As Introduced
135th General Assembly
Regular Session H. B. No. 675
2023-2024
Representatives Whitted, Baker
Cosponsors: Representatives Piccolantonio, Denson, Miller, A., Dell'Aquila,
Liston, Brennan, Russo, Upchurch, Grim, Isaacsohn, Weinstein, Somani, Miller, J.,
Jarrells
A BILL
To amend sections 718.01 and 5747.01 and to enact 1
section 3333.1210 of the Revised Code to 2
establish the Social Work Internship Grant 3
Program, to exempt grants received under the 4
program from state and local income taxes, and 5
to make an appropriation. 6
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 718.01 and 5747.01 be amended and 7
section 3333.1210 of the Revised Code be enacted to read as 8
follows: 9
Sec. 718.01. Any term used in this chapter that is not 10
otherwise defined in this chapter has the same meaning as when 11
used in a comparable context in laws of the United States 12
relating to federal income taxation or in Title LVII of the 13
Revised Code, unless a different meaning is clearly required. 14
Except as provided in section 718.81 of the Revised Code, if a 15
term used in this chapter that is not otherwise defined in this 16
chapter is used in a comparable context in both the laws of the 17
H. B. No. 675 Page 2
As Introduced
United States relating to federal income tax and in Title LVII 18
of the Revised Code and the use is not consistent, then the use 19
of the term in the laws of the United States relating to federal 20
income tax shall control over the use of the term in Title LVII 21
of the Revised Code. 22
Except as otherwise provided in section 718.81 of the 23
Revised Code, as used in this chapter: 24
(A)(1) "Municipal taxable income" means the following: 25
(a) For a person other than an individual, income 26
apportioned or sitused to the municipal corporation under 27
section 718.02 of the Revised Code, as applicable, reduced by 28
any pre-2017 net operating loss carryforward available to the 29
person for the municipal corporation. 30
(b)(i) For an individual who is a resident of a municipal 31
corporation other than a qualified municipal corporation, income 32
reduced by exempt income to the extent otherwise included in 33
income, then reduced as provided in division (A)(2) of this 34
section, and further reduced by any pre-2017 net operating loss 35
carryforward available to the individual for the municipal 36
corporation. 37
(ii) For an individual who is a resident of a qualified 38
municipal corporation, Ohio adjusted gross income reduced by 39
income exempted, and increased by deductions excluded, by the 40
qualified municipal corporation from the qualified municipal 41
corporation's tax. If a qualified municipal corporation, on or 42
before December 31, 2013, exempts income earned by individuals 43
who are not residents of the qualified municipal corporation and 44
net profit of persons that are not wholly located within the 45
qualified municipal corporation, such individual or person shall 46
H. B. No. 675 Page 3
As Introduced
have no municipal taxable income for the purposes of the tax 47
levied by the qualified municipal corporation and may be 48
exempted by the qualified municipal corporation from the 49
requirements of section 718.03 of the Revised Code. 50
(c) For an individual who is a nonresident of a municipal 51
corporation, income reduced by exempt income to the extent 52
otherwise included in income and then, as applicable, 53
apportioned or sitused to the municipal corporation under 54
section 718.02 of the Revised Code, then reduced as provided in 55
division (A)(2) of this section, and further reduced by any pre- 56
2017 net operating loss carryforward available to the individual 57
for the municipal corporation. 58
(2) In computing the municipal taxable income of a 59
taxpayer who is an individual, the taxpayer may subtract, as 60
provided in division (A)(1)(b)(i) or (c) of this section, the 61
amount of the individual's employee business expenses reported 62
on the individual's form 2106 that the individual deducted for 63
federal income tax purposes for the taxable year, subject to the 64
limitation imposed by section 67 of the Internal Revenue Code. 65
For the municipal corporation in which the taxpayer is a 66
resident, the taxpayer may deduct all such expenses allowed for 67
federal income tax purposes. For a municipal corporation in 68
which the taxpayer is not a resident, the taxpayer may deduct 69
such expenses only to the extent the expenses are related to the 70
taxpayer's performance of personal services in that nonresident 71
municipal corporation. 72
(B) "Income" means the following: 73
(1)(a) For residents, all income, salaries, qualifying 74
wages, commissions, and other compensation from whatever source 75
earned or received by the resident, including the resident's 76
H. B. No. 675 Page 4
As Introduced
distributive share of the net profit of pass-through entities 77
owned directly or indirectly by the resident and any net profit 78
of the resident, except as provided in division (D)(5) of this 79
section. 80
(b) For the purposes of division (B)(1)(a) of this 81
section: 82
(i) Any net operating loss of the resident incurred in the 83
taxable year and the resident's distributive share of any net 84
operating loss generated in the same taxable year and 85
attributable to the resident's ownership interest in a pass- 86
through entity shall be allowed as a deduction, for that taxable 87
year and the following five taxable years, against any other net 88
profit of the resident or the resident's distributive share of 89
any net profit attributable to the resident's ownership interest 90
in a pass-through entity until fully utilized, subject to 91
division (B)(1)(d) of this section; 92
(ii) The resident's distributive share of the net profit 93
of each pass-through entity owned directly or indirectly by the 94
resident shall be calculated without regard to any net operating 95
loss that is carried forward by that entity from a prior taxable 96
year and applied to reduce the entity's net profit for the 97
current taxable year. 98
(c) Division (B)(1)(b) of this section does not apply with 99
respect to any net profit or net operating loss attributable to 100
an ownership interest in an S corporation unless shareholders' 101
distributive shares of net profits from S corporations are 102
subject to tax in the municipal corporation as provided in 103
division (C)(14)(b) or (c) of this section. 104
(d) Any amount of a net operating loss used to reduce a 105
H. B. No. 675 Page 5
As Introduced
taxpayer's net profit for a taxable year shall reduce the amount 106
of net operating loss that may be carried forward to any 107
