Bill Text: OH HB227 | 2011-2012 | 129th General Assembly | Introduced

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Bill Title: To grant an income tax credit to individuals who earn degrees in science, technology, engineering, or math-based fields of study and to authorize municipal corporations to grant a credit to individuals qualifying for the state credit.

Spectrum: Moderate Partisan Bill (Democrat 12-3)

Status: (Introduced - Dead) 2011-05-17 - To Ways & Means [HB227 Detail]

Download: Ohio-2011-HB227-Introduced.html

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As Introduced

129th General Assembly Regular Session 2011-2012

H. B. No. 227

Representative Goyal 

Cosponsors: Representatives Garland, Ruhl, Stinziano, Schuring, Fedor, Williams, Martin, Phillips, Clyde, Weddington, O'Brien, Ashford, Fende, Antonio 

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A BILL

To amend sections 5747.08 and 5747.98 and to enact

1

sections 718.17, 3333.51, and 5747.81 of the

2

Revised Code to grant an income tax credit to

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individuals who earn degrees in science,

4

technology, engineering, or math-based fields of

5

study and to authorize municipal corporations to

6

grant a credit to individuals qualifying for the

7

state credit.

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

Section 1.  That sections 5747.08 and 5747.98 be amended and	9
sections 718.17, 3333.51, and 5747.81 of the Revised Code be	10
enacted to read as follows:	11

Sec. 718.17. The legislative authority of a municipal	12
corporation, by ordinance, may grant a credit against a tax	13
imposed on income to an individual who is subject to the tax and	14
who qualifies for a credit authorized under section 3333.51 of the	15
Revised Code. The legislative authority may establish credit	16
amounts and limits, refundability attributes, carry-forward	17
periods, and deferral periods and procedures other than as	18
prescribed in sections 3333.51 and 5747.81 of the Revised Code.	19

Sec. 3333.51. (A) As used in this section:

20

(1) "Approved field of study" means a field of study in the	21
natural sciences, technology, engineering, or mathematics that the	22
Ohio board of regents determines is associated with job creation	23
and retention in Ohio.	24

(2) "Institution of higher education" means all of the	25
following:	26

(a) An institution of higher education, as defined in section	27
3345.12 of the Revised Code;	28

(b) An institution authorized by the Ohio board of regents	29
under Chapter 1713. of the Revised Code to grant degrees and that	30
is accredited by the appropriate regional and professional	31
accrediting associations within whose jurisdiction it falls;	32

(c) Private career schools holding program authorizations	33
issued by the state board of career colleges and schools under	34
division (C) of section 3332.05 of the Revised Code;	35

(d) Private institutions exempt from regulation under Chapter	36
3332. of the Revised Code as prescribed in section 3333.046 of the	37
Revised Code;	38

(e) Any institution located outside Ohio designated as an	39
"institution of higher education" by the Ohio board of regents for	40
purposes of this section.	41

(B) For the purpose of developing and maintaining a highly	42
qualified workforce and thereby to improve the economic welfare of	43
all Ohioans, an individual who graduates on or after the effective	44
date of the enactment of this section from an institution of	45
higher education with a degree in an approved field of study is	46
allowed a credit against the tax imposed by section 5747.02 of the	47
Revised Code. Except as provided in division (C) of this section,	48
the credit shall equal five thousand dollars in the case of an	49
associate's degree; twenty thousand dollars in the case of a	50
baccalaureate degree; and thirty thousand dollars in the case of a	51
master's or doctoral degree. Except as otherwise provided in this	52
section, the individual shall claim one-tenth of the credit amount	53
for the individual's taxable year that includes the date of	54
graduation and one-tenth of the credit amount in each of the	55
succeeding nine consecutive taxable years for which the individual	56
is subject to the tax imposed by section 5747.02 of the Revised	57
Code. Evidence of graduation shall be retained for inspection by	58
the tax commissioner until the expiration of four years after the	59
end of the last taxable year the credit is taken.	60

