Ohio House Bill HB69 Latest Draft

                            As Introduced
136th General Assembly
Regular Session	H. B. No. 69
2025-2026
Representatives Peterson, Claggett
A B I L L
To amend sections 5733.40 , 5747.01, and 5747.05 of 
the Revised Code to allow taxpayers to deduct in 
a single year the full bonus depreciation and 
enhanced expensing allowances the taxpayer 
deducts for federal income tax purposes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 5733.40 , 5747.01, and 5747.05 of 
the Revised Code be amended to read as follows:
Sec. 5733.40. As used in sections 5733.40 and 5733.41 and 
Chapter 5747. of the Revised Code:
(A)(1) "Adjusted qualifying amount" means either of the 
following:
(a) The sum of each qualifying investor's distributive 
share of the income, gain, expense, or loss of a qualifying 
pass-through entity for the qualifying taxable year of the 
qualifying pass-through entity multiplied by the apportionment 
fraction defined in division (B) of this section, subject to 
section 5733.401 of the Revised Code and divisions (A)(2) to (7) 
of this section;
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(b) The sum of each qualifying beneficiary's share of the 
qualifying net income and qualifying net gain distributed by a 
qualifying trust for the qualifying taxable year of the 
qualifying trust multiplied by the apportionment fraction 
defined in division (B) of this section, subject to section 
5733.401 of the Revised Code and divisions (A)(2) to (7) of this 
section.
(2) The sum shall exclude any amount which, pursuant to 
the Constitution of the United States, the Constitution of Ohio, 
or any federal law is not subject to a tax on or measured by net 
income.
(3) For the purposes of Chapters 5733. and 5747. of the 
Revised Code, the profit or net income of the qualifying entity 
shall be increased by disallowing all amounts representing 
expenses, other than amounts described in division (A)(7) of 
this section, that the qualifying entity paid to or incurred 
with respect to direct or indirect transactions with one or more 
related members, excluding the cost of goods sold calculated in 
accordance with section 263A of the Internal Revenue Code and 
United States department of the treasury regulations issued 
thereunder. Nothing in division (A)(3) of this section shall be 
construed to limit solely to this chapter the application of 
section 263A of the Internal Revenue Code and United States 
department of the treasury regulations issued thereunder. 
(4) For the purposes of Chapters 5733. and 5747. of the 
Revised Code, the profit or net income of the qualifying entity 
shall be increased by disallowing all recognized losses, other 
than losses from sales of inventory the cost of which is 
calculated in accordance with section 263A of the Internal 
Revenue Code and United States department of the treasury 
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regulations issued thereunder, with respect to all direct or 
indirect transactions with one or more related members. For the 
purposes of Chapters 5733. and 5747. of the Revised Code, losses 
from the sales of such inventory shall be allowed only to the 
extent calculated in accordance with section 482 of the Internal 
Revenue Code and United States department of the treasury 
regulations issued thereunder. Nothing in division (A)(4) of 
this section shall be construed to limit solely to this section 
the application of section 263A and section 482 of the Internal 
Revenue Code and United States department of the treasury 
regulations issued thereunder. 
(5) The sum shall be increased or decreased by an amount 
equal to the qualifying investor's or qualifying beneficiary's 
distributive or proportionate share of the amount that the 
qualifying entity would be required allowed to add or deduct 
under divisions (A)(17) and (18) division (A)(18) of section 
5747.01 of the Revised Code if the qualifying entity were a 
taxpayer for the purposes of Chapter 5747. of the Revised Code.
(6) The sum shall be computed without regard to section 
5733.051 or division (D) of section 5733.052 of the Revised 
Code.
(7) For the purposes of Chapters 5733. and 5747. of the 
Revised Code, guaranteed payments or compensation paid to 
investors by a qualifying entity that is not subject to the tax 
imposed by section 5733.06 of the Revised Code shall be 
considered a distributive share of income of the qualifying 
entity. Division (A)(7) of this section applies only to such 
payments or such compensation paid to an investor who at any 
time during the qualifying entity's taxable year holds at least 
a twenty per cent direct or indirect interest in the profits or 
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capital of the qualifying entity. For the purposes of this 
division, guaranteed payments and compensation shall be 
considered to be paid to an investor by a qualifying entity if 
the qualifying entity in which the investor holds at least a 
twenty per cent direct or indirect interest is a client employer 
of a professional employer organization or alternate employer 
organization, as those terms are defined in section 4125.01 or 
4133.01 of the Revised Code, as applicable, and the guaranteed 
payments or compensation are paid to the investor by that 
professional employer organization or alternate employer 
organization.
(B) "Apportionment fraction" means:
(1) With respect to a qualifying pass-through entity other 
than a financial institution, the fraction calculated pursuant 
to division (B)(2) of section 5733.05 of the Revised Code as if 
the qualifying pass-through entity were a corporation subject to 
the tax imposed by section 5733.06 of the Revised Code;
(2) With respect to a qualifying pass-through entity that 
is a financial institution, the fraction calculated pursuant to 
division (C) of section 5733.056 of the Revised Code as if the 
qualifying pass-through entity were a financial institution 
subject to the tax imposed by section 5733.06 of the Revised 
Code;
(3) With respect to a qualifying trust, the fraction 
calculated pursuant to division (B)(2) of section 5733.05 of the 
Revised Code as if the qualifying trust were a corporation 
subject to the tax imposed by section 5733.06 of the Revised 
Code, except that the property, payroll, and sales fractions 
shall be calculated by including in the numerator and 
denominator of the fractions only the property, payroll, and 
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sales, respectively, directly related to the production of 
income or gain from acquisition, ownership, use, maintenance, 
management, or disposition of tangible personal property located 
in this state at any time during the qualifying trust's 
qualifying taxable year or of real property located in this 
state.
(C) "Qualifying beneficiary" means any individual that, 
during the qualifying taxable year of a qualifying trust, is a 
beneficiary of that trust, but does not include an individual 
who is a resident taxpayer for the purposes of Chapter 5747. of 
the Revised Code for the entire qualifying taxable year of the 
qualifying trust.
(D) "Fiscal year" means an accounting period ending on any 
day other than the thirty-first day of December.
(E) "Individual" means a natural person.
(F) "Month" means a calendar month.
(G) "Distributive share" includes the sum of the income, 
gain, expense, or loss of a disregarded entity or qualified 
subchapter S subsidiary.
(H) "Investor" means any person that, during any portion 
of a taxable year of a qualifying pass-through entity, is a 
partner, member, shareholder, or investor in that qualifying 
pass-through entity.
(I) Except as otherwise provided in section 5733.402 or 
5747.401 of the Revised Code, "qualifying investor" means any 
investor except those described in divisions (I)(1) to (9) of 
this section.
(1) An investor satisfying one of the descriptions under 
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section 501(a) or (c) of the Internal Revenue Code, a 
partnership with equity securities registered with the United 
States securities and exchange commission under section 12 of 
the "Securities Exchange Act of 1934," as amended, or an 
investor described in division (F) of section 3334.01, or 
division (A) or (C) of section 5733.09 of the Revised Code for 
the entire qualifying taxable year of the qualifying pass-
through entity.
(2) An investor who is either an individual or an estate 
and is a resident taxpayer for the purposes of section 5747.01 
of the Revised Code for the entire qualifying taxable year of 
the qualifying pass-through entity.
(3) An investor who is an individual for whom the 
qualifying pass-through entity makes a good faith and reasonable 
effort to comply fully and timely with the filing and payment 
requirements set forth in division (D) of section 5747.08 of the 
Revised Code and section 5747.09 of the Revised Code with 
respect to the individual's adjusted qualifying amount for the 
entire qualifying taxable year of the qualifying pass-through 
entity.
(4) An investor that is another qualifying pass-through 
entity having only investors described in division (I)(1), (2), 
(3), or (6) of this section during the three-year period 
beginning twelve months prior to the first day of the qualifying 
taxable year of the qualifying pass-through entity.
(5) An investor that is another pass-through entity having 
no investors other than individuals and estates during the 
qualifying taxable year of the qualifying pass-through entity in 
which it is an investor, and that makes a good faith and 
reasonable effort to comply fully and timely with the filing and 
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payment requirements set forth in division (D) of section 
5747.08 of the Revised Code and section 5747.09 of the Revised 
Code with respect to investors that are not resident taxpayers 
of this state for the purposes of Chapter 5747. of the Revised 
Code for the entire qualifying taxable year of the qualifying 
pass-through entity in which it is an investor.
(6) An investor that is treated as a C corporation for 
federal income tax purposes for the entire qualifying taxable 
year of the qualifying pass-through entity in which it is an 
investor.
(7) An investor other than an individual that satisfies 
all the following:
(a) The investor submits a written statement to the 
qualifying pass-through entity stating that the investor 
irrevocably agrees that the investor has nexus with this state 
under the Constitution of the United States and is subject to 
and liable for the tax calculated under division (A) or (B) of 
section 5733.06 of the Revised Code with respect to the 
investor's adjusted qualifying amount for the entire qualifying 
taxable year of the qualifying pass-through entity. The 
statement is subject to the penalties of perjury, shall be 
retained by the qualifying pass-through entity for no fewer than 
seven years, and shall be delivered to the tax commissioner upon 
request.
(b) The investor makes a good faith and reasonable effort 
to comply timely and fully with all the reporting and payment 
requirements set forth in Chapter 5733. of the Revised Code with 
respect to the investor's adjusted qualifying amount for the 
entire qualifying taxable year of the qualifying pass-through 
entity.
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(c) Neither the investor nor the qualifying pass-through 
entity in which it is an investor, before, during, or after the 
qualifying pass-through entity's qualifying taxable year, 
carries out any transaction or transactions with one or more 
related members of the investor or the qualifying pass-through 
entity resulting in a reduction or deferral of tax imposed by 
Chapter 5733. of the Revised Code with respect to all or any 
portion of the investor's adjusted qualifying amount for the 
qualifying pass-through entity's taxable year, or that 
constitute a sham, lack economic reality, or are part of a 
series of transactions the form of which constitutes a step 
transaction or transactions or does not reflect the substance of 
those transactions.
