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) "Affiliated entities" means any person that (directly or indirectly) owns or controls, is owned or controlled by, or is under common ownership or control with, the taxpaper. For purposes of this definition, the term "own" means to own an equity interest (or the equivalent thereof) of fifty per cent or more.

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

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

(D) "Consumer price index" means the statistic released by the United States department of labor, bureau of labor statistics.

(E) "Director" means the director of development services agency 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 Innovation and Opportunity 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) "Effective date" means January 1 of the first year of the term of the tax credit as approved by the authority.

(H) "Excess income tax revenue" means the total amount to be withheld under section 5747.06 of the Revised Code by the taxpayer from the compensation of each new employee to be created at the project location during the term of the agreement and post-term reporting period.

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

(J) "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 development services agency 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 development services agency 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.

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

(L) "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.

(M) "Income tax revenue" means the total amount withheld under section 5747.06 of the Revised Code by the taxpayer during the tax year from the compensation of each employee at the project location.

(N) "Maintain operations" means the continuation of operations of the taxpayer as described in the tax credit agreement.

(O) "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.

(P) "Payroll increase factor" means a numerical percentage determined by the authority to represent retained payroll growth, and which shall be applied annually during the term of the tax credit to adjust the "baseline payroll," 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 payroll to equal the next taxable year's baseline payroll for each year during the term of the tax credit.

(Q) "Person" means, but is not limited to, individuals, combinations of individuals of any form, receivers, assignees, trustees in bankruptcy, firms, companies, joint-stock companies, business trusts, estates, partnerships, limited liability partnerships, limited liability companies, associations, joint ventures, clubs, societies, for-profit corporations, S corporations, qualified subchapter S subsidiaries, qualified subchapter S trusts, trusts, entities that are disregarded for federal tax purposes, and any other entities.

(R) "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.

(S) "Project locations" means the address or addresses listed in the tax credit agreement.

(T) "Relocated employees" means the full-time equivalent employees or employment positions employed by the taxpayer or an affiliated entity at the location elsewhere in the State other than the project location that are relocated to the project location, and whose positions are not replaced within the same calendar year, or, if the employees or employment positions are relocated in the final quarter of the calendar year, within that calendar year or the following calendar year.

(U) "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.

(V) "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.

(W) "Substantially maintain" with respect to division (K)(1)(c) of section 122.17 of the Revised Code means at least fifty per cent of each of the commitments identified in the tax credit agreement.

(X) "Substantially meet" with respect to division (K)(1)(b) of section 122.17 of the Revised Code means at least fifty per cent of each of the commitments identified in the tax credit agreement.

(Y) "Tax year" means the calendar year in and for which the tax imposed by section 5725.18, 5726.02, 5729.03, 5736.02 or 5747.02 or levied under Chapter 5751. of the Revised Code is required to be paid.

(Z) "Taxable year" means the annual tax reporting period of the taxpayer prescribed by division ( M) of section 5751.01 of the Revised Code with respect to persons subject to the Ohio commercial activities 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.

(AA) "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.

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

Effective: 7/28/2016
Five Year Review (FYR) Dates: 05/11/2016 and 07/28/2021
Promulgated Under: 119.03
Statutory Authority: ORC 122.17(I)
Rule Amplifies: ORC 122.17
Prior Effective Dates: 9/25/2000. 11/8/1999. 4/8/1994, 11/10/2003. 1/31/2007, 8/27/10

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 development services agency 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, facsimile or electronic transmission 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.

Effective: 7/28/2016
Five Year Review (FYR) Dates: 05/11/2016 and 07/28/2021
Promulgated Under: 119.03
Statutory Authority: ORC 122.17(I)
Rule Amplifies: ORC 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 development services agency to whom the chairperson has delegated such authority shall execute all agreements with the business entities for tax credits .

(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.

Effective: 7/28/2016
Five Year Review (FYR) Dates: 05/11/2016 and 07/28/2021
Promulgated Under: 119.03
Statutory Authority: ORC 122.17(I)
Rule Amplifies: ORC 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 into a 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 ( B) 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 by the director 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 ( D) 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: 7/28/2016
Five Year Review (FYR) Dates: 05/11/2016 and 07/28/2021
Promulgated Under: 119.03
Statutory Authority: ORC 122.17(I)
Rule Amplifies: ORC 122.17
Prior Effective Dates: 4/8/1994, 11/8/1999, 12/26/2003, 8/27/2010, 2/10/14

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 by the metric evaluation date :

(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 at the time the authority approves the project for all new employment positions added as a result of the project.

(3) 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, or in the case of a project with a to-be-determined project location, will receive such letter prior to the approval of the subsequently identified 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 by the metric evaluation date 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 baseline payroll for individuals employed at the project location as of the date of the job creation tax credit application is submitted. Acceptance of tax credit award shall constitute the taxpayer's confirmation that the amount of existing payroll 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 may, at the discretion of the authority, 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 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.

(F) If the authority does not approve a taxpayer's application in which it receives a recommendation under division (C) of section 122.17 of the Revised Code, the Ohio development services agency shall notify the taxpayer of such determination along with any reasons for such determination identified by the authority. The taxpayer may be eligible to reapply, unless otherwise determined by the authority.

(G) By the metric evaluation date and each year of the term thereafter, to remain eligible to receive a tax credit certificate, the taxpayer must:

(1) Maintain at least ten new full-time equivalent employees at the project location;

(2) Maintain an amount of additional annual payroll consistent with paragraph (A)(2)(b) of this rule over the baseline payroll; and

(3) Maintain an average hourly wage consistent with paragraph (A)(2)(c) of this rule.