(C)(1) An individual who has been allowed a credit for an	61
associate's or baccalaureate degree or both is allowed an	62
additional credit for the receipt of a more advanced degree from	63
an institution of higher education in an approved field of study.	64
The credit amount for the additional degree equals the credit	65
amount for the degree as provided in division (B) of this section	66
less the credit amount for the degree or degrees for which a	67
credit has previously been allowed. The credit shall be claimed	68
in the manner required under division (B) of this section.	69

(2) An individual who is allowed a credit under this section	70
may elect to defer the credit for each taxable year that includes	71
a date on which the individual is enrolled full time in an	72
institution of higher education to pursue a more advanced degree	73
in an approved field of study. Evidence of such enrollment shall	74
be retained for inspection by the tax commissioner until the	75
expiration of four years after the end of the last taxable year	76
the credit is taken.	77

(D) The Ohio board of regents shall identify institutions of	78
higher education and approved fields of study. In identifying	79
approved fields of study, the board shall give priority to those	80
related to information technology, power and propulsion, advanced	81
materials, instruments and controls, electronics, and	82
biotechnology and biosciences.	83

Sec. 5747.08.  An annual return with respect to the tax	84
imposed by section 5747.02 of the Revised Code and each tax	85
imposed under Chapter 5748. of the Revised Code shall be made by	86
every taxpayer for any taxable year for which the taxpayer is	87
liable for the tax imposed by that section or under that chapter,	88
unless the total credits allowed under divisions (E), (F), and (G)	89
of section 5747.05 of the Revised Code for the year are equal to	90
or exceed the tax imposed by section 5747.02 of the Revised Code,	91
in which case no return shall be required unless the taxpayer is	92
liable for a tax imposed pursuant to Chapter 5748. of the Revised	93
Code.	94

(A) If an individual is deceased, any return or notice	95
required of that individual under this chapter shall be made and	96
filed by that decedent's executor, administrator, or other person	97
charged with the property of that decedent.	98

(B) If an individual is unable to make a return or notice	99
required by this chapter, the return or notice required of that	100
individual shall be made and filed by the individual's duly	101
authorized agent, guardian, conservator, fiduciary, or other	102
person charged with the care of the person or property of that	103
individual.	104

(C) Returns or notices required of an estate or a trust shall	105
be made and filed by the fiduciary of the estate or trust.	106

(D)(1)(a) Except as otherwise provided in division (D)(1)(b)	107
of this section, any pass-through entity may file a single return	108
on behalf of one or more of the entity's investors other than an	109
investor that is a person subject to the tax imposed under section	110
5733.06 of the Revised Code. The single return shall set forth the	111
name, address, and social security number or other identifying	112
number of each of those pass-through entity investors and shall	113
indicate the distributive share of each of those pass-through	114
entity investor's income taxable in this state in accordance with	115
sections 5747.20 to 5747.231 of the Revised Code. Such	116
pass-through entity investors for whom the pass-through entity	117
elects to file a single return are not entitled to the exemption	118
or credit provided for by sections 5747.02 and 5747.022 of the	119
Revised Code; shall calculate the tax before business credits at	120
the highest rate of tax set forth in section 5747.02 of the	121
Revised Code for the taxable year for which the return is filed;	122
and are entitled to only their distributive share of the business	123
credits as defined in division (D)(2) of this section. A single	124
check drawn by the pass-through entity shall accompany the return	125
in full payment of the tax due, as shown on the single return, for	126
such investors, other than investors who are persons subject to	127
the tax imposed under section 5733.06 of the Revised Code.	128

(b)(i) A pass-through entity shall not include in such a	129
single return any investor that is a trust to the extent that any	130
direct or indirect current, future, or contingent beneficiary of	131
the trust is a person subject to the tax imposed under section	132
5733.06 of the Revised Code.	133

(ii) A pass-through entity shall not include in such a single	134
return any investor that is itself a pass-through entity to the	135
extent that any direct or indirect investor in the second	136
pass-through entity is a person subject to the tax imposed under	137
section 5733.06 of the Revised Code.	138

