Bill Text: OH HB567 | 2013-2014 | 130th General Assembly | Introduced

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Bill Title: To require the State Veterinary Medical Licensing Board to inspect the place of business of a person that is licensed, registered, or permitted under the Veterinarians Law, to establish requirements and procedures for those inspections, and to authorize an income tax deduction of up to $2,500 per year for veterinarians who provide free veterinary services.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2014-05-22 - To Finance and Appropriations [HB567 Detail]

Download: Ohio-2013-HB567-Introduced.html

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As Introduced

130th General Assembly Regular Session 2013-2014

H. B. No. 567

Representative Pillich 

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A BILL

To amend sections 4741.01, 4741.03, 4741.26, and

1

5747.01 and to enact section 5747.78 of the

2

Revised Code to require the State Veterinary

3

Medical Licensing Board to inspect the place of

4

business of a person that is licensed, registered,

5

or permitted under the Veterinarians Law, to

6

establish requirements and procedures for those

7

inspections, and to authorize an income tax

8

deduction of up to $2,500 per year for

9

veterinarians who provide free veterinary

10

services.

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

Section 1. That sections 4741.01, 4741.03, 4741.26, and	12
5747.01 be amended and section 5747.78 of the Revised Code be	13
enacted to read as follows:	14

Sec. 4741.01.  As used in this chapter:

15

(A) "Animal" means any animal other than a human being and	16
includes fowl, birds, fish, and reptiles, wild or domestic, living	17
or dead.	18

(B) The "practice of veterinary medicine" means the practice	19
of any person who performs any of the following actions:	20

(1) Diagnoses, prevents, or treats any disease, illness,	21
pain, deformity, defect, injury, or other physical, mental, or	22
dental condition of any animal;	23

(2) Administers to or performs any medical or surgical	24
technique on any animal that has any disease, illness, pain,	25
deformity, defect, injury, or other physical, mental, or dental	26
condition or performs a surgical procedure on any animal;	27

(3) Prescribes, applies, or dispenses any drug, medicine,	28
biologic, anesthetic, or other therapeutic or diagnostic	29
substance, or applies any apparatus for any disease, illness,	30
pain, deformity, defect, injury, or other physical, mental, or	31
dental condition of any animal;	32

(4) Uses complementary, alternative, and integrative	33
therapies on animals;	34

(5) Renders professional advice or recommendation by any	35
means, including telephonic or other electronic communication with	36
regard to any activity described in divisions (B)(1) to (4) of	37
this section;	38

(6) Represents the person's self, directly or indirectly,	39
publicly or privately, as having the ability and willingness to	40
perform an act described in divisions (B)(1) to (4) of this	41
section;	42

(7) Uses any words, letters, abbreviations, or titles in such	43
connection and under such circumstances as to induce the belief	44
that the person using them is engaged in the practice of	45
veterinary medicine.	46

(C) "Specialist" means a licensed veterinarian who is	47
certified by a veterinary specialty board of a professional	48
veterinary association recognized by rule of the state veterinary	49
medical licensing board.	50

(D) "Veterinary supervision" means instruction and directions	51
by a licensed veterinarian on the premises or by a licensed	52
veterinarian who is readily available to communicate with a person	53
requiring supervision.	54

(E) "Veterinary student" means a student enrolled in a	55
college of veterinary medicine or a veterinary technology college	56
approved by the board and who is working with a licensed	57
veterinarian.	58

(F) "Registered veterinary technician" means a person who is	59
a graduate of a veterinary technology college approved by the	60
state veterinary medical licensing board, has successfully passed	61
an examination approved by the board, and maintains registration	62
eligibility status in accordance with rules adopted by the board.	63

(G) "Animal aide" means a person who is employed by a	64
licensed veterinarian and supervised by a licensed veterinarian or	65
a registered veterinary technician to perform duties such as	66
record keeping, animal restraint, and such other duties that the	67
board, by rule, establishes. In adopting the rules, the board	68
shall include rules regarding the degree of supervision required	69
for each duty. The rules shall be consistent with generally	70
accepted standards of veterinary medical practice.	71

(H) "Advertising" means any manner, method, means, or	72
activity by which a practicing veterinarian, a practicing	73
veterinarian's partners, or associates, or any information in	74
reference to veterinary science, is made known to the public	75
through any use of motion pictures, newspapers, magazines, books,	76
radio, television announcements, or any other manner, method,	77
means, or activity which commercially publicizes the professional	78
image of the veterinarian.	79

(I) "Embryo transfer" means the removal of an embryo ovum	80
from the reproductive tract of an animal and its transfer to the	81
reproductive tract of another animal for the purpose of gestation	82
and birth.	83

(J) "Veterinary consultant" means a veterinarian who is not	84
licensed in this state and who provides advice and counsel to a	85
requesting veterinarian licensed in this state in regard to the	86
treatment, diagnosis, or health care of an animal or animals in a	87
specific case.	88

(K) "Direct veterinary supervision" means a licensed	89
veterinarian is in the immediate area and within audible range,	90
visual range, or both, of a patient and the person administering	91
to the patient.	92

(L) "Allied medical support" means a licensed dentist,	93
physician, chiropractor, or physical therapist who is in good	94
standing as determined under Chapter 4715., 4731., 4734., or 4755.	95
of the Revised Code, as applicable.	96

(M) "Veterinary-client-patient-relationship" means a	97
relationship that meets the requirements of section 4741.04 of the	98
Revised Code.	99

(N) "Licensed veterinarian" means a person licensed by the	100
board to practice veterinary medicine.	101

(O) "Client" means the patient's owner, owner's agent, or	102
other person responsible for the patient.	103

(P) "Veterinary technology" means the science and art of	104
providing professional support to veterinarians.	105

(Q) "Patient" means an animal that is examined or treated by	106
a licensed veterinarian.	107

(R) "Authorized agent" means a person who is currently or has	108
previously been licensed as a veterinarian or a person who is	109
currently or has previously been registered as a veterinary	110
technician in this state and has been hired by the state	111
veterinary medical board to conduct investigations and inspections	112
under section 4741.26 of the Revised Code.	113

Sec. 4741.03.  (A) The state veterinary medical licensing	114
board shall meet at least once in each calendar year and may hold	115
additional meetings as often as it considers necessary to conduct	116
the business of the board. The president of the board may call	117
special meetings, and the executive director shall call special	118
meetings upon the written request of three members of the board.	119
The board shall organize by electing a president and	120
vice-president from its veterinarian members and such other	121
officers as the board prescribes by rule. Each officer shall serve	122
for a term specified by board rule or until a successor is elected	123
and qualified. A quorum of the board consists of four members of	124
which at least three are members who are veterinarians. The	125
concurrence of four members is necessary for the board to take any	126
action.	127

(B) The board may appoint a person, not one of its members,	128
to serve as its executive director. The executive director is in	129
the unclassified service and serves at the pleasure of the board.	130
The executive director shall serve as the board's	131
secretary-treasurer ex officio. The board may employ additional	132
employees for professional, technical, clerical, and special work	133
as it considers necessary, including authorized agents. The	134
executive director shall give a surety bond to the state in the	135
sum the board requires, conditioned upon the faithful performance	136
of the executive director's duties. The board shall pay the cost	137
of the bond. The executive director shall keep a complete	138
accounting of all funds received and of all vouchers presented by	139
the board to the director of budget and management for the	140
disbursement of funds. The president or executive director shall	141
approve all vouchers of the board. All money received by the board	142
shall be credited to the occupational licensing and regulatory	143
fund.	144

(C) In addition to any other duty required under this	145
chapter, the board shall do all of the following:	146

(1) Prescribe a seal;

147

(2) Accept and review applications for admission to an	148
examination in accordance with section 4741.09 of the Revised Code	149
and review the results of examinations taken by applicants in	150
accordance with rules adopted by the board.;	151

(3) Keep a record of all of its meetings and proceedings;

152

(4) Maintain a register that records all applicants for a	153
certificate of license or a temporary permit, all persons who have	154
been denied a license or permit, all persons who have been granted	155
or reissued a license or permit, and all persons whose license or	156
permit has been revoked or suspended. The register shall also	157
include a record of persons licensed prior to October 17, 1975.	158

(5) Maintain a register, in such form as the board determines	159
by rule, of all colleges and universities that teach veterinary	160
medicine and veterinary technology that are approved by the board;	161

(6) Maintain a register, in a form that the board determines	162
by rule, of unannounced inspections and inspections resulting from	163
a written complaint that are conducted under section 4741.26 of	164
the Revised Code of any licensee's, permit holder's, or	165
registrant's place of business;	166

