Ohio Revised Code
Chapter 5733 | Corporation Franchise Tax
Section 5733.0510 | Reducing Net Income for Qualifying Assets.

Effective: July 6, 1999
Latest Legislation: Senate Bill 3 - 123rd General Assembly
(A) As used in this section:
(1) "Qualifying taxpayer" means either of the following:
(a) A person that is an electric company or a combined company, but only if the person was subject to and paid the tax imposed by section 5727.30 of the Revised Code for gross receipts received during the period of May 1, 2000, through April 30, 2001;
(b) Any taxpayer not described in division (A)(1)(a) of this section if a person described in division (A)(1)(a) of this section transfers all or a portion of its assets or equity directly or indirectly to the taxpayer, the transfer occurred as part of an entity organization or reorganization, or subsequent entity organization or reorganization, and the gain or loss with respect to the transfer is not recognized in whole or in part for federal income tax purposes under the Internal Revenue Code on account of a transfer as part of an equity organization or reorganization, or subsequent organization or reorganization.
(2) "Qualifying taxable event" means any event resulting in the recognition for federal income tax purposes of gain or loss in connection with any direct or indirect sale, direct or indirect exchange, direct or indirect transfer, or direct or indirect retirement of any qualifying asset.
(3) "Qualifying asset" means any asset shown on the qualifying taxpayer's books and records on December 31, 2000, in accordance with generally accepted accounting principles, including the cost of, or any portion of the cost of, any asset acquired after December 31, 2000, where such asset was acquired as a result of a tax-free or tax-deferred exchange of a qualifying asset.
(4) "Net income" has the same meaning as in division (I) of section 5733.04 of the Revised Code.
(5) "Book-tax differential" means the difference, if any, between an asset's net book value shown on the qualifying taxpayer's books and records on December 31, 2000, in accordance with generally accepted accounting principles, and such asset's adjusted basis on December 31, 2000. The book-tax differential may be a negative number.
(6) "Qualifying regulatory asset" means those qualifying assets that, as of December 31, 2000, are no longer included in federal energy regulatory commission uniform system of accounts 101 through 106 or are deferred expenses for operation or maintenance, or deferred costs associated with leaseback transactions on generating units, that have been authorized by a regulatory agency for recovery from customers in a future period and that, as of December 31, 2000, are subject to transition cost recovery under Chapter 4928. of the Revised Code or similar laws of another state.
(B)(1) If, with respect to a qualifying asset, there occurs a qualifying taxable event and if the gain or loss recognized is a type of gain or loss that is apportioned as provided in division (B) of section 5733.05 of the Revised Code, the qualifying taxpayer shall reduce its net income by the amount of the book-tax differential for that qualifying asset, if the book-tax differential is positive, and the qualifying taxpayer shall increase its net income by the absolute value of the amount of the book-tax differential for that qualifying asset, if the book-tax differential is negative.
(2) If, with respect to a qualifying asset, there occurs a qualifying taxable event and if the gain or loss recognized is a type of gain or loss that is allocated to this state as provided in section 5733.051 of the Revised Code, the qualifying taxpayer shall reduce its income allocated to this state by the amount of the book-tax differential for that qualifying asset, if the book-tax differential is positive, and the qualifying taxpayer shall increase its income allocated to this state by the absolute value of the amount of the book-tax differential for that qualifying asset, if the book-tax differential is negative.
(3) If, with respect to a qualifying taxable event, the person uses the installment sales method to recognize gain over more than one year, the adjustments required by divisions (B)(1) and (2) of this section shall not be made entirely in the tax year immediately following the taxable year in which the qualifying taxable event occurred but shall be made in part in such tax year and in subsequent tax years in proportion to the gain recognized for federal income tax purposes in each corresponding taxable year.
(4) If the recognized gain or loss to which divisions (B)(1) and (2) of this section refer is zero solely because at the time of the qualifying taxable event the amount realized by the qualifying taxpayer with respect to that event equals the qualifying asset's adjusted basis, then solely for the purposes of division (B) of this section, the amount realized shall be deemed to be one dollar greater than the qualifying asset's adjusted basis.
(5) Whenever there is a qualifying taxable event, all qualifying regulatory assets directly or indirectly associated with a qualifying asset in connection with that event shall be considered to have been disposed of as part of the event for an amount realized of one dollar.
(C) Nothing in division (B) of this section shall be construed to allow for an adjustment more than once with respect to the same qualifying asset.
(D) Nothing in this section shall be construed to allow more than one corporation to claim an adjustment with respect to the same qualifying asset.

Structure Ohio Revised Code

Ohio Revised Code

Title 57 | Taxation

Chapter 5733 | Corporation Franchise Tax

Section 5733.01 | Tax Charged Against Corporations.

Section 5733.02 | Annual Taxpayer Report and Remittance - Report on Dissolution or Withdrawal.

Section 5733.021 | Declaration of Estimated Tax Report.

Section 5733.022 | Tax Payment by Electronic Funds Transfer.

Section 5733.03 | Annual Report.

Section 5733.031 | Taxable Year; Method of Accounting; Amended Report; Additional Payment or Application for Refund.

Section 5733.04 | Corporation Franchise Tax Definitions.

Section 5733.041 | Net Income Defined for Tax Years 1984 to 1993.

Section 5733.042 | Computing Net Income of Member of Affiliated Group.

Section 5733.05 | Determination of Value of Issued and Outstanding Stock and Intangible Property - Determination of Net Income of Corporation.

Section 5733.051 | Allocating and Apportioning of Net Income of Corporation.

Section 5733.052 | Combining Net Incomes of Corporations.