(c) Nothing in division (D) of this section precludes the tax	139
commissioner from requiring such investors to file the return and	140
make the payment of taxes and related interest, penalty, and	141
interest penalty required by this section or section 5747.02,	142
5747.09, or 5747.15 of the Revised Code. Nothing in division (D)	143
of this section shall be construed to provide to such an investor	144
or pass-through entity any additional deduction or credit, other	145
than the credit provided by division (J) of this section, solely	146
on account of the entity's filing a return in accordance with this	147
section. Such a pass-through entity also shall make the filing and	148
payment of estimated taxes on behalf of the pass-through entity	149
investors other than an investor that is a person subject to the	150
tax imposed under section 5733.06 of the Revised Code.	151

(2) For the purposes of this section, "business credits"	152
means the credits listed in section 5747.98 of the Revised Code	153
excluding the following credits:	154

(a) The retirement credit under division (B) of section	155
5747.055 of the Revised Code;	156

(b) The senior citizen credit under division (C) of section	157
5747.05 of the Revised Code;	158

(c) The lump sum distribution credit under division (D) of	159
section 5747.05 of the Revised Code;	160

(d) The dependent care credit under section 5747.054 of the	161
Revised Code;	162

(e) The lump sum retirement income credit under division (C)	163
of section 5747.055 of the Revised Code;	164

(f) The lump sum retirement income credit under division (D)	165
of section 5747.055 of the Revised Code;	166

(g) The lump sum retirement income credit under division (E)	167
of section 5747.055 of the Revised Code;	168

(h) The credit for displaced workers who pay for job training	169
under section 5747.27 of the Revised Code;	170

(i) The twenty-dollar personal exemption credit under section	171
5747.022 of the Revised Code;	172

(j) The joint filing credit under division (G) of section	173
5747.05 of the Revised Code;	174

(k) The nonresident credit under division (A) of section	175
5747.05 of the Revised Code;	176

(l) The credit for a resident's out-of-state income under	177
division (B) of section 5747.05 of the Revised Code;	178

(m) The low-income credit under section 5747.056 of the	179
Revised Code;	180

(n) The credit for graduates from institutions of higher	181
education in approved fields of study under section 5747.81 of the	182
Revised Code.	183

(3) The election provided for under division (D) of this	184
section applies only to the taxable year for which the election is	185
made by the pass-through entity. Unless the tax commissioner	186
provides otherwise, this election, once made, is binding and	187
irrevocable for the taxable year for which the election is made.	188
Nothing in this division shall be construed to provide for any	189
deduction or credit that would not be allowable if a nonresident	190
pass-through entity investor were to file an annual return.	191

(4) If a pass-through entity makes the election provided for	192
under division (D) of this section, the pass-through entity shall	193
be liable for any additional taxes, interest, interest penalty, or	194
penalties imposed by this chapter if the tax commissioner finds	195
that the single return does not reflect the correct tax due by the	196
pass-through entity investors covered by that return. Nothing in	197
this division shall be construed to limit or alter the liability,	198
if any, imposed on pass-through entity investors for unpaid or	199
underpaid taxes, interest, interest penalty, or penalties as a	200
result of the pass-through entity's making the election provided	201
for under division (D) of this section. For the purposes of	202
division (D) of this section, "correct tax due" means the tax that	203
would have been paid by the pass-through entity had the single	204
return been filed in a manner reflecting the tax commissioner's	205
findings. Nothing in division (D) of this section shall be	206
construed to make or hold a pass-through entity liable for tax	207
attributable to a pass-through entity investor's income from a	208
source other than the pass-through entity electing to file the	209
single return.	210

(E) If a husband and wife file a joint federal income tax	211
return for a taxable year, they shall file a joint return under	212
this section for that taxable year, and their liabilities are	213
joint and several, but, if the federal income tax liability of	214
either spouse is determined on a separate federal income tax	215
return, they shall file separate returns under this section.	216

If either spouse is not required to file a federal income tax	217
return and either or both are required to file a return pursuant	218
to this chapter, they may elect to file separate or joint returns,	219
and, pursuant to that election, their liabilities are separate or	220
joint and several. If a husband and wife file separate returns	221
pursuant to this chapter, each must claim the taxpayer's own	222
exemption, but not both, as authorized under section 5747.02 of	223
the Revised Code on the taxpayer's own return.	224