(8) Any other investor that the tax commissioner may 
designate by rule. The tax commissioner may adopt rules 
including a rule defining "qualifying investor" or "qualifying 
beneficiary" and governing the imposition of the withholding tax 
imposed by section 5747.41 of the Revised Code with respect to 
an individual who is a resident taxpayer for the purposes of 
Chapter 5747. of the Revised Code for only a portion of the 
qualifying taxable year of the qualifying entity.
(9) An investor that is a trust or fund the beneficiaries 
of which, during the qualifying taxable year of the qualifying 
pass-through entity, are limited to the following:
(a) A person that is or may be the beneficiary of a trust 
subject to Subchapter D of Chapter 1 of Subtitle A of the 
Internal Revenue Code.
(b) A person that is or may be the beneficiary of or the 
recipient of payments from a trust or fund that is a nuclear 
decommissioning reserve fund, a designated settlement fund, or 
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any other trust or fund established to resolve and satisfy 
claims that may otherwise be asserted by the beneficiary or a 
member of the beneficiary's family. Sections 267(c)(4), 468A(e), 
and 468B(d)(2) of the Internal Revenue Code apply to the 
determination of whether such a person satisfies division (I)(9) 
of this section.
(c) A person who is or may be the beneficiary of a trust 
that, under its governing instrument, is not required to 
distribute all of its income currently. Division (I)(9)(c) of 
this section applies only if the trust, prior to the due date 
for filing the qualifying pass-through entity's return for taxes 
imposed by section 5733.41 and sections 5747.41 to 5747.453 of 
the Revised Code, irrevocably agrees in writing that for the 
taxable year during or for which the trust distributes any of 
its income to any of its beneficiaries, the trust is a 
qualifying trust and will pay the estimated tax, and will 
withhold and pay the withheld tax, as required under sections 
5747.40 to 5747.453 of the Revised Code.
For the purposes of division (I)(9) of this section, a 
trust or fund shall be considered to have a beneficiary other 
than persons described under divisions (I)(9)(a) to (c) of this 
section if a beneficiary would not qualify under those divisions 
under the doctrines of "economic reality," "sham transaction," 
"step doctrine," or "substance over form." A trust or fund 
described in division (I)(9) of this section bears the burden of 
establishing by a preponderance of the evidence that any 
transaction giving rise to the tax benefits provided under 
division (I)(9) of this section does not have as a principal 
purpose a claim of those tax benefits. Nothing in this section 
shall be construed to limit solely to this section the 
application of the doctrines referred to in this paragraph.
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(J) "Qualifying net gain" means any recognized net gain 
with respect to the acquisition, ownership, use, maintenance, 
management, or disposition of tangible personal property located 
in this state at any time during a trust's qualifying taxable 
year or real property located in this state.
(K) "Qualifying net income" means any recognized income, 
net of related deductible expenses, other than distributions 
deductions with respect to the acquisition, ownership, use, 
maintenance, management, or disposition of tangible personal 
property located in this state at any time during the trust's 
qualifying taxable year or real property located in this state.
(L) "Qualifying entity" means a qualifying pass-through 
entity or a qualifying trust.
(M) "Qualifying trust" means a trust subject to subchapter 
J of the Internal Revenue Code that, during any portion of the 
trust's qualifying taxable year, has income or gain from the 
acquisition, management, ownership, use, or disposition of 
tangible personal property located in this state at any time 
during the trust's qualifying taxable year or real property 
located in this state. "Qualifying trust" does not include a 
person described in section 501(c) of the Internal Revenue Code 
or a person described in division (C) of section 5733.09 of the 
Revised Code.
(N) "Qualifying pass-through entity" means a pass-through 
entity as defined in section 5733.04 of the Revised Code, 
excluding: a person described in section 501(c) of the Internal 
Revenue Code; a partnership with equity securities registered 
with the United States securities and exchange commission under 
section 12 of the Securities Exchange Act of 1934, as amended; 
or a person described in division (C) of section 5733.09 of the 
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Revised Code.
(O) "Quarter" means the first three months, the second 
three months, the third three months, or the last three months 
of a qualifying entity's qualifying taxable year.
(P) "Related member" has the same meaning as in division 
(A)(6) of section 5733.042 of the Revised Code without regard to 
division (B) of that section. However, for the purposes of 
divisions (A)(3) and (4) of this section only, "related member" 
has the same meaning as in division (A)(6) of section 5733.042 
of the Revised Code without regard to division (B) of that 
section, but shall be applied by substituting "forty per cent" 
for "twenty per cent" wherever "twenty per cent" appears in 
division (A) of that section. 
(Q) "Return" or "report" means the notifications and 
reports required to be filed pursuant to sections 5747.42 to 
5747.45 of the Revised Code for the purpose of reporting the tax 
imposed under section 5733.41 or 5747.41 of the Revised Code, 
and included declarations of estimated tax when so required.
(R) "Qualifying taxable year" means the calendar year or 
the qualifying entity's fiscal year ending during the calendar 
year, or fractional part thereof, for which the adjusted 
qualifying amount is calculated pursuant to sections 5733.40 and 
5733.41 or sections 5747.40 to 5747.453 of the Revised Code.
Sec. 5747.01. Except as otherwise expressly provided or 
clearly appearing from the context, any term used in this 
chapter that is not otherwise defined in this section has the 
same meaning as when used in a comparable context in the laws of 
the United States relating to federal income taxes or if not 
used in a comparable context in those laws, has the same meaning 
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As Introduced
as in section 5733.40 of the Revised Code. Any reference in this 
chapter to the Internal Revenue Code includes other laws of the 
United States relating to federal income taxes. 
As used in this chapter: 
(A) "Adjusted gross income" or "Ohio adjusted gross 
income" means federal adjusted gross income, as defined and used 
in the Internal Revenue Code, adjusted as provided in this 
section: 
(1) Add interest or dividends on obligations or securities 
of any state or of any political subdivision or authority of any 
state, other than this state and its subdivisions and 
authorities. 
(2) Add interest or dividends on obligations of any 
authority, commission, instrumentality, territory, or possession 
of the United States to the extent that the interest or 
dividends are exempt from federal income taxes but not from 
state income taxes. 
(3) Deduct interest or dividends on obligations of the 
United States and its territories and possessions or of any 
authority, commission, or instrumentality of the United States 
to the extent that the interest or dividends are included in 
federal adjusted gross income but exempt from state income taxes 
under the laws of the United States. 
(4) Deduct disability and survivor's benefits to the 
extent included in federal adjusted gross income. 
(5) Deduct the following, to the extent not otherwise 
deducted or excluded in computing federal or Ohio adjusted gross 
income: 
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(a) Benefits under Title II of the Social Security Act and 
tier 1 railroad retirement; 
(b) Railroad retirement benefits, other than tier 1 
railroad retirement benefits, to the extent such amounts are 
exempt from state taxation under federal law. 
(6) Deduct the amount of wages and salaries, if any, not 
otherwise allowable as a deduction but that would have been 
allowable as a deduction in computing federal adjusted gross 
income for the taxable year, had the work opportunity tax credit 
allowed and determined under sections 38, 51, and 52 of the 
Internal Revenue Code not been in effect. 
(7) Deduct any interest or interest equivalent on public 
obligations and purchase obligations to the extent that the 
interest or interest equivalent is included in federal adjusted 
gross income. 
(8) Add any loss or deduct any gain resulting from the 
sale, exchange, or other disposition of public obligations to 
the extent that the loss has been deducted or the gain has been 
included in computing federal adjusted gross income. 
(9) Deduct or add amounts, as provided under section 
5747.70 of the Revised Code, related to contributions made to or 
tuition units purchased under a qualified tuition program 
established pursuant to section 529 of the Internal Revenue 
Code. 
(10)(a) Deduct, to the extent not otherwise allowable as a 
deduction or exclusion in computing federal or Ohio adjusted 
gross income for the taxable year, the amount the taxpayer paid 
during the taxable year for medical care insurance and qualified 
long-term care insurance for the taxpayer, the taxpayer's 
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spouse, and dependents. No deduction for medical care insurance 
under division (A)(10)(a) of this section shall be allowed 
either to any taxpayer who is eligible to participate in any 
subsidized health plan maintained by any employer of the 
taxpayer or of the taxpayer's spouse, or to any taxpayer who is 
entitled to, or on application would be entitled to, benefits 
under part A of Title XVIII of the "Social Security Act," 49 
Stat. 620 (1935), 42 U.S.C. 301, as amended. For the purposes of 
division (A)(10)(a) of this section, "subsidized health plan" 
means a health plan for which the employer pays any portion of 
the plan's cost. The deduction allowed under division (A)(10)(a) 
of this section shall be the net of any related premium refunds, 
related premium reimbursements, or related insurance premium 
dividends received during the taxable year. 
(b) Deduct, to the extent not otherwise deducted or 
excluded in computing federal or Ohio adjusted gross income 
during the taxable year, the amount the taxpayer paid during the 
taxable year, not compensated for by any insurance or otherwise, 
for medical care of the taxpayer, the taxpayer's spouse, and 
dependents, to the extent the expenses exceed seven and one-half 
per cent of the taxpayer's federal adjusted gross income. 
(c) For purposes of division (A)(10) of this section, 
"medical care" has the meaning given in section 213 of the 
Internal Revenue Code, subject to the special rules, 
limitations, and exclusions set forth therein, and "qualified 
long-term care" has the same meaning given in section 7702B(c) 
of the Internal Revenue Code. Solely for purposes of division 
(A)(10)(a) of this section, "dependent" includes a person who 
otherwise would be a "qualifying relative" and thus a 
"dependent" under section 152 of the Internal Revenue Code but 
for the fact that the person fails to meet the income and 
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As Introduced
support limitations under section 152(d)(1)(B) and (C) of the 
Internal Revenue Code. 
(11)(a) Deduct any amount included in federal adjusted 
gross income solely because the amount represents a 
reimbursement or refund of expenses that in any year the 
taxpayer had deducted as an itemized deduction pursuant to 
section 63 of the Internal Revenue Code and applicable United 
States department of the treasury regulations. The deduction 
otherwise allowed under division (A)(11)(a) of this section 
shall be reduced to the extent the reimbursement is attributable 
to an amount the taxpayer deducted under this section in any 
taxable year. 
