shall	363
be apportioned, subject to one or more of the four alternative	364
methods of apportionment enumerated in section 5747.21 of the	365
Revised Code.	366

(d) For the purposes of division (A) of this section, net	367
operating loss carryback and carryforward shall not include	368
five-sixths of the allowance of any net operating loss deduction	369
carryback or carryforward to the taxable year to the extent such	370
loss resulted from depreciation allowed by section 168(k) of the	371
Internal Revenue Code and by the qualifying section 179	372
depreciation expense amount.	373

(21)(a) If the taxpayer was required to add an amount under	374
division (A)(20)(a) of this section for a taxable year, deduct	375
one-fifth of the amount so added for each of the five succeeding	376
taxable years.	377

(b) If the amount deducted under division (A)(21)(a) of this	378
section is attributable to an add-back allocated under division	379
(A)(20)(c) of this section, the amount deducted shall be sitused	380
to the same location. Otherwise, the add-back shall be apportioned	381
using the apportionment factors for the taxable year in which the	382
deduction is taken, subject to one or more of the four alternative	383
methods of apportionment enumerated in section 5747.21 of the	384
Revised Code.	385

(c) No deduction is available under division (A)(21)(a) of	386
this section with regard to any depreciation allowed by section	387
168(k) of the Internal Revenue Code and by the qualifying section	388
179 depreciation expense amount to the extent that such	389
depreciation resulted in or increased a federal net operating loss	390
carryback or carryforward to a taxable year to which division	391
(A)(20)(d) of this section does not apply.	392

(22) Deduct, to the extent not otherwise deducted or excluded	393
in computing federal or Ohio adjusted gross income for the taxable	394
year, the amount the taxpayer received during the taxable year as	395
reimbursement for life insurance premiums under section 5919.31 of	396
the Revised Code.	397

(23) Deduct, to the extent not otherwise deducted or excluded	398
in computing federal or Ohio adjusted gross income for the taxable	399
year, the amount the taxpayer received during the taxable year as	400
a death benefit paid by the adjutant general under section 5919.33	401
of the Revised Code.	402

(24) Deduct, to the extent included in federal adjusted gross	403
income and not otherwise allowable as a deduction or exclusion in	404
computing federal or Ohio adjusted gross income for the taxable	405
year, military pay and allowances received by the taxpayer during	406
the taxable year for active duty service in the United States	407
army, air force, navy, marine corps, or coast guard or reserve	408
components thereof or the national guard. The deduction may not be	409
claimed for military pay and allowances received by the taxpayer	410
while the taxpayer is stationed in this state.	411

(25) Deduct, to the extent not otherwise allowable as a	412
deduction or exclusion in computing federal or Ohio adjusted gross	413
income for the taxable year and not otherwise compensated for by	414
any other source, the amount of qualified organ donation expenses	415
incurred by the taxpayer during the taxable year, not to exceed	416
ten thousand dollars. A taxpayer may deduct qualified organ	417
donation expenses only once for all taxable years beginning with	418
taxable years beginning in 2007.	419

For the purposes of division (A)(25) of this section:

420

(a) "Human organ" means all or any portion of a human liver,	421
pancreas, kidney, intestine, or lung, and any portion of human	422
bone marrow.	423

(b) "Qualified organ donation expenses" means travel	424
expenses, lodging expenses, and wages and salary forgone by a	425
taxpayer in connection with the taxpayer's donation, while living,	426
of one or more of the taxpayer's human organs to another human	427
being.	428

(26) Deduct, to the extent not otherwise deducted or excluded	429
in computing federal or Ohio adjusted gross income for the taxable	430
year, amounts received by the taxpayer as retired military	431
personnel pay for service in the United States army, navy, air	432
force, coast guard, or marine corps or reserve components thereof,	433
or the national guard, or received by the surviving spouse or	434
former spouse of such a taxpayer under the survivor benefit plan	435
on account of such a taxpayer's death. If the taxpayer receives	436
income on account of retirement paid under the federal civil	437
service retirement system or federal employees retirement system,	438
or under any successor retirement program enacted by the congress	439
of the United States that is established and maintained for	440
retired employees of the United States government, and such	441
retirement income is based, in whole or in part, on credit for	442
the taxpayer's military service, the deduction allowed under this	443
division shall include only that portion of such retirement	444
income that is attributable to the taxpayer's military service,	445
to the extent that portion of such retirement income is otherwise	446
included in federal adjusted gross income and is not otherwise	447
deducted under this section. Any amount deducted under division	448
(A)(26) of this section is not included in a taxpayer's	449
adjusted gross income for the purposes of section 5747.055 of	450
the Revised Code. No amount may be deducted under division	451
(A)(26) of this section on the basis of which a credit was	452
claimed under section 5747.055 of the Revised Code.	453

(27) Deduct, to the extent not otherwise deducted or excluded	454
in computing federal or Ohio adjusted gross income for the taxable	455
year, the amount the taxpayer received during the taxable year	456
from the military injury relief fund created in section 5101.98 of	457
the Revised Code.	458

(28) Deduct an amount equal to fifty per cent of the	459
compensation received for personal services rendered in this state	460
by the taxpayer as a nurse aide, as defined in section 3721.21 of	461
the Revised Code, who satisfies division (B) or (C) of section	462
3721.28 of the Revised Code, to the extent such compensation is	463
not otherwise deducted or excluded in computing federal or Ohio	464
adjusted gross income for the taxable year.	465

(B) "Business income" means income, including gain or loss,	466
arising from transactions, activities, and sources in the regular	467
course of a trade or business and includes income, gain, or loss	468
from real property, tangible property, and intangible property if	469
the acquisition, rental, management, and disposition of the	470
property constitute integral parts of the regular course of a	471
trade or business operation. "Business income" includes income,	472
including gain or loss, from a partial or complete liquidation of	473
a business, including, but not limited to, gain or loss from the	474
sale or other disposition of goodwill.	475

(C) "Nonbusiness income" means all income other than business	476
income and may include, but is not limited to, compensation, rents	477
and royalties from real or tangible personal property, capital	478
gains, interest, dividends and distributions, patent or copyright	479
royalties, or lottery winnings, prizes, and awards.	480

(D) "Compensation" means any form of remuneration paid to an	481
employee for personal services.	482

(E) "Fiduciary" means a guardian, trustee, executor,	483
administrator, receiver, conservator, or any other person acting	484
in any fiduciary capacity for any individual, trust, or estate.	485

(F) "Fiscal year" means an accounting period of twelve months	486
ending on the last day of any month other than December.	487

(G) "Individual" means any natural person.

