5747.35 Credit for pass-through entity establishing day-care center for employees.

(A) As used in this section, "pass-through entity" has the same meaning as in division (O) of section 5733.04 of the Revised Code and includes a sole proprietorship.

(B) A nonrefundable credit is allowed against the tax imposed by section 5747.02 of the Revised Code equal to the lesser of one hundred thousand dollars, or fifty per cent of the amount incurred by a pass-through entity for equipment, supplies, labor, and real property, including renovation of real property, used exclusively to establish a child day-care center. The credit is allowed only for the taxable year in which the child day-care center begins operations. The credit may be claimed only for a taxable year beginning after December 31, 1996, but beginning prior to January 1, 2003. However, the credit may be carried forward pursuant to division (C) of this section.

The center must be licensed under section 5104.03 of the Revised Code, used exclusively by employees of the pass-through entity, and located at the employees' worksite. Amounts incurred for supplies that are to be used after the center begins operations may be included only with regard to supplies that are expected to last more than one year under normal usage. To be eligible for the credit, the entity must specify that an employee has the option of refusing to place the employee's child in the day-care center established by the entity.

(C) The amount of a taxpayer's credit is the taxpayer's proportionate share of the credit distributed by the pass-through entity. The taxpayer shall claim the credit in the order required under section 5747.98 of the Revised Code. The taxpayer may carry forward any credit amount in excess of its tax due under section 5747.02 of the Revised Code in the taxable year in which the day-care center begins operations, after allowing for any other credits that precede the credit under this section in the order required under section 5747.98 of the Revised Code, and shall deduct the amount of the excess credit allowed in any such year from the balance carried forward to the next taxable year. The credit may be carried forward for five taxable years following the taxable year for which the credit is claimed under division (B) of this section. However, if the pass-through entity disposes of the day-care center or ceases to operate it at any time during the five-year period, the taxpayer shall not claim or carry forward any credit in connection with that property in the taxable year of disposal or cessation of operation or in any ensuing taxable year.

Cite as R.C. § 5747.35

History. Effective Date: 06-30-1997