Instructions For Ohio Form Ft 1120fi - Ohio Corporation Franchise Tax Report

Ohio Corporation Franchise Tax Instructions for

General Instructions and Information

Financial Institutions

The Ohio corporation franchise tax is an excise tax imposed on

Tax Year (Report Year) 2012

certain domestic and foreign corporations for the privilege of doing

Taxable Year Ending in 2011

business in Ohio, owning capital or property in Ohio, holding a

Ohio Form FT 1120FI

charter or certiﬁ cate of compliance authorizing the corporation to

The 2012 franchise tax instructions that follow apply only to

do business in Ohio, or otherwise having nexus with Ohio during

ﬁ nancial institutions (deﬁ ned below). With the completion of

a calendar year. Unless otherwise exempt, those corporations to

the franchise tax phase-out in 2009, most corporations are not

which the franchise tax phase-out does not apply are subject to

subject to the franchise tax for tax years (report years) 2010 and

the franchise tax for each calendar year (tax year) for which on

thereafter. However, ﬁ nancial institutions along with certain other

the ﬁ rst day of January of that calendar year the corporation holds

corporations described in R.C. 5733.01(G) and 5751.01(E) are

an Ohio charter, does business in Ohio, owns or uses a part or all

an exception. Financial institutions must ﬁ le Ohio form FT 1120FI.

of its capital or property in Ohio, holds a certiﬁ cate of compliance

Other corporations remaining subject to the franchise tax must ﬁ le

authorizing the corporation to do business in Ohio, or otherwise

Ohio form FT 1120, the instructions for which are in a separate ﬁ le

has nexus with Ohio under the Constitution of the United States.

on our Web site.

The franchise tax is levied on the value of a corporation’s issued and

In our continuing effort to serve Ohio taxpayers in a cost-effective

outstanding shares of stock. The value of issued and outstanding

manner the Department of Taxation did not mail the 2012

shares of stock is determined from the books of the taxpayer

franchise tax instruction booklet or the 2012 franchise tax

as of the beginning of the taxpayer’s annual accounting period

forms. Instead, the franchise tax instructions and forms are

that includes the ﬁ rst day of January of the tax year. See R.C.

available on the Department of Taxation’s Web site. In addition to

5733.056(B). Corporations remaining subject to the franchise tax

forms and instructions, our Web site has links to the Ohio Revised

after the phase-out, other than ﬁ nancial institutions, must determine

Code, Administrative Code (tax commissioner rules), Department of

the value of their issued and outstanding shares of stock under both

Taxation information releases, and other information. We encourage

the net income base and the net worth base and pay the tax on the

you to become familiar with our Web site:

base that produces the greater tax. Financial institutions are not

subject to the tax on the net income base but are subject to the tax

tax.ohio.gov

on the net worth base at a higher rate than other taxpayers. Financial

institutions must ﬁ le Ohio form FT 1120FI. Other corporations

Taxpayers not having Internet access can obtain forms and

remaining subject to the franchise tax must ﬁ le Ohio form FT 1120.

printed instructions by calling us toll free at 1-800-282-1782.

Tax year. The calendar year in and for which the tax is paid is

A ﬁ nancial institution is any of the following:

called the “tax year.” The tax year is also referred to as the “report

• A national bank organized and existing as a national bank

year.” The franchise tax for tax year 2012 is paid for the privilege of

association pursuant to the “National Bank Act,” 12 U.S.C. 21;

doing business in Ohio during the calendar year 2012.

• A federal savings association or federal savings bank that is

chartered under 12 U.S.C. 1464;

Taxable year. The accounting period on which the tax is based

• A bank, banking association, trust company, savings and loan

is called the “taxable year” and is deﬁ ned as “. . . a period ending

association, savings bank or other banking institution that is

on the date immediately preceding the date of commencement of

incorporated or organized under the laws of any state;

the corporation’s annual accounting period that includes the ﬁ rst day

• Any corporation organized under 12 U.S.C. 611 to 631;

of January of the tax year.” Generally, a corporation’s taxable year

• Any agency or branch of a foreign depository as deﬁ ned in 12

for franchise tax purposes is the same as the corporation’s taxable

U.S.C. 3101;

year for federal income tax purposes. However, a corporation’s

• A company licensed as a small business investment company

franchise tax taxable year may consist of an aggregation of

under the “Small Business Investment Act of 1958,” 72 Stat. 689,

more than one federal taxable year and can exceed one year in

15 U.S.C. 661, as amended; or

length. The franchise tax for tax year 2012 is based upon the

• A company chartered under the “Farm Credit Act of 1933,” 48

taxpayer’s activity during its taxable year ending in 2011. See

Stat. 257, 12 U.S.C. 1131(d), as amended.

R.C. 5733.031(A), 5733.04(E) and general instruction #7. Unless

otherwise stated, all references are to the Ohio Revised Code (R.C).

Speciﬁ cally excluded from the deﬁ nition of a "ﬁ nancial institution"

(and from the deﬁ nition of a "dealer in intangibles") are insurance

1. Who Must File

companies, credit unions and corporations or institutions organized

Unless an exemption applies (see general instruction #2), a ﬁ nancial

under the “Federal Farm Loan Act” and amendments thereto. In

institution is subject to the franchise tax for each calendar year

addition, for franchise tax purposes a production credit association

(tax year) that on the ﬁ rst day of January of that calendar year the

is not a ﬁ nancial institution.

corporation holds an Ohio charter, does business in Ohio, owns or

uses a part or all of its capital or property in Ohio, holds a certiﬁ cate

Recent Legislation

of compliance authorizing the corporation to do business in Ohio,

or otherwise has nexus with Ohio under the Constitution of the

During calendar year 2011 the Ohio General Assembly enacted

United States.

no signiﬁ cant legislation affecting the franchise tax.

Each ﬁ nancial institution that is subject to the franchise tax must ﬁ le

Decisions

an Ohio corporation franchise tax report. Financial institutions must

Ohio Supreme Court

ﬁ le Ohio form FT 1120FI; all other C corporations that remain subject

to the franchise tax after the phase-out must ﬁ le Ohio form FT 1120.

During calendar year 2011 neither the Board of Tax Appeals nor

the courts issued any decisions that signiﬁ cantly affect the Ohio

corporation franchise tax.

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Instructions For Ohio Form Ft 1120fi - Ohio Corporation Franchise Tax Report - 2012 Page 3

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