Chapter 5703-41 Municipal Net Profit Tax

5703-41-01 Filing of returns and payments by electronic means.

(A) Except as provided in paragraph (C) of this rule, any taxpayer subject to municipal income taxation with respect to the taxpayer's net profit from a business or profession that uses the Ohio business gateway to file a municipal net profit tax return, an extension for filing a municipal net profit tax return, or a declaration of estimated taxes, or that uses the Ohio business gateway to make payment of amounts shown to be due on such returns and declarations, shall file such tax returns, extensions, and declarations and shall make payments in accordance with the guidance published on the Ohio business gateway website at http://www.business.ohio.gov.

(B) Except as provided in paragraph (D) of this rule, a taxpayer that made an election under section 718.80 of the Revised Code shall file all tax returns, extensions for filing tax returns, and declarations of estimated taxes, and shall make payment of amounts shown to be due on such returns and declarations, electronically, either through the Ohio business gateway or in another manner as prescribed by the tax commissioner. Payments made through the treasurer of state shall be made in the manner prescribed by the rules adopted by the treasurer of state under section 113.061 of the Revised Code.

(C) Except as provided in paragraph (D) of this rule, if the tax commissioner prescribes electronic filing and payment to be made using electronic means other than the Ohio business gateway for those taxpayers that made an election under division (A) of section 718.80 of the Revised Code, such taxpayers shall file and pay using such electronic means required in accordance with the guidance published by the tax commissioner on the Ohio department of taxation's website at http://www.tax.ohio.gov.

(D)

(1) As authorized by division (B) of section 718.851 of the Revised Code, a taxpayer that made an election under section 718.80 of the Revised Code may apply to the tax commissioner to be excused from the requirement to file returns and make payments electronically. A form prescribed for such purpose shall be posted on the department of taxation's website.

(2) The commissioner shall notify the person in writing of the commissioner's decision. Unless an earlier date is specified in the notice, the excuse shall continue to apply until revoked in writing by the commissioner. The denial or revocation of an excuse under this paragraph is not a final determination of the commissioner and is not subject to further appeal.

(E) Nothing in this rule affects any taxpayer's obligation to timely file all returns and timely pay all amounts required by Chapter 718. of the Revised Code.

Effective: 1/12/2018
Five Year Review (FYR) Dates: 01/12/2023
Promulgated Under: 119
Statutory Authority: 5703.05, 718.80, 718.051, 718.851
Rule Amplifies: 718.051, 718.851

5703-41-02 Joint economic development zones and joint economic development districts.

(A) As used in this rule:

(1) "Agreement" means an agreement required by division (H)(4) of section 715.691, division (F)(5) of section 715.70, division (G) of section 715.71, or division (F) (5)(c) of section 715.72 of the Revised Code, between the board of directors of a JEDD or JEDZ and a qualifying municipal corporation to administer, collect, and enforce the income tax on behalf of a JEDD or JEDZ.

(2) "Contract" means a contract creating a joint economic development district entered into under section 715.70, 715.71, or 715.72 of the Revised Code, or a contract creating a joint economic development zone entered into under section 715.691 of the Revised Code.

(3) "JEDD" means a joint economic development district that levies an income tax under section 715.70, 715.71, or 715.72 of the Revised Code.

(4) "JEDZ" means a joint economic development zone that levies an income tax under section 715.691 of the Revised Code.

(5) "Map of the JEDD or JEDZ" means a description of the area or areas included in the JEDD or JEDZ, including a map in sufficient detail to denote the specific boundaries of the area or areas, and the parcel number of any parcel located within the boundaries of the JEDD or JEDZ which is excluded from the JEDD or JEDZ.

(6) "Qualifying municipal corporation" is any municipal corporation other than a JEDD or JEDZ.

(7) "Tax collections" means any amount collected pursuant to sections 718.80 to 718.95 of the Revised Code and distributed under section 718.83 of the Revised Code.

(B) The board of directors of each JEDD and JEDZ shall provide to the tax commissioner a copy of the contract, map of the JEDD or JEDZ, and any amendments to the contract, as follows:

(1) The board of directors of each JEDD and JEDZ shall provide a copy of the signed contract and a map of the JEDD or JEDZ within thirty days of the effective date of this rule, or within thirty days of the effective date of the contract, whichever comes later.

(2) The board of directors of each JEDD and JEDZ shall provide a copy of any signed amendment to the contract within thirty days of the effective date of this rule, or within thirty days of the effective date of such amendment, whichever comes later.

(C) The board of directors of each JEDD and JEDZ shall notify the tax commissioner if a contract is renewed, terminated, or canceled, or if any change is made to the map of the JEDD or JEDZ, at least thirty days prior to the effective date of the renewal, termination, cancelation, or change.

(D) The board of directors of each JEDD and JEDZ shall notify the tax commissioner which qualifying municipal corporation is charged with administering, collecting, and enforcing the municipal net profit tax on behalf of the JEDD or JEDZ and provide to the tax commissioner a copy of the agreement, and any amendments to the agreement, as follows:

(1) The board of directors of each JEDD and JEDZ shall notify the tax commissioner and provide a copy of the signed agreement within thirty days of the effective date of this rule, or within thirty days of the effective date of the agreement, whichever comes later.

(2) The board of directors of each JEDD and JEDZ shall provide a copy of any signed amendment to the agreement within thirty days of the effective date of this rule, or within thirty days of the effective date of such amendment, whichever comes later.

