Chapter 5749: SEVERANCE TAX

5749.01 Severance tax definitions.

As used in this chapter:

(A) "Ton" shall mean two thousand pounds as measured at the point and time of severance, after the removal of any impurities, under such rules and regulations as the tax commissioner may prescribe.

(B) "Taxpayer" means any person required to pay the tax levied by Chapter 5749. of the Revised Code.

(C) "Natural resource" means all forms of coal, salt, limestone, dolomite, sand, gravel, natural gas, and oil.

(D) "Owner" has the same meaning as in section 1509.01 of the Revised Code.

(E) "Person" means any individual, firm, partnership, association, joint stock company, corporation, or estate, or combination thereof.

(F) "Return" means any report or statement required to be filed pursuant to Chapter 5749. of the Revised Code used to determine the tax due.

(G) "Severance" means the extraction or other removal of a natural resource from the soil or water of this state.

(H) "Severed" means the point at which the natural resource has been separated from the soil or water in this state.

(I) "Severer" means any person who actually removes the natural resources from the soil or water in this state.

Amended by 128th General AssemblyFile No.27, SB 165, §1, eff. 6/30/2010.

Effective Date: 07-20-1973

5749.02 Imposing tax on severance of natural resources.

(A) For the purpose of providing revenue to administer the state's coal mining and reclamation regulatory program, to meet the environmental and resource management needs of this state, and to reclaim land affected by mining, an excise tax is hereby levied on the privilege of engaging in the severance of natural resources from the soil or water of this state. The tax shall be imposed upon the severer at the rates prescribed by divisions (A)(1) to (9) of this section:

(1) Ten cents per ton of coal;

(2) Four cents per ton of salt;

(3) Two cents per ton of limestone or dolomite;

(4) Two cents per ton of sand and gravel;

(5) Ten cents per barrel of oil;

(6) Two and one-half cents per thousand cubic feet of natural gas;

(7) One cent per ton of clay, sandstone or conglomerate, shale, gypsum, or quartzite;

(8) Except as otherwise provided in this division or in rules adopted by the reclamation forfeiture fund advisory board under section 1513.182 of the Revised Code, an additional fourteen cents per ton of coal produced from an area under a coal mining and reclamation permit issued under Chapter 1513. of the Revised Code for which the performance security is provided under division (C)(2) of section 1513.08 of the Revised Code. Beginning July 1, 2007, if at the end of a fiscal biennium the balance of the reclamation forfeiture fund created in section 1513.18 of the Revised Code is equal to or greater than ten million dollars, the rate levied shall be twelve cents per ton. Beginning July 1, 2007, if at the end of a fiscal biennium the balance of the fund is at least five million dollars, but less than ten million dollars, the rate levied shall be fourteen cents per ton. Beginning July 1, 2007, if at the end of a fiscal biennium the balance of the fund is less than five million dollars, the rate levied shall be sixteen cents per ton. Beginning July 1, 2009, not later than thirty days after the close of a fiscal biennium, the chief of the division of mineral resources management shall certify to the tax commissioner the amount of the balance of the reclamation forfeiture fund as of the close of the fiscal biennium. Any necessary adjustment of the rate levied shall take effect on the first day of the following January and shall remain in effect during the calendar biennium that begins on that date.

(9) An additional one and two-tenths cents per ton of coal mined by surface mining methods.

(B) After the director of budget and management transfers money from the severance tax receipts fund as required in division (H) of section 5749.06 of the Revised Code, money remaining in the severance tax receipts fund, except for money in the fund from the amounts due under section 1509.50 of the Revised Code, shall be credited as follows:

(1) Of the moneys in the fund from the tax levied in division (A)(1) of this section, four and seventy-six-hundredths per cent shall be credited to the geological mapping fund created in section 1505.09 of the Revised Code, eighty and ninety-five-hundredths per cent shall be credited to the coal mining administration and reclamation reserve fund created in section 1513.181 of the Revised Code, and fourteen and twenty-nine-hundredths per cent shall be credited to the unreclaimed lands fund created in section 1513.30 of the Revised Code.

(2) The money in the fund from the tax levied in division (A)(2) of this section shall be credited to the geological mapping fund.

