5747.32 Credit for economic redevelopment of distressed area.

(A) As used in this section:

(1) "Partner" includes a member of a limited liability company if the limited liability company is not treated as a corporation for purposes of Chapter 5733. of the Revised Code and is not classified as an association taxable as a corporation for federal income tax purposes.

(2) "S corporation" means a corporation that has made an election under subchapter S of chapter one of subtitle A of the Internal Revenue Code for its taxable year under the Internal Revenue Code.

(B)

(1) A nonrefundable credit is allowed against the tax imposed by section 5747.02 of the Revised Code for a taxpayer that has entered into an agreement with the director of development under section 122.16 of the Revised Code, or for a taxpayer that is a partner in a partnership or a shareholder in an S corporation that has entered into such an agreement. If a taxpayer is a partner in such a partnership or a shareholder in such an S corporation, the taxpayer shall be allowed the taxpayer's distributive share of the credit available through the partnership or S corporation.

(2) If a taxpayer, or a partnership or S corporation in which the taxpayer is a partner or shareholder, enters into more than one agreement under section 122.16 of the Revised Code, the taxpayer may aggregate the amount of those credits each taxable year.

(3) A taxpayer entitled to the credit allowed under this section shall claim one-fifth of the credit amount for the taxable year in which the agreement is entered into, and one-fifth of the credit amount for each of the four succeeding taxable years.

(4) A taxpayer shall claim the credit in the order provided under section 5747.98 of the Revised Code. The amount of the credit that a taxpayer may claim each year shall be the amount indicated on the certificate issued by the director of development under section 122.16 of the Revised Code, or the taxpayer's distributive share of that amount if the taxpayer is entitled to the credit through a partnership or S corporation. The taxpayer shall submit the certificate with the taxpayer's annual return filed under section 5747.08 of the Revised Code. Each year, any credit amount in excess of the tax due for that year under this chapter, after allowing for all other credits preceding the credit in that order, may be carried forward for no more than three taxable years.

(5) A taxpayer shall not claim any credit amount remaining, including any amounts carried forward from prior taxable years, for any taxable year in which any of the following events occur, or for any subsequent taxable year except as otherwise provided under division (B)(6) of this section:

(a) The taxpayer, or a partnership or S corporation through which the taxpayer is entitled to the credit, enters into a compliance schedule agreement pursuant to division (B)(3) of section 3746.12 of the Revised Code;

(b) The taxpayer, or a partnership or S corporation through which the taxpayer is entitled to the credit, has its covenant not to sue revoked pursuant to Chapter 3746. of the Revised Code and rules adopted under that chapter;

(c) The covenant not to sue issued to the taxpayer, or a partnership or S corporation through which the taxpayer is entitled to the credit, is void pursuant to Chapter 3746. of the Revised Code;

(d) The director of development has determined that the taxpayer, or a partnership or S corporation through which the taxpayer is entitled to the credit, has permitted the eligible site to be used in such a manner as to cause the relocation of employment positions from elsewhere in this state in violation of the commitment required under division (D) of section 122.16 of the Revised Code.

If a taxpayer claims credits through more than one partnership or S corporation, division (B)(5) of this section prohibits that taxpayer from claiming a credit through any of those partnerships or S corporations that has entered into a compliance schedule agreement, has had its covenant not to sue revoked or voided, or has violated the commitment required in division (D) of section 122.16 of the Revised Code. Division (B)(5) of this section does not prohibit such a taxpayer from claiming a credit through a partnership or S corporation that has not entered into a compliance schedule agreement, has not had its covenant not to sue revoked or voided, or has not violated the commitment required in division (D) of section 122.16 of the Revised Code.

(6) If a taxpayer has been prohibited from claiming the credit or a portion of the credit by reason of division (B)(5)(a) of this section, and the taxpayer, or a partnership or S corporation in which the taxpayer is a partner or shareholder, subsequently has returned the property to compliance with applicable standards pursuant to the compliance schedule agreement, the taxpayer may claim the credit for the taxable year in which the director of environmental protection has determined that the taxpayer, partnership, or S corporation has returned the property to compliance with applicable standards and for each subsequent taxable year for which the taxpayer is otherwise allowed to claim the credit under division (B)(3) of this section.

Effective Date: 09-29-1997