(b) Add any amount not otherwise included in Ohio adjusted 
gross income for any taxable year to the extent that the amount 
is attributable to the recovery during the taxable year of any 
amount deducted or excluded in computing federal or Ohio 
adjusted gross income in any taxable year. 
(12) Deduct any portion of the deduction described in 
section 1341(a)(2) of the Internal Revenue Code, for repaying 
previously reported income received under a claim of right, that 
meets both of the following requirements: 
(a) It is allowable for repayment of an item that was 
included in the taxpayer's adjusted gross income for a prior 
taxable year and did not qualify for a credit under division (A) 
or (B) of section 5747.05 of the Revised Code for that year; 
(b) It does not otherwise reduce the taxpayer's adjusted 
gross income for the current or any other taxable year. 
(13) Deduct an amount equal to the deposits made to, and 
net investment earnings of, a medical savings account during the 
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As Introduced
taxable year, in accordance with section 3924.66 of the Revised 
Code. The deduction allowed by division (A)(13) of this section 
does not apply to medical savings account deposits and earnings 
otherwise deducted or excluded for the current or any other 
taxable year from the taxpayer's federal adjusted gross income. 
(14)(a) Add an amount equal to the funds withdrawn from a 
medical savings account during the taxable year, and the net 
investment earnings on those funds, when the funds withdrawn 
were used for any purpose other than to reimburse an account 
holder for, or to pay, eligible medical expenses, in accordance 
with section 3924.66 of the Revised Code; 
(b) Add the amounts distributed from a medical savings 
account under division (A)(2) of section 3924.68 of the Revised 
Code during the taxable year. 
(15) Add any amount claimed as a credit under section 
5747.059 of the Revised Code to the extent that such amount 
satisfies either of the following: 
(a) The amount was deducted or excluded from the 
computation of the taxpayer's federal adjusted gross income as 
required to be reported for the taxpayer's taxable year under 
the Internal Revenue Code; 
(b) The amount resulted in a reduction of the taxpayer's 
federal adjusted gross income as required to be reported for any 
of the taxpayer's taxable years under the Internal Revenue Code. 
(16) Deduct the amount contributed by the taxpayer to an 
individual development account program established by a county 
department of job and family services pursuant to sections 
329.11 to 329.14 of the Revised Code for the purpose of matching 
funds deposited by program participants. On request of the tax 
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As Introduced
commissioner, the taxpayer shall provide any information that, 
in the tax commissioner's opinion, is necessary to establish the 
amount deducted under division (A)(16) of this section. 
(17)(a)(i) Subject to divisions (A)(17)(a)(iii), (iv), and 
(v) of this section, add five-sixths of the amount of 
depreciation expense allowed by subsection (k) of section 168 of 
the Internal Revenue Code, including the taxpayer's 
proportionate or distributive share of the amount of 
depreciation expense allowed by that subsection to a pass-
through entity in which the taxpayer has a direct or indirect 
ownership interest. 
(ii) Subject to divisions (A)(17)(a)(iii), (iv), and (v) 
of this section, add five-sixths of the amount of qualifying 
section 179 depreciation expense, including the taxpayer's 
proportionate or distributive share of the amount of qualifying 
section 179 depreciation expense allowed to any pass-through 
entity in which the taxpayer has a direct or indirect ownership 
interest. 
(iii) Subject to division (A)(17)(a)(v) of this section, 
for taxable years beginning in 2012 or thereafter, if the 
increase in income taxes withheld by the taxpayer is equal to or 
greater than ten per cent of income taxes withheld by the 
taxpayer during the taxpayer's immediately preceding taxable 
year, "two-thirds" shall be substituted for "five-sixths" for 
the purpose of divisions (A)(17)(a)(i) and (ii) of this section. 
(iv) Subject to division (A)(17)(a)(v) of this section, 
for taxable years beginning in 2012 or thereafter, a taxpayer is 
not required to add an amount under division (A)(17) of this 
section if the increase in income taxes withheld by the taxpayer 
and by any pass-through entity in which the taxpayer has a 
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As Introduced
direct or indirect ownership interest is equal to or greater 
than the sum of (I) the amount of qualifying section 179 
depreciation expense and (II) the amount of depreciation expense 
allowed to the taxpayer by subsection (k) of section 168 of the 
Internal Revenue Code, and including the taxpayer's 
proportionate or distributive shares of such amounts allowed to 
any such pass-through entities. 
(v) If a taxpayer directly or indirectly incurs a net 
operating loss for the taxable year for federal income tax 
purposes, to the extent such loss resulted from depreciation 
expense allowed by subsection (k) of section 168 of the Internal 
Revenue Code and by qualifying section 179 depreciation expense, 
"the entire" shall be substituted for "five-sixths of the" for 
the purpose of divisions (A)(17)(a)(i) and (ii) of this section. 
The tax commissioner, under procedures established by the 
commissioner, may waive the add-backs related to a pass-through 
entity if the taxpayer owns, directly or indirectly, less than 
five per cent of the pass-through entity. 
(b) Nothing in division (A)(17) of this section shall be 
construed to adjust or modify the adjusted basis of any asset. 
(c) To the extent the add-back required under division (A)
(17)(a) of this section is attributable to property generating 
nonbusiness income or loss allocated under section 5747.20 of 
the Revised Code, the add-back shall be sitused to the same 
location as the nonbusiness income or loss generated by the 
property for the purpose of determining the credit under 
division (A) of section 5747.05 of the Revised Code. Otherwise, 
the add-back shall be apportioned, subject to one or more of the 
four alternative methods of apportionment enumerated in section 
5747.21 of the Revised Code. 
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522 H. B. No. 69 Page 19
As Introduced
(d) For the purposes of division (A)(17)(a)(v) of this 
section, net operating loss carryback and carryforward shall not 
include the allowance of any net operating loss deduction 
carryback or carryforward to the taxable year to the extent such 
loss resulted from depreciation allowed by section 168(k) of the 
Internal Revenue Code and by the qualifying section 179 
depreciation expense amount. 
(e) For the purposes of divisions (A)(17) and (18) of this 
section: 
(i) "Income taxes withheld" means the total amount 
withheld and remitted under sections 5747.06 and 5747.07 of the 
Revised Code by an employer during the employer's taxable year. 
(ii) "Increase in income taxes withheld" means the amount 
by which the amount of income taxes withheld by an employer 
during the employer's current taxable year exceeds the amount of 
income taxes withheld by that employer during the employer's 
immediately preceding taxable year. 
(iii) "Qualifying section 179 depreciation expense" means 
the difference between (I) the amount of depreciation expense 
directly or indirectly allowed to a taxpayer under section 179 
of the Internal Revised Code, and (II) the amount of 
depreciation expense directly or indirectly allowed to the 
taxpayer under section 179 of the Internal Revenue Code as that 
section existed on December 31, 2002 (17) Deduct, to the extent 
included in federal adjusted gross income, income attributable 
to loan repayments on behalf of the taxpayer under the rural 
practice incentive program under section 3333.135 of the Revised 
Code. 
(18)(a) If, in computing the taxpayer's Ohio adjusted 
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As Introduced
gross income for a taxable year beginning before January 1, 
2025, the taxpayer was required to add an amount back a 
depreciation expense allowed under division (A)(17)(a) of this 
section for a taxable year subsection (k) of section 168 or 
section 179 of the Internal Revenue Code , deduct one of the 
following: 
(i) One-fifth of the amount so added for each of the five 
succeeding taxable years if the amount so added was five-sixths 
of qualifying section 179 depreciation expense or depreciation 
expense allowed by subsection (k) of section 168 of the Internal 
Revenue Code; 
(ii) One-half of the amount so added for each of the two 
succeeding taxable years if the amount so added was two-thirds 
of such depreciation expense; 
(iii) One-sixth of the amount so added for each of the six 
succeeding taxable years if the entire amount of such 
depreciation expense was so added. 
(b) If the amount deducted under division (A)(18)(a) of 
this section is attributable to an add-back allocated under 
division (A)(17)(c) of this section that is attributable to 
property generating nonbusiness income or loss allocated under 
section 5747.20 of the Revised Code , the amount deducted shall 
be sitused to the same location as the add-back. Otherwise, the 
add-back deduction shall be apportioned using the apportionment 
factors for the taxable year in which the deduction is taken, 
subject to one or more of the four alternative methods of 
apportionment enumerated in section 5747.21 of the Revised Code. 
(c) No deduction is available under division (A)(18)(a) of 
this section with regard to any depreciation allowed by section 
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As Introduced
168(k) of the Internal Revenue Code and by the qualifying 
section 179 depreciation expense amount to the extent that such 
depreciation results in or increases a federal net operating 
loss carryback or carryforward. If no such deduction is 
available for a taxable year, the taxpayer may carry forward the 
amount not deducted in such taxable year to the next taxable 
year and add that amount to any deduction otherwise available 
under division (A)(18)(a) of this section for that next taxable 
year. The carryforward of amounts not so deducted shall continue 
until the entire addition required by division (A)(17)(a) of 
this section amount added back for taxable years beginning 
before January 1, 2025, has been deducted. 
(d) Notwithstanding division (A)(18)(a) or (c) of this 
section, for taxable years beginning in 2025 or thereafter, a 
taxpayer that was required to add back a depreciation expense in 
computing the taxpayer's Ohio adjusted gross income for a 
taxable year beginning before January 1, 2025, may elect to 
deduct the entire amount so added, less any amount already 
deducted under this section in any preceding taxable year with 
respect to that depreciation expense. The taxpayer shall make 
the election on the annual return filed for the first taxable 
year beginning after January 1, 2025, for which the taxpayer 
files a return, and the election shall be irrevocable after the 
due date plus extensions, if any, for filing that return.
(e) Nothing in division (A)(18) of this section shall be 
construed to allow a taxpayer to deduct any amount that, under 
this section as it existed before the effective date of this 
amendment, the taxpayer would not have been eligible to deduct 
for a taxable year beginning on or after January 1, 2025. 