(7) Enforce this chapter, and for that purpose, make	167
investigations relative as provided in section 4741.26 of the	168
Revised Code;	169

(7)(8) Issue licenses and permits to persons who meet the	170
qualifications set forth in this chapter;	171

(8)(9) Approve colleges and universities whichthat meet the	172
board's requirements for veterinary medicine and associated fields	173
of study and withdraw or deny, after an adjudication conducted in	174
accordance with Chapter 119. of the Revised Code, approval from	175
colleges and universities whichthat fail to meet those	176
requirements;	177

(9)(10) Establish a list of practices and procedures to be	178
examined during inspections conducted under section 4741.26 of the	179
Revised Code, including standards of hygiene, protocols for	180
procedures, record keeping, maintenance of equipment, and training	181
on the use of equipment;	182

(11) Establish criteria for dismissing a complaint under	183
section 4741.26 of the Revised Code;	184

(12) Establish the pay scale for authorized agents;

185

(13) Adopt rules, in accordance with Chapter 119. of the	186
Revised Code, whichthat are necessary for its government and for	187
the administration and enforcement of this chapter.	188

(D) The board may do allboth of the following:

189

(1) Subpoena witnesses and require their attendance and	190
testimony, and require the production by witnesses of books,	191
papers, public records, animal patient records, and other	192
documentary evidence and examine them, in relation to any matter	193
that the board has authority to investigate, inquire into, or	194
hear. Except for any officer or employee of the state or any	195
political subdivision of the state, the treasurer of state shall	196
pay all witnesses in any proceeding before the board, upon	197
certification from the board, witness fees and mileage in the	198
amount provided for under section 119.094 of the Revised Code.	199

(2) Examine and inspect books, papers, public records, animal	200
patient records, and other documentary evidence at the location	201
where the books, papers, records, and other evidence are normally	202
stored or maintained.	203

(E) All registers, books, and records kept by the board are	204
the property of the board and are open for public examination and	205
inspection at all reasonable times in accordance with section	206
149.43 of the Revised Code. The registers, books, and records are	207
prima-facie evidence of the matters contained in them.	208

Sec. 4741.26.  (A)(1) The state veterinary medical licensing	209
board shall enforce this chapter and for that purpose shall make	210
investigations relative thereto. Except as provided in this	211
division, in making any inspection pursuant to this chapter, the	212
board may enter and inspect, upon written notice of not less than	213
five days and during normal business hours, any licensee's, permit	214
holder's, or registrant's place of business. IfThe board may	215
enter and shall conduct random, unannounced inspections of twenty	216
per cent of all licensees', permit holders', and registrants'	217
places of business in this state each year. Each such place of	218
business shall be inspected at least once every five years. The	219
licensee, permit holder, or registrant shall pay a fee of two	220
hundred dollars for the inspection.	221

(2) If the board has knowledge or notice, pursuant to a	222
written complaint or any other written knowledge or notice by any	223
person as verified by the signature of that person, of a violation	224
of section 4741.18, 4741.19, or 4741.23 of the Revised Code, it	225
shall investigate and, upon probable cause appearing,. An	226
authorized agent shall meet in person with the complainant to	227
collect information regarding the complaint. The agent shall	228
deliver the information to the board for consideration. The board	229
shall do one of the following regarding the complaint:	230

(a) If the board determines that there is not probable cause	231
for the complaint, the board shall dismiss the complaint in	232
accordance with rules adopted under section 4741.03 of the Revised	233
Code and notify the complainant of the decision together with an	234
explanation of why the complaint was dismissed.	235

(b) If the board determines that there is probable cause for	236
the complaint, the board shall direct the executive director to	237
file a complaint and institute the prosecution of the offender. In	238

In conducting any investigation for a suspected violation of	239
this chapter, the board or its authorized agent does not have to	240
provide any prior written notice to the licensee, permit holder,	241
or registrant as long as the board provides a written	242
authorization for the investigation and the board or its	243
authorized agent provides the licensee, permit holder, or	244
registrant with a copy of the authorization at the time of the	245
investigation. When requested by the executive director, the	246
prosecuting attorney of a county or the village solicitor or city	247
director of law of a municipal corporation, wherein the violation	248
occurs shall take charge of and conduct the prosecution. The	249
attorney general or the attorney general's designated assistant	250
shall act as legal adviser to the board and shall render such	251
legal assistance as may be necessary.	252

(B) In addition to any other remedy the board may have	253
pursuant to law, if the board determines that any person is	254
practicing veterinary medicine without a license issued pursuant	255
to this chapter or is otherwise in violation of this chapter, the	256
board may, through its executive director, apply to a court having	257
jurisdiction in the county in which the offense occurred, for an	258
injunction or restraining order to enjoin or restrain the person	259
from further violations of this chapter. The attorney general	260
shall serve as the board's legal agent in the action.	261

Sec. 5747.01.  Except as otherwise expressly provided or	262
clearly appearing from the context, any term used in this chapter	263
that is not otherwise defined in this section has the same meaning	264
as when used in a comparable context in the laws of the United	265
States relating to federal income taxes or if not used in a	266
comparable context in those laws, has the same meaning as in	267
section 5733.40 of the Revised Code. Any reference in this chapter	268
to the Internal Revenue Code includes other laws of the United	269
States relating to federal income taxes.	270

As used in this chapter:

271

(A) "Adjusted gross income" or "Ohio adjusted gross income"	272
means federal adjusted gross income, as defined and used in the	273
Internal Revenue Code, adjusted as provided in this section:	274

(1) Add interest or dividends on obligations or securities of	275
any state or of any political subdivision or authority of any	276
state, other than this state and its subdivisions and authorities.	277

(2) Add interest or dividends on obligations of any	278
authority, commission, instrumentality, territory, or possession	279
of the United States to the extent that the interest or dividends	280
are exempt from federal income taxes but not from state income	281
taxes.	282

(3) Deduct interest or dividends on obligations of the United	283
States and its territories and possessions or of any authority,	284
commission, or instrumentality of the United States to the extent	285
that the interest or dividends are included in federal adjusted	286
gross income but exempt from state income taxes under the laws of	287
the United States.	288

(4) Deduct disability and survivor's benefits to the extent	289
included in federal adjusted gross income.	290

(5) Deduct benefits under Title II of the Social Security Act	291
and tier 1 railroad retirement benefits to the extent included in	292
federal adjusted gross income under section 86 of the Internal	293
Revenue Code.	294

(6) In the case of a taxpayer who is a beneficiary of a trust	295
that makes an accumulation distribution as defined in section 665	296
of the Internal Revenue Code, add, for the beneficiary's taxable	297
years beginning before 2002, the portion, if any, of such	298
distribution that does not exceed the undistributed net income of	299
the trust for the three taxable years preceding the taxable year	300
in which the distribution is made to the extent that the portion	301
was not included in the trust's taxable income for any of the	302
trust's taxable years beginning in 2002 or thereafter.	303
"Undistributed net income of a trust" means the taxable income of	304
the trust increased by (a)(i) the additions to adjusted gross	305
income required under division (A) of this section and (ii) the	306
personal exemptions allowed to the trust pursuant to section	307
642(b) of the Internal Revenue Code, and decreased by (b)(i) the	308
deductions to adjusted gross income required under division (A) of	309
this section, (ii) the amount of federal income taxes attributable	310
to such income, and (iii) the amount of taxable income that has	311
been included in the adjusted gross income of a beneficiary by	312
reason of a prior accumulation distribution. Any undistributed net	313
income included in the adjusted gross income of a beneficiary	314
shall reduce the undistributed net income of the trust commencing	315
with the earliest years of the accumulation period.	316

(7) Deduct the amount of wages and salaries, if any, not	317
otherwise allowable as a deduction but that would have been	318
allowable as a deduction in computing federal adjusted gross	319
income for the taxable year, had the targeted jobs credit allowed	320
and determined under sections 38, 51, and 52 of the Internal	321
Revenue Code not been in effect.	322

(8) Deduct any interest or interest equivalent on public	323
obligations and purchase obligations to the extent that the	324
interest or interest equivalent is included in federal adjusted	325
gross income.	326

(9) Add any loss or deduct any gain resulting from the sale,	327
exchange, or other disposition of public obligations to the extent	328
that the loss has been deducted or the gain has been included in	329
computing federal adjusted gross income.	330