Section 5733.053 | Transferee Corporation Subject to Transferor's Tax Liability.

Section 5733.054 | Deduction or Addition Where Portion of Certain Gains or Losses Is Allocated or Apportioned to Ohio.

Section 5733.055 | Deducting Expenses and Costs Paid to Related Member.

Section 5733.056 | Determining Value of Issued and Outstanding Shares of Stock.

Section 5733.057 | Ownership Interest in Pass-Through Entity.

Section 5733.058 | Adjusting for Equity Investment in an Exempted Investment.

Section 5733.059 | Allocating Sales of Electric Transmission and Distribution Services.

Section 5733.0510 | Reducing Net Income for Qualifying Assets.

Section 5733.0511 | Net Income for Qualifying Telephone Company Taxpayer.

Section 5733.06 | Computing Tax.

Section 5733.061 | Credit Allowed for Investment in Property Used in Refining or Manufacturing.

Section 5733.064 | Credit for Recycling and Litter Prevention Program Donations.

Section 5733.065 | Additional Tax on Corporations for Privilege of Manufacturing or Selling Litter Stream Products in State.

Section 5733.066 | Surcharge Added to Rates to Fund Recycling and Litter Prevention.

Section 5733.067 | Credit Concerning Subsidiaries; Amended Report; Additional Payment or Application for Refund.

Section 5733.068 | Credit Allowed to Member of Qualifying Affiliated Group.

Section 5733.069 | Credit Allowed for Increase in Export Sales.

Section 5733.0610 | Credit for Ohio Job Creation.

Section 5733.0611 | Credit Relating to Tax on Qualifying Pass-Through Entities.

Section 5733.07 | Powers and Duties of Tax Commissioner.

Section 5733.09 | Exempted Companies.

Section 5733.10 | Exemption of Municipal Corporations.

Section 5733.11 | Failing to File or Remit - Filing Incorrect Report.

Section 5733.12 | Crediting of Payments to Funds - Filing of Refund Application.

Section 5733.121 | Applying Refund in Partial Satisfaction of Debt.

Section 5733.13 | Extension of Time to File Report.

Section 5733.14 | Monthly Report by Secretary of State - Access to Records of County Auditors.

Section 5733.16 | Organization of Domestic and Foreign Corporations.

Section 5733.17 | Duty to Make Reports or Pay Taxes on Dissolution or Retirement.

Section 5733.20 | Cancellation of Articles of Incorporation or Certificate of Authority for Failure to Report or Pay Taxes.

Section 5733.21 | Prohibition Against Doing Business After Cancellation of Articles or Certificate.

Section 5733.22 | Reinstatement of Corporation.

Section 5733.23 | Petition for Judgment for Taxes - Injunction - Procedure - Evidence.

Section 5733.24 | Quo Warranto Proceedings.

Section 5733.26 | Interest on Unpaid Tax or Refund.

Section 5733.261 | Qualifying Refund Overpayment - Liability for Interest or Penalty.

Section 5733.27 | Affidavit Denying Unlawful Political Contributions.

Section 5733.28 | Failing to File Complying Report or Pay Tax.

Section 5733.29 | Underpayment of Estimated Tax.

Section 5733.31 | Credit for Purchasing New Manufacturing Machinery or Equipment - 18 Month Look Back.

Section 5733.311 | Credit for Purchasing New Manufacturing Machinery or Equipment - 7 Month Look Back.

Section 5733.32 | Credit for Grape Producing Business Purchasing Qualifying Property.

Section 5733.33 | Credit for Purchasing New Manufacturing Machinery or Equipment - Installation Before 12-31-2006.

Section 5733.34 | Credit for Economic Redevelopment of Voluntary Environmental Clean-Up Site.

Section 5733.351 | Credit for Qualified Research Expenses.

Section 5733.352 | Nonrefundable Credit Equal to Borrower's Qualified Research and Development Loan Payments.

Section 5733.36 | Credit for Providing Day-Care for Children of Employees.

Section 5733.37 | Credit for Establishing Day-Care Center for Children of Employees.

Section 5733.38 | Credit for Reimbursement of Employee Day-Care Expenses.

Section 5733.39 | Credit for Use of Ohio Coal in Coal-Fired Electric Generating Unit.

Section 5733.40 | Qualified Pass-Through Entity Definitions.

Section 5733.401 | Investment in Pass-Through Entities.

Section 5733.402 | Exemption for Pass-Through Entity Distributing Income and Gain to Investing Entity.

Section 5733.41 | Tax on Qualifying Pass-Through Entity Having at Least One Qualifying Investor That Is Not Individual.

Section 5733.42 | Credit for Eligible Employee Training Costs.

Section 5733.45 | Credit Concerning Qualifying Dealer in Intangibles.

Section 5733.47 | Refundable Franchise Tax Credit for Owner of Rc 149.311 Certificate.

Section 5733.49 | Issuance of Tax Credits by Ohio Venture Capital Authority.

Section 5733.55 | Nonrefundable Credit Equal to Amount of Eligible Nonrecurring 9-1-1 Charges.

Section 5733.56 | Nonrefundable Credit Equal to Cost Incurred by Company for Providing Telephone Service Program.

Section 5733.57 | Nonrefundable Credit Equal to Product Obtained by Multiplying Applicable Percentage by Applicable Amount.

Section 5733.58 | Nonrefundable Credit Financial Institution Holding a Qualified Equity Investment.

Section 5733.59 | Credit Against Tax for Any Corporation That Is the Certificate Owner of a Tax Credit Certificate.

Section 5733.98 | Order of Claiming Credits.

Section 5733.99 | Penalty.