488

(H) "Internal Revenue Code" means the "Internal Revenue Code	489
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.	490

(I) "Resident" means any of the following, provided that	491
division (I)(3) of this section applies only to taxable years of a	492
trust beginning in 2002 or thereafter:	493

(1) An individual who is domiciled in this state, subject to	494
section 5747.24 of the Revised Code;	495

(2) The estate of a decedent who at the time of death was	496
domiciled in this state. The domicile tests of section 5747.24 of	497
the Revised Code are not controlling for purposes of division	498
(I)(2) of this section.	499

(3) A trust that, in whole or part, resides in this state. If	500
only part of a trust resides in this state, the trust is a	501
resident only with respect to that part.	502

For the purposes of division (I)(3) of this section:

503

(a) A trust resides in this state for the trust's current	504
taxable year to the extent, as described in division (I)(3)(d) of	505
this section, that the trust consists directly or indirectly, in	506
whole or in part, of assets, net of any related liabilities, that	507
were transferred, or caused to be transferred, directly or	508
indirectly, to the trust by any of the following:	509

(i) A person, a court, or a governmental entity or	510
instrumentality on account of the death of a decedent, but only if	511
the trust is described in division (I)(3)(e)(i) or (ii) of this	512
section;	513

(ii) A person who was domiciled in this state for the	514
purposes of this chapter when the person directly or indirectly	515
transferred assets to an irrevocable trust, but only if at least	516
one of the trust's qualifying beneficiaries is domiciled in this	517
state for the purposes of this chapter during all or some portion	518
of the trust's current taxable year;	519

(iii) A person who was domiciled in this state for the	520
purposes of this chapter when the trust document or instrument or	521
part of the trust document or instrument became irrevocable, but	522
only if at least one of the trust's qualifying beneficiaries is a	523
resident domiciled in this state for the purposes of this chapter	524
during all or some portion of the trust's current taxable year. If	525
a trust document or instrument became irrevocable upon the death	526
of a person who at the time of death was domiciled in this state	527
for purposes of this chapter, that person is a person described in	528
division (I)(3)(a)(iii) of this section.	529

(b) A trust is irrevocable to the extent that the transferor	530
is not considered to be the owner of the net assets of the trust	531
under sections 671 to 678 of the Internal Revenue Code.	532

(c) With respect to a trust other than a charitable lead	533
trust, "qualifying beneficiary" has the same meaning as "potential	534
current beneficiary" as defined in section 1361(e)(2) of the	535
Internal Revenue Code, and with respect to a charitable lead trust	536
"qualifying beneficiary" is any current, future, or contingent	537
beneficiary, but with respect to any trust "qualifying	538
beneficiary" excludes a person or a governmental entity or	539
instrumentality to any of which a contribution would qualify for	540
the charitable deduction under section 170 of the Internal Revenue	541
Code.	542

(d) For the purposes of division (I)(3)(a) of this section,	543
the extent to which a trust consists directly or indirectly, in	544
whole or in part, of assets, net of any related liabilities, that	545
were transferred directly or indirectly, in whole or part, to the	546
trust by any of the sources enumerated in that division shall be	547
ascertained by multiplying the fair market value of the trust's	548
assets, net of related liabilities, by the qualifying ratio, which	549
shall be computed as follows:	550

(i) The first time the trust receives assets, the numerator	551
of the qualifying ratio is the fair market value of those assets	552
at that time, net of any related liabilities, from sources	553
enumerated in division (I)(3)(a) of this section. The denominator	554
of the qualifying ratio is the fair market value of all the	555
trust's assets at that time, net of any related liabilities.	556

(ii) Each subsequent time the trust receives assets, a	557
revised qualifying ratio shall be computed. The numerator of the	558
revised qualifying ratio is the sum of (1) the fair market value	559
of the trust's assets immediately prior to the subsequent	560
transfer, net of any related liabilities, multiplied by the	561
qualifying ratio last computed without regard to the subsequent	562
transfer, and (2) the fair market value of the subsequently	563
transferred assets at the time transferred, net of any related	564
liabilities, from sources enumerated in division (I)(3)(a) of this	565
section. The denominator of the revised qualifying ratio is the	566
fair market value of all the trust's assets immediately after the	567
subsequent transfer, net of any related liabilities.	568

(iii) Whether a transfer to the trust is by or from any of	569
the sources enumerated in division (I)(3)(a) of this section shall	570
be ascertained without regard to the domicile of the trust's	571
beneficiaries.	572

(e) For the purposes of division (I)(3)(a)(i) of this	573
section:	574

(i) A trust is described in division (I)(3)(e)(i) of this	575
section if the trust is a testamentary trust and the testator of	576
that testamentary trust was domiciled in this state at the time of	577
the testator's death for purposes of the taxes levied under	578
Chapter 5731. of the Revised Code.	579

(ii) A trust is described in division (I)(3)(e)(ii) of this	580
section if the transfer is a qualifying transfer described in any	581
of divisions (I)(3)(f)(i) to (vi) of this section, the trust is an	582
irrevocable inter vivos trust, and at least one of the trust's	583
qualifying beneficiaries is domiciled in this state for purposes	584
of this chapter during all or some portion of the trust's current	585
taxable year.	586

(f) For the purposes of division (I)(3)(e)(ii) of this	587
section, a "qualifying transfer" is a transfer of assets, net of	588
any related liabilities, directly or indirectly to a trust, if the	589
transfer is described in any of the following:	590

(i) The transfer is made to a trust, created by the decedent	591
before the decedent's death and while the decedent was domiciled	592
in this state for the purposes of this chapter, and, prior to the	593
death of the decedent, the trust became irrevocable while the	594
decedent was domiciled in this state for the purposes of this	595
chapter.	596

(ii) The transfer is made to a trust to which the decedent,	597
prior to the decedent's death, had directly or indirectly	598
transferred assets, net of any related liabilities, while the	599
decedent was domiciled in this state for the purposes of this	600
chapter, and prior to the death of the decedent the trust became	601
irrevocable while the decedent was domiciled in this state for the	602
purposes of this chapter.	603

(iii) The transfer is made on account of a contractual	604
relationship existing directly or indirectly between the	605
transferor and either the decedent or the estate of the decedent	606
at any time prior to the date of the decedent's death, and the	607
decedent was domiciled in this state at the time of death for	608
purposes of the taxes levied under Chapter 5731. of the Revised	609
Code.	610

(iv) The transfer is made to a trust on account of a	611
contractual relationship existing directly or indirectly between	612
the transferor and another person who at the time of the	613
decedent's death was domiciled in this state for purposes of this	614
chapter.	615

(v) The transfer is made to a trust on account of the will of	616
a testator.	617

(vi) The transfer is made to a trust created by or caused to	618
be created by a court, and the trust was directly or indirectly	619
created in connection with or as a result of the death of an	620
individual who, for purposes of the taxes levied under Chapter	621
5731. of the Revised Code, was domiciled in this state at the time	622
of the individual's death.	623

(g) The tax commissioner may adopt rules to ascertain the	624
part of a trust residing in this state.	625