(10) Deduct or add amounts, as provided under section 5747.70	331
of the Revised Code, related to contributions to variable college	332
savings program accounts made or tuition units purchased pursuant	333
to Chapter 3334. of the Revised Code.	334

(11)(a) Deduct, to the extent not otherwise allowable as a	335
deduction or exclusion in computing federal or Ohio adjusted gross	336
income for the taxable year, the amount the taxpayer paid during	337
the taxable year for medical care insurance and qualified	338
long-term care insurance for the taxpayer, the taxpayer's spouse,	339
and dependents. No deduction for medical care insurance under	340
division (A)(11) of this section shall be allowed either to any	341
taxpayer who is eligible to participate in any subsidized health	342
plan maintained by any employer of the taxpayer or of the	343
taxpayer's spouse, or to any taxpayer who is entitled to, or on	344
application would be entitled to, benefits under part A of Title	345
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.	346
301, as amended. For the purposes of division (A)(11)(a) of this	347
section, "subsidized health plan" means a health plan for which	348
the employer pays any portion of the plan's cost. The deduction	349
allowed under division (A)(11)(a) of this section shall be the net	350
of any related premium refunds, related premium reimbursements, or	351
related insurance premium dividends received during the taxable	352
year.	353

(b) Deduct, to the extent not otherwise deducted or excluded	354
in computing federal or Ohio adjusted gross income during the	355
taxable year, the amount the taxpayer paid during the taxable	356
year, not compensated for by any insurance or otherwise, for	357
medical care of the taxpayer, the taxpayer's spouse, and	358
dependents, to the extent the expenses exceed seven and one-half	359
per cent of the taxpayer's federal adjusted gross income.	360

(c) Deduct, to the extent not otherwise deducted or excluded	361
in computing federal or Ohio adjusted gross income, any amount	362
included in federal adjusted gross income under section 105 or not	363
excluded under section 106 of the Internal Revenue Code solely	364
because it relates to an accident and health plan for a person who	365
otherwise would be a "qualifying relative" and thus a "dependent"	366
under section 152 of the Internal Revenue Code but for the fact	367
that the person fails to meet the income and support limitations	368
under section 152(d)(1)(B) and (C) of the Internal Revenue Code.	369

(d) For purposes of division (A)(11) of this section,	370
"medical care" has the meaning given in section 213 of the	371
Internal Revenue Code, subject to the special rules, limitations,	372
and exclusions set forth therein, and "qualified long-term care"	373
has the same meaning given in section 7702B(c) of the Internal	374
Revenue Code. Solely for purposes of divisions (A)(11)(a) and (c)	375
of this section, "dependent" includes a person who otherwise would	376
be a "qualifying relative" and thus a "dependent" under section	377
152 of the Internal Revenue Code but for the fact that the person	378
fails to meet the income and support limitations under section	379
152(d)(1)(B) and (C) of the Internal Revenue Code.	380

(12)(a) Deduct any amount included in federal adjusted gross	381
income solely because the amount represents a reimbursement or	382
refund of expenses that in any year the taxpayer had deducted as	383
an itemized deduction pursuant to section 63 of the Internal	384
Revenue Code and applicable United States department of the	385
treasury regulations. The deduction otherwise allowed under	386
division (A)(12)(a) of this section shall be reduced to the extent	387
the reimbursement is attributable to an amount the taxpayer	388
deducted under this section in any taxable year.	389

(b) Add any amount not otherwise included in Ohio adjusted	390
gross income for any taxable year to the extent that the amount is	391
attributable to the recovery during the taxable year of any amount	392
deducted or excluded in computing federal or Ohio adjusted gross	393
income in any taxable year.	394

(13) Deduct any portion of the deduction described in section	395
1341(a)(2) of the Internal Revenue Code, for repaying previously	396
reported income received under a claim of right, that meets both	397
of the following requirements:	398

(a) It is allowable for repayment of an item that was	399
included in the taxpayer's adjusted gross income for a prior	400
taxable year and did not qualify for a credit under division (A)	401
or (B) of section 5747.05 of the Revised Code for that year;	402

(b) It does not otherwise reduce the taxpayer's adjusted	403
gross income for the current or any other taxable year.	404

(14) Deduct an amount equal to the deposits made to, and net	405
investment earnings of, a medical savings account during the	406
taxable year, in accordance with section 3924.66 of the Revised	407
Code. The deduction allowed by division (A)(14) of this section	408
does not apply to medical savings account deposits and earnings	409
otherwise deducted or excluded for the current or any other	410
taxable year from the taxpayer's federal adjusted gross income.	411

(15)(a) Add an amount equal to the funds withdrawn from a	412
medical savings account during the taxable year, and the net	413
investment earnings on those funds, when the funds withdrawn were	414
used for any purpose other than to reimburse an account holder	415
for, or to pay, eligible medical expenses, in accordance with	416
section 3924.66 of the Revised Code;	417

(b) Add the amounts distributed from a medical savings	418
account under division (A)(2) of section 3924.68 of the Revised	419
Code during the taxable year.	420

(16) Add any amount claimed as a credit under section	421
5747.059 or 5747.65 of the Revised Code to the extent that such	422
amount satisfies either of the following:	423

(a) The amount was deducted or excluded from the computation	424
of the taxpayer's federal adjusted gross income as required to be	425
reported for the taxpayer's taxable year under the Internal	426
Revenue Code;	427

(b) The amount resulted in a reduction of the taxpayer's	428
federal adjusted gross income as required to be reported for any	429
of the taxpayer's taxable years under the Internal Revenue Code.	430

(17) Deduct the amount contributed by the taxpayer to an	431
individual development account program established by a county	432
department of job and family services pursuant to sections 329.11	433
to 329.14 of the Revised Code for the purpose of matching funds	434
deposited by program participants. On request of the tax	435
commissioner, the taxpayer shall provide any information that, in	436
the tax commissioner's opinion, is necessary to establish the	437
amount deducted under division (A)(17) of this section.	438

(18) Beginning in taxable year 2001 but not for any taxable	439
year beginning after December 31, 2005, if the taxpayer is married	440
and files a joint return and the combined federal adjusted gross	441
income of the taxpayer and the taxpayer's spouse for the taxable	442
year does not exceed one hundred thousand dollars, or if the	443
taxpayer is single and has a federal adjusted gross income for the	444
taxable year not exceeding fifty thousand dollars, deduct amounts	445
paid during the taxable year for qualified tuition and fees paid	446
to an eligible institution for the taxpayer, the taxpayer's	447
spouse, or any dependent of the taxpayer, who is a resident of	448
this state and is enrolled in or attending a program that	449
culminates in a degree or diploma at an eligible institution. The	450
deduction may be claimed only to the extent that qualified tuition	451
and fees are not otherwise deducted or excluded for any taxable	452
year from federal or Ohio adjusted gross income. The deduction may	453
not be claimed for educational expenses for which the taxpayer	454
claims a credit under section 5747.27 of the Revised Code.	455

(19) Add any reimbursement received during the taxable year	456
of any amount the taxpayer deducted under division (A)(18) of this	457
section in any previous taxable year to the extent the amount is	458
not otherwise included in Ohio adjusted gross income.	459

(20)(a)(i) Subject to divisions (A)(20)(a)(iii), (iv), and	460
(v) of this section, add five-sixths of the amount of depreciation	461
expense allowed by subsection (k) of section 168 of the Internal	462
Revenue Code, including the taxpayer's proportionate or	463
distributive share of the amount of depreciation expense allowed	464
by that subsection to a pass-through entity in which the taxpayer	465
has a direct or indirect ownership interest.	466

(ii) Subject to divisions (A)(20)(a)(iii), (iv), and (v) of	467
this section, add five-sixths of the amount of qualifying section	468
179 depreciation expense, including the taxpayer's proportionate	469
or distributive share of the amount of qualifying section 179	470
depreciation expense allowed to any pass-through entity in which	471
the taxpayer has a direct or indirect ownership interest.	472

(iii) Subject to division (A)(20)(a)(v) of this section, for	473
taxable years beginning in 2012 or thereafter, if the increase in	474
income taxes withheld by the taxpayer is equal to or greater than	475
ten per cent of income taxes withheld by the taxpayer during the	476
taxpayer's immediately preceding taxable year, "two-thirds" shall	477
be substituted for "five-sixths" for the purpose of divisions	478
(A)(20)(a)(i) and (ii) of this section.	479

