Bill Text: OH SB135 | 2013-2014 | 130th General Assembly | Introduced

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Bill Title: To authorize nonrefundable tax credits for authorized donations to projects of nonprofit entities and municipal agencies providing community services.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2013-05-21 - To Ways & Means [SB135 Detail]

Download: Ohio-2013-SB135-Introduced.html

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As Introduced

130th General Assembly Regular Session 2013-2014

S. B. No. 135

Senator Tavares 

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A BILL

To amend sections 5725.98, 5726.98, 5729.98, 5747.98,

1

and 5751.98 and to enact section 715.58 of the

2

Revised Code to authorize nonrefundable tax

3

credits for authorized donations to projects of

4

nonprofit entities and municipal agencies

5

providing community services.

6

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

Section 1.  That sections 5725.98, 5726.98, 5729.98, 5747.98,	7
and 5751.98 be amended and section 715.58 of the Revised Code be	8
enacted to read as follows:	9

Sec. 715.58. (A) As used in this section:

10

(1) "Application year" means the calendar year beginning the	11
year following the calendar year in which a taxpayer applies for a	12
tax credit in the application period.	13

(2) "Application period" means the period between the	14
fifteenth day of September and the first day of October of each	15
year, as described in division (C)(3) of this section.	16

(3) "Authorized donation" means a donation of more than two	17
hundred fifty dollars made to a project approved and authorized by	18
the tax commissioner in accordance with division (C) of this	19
section.	20

(4) "Donation" means an unconditional gift of cash.

21

(5) "Pass-through entity" has the same meaning as in section	22
5733.04 of the Revised Code and includes a sole proprietorship.	23

(6) "Project" means a project or activity proposed by a	24
municipal corporation that involves providing, either directly or	25
through a neighborhood organization, neighborhood assistance, job	26
training or education, community services, crime prevention,	27
energy conservation, or construction or rehabilitation of dwelling	28
units for persons of low and moderate income in the state, or	29
donation of money to an open space acquisition fund of any	30
political subdivision of the state or any nonprofit land	31
conservation organization that meets the requirements of division	32
(B) of section 5301.69 of the Revised Code.	33

(7) "Taxpayer" means a person subject to a tax against which	34
a credit is allowed under this section.	35

(8) "Tax period" means:

36

(a) In the case of a domestic insurance company or a foreign	37
insurance company, the calendar year ending on the thirty-first	38
day of December next preceding the day the report or annual	39
statement is required to be returned under section 5725.18 or	40
5729.02 of the Revised Code;	41

(b) In the case of a financial institution subject to	42
taxation under Chapter 5726. of the Revised Code, the financial	43
institution's taxable year for the purposes of that chapter;	44

(c) In the case of a public utility, electric distribution	45
company, or natural gas distribution company, the calendar year;	46

(d) In the case of a pass-through entity the owners of which	47
are subject to taxation under Chapter 5747. of the Revised Code,	48
the pass-through entity's taxable year for the purposes of that	49
chapter;	50

(e) In the case of a person subject to taxation under Chapter	51
5751. of the Revised Code, the calendar year.	52

(9) "Community services" means any type of counseling and	53
advice, emergency assistance, alcoholism prevention and treatment,	54
or medical care furnished to individuals or groups in the state.	55

(10) "Crime prevention" means any activity that aids in the	56
reduction of crime in the state.	57

(11) "Education" means any type of scholastic instruction or	58
scholarship assistance to any person who resides in the state.	59

(12) "Job training" means any type of instruction to any	60
person who resides in the state that enables the person to acquire	61
vocational skills to become employable or seek a higher grade of	62
employment.	63

(13) "Neighborhood" means any specific geographic area that	64
is experiencing problems endangering the area's economic viability	65
and stability.	66

(14) "Neighborhood assistance" means the furnishing of	67
financial assistance, labor, material, or technical advice to aid	68
in the physical improvement or rehabilitation of all or any part	69
of a neighborhood.	70

(15) "Neighborhood organization" means any organization	71
performing community services in the state that satisfies any of	72
the following:	73

(a) It is exempt from income taxation under the Internal	74
Revenue Code.	75

(b) It is designated as a community development corporation	76
by the United States government under Title VII of the Economic	77
Opportunity Act of 1964.	78