(J) "Nonresident" means an individual or estate that is not a	626
resident. An individual who is a resident for only part of a	627
taxable year is a nonresident for the remainder of that taxable	628
year.	629

(K) "Pass-through entity" has the same meaning as in section	630
5733.04 of the Revised Code.	631

(L) "Return" means the notifications and reports required to	632
be filed pursuant to this chapter for the purpose of reporting the	633
tax due and includes declarations of estimated tax when so	634
required.	635

(M) "Taxable year" means the calendar year or the taxpayer's	636
fiscal year ending during the calendar year, or fractional part	637
thereof, upon which the adjusted gross income is calculated	638
pursuant to this chapter.	639

(N) "Taxpayer" means any person subject to the tax imposed by	640
section 5747.02 of the Revised Code or any pass-through entity	641
that makes the election under division (D) of section 5747.08 of	642
the Revised Code.	643

(O) "Dependents" means dependents as defined in the Internal	644
Revenue Code and as claimed in the taxpayer's federal income tax	645
return for the taxable year or which the taxpayer would have been	646
permitted to claim had the taxpayer filed a federal income tax	647
return.	648

(P) "Principal county of employment" means, in the case of a	649
nonresident, the county within the state in which a taxpayer	650
performs services for an employer or, if those services are	651
performed in more than one county, the county in which the major	652
portion of the services are performed.	653

(Q) As used in sections 5747.50 to 5747.55 of the Revised	654
Code:	655

(1) "Subdivision" means any county, municipal corporation,	656
park district, or township.	657

(2) "Essential local government purposes" includes all	658
functions that any subdivision is required by general law to	659
exercise, including like functions that are exercised under a	660
charter adopted pursuant to the Ohio Constitution.	661

(R) "Overpayment" means any amount already paid that exceeds	662
the figure determined to be the correct amount of the tax.	663

(S) "Taxable income" or "Ohio taxable income" applies only to	664
estates and trusts, and means federal taxable income, as defined	665
and used in the Internal Revenue Code, adjusted as follows:	666

(1) Add interest or dividends, net of ordinary, necessary,	667
and reasonable expenses not deducted in computing federal taxable	668
income, on obligations or securities of any state or of any	669
political subdivision or authority of any state, other than this	670
state and its subdivisions and authorities, but only to the extent	671
that such net amount is not otherwise includible in Ohio taxable	672
income and is described in either division (S)(1)(a) or (b) of	673
this section:	674

(a) The net amount is not attributable to the S portion of an	675
electing small business trust and has not been distributed to	676
beneficiaries for the taxable year;	677

(b) The net amount is attributable to the S portion of an	678
electing small business trust for the taxable year.	679

(2) Add interest or dividends, net of ordinary, necessary,	680
and reasonable expenses not deducted in computing federal taxable	681
income, on obligations of any authority, commission,	682
instrumentality, territory, or possession of the United States to	683
the extent that the interest or dividends are exempt from federal	684
income taxes but not from state income taxes, but only to the	685
extent that such net amount is not otherwise includible in Ohio	686
taxable income and is described in either division (S)(1)(a) or	687
(b) of this section;	688

(3) Add the amount of personal exemption allowed to the	689
estate pursuant to section 642(b) of the Internal Revenue Code;	690

(4) Deduct interest or dividends, net of related expenses	691
deducted in computing federal taxable income, on obligations of	692
the United States and its territories and possessions or of any	693
authority, commission, or instrumentality of the United States to	694
the extent that the interest or dividends are exempt from state	695
taxes under the laws of the United States, but only to the extent	696
that such amount is included in federal taxable income and is	697
described in either division (S)(1)(a) or (b) of this section;	698

(5) Deduct the amount of wages and salaries, if any, not	699
otherwise allowable as a deduction but that would have been	700
allowable as a deduction in computing federal taxable income for	701
the taxable year, had the targeted jobs credit allowed under	702
sections 38, 51, and 52 of the Internal Revenue Code not been in	703
effect, but only to the extent such amount relates either to	704
income included in federal taxable income for the taxable year or	705
to income of the S portion of an electing small business trust for	706
the taxable year;	707

(6) Deduct any interest or interest equivalent, net of	708
related expenses deducted in computing federal taxable income, on	709
public obligations and purchase obligations, but only to the	710
extent that such net amount relates either to income included in	711
federal taxable income for the taxable year or to income of the S	712
portion of an electing small business trust for the taxable year;	713

(7) Add any loss or deduct any gain resulting from sale,	714
exchange, or other disposition of public obligations to the extent	715
that such loss has been deducted or such gain has been included in	716
computing either federal taxable income or income of the S portion	717
of an electing small business trust for the taxable year;	718

(8) Except in the case of the final return of an estate, add	719
any amount deducted by the taxpayer on both its Ohio estate tax	720
return pursuant to section 5731.14 of the Revised Code, and on its	721
federal income tax return in determining federal taxable income;	722

(9)(a) Deduct any amount included in federal taxable income	723
solely because the amount represents a reimbursement or refund of	724
expenses that in a previous year the decedent had deducted as an	725
itemized deduction pursuant to section 63 of the Internal Revenue	726
Code and applicable treasury regulations. The deduction otherwise	727
allowed under division (S)(9)(a) of this section shall be reduced	728
to the extent the reimbursement is attributable to an amount the	729
taxpayer or decedent deducted under this section in any taxable	730
year.	731

(b) Add any amount not otherwise included in Ohio taxable	732
income for any taxable year to the extent that the amount is	733
attributable to the recovery during the taxable year of any amount	734
deducted or excluded in computing federal or Ohio taxable income	735
in any taxable year, but only to the extent such amount has not	736
been distributed to beneficiaries for the taxable year.	737

(10) Deduct any portion of the deduction described in section	738
1341(a)(2) of the Internal Revenue Code, for repaying previously	739
reported income received under a claim of right, that meets both	740
of the following requirements:	741

(a) It is allowable for repayment of an item that was	742
included in the taxpayer's taxable income or the decedent's	743
adjusted gross income for a prior taxable year and did not qualify	744
for a credit under division (A) or (B) of section 5747.05 of the	745
Revised Code for that year.	746

(b) It does not otherwise reduce the taxpayer's taxable	747
income or the decedent's adjusted gross income for the current or	748
any other taxable year.	749

(11) Add any amount claimed as a credit under section	750
5747.059 of the Revised Code to the extent that the amount	751
satisfies either of the following:	752

(a) The amount was deducted or excluded from the computation	753
of the taxpayer's federal taxable income as required to be	754
reported for the taxpayer's taxable year under the Internal	755
Revenue Code;	756

(b) The amount resulted in a reduction in the taxpayer's	757
federal taxable income as required to be reported for any of the	758
taxpayer's taxable years under the Internal Revenue Code.	759