(iv) Subject to division (A)(20)(a)(v) of this section, for	480
taxable years beginning in 2012 or thereafter, a taxpayer is not	481
required to add an amount under division (A)(20) of this section	482
if the increase in income taxes withheld by the taxpayer and by	483
any pass-through entity in which the taxpayer has a direct or	484
indirect ownership interest is equal to or greater than the sum of	485
(I) the amount of qualifying section 179 depreciation expense and	486
(II) the amount of depreciation expense allowed to the taxpayer by	487
subsection (k) of section 168 of the Internal Revenue Code, and	488
including the taxpayer's proportionate or distributive shares of	489
such amounts allowed to any such pass-through entities.	490

(v) If a taxpayer directly or indirectly incurs a net	491
operating loss for the taxable year for federal income tax	492
purposes, to the extent such loss resulted from depreciation	493
expense allowed by subsection (k) of section 168 of the Internal	494
Revenue Code and by qualifying section 179 depreciation expense,	495
"the entire" shall be substituted for "five-sixths of the" for the	496
purpose of divisions (A)(20)(a)(i) and (ii) of this section.	497

The tax commissioner, under procedures established by the	498
commissioner, may waive the add-backs related to a pass-through	499
entity if the taxpayer owns, directly or indirectly, less than	500
five per cent of the pass-through entity.	501

(b) Nothing in division (A)(20) of this section shall be	502
construed to adjust or modify the adjusted basis of any asset.	503

(c) To the extent the add-back required under division	504
(A)(20)(a) of this section is attributable to property generating	505
nonbusiness income or loss allocated under section 5747.20 of the	506
Revised Code, the add-back shall be sitused to the same location	507
as the nonbusiness income or loss generated by the property for	508
the purpose of determining the credit under division (A) of	509
section 5747.05 of the Revised Code. Otherwise, the add-back shall	510
be apportioned, subject to one or more of the four alternative	511
methods of apportionment enumerated in section 5747.21 of the	512
Revised Code.	513

(d) For the purposes of division (A)(20)(a)(v) of this	514
section, net operating loss carryback and carryforward shall not	515
include the allowance of any net operating loss deduction	516
carryback or carryforward to the taxable year to the extent such	517
loss resulted from depreciation allowed by section 168(k) of the	518
Internal Revenue Code and by the qualifying section 179	519
depreciation expense amount.	520

(e) For the purposes of divisions (A)(20) and (21) of this	521
section:	522

(i) "Income taxes withheld" means the total amount withheld	523
and remitted under sections 5747.06 and 5747.07 of the Revised	524
Code by an employer during the employer's taxable year.	525

(ii) "Increase in income taxes withheld" means the amount by	526
which the amount of income taxes withheld by an employer during	527
the employer's current taxable year exceeds the amount of income	528
taxes withheld by that employer during the employer's immediately	529
preceding taxable year.	530

(iii) "Qualifying section 179 depreciation expense" means the	531
difference between (I) the amount of depreciation expense directly	532
or indirectly allowed to a taxpayer under section 179 of the	533
Internal Revised Code, and (II) the amount of depreciation expense	534
directly or indirectly allowed to the taxpayer under section 179	535
of the Internal Revenue Code as that section existed on December	536
31, 2002.	537

(21)(a) If the taxpayer was required to add an amount under	538
division (A)(20)(a) of this section for a taxable year, deduct one	539
of the following:	540

(i) One-fifth of the amount so added for each of the five	541
succeeding taxable years if the amount so added was five-sixths of	542
qualifying section 179 depreciation expense or depreciation	543
expense allowed by subsection (k) of section 168 of the Internal	544
Revenue Code;	545

(ii) One-half of the amount so added for each of the two	546
succeeding taxable years if the amount so added was two-thirds of	547
such depreciation expense;	548

(iii) One-sixth of the amount so added for each of the six	549
succeeding taxable years if the entire amount of such depreciation	550
expense was so added.	551

(b) If the amount deducted under division (A)(21)(a) of this	552
section is attributable to an add-back allocated under division	553
(A)(20)(c) of this section, the amount deducted shall be sitused	554
to the same location. Otherwise, the add-back shall be apportioned	555
using the apportionment factors for the taxable year in which the	556
deduction is taken, subject to one or more of the four alternative	557
methods of apportionment enumerated in section 5747.21 of the	558
Revised Code.	559

(c) No deduction is available under division (A)(21)(a) of	560
this section with regard to any depreciation allowed by section	561
168(k) of the Internal Revenue Code and by the qualifying section	562
179 depreciation expense amount to the extent that such	563
depreciation results in or increases a federal net operating loss	564
carryback or carryforward. If no such deduction is available for a	565
taxable year, the taxpayer may carry forward the amount not	566
deducted in such taxable year to the next taxable year and add	567
that amount to any deduction otherwise available under division	568
(A)(21)(a) of this section for that next taxable year. The	569
carryforward of amounts not so deducted shall continue until the	570
entire addition required by division (A)(20)(a) of this section	571
has been deducted.	572

(d) No refund shall be allowed as a result of adjustments	573
made by division (A)(21) of this section.	574

(22) Deduct, to the extent not otherwise deducted or excluded	575
in computing federal or Ohio adjusted gross income for the taxable	576
year, the amount the taxpayer received during the taxable year as	577
reimbursement for life insurance premiums under section 5919.31 of	578
the Revised Code.	579

(23) Deduct, to the extent not otherwise deducted or excluded	580
in computing federal or Ohio adjusted gross income for the taxable	581
year, the amount the taxpayer received during the taxable year as	582
a death benefit paid by the adjutant general under section 5919.33	583
of the Revised Code.	584

(24) Deduct, to the extent included in federal adjusted gross	585
income and not otherwise allowable as a deduction or exclusion in	586
computing federal or Ohio adjusted gross income for the taxable	587
year, military pay and allowances received by the taxpayer during	588
the taxable year for active duty service in the United States	589
army, air force, navy, marine corps, or coast guard or reserve	590
components thereof or the national guard. The deduction may not be	591
claimed for military pay and allowances received by the taxpayer	592
while the taxpayer is stationed in this state.	593

(25) Deduct, to the extent not otherwise allowable as a	594
deduction or exclusion in computing federal or Ohio adjusted gross	595
income for the taxable year and not otherwise compensated for by	596
any other source, the amount of qualified organ donation expenses	597
incurred by the taxpayer during the taxable year, not to exceed	598
ten thousand dollars. A taxpayer may deduct qualified organ	599
donation expenses only once for all taxable years beginning with	600
taxable years beginning in 2007.	601

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

602

(a) "Human organ" means all or any portion of a human liver,	603
pancreas, kidney, intestine, or lung, and any portion of human	604
bone marrow.	605

(b) "Qualified organ donation expenses" means travel	606
expenses, lodging expenses, and wages and salary forgone by a	607
taxpayer in connection with the taxpayer's donation, while living,	608
of one or more of the taxpayer's human organs to another human	609
being.	610

(26) Deduct, to the extent not otherwise deducted or excluded	611
in computing federal or Ohio adjusted gross income for the taxable	612
year, amounts received by the taxpayer as retired personnel pay	613
for service in the uniformed services or reserve components	614
thereof, or the national guard, or received by the surviving	615
spouse or former spouse of such a taxpayer under the survivor	616
benefit plan on account of such a taxpayer's death. If the	617
taxpayer receives income on account of retirement paid under the	618
federal civil service retirement system or federal employees	619
retirement system, or under any successor retirement program	620
enacted by the congress of the United States that is established	621
and maintained for retired employees of the United States	622
government, and such retirement income is based, in whole or in	623
part, on credit for the taxpayer's uniformed service, the	624
deduction allowed under this division shall include only that	625
portion of such retirement income that is attributable to the	626
taxpayer's uniformed service, to the extent that portion of such	627
retirement income is otherwise included in federal adjusted gross	628
income and is not otherwise deducted under this section. Any	629
amount deducted under division (A)(26) of this section is not	630
included in a taxpayer's adjusted gross income for the purposes of	631
section 5747.055 of the Revised Code. No amount may be deducted	632
under division (A)(26) of this section on the basis of which a	633
credit was claimed under section 5747.055 of the Revised Code.	634

(27) Deduct, to the extent not otherwise deducted or excluded	635
in computing federal or Ohio adjusted gross income for the taxable	636
year, the amount the taxpayer received during the taxable year	637
from the military injury relief fund created in section 5101.98 of	638
the Revised Code.	639

(28) Deduct, to the extent not otherwise deducted or excluded	640
in computing federal or Ohio adjusted gross income for the taxable	641
year, the amount the taxpayer received as a veterans bonus during	642
the taxable year from the Ohio department of veterans services as	643
authorized by Section 2r of Article VIII, Ohio Constitution.	644