(H) If the taxpayer fails to satisfy the requirements of paragraph (G) of rule 122:7-1-05 of the Administrative Code no tax certificate shall be issued for that year and the taxpayer may be subject to remedial action as set forth in division (E) of section 122.17 of the Revised Code.

Effective: 7/28/2016
Five Year Review (FYR) Dates: 05/11/2016 and 07/28/2021
Promulgated Under: 119.03
Statutory Authority: ORC 122.17(I)
Rule Amplifies: ORC 122.17
Prior Effective Dates: 4/8/1994, 11/8/1999, 9/25/2000, 11/10/2003, 8/27/10

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 in which the estimated value to the taxpayer exceeds seventy five per cent of the estimated excess income tax revenue to be received by the state.

(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 annually determine the "pay increase factor," as defined in paragraph ( P) 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 an examination of the average per cent change in the consumer price index - all urban consumers - midwest urban during each of the previous five years for which such consumer price index data are then available.

(E) The authority may grant a tax credit with an estimated value to the taxpayer greater than seventy-five per cent of the estimated excess income tax revenue to be received by the state if the director recommends and the authority finds that there is an extraordinary circumstance which merits such an exception. At the time the authority approves the project, the estimated value of the tax credit shall not exceed the project's estimated excess income tax revenue.

(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.

Effective: 7/28/2016
Five Year Review (FYR) Dates: 05/11/2016 and 07/28/2021
Promulgated Under: 119.03
Statutory Authority: ORC 122.17(I)
Rule Amplifies: ORC 122.17
Prior Effective Dates: 8/27/2010, 4/8/1994, 11/8/1999, 9/25/2000, 11/10/2003

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, Ohio employee payroll from operations at the project location as defined in division (A) of section 122.17 of the Revised Code, the average hourly wage of the full-time equivalent employees, the amount of any transferred payroll during the tax year, the original cost of fixed-asset investment made at the project location, 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) If a taxpayer uses a professional employer organization as defined in section 4125.01 of the Revised Code in conjunction with the project as authorized under section 4125.042 of the Revised Code, the taxpayer is responsible for collecting all appropriate information from the professional employer organization necessary to complete the report to the director identified in paragraph (A) of this rule and failure to do so will be considered a taxpayer's failure to file.

(C) 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.

(D) 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.

(E) Each taxpayer and any professional employer organization utilized in the project shall establish and maintain for at least four years from the conclusion of the post-term reporting period such records of the taxpayer and professional employer organization that substantiate the employment, investment, and operations on which the tax credits are granted and issued. Such records include, but are not limited to, records of personnel, wage records for employees at the project location and conditions of employment. The taxpayer and any professional employer organization 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 and any professional employer organization 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.

(F) 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 ( H) of this rule.

(G) If a taxpayer fails to file any complete annual post-term reporting period annual certification, as described in paragraph ( D) 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 ( H) of this rule.

(H) 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 ( C) and ( D) of this rule and includes all of the information required by paragraphs (A) and ( D) of this rule in a manner proscribed by the director.

Effective: 7/28/2016
Five Year Review (FYR) Dates: 05/11/2016 and 07/28/2021
Promulgated Under: 119.03
Statutory Authority: ORC 122.17(I)
Rule Amplifies: ORC 122.17
Prior Effective Dates: 4/8/1994, 11/8/1999, 11/10/2003, 8/27/10

122:7-1-08 Remedies.

(A) In the event a taxpayer fails to achieve the new full-time equivalent employee number or annual payroll committed in the tax credit agreement by the metric evaluation 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, as set forth in division (E) of section 122.17 of the Revised Code.

(B) In the event a taxpayer relocates employment positions in violation of division (D)(8) section 122.17 of the Revised Code 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, as set forth in division (E) of section 122.17 of the Revised Code.

(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.

Effective: 7/28/2016
Five Year Review (FYR) Dates: 05/11/2016 and 07/28/2021
Promulgated Under: 119.03
Statutory Authority: ORC 122.17(I)
Rule Amplifies: ORC 122.17
Prior Effective Dates: 4/8/1994, 11/8/1999, 11/10/2003, 8/27/10

122:7-1-09 Relocation of employees.

(A) A taxpayer that relocates a substantial number of employment positions from other operations elsewhere in the state , other than the local jurisdiction of the project location, to the project location shall notify, by certified mail, delivery confirmed courier or acknowledged personal delivery, the legislative authority of the county(s), township(s) or municipal corporation(s) from which the relocated employment positions are to be moved prior to the relocation of such employment positions. 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) If a taxpayer or affiliated entity relocates any employment position(s) from other operations elsewhere in the state to the project location, the taxpayer 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) If a taxpayeror affiliated entity relocates a substantial number of employment positions, as defined in paragraph ( S) of rule 122:7-1-01 of the Administrative Code, to the project location, the transferred payroll attributable to the relocated employment positions shall be added to both the project's Ohio employee payroll, as defined in division (A) of section 122.17 of the Revised Code and baseline payroll, as defined in division (A) of section 122.17 of the Revised Code.

(D) If a taxpayeror affiliated entity relocates fewer than a substantial number of employment positions, as defined in paragraph ( S) of rule 122:7-1-01 of the Administrative Code, to the project location, then the transferred payroll attributable to the relocated positions shall be added to the baseline payroll, as defined by division (A)( 2) 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.

(E) 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: 7/28/2016
Five Year Review (FYR) Dates: 05/11/2016 and 07/28/2021
Promulgated Under: 119.03
Statutory Authority: ORC 122.17(I)
Rule Amplifies: ORC 122.17
Prior Effective Dates: 08/27/2010