(F) Each return or notice required to be filed under this	225
section shall contain the signature of the taxpayer or the	226
taxpayer's duly authorized agent and of the person who prepared	227
the return for the taxpayer, and shall include the taxpayer's	228
social security number. Each return shall be verified by a	229
declaration under the penalties of perjury. The tax commissioner	230
shall prescribe the form that the signature and declaration shall	231
take.	232

(G) Each return or notice required to be filed under this	233
section shall be made and filed as required by section 5747.04 of	234
the Revised Code, on or before the fifteenth day of April of each	235
year, on forms that the tax commissioner shall prescribe, together	236
with remittance made payable to the treasurer of state in the	237
combined amount of the state and all school district income taxes	238
shown to be due on the form, unless the combined amount shown to	239
be due is one dollar or less, in which case that amount need not	240
be remitted.	241

Upon good cause shown, the tax commissioner may extend the	242
period for filing any notice or return required to be filed under	243
this section and may adopt rules relating to extensions. If the	244
extension results in an extension of time for the payment of any	245
state or school district income tax liability with respect to	246
which the return is filed, the taxpayer shall pay at the time the	247
tax liability is paid an amount of interest computed at the rate	248
per annum prescribed by section 5703.47 of the Revised Code on	249
that liability from the time that payment is due without extension	250
to the time of actual payment. Except as provided in section	251
5747.132 of the Revised Code, in addition to all other interest	252
charges and penalties, all taxes imposed under this chapter or	253
Chapter 5748. of the Revised Code and remaining unpaid after they	254
become due, except combined amounts due of one dollar or less,	255
bear interest at the rate per annum prescribed by section 5703.47	256
of the Revised Code until paid or until the day an assessment is	257
issued under section 5747.13 of the Revised Code, whichever occurs	258
first.	259

If the tax commissioner considers it necessary in order to	260
ensure the payment of the tax imposed by section 5747.02 of the	261
Revised Code or any tax imposed under Chapter 5748. of the Revised	262
Code, the tax commissioner may require returns and payments to be	263
made otherwise than as provided in this section.	264

To the extent that any provision in this division conflicts	265
with any provision in section 5747.026 of the Revised Code, the	266
provision in that section prevails.	267

(H) If any report, claim, statement, or other document	268
required to be filed, or any payment required to be made, within a	269
prescribed period or on or before a prescribed date under this	270
chapter is delivered after that period or that date by United	271
States mail to the agency, officer, or office with which the	272
report, claim, statement, or other document is required to be	273
filed, or to which the payment is required to be made, the date of	274
the postmark stamped on the cover in which the report, claim,	275
statement, or other document, or payment is mailed shall be deemed	276
to be the date of delivery or the date of payment.	277

If a payment is required to be made by electronic funds	278
transfer pursuant to section 5747.072 of the Revised Code, the	279
payment is considered to be made when the payment is received by	280
the treasurer of state or credited to an account designated by the	281
treasurer of state for the receipt of tax payments.	282

"The date of the postmark" means, in the event there is more	283
than one date on the cover, the earliest date imprinted on the	284
cover by the United States postal service.	285

(I) The amounts withheld by the employer pursuant to section	286
5747.06 of the Revised Code shall be allowed to the recipient of	287
the compensation as credits against payment of the appropriate	288
taxes imposed on the recipient by section 5747.02 and under	289
Chapter 5748. of the Revised Code.	290

(J) If, in accordance with division (D) of this section, a	291
pass-through entity elects to file a single return and if any	292
investor is required to file the return and make the payment of	293
taxes required by this chapter on account of the investor's other	294
income that is not included in a single return filed by a	295
pass-through entity, the investor is entitled to a refundable	296
credit equal to the investor's proportionate share of the tax paid	297
by the pass-through entity on behalf of the investor. The investor	298
shall claim the credit for the investor's taxable year in which or	299
with which ends the taxable year of the pass-through entity.	300
Nothing in this chapter shall be construed to allow any credit	301
provided in this chapter to be claimed more than once. For the	302
purposes of computing any interest, penalty, or interest penalty,	303
the investor shall be deemed to have paid the refundable credit	304
provided by this division on the day that the pass-through entity	305
paid the estimated tax or the tax giving rise to the credit.	306