(c) It is incorporated as a charitable corporation or trust	79
under Chapter 1716. of the Revised Code, a community improvement	80
corporation under Chapter 1724. of the Revised Code, a charitable	81
organization described under section 5301.69 of the Revised Code,	82
or a community redevelopment corporation under Chapter 1728. of	83
the Revised Code.	84

(16) "Persons of low and moderate income" means persons	85
satisfying the criteria for designation as persons of low- and	86
moderate-income established by the housing finance agency pursuant	87
to section 175.01 of the Revised Code.	88

(B) A nonrefundable credit is allowed against the tax imposed	89
by section 5725.18, 5726.02, 5727.24, 5727.30, 5727.81, or	90
5727.811, the tax assessed under Chapter 5729., or the tax imposed	91
by section 5747.02 or 5751.03 of the Revised Code for a taxpayer	92
that makes an authorized donation or that is an equity owner of a	93
pass-through entity that makes an authorized donation. If a	94
pass-through entity claims a credit under this section, it may	95
apply the credit to the tax imposed under section 5751.03 of the	96
Revised Code, or its equity owners may apply the credit to the tax	97
imposed on them under section 5747.02 of the Revised Code, but the	98
credit for any authorized donation may not be applied to both of	99
those taxes.	100

The credit equals sixty per cent of the amount of the	101
authorized donation a taxpayer or pass-through entity makes in an	102
application year. The amount of the credit granted to a taxpayer	103
may not exceed seventy-five thousand dollars for an application	104
year; if the authorized donation is made by a pass-through entity	105
and the credit is to be applied against the tax imposed under	106
section 5747.02 of the Revised Code, the credit may not exceed the	107
taxpayer's distributive or proportionate share of seventy-five	108
thousand dollars.	109

The credit shall be claimed for the tax period in which the	110
authorized donation is made and shall be claimed in the order	111
required under section 5725.98, 5726.98, 5729.98, 5747.98, or	112
5751.98 of the Revised Code, except that an individual claiming a	113
distributive share of a credit as an owner of a pass-through	114
entity shall claim the credit for the taxpayer's taxable year that	115
includes the last day of the entity's taxable year in which the	116
donation was made. The amount of the credit may not exceed the tax	117
otherwise due after allowing for all other credits in that order.	118
Excess credit not used in the tax period during which the	119
authorized donation was made may be carried back and applied to	120
not more than two of the immediately preceding tax periods. If the	121
taxpayer is required to pay the tax imposed by section 5727.24 or	122
5727.30 of the Revised Code more frequently than once per calendar	123
year, or claims the credit against the tax imposed by section	124
5727.81 or 5727.811 of the Revised Code, the amount of the credit	125
allowed for a calendar year shall be claimed in substantially	126
equal amounts against each tax payment required during the year	127
and after the donation is made.	128

(C)(1) To qualify one or more projects as eligible to receive	129
a donation eligible for the tax credit provided by this section,	130
the legislative authority of a municipal corporation, on or before	131
the first day of July of each year, may deliver to the tax	132
commissioner a list of projects for which it seeks eligibility to	133
receive donations eligible for the credit provided by this	134
section. The list prepared by the legislative authority shall, for	135
each project, set forth all of the following:	136

(a) The objective or mission of the project;

137

(b) The neighborhood area to be served;

138

(c) Reasons why the project is needed;

139

(d) The estimated cost of the project;

140

(e) The suggested plan for implementing the project,	141
including the projected length of time the project will be	142
undertaken;	143

(f) The name and address of the agency designated by the	144
municipal corporation to oversee implementation of the project;	145
and	146

(g) Other information as the commissioner may prescribe.