(29) Deduct, to the extent not otherwise deducted or excluded	645
in computing federal or Ohio adjusted gross income for the taxable	646
year, any income derived from a transfer agreement or from the	647
enterprise transferred under that agreement under section 4313.02	648
of the Revised Code.	649

(30) Deduct, to the extent not otherwise deducted or excluded	650
in computing federal or Ohio adjusted gross income for the taxable	651
year, Ohio college opportunity or federal Pell grant amounts	652
received by the taxpayer or the taxpayer's spouse or dependent	653
pursuant to section 3333.122 of the Revised Code or 20 U.S.C.	654
1070a, et seq., and used to pay room or board furnished by the	655
educational institution for which the grant was awarded at the	656
institution's facilities, including meal plans administered by the	657
institution. For the purposes of this division, receipt of a grant	658
includes the distribution of a grant directly to an educational	659
institution and the crediting of the grant to the enrollee's	660
account with the institution.	661

(31) Deduct one-half of the taxpayer's Ohio small business	662
investor income, the deduction not to exceed sixty-two thousand	663
five hundred dollars for each spouse if spouses file separate	664
returns under section 5747.08 of the Revised Code or one hundred	665
twenty-five thousand dollars for all other taxpayers. No	666
pass-through entity may claim a deduction under this division.	667

(32) Deduct the amount allowed under section 5747.78 of the	668
Revised Code for a licensed veterinarian who provided services	669
free of charge during the taxable year.	670

For the purposes of this division, "Ohio small business	671
investor income" means the portion of a taxpayer's adjusted gross	672
income that is business income reduced by deductions from business	673
income and apportioned or allocated to this state under sections	674
5747.21 and 5747.22 of the Revised Code, to the extent not	675
otherwise deducted or excluded in computing federal or Ohio	676
adjusted gross income for the taxable year.	677

(B) "Business income" means income, including gain or loss,	678
arising from transactions, activities, and sources in the regular	679
course of a trade or business and includes income, gain, or loss	680
from real property, tangible property, and intangible property if	681
the acquisition, rental, management, and disposition of the	682
property constitute integral parts of the regular course of a	683
trade or business operation. "Business income" includes income,	684
including gain or loss, from a partial or complete liquidation of	685
a business, including, but not limited to, gain or loss from the	686
sale or other disposition of goodwill.	687

(C) "Nonbusiness income" means all income other than business	688
income and may include, but is not limited to, compensation, rents	689
and royalties from real or tangible personal property, capital	690
gains, interest, dividends and distributions, patent or copyright	691
royalties, or lottery winnings, prizes, and awards.	692

(D) "Compensation" means any form of remuneration paid to an	693
employee for personal services.	694

(E) "Fiduciary" means a guardian, trustee, executor,	695
administrator, receiver, conservator, or any other person acting	696
in any fiduciary capacity for any individual, trust, or estate.	697

(F) "Fiscal year" means an accounting period of twelve months	698
ending on the last day of any month other than December.	699

(G) "Individual" means any natural person.

700

(H) "Internal Revenue Code" means the "Internal Revenue Code	701
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.	702

(I) "Resident" means any of the following, provided that	703
division (I)(3) of this section applies only to taxable years of a	704
trust beginning in 2002 or thereafter:	705

(1) An individual who is domiciled in this state, subject to	706
section 5747.24 of the Revised Code;	707

(2) The estate of a decedent who at the time of death was	708
domiciled in this state. The domicile tests of section 5747.24 of	709
the Revised Code are not controlling for purposes of division	710
(I)(2) of this section.	711

(3) A trust that, in whole or part, resides in this state. If	712
only part of a trust resides in this state, the trust is a	713
resident only with respect to that part.	714

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

715

(a) A trust resides in this state for the trust's current	716
taxable year to the extent, as described in division (I)(3)(d) of	717
this section, that the trust consists directly or indirectly, in	718
whole or in part, of assets, net of any related liabilities, that	719
were transferred, or caused to be transferred, directly or	720
indirectly, to the trust by any of the following:	721

(i) A person, a court, or a governmental entity or	722
instrumentality on account of the death of a decedent, but only if	723
the trust is described in division (I)(3)(e)(i) or (ii) of this	724
section;	725

(ii) A person who was domiciled in this state for the	726
purposes of this chapter when the person directly or indirectly	727
transferred assets to an irrevocable trust, but only if at least	728
one of the trust's qualifying beneficiaries is domiciled in this	729
state for the purposes of this chapter during all or some portion	730
of the trust's current taxable year;	731

(iii) A person who was domiciled in this state for the	732
purposes of this chapter when the trust document or instrument or	733
part of the trust document or instrument became irrevocable, but	734
only if at least one of the trust's qualifying beneficiaries is a	735
resident domiciled in this state for the purposes of this chapter	736
during all or some portion of the trust's current taxable year. If	737
a trust document or instrument became irrevocable upon the death	738
of a person who at the time of death was domiciled in this state	739
for purposes of this chapter, that person is a person described in	740
division (I)(3)(a)(iii) of this section.	741

(b) A trust is irrevocable to the extent that the transferor	742
is not considered to be the owner of the net assets of the trust	743
under sections 671 to 678 of the Internal Revenue Code.	744

(c) With respect to a trust other than a charitable lead	745
trust, "qualifying beneficiary" has the same meaning as "potential	746
current beneficiary" as defined in section 1361(e)(2) of the	747
Internal Revenue Code, and with respect to a charitable lead trust	748
"qualifying beneficiary" is any current, future, or contingent	749
beneficiary, but with respect to any trust "qualifying	750
beneficiary" excludes a person or a governmental entity or	751
instrumentality to any of which a contribution would qualify for	752
the charitable deduction under section 170 of the Internal Revenue	753
Code.	754

(d) For the purposes of division (I)(3)(a) of this section,	755
the extent to which a trust consists directly or indirectly, in	756
whole or in part, of assets, net of any related liabilities, that	757
were transferred directly or indirectly, in whole or part, to the	758
trust by any of the sources enumerated in that division shall be	759
ascertained by multiplying the fair market value of the trust's	760
assets, net of related liabilities, by the qualifying ratio, which	761
shall be computed as follows:	762

(i) The first time the trust receives assets, the numerator	763
of the qualifying ratio is the fair market value of those assets	764
at that time, net of any related liabilities, from sources	765
enumerated in division (I)(3)(a) of this section. The denominator	766
of the qualifying ratio is the fair market value of all the	767
trust's assets at that time, net of any related liabilities.	768

(ii) Each subsequent time the trust receives assets, a	769
revised qualifying ratio shall be computed. The numerator of the	770
revised qualifying ratio is the sum of (1) the fair market value	771
of the trust's assets immediately prior to the subsequent	772
transfer, net of any related liabilities, multiplied by the	773
qualifying ratio last computed without regard to the subsequent	774
transfer, and (2) the fair market value of the subsequently	775
transferred assets at the time transferred, net of any related	776
liabilities, from sources enumerated in division (I)(3)(a) of this	777
section. The denominator of the revised qualifying ratio is the	778
fair market value of all the trust's assets immediately after the	779
subsequent transfer, net of any related liabilities.	780

(iii) Whether a transfer to the trust is by or from any of	781
the sources enumerated in division (I)(3)(a) of this section shall	782
be ascertained without regard to the domicile of the trust's	783
beneficiaries.	784

(e) For the purposes of division (I)(3)(a)(i) of this	785
section:	786

(i) A trust is described in division (I)(3)(e)(i) of this	787
section if the trust is a testamentary trust and the testator of	788
that testamentary trust was domiciled in this state at the time of	789
the testator's death for purposes of the taxes levied under	790
Chapter 5731. of the Revised Code.	791

(ii) A trust is described in division (I)(3)(e)(ii) of this	792
section if the transfer is a qualifying transfer described in any	793
of divisions (I)(3)(f)(i) to (vi) of this section, the trust is an	794
irrevocable inter vivos trust, and at least one of the trust's	795
qualifying beneficiaries is domiciled in this state for purposes	796
of this chapter during all or some portion of the trust's current	797
taxable year.	798

(f) For the purposes of division (I)(3)(e)(ii) of this	799
section, a "qualifying transfer" is a transfer of assets, net of	800
any related liabilities, directly or indirectly to a trust, if the	801
transfer is described in any of the following:	802