(K) The tax commissioner shall ensure that each return	307
required to be filed under this section includes a box that the	308
taxpayer may check to authorize a paid tax preparer who prepared	309
the return to communicate with the department of taxation about	310
matters pertaining to the return. The return or instructions	311
accompanying the return shall indicate that by checking the box	312
the taxpayer authorizes the department of taxation to contact the	313
preparer concerning questions that arise during the processing of	314
the return and authorizes the preparer only to provide the	315
department with information that is missing from the return, to	316
contact the department for information about the processing of the	317
return or the status of the taxpayer's refund or payments, and to	318
respond to notices about mathematical errors, offsets, or return	319
preparation that the taxpayer has received from the department and	320
has shown to the preparer.	321

(L) The tax commissioner shall permit individual taxpayers to	322
instruct the department of taxation to cause any refund of	323
overpaid taxes to be deposited directly into a checking account,	324
savings account, or an individual retirement account or individual	325
retirement annuity, or preexisting college savings plan or program	326
account offered by the Ohio tuition trust authority under Chapter	327
3334. of the Revised Code, as designated by the taxpayer, when the	328
taxpayer files the annual return required by this section	329
electronically.	330

(M) The tax commissioner may adopt rules to administer this	331
section.	332

Sec. 5747.81.  A taxpayer who qualifies for the credit	333
authorized under section 3333.51 of the Revised Code is allowed a	334
nonrefundable credit against the tax imposed by section 5747.02	335
of the Revised Code. The credit shall be claimed as provided in	336
section 3333.51 of the Revised Code and in the order required	337
under section 5747.98 of the Revised Code. The amount of credit	338
claimed for a taxable year shall not exceed the tax otherwise due	339
after allowing for all preceding credits in that order. If the	340
amount of credit allowed for a taxable year exceeds the tax	341
otherwise due, the excess may be carried forward to the next	342
taxable year. Excess credit allowed in a taxable year shall be	343
deducted from the balance carried forward to the ensuing taxable	344
year. If a credit may not be claimed for a taxable year, excess	345
credit carried forward from a previous year may not be claimed.	346

Sec. 5747.98.  (A) To provide a uniform procedure for	347
calculating the amount of tax due under section 5747.02 of the	348
Revised Code, a taxpayer shall claim any credits to which the	349
taxpayer is entitled in the following order:	350

(1) The retirement income credit under division (B) of	351
section 5747.055 of the Revised Code;	352

(2) The senior citizen credit under division (C) of section	353
5747.05 of the Revised Code;	354

(3) The lump sum distribution credit under division (D) of	355
section 5747.05 of the Revised Code;	356

(4) The dependent care credit under section 5747.054 of the	357
Revised Code;	358

(5) The lump sum retirement income credit under division (C)	359
of section 5747.055 of the Revised Code;	360

(6) The lump sum retirement income credit under division (D)	361
of section 5747.055 of the Revised Code;	362

(7) The lump sum retirement income credit under division (E)	363
of section 5747.055 of the Revised Code;	364

(8) The low-income credit under section 5747.056 of the	365
Revised Code;	366

(9) The credit for displaced workers who pay for job training	367
under section 5747.27 of the Revised Code;	368

(10) The campaign contribution credit under section 5747.29	369
of the Revised Code;	370

(11) The twenty-dollar personal exemption credit under	371
section 5747.022 of the Revised Code;	372

(12) The joint filing credit under division (G) of section	373
5747.05 of the Revised Code;	374

(13) The nonresident credit under division (A) of section	375
5747.05 of the Revised Code;	376

(14) The credit for a resident's out-of-state income under	377
division (B) of section 5747.05 of the Revised Code;	378