147

The projected length of time a project will be undertaken	148
shall not exceed two consecutive years.	149

Before submitting the list to the tax commissioner, the	150
legislative authority shall hold at least one public hearing for	151
the purpose of discussing the programs to be included on the list	152
and receiving public testimony.	153

(2) Annually, on or before the first day of September, the	154
tax commissioner shall compile and post on the department of	155
taxation's web site a list of all projects submitted by municipal	156
corporations that are eligible to receive applications for	157
donations eligible to receive a credit under this section. The	158
list shall be organized by each municipal corporation that applied	159
and shall indicate the estimated cost of each project as shown on	160
the municipal corporation's list. Each year, the commissioner also	161
shall publish a copy of the list in paper form. The commissioner	162
shall update the list as necessary.	163

(3) To be eligible for a tax credit under this section, a	164
taxpayer must donate to one or more projects appearing on the list	165
prepared by the tax commissioner and apply to the commissioner on	166
a form prescribed by the commissioner. Applications shall be	167
submitted to the commissioner during the application period. The	168
commissioner shall forward a copy of the application to the agency	169
designated by the municipal corporation to oversee implementation	170
of the project.	171

The agency to which the commissioner has forwarded an	172
application shall approve or deny the application within thirty	173
days after receiving the application from the commissioner.	174
Failure of an agency to approve an application within that	175
thirty-day period constitutes denial of the application. After the	176
approval of the agency or the passing of the thirty-day period, an	177
application shall be approved or denied by the commissioner based	178
on the compliance of the proposed donation with the provisions of	179
this section.	180

The commissioner may approve an application only if it is	181
received by the commissioner during the application period and	182
only if it has been approved by the agency. After the commissioner	183
approves or denies an application, the commissioner shall issue	184
written notice of the commissioner's decision to the applicant by	185
ordinary mail within twenty days after reaching a decision. If the	186
commissioner approves an application, the commissioner shall	187
forward a copy of the commissioner's decision to the taxpayer	188
eligible to claim the credit. The commissioner shall consider and	189
approve applications in the order received.	190

The commissioner shall not approve an application for an	191
authorized donation to any project for any application period in	192
an amount that would cause the total authorized donations for that	193
project for the application period to exceed one hundred fifty	194
thousand dollars. If an application proposes a donation in an	195
amount that would cause the total authorized donations to the	196
project to exceed one hundred fifty thousand dollars, the	197
commissioner shall notify the applicant, and the applicant, in a	198
manner prescribed by the commissioner, may propose a donation to	199
the project in a lesser amount or propose a donation to another	200
project.	201

(4) If a project is to be undertaken over more than one year,	202
the applicant for authorized donations shall indicate in the	203
application the amount of the donation to be made in each	204
application year, and the amounts so indicated shall be applied to	205
the annual credit limit under division (E) of this section for the	206
corresponding application year.	207

(5) The tax commissioner may charge a reasonable fee for the	208
filing of an application under division (C)(3) of this section to	209
defray the costs of processing the application and administering	210
this section.	211

(6) The commissioner may remove a project from the list	212
created by the commissioner under this section if the project	213
fails to satisfy the requirements of a project as defined in	214
division (A)(6) of this section.	215

(D) No tax credit shall be granted to any person under this	216
section unless the person furnishes evidence to the commissioner	217
that the amount of funds the person expended for charitable	218
purposes and for the support of organizations eligible for	219
assistance under this section in the year for which the credit is	220
claimed equals or exceeds the amount the person expended for such	221
purposes in the immediately preceding year.	222

(E) The total amount of credits that may be claimed under	223
this section in any year shall not exceed five million dollars.	224
If, for any year, all of the applications submitted to the tax	225
commissioner pursuant to this section claim tax credits in excess	226
of that amount, the commissioner, on or before the fifteenth day	227
of November each year, shall prorate the amounts of tax credits in	228
proportion to each taxpayer's authorized donation amount.	229

(F) A single neighborhood organization may propose multiple	230
projects, but may not receive more than one hundred fifty thousand	231
dollars in authorized donations during an application year.	232

(G) If the total funds donated in any year by any taxpayer in	233
a project in which a neighborhood organization is involved exceeds	234
twenty-five thousand dollars, the organization, upon completion of	235
the project, shall engage an independent public accountant to	236
audit the finances of the project and file the audit report with	237
the municipal corporation or agency overseeing the project. The	238
accountant's report shall verify whether the organization's	239
expenditures were made in accordance with the project as proposed	240
and approved by the commissioner. The municipal corporation or	241
agency shall forward each audit to the commissioner.	242

The tax commissioner shall review each audit report for	243
evidence of fraud or embezzlement. If the commissioner discovers	244
evidence of fraud or embezzlement, the commissioner shall report	245
the commissioner's findings to the county prosecutor of the county	246
in which the project is located. If the commissioner finds	247
evidence of unsound or irregular financial practice in relation to	248
generally accepted accounting standards, the commissioner may make	249
any projects in which the audited organization is involved	250
ineligible to receive authorized donations.	251