(i) The transfer is made to a trust, created by the decedent	803
before the decedent's death and while the decedent was domiciled	804
in this state for the purposes of this chapter, and, prior to the	805
death of the decedent, the trust became irrevocable while the	806
decedent was domiciled in this state for the purposes of this	807
chapter.	808

(ii) The transfer is made to a trust to which the decedent,	809
prior to the decedent's death, had directly or indirectly	810
transferred assets, net of any related liabilities, while the	811
decedent was domiciled in this state for the purposes of this	812
chapter, and prior to the death of the decedent the trust became	813
irrevocable while the decedent was domiciled in this state for the	814
purposes of this chapter.	815

(iii) The transfer is made on account of a contractual	816
relationship existing directly or indirectly between the	817
transferor and either the decedent or the estate of the decedent	818
at any time prior to the date of the decedent's death, and the	819
decedent was domiciled in this state at the time of death for	820
purposes of the taxes levied under Chapter 5731. of the Revised	821
Code.	822

(iv) The transfer is made to a trust on account of a	823
contractual relationship existing directly or indirectly between	824
the transferor and another person who at the time of the	825
decedent's death was domiciled in this state for purposes of this	826
chapter.	827

(v) The transfer is made to a trust on account of the will of	828
a testator who was domiciled in this state at the time of the	829
testator's death for purposes of the taxes levied under Chapter	830
5731. of the Revised Code.	831

(vi) The transfer is made to a trust created by or caused to	832
be created by a court, and the trust was directly or indirectly	833
created in connection with or as a result of the death of an	834
individual who, for purposes of the taxes levied under Chapter	835
5731. of the Revised Code, was domiciled in this state at the time	836
of the individual's death.	837

(g) The tax commissioner may adopt rules to ascertain the	838
part of a trust residing in this state.	839

(J) "Nonresident" means an individual or estate that is not a	840
resident. An individual who is a resident for only part of a	841
taxable year is a nonresident for the remainder of that taxable	842
year.	843

(K) "Pass-through entity" has the same meaning as in section	844
5733.04 of the Revised Code.	845

(L) "Return" means the notifications and reports required to	846
be filed pursuant to this chapter for the purpose of reporting the	847
tax due and includes declarations of estimated tax when so	848
required.	849

(M) "Taxable year" means the calendar year or the taxpayer's	850
fiscal year ending during the calendar year, or fractional part	851
thereof, upon which the adjusted gross income is calculated	852
pursuant to this chapter.	853

(N) "Taxpayer" means any person subject to the tax imposed by	854
section 5747.02 of the Revised Code or any pass-through entity	855
that makes the election under division (D) of section 5747.08 of	856
the Revised Code.	857

(O) "Dependents" means dependents as defined in the Internal	858
Revenue Code and as claimed in the taxpayer's federal income tax	859
return for the taxable year or which the taxpayer would have been	860
permitted to claim had the taxpayer filed a federal income tax	861
return.	862

(P) "Principal county of employment" means, in the case of a	863
nonresident, the county within the state in which a taxpayer	864
performs services for an employer or, if those services are	865
performed in more than one county, the county in which the major	866
portion of the services are performed.	867

(Q) As used in sections 5747.50 to 5747.55 of the Revised	868
Code:	869

(1) "Subdivision" means any county, municipal corporation,	870
park district, or township.	871

(2) "Essential local government purposes" includes all	872
functions that any subdivision is required by general law to	873
exercise, including like functions that are exercised under a	874
charter adopted pursuant to the Ohio Constitution.	875

(R) "Overpayment" means any amount already paid that exceeds	876
the figure determined to be the correct amount of the tax.	877

(S) "Taxable income" or "Ohio taxable income" applies only to	878
estates and trusts, and means federal taxable income, as defined	879
and used in the Internal Revenue Code, adjusted as follows:	880

(1) Add interest or dividends, net of ordinary, necessary,	881
and reasonable expenses not deducted in computing federal taxable	882
income, on obligations or securities of any state or of any	883
political subdivision or authority of any state, other than this	884
state and its subdivisions and authorities, but only to the extent	885
that such net amount is not otherwise includible in Ohio taxable	886
income and is described in either division (S)(1)(a) or (b) of	887
this section:	888

(a) The net amount is not attributable to the S portion of an	889
electing small business trust and has not been distributed to	890
beneficiaries for the taxable year;	891

(b) The net amount is attributable to the S portion of an	892
electing small business trust for the taxable year.	893

(2) Add interest or dividends, net of ordinary, necessary,	894
and reasonable expenses not deducted in computing federal taxable	895
income, on obligations of any authority, commission,	896
instrumentality, territory, or possession of the United States to	897
the extent that the interest or dividends are exempt from federal	898
income taxes but not from state income taxes, but only to the	899
extent that such net amount is not otherwise includible in Ohio	900
taxable income and is described in either division (S)(1)(a) or	901
(b) of this section;	902

(3) Add the amount of personal exemption allowed to the	903
estate pursuant to section 642(b) of the Internal Revenue Code;	904

(4) Deduct interest or dividends, net of related expenses	905
deducted in computing federal taxable income, on obligations of	906
the United States and its territories and possessions or of any	907
authority, commission, or instrumentality of the United States to	908
the extent that the interest or dividends are exempt from state	909
taxes under the laws of the United States, but only to the extent	910
that such amount is included in federal taxable income and is	911
described in either division (S)(1)(a) or (b) of this section;	912

(5) Deduct the amount of wages and salaries, if any, not	913
otherwise allowable as a deduction but that would have been	914
allowable as a deduction in computing federal taxable income for	915
the taxable year, had the targeted jobs credit allowed under	916
sections 38, 51, and 52 of the Internal Revenue Code not been in	917
effect, but only to the extent such amount relates either to	918
income included in federal taxable income for the taxable year or	919
to income of the S portion of an electing small business trust for	920
the taxable year;	921

(6) Deduct any interest or interest equivalent, net of	922
related expenses deducted in computing federal taxable income, on	923
public obligations and purchase obligations, but only to the	924
extent that such net amount relates either to income included in	925
federal taxable income for the taxable year or to income of the S	926
portion of an electing small business trust for the taxable year;	927

(7) Add any loss or deduct any gain resulting from sale,	928
exchange, or other disposition of public obligations to the extent	929
that such loss has been deducted or such gain has been included in	930
computing either federal taxable income or income of the S portion	931
of an electing small business trust for the taxable year;	932

(8) Except in the case of the final return of an estate, add	933
any amount deducted by the taxpayer on both its Ohio estate tax	934
return pursuant to section 5731.14 of the Revised Code, and on its	935
federal income tax return in determining federal taxable income;	936

(9)(a) Deduct any amount included in federal taxable income	937
solely because the amount represents a reimbursement or refund of	938
expenses that in a previous year the decedent had deducted as an	939
itemized deduction pursuant to section 63 of the Internal Revenue	940
Code and applicable treasury regulations. The deduction otherwise	941
allowed under division (S)(9)(a) of this section shall be reduced	942
to the extent the reimbursement is attributable to an amount the	943
taxpayer or decedent deducted under this section in any taxable	944
year.	945

(b) Add any amount not otherwise included in Ohio taxable	946
income for any taxable year to the extent that the amount is	947
attributable to the recovery during the taxable year of any amount	948
deducted or excluded in computing federal or Ohio taxable income	949
in any taxable year, but only to the extent such amount has not	950
been distributed to beneficiaries for the taxable year.	951

(10) Deduct any portion of the deduction described in section	952
1341(a)(2) of the Internal Revenue Code, for repaying previously	953
reported income received under a claim of right, that meets both	954
of the following requirements:	955

(a) It is allowable for repayment of an item that was	956
included in the taxpayer's taxable income or the decedent's	957
adjusted gross income for a prior taxable year and did not qualify	958
for a credit under division (A) or (B) of section 5747.05 of the	959
Revised Code for that year.	960

(b) It does not otherwise reduce the taxpayer's taxable	961
income or the decedent's adjusted gross income for the current or	962
any other taxable year.	963

(11) Add any amount claimed as a credit under section	964
5747.059 or 5747.65 of the Revised Code to the extent that the	965
amount satisfies either of the following:	966

(a) The amount was deducted or excluded from the computation	967
of the taxpayer's federal taxable income as required to be	968
reported for the taxpayer's taxable year under the Internal	969
Revenue Code;	970

(b) The amount resulted in a reduction in the taxpayer's	971
federal taxable income as required to be reported for any of the	972
taxpayer's taxable years under the Internal Revenue Code.	973