(15) The credit for employers that enter into agreements with	379
child day-care centers under section 5747.34 of the Revised Code;	380

(16) The credit for employers that reimburse employee child	381
care expenses under section 5747.36 of the Revised Code;	382

(17) The credit for adoption of a minor child under section	383
5747.37 of the Revised Code;	384

(18) The credit for purchases of lights and reflectors under	385
section 5747.38 of the Revised Code;	386

(19) The job retention credit under division (B) of section	387
5747.058 of the Revised Code;	388

(20) The credit for selling alternative fuel under section	389
5747.77 of the Revised Code;	390

(21) The second credit for purchases of new manufacturing	391
machinery and equipment and the credit for using Ohio coal under	392
section 5747.31 of the Revised Code;	393

(22) The job training credit under section 5747.39 of the	394
Revised Code;	395

(23) The enterprise zone credit under section 5709.66 of the	396
Revised Code;	397

(24) The credit for the eligible costs associated with a	398
voluntary action under section 5747.32 of the Revised Code;	399

(25) The credit for employers that establish on-site child	400
day-care centers under section 5747.35 of the Revised Code;	401

(26) The ethanol plant investment credit under section	402
5747.75 of the Revised Code;	403

(27) The credit for purchases of qualifying grape production	404
property under section 5747.28 of the Revised Code;	405

(28) The credit for graduates from institutions of higher	406
education in approved fields of study under section 5747.81 of the	407
Revised Code;	408

(29) The export sales credit under section 5747.057 of the	409
Revised Code;	410

(29)(30) The credit for research and development and	411
technology transfer investors under section 5747.33 of the Revised	412
Code;	413

(30)(31) The enterprise zone credits under section 5709.65 of	414
the Revised Code;	415

(31)(32) The research and development credit under section	416
5747.331 of the Revised Code;	417

(32)(33) The credit for rehabilitating a historic building	418
under section 5747.76 of the Revised Code;	419

(33)(34) The refundable credit for rehabilitating a historic	420
building under section 5747.76 of the Revised Code;	421

(34)(35) The refundable jobs creation credit under division	422
(A) of section 5747.058 of the Revised Code;	423

(35)(36) The refundable credit for taxes paid by a qualifying	424
entity granted under section 5747.059 of the Revised Code;	425

(36)(37) The refundable credits for taxes paid by a	426
qualifying pass-through entity granted under division (J) of	427
section 5747.08 of the Revised Code;	428

(37)(38) The refundable credit for tax withheld under	429
division (B)(1) of section 5747.062 of the Revised Code;	430

(38)(39) The refundable credit for tax withheld under section	431
5747.063 of the Revised Code;	432

(39)(40) The refundable credit under section 5747.80 of the	433
Revised Code for losses on loans made to the Ohio venture capital	434
program under sections 150.01 to 150.10 of the Revised Code;	435

(40)(41) The refundable motion picture production credit	436
under section 5747.66 of the Revised Code.	437

(B) For any nonrefundable credit, except the refundable	438
credits enumerated in this section and the credit granted under	439
division (I) of section 5747.08 of the Revised Code, the amount of	440
the credit for a taxable year shall not exceed the tax due after	441
allowing for any other credit that precedes it in the order	442
required under this section. Any excess amount of a particular	443
credit may be carried forward if authorized under the section	444
creating that credit. Nothing in this chapter shall be construed	445
to allow a taxpayer to claim, directly or indirectly, a credit	446
more than once for a taxable year.	447

Section 2.  That existing sections 5747.08 and 5747.98 of the	448
Revised Code are hereby repealed.	449

Section 3.  Section 5747.08 of the Revised Code is presented	450
in this act as a composite of the section as amended by both Sub.	451
S.B. 155 and Am. Sub. S.B. 194 of the 128th General Assembly. The	452
General Assembly, applying the principle stated in division (B) of	453
section 1.52 of the Revised Code that amendments are to be	454
harmonized if reasonably capable of simultaneous operation, finds	455
that the composite is the resulting version of the section in	456
effect prior to the effective date of the section as presented in	457
this act.	458