As Introduced

130th General Assembly
Regular Session
2013-2014
S. B. No. 157


Senator Tavares 

Cosponsor: Senator Turner 



A BILL
To amend sections 5726.98, 5747.98, and 5751.98 and 1
to enact sections 5726.58, 5747.391, and 5751.55 2
of the Revised Code to create a tax credit for the 3
employment of individuals who have been convicted 4
of criminal offenses.5


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

       Section 1. That sections 5726.98, 5747.98, and 5751.98 be 6
amended and sections 5726.58, 5747.391, and 5751.55 of the Revised 7
Code be enacted to read as follows:8

       Sec. 5726.58.  (A) As used in this section:9

       (1) "Qualified reforming offender" means an individual who:10

       (a) Has been convicted of a felony or misdemeanor under any 11
statute of the United States or any state;12

       (b) Was hired by a taxpayer within one year after the 13
conviction or, if sentenced to a term of incarceration, was hired 14
within one year after being released from incarceration; and15

       (c) Is a member of a family that, in the six months 16
immediately preceding the date of hiring, had an income that, on 17
an annual basis, would be seventy per cent or less of the most 18
recent lower living standard calculated by the federal bureau of 19
labor statistics.20

       (2) "Family" means an individual, an individual's spouse, and 21
children.22

       (3) "Wages" has the same meaning as in section 3306 of the 23
Internal Revenue Code.24

       (B)(1) A nonrefundable credit is allowed against the tax 25
imposed by section 5726.02 of the Revised Code for the wages paid 26
by a taxpayer to a qualified reforming offender who works at least 27
one hundred twenty hours for the taxpayer during the taxpayer's 28
taxable year. The amount of the credit shall be calculated as 29
follows:30

       (a) For each qualified reforming offender who works at least 31
four hundred hours during the taxable year, the credit equals 32
forty per cent of the wages paid to the qualified reforming 33
offender, but shall not exceed two thousand four hundred dollars 34
per qualified reforming offender.35

       (b) For each qualified reforming offender who works less than 36
four hundred hours but at least one hundred twenty hours during 37
the taxable year, the credit equals twenty-five per cent of the 38
wages paid to the qualified reforming offender, but shall not 39
exceed one thousand five hundred dollars per qualified reforming 40
offender.41

       The credit shall be claimed in the order required under 42
section 5726.98 of the Revised Code. The credit, to the extent it 43
exceeds the taxpayer's tax liability for the tax year after 44
allowance for any other credits that precede the credit under that 45
section in that order, may be carried forward for the next five 46
succeeding tax years, but the amount of any excess credit allowed 47
in any such year shall be deducted from the balance carried 48
forward to the succeeding year.49

       (2) A taxpayer who received federally funded payments for 50
on-the-job training of a qualified reforming offender may not 51
claim the credit allowed under this section for any portion of the 52
wages paid to that qualified reforming offender.53

       (3) A taxpayer may not claim the credit allowed under this 54
section for any portion of the wages paid to a qualified reforming 55
offender for services that were the same as, or substantially 56
similar to, services that, but for a strike or lockout, would have 57
been performed by another employee.58

       (4) If a qualified reforming offender's employment is 59
terminated during the taxable year and the qualified reforming 60
offender was employed by the taxpayer for less than twelve months, 61
the taxpayer may not claim the full amount of the credit allowed 62
under this section unless the qualified reforming offender 63
voluntarily terminated employment; was unable to continue 64
employment due to a disability or death; or was terminated for 65
cause. If a qualified reforming offender's employment is 66
terminated for any other reason, the amount of the credit to which 67
the taxpayer is entitled under this section is reduced by a 68
percentage equal to the percentage of the taxable year that the 69
qualified reforming offender was not employed by the taxpayer.70

       (C) All files, statements, returns, reports, papers, or 71
documents of any kind relating to qualified reforming offenders or 72
their families are not public records under section 149.43 of the 73
Revised Code.74

       (D) A taxpayer that claims a credit under this section may 75
not claim the credit allowed under section 5747.391 or 5751.55 of 76
the Revised Code on the basis of the same qualified reforming 77
offender.78