(12) Deduct any amount, net of related expenses deducted in	974
computing federal taxable income, that a trust is required to	975
report as farm income on its federal income tax return, but only	976
if the assets of the trust include at least ten acres of land	977
satisfying the definition of "land devoted exclusively to	978
agricultural use" under section 5713.30 of the Revised Code,	979
regardless of whether the land is valued for tax purposes as such	980
land under sections 5713.30 to 5713.38 of the Revised Code. If the	981
trust is a pass-through entity investor, section 5747.231 of the	982
Revised Code applies in ascertaining if the trust is eligible to	983
claim the deduction provided by division (S)(12) of this section	984
in connection with the pass-through entity's farm income.	985

Except for farm income attributable to the S portion of an	986
electing small business trust, the deduction provided by division	987
(S)(12) of this section is allowed only to the extent that the	988
trust has not distributed such farm income. Division (S)(12) of	989
this section applies only to taxable years of a trust beginning in	990
2002 or thereafter.	991

(13) Add the net amount of income described in section 641(c)	992
of the Internal Revenue Code to the extent that amount is not	993
included in federal taxable income.	994

(14) Add or deduct the amount the taxpayer would be required	995
to add or deduct under division (A)(20) or (21) of this section if	996
the taxpayer's Ohio taxable income were computed in the same	997
manner as an individual's Ohio adjusted gross income is computed	998
under this section. In the case of a trust, division (S)(14) of	999
this section applies only to any of the trust's taxable years	1000
beginning in 2002 or thereafter.	1001

(T) "School district income" and "school district income tax"	1002
have the same meanings as in section 5748.01 of the Revised Code.	1003

(U) As used in divisions (A)(8), (A)(9), (S)(6), and (S)(7)	1004
of this section, "public obligations," "purchase obligations," and	1005
"interest or interest equivalent" have the same meanings as in	1006
section 5709.76 of the Revised Code.	1007

(V) "Limited liability company" means any limited liability	1008
company formed under Chapter 1705. of the Revised Code or under	1009
the laws of any other state.	1010

(W) "Pass-through entity investor" means any person who,	1011
during any portion of a taxable year of a pass-through entity, is	1012
a partner, member, shareholder, or equity investor in that	1013
pass-through entity.	1014

(X) "Banking day" has the same meaning as in section 1304.01	1015
of the Revised Code.	1016

(Y) "Month" means a calendar month.

1017

(Z) "Quarter" means the first three months, the second three	1018
months, the third three months, or the last three months of the	1019
taxpayer's taxable year.	1020

(AA)(1) "Eligible institution" means a state university or	1021
state institution of higher education as defined in section	1022
3345.011 of the Revised Code, or a private, nonprofit college,	1023
university, or other post-secondary institution located in this	1024
state that possesses a certificate of authorization issued by the	1025
Ohio board of regents pursuant to Chapter 1713. of the Revised	1026
Code or a certificate of registration issued by the state board of	1027
career colleges and schools under Chapter 3332. of the Revised	1028
Code.	1029

(2) "Qualified tuition and fees" means tuition and fees	1030
imposed by an eligible institution as a condition of enrollment or	1031
attendance, not exceeding two thousand five hundred dollars in	1032
each of the individual's first two years of post-secondary	1033
education. If the individual is a part-time student, "qualified	1034
tuition and fees" includes tuition and fees paid for the academic	1035
equivalent of the first two years of post-secondary education	1036
during a maximum of five taxable years, not exceeding a total of	1037
five thousand dollars. "Qualified tuition and fees" does not	1038
include:	1039

(a) Expenses for any course or activity involving sports,	1040
games, or hobbies unless the course or activity is part of the	1041
individual's degree or diploma program;	1042

(b) The cost of books, room and board, student activity fees,	1043
athletic fees, insurance expenses, or other expenses unrelated to	1044
the individual's academic course of instruction;	1045

(c) Tuition, fees, or other expenses paid or reimbursed	1046
through an employer, scholarship, grant in aid, or other	1047
educational benefit program.	1048

(BB)(1) "Modified business income" means the business income	1049
included in a trust's Ohio taxable income after such taxable	1050
income is first reduced by the qualifying trust amount, if any.	1051

(2) "Qualifying trust amount" of a trust means capital gains	1052
and losses from the sale, exchange, or other disposition of equity	1053
or ownership interests in, or debt obligations of, a qualifying	1054
investee to the extent included in the trust's Ohio taxable	1055
income, but only if the following requirements are satisfied:	1056

(a) The book value of the qualifying investee's physical	1057
assets in this state and everywhere, as of the last day of the	1058
qualifying investee's fiscal or calendar year ending immediately	1059
prior to the date on which the trust recognizes the gain or loss,	1060
is available to the trust.	1061

(b) The requirements of section 5747.011 of the Revised Code	1062
are satisfied for the trust's taxable year in which the trust	1063
recognizes the gain or loss.	1064

Any gain or loss that is not a qualifying trust amount is	1065
modified business income, qualifying investment income, or	1066
modified nonbusiness income, as the case may be.	1067

(3) "Modified nonbusiness income" means a trust's Ohio	1068
taxable income other than modified business income, other than the	1069
qualifying trust amount, and other than qualifying investment	1070
income, as defined in section 5747.012 of the Revised Code, to the	1071
extent such qualifying investment income is not otherwise part of	1072
modified business income.	1073

(4) "Modified Ohio taxable income" applies only to trusts,	1074
and means the sum of the amounts described in divisions (BB)(4)(a)	1075
to (c) of this section:	1076

(a) The fraction, calculated under section 5747.013, and	1077
applying section 5747.231 of the Revised Code, multiplied by the	1078
sum of the following amounts:	1079

(i) The trust's modified business income;

1080

(ii) The trust's qualifying investment income, as defined in	1081
section 5747.012 of the Revised Code, but only to the extent the	1082
qualifying investment income does not otherwise constitute	1083
modified business income and does not otherwise constitute a	1084
qualifying trust amount.	1085

(b) The qualifying trust amount multiplied by a fraction, the	1086
numerator of which is the sum of the book value of the qualifying	1087
investee's physical assets in this state on the last day of the	1088
qualifying investee's fiscal or calendar year ending immediately	1089
prior to the day on which the trust recognizes the qualifying	1090
trust amount, and the denominator of which is the sum of the book	1091
value of the qualifying investee's total physical assets	1092
everywhere on the last day of the qualifying investee's fiscal or	1093
calendar year ending immediately prior to the day on which the	1094
trust recognizes the qualifying trust amount. If, for a taxable	1095
year, the trust recognizes a qualifying trust amount with respect	1096
to more than one qualifying investee, the amount described in	1097
division (BB)(4)(b) of this section shall equal the sum of the	1098
products so computed for each such qualifying investee.	1099

(c)(i) With respect to a trust or portion of a trust that is	1100
a resident as ascertained in accordance with division (I)(3)(d) of	1101
this section, its modified nonbusiness income.	1102

(ii) With respect to a trust or portion of a trust that is	1103
not a resident as ascertained in accordance with division	1104
(I)(3)(d) of this section, the amount of its modified nonbusiness	1105
income satisfying the descriptions in divisions (B)(2) to (5) of	1106
section 5747.20 of the Revised Code, except as otherwise provided	1107
in division (BB)(4)(c)(ii) of this section. With respect to a	1108
trust or portion of a trust that is not a resident as ascertained	1109
in accordance with division (I)(3)(d) of this section, the trust's	1110
portion of modified nonbusiness income recognized from the sale,	1111
exchange, or other disposition of a debt interest in or equity	1112
interest in a section 5747.212 entity, as defined in section	1113
5747.212 of the Revised Code, without regard to division (A) of	1114
that section, shall not be allocated to this state in accordance	1115
with section 5747.20 of the Revised Code but shall be apportioned	1116
to this state in accordance with division (B) of section 5747.212	1117
of the Revised Code without regard to division (A) of that	1118
section.	1119

If the allocation and apportionment of a trust's income under	1120
divisions (BB)(4)(a) and (c) of this section do not fairly	1121
represent the modified Ohio taxable income of the trust in this	1122
state, the alternative methods described in division (C) of	1123
section 5747.21 of the Revised Code may be applied in the manner	1124
and to the same extent provided in that section.	1125

(5)(a) Except as set forth in division (BB)(5)(b) of this	1126
section, "qualifying investee" means a person in which a trust has	1127
an equity or ownership interest, or a person or unit of government	1128
the debt obligations of either of which are owned by a trust. For	1129
the purposes of division (BB)(2)(a) of this section and for the	1130
purpose of computing the fraction described in division (BB)(4)(b)	1131
of this section, all of the following apply:	1132

