Chapter 122:7-1 General Provisions

122:7-1-01 Definitions.

As used in rules 122:7-1-02 to 122:7-1-09 of the Administrative Code:

(A) "Amendment" means any change to the terms and conditions of a tax credit agreement following approval from the authority.

(B) "Authority" means the tax credit authority created pursuant to division (M) of section 122.17 of the Revised Code.

(C) "Consumer price index" means the statistic released by the United States department of labor, bureau of labor statistics. The rate of the index to be considered by the authority is the United States city average percent change for all urban consumers.

(D) "Date of initial operations" means the beginning of the term of the tax credit, as specified in the tax credit agreement.

(E) "Director" means the director of development of the state of Ohio.

(F) "Disadvantaged person" means a resident of Ohio who meets at least one of the following criteria:

(1) Is a person who is currently receiving unemployment compensation or has not held a full-time job for at least the four months immediately preceding the determination of disadvantaged person status;

(2) Is certified as having a disability by the state of Ohio's rehabilitation services commission or bureau of workers' compensation, or who is determined to be disabled by the United States social security administration;

(3) Is eligible for Workforce Investment Act program assistance; or

(4) Is a person whose total gross annual income is less than the annual equivalent of one hundred fifty per cent of the federal minimum wage, or is part of a household of two or more persons whose total gross annual income is less than the annual equivalent of three hundred fifty per cent of the federal minimum wage.

(G) "Executive director" means the executive director of the tax credit authority.

(H) "Extraordinary circumstance" means

(1) The proposed project will encompass asset expenditures that significantly exceed the asset expenditures of similar projects within that industry sector;

(2) The proposed project establishes or enhances a taxpayer's operations within a targeted industry. Targeted industry means an industry sector that the Ohio department of development has then identified as a sector whose growth is vital to the economic success of Ohio;

(3) The proposed project utilizes a facility that has been vacant for at least twelve consecutive months immediately preceding the application for the proposed project;

(4) For a taxpayer with existing operations at the project location, the proposed project will result in a growth in the number of full-time equivalent employees at the project location of at least three hundred per cent;

(5) The proposed project establishes a company or division national/international headquarters location and the taxpayer will employ a minimum of two-hundred fifty full-time equivalent employees at the project location; or

(6) After assessing all of the factors included but not limited to those listed in this division and in paragraph (C) of rule 122:7-1-06 of the Administrative Code as well as such other factors regarding the proposed project as an indication of substantial economic impact, the authority determines that the proposed project presents an extraordinary opportunity for the state. Additional consideration will be provided to proposed projects that:

(a) Plan to generate substantial payroll growth in a distressed city or county. Distress criteria are established by the Ohio department of development and are published in map format at least twice each year to identify "priority investment areas".

(b) Commit to hire and retain a significant percentage of disadvantaged persons.

(I) "Fixed-asset investment" means the dollar amount invested in building, land, machinery and equipment, including computers, and infrastructure related to the project. Fixed-asset investment does not include investments in furniture, inventory, working capital, and other operating expenses.

(J) "Full-time equivalent employees" means the quotient obtained by dividing the total number of hours for which employees were compensated for employment in the project by two-thousand eighty. If the authority determines that full-time employees in a particular industry sector normally work fewer than two thousand eighty hours per year, the authority may reduce the denominator described in the preceding sentence to the number of hours that correspond to full-time employment in the relevant industry sector. The calculation of "full-time equivalent employees" shall exclude any and all hours that are included as part of a tax credit under section 122.171 of the Revised Code.

(K) "Maintain operations" means the continuation of operations of the taxpayer as described in the tax credit agreement. The tax credit agreement shall describe the type of work performed, the number of full-time equivalent employees to be created and retained, the level of investment, and other details the authority deems appropriate to measure maintenance of operations.

(L) "Minority" means a resident of Ohio who is a member of one of the following groups: Blacks or African Americans, American Indians, Hispanics or Latinos, and Asians.