       Sec. 5726.98. (A) To provide a uniform procedure for 79
calculating the amount of tax due under section 5726.02 of the 80
Revised Code, a taxpayer shall claim any credits to which the 81
taxpayer is entitled under this chapter in the following order:82

       (1) The bank organization assessment credit under section 83
5726.51 of the Revised Code; 84

       (2) The nonrefundable job retention credit under division (B) 85
of section 5726.50 of the Revised Code;86

       (3) The nonrefundable credit for purchases of qualified 87
low-income community investments under section 5726.54 of the 88
Revised Code;89

       (4) The nonrefundable credit for employers that employ 90
qualified reforming offenders under section 5726.58 of the Revised 91
Code; 92

       (5) The nonrefundable credit for qualified research expenses 93
under section 5726.56 of the Revised Code;94

       (5)(6) The nonrefundable credit for qualifying dealer in 95
intangibles taxes under section 5726.57 of the Revised Code.;96

       (6)(7) The refundable credit for rehabilitating an historic 97
building under section 5726.52 of the Revised Code;98

       (7)(8) The refundable job retention or job creation credit 99
under division (A) of section 5726.50 of the Revised Code;100

       (8)(9) The refundable credit under section 5726.53 of the 101
Revised Code for losses on loans made under the Ohio venture 102
capital program under sections 150.01 to 150.10 of the Revised 103
Code;104

       (9)(10) The refundable motion picture production credit under 105
section 5726.55 of the Revised Code.106

       (B) For any credit except the refundable credits enumerated 107
in this section, the amount of the credit for a taxable year shall 108
not exceed the tax due after allowing for any other credit that 109
precedes it in the order required under this section. Any excess 110
amount of a particular credit may be carried forward if authorized 111
under the section creating that credit. Nothing in this chapter 112
shall be construed to allow a taxpayer to claim, directly or 113
indirectly, a credit more than once for a taxable year.114

       Sec. 5747.391.  (A) As used in this section:115

       (1) "Pass-through entity" includes a sole proprietorship.116

       (2) "Qualified reforming offender" means an individual who:117

       (a) Has been convicted of a misdemeanor or felony under any 118
statute of the United States or any state;119

       (b) Was hired by a pass-through entity within one year after 120
the conviction or, if sentenced to a term of incarceration, was 121
hired within one year after being released from incarceration; and122

       (c) Is a member of a family that, in the six months 123
immediately preceding the date of hiring, had an income that, on 124
an annual basis, would be seventy per cent or less of the most 125
recent lower living standard calculated by the federal bureau of 126
labor statistics.127

       (3) "Family" means an individual, an individual's spouse, and 128
children.129

       (4) "Wages" has the same meaning as in section 3306 of the 130
Internal Revenue Code.131

       (B)(1) For taxable years beginning in 2013 or thereafter, a 132
nonrefundable credit is allowed against the tax imposed by section 133
5747.02 of the Revised Code for the wages paid by a pass-through 134
entity to a qualified reforming offender who works at least one 135
hundred twenty hours for the pass-through entity during the 136
entity's taxable year ending in or with the taxpayer's taxable 137
year. The amount of the credit shall be calculated as follows:138

       (a) For each qualified reforming offender who works at least 139
four hundred hours during the entity's taxable year, the credit 140
equals forty per cent of the wages paid to the qualified reforming 141
offender, but shall not exceed two thousand four hundred dollars 142
per qualified reforming offender.143

       (b) For each qualified reforming offender who works less than 144
four hundred hours but at least one hundred twenty hours during 145
the entity's taxable year, the credit equals twenty-five per cent 146
of the wages paid to the qualified reforming offender, but shall 147
not exceed one thousand five hundred dollars per qualified 148
reforming offender.149

       The amount of a taxpayer's credit is the taxpayer's 150
proportionate share of the credit distributed by the pass-through 151
entity. The credit shall be claimed in the order required under 152
section 5747.98 of the Revised Code. The credit, to the extent it 153
exceeds the taxpayer's tax liability for the taxable year after 154
allowance for any other credits that precede the credit under that 155
section in that order, may be carried forward for the next five 156
succeeding taxable years, but the amount of any excess credit 157
allowed in any such year shall be deducted from the balance 158
carried forward to the succeeding year.159