(3) Of the moneys in the fund from the tax levied in divisions (A)(3) and (4) of this section, seven and five-tenths per cent shall be credited to the geological mapping fund, forty-two and five-tenths per cent shall be credited to the unreclaimed lands fund, and the remainder shall be credited to the surface mining fund created in section 1514.06 of the Revised Code.

(4) Of the moneys in the fund from the tax levied in divisions (A)(5) and (6) of this section, ninety per cent shall be credited to the oil and gas well fund created in section 1509.02 of the Revised Code and ten per cent shall be credited to the geological mapping fund. All of the moneys in the fund from the tax levied in division (A)(7) of this section shall be credited to the surface mining fund.

(5) All of the moneys in the fund from the tax levied in division (A)(8) of this section shall be credited to the reclamation forfeiture fund.

(6) All of the moneys in the fund from the tax levied in division (A)(9) of this section shall be credited to the unreclaimed lands fund.

(C) When, at the close of any fiscal year, the chief finds that the balance of the reclamation forfeiture fund, plus estimated transfers to it from the coal mining administration and reclamation reserve fund under section 1513.181 of the Revised Code, plus the estimated revenues from the tax levied by division (A)(8) of this section for the remainder of the calendar year that includes the close of the fiscal year, are sufficient to complete the reclamation of all lands for which the performance security has been provided under division (C)(2) of section 1513.08 of the Revised Code, the purposes for which the tax under division (A)(8) of this section is levied shall be deemed accomplished at the end of that calendar year. The chief, within thirty days after the close of the fiscal year, shall certify those findings to the tax commissioner, and the tax levied under division (A)(8) of this section shall cease to be imposed for the subsequent calendar year after the last day of that calendar year on coal produced under a coal mining and reclamation permit issued under Chapter 1513. of the Revised Code if the permittee has made tax payments under division (A)(8) of this section during each of the preceding five full calendar years. Not later than thirty days after the close of a fiscal year, the chief shall certify to the tax commissioner the identity of any permittees who accordingly no longer are required to pay the tax levied under division (A)(8) of this section for the subsequent calendar year.

Amended by 130th General Assembly File No. 25, HB 59, §101.01, eff. 9/29/2013.

Amended by 128th General AssemblyFile No.9, HB 1, §101.01, eff. 10/16/2009.

Amended by 128th General Assemblych.9, SB 73, §1, eff. 6/15/2009.

Effective Date: 06-14-2000; 09-29-2005; 09-28-2006; 04-01-2007; 2007 HB119 09-29-2007

5749.021 [Repealed].

Effective Date: 02-11-1988

5749.03 Tax exemptions.

The following shall be exempt from the tax imposed by section 5749.02 of the Revised Code and the amount due under section 1509.50 of the Revised Code:

The severance of natural resources from land or water in this state owned legally or beneficially by the severer, which natural resources will be used on the land from which they are taken by the severer as part of the improvement of or use in the severer's homestead and which have a yearly cumulative market value of not greater than one thousand dollars. When severed natural resources so used exceed a cumulative market value of one thousand dollars during any year, the further severance of natural resources shall be subject to the tax imposed by section 5749.02 of the Revised Code.

Amended by 128th General AssemblyFile No.27, SB 165, §1, eff. 6/30/2010.

Effective Date: 12-20-1971

5749.04 Issuing license or permit.

No severer shall sever or sell a natural resource in this state without first having obtained a license or permit therefor.

Unless the severer has obtained a license or permit from another department of this state, the license or permit shall be issued by the tax commissioner upon receipt of a completed application on a form which he shall prescribe. The license or permit shall become effective on the date the application is accepted by the commissioner, who shall notify the applicant in writing of the acceptance, and shall remain in effect until such time as the commissioner revokes the license or permit. The commissioner may revoke the license or permit if he finds that the applicant has failed to fully and truthfully complete the application or has failed to pay the tax required by Chapter 5749. of the Revised Code.

The fee charged for the license or permit shall be fifty dollars. The remittance for such fee shall accompany the application and shall be made payable to the treasurer of state for deposit in the general revenue fund.

