122:24-1-08 Small business enterprise.

(A) In order for a business entity to qualify as a small business enterprise either its assets cannot exceed fifty million dollars or its annual sales cannot exceed ten million dollars. For example, a business entity having five hundred million dollars of Assets but only nine million dollars in annual sales, would qualify under division (A)(1)(a) of section 122.86 of the Revised Code. These calculations are to be made at the time of each qualifying investment and are to be calculated based upon generally accepted accounting principles.

(B) In order for a business entity to qualify as a small business enterprise, it must employ at least fifty full-time equivalent employees in Ohio for whom it is required to withhold Ohio income taxes from their wages or more than one-half of the business entity's total number of full-time equivalent employees employed in the United States are employed in Ohio and are subject to the withholding requirement. The determination of whether this employment test has been met is made on the date of each qualifying investment. This requirement is illustrated as follows (all employees are assumed to be full-time):

(1) A business entity having fifty-one employees working in Ohio and for whom it is withholding Ohio income taxes from their wages will meet the employment test, even if the business has two hundred full-time equivalent employees working in the United States.

(2) A business entity having seven employees working in Ohio and for whom it is withholding Ohio income taxes from their wages will meet the employment test, so long as it has no more than thirteen employees working in the United States, even if the business has one thousand full-time equivalent employees working globally.

(3) For a new business entity created after July 1, 2011 with no employees at the time of its creation, the new business entity must meet the employment requirement of division (A)(1)(b) of section 122.86 of the Revised Code prior to receiving any qualifying investment.

(C) A small business enterprise is required to annually update its registration information for the investOhio program, described in rule 122:24-1-03 of the Administrative Code, with the director. This report shall be in a format established by the director and shall provide the director with information necessary for the director to make a determination as to the entity's status as a small business enterprise as well as whether the entity is complying with requirements associated with its reinvestment of the qualifying investments.

Effective: 03/29/2012
R.C. 119.032 review dates: 03/29/2017
Promulgated Under: 119.03
Statutory Authority: 122.86(F)
Rule Amplifies: 122.86 , 5747.81
Prior Effective Dates: 11/8/2011 (Emer)