subsequent year for use by that taxpayer. In no event shall the 108
cumulative deductions for all taxable years with respect to a 109
taxpayer's net operating loss exceed the original amount of that 110
net operating loss available to that taxpayer. 111
(2) In the case of nonresidents, all income, salaries, 112
qualifying wages, commissions, and other compensation from 113
whatever source earned or received by the nonresident for work 114
done, services performed or rendered, or activities conducted in 115
the municipal corporation, including any net profit of the 116
nonresident, but excluding the nonresident's distributive share 117
of the net profit or loss of only pass-through entities owned 118
directly or indirectly by the nonresident. 119
(3) For taxpayers that are not individuals, net profit of 120
the taxpayer; 121
(4) Lottery, sweepstakes, gambling and sports winnings, 122
winnings from games of chance, and prizes and awards. If the 123
taxpayer is a professional gambler for federal income tax 124
purposes, the taxpayer may deduct related wagering losses and 125
expenses to the extent authorized under the Internal Revenue 126
Code and claimed against such winnings. 127
(C) "Exempt income" means all of the following: 128
(1) The military pay or allowances of members of the armed 129
forces of the United States or members of their reserve 130
components, including the national guard of any state; 131
(2)(a) Except as provided in division (C)(2)(b) of this 132
section, intangible income; 133
(b) A municipal corporation that taxed any type of 134
H. B. No. 675 Page 6
As Introduced
intangible income on March 29, 1988, pursuant to Section 3 of 135
S.B. 238 of the 116th general assembly, may continue to tax that 136
type of income if a majority of the electors of the municipal 137
corporation voting on the question of whether to permit the 138
taxation of that type of intangible income after 1988 voted in 139
favor thereof at an election held on November 8, 1988. 140
(3) Social security benefits, railroad retirement 141
benefits, unemployment compensation, pensions, retirement 142
benefit payments, payments from annuities, and similar payments 143
made to an employee or to the beneficiary of an employee under a 144
retirement program or plan, disability payments received from 145
private industry or local, state, or federal governments or from 146
charitable, religious or educational organizations, and the 147
proceeds of sickness, accident, or liability insurance policies. 148
As used in division (C)(3) of this section, "unemployment 149
compensation" does not include supplemental unemployment 150
compensation described in section 3402(o)(2) of the Internal 151
Revenue Code. 152
(4) The income of religious, fraternal, charitable, 153
scientific, literary, or educational institutions to the extent 154
such income is derived from tax-exempt real estate, tax-exempt 155
tangible or intangible property, or tax-exempt activities. 156
(5) Compensation paid under section 3501.28 or 3501.36 of 157
the Revised Code to a person serving as a precinct election 158
official to the extent that such compensation does not exceed 159
one thousand dollars for the taxable year. Such compensation in 160
excess of one thousand dollars for the taxable year may be 161
subject to taxation by a municipal corporation. A municipal 162
corporation shall not require the payer of such compensation to 163
withhold any tax from that compensation. 164
H. B. No. 675 Page 7
As Introduced
(6) Dues, contributions, and similar payments received by 165
charitable, religious, educational, or literary organizations or 166
labor unions, lodges, and similar organizations; 167
(7) Alimony and child support received; 168
(8) Compensation for personal injuries or for damages to 169
property from insurance proceeds or otherwise, excluding 170
compensation paid for lost salaries or wages or compensation 171
from punitive damages; 172
(9) Income of a public utility when that public utility is 173
subject to the tax levied under section 5727.24 or 5727.30 of 174
the Revised Code. Division (C)(9) of this section does not apply 175
for purposes of Chapter 5745. of the Revised Code. 176
(10) Gains from involuntary conversions, interest on 177
federal obligations, items of income subject to a tax levied by 178
the state and that a municipal corporation is specifically 179
prohibited by law from taxing, and income of a decedent's estate 180
during the period of administration except such income from the 181
operation of a trade or business; 182
(11) Compensation or allowances excluded from federal 183
gross income under section 107 of the Internal Revenue Code; 184
(12) Employee compensation that is not qualifying wages as 185
defined in division (R) of this section; 186
(13) Compensation paid to a person employed within the 187
boundaries of a United States air force base under the 188
jurisdiction of the United States air force that is used for the 189
housing of members of the United States air force and is a 190
center for air force operations, unless the person is subject to 191
taxation because of residence or domicile. If the compensation 192
is subject to taxation because of residence or domicile, tax on 193
H. B. No. 675 Page 8
As Introduced
such income shall be payable only to the municipal corporation 194
of residence or domicile. 195
(14)(a) Except as provided in division (C)(14)(b) or (c) 196
of this section, an S corporation shareholder's distributive 197
share of net profits of the S corporation, other than any part 198
of the distributive share of net profits that represents wages 199
as defined in section 3121(a) of the Internal Revenue Code or 200
net earnings from self-employment as defined in section 1402(a) 201
of the Internal Revenue Code. 202
(b) If, pursuant to division (H) of former section 718.01 203
of the Revised Code as it existed before March 11, 2004, a 204
majority of the electors of a municipal corporation voted in 205
favor of the question at an election held on November 4, 2003, 206
the municipal corporation may continue after 2002 to tax an S 207
corporation shareholder's distributive share of net profits of 208
an S corporation. 209
(c) If, on December 6, 2002, a municipal corporation was 210
imposing, assessing, and collecting a tax on an S corporation 211
shareholder's distributive share of net profits of the S 212
corporation to the extent the distributive share would be 213
allocated or apportioned to this state under divisions (B)(1) 214
and (2) of section 5733.05 of the Revised Code if the S 215
corporation were a corporation subject to taxes imposed under 216
Chapter 5733. o