(12) Deduct any amount, net of related expenses deducted in	760
computing federal taxable income, that a trust is required to	761
report as farm income on its federal income tax return, but only	762
if the assets of the trust include at least ten acres of land	763
satisfying the definition of "land devoted exclusively to	764
agricultural use" under section 5713.30 of the Revised Code,	765
regardless of whether the land is valued for tax purposes as such	766
land under sections 5713.30 to 5713.38 of the Revised Code. If the	767
trust is a pass-through entity investor, section 5747.231 of the	768
Revised Code applies in ascertaining if the trust is eligible to	769
claim the deduction provided by division (S)(12) of this section	770
in connection with the pass-through entity's farm income.	771

Except for farm income attributable to the S portion of an	772
electing small business trust, the deduction provided by division	773
(S)(12) of this section is allowed only to the extent that the	774
trust has not distributed such farm income. Division (S)(12) of	775
this section applies only to taxable years of a trust beginning in	776
2002 or thereafter.	777

(13) Add the net amount of income described in section 641(c)	778
of the Internal Revenue Code to the extent that amount is not	779
included in federal taxable income.	780

(14) Add or deduct the amount the taxpayer would be required	781
to add or deduct under division (A)(20) or (21) of this section if	782
the taxpayer's Ohio taxable income were computed in the same	783
manner as an individual's Ohio adjusted gross income is computed	784
under this section. In the case of a trust, division (S)(14) of	785
this section applies only to any of the trust's taxable years	786
beginning in 2002 or thereafter.	787

(T) "School district income" and "school district income tax"	788
have the same meanings as in section 5748.01 of the Revised Code.	789

(U) As used in divisions (A)(8), (A)(9), (S)(6), and (S)(7)	790
of this section, "public obligations," "purchase obligations," and	791
"interest or interest equivalent" have the same meanings as in	792
section 5709.76 of the Revised Code.	793

(V) "Limited liability company" means any limited liability	794
company formed under Chapter 1705. of the Revised Code or under	795
the laws of any other state.	796

(W) "Pass-through entity investor" means any person who,	797
during any portion of a taxable year of a pass-through entity, is	798
a partner, member, shareholder, or equity investor in that	799
pass-through entity.	800

(X) "Banking day" has the same meaning as in section 1304.01	801
of the Revised Code.	802

(Y) "Month" means a calendar month.

803

(Z) "Quarter" means the first three months, the second three	804
months, the third three months, or the last three months of the	805
taxpayer's taxable year.	806

(AA)(1) "Eligible institution" means a state university or	807
state institution of higher education as defined in section	808
3345.011 of the Revised Code, or a private, nonprofit college,	809
university, or other post-secondary institution located in this	810
state that possesses a certificate of authorization issued by the	811
Ohio board of regents pursuant to Chapter 1713. of the Revised	812
Code or a certificate of registration issued by the state board of	813
career colleges and schools under Chapter 3332. of the Revised	814
Code.	815

(2) "Qualified tuition and fees" means tuition and fees	816
imposed by an eligible institution as a condition of enrollment or	817
attendance, not exceeding two thousand five hundred dollars in	818
each of the individual's first two years of post-secondary	819
education. If the individual is a part-time student, "qualified	820
tuition and fees" includes tuition and fees paid for the academic	821
equivalent of the first two years of post-secondary education	822
during a maximum of five taxable years, not exceeding a total of	823
five thousand dollars. "Qualified tuition and fees" does not	824
include:	825

(a) Expenses for any course or activity involving sports,	826
games, or hobbies unless the course or activity is part of the	827
individual's degree or diploma program;	828

(b) The cost of books, room and board, student activity fees,	829
athletic fees, insurance expenses, or other expenses unrelated to	830
the individual's academic course of instruction;	831

(c) Tuition, fees, or other expenses paid or reimbursed	832
through an employer, scholarship, grant in aid, or other	833
educational benefit program.	834

(BB)(1) "Modified business income" means the business income	835
included in a trust's Ohio taxable income after such taxable	836
income is first reduced by the qualifying trust amount, if any.	837

(2) "Qualifying trust amount" of a trust means capital gains	838
and losses from the sale, exchange, or other disposition of equity	839
or ownership interests in, or debt obligations of, a qualifying	840
investee to the extent included in the trust's Ohio taxable	841
income, but only if the following requirements are satisfied:	842

(a) The book value of the qualifying investee's physical	843
assets in this state and everywhere, as of the last day of the	844
qualifying investee's fiscal or calendar year ending immediately	845
prior to the date on which the trust recognizes the gain or loss,	846
is available to the trust.	847

(b) The requirements of section 5747.011 of the Revised Code	848
are satisfied for the trust's taxable year in which the trust	849
recognizes the gain or loss.	850

Any gain or loss that is not a qualifying trust amount is	851
modified business income, qualifying investment income, or	852
modified nonbusiness income, as the case may be.	853

(3) "Modified nonbusiness income" means a trust's Ohio	854
taxable income other than modified business income, other than the	855
qualifying trust amount, and other than qualifying investment	856
income, as defined in section 5747.012 of the Revised Code, to the	857
extent such qualifying investment income is not otherwise part of	858
modified business income.	859

(4) "Modified Ohio taxable income" applies only to trusts,	860
and means the sum of the amounts described in divisions (BB)(4)(a)	861
to (c) of this section:	862

(a) The fraction, calculated under section 5747.013, and	863
applying section 5747.231 of the Revised Code, multiplied by the	864
sum of the following amounts:	865

(i) The trust's modified business income;

866

(ii) The trust's qualifying investment income, as defined in	867
section 5747.012 of the Revised Code, but only to the extent the	868
qualifying investment income does not otherwise constitute	869
modified business income and does not otherwise constitute a	870
qualifying trust amount.	871

(b) The qualifying trust amount multiplied by a fraction, the	872
numerator of which is the sum of the book value of the qualifying	873
investee's physical assets in this state on the last day of the	874
qualifying investee's fiscal or calendar year ending immediately	875
prior to the day on which the trust recognizes the qualifying	876
trust amount, and the denominator of which is the sum of the book	877
value of the qualifying investee's total physical assets	878
everywhere on the last day of the qualifying investee's fiscal or	879
calendar year ending immediately prior to the day on which the	880
trust recognizes the qualifying trust amount. If, for a taxable	881
year, the trust recognizes a qualifying trust amount with respect	882
to more than one qualifying investee, the amount described in	883
division (BB)(4)(b) of this section shall equal the sum of the	884
products so computed for each such qualifying investee.	885

(c)(i) With respect to a trust or portion of a trust that is	886
a resident as ascertained in accordance with division (I)(3)(d) of	887
this section, its modified nonbusiness income.	888