(M) "Payroll" means the aggregate taxable income paid to full-time equivalent employees at the project location. Payroll does not include employer contributions to fringe benefits that are provided to employees.

(N) "Payroll increase factor" means a numerical percentage determined by the authority to represent retained payroll growth, and which shall be applied to adjust annually "baseline income tax revenue," as defined in division (A)(2) of section 122.17 of the Revised Code. The payroll increase factor shall be a minimum of one. The payroll increase factor shall be multiplied by the current taxable year's baseline income tax revenue to equal the next taxable year's baseline income tax revenue for each year during the term of the tax credit.

(O) "Post-term reporting period" means the time period a taxpayer must report to the authority and director to verify the maintenance of operations at the project location. The post-term reporting period begins at the conclusion of the tax credit term and continues for a minimum of three years as set forth in the tax credit agreement corresponding to the taxpayer's obligation to maintain operations at the project location.

(P) "Relocated employees" means either of the following:

(1) The full-time equivalent employees or employment positions employed by the taxpayer in a political subdivision in this state other than the political subdivision in which the project is located are relocated to the project location and whose positions are not replaced in the first political subdivision within the same calendar year.

(2) The full-time equivalent employees or employment positions employed by the taxpayer at a location other than the project location within the same political subdivision as the project location that are relocated to the project location, and whose positions are not replaced within the same calendar year.

(Q) "Retail" means operations that include point-of-final-purchase transactions at a facility open to the consuming public, wherein one party is obligated to pay the price and the other party is obligated to transfer title to or possession of the item sold.

(R) "Substantial number of employment positions" means individual employees of the taxpayer for which the aggregate annual gross payroll, excluding amounts paid for fringe benefits, is at least two hundred thousand dollars. In calculating the "substantial number of employment positions" threshold, the taxpayer must aggregate the payroll from all relocated employees under paragraph (B) of rule 122:7-1-09 of the Administrative Code for each year during the term of the tax credit.

(S) "Tax year" means the calendar year in and for which the tax imposed by sections 5725.18 , 5729.03 , 5733.06 , 5747.02 or 5751.031 of the Revised Code is required to be paid.

(T) "Taxable year" means the annual tax reporting period of the taxpayer prescribed by division (A) of section 5733.031 of the Revised Code with respect to persons subject to the Ohio corporate franchise tax, and prescribed by division (M) of section 5747.01 of the Revised Code with respect to persons subject to individual income tax. With respect to insurance companies taxable year means the calendar year subject to the franchise tax return required pursuant to section 5725.18 of the Revised Code, or subject to the tax required pursuant to section 5729.03 of the Revised Code.

(U) "Taxpayer" means a business entity that has entered into an agreement for a tax credit pursuant to division (D) of section 122.17 of the Revised Code.

(V) "Transferred income tax revenue" means the withholdings attributed to all relocated employees at the project location, if any.

(W) "Transferred payroll" means the payroll attributed to all relocated employees at the project location, if any.

Replaces: 122:7-1-01

Effective: 08/27/2010
R.C. 119.032 review dates: 08/17/2015
Promulgated Under: 119.03
Statutory Authority: 122.17(I)
Rule Amplifies: 122.17
Prior Effective Dates: 9/25/2000; 11/8/1999; 4/8/1994; 11/10/2003, 1/31/2007

122:7-1-02 Meetings of the tax credit authority.

(A) The authority shall act only at a meeting conducted in accordance with this rule. Three members of the authority constitute a quorum to transact and vote on the business of the authority. No action shall be taken by the authority without the concurrence of a majority of the membership. "Roberts Rules of Order" shall govern the proceedings at all meetings.

(B) The department of development shall provide the authority with an adequate meeting place, supplies, and staff assistance, including an executive director.

(C) Regular meetings. Regular meetings of the authority may be:

(1) Held in accordance with a schedule adopted by the authority, without additional notice to members;

(2) Scheduled at a previous meeting of the authority; or

(3) Scheduled by the chairman or a majority of the members of the authority at least seven days in advance of a meeting. Upon request, the authority shall provide at least four days notice of the time, place, and purpose of its regular meetings to any person.