(f) As used in division (A)(18) of this section, 
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610 H. B. No. 69 Page 22
As Introduced
"qualifying section 179 depreciation expense" means the 
difference between (i) the amount of depreciation expense 
directly or indirectly allowed to a taxpayer under section 179 
of the Internal Revenue Code, and (ii) the amount of 
depreciation expense directly or indirectly allowed to the 
taxpayer under section 179 of the Internal Revenue Code as that 
section existed on December 31, 2002.
(19) Deduct, to the extent not otherwise deducted or 
excluded in computing federal or Ohio adjusted gross income for 
the taxable year, the amount the taxpayer received during the 
taxable year as reimbursement for life insurance premiums under 
section 5919.31 of the Revised Code. 
(20) Deduct, to the extent not otherwise deducted or 
excluded in computing federal or Ohio adjusted gross income for 
the taxable year, the amount the taxpayer received during the 
taxable year as a death benefit paid by the adjutant general 
under section 5919.33 of the Revised Code. 
(21) Deduct, to the extent included in federal adjusted 
gross income and not otherwise allowable as a deduction or 
exclusion in computing federal or Ohio adjusted gross income for 
the taxable year, military pay and allowances received by the 
taxpayer during the taxable year for active duty service in the 
United States army, air force, navy, marine corps, or coast 
guard or reserve components thereof or the national guard. The 
deduction may not be claimed for military pay and allowances 
received by the taxpayer while the taxpayer is stationed in this 
state. 
(22) Deduct, to the extent not otherwise allowable as a 
deduction or exclusion in computing federal or Ohio adjusted 
gross income for the taxable year and not otherwise compensated 
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640 H. B. No. 69 Page 23
As Introduced
for by any other source, the amount of qualified organ donation 
expenses incurred by the taxpayer during the taxable year, not 
to exceed ten thousand dollars. A taxpayer may deduct qualified 
organ donation expenses only once for all taxable years 
beginning with taxable years beginning in 2007. 
For the purposes of division (A)(22) of this section: 
(a) "Human organ" means all or any portion of a human 
liver, pancreas, kidney, intestine, or lung, and any portion of 
human bone marrow. 
(b) "Qualified organ donation expenses" means travel 
expenses, lodging expenses, and wages and salary forgone by a 
taxpayer in connection with the taxpayer's donation, while 
living, of one or more of the taxpayer's human organs to another 
human being. 
(23) Deduct, to the extent not otherwise deducted or 
excluded in computing federal or Ohio adjusted gross income for 
the taxable year, amounts received by the taxpayer as retired 
personnel pay for service in the uniformed services or reserve 
components thereof, or the national guard, or received by the 
surviving spouse or former spouse of such a taxpayer under the 
survivor benefit plan on account of such a taxpayer's death. If 
the taxpayer receives income on account of retirement paid under 
the federal civil service retirement system or federal employees 
retirement system, or under any successor retirement program 
enacted by the congress of the United States that is established 
and maintained for retired employees of the United States 
government, and such retirement income is based, in whole or in 
part, on credit for the taxpayer's uniformed service, the 
deduction allowed under this division shall include only that 
portion of such retirement income that is attributable to the 
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670 H. B. No. 69 Page 24
As Introduced
taxpayer's uniformed service, to the extent that portion of such 
retirement income is otherwise included in federal adjusted 
gross income and is not otherwise deducted under this section. 
Any amount deducted under division (A)(23) of this section is 
not included in a taxpayer's adjusted gross income for the 
purposes of section 5747.055 of the Revised Code. No amount may 
be deducted under division (A)(23) of this section on the basis 
of which a credit was claimed under section 5747.055 of the 
Revised Code. 
(24) Deduct, to the extent not otherwise deducted or 
excluded in computing federal or Ohio adjusted gross income for 
the taxable year, the amount the taxpayer received during the 
taxable year from the military injury relief fund created in 
section 5902.05 of the Revised Code. 
(25) Deduct, to the extent not otherwise deducted or 
excluded in computing federal or Ohio adjusted gross income for 
the taxable year, the amount the taxpayer received as a veterans 
bonus during the taxable year from the Ohio department of 
veterans services as authorized by Section 2r of Article VIII, 
Ohio Constitution. 
(26) Deduct, to the extent not otherwise deducted or 
excluded in computing federal or Ohio adjusted gross income for 
the taxable year, any income derived from a transfer agreement 
or from the enterprise transferred under that agreement under 
section 4313.02 of the Revised Code. 
(27) Deduct, to the extent not otherwise deducted or 
excluded in computing federal or Ohio adjusted gross income for 
the taxable year, Ohio college opportunity or federal Pell grant 
amounts received by the taxpayer or the taxpayer's spouse or 
dependent pursuant to section 3333.122 of the Revised Code or 20 
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700 H. B. No. 69 Page 25
As Introduced
U.S.C. 1070a, et seq., and used to pay room or board furnished 
by the educational institution for which the grant was awarded 
at the institution's facilities, including meal plans 
administered by the institution. For the purposes of this 
division, receipt of a grant includes the distribution of a 
grant directly to an educational institution and the crediting 
of the grant to the enrollee's account with the institution. 
(28) Deduct from the portion of an individual's federal 
adjusted gross income that is business income, to the extent not 
otherwise deducted or excluded in computing federal adjusted 
gross income for the taxable year, one hundred twenty-five 
thousand dollars for each spouse if spouses file separate 
returns under section 5747.08 of the Revised Code or two hundred 
fifty thousand dollars for all other individuals. 
(29) Deduct, as provided under section 5747.78 of the 
Revised Code, contributions to ABLE savings accounts made in 
accordance with sections 113.50 to 113.56 of the Revised Code. 
(30)(a) Deduct, to the extent not otherwise deducted or 
excluded in computing federal or Ohio adjusted gross income 
during the taxable year, all of the following: 
(i) Compensation paid to a qualifying employee described 
in division (A)(14)(a) of section 5703.94 of the Revised Code to 
the extent such compensation is for disaster work conducted in 
this state during a disaster response period pursuant to a 
qualifying solicitation received by the employee's employer; 
(ii) Compensation paid to a qualifying employee described 
in division (A)(14)(b) of section 5703.94 of the Revised Code to 
the extent such compensation is for disaster work conducted in 
this state by the employee during the disaster response period 
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729 H. B. No. 69 Page 26
As Introduced
on critical infrastructure owned or used by the employee's 
employer; 
(iii) Income received by an out-of-state disaster business 
for disaster work conducted in this state during a disaster 
response period, or, if the out-of-state disaster business is a 
pass-through entity, a taxpayer's distributive share of the 
pass-through entity's income from the business conducting 
disaster work in this state during a disaster response period, 
if, in either case, the disaster work is conducted pursuant to a 
qualifying solicitation received by the business. 
(b) All terms used in division (A)(30) of this section 
have the same meanings as in section 5703.94 of the Revised 
Code. 
(31) For a taxpayer who is a qualifying Ohio educator, 
deduct, to the extent not otherwise deducted or excluded in 
computing federal or Ohio adjusted gross income for the taxable 
year, the lesser of two hundred fifty dollars or the amount of 
expenses described in subsections (a)(2)(D)(i) and (ii) of 
section 62 of the Internal Revenue Code paid or incurred by the 
taxpayer during the taxpayer's taxable year in excess of the 
amount the taxpayer is authorized to deduct for that taxable 
year under subsection (a)(2)(D) of that section. 
(32) Deduct, to the extent not otherwise deducted or 
excluded in computing federal or Ohio adjusted gross income for 
the taxable year, amounts received by the taxpayer as a 
disability severance payment, computed under 10 U.S.C. 1212, 
following discharge or release under honorable conditions from 
the armed forces of the United States, as defined in section 
5907.01 of the Revised Code. 
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758 H. B. No. 69 Page 27
As Introduced
(33) Deduct, to the extent not otherwise deducted or 
excluded in computing federal adjusted gross income or Ohio 
adjusted gross income, amounts not subject to tax due to an 
agreement entered into under division (A)(2) of section 5747.05 
of the Revised Code. 
(34) Deduct amounts as provided under section 5747.79 of 
the Revised Code related to the taxpayer's qualifying capital 
gains and deductible payroll. 
To the extent a qualifying capital gain described under 
division (A)(34) of this section is business income, the 
taxpayer shall deduct those gains under this division before 
deducting any such gains under division (A)(28) of this section. 
(35)(a) For taxable years beginning in or after 2026, 
deduct, to the extent not otherwise deducted or excluded in 
computing federal or Ohio adjusted gross income for the taxable 
year: 
(i) One hundred per cent of the capital gain received by 
the taxpayer in the taxable year from a qualifying interest in 
an Ohio venture capital operating company attributable to the 
company's investments in Ohio businesses during the period for 
which the company was an Ohio venture operating company; and 
(ii) Fifty per cent of the capital gain received by the 
taxpayer in the taxable year from a qualifying interest in an 
Ohio venture capital operating company attributable to the 
company's investments in all other businesses during the period 
for which the company was an Ohio venture operating company. 
(b) Add amounts previously deducted by the taxpayer under 
division (A)(35)(a) of this section if the director of 
development certifies to the tax commissioner that the 
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787 H. B. No. 69 Page 28
As Introduced
requirements for the deduction were not met. 
(c) All terms used in division (A)(35) of this section 
have the same meanings as in section 122.851 of the Revised 
Code. 
(d) To the extent a capital gain described in division (A)
(35)(a) of this section is business income, the taxpayer shall 
apply that division before applying division (A)(28) of this 
section. 
(36) Add, to the extent not otherwise included in 
computing federal or Ohio adjusted gross income for any taxable 
year, the taxpayer's proportionate share of the amount of the 
tax levied under section 5747.38 of the Revised Code and paid by 
an electing pass-through entity for the taxable year. 
Notwithstanding any provision of the Revised Code to the 
contrary, the portion of the addition required by division (A)
(36) of this section related to the apportioned business income 
of the pass-through entity shall be considered business income 
under division (B) of this section. Such addition is eligible 
for the deduction in division (A)(28) of this section, subject 
to the applicable dollar limitations, and the tax rate 
prescribed by division (A)(4)(a) of section 5747.02 of the 
Revised Code. The taxpayer shall provide, upon request of the 
tax commissioner, any documentation necessary to verify the 
portion of the addition that is business income under this 
division. 