(H) The commissioner may adopt rules to implement this	252
section.	253

Sec. 5725.98. (A) To provide a uniform procedure for	254
calculating the amount of tax imposed by section 5725.18 of the	255
Revised Code that is due under this chapter, a taxpayer shall	256
claim any credits and offsets against tax liability to which it is	257
entitled in the following order:	258

(1) The credit for an insurance company or insurance company	259
group under section 5729.031 of the Revised Code;	260

(2) The credit for eligible employee training costs under	261
section 5725.31 of the Revised Code;	262

(3) The nonrefundable credit for authorized donations under	263
section 715.58 of the Revised Code;	264

(4) The credit for purchasers of qualified low-income	265
community investments under section 5725.33 of the Revised Code;	266

(4)(5) The nonrefundable job retention credit under division	267
(B)(1) of section 122.171 of the Revised Code;	268

(5)(6) The offset of assessments by the Ohio life and health	269
insurance guaranty association permitted by section 3956.20 of the	270
Revised Code;	271

(6)(7) The refundable credit for rehabilitating a historic	272
building under section 5725.34 of the Revised Code.	273

(7)(8) The refundable credit for Ohio job retention under	274
division (B)(2) or (3) of section 122.171 of the Revised Code;	275

(8)(9) The refundable credit for Ohio job creation under	276
section 5725.32 of the Revised Code;	277

(9)(10) The refundable credit under section 5725.19 of the	278
Revised Code for losses on loans made under the Ohio venture	279
capital program under sections 150.01 to 150.10 of the Revised	280
Code.	281

(B) For any credit except the refundable credits enumerated	282
in this section, the amount of the credit for a taxable year shall	283
not exceed the tax due after allowing for any other credit that	284
precedes it in the order required under this section. Any excess	285
amount of a particular credit may be carried forward if authorized	286
under the section creating that credit. Nothing in this chapter	287
shall be construed to allow a taxpayer to claim, directly or	288
indirectly, a credit more than once for a taxable year.	289

Sec. 5726.98. (A) To provide a uniform procedure for	290
calculating the amount of tax due under section 5726.02 of the	291
Revised Code, a taxpayer shall claim any credits to which the	292
taxpayer is entitled under this chapter in the following order:	293

(1) The bank organization assessment credit under section	294
5726.51 of the Revised Code;	295

(2) The nonrefundable job retention credit under division (B)	296
of section 5726.50 of the Revised Code;	297

(3) The nonrefundable credit for authorized donations under	298
section 715.58 of the Revised Code;	299

(4) The nonrefundable credit for purchases of qualified	300
low-income community investments under section 5726.54 of the	301
Revised Code;	302

(4)(5) The nonrefundable credit for qualified research	303
expenses under section 5726.56 of the Revised Code;	304

(5)(6) The nonrefundable credit for qualifying dealer in	305
intangibles taxes under section 5726.57 of the Revised Code.;	306

(6)(7) The refundable credit for rehabilitating an historic	307
building under section 5726.52 of the Revised Code;	308

(7)(8) The refundable job retention or job creation credit	309
under division (A) of section 5726.50 of the Revised Code;	310

(8)(9) The refundable credit under section 5726.53 of the	311
Revised Code for losses on loans made under the Ohio venture	312
capital program under sections 150.01 to 150.10 of the Revised	313
Code;	314

(9)(10) The refundable motion picture production credit under	315
section 5726.55 of the Revised Code.	316

(B) For any credit except the refundable credits enumerated	317
in this section, the amount of the credit for a taxable year shall	318
not exceed the tax due after allowing for any other credit that	319
precedes it in the order required under this section. Any excess	320
amount of a particular credit may be carried forward if authorized	321
under the section creating that credit. Nothing in this chapter	322
shall be construed to allow a taxpayer to claim, directly or	323
indirectly, a credit more than once for a taxable year.	324

Sec. 5729.98. (A) To provide a uniform procedure for	325
calculating the amount of tax due under this chapter, a taxpayer	326
shall claim any credits and offsets against tax liability to which	327
it is entitled in the following order:	328