(D) Special meetings. The chairman or a majority of the members of the authority may call a special meeting by providing to the members at least twenty-four hours advance notice of the time, place, and purpose of the meeting. The authority shall give twenty-four hours advance notice of the time, place, and purpose of all special meetings to the news media that have requested notification.

(E) Emergency meetings. In the event of an emergency requiring immediate official action, the chairman or a majority of the members of the authority may call an emergency meeting. The authority shall notify, as soon as possible, the news media that have requested notification regarding the time, place, and purpose of the meeting.

(F) Specific business. Any person may, upon request and payment of a reasonable fee to be determined by the authority, obtain reasonable advance notice and an agenda of all meetings at which any specific type of public business is to be discussed.

(G) Agenda. The chairman of the authority shall prepare an agenda for each regular meeting. The agenda shall be distributed by mail or facsimile to the members of the authority at least four days prior to each regular meeting. The chairman or authority calling a special meeting of the authority shall prepare an agenda for such meeting and include a copy of the agenda with a notice of such meeting.

R.C. 119.032 review dates: 12/15/2011 and 08/17/2015
Promulgated Under: 119.03
Statutory Authority: 122.17(I)
Rule Amplifies: 122.17
Prior Effective Dates: 4/8/1994, 11/8/1999

122:7-1-03 Officers.

(A) Chairperson. The director, or the director's designee, shall serve as chairperson of the authority. After the authority has approved tax credits for a project, the chairperson or a professional employee of the department of development to whom the chairperson has delegated such authority shall execute all agreements with the business entities for tax credits and all agreements with the landlords for annual payments.

(B) Vice-chairperson. The authority shall annually elect one of its members to serve as vice-chairperson. In the absence of the chairperson or the chairperson's designee, the vice-chairperson shall act as chairperson of the authority. In the absence of the chairperson or the chairperson's designee and the vice-chairperson, the members of the authority present at a meeting may elect one of its members to chair the meeting.

R.C. 119.032 review dates: 12/15/2011 and 08/17/2015
Promulgated Under: 119.03
Statutory Authority: 122.17(I)
Rule Amplifies: 122.17
Prior Effective Dates: 4/8/1994, 11/8/1999

122:7-1-04 Fees.

(A) Servicing fees. At the time each taxpayer enters a the tax credit agreement, the taxpayer shall pay to the development services agency a servicing fee in an amount equal to four hundred dollars times the term of years of the tax credit. A separate servicing fee, each calculated as described in the preceding sentence, shall be assessed for each taxpayer that is party to a tax credit agreement. An amendment that requests the addition of taxpayer(s) following the initial approval of the tax credit shall be subject to payment of the servicing fee for each added taxpayer. Such an amendment is not subject to the amendment fee, as described in paragraph (C) of this rule, unless the amendment requests changes to other terms of the tax credit agreement.

(B) Amendment fees. A taxpayer that has already received project approval from the authority for tax credit assistance shall submit a three hundred dollar fee to the development services agency in connection with a taxpayer's request to amend a previously approved tax credit project, provided that the amendment fee shall not be assessed for ministerial amendments. The determination of the executive director of the authority about the nature of an amendment as ministerial or substantive shall be final.

(C) Late fees. A taxpayer that does not submit a complete annual report or annual certification postmarked by or received prior to March first of the year the report or certification is due shall be assessed a late fee of five hundred dollars for each month the report or certification is not received on or before the first day of each ensuing calendar month until the taxpayer submits a complete annual report or annual certification under paragraphs (A) and (C) of rule 122:7-1-07 of the Administrative Code. If an annual report or annual certification submitted to the director is not complete, the director, or his or her designee, shall notify the taxpayer of the deficiencies in the submission, and the taxpayer shall have thirty days from the date of the notice to provide supplemental information to the director that completes the annual report or annual certification. During the pendency of the thirty day time period to supplement annual report or annual certification information, the taxpayer will be subject to the monthly late fee. Failure by a taxpayer to comply with reporting requirements is a breach of taxpayer's obligations under the tax credit agreement and, after the expiration of any applicable cure period provided for in the agreement, the authority may exercise its remedies including, without limitation, reduction of the term or percentage of the tax credit or both, or termination of the tax credit.