(37) Deduct, to the extent not otherwise deducted or 
excluded in computing federal or Ohio adjusted gross income for 
the taxable year, amounts delivered to a qualifying institution 
pursuant to section 3333.128 of the Revised Code for the benefit 
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816 H. B. No. 69 Page 29
As Introduced
of the taxpayer or the taxpayer's spouse or dependent. 
(38) Deduct, to the extent not otherwise deducted or 
excluded in computing federal or Ohio adjusted gross income for 
the taxable year, amounts received under the Ohio adoption grant 
program pursuant to section 5101.191 of the Revised Code. 
(39) Deduct, to the extent included in federal adjusted 
gross income, income attributable to amounts provided to a 
taxpayer for any of the purposes for which an exclusion would 
have been authorized under section 139 of the Internal Revenue 
Code if the train derailment near the city of East Palestine on 
February 3, 2023, had been a qualified disaster pursuant to that 
section, or to compensate for lost business resulting from that 
derailment, if such amounts are provided by any of the 
following: 
(a) A federal, state, or local government agency; 
(b) A railroad company, as that term is defined in section 
5727.01 of the Revised Code; 
(c) Any subsidiary, insurer, or agent of a railroad 
company or any related person. 
Notwithstanding any provision to the contrary, the 
derailment is not required to meet the definition of a 
"qualified disaster" pursuant to section 139 of the Internal 
Revenue Code to qualify for the deduction under this section.
(40) Deduct, to the extent included in federal adjusted 
gross income, income attributable to loan repayments on behalf 
of the taxpayer under the rural practice incentive program under 
section 3333.135 of the Revised Code. 
(41) Add any income taxes deducted in computing federal or 
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844 H. B. No. 69 Page 30
As Introduced
Ohio adjusted gross income to the extent the income taxes were 
derived from income subject to a tax levied in another state or 
the District of Columbia when such tax was enacted for purposes 
of complying with internal revenue service notice 2020-75. 
Notwithstanding any provision of the Revised Code to the 
contrary, the portion of the addition required by division (A)
(41)(A)(40) of this section related to the apportioned business 
income of the pass-through entity shall be considered business 
income under division (B) of this section. Such addition is 
eligible for the deduction in division (A)(28) of this section, 
subject to the applicable dollar limitations, and the tax rate 
prescribed by division (A)(4)(a) of section 5747.02 of the 
Revised Code. The taxpayer shall provide, upon request of the 
tax commissioner, any documentation necessary to verify the 
portion of the addition that is business income under this 
division. 
(42)(41) Deduct amounts contributed to a homeownership 
savings account and calculated pursuant to divisions (B) and (C) 
of section 5747.85 of the Revised Code. 
(43)(42) If the taxpayer is the account owner, add the 
amount of funds withdrawn from a homeownership savings account 
not used for eligible expenses, regardless of who deposited 
those funds. As used in division (A)(43)(A)(42) of this section, 
"homeownership savings account," "account owner," and "eligible 
expenses" have the same meanings as in section 5747.85 of the 
Revised Code. 
(B) "Business income" means income, including gain or 
loss, arising from transactions, activities, and sources in the 
regular course of a trade or business and includes income, gain, 
or loss from real property, tangible property, and intangible 
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874 H. B. No. 69 Page 31
As Introduced
property if the acquisition, rental, management, and disposition 
of the property constitute integral parts of the regular course 
of a trade or business operation. "Business income" includes 
income, including gain or loss, from a partial or complete 
liquidation of a business, including, but not limited to, gain 
or loss from the sale or other disposition of goodwill or the 
sale of an equity or ownership interest in a business. 
As used in this division, the "sale of an equity or 
ownership interest in a business" means sales to which either or 
both of the following apply: 
(1) The sale is treated for federal income tax purposes as 
the sale of assets. 
(2) The seller materially participated, as described in 26 
C.F.R. 1.469-5T, in the activities of the business during the 
taxable year in which the sale occurs or during any of the five 
preceding taxable years. 
(C) "Nonbusiness income" means all income other than 
business income and may include, but is not limited to, 
compensation, rents and royalties from real or tangible personal 
property, capital gains, interest, dividends and distributions, 
patent or copyright royalties, or lottery winnings, prizes, and 
awards. 
(D) "Compensation" means any form of remuneration paid to 
an employee for personal services. 
(E) "Fiduciary" means a guardian, trustee, executor, 
administrator, receiver, conservator, or any other person acting 
in any fiduciary capacity for any individual, trust, or estate. 
(F) "Fiscal year" means an accounting period of twelve 
months ending on the last day of any month other than December. 
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903 H. B. No. 69 Page 32
As Introduced
(G) "Individual" means any natural person. 
(H) "Internal Revenue Code" means the "Internal Revenue 
Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended. 
(I) "Resident" means any of the following: 
(1) An individual who is domiciled in this state, subject 
to section 5747.24 of the Revised Code; 
(2) The estate of a decedent who at the time of death was 
domiciled in this state. The domicile tests of section 5747.24 
of the Revised Code are not controlling for purposes of division 
(I)(2) of this section. 
(3) A trust that, in whole or part, resides in this state. 
If only part of a trust resides in this state, the trust is a 
resident only with respect to that part. 
For the purposes of division (I)(3) of this section: 
(a) A trust resides in this state for the trust's current 
taxable year to the extent, as described in division (I)(3)(d) 
of this section, that the trust consists directly or indirectly, 
in whole or in part, of assets, net of any related liabilities, 
that were transferred, or caused to be transferred, directly or 
indirectly, to the trust by any of the following: 
(i) A person, a court, or a governmental entity or 
instrumentality on account of the death of a decedent, but only 
if the trust is described in division (I)(3)(e)(i) or (ii) of 
this section; 
(ii) A person who was domiciled in this state for the 
purposes of this chapter when the person directly or indirectly 
transferred assets to an irrevocable trust, but only if at least 
one of the trust's qualifying beneficiaries is domiciled in this 
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931 H. B. No. 69 Page 33
As Introduced
state for the purposes of this chapter during all or some 
portion of the trust's current taxable year; 
(iii) A person who was domiciled in this state for the 
purposes of this chapter when the trust document or instrument 
or part of the trust document or instrument became irrevocable, 
but only if at least one of the trust's qualifying beneficiaries 
is a resident domiciled in this state for the purposes of this 
chapter during all or some portion of the trust's current 
taxable year. If a trust document or instrument became 
irrevocable upon the death of a person who at the time of death 
was domiciled in this state for purposes of this chapter, that 
person is a person described in division (I)(3)(a)(iii) of this 
section. 
(b) A trust is irrevocable to the extent that the 
transferor is not considered to be the owner of the net assets 
of the trust under sections 671 to 678 of the Internal Revenue 
Code. 
(c) With respect to a trust other than a charitable lead 
trust, "qualifying beneficiary" has the same meaning as 
"potential current beneficiary" as defined in section 1361(e)(2) 
of the Internal Revenue Code, and with respect to a charitable 
lead trust "qualifying beneficiary" is any current, future, or 
contingent beneficiary, but with respect to any trust 
"qualifying beneficiary" excludes a person or a governmental 
entity or instrumentality to any of which a contribution would 
qualify for the charitable deduction under section 170 of the 
Internal Revenue Code. 
(d) For the purposes of division (I)(3)(a) of this 
section, the extent to which a trust consists directly or 
indirectly, in whole or in part, of assets, net of any related 
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961 H. B. No. 69 Page 34
As Introduced
liabilities, that were transferred directly or indirectly, in 
whole or part, to the trust by any of the sources enumerated in 
that division shall be ascertained by multiplying the fair 
market value of the trust's assets, net of related liabilities, 
by the qualifying ratio, which shall be computed as follows: 
(i) The first time the trust receives assets, the 
numerator of the qualifying ratio is the fair market value of 
those assets at that time, net of any related liabilities, from 
sources enumerated in division (I)(3)(a) of this section. The 
denominator of the qualifying ratio is the fair market value of 
all the trust's assets at that time, net of any related 
liabilities. 
(ii) Each subsequent time the trust receives assets, a 
revised qualifying ratio shall be computed. The numerator of the 
revised qualifying ratio is the sum of (1) the fair market value 
of the trust's assets immediately prior to the subsequent 
transfer, net of any related liabilities, multiplied by the 
qualifying ratio last computed without regard to the subsequent 
transfer, and (2) the fair market value of the subsequently 
transferred assets at the time transferred, net of any related 
liabilities, from sources enumerated in division (I)(3)(a) of 
this section. The denominator of the revised qualifying ratio is 
the fair market value of all the trust's assets immediately 
after the subsequent transfer, net of any related liabilities. 
(iii) Whether a transfer to the trust is by or from any of 
the sources enumerated in division (I)(3)(a) of this section 
shall be ascertained without regard to the domicile of the 
trust's beneficiaries. 
(e) For the purposes of division (I)(3)(a)(i) of this 
section: 
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991 H. B. No. 69 Page 35
As Introduced
(i) A trust is described in division (I)(3)(e)(i) of this 
section if the trust is a testamentary trust and the testator of 
that testamentary trust was domiciled in this state at the time 
of the testator's death for purposes of the taxes levied under 
Chapter 5731. of the Revised Code. 
(ii) A trust is described in division (I)(3)(e)(ii) of 
this section if the transfer is a qualifying transfer described 
in any of divisions (I)(3)(f)(i) to (vi) of this section, the 
trust is an irrevocable inter vivos trust, and at least one of 
the trust's qualifying beneficiaries is domiciled in this state 
for purposes of this chapter during all or some portion of the 
trust's current taxable year. 
(f) For the purposes of division (I)(3)(e)(ii) of this 
section, a "qualifying transfer" is a transfer of assets, net of 
any related liabilities, directly or indirectly to a trust, if 
the transfer is described in any of the following: 
(i) The transfer is made to a trust, created by the 
decedent before the decedent's death and while the decedent was 
domiciled in this state for the purposes of this chapter, and, 
prior to the death of the decedent, the trust became irrevocable 
while the decedent was domiciled in this state for the purposes 
of this chapter. 