(1) The credit for an insurance company or insurance company	329
group under section 5729.031 of the Revised Code;	330

(2) The credit for eligible employee training costs under	331
section 5729.07 of the Revised Code;	332

(3) The nonrefundable credit for authorized donations under	333
section 715.58 of the Revised Code;	334

(4) The credit for purchases of qualified low-income	335
community investments under section 5729.16 of the Revised Code;	336

(4)(5) The nonrefundable job retention credit under division	337
(B)(1) of section 122.171 of the Revised Code;	338

(5)(6) The offset of assessments by the Ohio life and health	339
insurance guaranty association against tax liability permitted by	340
section 3956.20 of the Revised Code;	341

(6)(7) The refundable credit for rehabilitating a historic	342
building under section 5729.17 of the Revised Code.	343

(7)(8) The refundable credit for Ohio job retention under	344
division (B)(2) or (3) of section 122.171 of the Revised Code;	345

(8)(9) The refundable credit for Ohio job creation under	346
section 5729.032 of the Revised Code;	347

(9)(10) The refundable credit under section 5729.08 of the	348
Revised Code for losses on loans made under the Ohio venture	349
capital program under sections 150.01 to 150.10 of the Revised	350
Code.	351

(B) For any credit except the refundable credits enumerated	352
in this section, the amount of the credit for a taxable year shall	353
not exceed the tax due after allowing for any other credit that	354
precedes it in the order required under this section. Any excess	355
amount of a particular credit may be carried forward if authorized	356
under the section creating that credit. Nothing in this chapter	357
shall be construed to allow a taxpayer to claim, directly or	358
indirectly, a credit more than once for a taxable year.	359

Sec. 5747.98.  (A) To provide a uniform procedure for	360
calculating the amount of tax due under section 5747.02 of the	361
Revised Code, a taxpayer shall claim any credits to which the	362
taxpayer is entitled in the following order:	363

(1) The retirement income credit under division (B) of	364
section 5747.055 of the Revised Code;	365

(2) The senior citizen credit under division (C) of section	366
5747.05 of the Revised Code;	367

(3) The lump sum distribution credit under division (D) of	368
section 5747.05 of the Revised Code;	369

(4) The dependent care credit under section 5747.054 of the	370
Revised Code;	371

(5) The lump sum retirement income credit under division (C)	372
of section 5747.055 of the Revised Code;	373

(6) The lump sum retirement income credit under division (D)	374
of section 5747.055 of the Revised Code;	375

(7) The lump sum retirement income credit under division (E)	376
of section 5747.055 of the Revised Code;	377

(8) The low-income credit under section 5747.056 of the	378
Revised Code;	379

(9) The credit for displaced workers who pay for job training	380
under section 5747.27 of the Revised Code;	381

(10) The campaign contribution credit under section 5747.29	382
of the Revised Code;	383

(11) The twenty-dollar personal exemption credit under	384
section 5747.022 of the Revised Code;	385

(12) The joint filing credit under division (G) of section	386
5747.05 of the Revised Code;	387

(13) The nonresident credit under division (A) of section	388
5747.05 of the Revised Code;	389

(14) The credit for a resident's out-of-state income under	390
division (B) of section 5747.05 of the Revised Code;	391

(15) The credit for employers that enter into agreements with	392
child day-care centers under section 5747.34 of the Revised Code;	393

(16) The credit for employers that reimburse employee child	394
care expenses under section 5747.36 of the Revised Code;	395

(17) The credit for adoption of a minor child under section	396
5747.37 of the Revised Code;	397

(18) The credit for purchases of lights and reflectors under	398
section 5747.38 of the Revised Code;	399

(19) The nonrefundable job retention credit under division	400
(B) of section 5747.058 of the Revised Code;	401

(20) The credit for selling alternative fuel under section	402
5747.77 of the Revised Code;	403

(21) The second credit for purchases of new manufacturing	404
machinery and equipment and the credit for using Ohio coal under	405
section 5747.31 of the Revised Code;	406

(22) The job training credit under section 5747.39 of the	407
Revised Code;	408

(23) The enterprise zone credit under section 5709.66 of the	409
Revised Code;	410

(24) The credit for the eligible costs associated with a	411
voluntary action under section 5747.32 of the Revised Code;	412