(D) Issuance of tax credit certificates. A tax credit certificate shall not be issued to any taxpayer with unpaid fees under this rule.

(E) Use of fees. All fees assessed in connection with the job creation tax credit program shall be utilized to offset the administrative costs of the program.

Effective: 02/10/2014
R.C. 119.032 review dates: 11/22/2013 and 02/10/2019
Promulgated Under: 119.03
Statutory Authority: 122.17(I)
Rule Amplifies: 122.17
Prior Effective Dates: 4/8/1994, 11/8/1999, 12/26/2003, 8/27/10

122:7-1-05 Eligibility requirements.

(A) Except as otherwise provided in this rule, the authority may grant a tax credit pursuant to section 122.17 of the Revised Code if the authority determines the business entity's project satisfies all of the following:

(1) The project satisfies the requirements set forth in division (C) of section 122.17 of the Revised Code;

(2) The taxpayer proposes as a result of the project to do all of the following within three years after the date of the initial operations:

(a) Create at least ten full-time equivalent employees at the project location;

(b) Generate additional annual payroll at the project location in an amount equal to or greater than one hundred seventy-five per cent of the federal minimum wage at the time the authority approves the project, multiplied by fifty-two thousand (which is the number of hours twenty-five full-time equivalent employees would work in one year); and

(c) Have an average hourly wage rate of at least one hundred fifty per cent of the federal minimum wage for all new employment positions added as a result of the project.

(3) Within three years of a project's date of initial operations, the taxpayer accomplishes the following:

(a) Creates at least ten new full-time equivalent employees at the project location;

(b) Generates additional annual payroll at the project location in an amount equal to or greater than one hundred seventy five per cent of the federal minimum wage at the time the authority approved the project, multiplied by fifty-two thousand (which is the number of hours twenty-five full-time equivalent employees work in one year);

(c) Maintains at least six hundred sixty thousand dollars of additional annual payroll over the baseline existing payroll set forth in the tax credit agreement for the term of the tax credit and the post-term reporting period, as defined in paragraph (O) of rule 122:7-1-01 of the Administrative Code and required by division (D)(3) of section 122.17 of the Revised Code. All payroll attributed to relocated employees is excluded from this calculation. If a taxpayer fails to satisfy this provision, no tax certificate shall be issued for that tax year; and

(d) Maintains an average hourly wage rate consistent with paragraph (A)(2)(c) of this rule and continues to do so for the entirety of the tax credit term.

(4) The project has received a letter of support from the chief executive, or his or her designee, of the local political subdivision or a regional development agency charged with promoting economic development with jurisdiction over the project location.

(B) All or any portion of a project determined to be retail shall not be eligible for tax credits pursuant to section 122.17 of the Revised Code.

(C) A taxpayer that sells or derives revenue from the performance of services rather than the sale of goods, must demonstrate to the satisfaction of the authority that at least fifty-one per cent of the sales or revenues attributable to the proposed project are projected to be generated from outside the state of Ohio within three years of the date of initial operations to be eligible for tax credits pursuant to section 122.17 of the Revised Code.

(D) Each taxpayer shall certify to the authority the amount of existing payroll for individuals employed at the project location as of the date of the job creation tax credit application. Acceptance of tax credit award shall constitute the taxpayer's confirmation that the amount of existing payroll and income tax revenue certified to the authority is accurate and will be relied upon by the authority in issuing tax credit certificates. The tax credit shall be calculated on payroll attributed to full-time equivalent employees employed by the taxpayer in excess of the existing payroll, as accepted by the authority, provided that the taxpayer executes and returns the tax credit agreement, within sixty days of delivery of the agreement. If the taxpayer fails to execute the tax credit agreement within such sixty day period, the tax credit shall be calculated on payroll attributed to full-time equivalent employees employed by the taxpayer in excess of the existing payroll, as of the date of the execution of the tax credit agreement. The taxpayer shall include with any agreement returned more than sixty days after delivery the amount of the taxpayer's payroll and income tax revenue at the project location not more than ten business days prior to the date the taxpayer signs the agreement. Such payroll amount shall be certified as accurate by the chief executive officer, chief financial officer, or other officer authorized to sign tax returns for the taxpayer.