(ii) With respect to a trust or portion of a trust that is	889
not a resident as ascertained in accordance with division	890
(I)(3)(d) of this section, the amount of its modified nonbusiness	891
income satisfying the descriptions in divisions (B)(2) to (5) of	892
section 5747.20 of the Revised Code, except as otherwise provided	893
in division (BB)(4)(c)(ii) of this section. With respect to a	894
trust or portion of a trust that is not a resident as ascertained	895
in accordance with division (I)(3)(d) of this section, the trust's	896
portion of modified nonbusiness income recognized from the sale,	897
exchange, or other disposition of a debt interest in or equity	898
interest in a section 5747.212 entity, as defined in section	899
5747.212 of the Revised Code, without regard to division (A) of	900
that section, shall not be allocated to this state in accordance	901
with section 5747.20 of the Revised Code but shall be apportioned	902
to this state in accordance with division (B) of section 5747.212	903
of the Revised Code without regard to division (A) of that	904
section.	905

If the allocation and apportionment of a trust's income under	906
divisions (BB)(4)(a) and (c) of this section do not fairly	907
represent the modified Ohio taxable income of the trust in this	908
state, the alternative methods described in division (C) of	909
section 5747.21 of the Revised Code may be applied in the manner	910
and to the same extent provided in that section.	911

(5)(a) Except as set forth in division (BB)(5)(b) of this	912
section, "qualifying investee" means a person in which a trust has	913
an equity or ownership interest, or a person or unit of government	914
the debt obligations of either of which are owned by a trust. For	915
the purposes of division (BB)(2)(a) of this section and for the	916
purpose of computing the fraction described in division (BB)(4)(b)	917
of this section, all of the following apply:	918

(i) If the qualifying investee is a member of a qualifying	919
controlled group on the last day of the qualifying investee's	920
fiscal or calendar year ending immediately prior to the date on	921
which the trust recognizes the gain or loss, then "qualifying	922
investee" includes all persons in the qualifying controlled group	923
on such last day.	924

(ii) If the qualifying investee, or if the qualifying	925
investee and any members of the qualifying controlled group of	926
which the qualifying investee is a member on the last day of the	927
qualifying investee's fiscal or calendar year ending immediately	928
prior to the date on which the trust recognizes the gain or loss,	929
separately or cumulatively own, directly or indirectly, on the	930
last day of the qualifying investee's fiscal or calendar year	931
ending immediately prior to the date on which the trust recognizes	932
the qualifying trust amount, more than fifty per cent of the	933
equity of a pass-through entity, then the qualifying investee and	934
the other members are deemed to own the proportionate share of the	935
pass-through entity's physical assets which the pass-through	936
entity directly or indirectly owns on the last day of the	937
pass-through entity's calendar or fiscal year ending within or	938
with the last day of the qualifying investee's fiscal or calendar	939
year ending immediately prior to the date on which the trust	940
recognizes the qualifying trust amount.	941

(iii) For the purposes of division (BB)(5)(a)(iii) of this	942
section, "upper level pass-through entity" means a pass-through	943
entity directly or indirectly owning any equity of another	944
pass-through entity, and "lower level pass-through entity" means	945
that other pass-through entity.	946

An upper level pass-through entity, whether or not it is also	947
a qualifying investee, is deemed to own, on the last day of the	948
upper level pass-through entity's calendar or fiscal year, the	949
proportionate share of the lower level pass-through entity's	950
physical assets that the lower level pass-through entity directly	951
or indirectly owns on the last day of the lower level pass-through	952
entity's calendar or fiscal year ending within or with the last	953
day of the upper level pass-through entity's fiscal or calendar	954
year. If the upper level pass-through entity directly and	955
indirectly owns less than fifty per cent of the equity of the	956
lower level pass-through entity on each day of the upper level	957
pass-through entity's calendar or fiscal year in which or with	958
which ends the calendar or fiscal year of the lower level	959
pass-through entity and if, based upon clear and convincing	960
evidence, complete information about the location and cost of the	961
physical assets of the lower pass-through entity is not available	962
to the upper level pass-through entity, then solely for purposes	963
of ascertaining if a gain or loss constitutes a qualifying trust	964
amount, the upper level pass-through entity shall be deemed as	965
owning no equity of the lower level pass-through entity for each	966
day during the upper level pass-through entity's calendar or	967
fiscal year in which or with which ends the lower level	968
pass-through entity's calendar or fiscal year. Nothing in division	969
(BB)(5)(a)(iii) of this section shall be construed to provide for	970
any deduction or exclusion in computing any trust's Ohio taxable	971
income.	972

(b) With respect to a trust that is not a resident for the	973
taxable year and with respect to a part of a trust that is not a	974
resident for the taxable year, "qualifying investee" for that	975
taxable year does not include a C corporation if both of the	976
following apply:	977

(i) During the taxable year the trust or part of the trust	978
recognizes a gain or loss from the sale, exchange, or other	979
disposition of equity or ownership interests in, or debt	980
obligations of, the C corporation.	981

(ii) Such gain or loss constitutes nonbusiness income.

982

(6) "Available" means information is such that a person is	983
able to learn of the information by the due date plus extensions,	984
if any, for filing the return for the taxable year in which the	985
trust recognizes the gain or loss.	986

(CC) "Qualifying controlled group" has the same meaning as in	987
section 5733.04 of the Revised Code.	988

(DD) "Related member" has the same meaning as in section	989
5733.042 of the Revised Code.	990

(EE)(1) For the purposes of division (EE) of this section:

991

(a) "Qualifying person" means any person other than a	992
qualifying corporation.	993

(b) "Qualifying corporation" means any person classified for	994
federal income tax purposes as an association taxable as a	995
corporation, except either of the following:	996

(i) A corporation that has made an election under subchapter	997
S, chapter one, subtitle A, of the Internal Revenue Code for its	998
taxable year ending within, or on the last day of, the investor's	999
taxable year;	1000

(ii) A subsidiary that is wholly owned by any corporation	1001
that has made an election under subchapter S, chapter one,	1002
subtitle A of the Internal Revenue Code for its taxable year	1003
ending within, or on the last day of, the investor's taxable year.	1004

(2) For the purposes of this chapter, unless expressly stated	1005
otherwise, no qualifying person indirectly owns any asset directly	1006
or indirectly owned by any qualifying corporation.	1007

(FF) For purposes of this chapter and Chapter 5751. of the	1008
Revised Code:	1009

(1) "Trust" does not include a qualified pre-income tax	1010
trust.	1011

(2) A "qualified pre-income tax trust" is any pre-income tax	1012
trust that makes a qualifying pre-income tax trust election as	1013
described in division (FF)(3) of this section.	1014

(3) A "qualifying pre-income tax trust election" is an	1015
election by a pre-income tax trust to subject to the tax imposed	1016
by section 5751.02 of the Revised Code the pre-income tax trust	1017
and all pass-through entities of which the trust owns or	1018
controls, directly, indirectly, or constructively through related	1019
interests, five per cent or more of the ownership or equity	1020
interests. The trustee shall notify the tax commissioner in	1021
writing of the election on or before April 15, 2006. The	1022
election, if timely made, shall be effective on and after January	1023
1, 2006, and shall apply for all tax periods and tax years until	1024
revoked by the trustee of the trust.	1025

