Ohio Corporation Franchise Tax Report Instructions For Financial Institutions

Line 10 – Receipts from merchant discount. Such receipts are

B. Average value method for determining components of the nu-

computed net of any card holder charge backs, but are not re-

merator with respect to interest, dividends, net gains and oth-

duced by any interchange transaction fees or by any issuer’s re-

er income from investment assets and activities and from trad-

imbursement fees paid to another for charges made by its

ing assets and activities described above. “Average value” as

cardholders.

used below is determined using the same rules for determin-

ing the average value of tangible personal property for pur-

The numerator of the factor includes receipts from merchant dis-

poses of the property factor.

counts if the commercial domicile of the merchant is in Ohio.

(i) The amount of interest and dividends (other than interest

and dividends from a subsidiary corporation at least 51

Line 11 – Loan-servicing fees derived from loans secured by

percent of whose common stock is owned by the taxpay-

real property. The amount of such loan servicing fees included

er) and the amount of net gains and other income from

in the numerator of the factor is determined by multiplying such

investment assets and activities in the investment account

fees by a fraction the numerator of which is the amount included

included in the numerator of the factor is determined by

in the numerator of the sales factor pursuant to the instructions

multiplying all such income from such assets and activi-

for line #3 above, and the denominator of which is the total amount

ties by a fraction, the numerator of which is the average

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

value of such assets which are properly assigned to a reg-

loans secured by real property.

ular place of business of the taxpayer within Ohio and

the denominator of which is the average value of all such

Line 12 – Loan-servicing fees derived from loans not secured

assets.

by real property. The amount of such loan servicing fees includ-

(ii) The amount of interest from federal funds sold and pur-

ed in the numerator of the factor is determined by multiplying such

chased and from securities purchased under resale agree-

fees by a fraction the numerator of which is the amount included

ments and securities sold under repurchase agreements

in the numerator of the sales factor pursuant to the instructions

included in the numerator of the factor is determined by

for line #4 above, and the denominator of which is the total amount

multiplying the amount by which interest from federal funds

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

sold and securities purchased under resale agreements

loans not secured by real property.

exceeds interest expense on federal funds purchased and

securities sold under repurchase agreements by a frac-

Line 13 – Loan-servicing fees for servicing either the secured

tion, the numerator of which is the average value of feder-

or unsecured loans of others. The numerator of the factor in-

al funds sold and securities purchased under agreements

cludes loan-servicing fees for servicing either the secured or un-

to resell which are properly assigned to a regular place

secured loans of another if the borrower is located in Ohio.

of business of the taxpayer within Ohio and the denomi-

nator of which is the average value of all such funds and

Line 14 – Receipts from services not otherwise apportioned.

such securities.

The numerator of the factor includes receipts from services not

(iii) The amount of interest, dividends, gains, and other income

otherwise apportioned if the service is performed in Ohio. If the

from trading assets and activities, but excluding amounts

service is performed both within and without Ohio, the numerator

described in B(i) and B(ii) above included in the numera-

of the sales factor includes receipts from such services, if a great-

tor of the factor is determined by multiplying the amount

er proportion of the income producing activity is performed in Ohio

described in A(ii) above, by a fraction, the numerator of

based on cost of performance.

which is the average value of such trading assets which

are properly assigned to a regular place of business of

Line 15 – Interest, dividends, net gains, and other income

the taxpayer within Ohio and the denominator of which is

from investment assets and activities and from trading as-

the average value of all such assets.

sets and activities. “Investment assets and activities” and “trad-

(iv) Dividends and interest received from subsidiaries - amount

ing assets and activities” include but are not limited to: invest-

included in numerator. The amount of dividends received

ment securities, trading account assets, federal funds, securities

on the capital stock of, and the amount of interest received

purchased and sold under agreements to resell or repurchase,

from loans and advances to, subsidiary corporations at

options, futures contracts, forward contracts, notional principal

least 51 percent of whose common stock is owned by the

contracts such as swaps, equities, and foreign currency transac-

taxpayer included in the numerator of the factor is deter-

tions.

mined by multiplying such dividends and interest by a frac-

A. Components of the denominator with respect to interest, divi-

tion the numerator of which is the sum of the net book

dends, net gains and other income from investment assets

value of the payor’s real property owned in Ohio and the

and activities and from trading assets and activities:

payor’s tangible personal property owned in Ohio and

(i) With respect to investment assets and activities and trad-

whose denominator is the sum of the net book value of

ing assets and activities, the factor includes the amount

the payor’s real property owned wherever located and the

by which interest from federal funds sold and securities

payor’s tangible personal property owned wherever locat-

purchased under resale agreements exceeds interest ex-

ed. For purposes of determining this fraction, the taxpayer

pense on federal funds purchased and securities sold un-

must determine net book value in accordance with gener-

der repurchase agreements.

ally accepted accounting principles.

(ii) With respect to trading assets and activities, the factor

includes the amount by which interest, dividends, gains,

C. Gross income method for determining components of the nu-

and other income from trading assets and activities, in-

merator with respect to interest, dividends, net gains, and oth-

cluding, but not limited to assets and activities in the

er income from investment assets and activities and from trad-

matched book, in the arbitrage book, and foreign curren-

ing assets and activities described above. In lieu of using the

cy transactions, exceed amounts paid in lieu of interest,

average value method set forth in the instructions for item 15(B)

amounts paid in lieu of dividends, and losses from such

above, the taxpayer may elect, or the tax commissioner may

assets and activities.

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Ohio Corporation Franchise Tax Report Instructions For Financial Institutions - 2004 Page 13

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