(ii) The transfer is made to a trust to which the 
decedent, prior to the decedent's death, had directly or 
indirectly transferred assets, net of any related liabilities, 
while the decedent was domiciled in this state for the purposes 
of this chapter, and prior to the death of the decedent the 
trust became irrevocable while the decedent was domiciled in 
this state for the purposes of this chapter. 
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1020 H. B. No. 69 Page 36
As Introduced
(iii) The transfer is made on account of a contractual 
relationship existing directly or indirectly between the 
transferor and either the decedent or the estate of the decedent 
at any time prior to the date of the decedent's death, and the 
decedent was domiciled in this state at the time of death for 
purposes of the taxes levied under Chapter 5731. of the Revised 
Code. 
(iv) The transfer is made to a trust on account of a 
contractual relationship existing directly or indirectly between 
the transferor and another person who at the time of the 
decedent's death was domiciled in this state for purposes of 
this chapter. 
(v) The transfer is made to a trust on account of the will 
of a testator who was domiciled in this state at the time of the 
testator's death for purposes of the taxes levied under Chapter 
5731. of the Revised Code. 
(vi) The transfer is made to a trust created by or caused 
to be created by a court, and the trust was directly or 
indirectly created in connection with or as a result of the 
death of an individual who, for purposes of the taxes levied 
under Chapter 5731. of the Revised Code, was domiciled in this 
state at the time of the individual's death. 
(g) The tax commissioner may adopt rules to ascertain the 
part of a trust residing in this state. 
(J) "Nonresident" means an individual or estate that is 
not a resident. An individual who is a resident for only part of 
a taxable year is a nonresident for the remainder of that 
taxable year. 
(K) "Pass-through entity" has the same meaning as in 
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1049 H. B. No. 69 Page 37
As Introduced
section 5733.04 of the Revised Code. 
(L) "Return" means the notifications and reports required 
to be filed pursuant to this chapter for the purpose of 
reporting the tax due and includes declarations of estimated tax 
when so required. 
(M) "Taxable year" means the calendar year or the 
taxpayer's fiscal year ending during the calendar year, or 
fractional part thereof, upon which the adjusted gross income is 
calculated pursuant to this chapter. 
(N) "Taxpayer" means any person subject to the tax imposed 
by section 5747.02 of the Revised Code or any pass-through 
entity that makes the election under division (D) of section 
5747.08 of the Revised Code. 
(O) "Dependents" means one of the following: 
(1) For taxable years beginning on or after January 1, 
2018, and before January 1, 2026, dependents as defined in the 
Internal Revenue Code; 
(2) For all other taxable years, dependents as defined in 
the Internal Revenue Code and as claimed in the taxpayer's 
federal income tax return for the taxable year or which the 
taxpayer would have been permitted to claim had the taxpayer 
filed a federal income tax return. 
(P) "Principal county of employment" means, in the case of 
a nonresident, the county within the state in which a taxpayer 
performs services for an employer or, if those services are 
performed in more than one county, the county in which the major 
portion of the services are performed. 
(Q) As used in sections 5747.50 to 5747.55 of the Revised 
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1077 H. B. No. 69 Page 38
As Introduced
Code: 
(1) "Subdivision" means any county, municipal corporation, 
park district, or township. 
(2) "Essential local government purposes" includes all 
functions that any subdivision is required by general law to 
exercise, including like functions that are exercised under a 
charter adopted pursuant to the Ohio Constitution. 
(R) "Overpayment" means any amount already paid that 
exceeds the figure determined to be the correct amount of the 
tax. 
(S) "Taxable income" or "Ohio taxable income" applies only 
to estates and trusts, and means federal taxable income, as 
defined and used in the Internal Revenue Code, adjusted as 
follows: 
(1) Add interest or dividends, net of ordinary, necessary, 
and reasonable expenses not deducted in computing federal 
taxable income, on obligations or securities of any state or of 
any political subdivision or authority of any state, other than 
this state and its subdivisions and authorities, but only to the 
extent that such net amount is not otherwise includible in Ohio 
taxable income and is described in either division (S)(1)(a) or 
(b) of this section: 
(a) The net amount is not attributable to the S portion of 
an electing small business trust and has not been distributed to 
beneficiaries for the taxable year; 
(b) The net amount is attributable to the S portion of an 
electing small business trust for the taxable year. 
(2) Add interest or dividends, net of ordinary, necessary, 
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1105 H. B. No. 69 Page 39
As Introduced
and reasonable expenses not deducted in computing federal 
taxable income, on obligations of any authority, commission, 
instrumentality, territory, or possession of the United States 
to the extent that the interest or dividends are exempt from 
federal income taxes but not from state income taxes, but only 
to the extent that such net amount is not otherwise includible 
in Ohio taxable income and is described in either division (S)
(1)(a) or (b) of this section; 
(3) Add the amount of personal exemption allowed to the 
estate pursuant to section 642(b) of the Internal Revenue Code; 
(4) Deduct interest or dividends, net of related expenses 
deducted in computing federal taxable income, on obligations of 
the United States and its territories and possessions or of any 
authority, commission, or instrumentality of the United States 
to the extent that the interest or dividends are exempt from 
state taxes under the laws of the United States, but only to the 
extent that such amount is included in federal taxable income 
and is described in either division (S)(1)(a) or (b) of this 
section; 
(5) Deduct the amount of wages and salaries, if any, not 
otherwise allowable as a deduction but that would have been 
allowable as a deduction in computing federal taxable income for 
the taxable year, had the work opportunity tax credit allowed 
under sections 38, 51, and 52 of the Internal Revenue Code not 
been in effect, but only to the extent such amount relates 
either to income included in federal taxable income for the 
taxable year or to income of the S portion of an electing small 
business trust for the taxable year; 
(6) Deduct any interest or interest equivalent, net of 
related expenses deducted in computing federal taxable income, 
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1135 H. B. No. 69 Page 40
As Introduced
on public obligations and purchase obligations, but only to the 
extent that such net amount relates either to income included in 
federal taxable income for the taxable year or to income of the 
S portion of an electing small business trust for the taxable 
year; 
(7) Add any loss or deduct any gain resulting from sale, 
exchange, or other disposition of public obligations to the 
extent that such loss has been deducted or such gain has been 
included in computing either federal taxable income or income of 
the S portion of an electing small business trust for the 
taxable year; 
(8) Except in the case of the final return of an estate, 
add any amount deducted by the taxpayer on both its Ohio estate 
tax return pursuant to section 5731.14 of the Revised Code, and 
on its federal income tax return in determining federal taxable 
income; 
(9)(a) Deduct any amount included in federal taxable 
income solely because the amount represents a reimbursement or 
refund of expenses that in a previous year the decedent had 
deducted as an itemized deduction pursuant to section 63 of the 
Internal Revenue Code and applicable treasury regulations. The 
deduction otherwise allowed under division (S)(9)(a) of this 
section shall be reduced to the extent the reimbursement is 
attributable to an amount the taxpayer or decedent deducted 
under this section in any taxable year. 
(b) Add any amount not otherwise included in Ohio taxable 
income for any taxable year to the extent that the amount is 
attributable to the recovery during the taxable year of any 
amount deducted or excluded in computing federal or Ohio taxable 
income in any taxable year, but only to the extent such amount 
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1165 H. B. No. 69 Page 41
As Introduced
has not been distributed to beneficiaries for the taxable year. 
(10) Deduct any portion of the deduction described in 
section 1341(a)(2) of the Internal Revenue Code, for repaying 
previously reported income received under a claim of right, that 
meets both of the following requirements: 
(a) It is allowable for repayment of an item that was 
included in the taxpayer's taxable income or the decedent's 
adjusted gross income for a prior taxable year and did not 
qualify for a credit under division (A) or (B) of section 
5747.05 of the Revised Code for that year. 
(b) It does not otherwise reduce the taxpayer's taxable 
income or the decedent's adjusted gross income for the current 
or any other taxable year. 
(11) Add any amount claimed as a credit under section 
5747.059 of the Revised Code to the extent that the amount 
satisfies either of the following: 
(a) The amount was deducted or excluded from the 
computation of the taxpayer's federal taxable income as required 
to be reported for the taxpayer's taxable year under the 
Internal Revenue Code; 
(b) The amount resulted in a reduction in the taxpayer's 
federal taxable income as required to be reported for any of the 
taxpayer's taxable years under the Internal Revenue Code. 
(12) Deduct any amount, net of related expenses deducted 
in computing federal taxable income, that a trust is required to 
report as farm income on its federal income tax return, but only 
if the assets of the trust include at least ten acres of land 
satisfying the definition of "land devoted exclusively to 
agricultural use" under section 5713.30 of the Revised Code, 
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1194 H. B. No. 69 Page 42
As Introduced
regardless of whether the land is valued for tax purposes as 
such land under sections 5713.30 to 5713.38 of the Revised Code. 
If the trust is a pass-through entity investor, section 5747.231 
of the Revised Code applies in ascertaining if the trust is 
eligible to claim the deduction provided by division (S)(12) of 
this section in connection with the pass-through entity's farm 
income. 
Except for farm income attributable to the S portion of an 
electing small business trust, the deduction provided by 
division (S)(12) of this section is allowed only to the extent 
that the trust has not distributed such farm income. 
(13) Add the net amount of income described in section 
641(c) of the Internal Revenue Code to the extent that amount is 
not included in federal taxable income. 
(14) Deduct the amount the taxpayer would be required to 
deduct under division (A)(18) of this section if the taxpayer's 
Ohio taxable income were was computed in the same manner as an 
individual's Ohio adjusted gross income is computed under this 
section. 
(15) Add, to the extent not otherwise included in 
computing taxable income or Ohio taxable income for any taxable 
year, the taxpayer's proportionate share of the amount of the 
tax levied under section 5747.38 of the Revised Code and paid by 
an electing pass-through entity for the taxable year. 
(16) Add any income taxes deducted in computing federal 
taxable income or Ohio taxable income to the extent the income 
taxes were derived from income subject to a tax levied in 
another state or the District of Columbia when such tax was 
enacted for purposes of complying with internal revenue service 
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1223 H. B. No. 69 Page 43
As Introduced
notice 2020-75. 
(T) "School district income" and "school district income 
tax" have the same meanings as in section 5748.01 of the Revised 
Code. 