(4) A "pre-income tax trust" is a trust that satisfies all of	1026
the following requirements:	1027

(a) The document or instrument creating the trust was	1028
executed by the grantor before January 1, 1972;	1029

(b) The trust became irrevocable upon the creation of the	1030
trust; and	1031

(c) The grantor was domiciled in this state at the time the	1032
trust was created.	1033

Sec. 5747.08.  An annual return with respect to the tax	1034
imposed by section 5747.02 of the Revised Code and each tax	1035
imposed under Chapter 5748. of the Revised Code shall be made by	1036
every taxpayer for any taxable year for which the taxpayer is	1037
liable for the tax imposed by that section or under that chapter,	1038
unless the total credits allowed under divisions (E), (F), and (G)	1039
of section 5747.05 of the Revised Code for the year are equal to	1040
or exceed the tax imposed by section 5747.02 of the Revised Code,	1041
in which case no return shall be required unless the taxpayer is	1042
liable for a tax imposed pursuant to Chapter 5748. of the Revised	1043
Code.	1044

(A) If an individual is deceased, any return or notice	1045
required of that individual under this chapter shall be made and	1046
filed by that decedent's executor, administrator, or other person	1047
charged with the property of that decedent.	1048

(B) If an individual is unable to make a return or notice	1049
required by this chapter, the return or notice required of that	1050
individual shall be made and filed by the individual's duly	1051
authorized agent, guardian, conservator, fiduciary, or other	1052
person charged with the care of the person or property of that	1053
individual.	1054

(C) Returns or notices required of an estate or a trust shall	1055
be made and filed by the fiduciary of the estate or trust.	1056

(D)(1)(a) Except as otherwise provided in division (D)(1)(b)	1057
of this section, any pass-through entity may file a single return	1058
on behalf of one or more of the entity's investors other than an	1059
investor that is a person subject to the tax imposed under section	1060
5733.06 of the Revised Code. The single return shall set forth the	1061
name, address, and social security number or other identifying	1062
number of each of those pass-through entity investors and shall	1063
indicate the distributive share of each of those pass-through	1064
entity investor's income taxable in this state in accordance with	1065
sections 5747.20 to 5747.231 of the Revised Code. Such	1066
pass-through entity investors for whom the pass-through entity	1067
elects to file a single return are not entitled to the exemption	1068
or credit provided for by sections 5747.02 and 5747.022 of the	1069
Revised Code; shall calculate the tax before business credits at	1070
the highest rate of tax set forth in section 5747.02 of the	1071
Revised Code for the taxable year for which the return is filed;	1072
and are entitled to only their distributive share of the business	1073
credits as defined in division (D)(2) of this section. A single	1074
check drawn by the pass-through entity shall accompany the return	1075
in full payment of the tax due, as shown on the single return, for	1076
such investors, other than investors who are persons subject to	1077
the tax imposed under section 5733.06 of the Revised Code.	1078

(b)(i) A pass-through entity shall not include in such a	1079
single return any investor that is a trust to the extent that any	1080
direct or indirect current, future, or contingent beneficiary of	1081
the trust is a person subject to the tax imposed under section	1082
5733.06 of the Revised Code.	1083

(ii) A pass-through entity shall not include in such a single	1084
return any investor that is itself a pass-through entity to the	1085
extent that any direct or indirect investor in the second	1086
pass-through entity is a person subject to the tax imposed under	1087
section 5733.06 of the Revised Code.	1088

(c) Nothing in division (D) of this section precludes the tax	1089
commissioner from requiring such investors to file the return and	1090
make the payment of taxes and related interest, penalty, and	1091
interest penalty required by this section or section 5747.02,	1092
5747.09, or 5747.15 of the Revised Code. Nothing in division (D)	1093
of this section shall be construed to provide to such an investor	1094
or pass-through entity any additional deduction or credit, other	1095
than the credit provided by division (J) of this section, solely	1096
on account of the entity's filing a return in accordance with this	1097
section. Such a pass-through entity also shall make the filing and	1098
payment of estimated taxes on behalf of the pass-through entity	1099
investors other than an investor that is a person subject to the	1100
tax imposed under section 5733.06 of the Revised Code.	1101

(2) For the purposes of this section, "business credits"	1102
means the credits listed in section 5747.98 of the Revised Code	1103
excluding the following credits:	1104

(a) The retirement credit under division (B) of section	1105
5747.055 of the Revised Code;	1106

(b) The senior citizen credit under division (C) of section	1107
5747.05 of the Revised Code;	1108

(c) The lump sum distribution credit under division (D) of	1109
section 5747.05 of the Revised Code;	1110

(d) The dependent care credit under section 5747.054 of the	1111
Revised Code;	1112

(e) The lump sum retirement income credit under division (C)	1113
of section 5747.055 of the Revised Code;	1114

(f) The lump sum retirement income credit under division (D)	1115
of section 5747.055 of the Revised Code;	1116

(g) The lump sum retirement income credit under division (E)	1117
of section 5747.055 of the Revised Code;	1118

(h) The credit for displaced workers who pay for job training	1119
under section 5747.27 of the Revised Code;	1120

(i) The twenty-dollar personal exemption credit under section	1121
5747.022 of the Revised Code;	1122

(j) The joint filing credit under division (G) of section	1123
5747.05 of the Revised Code;	1124

(k) The nonresident credit under division (A) of section	1125
5747.05 of the Revised Code;	1126

(l) The credit for a resident's out-of-state income under	1127
division (B) of section 5747.05 of the Revised Code;	1128

(m) The low-income credit under section 5747.056 of the	1129
Revised Code;	1130

(n) The nursing professor credit under section 5747.72 of the	1131
Revised Code.	1132

(3) The election provided for under division (D) of this	1133
section applies only to the taxable year for which the election is	1134
made by the pass-through entity. Unless the tax commissioner	1135
provides otherwise, this election, once made, is binding and	1136
irrevocable for the taxable year for which the election is made.	1137
Nothing in this division shall be construed to provide for any	1138
deduction or credit that would not be allowable if a nonresident	1139
pass-through entity investor were to file an annual return.	1140