Effective Date: 12-20-1971

5749.06 Filing returns for each calendar quarterly period.

(A)

(1) Each severer liable for the tax imposed by section 5749.02 of the Revised Code and each severer or owner liable for the amounts due under section 1509.50 of the Revised Code shall make and file returns with the tax commissioner in the prescribed form and as of the prescribed times, computing and reflecting therein the tax as required by this chapter and amounts due under section 1509.50 of the Revised Code.

(2) The returns shall be filed for every quarterly period, which periods shall end on the thirty-first day of March, the thirtieth day of June, the thirtieth day of September, and the thirty-first day of December of each year, as required by this section, unless a different return period is prescribed for a taxpayer by the commissioner.

(B)

(1) A separate return shall be filed for each calendar quarterly period, or other period, or any part thereof, during which the severer holds a license as provided by section 5749.04 of the Revised Code, or is required to hold the license, or during which an owner is required to file a return . The return shall be filed within forty-five days after the last day of each such calendar month, or other period, or any part thereof, for which the return is required . The tax due is payable along with the return. All such returns shall contain such information as the commissioner may require to fairly administer the tax.

(2) All returns shall be signed by the severer or owner, as applicable, shall contain the full and complete information requested, and shall be made under penalty of perjury.

(C) If the commissioner believes that quarterly payments of tax would result in a delay that might jeopardize the collection of such tax payments, the commissioner may order that such payments be made weekly, or more frequently if necessary, such payments to be made not later than seven days following the close of the period for which the jeopardy payment is required. Such an order shall be delivered to the taxpayer personally or by certified mail and shall remain in effect until the commissioner notifies the taxpayer to the contrary.

(D) Upon good cause the commissioner may extend for thirty days the period for filing any notice or return required to be filed under this section, and may remit all or a part of penalties that may become due under this chapter.

(E) Any tax and any amount due under section 1509.50 of the Revised Code not paid by the day the tax or amount is due shall bear interest computed at the rate per annum prescribed by section 5703.47 of the Revised Code on that amount due from the day that the amount was originally required to be paid to the day of actual payment or to the day an assessment was issued under section 5749.07 or 5749.10 of the Revised Code, whichever occurs first.

(F) A severer or owner, as applicable, that fails to file a complete return or pay the full amount due under this chapter within the time prescribed, including any extensions of time granted by the commissioner, shall be subject to a penalty not to exceed the greater of fifty dollars or ten per cent of the amount due for the period.

(G)

(1) A severer or owner, as applicable, shall remit payments electronically and, if required by the commissioner, file each return electronically. The commissioner may require that the severer or owner use the Ohio business gateway, as defined in section 718.051 of the Revised Code, or another electronic means to file returns and remit payments electronically.

(2) A severer or owner that is required to remit payments electronically under this section may apply to the commissioner, in the manner prescribed by the commissioner, to be excused from that requirement. The commissioner may excuse a severer or owner from the requirements of division (G) of this section for good cause.

(3) If a severer or owner that is required to remit payments or file returns electronically under this section fails to do so, the commissioner may impose a penalty on the severer or owner not to exceed the following:

(a) For the first or second payment or return the severer or owner fails to remit or file electronically, the greater of five per cent of the amount of the payment that was required to be remitted or twenty-five dollars;

(b) For every payment or return after the second that the severer or owner fails to remit or file electronically, the greater of ten per cent of the amount of the payment that was required to be remitted or fifty dollars.

(H)

(1) All amounts that the commissioner receives under this section shall be deemed to be revenue from taxes imposed under this chapter or from the amount due under section 1509.50 of the Revised Code, as applicable, and shall be deposited in the severance tax receipts fund, which is hereby created in the state treasury.

(2) The director of budget and management shall transfer from the severance tax receipts fund to the tax refund fund amounts equal to the refunds certified by the commissioner under section 5749.08 of the Revised Code. Any amount transferred under division (H)(2) of this section shall be derived from receipts of the same tax or other amount from which the refund arose.

(3) After the director of budget and management makes any transfer required by division (H)(2) of this section, but not later than the fifteenth day of the month following the end of each calendar quarter, the commissioner shall certify to the director the total amount remaining in the severance tax receipts fund organized according to the amount attributable to each natural resource and according to the amount attributable to a tax imposed by this chapter and the amounts due under section 1509.50 of the Revised Code.