       (2) A taxpayer may not claim the credit allowed under this 160
section for any portion of the wages paid to a qualified reforming 161
offender for whom the pass-through entity received federally 162
funded payments for on-the-job training.163

       (3) A taxpayer may not claim the credit allowed under this 164
section for any portion of the wages paid to a qualified reforming 165
offender for services that were the same as, or substantially 166
similar to, services that, but for a strike or lockout, would have 167
been performed by another employee.168

       (4) If a qualified reforming offender's employment is 169
terminated during the pass-through entity's taxable year ending in 170
or with the taxpayer's taxable year and the qualified reforming 171
offender was employed by the pass-through entity for less than 172
twelve months, a taxpayer may not claim the full amount of the 173
credit allowed under this section unless the qualified reforming 174
offender voluntarily terminated employment; was unable to continue 175
employment due to a disability or death; or was terminated for 176
cause. If a qualified reforming offender's employment is 177
terminated for any other reason, the amount of the credit to which 178
the taxpayer is entitled under this section is reduced by a 179
percentage equal to the percentage of the taxable year that the 180
qualified reforming offender was not employed by the pass-through 181
entity.182

       (C) All files, statements, returns, reports, papers, or 183
documents of any kind relating to qualified reforming offenders or 184
their families are not public records under section 149.43 of the 185
Revised Code.186

       (D) A taxpayer who claims a credit under this section may not 187
directly or indirectly claim the credit allowed under section 188
5726.58 or 5751.55 of the Revised Code on the basis of the same 189
qualified reforming offender.190

       Sec. 5747.98.  (A) To provide a uniform procedure for 191
calculating the amount of tax due under section 5747.02 of the 192
Revised Code, a taxpayer shall claim any credits to which the 193
taxpayer is entitled in the following order:194

       (1) The retirement income credit under division (B) of 195
section 5747.055 of the Revised Code;196

       (2) The senior citizen credit under division (C) of section 197
5747.05 of the Revised Code;198

       (3) The lump sum distribution credit under division (D) of 199
section 5747.05 of the Revised Code;200

       (4) The dependent care credit under section 5747.054 of the 201
Revised Code;202

       (5) The lump sum retirement income credit under division (C) 203
of section 5747.055 of the Revised Code;204

       (6) The lump sum retirement income credit under division (D) 205
of section 5747.055 of the Revised Code;206

       (7) The lump sum retirement income credit under division (E) 207
of section 5747.055 of the Revised Code;208

       (8) The low-income credit under section 5747.056 of the 209
Revised Code;210

       (9) The credit for displaced workers who pay for job training 211
under section 5747.27 of the Revised Code;212

       (10) The campaign contribution credit under section 5747.29 213
of the Revised Code;214

       (11) The twenty-dollar personal exemption credit under 215
section 5747.022 of the Revised Code;216

       (12) The joint filing credit under division (G) of section 217
5747.05 of the Revised Code;218

       (13) The nonresident credit under division (A) of section 219
5747.05 of the Revised Code;220

       (14) The credit for a resident's out-of-state income under 221
division (B) of section 5747.05 of the Revised Code;222

       (15) The credit for employers that enter into agreements with 223
child day-care centers under section 5747.34 of the Revised Code;224

       (16) The credit for employers that reimburse employee child 225
care expenses under section 5747.36 of the Revised Code;226

       (17) The credit for adoption of a minor child under section 227
5747.37 of the Revised Code;228

       (18) The credit for purchases of lights and reflectors under 229
section 5747.38 of the Revised Code;230

       (19) The nonrefundable job retention credit under division 231
(B) of section 5747.058 of the Revised Code;232

       (20) The credit for selling alternative fuel under section 233
5747.77 of the Revised Code;234

       (21) The second credit for purchases of new manufacturing 235
machinery and equipment and the credit for using Ohio coal under 236
section 5747.31 of the Revised Code;237

       (22) The job training credit under section 5747.39 of the 238
Revised Code;239

       (23) The enterprise zone credit under section 5709.66 of the 240
Revised Code;241

       (24) The credit for the eligible costs associated with a 242
voluntary action under section 5747.32 of the Revised Code;243

       (25) The credit for employers that establish on-site child 244
day-care centers under section 5747.35 of the Revised Code;245