(4) If a pass-through entity makes the election provided for	1141
under division (D) of this section, the pass-through entity shall	1142
be liable for any additional taxes, interest, interest penalty, or	1143
penalties imposed by this chapter if the tax commissioner finds	1144
that the single return does not reflect the correct tax due by the	1145
pass-through entity investors covered by that return. Nothing in	1146
this division shall be construed to limit or alter the liability,	1147
if any, imposed on pass-through entity investors for unpaid or	1148
underpaid taxes, interest, interest penalty, or penalties as a	1149
result of the pass-through entity's making the election provided	1150
for under division (D) of this section. For the purposes of	1151
division (D) of this section, "correct tax due" means the tax that	1152
would have been paid by the pass-through entity had the single	1153
return been filed in a manner reflecting the tax commissioner's	1154
findings. Nothing in division (D) of this section shall be	1155
construed to make or hold a pass-through entity liable for tax	1156
attributable to a pass-through entity investor's income from a	1157
source other than the pass-through entity electing to file the	1158
single return.	1159

(E) If a husband and wife file a joint federal income tax	1160
return for a taxable year, they shall file a joint return under	1161
this section for that taxable year, and their liabilities are	1162
joint and several, but, if the federal income tax liability of	1163
either spouse is determined on a separate federal income tax	1164
return, they shall file separate returns under this section.	1165

If either spouse is not required to file a federal income tax	1166
return and either or both are required to file a return pursuant	1167
to this chapter, they may elect to file separate or joint returns,	1168
and, pursuant to that election, their liabilities are separate or	1169
joint and several. If a husband and wife file separate returns	1170
pursuant to this chapter, each must claim the taxpayer's own	1171
exemption, but not both, as authorized under section 5747.02 of	1172
the Revised Code on the taxpayer's own return.	1173

(F) Each return or notice required to be filed under this	1174
section shall contain the signature of the taxpayer or the	1175
taxpayer's duly authorized agent and of the person who prepared	1176
the return for the taxpayer, and shall include the taxpayer's	1177
social security number. Each return shall be verified by a	1178
declaration under the penalties of perjury. The tax commissioner	1179
shall prescribe the form that the signature and declaration shall	1180
take.	1181

(G) Each return or notice required to be filed under this	1182
section shall be made and filed as required by section 5747.04 of	1183
the Revised Code, on or before the fifteenth day of April of each	1184
year, on forms that the tax commissioner shall prescribe, together	1185
with remittance made payable to the treasurer of state in the	1186
combined amount of the state and all school district income taxes	1187
shown to be due on the form, unless the combined amount shown to	1188
be due is one dollar or less, in which case that amount need not	1189
be remitted.	1190

Upon good cause shown, the tax commissioner may extend the	1191
period for filing any notice or return required to be filed under	1192
this section and may adopt rules relating to extensions. If the	1193
extension results in an extension of time for the payment of any	1194
state or school district income tax liability with respect to	1195
which the return is filed, the taxpayer shall pay at the time the	1196
tax liability is paid an amount of interest computed at the rate	1197
per annum prescribed by section 5703.47 of the Revised Code on	1198
that liability from the time that payment is due without extension	1199
to the time of actual payment. Except as provided in section	1200
5747.132 of the Revised Code, in addition to all other interest	1201
charges and penalties, all taxes imposed under this chapter or	1202
Chapter 5748. of the Revised Code and remaining unpaid after they	1203
become due, except combined amounts due of one dollar or less,	1204
bear interest at the rate per annum prescribed by section 5703.47	1205
of the Revised Code until paid or until the day an assessment is	1206
issued under section 5747.13 of the Revised Code, whichever occurs	1207
first.	1208

If the tax commissioner considers it necessary in order to	1209
ensure the payment of the tax imposed by section 5747.02 of the	1210
Revised Code or any tax imposed under Chapter 5748. of the Revised	1211
Code, the tax commissioner may require returns and payments to be	1212
made otherwise than as provided in this section.	1213

To the extent that any provision in this division conflicts	1214
with any provision in section 5747.026 of the Revised Code, the	1215
provision in that section prevails.	1216

(H) If any report, claim, statement, or other document	1217
required to be filed, or any payment required to be made, within a	1218
prescribed period or on or before a prescribed date under this	1219
chapter is delivered after that period or that date by United	1220
States mail to the agency, officer, or office with which the	1221
report, claim, statement, or other document is required to be	1222
filed, or to which the payment is required to be made, the date of	1223
the postmark stamped on the cover in which the report, claim,	1224
statement, or other document, or payment is mailed shall be deemed	1225
to be the date of delivery or the date of payment.	1226

If a payment is required to be made by electronic funds	1227
transfer pursuant to section 5747.072 of the Revised Code, the	1228
payment is considered to be made when the payment is received by	1229
the treasurer of state or credited to an account designated by the	1230
treasurer of state for the receipt of tax payments.	1231

"The date of the postmark" means, in the event there is more	1232
than one date on the cover, the earliest date imprinted on the	1233
cover by the United States postal service.	1234

(I) The amounts withheld by the employer pursuant to section	1235
5747.06 of the Revised Code shall be allowed to the recipient of	1236
the compensation as credits against payment of the appropriate	1237
taxes imposed on the recipient by section 5747.02 and under	1238
Chapter 5748. of the Revised Code.	1239

(J) If, in accordance with division (D) of this section, a	1240
pass-through entity elects to file a single return and if any	1241
investor is required to file the return and make the payment of	1242
taxes required by this chapter on account of the investor's other	1243
income that is not included in a single return filed by a	1244
pass-through entity, the investor is entitled to a refundable	1245
credit equal to the investor's proportionate share of the tax paid	1246
by the pass-through entity on behalf of the investor. The investor	1247
shall claim the credit for the investor's taxable year in which or	1248
with which ends the taxable year of the pass-through entity.	1249
Nothing in this chapter shall be construed to allow any credit	1250
provided in this chapter to be claimed more than once. For the	1251
purposes of computing any interest, penalty, or interest penalty,	1252
the investor shall be deemed to have paid the refundable credit	1253
provided by this division on the day that the pass-through entity	1254
paid the estimated tax or the tax giving rise to the credit.	1255

(K) The tax commissioner shall ensure that each return	1256
required to be filed under this section includes a box that the	1257
taxpayer may check to authorize a paid tax preparer who prepared	1258
the return to communicate with the department of taxation about	1259
matters pertaining to the return. The return or instructions	1260
accompanying the return shall indicate that by checking the box	1261
the taxpayer authorizes the department of taxation to contact the	1262
preparer concerning questions that arise during the processing of	1263
the return and authorizes the preparer only to provide the	1264
department with information that is missing from the return, to	1265
contact the department for information about the processing of the	1266
return or the status of the taxpayer's refund or payments, and to	1267
respond to notices about mathematical errors, offsets, or return	1268
preparation that the taxpayer has received from the department and	1269
has shown to the preparer.	1270

Sec. 5747.72. (A) As used in this section:

1271

(1) "Nursing professor" means an individual who is licensed	1272
to practice as a registered nurse under Chapter 4723. of the	1273
Revised Code and is teaching at a post-secondary educational	1274
institution in a program that leads to a diploma or degree in	1275
nursing.	1276