(I) Penalties imposed under this section are in addition to any other penalty imposed under this chapter and shall be considered as revenue arising from the tax levied under this chapter or the amount due under section 1509.50 of the Revised Code, as applicable. The commissioner may collect any penalty or interest imposed under this section in the same manner as provided for the making of an assessment in section 5749.07 of the Revised Code. The commissioner may abate all or a portion of such interest or penalties and may adopt rules governing such abatements.

Amended by 130th General Assembly File No. 25, HB 59, §101.01, eff. 9/29/2013.

Amended by 128th General AssemblyFile No.27, SB 165, §1, eff. 6/30/2010.

Effective Date: 01-01-2003

5749.07 Failure to file or pay tax.

(A) If any severer required by this chapter to make and file returns and pay the tax levied by section 5749.02 of the Revised Code, or any severer or owner liable for the amounts due under section 1509.50 of the Revised Code, fails to make such return or pay such tax or amounts, the tax commissioner may make an assessment against the severer or owner based upon any information in the commissioner's possession.

No assessment shall be made or issued against any severer for any tax imposed by section 5749.02 of the Revised Code or against any severer or owner for any amount due under section 1509.50 of the Revised Code more than four years after the return was due or was filed, whichever is later. This section does not bar an assessment against a severer or owner who fails to file a return as required by this chapter, or who files a fraudulent return.

The commissioner shall give the party assessed written notice of such assessment in the manner provided in section 5703.37 of the Revised Code. With the notice, the commissioner shall provide instructions on how to petition for reassessment and request a hearing on the petition.

(B) Unless the party assessed files with the commissioner within sixty days after service of the notice of assessment, either personally or by certified mail, a written petition for reassessment signed by the party assessed or that party's authorized agent having knowledge of the facts, the assessment becomes final and the amount of the assessment is due and payable from the party assessed to the treasurer of state. The petition shall indicate the objections of the party assessed, but additional objections may be raised in writing if received by the commissioner prior to the date shown on the final determination. If the petition has been properly filed, the commissioner shall proceed under section 5703.60 of the Revised Code.

(C) After an assessment becomes final, if any portion of the assessment remains unpaid, including accrued interest, a certified copy of the commissioner's entry making the assessment final may be filed in the office of the clerk of the court of common pleas in the county in which the party assessed resides or in which the party's business is conducted. If the party assessed maintains no place of business in this state and is not a resident of this state, the certified copy of the entry may be filed in the office of the clerk of the court of common pleas of Franklin county.

Immediately upon the filing of such entry, the clerk shall enter a judgment for the state against the party assessed in the amount shown on the entry. The judgment may be filed by the clerk in a loose-leaf book entitled "special judgments for state severance tax," and shall have the same effect as other judgments. Execution shall issue upon the judgment upon the request of the commissioner, and all laws applicable to sales on execution shall apply to sales made under the judgment.

If the assessment is not paid in its entirety within sixty days after the day the assessment is issued, the portion of the assessment consisting of tax due or amounts due under section 1509.50 of the Revised Code shall bear interest at the rate per annum prescribed by section 5703.47 of the Revised Code from the day the commissioner issues the assessment until it is paid or until it is certified to the attorney general for collection under section 131.02 of the Revised Code, whichever comes first. If the unpaid portion of the assessment is certified to the attorney general for collection, the entire unpaid portion of the assessment shall bear interest at the rate per annum prescribed by section 5703.47 of the Revised Code from the date of certification until the date it is paid in its entirety. Interest shall be paid in the same manner as the tax and may be collected by the issuance of an assessment under this section.

(D) All money collected by the commissioner under this section shall be paid to the treasurer of state, and when paid shall be considered as revenue arising from the tax imposed by section 5749.02 of the Revised Code and the amount due under section 1509.50 of the Revised Code, as applicable.

Amended by 130th General Assembly File No. 25, HB 59, §101.01, eff. 9/29/2013.

Amended by 128th General AssemblyFile No.27, SB 165, §1, eff. 6/30/2010.