       (26) The ethanol plant investment credit under section 246
5747.75 of the Revised Code;247

       (27) The nonrefundable credit for employers that employ 248
qualified reforming offenders under section 5747.391 of the 249
Revised Code; 250

       (28) The credit for purchases of qualifying grape production 251
property under section 5747.28 of the Revised Code;252

       (28)(29) The small business investment credit under section 253
5747.81 of the Revised Code;254

       (29)(30) The credit for research and development and 255
technology transfer investors under section 5747.33 of the Revised 256
Code;257

       (30)(31) The enterprise zone credits under section 5709.65 of 258
the Revised Code;259

       (31)(32) The research and development credit under section 260
5747.331 of the Revised Code;261

       (32)(33) The credit for rehabilitating a historic building 262
under section 5747.76 of the Revised Code;263

       (33)(34) The refundable credit for rehabilitating a historic 264
building under section 5747.76 of the Revised Code;265

       (34)(35) The refundable jobs creation credit or job retention 266
credit under division (A) of section 5747.058 of the Revised Code;267

       (35)(36) The refundable credit for taxes paid by a qualifying 268
entity granted under section 5747.059 of the Revised Code;269

       (36)(37) The refundable credits for taxes paid by a 270
qualifying pass-through entity granted under division (J) of 271
section 5747.08 of the Revised Code;272

       (37)(38) The refundable credit under section 5747.80 of the 273
Revised Code for losses on loans made to the Ohio venture capital 274
program under sections 150.01 to 150.10 of the Revised Code;275

       (38)(39) The refundable motion picture production credit 276
under section 5747.66 of the Revised Code.277

       (39)(40) The refundable credit for financial institution 278
taxes paid by a pass-through entity granted under section 5747.65 279
of the Revised Code.280

       (B) For any credit, except the refundable credits enumerated 281
in this section and the credit granted under division (I) of 282
section 5747.08 of the Revised Code, the amount of the credit for 283
a taxable year shall not exceed the tax due after allowing for any 284
other credit that precedes it in the order required under this 285
section. Any excess amount of a particular credit may be carried 286
forward if authorized under the section creating that credit. 287
Nothing in this chapter shall be construed to allow a taxpayer to 288
claim, directly or indirectly, a credit more than once for a 289
taxable year.290

       Sec. 5751.55. (A) As used in this section:291

       (1) "Qualified reforming offender" means an individual who:292

       (a) Has been convicted of a misdemeanor or felony under any 293
statute of the United States or any state;294

       (b) Was hired by a taxpayer within one year after the 295
conviction or, if sentenced to a term of incarceration, was hired 296
within one year after being released from incarceration; and297

       (c) Is a member of a family that, in the six months 298
immediately preceding the date of hiring, had an income that, on 299
an annual basis, would be seventy per cent or less of the most 300
recent lower living standard calculated by the federal bureau of 301
labor statistics.302

       (2) "Family" means an individual, an individual's spouse, and 303
children.304

       (3) "Wages" has the same meaning as in section 3306 of the 305
Internal Revenue Code.306

       (B)(1) For tax periods beginning in 2013 and thereafter, a 307
nonrefundable credit is allowed against the tax imposed by section 308
5751.02 of the Revised Code for the wages paid by a taxpayer to a 309
qualified reforming offender who works at least one hundred twenty 310
hours for the taxpayer during the calendar year. The amount of the 311
credit shall be calculated as follows:312

       (a) For each qualified reforming offender who works at least 313
four hundred hours during the calendar year, the credit equals 314
forty per cent of the wages paid to the qualified reforming 315
offender, but shall not exceed two thousand four hundred dollars 316
per qualified reforming offender.317

       (b) For each qualified reforming offender who works less than 318
four hundred hours but at least one hundred twenty hours during 319
the calendar year, the credit equals twenty-five per cent of the 320
wages paid to the qualified reforming offender, but shall not 321
exceed one thousand five hundred dollars per qualified reforming 322
offender.323