(2) "Post-secondary educational institution" means any	1277
state-assisted college or university as defined in section	1278
3333.041 of the Revised Code, any nonprofit institution holding a	1279
certificate of authorization pursuant to Chapter 1713. of the	1280
Revised Code, any institution holding a certificate of	1281
registration from the state board of proprietary school	1282
registration issued under Chapter 3332. of the Revised Code, or	1283
any school holding authorization pursuant to Title XLVII of the	1284
Revised Code to offer courses leading to a nursing license.	1285

(B) A refundable credit is allowed against the tax imposed by	1286
section 5747.02 of the Revised Code for a taxpayer who is a	1287
nursing professor during a taxable year. The amount of the credit	1288
shall be as follows:	1289

(1) Three thousand five hundred dollars each taxable year for	1290
four consecutive taxable years;	1291

(2) One thousand seven hundred fifty dollars each taxable	1292
year for two consecutive taxable years after the credit has been	1293
taken in four consecutive taxable years under division (B)(1) of	1294
this section.	1295

A taxpayer may not claim the credit allowed under this	1296
section in taxable year 2022 or thereafter.	1297

(C) The credit under this section shall be claimed in the	1298
order required under section 5747.98 of the Revised Code. If the	1299
amount of the credit under this section exceeds the amount of tax	1300
otherwise due under section 5747.02 of the Revised Code after	1301
deduction of all other credits in that order, the taxpayer is	1302
entitled to a refund of the excess.	1303

(D) The tax commissioner may require a taxpayer to furnish	1304
such information as is necessary to support a claim for a credit	1305
under this section, and no credit shall be allowed unless the	1306
information is provided.	1307

Sec. 5747.98.  (A) To provide a uniform procedure for	1308
calculating the amount of tax due under section 5747.02 of the	1309
Revised Code, a taxpayer shall claim any credits to which the	1310
taxpayer is entitled in the following order:	1311

(1) The retirement income credit under division (B) of	1312
section 5747.055 of the Revised Code;	1313

(2) The senior citizen credit under division (C) of section	1314
5747.05 of the Revised Code;	1315

(3) The lump sum distribution credit under division (D) of	1316
section 5747.05 of the Revised Code;	1317

(4) The dependent care credit under section 5747.054 of the	1318
Revised Code;	1319

(5) The lump sum retirement income credit under division (C)	1320
of section 5747.055 of the Revised Code;	1321

(6) The lump sum retirement income credit under division (D)	1322
of section 5747.055 of the Revised Code;	1323

(7) The lump sum retirement income credit under division (E)	1324
of section 5747.055 of the Revised Code;	1325

(8) The low-income credit under section 5747.056 of the	1326
Revised Code;	1327

(9) The credit for displaced workers who pay for job training	1328
under section 5747.27 of the Revised Code;	1329

(10) The campaign contribution credit under section 5747.29	1330
of the Revised Code;	1331

(11) The twenty-dollar personal exemption credit under	1332
section 5747.022 of the Revised Code;	1333

(12) The joint filing credit under division (G) of section	1334
5747.05 of the Revised Code;	1335

(13) The nonresident credit under division (A) of section	1336
5747.05 of the Revised Code;	1337

(14) The credit for a resident's out-of-state income under	1338
division (B) of section 5747.05 of the Revised Code;	1339

(15) The credit for employers that enter into agreements with	1340
child day-care centers under section 5747.34 of the Revised Code;	1341

(16) The credit for employers that reimburse employee child	1342
care expenses under section 5747.36 of the Revised Code;	1343

(17) The credit for adoption of a minor child under section	1344
5747.37 of the Revised Code;	1345

(18) The credit for purchases of lights and reflectors under	1346
section 5747.38 of the Revised Code;	1347

(19) The job retention credit under division (B) of section	1348
5747.058 of the Revised Code;	1349

(20) The credit for selling alternative fuel under section	1350
5747.77 of the Revised Code;	1351

(21) The second credit for purchases of new manufacturing	1352
machinery and equipment and the credit for using Ohio coal under	1353
section 5747.31 of the Revised Code;	1354

(22) The job training credit under section 5747.39 of the	1355
Revised Code;	1356

(23) The enterprise zone credit under section 5709.66 of the	1357
Revised Code;	1358

(24) The credit for the eligible costs associated with a	1359
voluntary action under section 5747.32 of the Revised Code;	1360

(25) The credit for employers that establish on-site child	1361
day-care centers under section 5747.35 of the Revised Code;	1362

(26) The ethanol plant investment credit under section	1363
5747.75 of the Revised Code;	1364

(27) The credit for purchases of qualifying grape production	1365
property under section 5747.28 of the Revised Code;	1366

(28) The export sales credit under section 5747.057 of the	1367
Revised Code;	1368

(29) The credit for research and development and technology	1369
transfer investors under section 5747.33 of the Revised Code;	1370

(30) The enterprise zone credits under section 5709.65 of the	1371
Revised Code;	1372

(31) The research and development credit under section	1373
5747.331 of the Revised Code;	1374

(32) The credit for rehabilitating a historic building under	1375
section 5747.76 of the Revised Code;	1376

(33) The refundable credit for rehabilitating a historic	1377
building under section 5747.76 of the Revised Code;	1378

(34) The refundable jobs creation credit under division (A)	1379
of section 5747.058 of the Revised Code;	1380

(35) The refundable credit for taxes paid by a qualifying	1381
entity granted under section 5747.059 of the Revised Code;	1382

(36) The refundable credits for taxes paid by a qualifying	1383
pass-through entity granted under division (J) of section 5747.08	1384
of the Revised Code;	1385

(37) The refundable credit for tax withheld under division	1386
(B)(1) of section 5747.062 of the Revised Code;	1387

(38) The refundable credit under section 5747.80 of the	1388
Revised Code for losses on loans made to the Ohio venture capital	1389
program under sections 150.01 to 150.10 of the Revised Code;	1390

(39) The refundable nursing professor credit granted under	1391
section 5747.72 of the Revised Code.	1392

(B) For any credit, except the credits enumerated in	1393
divisions (A)(33) to (38)(39) of this section and the credit	1394
granted under division (I) of section 5747.08 of the Revised	1395
Code, the amount of the credit for a taxable year shall not	1396
exceed the tax due after allowing for any other credit that	1397
precedes it in the order required under this section. Any excess	1398
amount of a particular credit may be carried forward if	1399
authorized under the section creating that credit. Nothing in	1400
this chapter shall be construed to allow a taxpayer to claim,	1401
directly or indirectly, a credit more than once for a taxable	1402
year.	1403

Section 2. That existing sections 5747.01, 5747.08, and	1404
5747.98 of the Revised Code are hereby repealed.	1405

Section 3. The amendment by this act of section 5747.01,	1406
5747.08, and 5747.98 of the Revised Code applies to taxable years	1407
beginning in 2009 or thereafter.	1408