(U) As used in divisions (A)(7), (A)(8), (S)(6), and (S)
(7) of this section, "public obligations," "purchase 
obligations," and "interest or interest equivalent" have the 
same meanings as in section 5709.76 of the Revised Code. 
(V) "Limited liability company" means any limited 
liability company formed under former Chapter 1705. of the 
Revised Code as that chapter existed prior to February 11, 2022, 
Chapter 1706. of the Revised Code, or the laws of any other 
state. 
(W) "Pass-through entity investor" means any person who, 
during any portion of a taxable year of a pass-through entity, 
is a partner, member, shareholder, or equity investor in that 
pass-through entity. 
(X) "Banking day" has the same meaning as in section 
1304.01 of the Revised Code. 
(Y) "Month" means a calendar month. 
(Z) "Quarter" means the first three months, the second 
three months, the third three months, or the last three months 
of the taxpayer's taxable year. 
(AA)(1) "Modified business income" means the business 
income included in a trust's Ohio taxable income after such 
taxable income is first reduced by the qualifying trust amount, 
if any. 
(2) "Qualifying trust amount" of a trust means capital 
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1251 H. B. No. 69 Page 44
As Introduced
gains and losses from the sale, exchange, or other disposition 
of equity or ownership interests in, or debt obligations of, a 
qualifying investee to the extent included in the trust's Ohio 
taxable income, but only if the following requirements are 
satisfied: 
(a) The book value of the qualifying investee's physical 
assets in this state and everywhere, as of the last day of the 
qualifying investee's fiscal or calendar year ending immediately 
prior to the date on which the trust recognizes the gain or 
loss, is available to the trust. 
(b) The requirements of section 5747.011 of the Revised 
Code are satisfied for the trust's taxable year in which the 
trust recognizes the gain or loss. 
Any gain or loss that is not a qualifying trust amount is 
modified business income, qualifying investment income, or 
modified nonbusiness income, as the case may be. 
(3) "Modified nonbusiness income" means a trust's Ohio 
taxable income other than modified business income, other than 
the qualifying trust amount, and other than qualifying 
investment income, as defined in section 5747.012 of the Revised 
Code, to the extent such qualifying investment income is not 
otherwise part of modified business income. 
(4) "Modified Ohio taxable income" applies only to trusts, 
and means the sum of the amounts described in divisions (AA)(4)
(a) to (c) of this section: 
(a) The fraction, calculated under section 5747.013, and 
applying section 5747.231 of the Revised Code, multiplied by the 
sum of the following amounts: 
(i) The trust's modified business income; 
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1280 H. B. No. 69 Page 45
As Introduced
(ii) The trust's qualifying investment income, as defined 
in section 5747.012 of the Revised Code, but only to the extent 
the qualifying investment income does not otherwise constitute 
modified business income and does not otherwise constitute a 
qualifying trust amount. 
(b) The qualifying trust amount multiplied by a fraction, 
the numerator of which is the sum of the book value of the 
qualifying investee's physical assets in this state on the last 
day of the qualifying investee's fiscal or calendar year ending 
immediately prior to the day on which the trust recognizes the 
qualifying trust amount, and the denominator of which is the sum 
of the book value of the qualifying investee's total physical 
assets everywhere on the last day of the qualifying investee's 
fiscal or calendar year ending immediately prior to the day on 
which the trust recognizes the qualifying trust amount. If, for 
a taxable year, the trust recognizes a qualifying trust amount 
with respect to more than one qualifying investee, the amount 
described in division (AA)(4)(b) of this section shall equal the 
sum of the products so computed for each such qualifying 
investee. 
(c)(i) With respect to a trust or portion of a trust that 
is a resident as ascertained in accordance with division (I)(3)
(d) of this section, its modified nonbusiness income. 
(ii) With respect to a trust or portion of a trust that is 
not a resident as ascertained in accordance with division (I)(3)
(d) of this section, the amount of its modified nonbusiness 
income satisfying the descriptions in divisions (B)(2) to (5) of 
section 5747.20 of the Revised Code, except as otherwise 
provided in division (AA)(4)(c)(ii) of this section. With 
respect to a trust or portion of a trust that is not a resident 
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1310 H. B. No. 69 Page 46
As Introduced
as ascertained in accordance with division (I)(3)(d) of this 
section, the trust's portion of modified nonbusiness income 
recognized from the sale, exchange, or other disposition of a 
debt interest in or equity interest in a section 5747.212 
entity, as defined in section 5747.212 of the Revised Code, 
without regard to division (A) of that section, shall not be 
allocated to this state in accordance with section 5747.20 of 
the Revised Code but shall be apportioned to this state in 
accordance with division (B) of section 5747.212 of the Revised 
Code without regard to division (A) of that section. 
If the allocation and apportionment of a trust's income 
under divisions (AA)(4)(a) and (c) of this section do not fairly 
represent the modified Ohio taxable income of the trust in this 
state, the alternative methods described in division (C) of 
section 5747.21 of the Revised Code may be applied in the manner 
and to the same extent provided in that section. 
(5)(a) Except as set forth in division (AA)(5)(b) of this 
section, "qualifying investee" means a person in which a trust 
has an equity or ownership interest, or a person or unit of 
government the debt obligations of either of which are owned by 
a trust. For the purposes of division (AA)(2)(a) of this section 
and for the purpose of computing the fraction described in 
division (AA)(4)(b) of this section, all of the following apply: 
(i) If the qualifying investee is a member of a qualifying 
controlled group on the last day of the qualifying investee's 
fiscal or calendar year ending immediately prior to the date on 
which the trust recognizes the gain or loss, then "qualifying 
investee" includes all persons in the qualifying controlled 
group on such last day. 
(ii) If the qualifying investee, or if the qualifying 
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1340 H. B. No. 69 Page 47
As Introduced
investee and any members of the qualifying controlled group of 
which the qualifying investee is a member on the last day of the 
qualifying investee's fiscal or calendar year ending immediately 
prior to the date on which the trust recognizes the gain or 
loss, separately or cumulatively own, directly or indirectly, on 
the last day of the qualifying investee's fiscal or calendar 
year ending immediately prior to the date on which the trust 
recognizes the qualifying trust amount, more than fifty per cent 
of the equity of a pass-through entity, then the qualifying 
investee and the other members are deemed to own the 
proportionate share of the pass-through entity's physical assets 
which the pass-through entity directly or indirectly owns on the 
last day of the pass-through entity's calendar or fiscal year 
ending within or with the last day of the qualifying investee's 
fiscal or calendar year ending immediately prior to the date on 
which the trust recognizes the qualifying trust amount. 
(iii) For the purposes of division (AA)(5)(a)(iii) of this 
section, "upper level pass-through entity" means a pass-through 
entity directly or indirectly owning any equity of another pass-
through entity, and "lower level pass-through entity" means that 
other pass-through entity. 
An upper level pass-through entity, whether or not it is 
also a qualifying investee, is deemed to own, on the last day of 
the upper level pass-through entity's calendar or fiscal year, 
the proportionate share of the lower level pass-through entity's 
physical assets that the lower level pass-through entity 
directly or indirectly owns on the last day of the lower level 
pass-through entity's calendar or fiscal year ending within or 
with the last day of the upper level pass-through entity's 
fiscal or calendar year. If the upper level pass-through entity 
directly and indirectly owns less than fifty per cent of the 
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1371 H. B. No. 69 Page 48
As Introduced
equity of the lower level pass-through entity on each day of the 
upper level pass-through entity's calendar or fiscal year in 
which or with which ends the calendar or fiscal year of the 
lower level pass-through entity and if, based upon clear and 
convincing evidence, complete information about the location and 
cost of the physical assets of the lower pass-through entity is 
not available to the upper level pass-through entity, then 
solely for purposes of ascertaining if a gain or loss 
constitutes a qualifying trust amount, the upper level pass-
through entity shall be deemed as owning no equity of the lower 
level pass-through entity for each day during the upper level 
pass-through entity's calendar or fiscal year in which or with 
which ends the lower level pass-through entity's calendar or 
fiscal year. Nothing in division (AA)(5)(a)(iii) of this section 
shall be construed to provide for any deduction or exclusion in 
computing any trust's Ohio taxable income. 
(b) With respect to a trust that is not a resident for the 
taxable year and with respect to a part of a trust that is not a 
resident for the taxable year, "qualifying investee" for that 
taxable year does not include a C corporation if both of the 
following apply: 
(i) During the taxable year the trust or part of the trust 
recognizes a gain or loss from the sale, exchange, or other 
disposition of equity or ownership interests in, or debt 
obligations of, the C corporation. 
(ii) Such gain or loss constitutes nonbusiness income. 
(6) "Available" means information is such that a person is 
able to learn of the information by the due date plus 
extensions, if any, for filing the return for the taxable year 
in which the trust recognizes the gain or loss. 
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1401 H. B. No. 69 Page 49
As Introduced
(BB) "Qualifying controlled group" has the same meaning as 
in section 5733.04 of the Revised Code. 
(CC) "Related member" has the same meaning as in section 
5733.042 of the Revised Code. 
(DD)(1) For the purposes of division (DD) of this section: 
(a) "Qualifying person" means any person other than a 
qualifying corporation. 
(b) "Qualifying corporation" means any person classified 
for federal income tax purposes as an association taxable as a 
corporation, except either of the following: 
(i) A corporation that has made an election under 
subchapter S, chapter one, subtitle A, of the Internal Revenue 
Code for its taxable year ending within, or on the last day of, 
the investor's taxable year; 
(ii) A subsidiary that is wholly owned by any corporation 
that has made an election under subchapter S, chapter one, 
subtitle A of the Internal Revenue Code for its taxable year 
ending within, or on the last day of, the investor's taxable 
year. 
(2) For the purposes of this chapter, unless expressly 
stated otherwise, no qualifying person indirectly owns any asset 
directly or indirectly owned by any qualifying corporation. 
(EE) For purposes of this chapter and Chapter 5751. of the 
Revised Code: 
(1) "Trust" does not include a qualified pre-income tax 
trust. 