(E) The authority may from time to time set additional eligibility requirements for job creation tax credit project applications.

Replaces: 122:7-1-05

Effective: 08/27/2010
R.C. 119.032 review dates: 08/17/2015
Promulgated Under: 119.03
Statutory Authority: 122.17(I)
Rule Amplifies: 122.17
Prior Effective Dates: 4/8/94; 11/8/99; 9/25/00; 11/10/03

122:7-1-06 Tax credit per cent and term.

(A) Except as otherwise provided in paragraph (E) of this rule, the authority shall not grant a tax credit that exceeds seventy five per cent of the excess income tax revenue to be received by the state for a taxable year from full-time equivalent employees located at a project location.

(B) Except as otherwise provided in paragraph (F) of this rule, the authority shall not grant a tax credit that exceeds a term of ten years. The tax credit may be claimed by the taxpayer only for the consecutive taxable years during the term.

(C) The authority shall consider the following factors in determining the tax credit percentage and term to be granted to a taxpayer:

(1) The number of full-time equivalent employees to be created;

(2) The average hourly wage rate, excluding benefits, of the full-time equivalent employees to be created;

(3) The total fixed-asset investment amount the taxpayer will make or cause to be made in the project;

(4) The number of full-time equivalent employees to be retained at the project location;

(5) The economic condition of the county and region of the state where the project is to be located;

(6) The specific percentage of disadvantaged persons and minorities the taxpayer is agreeing to hire for the project;

(7) The industry sector of the project proposed for tax credit assistance;

(8) The amount of direct local financial support committed to the project; and

(9) The amount of other financial assistance to be provided by the state in support of the project.

(D) In addition to the tax credit percentage and term, the authority shall also determine the "pay increase factor," as defined in paragraph (N) of rule 122:7-1-01 of the Administrative Code, for each project approved. Once determined, the pay increase factor shall be fixed for the term of the tax credit. The authority shall determine the pay increase factor by either:

(1) An examination of the historic payroll growth of the taxpayer during the more recent prior three year period , if available; or

(2) An examination of the average per cent change in the consumer price index during each of the previous five years for which consumer price index data are then available. The authority shall consider this method for calculating the pay increase factor when the taxpayer has demonstrated to the satisfaction of the authority that:

(a) The historic payroll growth of the taxpayer is not reflective of anticipated future growth and that a rate based upon historic payroll growth will materially curtail the taxpayer's ability to create new employment positions in the state; or

(b) Historic payroll information is not available for the taxpayer at the project location.

(E) The authority may grant a tax credit greater than seventy-five per cent of the excess income tax revenue to be received by the state for the taxable year from full-time equivalent employees in a project if:

(1) The proposed project receives a term of five years or less, and the executive director recommends and the authority finds that there is an extraordinary circumstance which merits such an exception; or

(2) The proposed project receives a term of more than five years, and the director recommends and the authority finds that there is an extraordinary circumstance which merits such an exception.

(F) The authority may grant a tax credit term between eleven and fifteen years if the director recommends and the authority finds that there is an extraordinary circumstance which merits such an exception. the authority shall not grant a tax credit that exceeds a term allowable under division (D)(2) of section 122.17 of the Revised Code.

Replaces: 122:7-1-06

Effective: 08/27/2010
R.C. 119.032 review dates: 08/17/2015
Promulgated Under: 119.03
Statutory Authority: 122.17(I)
Rule Amplifies: 122.17
Prior Effective Dates: 4/8/94; 11/8/99; 9/25/00; 11/10/03

122:7-1-07 Reports.

