Ohio Corporation Franchise Tax Report Instructions For Financial Institutions

value of air, noise and water pollution control facilities for which

Line 3 – Interest (and fees or penalties in the nature of inter-

the State of Ohio has issued a pollution control certificate, (2) the

est) from loans secured by real property. The numerator of the

net book value of property with respect to which the State of Ohio

factor includes interest (and fees or penalties in the nature of in-

has issued an exemption certificate for a coal gasification facility,

terest) from loans secured by real property located in Ohio. If the

coal conversion demonstration facility, energy conversion facility,

real property that secures the loan is located both within Ohio and

solid waste energy conversion facility or thermal efficiency im-

one or more other states, such amounts are included in the nu-

provements facility, (3) the net book value of qualifying improve-

merator of the sales factor if more than 50 percent of the fair mar-

ments to land or tangible personal property in an enterprise zone

ket value of the real property is located in Ohio. If more than 50

for which the Department of Development has issued a Tax In-

percent of the fair market value of the real property is not located

centive Qualification Certificate, (4) the net book value of proper-

within any one state, then such receipts are included in the nu-

ty within Ohio which is used exclusively during the taxable year

merator of the sales factor if the borrower is located in Ohio.

for qualified research, and (5) the book value of land in Ohio that

The determination of whether the real property securing a loan is

pursuant to section O.R.C. section 5713.31 the county auditor of

located in Ohio is made at the time the original loan agreement

the county in which such land is located has determined is devot-

was made and all subsequent substitutions of collateral are dis-

ed exclusively to agricultural use.

regarded.

Note: For taxable years ending on or after June 26, 2003, the net

Line 4 – Interest (and fees or penalties in the nature of inter-

worth base exempted asset deduction no longer applies to air,

est) from loans not secured by real property. The numerator of

noise, and water pollution control facilities, coal gasification facil-

the factor includes interest (and fees or penalties in the nature of

ities, coal conversion demonstration facilities, energy conversion

interest) from loans not secured by real property if the borrower

facilities, solid waste energy conversion facilities or thermal effi-

is located in Ohio.

ciency improvement facilities for which the State of Ohio has is-

sued an exemption certificate. See O.R.C. section 5709.25(B) as

Line 5 – Net gains from the sale of loans (including income

amended by Amended Substitute House Bill 95, 125

General

recorded under the coupon stripping rules of section 1286 of

Assembly.

the Internal Revenue Code) secured by real property. The

amount of net gain from the sale of loans secured by real proper-

SCHEDULE D – APPORTIONMENT FORMULA

ty included in the numerator of the factor is determined by multi-

plying such net gains by a fraction the numerator of which is inter-

Note: Terms appearing in italics are defined in the law. The

est (and fees or penalties in the nature of interest) from loans

definitions of the terms begin on page 15.

secured by real property located in Ohio and the denominator of

which is the total amount of interest (and fees or penalties in the

Sales Factor

nature of interest) from loans secured by real property.

The sales factor is a fraction, the numerator of which is the tax-

Line 6 – Net gains from the sale of loans (including income

payer’s Ohio receipts during the taxable year and the denomina-

recorded under the coupon stripping rules of section 1286 of

tor of which is the taxpayer’s everywhere receipts during the tax-

the Internal Revenue Code) not secured by real property. The

able year. The method of calculating receipts for purposes of the

amount of net gain from the sale of loans not secured by real

denominator is the same as the method used in determining re-

property included in the numerator of the factor is determined by

ceipts for purposes of the numerator. The sales factor includes

multiplying such net gains by a fraction the numerator of which is

the taxpayer’s receipts from the following sources:

interest from loans not secured by real property to borrowers

located in Ohio and the denominator of which is interest from

Line 1 – Receipts from the lease, or rental of real property

loans not secured by real property to borrowers everywhere.

owned by the taxpayer and receipts from the sublease of real

property. The numerator of the factor (within Ohio) includes re-

Line 7 – Interest (and fees or penalties in the nature of inter-

ceipts from the lease, rental or sublease of real property located

est) from credit card receivables and receipts from fees

in Ohio.

charged to credit cardholders, such as annual fees. The nu-

merator of the factor includes interest (and fees or penalties in

Line 2 – Receipts from the lease or rental of tangible person-

the nature of interest) from credit card receivables and receipts

al property owned by the taxpayer. The numerator of the factor

from fees charged to credit cardholders, such as annual fees, if

includes receipts from the lease or rental of tangible personal prop-

the billing address of the cardholder is in Ohio.

erty other than transportation property if the property is located

in Ohio when first placed in service by the lessee. The numerator

Line 8 – Net gains from the sale of credit card receivables.

of the factor also includes receipts from the lease or rental of trans-

The amount of such net gains included in the numerator of the

portation property owned by the taxpayer to the extent that the

factor is determined by multiplying such net gains by a fraction,

property is used in Ohio. The extent an aircraft is deemed to be

the numerator of which is the sum of (1) interest (and fees or

used in Ohio and the amount of receipts included in the numera-

penalties in the nature of interest) from credit card receivables if

tor of the factor is determined by multiplying all the receipts from

the billing address of the cardholder is in Ohio and (2) fees

the lease or rental of the aircraft by a fraction, the numerator of

charged to credit cardholders, such as annual fees, if the billing

which is the number of landings of the aircraft in Ohio and the

address of the cardholder is in Ohio. The denominator of the frac-

denominator of which is the total number of landings of the air-

tion is the sum of such amounts for credit cardholders everywhere.

craft. If the extent of use within Ohio of any transportation proper-

ty cannot be determined, the property will be deemed to be used

Line 9 – Credit card issuer’s reimbursement fees. The amount

wholly in the state in which the property has its principal base of

of credit card issuer’s reimbursement fees included in the numer-

operations. A motor vehicle is deemed to be used wholly in the

ator of the factor is determined by multiplying such fees by the

state in which it is registered.

fraction determined in the instructions for line #8, above.

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Ohio Corporation Franchise Tax Report Instructions For Financial Institutions - 2004 Page 12

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