       The credit shall be claimed in the order required under 324
section 5751.98 of the Revised Code. The credit, to the extent it 325
exceeds a calendar year taxpayer's tax liability for the tax 326
period after allowance for any other credits that precede the 327
credit under that section in that order, may be carried forward 328
for the next five succeeding tax periods. A calendar quarter 329
taxpayer shall claim the credit for the tax period ending on the 330
thirty-first day of December. To the extent the credit exceeds the 331
calendar quarter taxpayer's tax liability for the tax period after 332
allowance for any other credits that precede the credit under 333
section 5751.98 of the Revised Code in that order, the excess may 334
be carried forward for the next twenty-three tax periods. For all 335
taxpayers, the amount of any excess credit allowed in any such tax 336
period shall be deducted from the balance carried forward to the 337
succeeding tax period.338

       (2) A taxpayer who received federally funded payments for 339
on-the-job training of a qualified reforming offender may not 340
claim the credit allowed under this section for any portion of the 341
wages paid to that qualified reforming offender.342

       (3) A taxpayer may not claim the credit allowed under this 343
section for any portion of the wages paid to a qualified reforming 344
offender for services that were the same as, or substantially 345
similar to, services that, but for a strike or lockout, would have 346
been performed by another employee.347

       (4) If a qualified reforming offender's employment is 348
terminated during the calendar year and the qualified reforming 349
offender was employed by the taxpayer for less than twelve months, 350
the taxpayer may not claim the full amount of the credit allowed 351
under this section unless the qualified reforming offender 352
voluntarily terminated employment; was unable to continue 353
employment due to a disability or death; or was terminated for 354
cause. If a qualified reforming offender's employment is 355
terminated for any other reason, the amount of the credit to which 356
the taxpayer is entitled under this section is reduced by a 357
percentage equal to the percentage of the calendar year that the 358
qualified reforming offender was not employed by the taxpayer.359

       (C) All files, statements, returns, reports, papers, or 360
documents of any kind relating to qualified reforming offenders or 361
their families are not public records under section 149.43 of the 362
Revised Code.363

       (D) A taxpayer that claims a credit under this section may 364
not claim the credit allowed under section 5726.58 or 5747.391 of 365
the Revised Code on the basis of the same qualified reforming 366
offender.367

       Sec. 5751.98.  (A) To provide a uniform procedure for 368
calculating the amount of tax due under this chapter, a taxpayer 369
shall claim any credits to which it is entitled in the following 370
order:371

        (1) The nonrefundable jobs retention credit under division 372
(B) of section 5751.50 of the Revised Code;373

        (2) The nonrefundable credit for employers that employ 374
qualified reforming offenders under section 5751.55 of the Revised 375
Code; 376

       (3) The nonrefundable credit for qualified research expenses 377
under division (B) of section 5751.51 of the Revised Code;378

       (3)(4) The nonrefundable credit for a borrower's qualified 379
research and development loan payments under division (B) of 380
section 5751.52 of the Revised Code;381

       (4)(5) The nonrefundable credit for calendar years 2010 to 382
2029 for unused net operating losses under division (B) of section 383
5751.53 of the Revised Code;384

        (5)(6) The refundable motion picture production credit under 385
section 5751.54 of the Revised Code;386

       (6)(7) The refundable jobs creation credit or job retention 387
credit under division (A) of section 5751.50 of the Revised Code;388

       (7)(8) The refundable credit for calendar year 2030 for 389
unused net operating losses under division (C) of section 5751.53 390
of the Revised Code.391

        (B) For any credit except the refundable credits enumerated 392
in this section, the amount of the credit for a tax period shall 393
not exceed the tax due after allowing for any other credit that 394
precedes it in the order required under this section. Any excess 395
amount of a particular credit may be carried forward if authorized 396
under the section creating the credit.397

       Section 2.  That existing sections 5726.98, 5747.98, and 398
5751.98 of the Revised Code are hereby repealed.399

       Section 3.  Section 5747.98 of the Revised Code is presented 400
in this act as a composite of the section as amended by both Am. 401
Sub. H.B. 386 and Am. Sub. H.B. 510 of the 129th General Assembly. 402
The General Assembly, applying the principle stated in division 403
(B) of section 1.52 of the Revised Code that amendments are to be 404
harmonized if reasonably capable of simultaneous operation, finds 405
that the composite is the resulting version of the section in 406
effect prior to the effective date of the section as presented in 407
this act.408