(E) For each JEDD and JEDZ, the tax commissioner shall distribute tax collections according to section 718.83 of the Revised Code to the qualifying municipal corporation identified by the board of directors of each JEDD or JEDZ as the qualifying municipal corporation charged with administering, collecting, and enforcing the municipal net profit tax under the agreement provided under paragraph (D) of this rule. The qualifying municipal corporation receiving such distribution of tax collections on behalf of a JEDD or JEDZ shall distribute the tax collections in accordance with the applicable JEDD or JEDZ contract. The tax commissioner is not responsible for any delayed or errant distribution of tax collections under this paragraph if the board of directors of a JEDD or JEDZ fails to timely provide information required by this rule.

(F) Nothing in this rule affects the exchange of information between the tax commissioner and municipal corporations under sections 718.80 to 718.95 of the Revised Code. Information provided by the tax commissioner to each JEDD and JEDZ shall be provided to the persons identified under division (D) of section 718.84 of the Revised Code.

(G) The board of directors of each JEDD and JEDZ shall provide information to the tax commissioner required by this rule in accordance with guidance published by the tax commissioner on the Ohio department of taxation's website at http://www.tax.ohio.gov.

Effective: 1/12/2018
Five Year Review (FYR) Dates: 01/12/2023
Promulgated Under: 119
Statutory Authority: 5703.05, 718.80
Rule Amplifies: 718.80 , 718.83

5703-41-03 Change in taxable year and declaration of estimated taxes for short taxable years.

(A) Except as otherwise provided in this paragraph, terms used in this rule have the same meaning as in sections 718.80 to 718.95 of the Revised Code. As used in this rule, "short taxable year" means a taxable year consisting of a period of less than twelve full months. A short taxable year may occur if a taxpayer is not in existence for an entire taxable year or if a taxpayer changes its taxable year.

(B) If a taxpayer changes its taxable year, the taxpayer shall notify the tax commissioner of such change no later than the due date of the federal short period return. Failure to timely notify the tax commissioner under this paragraph may result in inaccurate billing notices or assessments.

(C) In the case of a short taxable year, no payment of estimated tax is required if the amount payable as estimated taxes for the short taxable year is less than two hundred dollars.

(D) Except as otherwise provided in paragraph (C) of this rule, in the case of a short taxable year, the taxpayer shall file a declaration of estimated taxes and remit estimated taxes in the amount of at least ninety per cent of the combined tax liability for the taxable year to the tax commissioner on or before the fifteenth day of the last month of the short taxable year.

(E) Although not a short taxable year, in the case of a taxpayer in existence for the entire taxable year but becoming subject to the municipal net profit tax for the first time after the beginning of the taxpayer's taxable year, the taxpayer shall file a declaration of estimated taxes and remit estimated taxes in the amount of at least ninety per cent of the combined tax liability for the taxable year by the fifteenth day of the last month of the taxable year.

(F) The following examples illustrate the application of this rule:

(1) Entity A is a taxpayer with a calendar year taxable year. Entity A closes its business as of March 15, 2020. Entity A must file a declaration and remit at least ninety per cent of the combined tax liability for taxable year 2020 by March 15, 2020. Assuming no extension is granted, Entity A must file its final return and remit any remaining amount due on or before July 15, 2020 under division (A)(1) of section 718.85 of the Revised Code.

(2) Entity B begins doing business June 1, 2020, and has a calendar year taxable year. Entity B must file a declaration of estimated taxes and remit at least ninety per cent of the combined tax liability for taxable year 2020 by December 15, 2020. For taxable year 2021, Entity B must make estimated tax payments according to the schedule in division (C) of section 718.88 of the Revised Code.

(3) Entity C, an Indiana corporation, was doing business solely in Indiana until March 15, 2019. On March 15, 2019, Entity C opened a new location and began selling its products in Ohio city A. Entity C files its federal income tax return based on a fiscal year ending in September. For taxable year 2019, Entity C must file a declaration of estimated taxes and remit at least ninety per cent of its combined tax liability for the taxable year by September 15, 2019.

(4) Entity D has a fiscal year ending in July and changes to a calendar year taxpayer in 2021. Entity D has a full fiscal year ending July 31, 2021, and a short taxable year beginning August 1, 2021 and ending December 31, 2021. Under division (A)(2) of section 718.85 of the Revised Code and assuming no extension is granted, Entity D must aggregate the facts and figures necessary for the computation of its tax and file one return for both the full fiscal year ending July 31, 2021 and the short taxable year ending December 31, 2021, on or before April 15, 2022. Entity D will have made estimated payments for the fiscal year on or before November fifteenth, January fifteenth, April fifteenth, and July fifteenth. For its short taxable year, Entity D must file a declaration and remit at least ninety per cent of the combined tax liability for the short taxable year (August 1, 2021 to December 31, 2021) by December 15, 2021.

(5) Entity E has a calendar year taxable year ending December 31, 2019, and changes its taxable year to a fiscal year ending June 30, 2020. Assuming no extension is granted, Entity E must file its tax return for taxable year 2019, by April 15, 2020. Entity E is not required to make an estimated payment on April 15, 2020, but must file a declaration and remit at least ninety per cent of its combined tax liability for the short taxable year (January 1, 2020 to June 30, 2020) by June 15, 2020. Assuming no extension is granted, Entity E must file a return for its short taxable year by October 15, 2020.

Effective: 1/12/2018
Five Year Review (FYR) Dates: 01/12/2023
Promulgated Under: 119
Statutory Authority: 5703.05, 718.80
Rule Amplifies: 718.88