(A) Each taxpayer that is party to a tax credit agreement shall report to the director annually during the term of the tax credit the number of eligible full-time equivalent employees first employed by the taxpayer at the project location as a result of the project, the total number of full-time equivalent employees employed by the taxpayer at the project location, the total payroll from operations at the project location, the income tax revenue from operations at the project location, the baseline income tax revenue for the project, the excess income tax revenue from operations at the project location, the average hourly wage of the full-time equivalent employees, the amount of any transferred payroll during the tax year, the amount of any transferred income tax revenue during the tax year and any other information the director deems necessary to perform the director's duties under section 122.17 of the Revised Code. Each taxpayer's report to the director shall be certified as accurate and complete by the original signature of any authorized officer of the taxpayer.

(B) The taxpayer's annual report shall be postmarked prior to or received by the director no later than March first of each year immediately succeeding the calendar year that is the subject of the annual report.

(C) Each taxpayer shall maintain substantial operations at the project location for a time period consistent with division (D)(3) of section 122.17 of the Revised Code. During the post-term reporting period, the taxpayer shall submit an annual certification to the director postmarked prior to or received by the director no later than March first of each year succeeding the calendar year that is the subject of the annual certification, the taxpayer shall submit to the director a certification that includes, but is not limited to, information demonstrating the taxpayer maintains operations at the project location and the total full-time equivalent employees at the project location.

(D) Each taxpayer shall establish and maintain for at least four years from the conclusion of the post-term reporting period such records of the taxpayer that substantiate the employment, investment, and operations on which the tax credits are granted and issued. Such records includes, but not limited to, records of personnel, wage records for employees at the project location and conditions of employment. The taxpayer shall organize and make available such records for the review and verification of the director or the director's representatives and appropriate state agencies or officials. The taxpayer shall permit such officials and their representatives to audit, examine and make excerpts or transcripts from records maintained under this rule at any time during normal business hours upon written notice as often as the director may deem necessary. In the event the director determines a taxpayer has submitted an annual report containing erroneous data or data not supported by the records maintained under this rule, the director may, after providing notice, require the taxpayer to resubmit corrected annual reports for the years in which such reports were filed with the applicable fees described in rule 122:7-1-04 of the Administrative Code. Thereafter, the director shall issue amended certificates consistent with amended data and report such amendments to the tax commissioner.

(E) If a taxpayer fails to file any complete annual report during the term of the tax credit, as described in paragraph (A) of this rule, within one hundred eighty days of the March first deadline, the taxpayer may be deemed to have discontinued operations at the project location and shall be subject to the refund provisions of division (K) of section 122.17 of the Revised Code. A complete annual report shall be one that meets the requirements of paragraph (G) of this rule.

(F) If a taxpayer fails to file any complete annual post-term reporting period annual certification, as described in paragraph (C) of this rule, within one hundred eighty days of the March first deadline, the taxpayer may be deemed to have discontinued operations at the project location and shall be subject to the refund provisions of division (K) of section 122.17 of the Revised Code. A complete annual certification shall be one that meets the requirements of paragraph (G) of this rule.

(G) For the purposes of this rule, a complete annual report or complete annual certification shall mean an annual report or annual certification that complies with the filing timeframes of paragraphs (B) and (C) of this rule and includes all of the information required by paragraphs (A) and (C) of this rule in a manner proscribed by the director.

Replaces: 122:7-1-07

Effective: 08/27/2010
R.C. 119.032 review dates: 08/17/2015
Promulgated Under: 119.03
Statutory Authority: 122.17(I)
Rule Amplifies: 122.17
Prior Effective Dates: 4/8/94; 11/8/99; 11/10/03

122:7-1-08 Remedies.

(A) In the event a taxpayer fails to achieve the annual payroll committed in the tax credit agreement by the date set forth in the tax credit agreement, or if the authority finds that the taxpayer has failed to comply with any term or condition of the tax credit agreement and such failure continues beyond any applicable cure period, the authority may, after providing written notice, unilaterally and prospectively reduce the percentage and/or term of the tax credit or immediately terminate the tax credit set forth in the tax credit agreement.