(2) A "qualified pre-income tax trust" is any pre-income 
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1428 H. B. No. 69 Page 50
As Introduced
tax trust that makes a qualifying pre-income tax trust election 
as described in division (EE)(3) of this section. 
(3) A "qualifying pre-income tax trust election" is an 
election by a pre-income tax trust to subject to the tax imposed 
by section 5751.02 of the Revised Code the pre-income tax trust 
and all pass-through entities of which the trust owns or 
controls, directly, indirectly, or constructively through 
related interests, five per cent or more of the ownership or 
equity interests. The trustee shall notify the tax commissioner 
in writing of the election on or before April 15, 2006. The 
election, if timely made, shall be effective on and after 
January 1, 2006, and shall apply for all tax periods and tax 
years until revoked by the trustee of the trust. 
(4) A "pre-income tax trust" is a trust that satisfies all 
of the following requirements: 
(a) The document or instrument creating the trust was 
executed by the grantor before January 1, 1972; 
(b) The trust became irrevocable upon the creation of the 
trust; and 
(c) The grantor was domiciled in this state at the time 
the trust was created. 
(FF) "Uniformed services" means all of the following:
(1) "Armed forces of the United States" as defined in 
section 5907.01 of the Revised Code;
(2) The commissioned corps of the national oceanic and 
atmospheric administration;
(3) The commissioned corps of the public health service.
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1455 H. B. No. 69 Page 51
As Introduced
(GG) "Taxable business income" means the amount by which 
an individual's business income that is included in federal 
adjusted gross income exceeds the amount of business income the 
individual is authorized to deduct under division (A)(28) of 
this section for the taxable year. 
(HH) "Employer" does not include a franchisor with respect 
to the franchisor's relationship with a franchisee or an 
employee of a franchisee, unless the franchisor agrees to assume 
that role in writing or a court of competent jurisdiction 
determines that the franchisor exercises a type or degree of 
control over the franchisee or the franchisee's employees that 
is not customarily exercised by a franchisor for the purpose of 
protecting the franchisor's trademark, brand, or both. For 
purposes of this division, "franchisor" and "franchisee" have 
the same meanings as in 16 C.F.R. 436.1. 
(II) "Modified adjusted gross income" means Ohio adjusted 
gross income plus any amount deducted under divisions (A)(28) 
and (34) of this section for the taxable year. 
(JJ) "Qualifying Ohio educator" means an individual who, 
for a taxable year, qualifies as an eligible educator, as that 
term is defined in section 62 of the Internal Revenue Code, and 
who holds a certificate, license, or permit described in Chapter 
3319. or section 3301.071 of the Revised Code.
Sec. 5747.05. As used in this section, "income tax" 
includes both a tax on net income and a tax measured by net 
income. 
The following credits shall be allowed against the 
aggregate income tax liability imposed by section 5747.02 of the 
Revised Code on individuals and estates: 
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1484 H. B. No. 69 Page 52
As Introduced
(A)(1) The amount of tax otherwise due under section 
5747.02 of the Revised Code on such portion of the combined 
adjusted gross income and business income of any nonresident 
taxpayer that is not allocable or apportionable to this state 
pursuant to sections 5747.20 to 5747.23 of the Revised Code. The 
credit provided under this division shall not exceed the total 
tax due under section 5747.02 of the Revised Code. 
(2) The tax commissioner may enter into an agreement with 
the taxing authorities of any state or of the District of 
Columbia that imposes an income tax to provide that compensation 
paid in this state to a nonresident taxpayer shall not be 
subject to the tax levied in section 5747.02 of the Revised Code 
so long as compensation paid in such other state or in the 
District of Columbia to a resident taxpayer shall likewise not 
be subject to the income tax of such other state or of the 
District of Columbia. 
(B) The lesser of division (B)(1) or (2) of this section: 
(1) The aggregate amount of tax otherwise due under 
section 5747.02 of the Revised Code on such portion of the 
combined adjusted gross income and business income of a resident 
taxpayer that in another state or in the District of Columbia is 
subjected to an income tax. The credit provided under division 
(B)(1) of this section shall not exceed the total tax due under 
section 5747.02 of the Revised Code. 
(2) The amount of income tax liability to another state or 
the District of Columbia on the portion of the combined adjusted 
gross income and business income of a resident taxpayer that in 
another state or in the District of Columbia is subjected to an 
income tax. The credit provided under division (B)(2) of this 
section shall not exceed the total amount of tax otherwise due 
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1514 H. B. No. 69 Page 53
As Introduced
under section 5747.02 of the Revised Code. 
(3) For the purpose of divisions (B)(1) and (2) of this 
section, a resident taxpayer's combined adjusted gross income 
and business income that is subject to an income tax levied in 
another state or in the District of Columbia includes income 
that is subject to either (a) a tax similar to the tax imposed 
by division (D)(1)(a) of section 5747.08 of the Revised Code or 
(b) a tax enacted for purposes of complying with internal 
revenue service notice 2020-75. In computing a resident 
taxpayer's income tax paid or accrued to another state or the 
District of Columbia, the deduction authorized by division (A)
(28) of section 5747.01 of the Revised Code shall first be 
deducted against business income apportioned to this state. 
(4) If the credit provided under division (B) of this 
section is affected by a change in either the portion of the 
combined adjusted gross income and business income of a resident 
taxpayer subjected to an income tax in another state or the 
District of Columbia or the amount of income tax liability that 
has been paid to another state or the District of Columbia, the 
taxpayer shall report the change to the tax commissioner within 
ninety days of the change in such form as the commissioner 
requires. 
(a) In the case of an underpayment, the report shall be 
accompanied by payment of any additional tax due as a result of 
the reduction in credit together with interest on the additional 
tax and is a return subject to assessment under section 5747.13 
of the Revised Code solely for the purpose of assessing any 
additional tax due under this division, together with any 
applicable penalty and interest. It shall not reopen the 
computation of the taxpayer's tax liability under this chapter 
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1544 H. B. No. 69 Page 54
As Introduced
from a previously filed return no longer subject to assessment 
except to the extent that such liability is affected by an 
adjustment to the credit allowed by division (B) of this 
section. 
(b) In the case of an overpayment, an application for 
refund may be filed under this division within the ninety-day 
period prescribed for filing the report even if it is beyond the 
period prescribed in section 5747.11 of the Revised Code if it 
otherwise conforms to the requirements of such section. An 
application filed under this division shall only claim refund of 
overpayments resulting from an adjustment to the credit allowed 
by division (B) of this section unless it is also filed within 
the time prescribed in section 5747.11 of the Revised Code. It 
shall not reopen the computation of the taxpayer's tax liability 
except to the extent that such liability is affected by an 
adjustment to the credit allowed by division (B) of this 
section. 
(5) No credit shall be allowed under division (B) of this 
section: 
(a) For income tax paid or accrued to another state or to 
the District of Columbia if the taxpayer, when computing federal 
adjusted gross income, has directly or indirectly deducted, or 
was required to directly or indirectly deduct, the amount of 
that income tax; 
Division (B)(5)(a) of this section does not apply to 
income taxes included in the computation of Ohio adjusted gross 
income under division (A)(41)(A)(40) of section 5747.01 of the 
Revised Code and not deducted from Ohio adjusted gross income 
under division (A)(28) of that section or to income taxes 
included in Ohio taxable income under division (S)(16) of 
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1574 H. B. No. 69 Page 55
As Introduced
section 5747.01 of the Revised Code. 
(b) For compensation that is not subject to the income tax 
of another state or the District of Columbia as the result of an 
agreement entered into by the tax commissioner under division 
(A)(3) of this section; or 
(c) For income tax paid or accrued to another state or the 
District of Columbia if the taxpayer fails to furnish such proof 
as the tax commissioner shall require that such income tax 
liability has been paid. 
(C) An individual who is a resident for part of a taxable 
year and a nonresident for the remainder of the taxable year is 
allowed the credits under divisions (A) and (B) of this section 
in accordance with rules prescribed by the tax commissioner. In 
no event shall the same income be subject to both credits. 
(D) The credit allowed under division (A) of this section 
shall be calculated based upon the amount of tax due under 
section 5747.02 of the Revised Code after subtracting any other 
credits that precede the credit under that division in the order 
required under section 5747.98 of the Revised Code. The credit 
allowed under division (B) of this section shall be calculated 
based upon the amount of tax due under section 5747.02 of the 
Revised Code after subtracting any other credits that precede 
the credit under that division in the order required under 
section 5747.98 of the Revised Code. 
(E)(1) On a joint return filed by a husband and wife, each 
of whom had adjusted gross income of at least five hundred 
dollars, exclusive of interest, dividends and distributions, 
royalties, rent, and capital gains, a credit equal to the lesser 
of six hundred fifty dollars or the percentage shown in column B 
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1603 H. B. No. 69 Page 56
As Introduced
that corresponds with the taxpayer's modified adjusted gross 
income, less exemptions for the taxable year, of the total 
amount of tax due after allowing for any other credit that 
precedes this credit as required under section 5747.98 of the 
Revised Code: 
1	2
A	A.	B.
B IF THE MODIFIED ADJUSTED GROSS 
INCOME, LESS EXEMPTIONS, FOR THE 
TAX YEAR IS:
THE CREDIT FOR THE TAXABLE YEAR 
IS:
C $25,000 or less	20%
D More than $25,000 but not more than 
$50,000
15%
E More than $50,000 but not more than 
$75,000
10%
F More than $75,000	5%
(2) The credit shall be claimed in the order required 
under section 5747.98 of the Revised Code. 
(F) No claim for credit under this section shall be 
allowed unless the claimant furnishes such supporting 
information as the tax commissioner prescribes by rules.
Section 2. That existing sections 5733.40 , 5747.01, and 
5747.05 of the Revised Code are hereby repealed.
Section 3. Section 5747.01 of the Revised Code is 
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1617 H. B. No. 69 Page 57
As Introduced
presented in this act as a composite of the section as amended 
by both H.B. 101 and S.B. 154 of the 135th General Assembly. The 
General Assembly, applying the principle stated in division (B) 
of section 1.52 of the Revised Code that amendments are to be 
harmonized if reasonably capable of simultaneous operation, 
finds that the composite is the resulting version of the section 
in effect prior to the effective date of the section as 
presented in this act.
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