(25) The nonrefundable credit for authorized donations under	413
section 715.58 of the Revised Code;	414

(26) The credit for employers that establish on-site child	415
day-care centers under section 5747.35 of the Revised Code;	416

(26)(27) The ethanol plant investment credit under section	417
5747.75 of the Revised Code;	418

(27)(28) The credit for purchases of qualifying grape	419
production property under section 5747.28 of the Revised Code;	420

(28)(29) The small business investment credit under section	421
5747.81 of the Revised Code;	422

(29)(30) The credit for research and development and	423
technology transfer investors under section 5747.33 of the Revised	424
Code;	425

(30)(31) The enterprise zone credits under section 5709.65 of	426
the Revised Code;	427

(31)(32) The research and development credit under section	428
5747.331 of the Revised Code;	429

(32)(33) The credit for rehabilitating a historic building	430
under section 5747.76 of the Revised Code;	431

(33)(34) The refundable credit for rehabilitating a historic	432
building under section 5747.76 of the Revised Code;	433

(34)(35) The refundable jobs creation credit or job retention	434
credit under division (A) of section 5747.058 of the Revised Code;	435

(35)(36) The refundable credit for taxes paid by a qualifying	436
entity granted under section 5747.059 of the Revised Code;	437

(36)(37) The refundable credits for taxes paid by a	438
qualifying pass-through entity granted under division (J) of	439
section 5747.08 of the Revised Code;	440

(37)(38) The refundable credit under section 5747.80 of the	441
Revised Code for losses on loans made to the Ohio venture capital	442
program under sections 150.01 to 150.10 of the Revised Code;	443

(38)(39) The refundable motion picture production credit	444
under section 5747.66 of the Revised Code.	445

(B) For any credit, except the refundable credits enumerated	446
in this section and the credit granted under division (I) of	447
section 5747.08 of the Revised Code, the amount of the credit for	448
a taxable year shall not exceed the tax due after allowing for any	449
other credit that precedes it in the order required under this	450
section. Any excess amount of a particular credit may be carried	451
forward if authorized under the section creating that credit.	452
Nothing in this chapter shall be construed to allow a taxpayer to	453
claim, directly or indirectly, a credit more than once for a	454
taxable year.	455

Sec. 5751.98.  (A) To provide a uniform procedure for	456
calculating the amount of tax due under this chapter, a taxpayer	457
shall claim any credits to which it is entitled in the following	458
order:	459

(1) The nonrefundable jobs retention credit under division	460
(B) of section 5751.50 of the Revised Code;	461

(2) The nonrefundable credit for qualified research expenses	462
under division (B) of section 5751.51 of the Revised Code;	463

(3) The nonrefundable credit for authorized donations under	464
section 715.58 of the Revised Code;	465

(4) The nonrefundable credit for a borrower's qualified	466
research and development loan payments under division (B) of	467
section 5751.52 of the Revised Code;	468

(4)(5) The nonrefundable credit for calendar years 2010 to	469
2029 for unused net operating losses under division (B) of section	470
5751.53 of the Revised Code;	471

(5)(6) The refundable motion picture production credit under	472
section 5751.54 of the Revised Code;	473

(6)(7) The refundable jobs creation credit or job retention	474
credit under division (A) of section 5751.50 of the Revised Code;	475

(7)(8) The refundable credit for calendar year 2030 for	476
unused net operating losses under division (C) of section 5751.53	477
of the Revised Code.	478

(B) For any credit except the refundable credits enumerated	479
in this section, the amount of the credit for a tax period shall	480
not exceed the tax due after allowing for any other credit that	481
precedes it in the order required under this section. Any excess	482
amount of a particular credit may be carried forward if authorized	483
under the section creating the credit.	484

Section 2.  That existing sections 5725.98, 5726.98, 5729.98,	485
5747.98, and 5751.98 of the Revised Code are hereby repealed.	486

Section 3.  If this act becomes effective before July 1 of	487
the current calendar year, projects may be submitted by municipal	488
corporations to the Tax Commissioner under section 715.58 of the	489
Revised Code on or before the first day of July of the current	490
calendar year. If this act becomes effective on or after July 1 of	491
the current calendar year, projects may be submitted by municipal	492
corporations to the Tax Commissioner on or before the first day of	493
July of the following calendar year.	494