Effective: June 26, 2003
Latest Legislation: House Bill 95 - 125th General Assembly
(A) There is hereby allowed a nonrefundable credit against the tax imposed under section 5733.06 of the Revised Code. The credit shall be equal to the taxpayer's proportionate share of the lesser of either the tax due or the tax paid by any qualifying entity under section 5733.41 of the Revised Code for the qualifying taxable year of the qualifying entity that ends in the taxable year of the taxpayer. The taxpayer shall claim the credit for the taxpayer's taxable year in which ends the qualifying entity's qualifying taxable year.
In claiming the credit and determining its proportionate share of the tax due and the tax paid by the qualifying entity, the person claiming the credit shall follow the concepts set forth in subchapter K of the Internal Revenue Code. Nothing in this division shall be construed to limit or disallow pass-through treatment of a pass-through entity's income, deductions, credits, or other amounts necessary to compute the tax imposed and the credits allowed under this chapter.
The credit shall be claimed in the order required under section 5733.98 of the Revised Code. Any unused credit shall be allowed as a credit in the ensuing tax year. Any such amount allowed as a credit in an ensuing tax year shall be deducted from the balance carried forward to the next ensuing tax year.
(B) Any person that is not a taxpayer solely by reason of division (A) or (C) of section 5733.09 of the Revised Code or a person described in section 501(c) of the Internal Revenue Code or division (F) of section 3334.01 of the Revised Code, but that would be entitled to claim the nonrefundable credit under this section if that person were a taxpayer, may file an application for refund pursuant to section 5733.12 of the Revised Code. Upon proper application for refund under that section, the tax commissioner shall issue a refund in the amount of the credit to which that person would have been entitled under division (A)(1) of this section if the person had been a taxpayer, and as if the credit were a refundable credit.
(C) If an organization described in section 401(a) of the Internal Revenue Code or a trust or fund is entitled to a proportionate share of the lesser of either the tax due or the tax paid by any qualifying entity under section 5733.41 of the Revised Code, and if that proportionate share is then or could be allocable to an exempt person as defined in division (D) of this section, then the organization, trust, or fund may file an application for refund with respect to such allocable amounts pursuant to section 5733.12 of the Revised Code. Upon proper application for refund under that section, the tax commissioner shall issue a refund in the amount of the credit to which the organization, trust, or fund would have been entitled under division (A)(1) of this section had the organization, trust, or fund been a taxpayer, and as if the credit were a refundable credit. To the extent that such an organization, trust, or fund is permitted to apply for a refund under this division, or to the extent that such an organization, trust, or fund has applied for such a refund, exempt persons are not entitled to the credit authorized under this section or section 5747.059 of the Revised Code.
(D)(1) For the purposes of division (C) of this section only, "exempt person" means any of the following:
(a) A person that is or may be the beneficiary of a trust if the trust is subject to Subchapter D of Chapter 1 of Subtitle A of the Internal Revenue Code.
(b) A person that is or may be the beneficiary of or the recipient of payments from a nuclear decommissioning reserve fund, a designated settlement fund, or any other trust or fund established to resolve and satisfy claims that may otherwise be asserted by the beneficiary or a member of the beneficiary's family. Sections 267(c)(4), 468A(e), and 468B(d)(2) of the Internal Revenue Code apply to the determination of whether such a person is an exempt person under division (D) of this section.
(c) A person, other than a person that is treated as a C corporation for federal income tax purposes, who is or may be the beneficiary of a trust that, under its governing instrument, is not required to distribute all of its income currently. Division (D)(1)(c) of this section applies only if the trust irrevocably agrees that for the taxable year during or for which the trust distributes any of its income to any of the beneficiaries, the trust is a qualifying trust as defined in section 5733.40 of the Revised Code and will pay the estimated tax, and will withhold and pay the withheld tax as required under section 5733.41 and sections 5747.40 to 5747.453 of the Revised Code.
(2) An exempt person does not include any person that would not qualify as an exempt person under the doctrines of "economic reality," "sham transaction," "step doctrine," or "substance over form." Notwithstanding section 5703.56 of the Revised Code to the contrary, an organization, trust, or fund described in division (C) of this section bears the burden of establishing by a preponderance of the evidence that any transaction giving rise to a claim for a refundable credit under this section does not have as a principal purpose a claim for that credit. Nothing in this section shall be construed to limit solely to this section the application of the doctrines referred to in division (D)(2) of this section.
(E) Nothing in this section shall be construed to allow a refund more than once with respect to the taxes imposed under section 5733.41 or 5747.41 of the Revised Code.
Structure Ohio Revised Code
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 5733.04 | 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 5733.051 | 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 5733.055 | 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 5733.066 | Surcharge Added to Rates to Fund Recycling and Litter Prevention.
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 5733.21 | 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 5733.32 | Credit for Grape Producing Business Purchasing Qualifying Property.
Section 5733.34 | Credit for Economic Redevelopment of Voluntary Environmental Clean-Up Site.
Section 5733.351 | Credit for Qualified Research Expenses.
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 5733.42 | 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 5733.58 | Nonrefundable Credit Financial Institution Holding a Qualified Equity Investment.