Effective Date: 09-06-2002

5749.08 Refund of of taxes paid illegally or erroneously or paid on an illegal or erroneous assessment.

The tax commissioner shall refund to taxpayers the amount of taxes levied by section 5749.02 of the Revised Code and amounts due under section 1509.50 of the Revised Code that were paid illegally or erroneously or paid on an illegal or erroneous assessment. Applications for refund shall be filed with the commissioner, on the form prescribed by the commissioner, within four years from the date of the illegal or erroneous payment . On the filing of the application, the commissioner shall determine the amount of refund to which the applicant is entitled, plus interest computed in accordance with section 5703.47 of the Revised Code from the date of the payment of an erroneous or illegal assessment until the date the refund is paid. If the amount is not less than that claimed, the commissioner shall certify the amount to the director of budget and management and treasurer of state for payment from the tax refund fund created by section 5703.052 of the Revised Code. If the amount is less than that claimed, the commissioner shall proceed in accordance with section 5703.70 of the Revised Code.

Amended by 128th General AssemblyFile No.27, SB 165, §1, eff. 6/30/2010.

Effective Date: 09-06-2002

5749.09 Deducting taxpayer's indebtedness to state from refund.

If any person who is entitled to a refund under section 5749.08 of the Revised Code is indebted to the state for any tax, the balance allowable on, the refund application shall be applied in satisfaction of the amount due the state. If the amount refundable is less than the amount due the state, it shall be applied in partial satisfaction of the amount due the state.

Effective Date: 07-01-1985

5749.10 Assessments for taxes in jeopardy.

If the tax commissioner finds that a taxpayer, liable for tax under this chapter or for any amount due under section 1509.50 of the Revised Code is about to depart from the state, or remove the taxpayer's property therefrom, or conceal the taxpayer's person or property, or do any other act tending to prejudice or to render wholly or partly ineffectual proceedings to collect such tax or other amount due unless such proceedings are brought without delay, or if the commissioner believes that the collection of the tax or amount due from any taxpayer will be jeopardized by delay, the commissioner shall give notice of such findings to such taxpayer together with the demand for an immediate return and immediate payment of such tax or other amount due, with penalty as provided in section 5749.15 of the Revised Code, whereupon such tax or other amount due shall become immediately due and payable. In such cases the commissioner may immediately file an entry with the clerk of the court of common pleas in the same manner and with the same effect as provided in section 5749.07 of the Revised Code, provided that if such taxpayer, within five days from notice of the assessment, furnishes evidence satisfactory to the commissioner, under the regulations prescribed by the commissioner, that the taxpayer is not in default in making returns or paying any tax prescribed by this chapter or amount due under section 1509.50 of the Revised Code, or that the taxpayer will duly return and pay, or post bond satisfactory to the commissioner conditioned upon payment of the tax or other amount finally determined to be due, then such tax or other amount due shall not be payable prior to the time and manner otherwise fixed for payment under section 5749.07 of the Revised Code, and the person assessed shall be restored the rights granted under such section. Upon satisfaction of the assessment the commissioner shall order the bond cancelled, securities released, and judgment vacated.

Any assessment issued under this section shall bear interest as prescribed under section 5749.07 of the Revised Code.

Amended by 128th General AssemblyFile No.27, SB 165, §1, eff. 6/30/2010.

Effective Date: 06-30-1997

5749.11 Nonrefundable severance credit tax credit for owner of RC 1513.171 certificate.

(A) There is hereby allowed a nonrefundable credit against the taxes imposed under division (A)(8) of section 5749.02 of the Revised Code for any severer to which a reclamation tax credit certificate is issued under section 1513.171 of the Revised Code. The credit shall be claimed in the amount shown on the certificate. The credit shall be claimed by deducting the amount of the credit from the amount of the first tax payment due under section 5749.06 of the Revised Code after the certificate is issued.

If the amount of the credit shown on a certificate exceeds the amount of the tax otherwise due with that first payment, the excess shall be claimed against the amount of tax otherwise due on succeeding payment dates until the entire credit amount has been deducted. The total amount of credit claimed against payments shall not exceed the total amount of credit shown on the certificate.

