Ohio Corporation Franchise Tax Report Instructions For Financial Institutions

For tax year 2006 the amount of the credit equals one-half

•

The aggregate amount of credits authorized may not

of the average of the eligible training costs paid or incurred

exceed $20 million dollars per calendar year;

by the taxpayer during calendar years 2003, 2004, and 2005.

•

No more than $10 million dollars in credits per calen-

(The credit is based upon costs incurred during a calendar

dar year may be authorized for corporations engaged

year regardless of whether the taxpayer has a fiscal year

primarily in manufacturing;

end.) The credit claimed by a taxpayer each tax year may

•

No less than $5 million dollars per calendar year will

not exceed $100,000 and for each tax year is not to exceed

be set aside for corporations engaged primarily in

$1,000 for each eligible employee on account of whom eli-

activities other than manufacturing and having fewer

gible training costs were paid or incurred by the taxpayer

than five hundred employees.

during the calendar years applicable to that tax year.

If the director issues the taxpayer a tax credit certificate

“Eligible training program” means a program to provide

and later determines that the training program fails to

job skills to eligible employees who are unable to function

meet the above requirements, the director may reduce

effectively on the job due to skill deficiencies or who would

the amount of the credit previously granted. If the Direc-

otherwise be displaced because of their skill deficiencies or

tor reduces the credit, the director must certify the re-

inability to use new technology or to provide job skills to

duction to the tax commissioner, and the tax commis-

eligible employees that enable them to perform other job

sioner will reduce the credit accordingly. The taxpayer

duties for the taxpayer. Eligible training programs do not

can appeal the reduction or denial of the credit to the

include executive, management, or personal enrichment

Director of the Department of Job and Family Services

training programs, or training programs intended exclusive-

and can appeal the director’s determination to the Board

ly for personal career development.

of Tax Appeals.

“Eligible training costs” are the sum of the following

Taxpayers must use the credit in the order established in

amounts: (1) direct instructional costs, such as, instructor

O.R.C. section 5733.98 and may carry forward unused credit

salaries, materials and supplies, textbooks and manuals,

amounts for three tax years following the tax year for which

videotapes, and other instructional media and training equip-

the credit is computed.

ment used exclusively for the purpose of training “eligible

The Job Training Credit did not appear on the 2003 franchise

employees,” and (2) wages paid to eligible employees for

tax report because this temporary credit did not apply to tax

time devoted exclusively to an “eligible training program”

year 2003. As a result of Amended Substitute House Bill 94,

during normal paid working hours.

124

General Assembly (the Budget Bill enacted in June

“Eligible employees” are individuals who are employed

2001), the credit now applies to tax years 2001, 2004, 2005

full-time by the taxpayer in Ohio and have been so employed

and 2006. The Legislature significantly amended the credit

by the taxpayer for at least one hundred eighty consecutive

in Amended Substitute Senate Bill 287, 123

General As-

days before the day an application for the credit is filed.

sembly.

“Eligible employees” do not include executive or manageri-

Credit for Employers that Establish On-Site Child Day-

al personnel except for the immediate supervisors of

Care Centers (O.R.C. section 5733.37). A taxpayer that es-

nonexecutive, nonmanagerial personnel, employees for

tablishes an Ohio licensed day-care center that serves only

whom the taxpayer claims the enterprise zone training credit

children of the taxpayer’s employees and is located at the

pursuant to O.R.C. section 5709.65(A) or employees that

employees’ worksite may claim a credit equal to the lesser of

are not full-time employees. See credit #16 for a summary

one hundred thousand dollars or 50 percent of the amount

of the enterprise zone training credit.

the taxpayer incurred for equipment, supplies, labor, and real

A taxpayer that proposes to conduct an eligible training pro-

property, including renovation of real property, to establish

gram for which the taxpayer intends to claim the credit must

the day-care center. The taxpayer can claim the credit only

apply to the Director of Job and Family Services for a tax

for the tax year immediately following the taxable year in which

credit certificate for each tax year with respect to a calendar

the child day-care center begins operations, and the taxpay-

year in which the taxpayer incurred eligible training costs.

er can claim the credit only for tax year 1999, 2000, 2001,

The Director may charge an application fee to cover the

2002, or 2003. The credit amount that the taxpayer does not

expenses incurred in administering the credit program, and

use in the tax year claimed may be carried forward for five

the Director may adopt rules to implement and administer

taxable years. However, if the taxpayer ceases to operate the

the credit.

center within the five-year carryforward period, any unused

portion of the credit is lost. O.R.C. 5733.37.

Upon receipt of an application the Director of Job and Fam-

ily Services may authorize a credit by granting the appli-

Ethanol plant investment credit (O.R.C. sections 5733.46

cant a tax credit certificate if the Director determines that all

and 901.13). This nonrefundable franchise tax and individual

of the following conditions are satisfied:

income tax credit equals 50 percent of the amount of money

(i) The proposed training program is an “eligible training

that the taxpayer invests in O.R.C. section 901.13 certified

program,” as defined above;

ethanol plants in the calendar year preceding the tax year

(ii) The proposed training program is economically sound

(the investment period is the calendar year preceding the tax

and will benefit the people of Ohio by improving work

year regardless of whether the taxpayer’s taxable year is a

force skills and strengthening the economy of Ohio;

calendar year). The credit is limited to $5,000 per taxpayer

(iii) Receiving the credit is a major factor in the taxpayer’s

per certified ethanol plant regardless of the number of years

decision to implement the program;

in which the taxpayer makes such investments. The credit

(

iv) Authorization of the credit is consistent with the follow-

applies to tax years 2003 through 2013. Credits not used in

ing:

the tax year following the calendar year in which the taxpayer

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Ohio Corporation Franchise Tax Report Instructions For Financial Institutions - 2004 Page 20

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