(i) If the qualifying investee is a member of a qualifying	1133
controlled group on the last day of the qualifying investee's	1134
fiscal or calendar year ending immediately prior to the date on	1135
which the trust recognizes the gain or loss, then "qualifying	1136
investee" includes all persons in the qualifying controlled group	1137
on such last day.	1138

(ii) If the qualifying investee, or if the qualifying	1139
investee and any members of the qualifying controlled group of	1140
which the qualifying investee is a member on the last day of the	1141
qualifying investee's fiscal or calendar year ending immediately	1142
prior to the date on which the trust recognizes the gain or loss,	1143
separately or cumulatively own, directly or indirectly, on the	1144
last day of the qualifying investee's fiscal or calendar year	1145
ending immediately prior to the date on which the trust recognizes	1146
the qualifying trust amount, more than fifty per cent of the	1147
equity of a pass-through entity, then the qualifying investee and	1148
the other members are deemed to own the proportionate share of the	1149
pass-through entity's physical assets which the pass-through	1150
entity directly or indirectly owns on the last day of the	1151
pass-through entity's calendar or fiscal year ending within or	1152
with the last day of the qualifying investee's fiscal or calendar	1153
year ending immediately prior to the date on which the trust	1154
recognizes the qualifying trust amount.	1155

(iii) For the purposes of division (BB)(5)(a)(iii) of this	1156
section, "upper level pass-through entity" means a pass-through	1157
entity directly or indirectly owning any equity of another	1158
pass-through entity, and "lower level pass-through entity" means	1159
that other pass-through entity.	1160

An upper level pass-through entity, whether or not it is also	1161
a qualifying investee, is deemed to own, on the last day of the	1162
upper level pass-through entity's calendar or fiscal year, the	1163
proportionate share of the lower level pass-through entity's	1164
physical assets that the lower level pass-through entity directly	1165
or indirectly owns on the last day of the lower level pass-through	1166
entity's calendar or fiscal year ending within or with the last	1167
day of the upper level pass-through entity's fiscal or calendar	1168
year. If the upper level pass-through entity directly and	1169
indirectly owns less than fifty per cent of the equity of the	1170
lower level pass-through entity on each day of the upper level	1171
pass-through entity's calendar or fiscal year in which or with	1172
which ends the calendar or fiscal year of the lower level	1173
pass-through entity and if, based upon clear and convincing	1174
evidence, complete information about the location and cost of the	1175
physical assets of the lower pass-through entity is not available	1176
to the upper level pass-through entity, then solely for purposes	1177
of ascertaining if a gain or loss constitutes a qualifying trust	1178
amount, the upper level pass-through entity shall be deemed as	1179
owning no equity of the lower level pass-through entity for each	1180
day during the upper level pass-through entity's calendar or	1181
fiscal year in which or with which ends the lower level	1182
pass-through entity's calendar or fiscal year. Nothing in division	1183
(BB)(5)(a)(iii) of this section shall be construed to provide for	1184
any deduction or exclusion in computing any trust's Ohio taxable	1185
income.	1186

(b) With respect to a trust that is not a resident for the	1187
taxable year and with respect to a part of a trust that is not a	1188
resident for the taxable year, "qualifying investee" for that	1189
taxable year does not include a C corporation if both of the	1190
following apply:	1191

(i) During the taxable year the trust or part of the trust	1192
recognizes a gain or loss from the sale, exchange, or other	1193
disposition of equity or ownership interests in, or debt	1194
obligations of, the C corporation.	1195

(ii) Such gain or loss constitutes nonbusiness income.

1196

(6) "Available" means information is such that a person is	1197
able to learn of the information by the due date plus extensions,	1198
if any, for filing the return for the taxable year in which the	1199
trust recognizes the gain or loss.	1200

(CC) "Qualifying controlled group" has the same meaning as in	1201
section 5733.04 of the Revised Code.	1202

(DD) "Related member" has the same meaning as in section	1203
5733.042 of the Revised Code.	1204

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

1205

(a) "Qualifying person" means any person other than a	1206
qualifying corporation.	1207

(b) "Qualifying corporation" means any person classified for	1208
federal income tax purposes as an association taxable as a	1209
corporation, except either of the following:	1210

(i) A corporation that has made an election under subchapter	1211
S, chapter one, subtitle A, of the Internal Revenue Code for its	1212
taxable year ending within, or on the last day of, the investor's	1213
taxable year;	1214

(ii) A subsidiary that is wholly owned by any corporation	1215
that has made an election under subchapter S, chapter one,	1216
subtitle A of the Internal Revenue Code for its taxable year	1217
ending within, or on the last day of, the investor's taxable year.	1218

(2) For the purposes of this chapter, unless expressly stated	1219
otherwise, no qualifying person indirectly owns any asset directly	1220
or indirectly owned by any qualifying corporation.	1221

(FF) For purposes of this chapter and Chapter 5751. of the	1222
Revised Code:	1223

(1) "Trust" does not include a qualified pre-income tax	1224
trust.	1225

(2) A "qualified pre-income tax trust" is any pre-income tax	1226
trust that makes a qualifying pre-income tax trust election as	1227
described in division (FF)(3) of this section.	1228

(3) A "qualifying pre-income tax trust election" is an	1229
election by a pre-income tax trust to subject to the tax imposed	1230
by section 5751.02 of the Revised Code the pre-income tax trust	1231
and all pass-through entities of which the trust owns or controls,	1232
directly, indirectly, or constructively through related interests,	1233
five per cent or more of the ownership or equity interests. The	1234
trustee shall notify the tax commissioner in writing of the	1235
election on or before April 15, 2006. The election, if timely	1236
made, shall be effective on and after January 1, 2006, and shall	1237
apply for all tax periods and tax years until revoked by the	1238
trustee of the trust.	1239

(4) A "pre-income tax trust" is a trust that satisfies all of	1240
the following requirements:	1241

(a) The document or instrument creating the trust was	1242
executed by the grantor before January 1, 1972;	1243

(b) The trust became irrevocable upon the creation of the	1244
trust; and	1245

(c) The grantor was domiciled in this state at the time the	1246
trust was created.	1247

(GG) "Uniformed services" has the same meaning as in 10	1248
U.S.C. 101.	1249

Sec. 5747.78.  (A) As used in this section:

1250

(1) "Licensed veterinarian" has the same meaning as in	1251
section 4741.01 of the Revised Code.	1252

(2) "Veterinary services" means any of the activities	1253
described in divisions (B)(1) to (5) of section 4741.01 of the	1254
Revised Code.	1255

(B) In computing Ohio adjusted gross income, a deduction from	1256
federal adjusted gross income is allowed for licensed	1257
veterinarians who provide veterinary services free of charge. The	1258
deduction shall equal the lesser of the following amounts:	1259

(1) The number of hours of veterinary service that the	1260
taxpayer provided free of charge during the taxable year	1261
multiplied by the average hourly rate, as determined by the tax	1262
commissioner, charged by licensed veterinarians doing business in	1263
the region in which the taxpayer provided the service;	1264

(2) Two thousand five hundred dollars.

1265

In August of 2019, and in August of each fifth year	1266
thereafter, the tax commissioner shall determine the percentage	1267
increase in the gross domestic product deflator determined by the	1268
bureau of economic analysis of the United States department of	1269
commerce during the five-year period that ended on the last day of	1270
December of the preceding calendar year, and shall adjust the	1271
amount in division (B)(2) of this section by multiplying that	1272
amount by the percentage increase in the gross domestic product	1273
deflator for that five-year period and adding the resulting	1274
product to the amount that applied for taxable years beginning in	1275
the preceding calendar year. The adjusted amount applies to	1276
taxable years beginning in the calendar year in which the	1277
adjustment is made and to taxable years beginning in each ensuing	1278
calendar year until the calendar year in which a new adjustment is	1279
made pursuant to this division. The commissioner shall not make a	1280
new adjustment in any calendar year in which the amount resulting	1281
from the adjustment would be less than the amount resulting from	1282
the immediately preceding adjustment or two thousand five hundred	1283
dollars, whichever is greater.	1284

(C) The tax commissioner may require a taxpayer to provide	1285
any documentation necessary to substantiate a claim for a	1286
deduction allowed under this section.	1287

Section 2.  That existing sections 4741.01, 4741.03, 4741.26,	1288
and 5747.01 of the Revised Code are hereby repealed.	1289