(B) A severer claiming a credit under this section shall retain a reclamation tax credit certificate for not less than four years following the date of the last tax payment against which the credit allowed under that certificate was applied. Severers shall make tax credit certificates available for inspection by the tax commissioner upon the tax commissioner's request.

Effective Date: 04-06-2007

5749.12 Nonresidents - service of process.

Any nonresident of this state who accepts the privilege extended by the laws of this state to nonresidents severing natural resources in this state, and any resident of this state who subsequently becomes a nonresident or conceals the resident's whereabouts, makes the secretary of state of Ohio the person's agent for the service of process or notice in any assessment, action, or proceedings instituted in this state against such person under this chapter or for purposes of amounts due under section 1509.50 of the Revised Code.

Such process or notice shall be served as provided under section 5703.37 of the Revised Code.

Amended by 128th General AssemblyFile No.27, SB 165, §1, eff. 6/30/2010.

Amended by 128th General AssemblyFile No.9, HB 1, §101.01, eff. 10/16/2009.

Effective Date: 12-20-1971

5749.13 Maintaining records.

The tax commissioner may prescribe requirements as to the keeping of records and other pertinent documents and the filing of copies of federal income tax returns and determinations. The commissioner may require any person, by rule or by notice served on that person, to keep such records as the commissioner considers necessary to show whether that person is liable, and the extent of liability, for the tax imposed under this chapter and the amount due under section 1509.50 of the Revised Code. Such records and other documents shall be open during business hours to the inspection of the commissioner, and shall be preserved for a period of four years after the date the return was required to be filed or actually was filed, whichever is later, unless the commissioner, in writing, consents to their destruction within that period, or by order requires that they be kept longer.

Amended by 128th General AssemblyFile No.27, SB 165, §1, eff. 6/30/2010.

Effective Date: 07-01-1993

5749.14 Tax commissioner - additional powers.

The tax commissioner shall enforce and administer this chapter and applicable provisions of section 1509.50 of the Revised Code. In addition to any other powers conferred upon the commissioner by law, the commissioner may:

(A) Prescribe all forms required to be filed pursuant to this chapter;

(B) Promulgate such rules as the commissioner finds necessary to carry out this chapter and applicable provisions of section 1509.50 of the Revised Code;

(C) Appoint and employ such personnel as may be necessary to carry out the duties imposed upon the commissioner by this chapter.

Amended by 128th General AssemblyFile No.27, SB 165, §1, eff. 6/30/2010.

Effective Date: 07-20-1973

5749.15 Civil penalties.

Any person who fails to file a return or pay the tax as required under this chapter or other amount due under section 1509.50 of the Revised Code who is assessed such taxes or other amount due pursuant to section 5749.07 or 5749.10 of the Revised Code may be liable for a penalty of up to twenty-five per cent of the amount assessed. The tax commissioner may adopt rules relating to the imposition and remission of penalties imposed under this section.

Amended by 128th General AssemblyFile No.27, SB 165, §1, eff. 6/30/2010.

Effective Date: 09-29-2000

5749.16 Filing incomplete, false, or fraudulent return.

No person shall fail to file any return or report required to be filed by this chapter or file or cause to be filed any incomplete, false, or fraudulent return, report, or statement, or aid or abet another in the filing of any false or fraudulent return, report, or statement.

Effective Date: 12-20-1971

5749.17 Information provided to natural resources department.

Except for purposes of enforcing Chapter 1509. of the Revised Code, any information provided to the department of natural resources by the department of taxation in accordance with division (C)(12) of section 5703.21 of the Revised Code shall not be disclosed publicly by the department of natural resources . However the department of natural resources may provide such information to the attorney general for purposes of enforcement of Chapter 1509. of the Revised Code.

Amended by 130th General Assembly File No. 25, HB 59, §101.01, eff. 9/29/2013.

Amended by 128th General AssemblyFile No.27, SB 165, §1, eff. 6/30/2010.

Effective Date: 2008 HB562 09-22-2008

5749.99 Penalty.

Whoever violates section 5749.16 of the Revised Code is guilty of a felony of the fifth degree.

Effective Date: 07-01-1996