(B) In the event a taxpayer relocates employment positions in violation of division (D)(8) section 122.17 of the Revised Code and the taxpayer has previously received tax credit certificates, the authority may, after providing written notice, reduce the tax credit rate to preclude the taxpayer from taking any further credits for the term of the tax credit. In the event a taxpayer relocates such positions and has not previously received a tax credit certificate, the authority may terminate the tax credit.

(C) The authority shall cause written notice to be given to the affected taxpayer of any proposed action to reduce the percentage or term of the tax credit or to terminate the tax credit agreement. Such notice shall be given at least thirty days prior to the authority meeting at which the action is to be considered, and such notice shall be effective if sent in accordance with the notice requirements of the tax credit agreement.

(D) The authority shall specify in any action reducing the percentage or term of a tax credit or terminating a tax credit agreement the taxable year for which the remedial action shall first be effective.

Replaces: 122:7-1-08

Effective: 08/27/2010
R.C. 119.032 review dates: 08/17/2015
Promulgated Under: 119.03
Statutory Authority: 122.17(I)
Rule Amplifies: 122.17
Prior Effective Dates: 4/8/94; 11/8/99; 11/10/03

122:7-1-09 Relocation of employees.

(A) As required by division (D)(8) of section 122.17 of the Revised Code, a taxpayer that relocates a substantial number of employment positions from other operations of the taxpayer within the state but outside the political subdivision in which the project location is located to the project location shall notify the legislative authority of the county(s), township(s) or municipal corporation(s) from which the relocated employment positions are to be moved. The taxpayer shall also concurrently send a copy of the notice to the executive director. The notice shall contain the following information:

(1) The number of full-time equivalent employees and employment positions that will be relocated;

(2) The payroll attributable to the relocated employees and relocated employment positions;

(3) The business reason for the relocation of employees or employment positions; and

(4) The location of the project location.

(B) A taxpayer that relocates any employment position(s) from other operations of the taxpayer within the state but outside the political subdivision in which the project location is located to the project location or from other operations of the taxpayer from within the same political subdivision to the project location shall certify the amounts of transferred payroll in the annual report required under paragraph (A) of rule 122:7-1-07 of the Administrative Code that is due in the year immediately following the relocation. The annual report shall include the items listed in paragraph (A) of this rule.

(C) The notices required in paragraph (A) of this rule shall be sent by certified mail, delivery confirmed courier or acknowledged personal delivery, prior to the relocation of the employee(s).

(D) If a taxpayer relocates a substantial number of employment positions, as defined in paragraph (R) of rule 122:7-1-01 of the Administrative Code, the transferred income tax attributable to the relocated employment positions shall be added to both the project's income tax revenue and baseline income tax revenue.

(E) If a taxpayer relocates fewer than a substantial number of employment positions, as defined in paragraph (R) of rule 122:7-1-01 of the Administrative ode, then the transferred income tax revenue related to the transferred payroll shall be added to the income tax revenue, as defined by division (A)(1) of section 122.17 of the Revised Code, in the year following the tax year in which the relocation occurred. A taxpayer shall derive no tax credit benefit under section 122.17 of the Revised Code from the relocation of employees in the year in which the relocation occurred.

(F) When the executive director believes there has been a violation of paragraph (A) or (B) of this rule, the executive director shall inform the director. If the director agrees that a violation has occurred, the director may recommend to the authority that the taxpayer be subject to a remedial action pursuant to rule 122:7-1-08 of the Administrative Code.

When a violation has occurred the director shall issue amended tax certificates, if necessary, to the taxpayer to properly account for the effect of the relocated payroll for each tax year in which the relocated employees were employed at the project location. The director shall forward a copy of each corrected tax certificate to the tax commissioner or in the case of an insurance company, to the superintendent of insurance.

Effective: 08/27/2010
R.C. 119.032 review dates: 08/17/2015
Promulgated Under: 119.03
Statutory Authority: 122.17(I)
Rule Amplifies: 122.17