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

Ohio Department of Taxation

Reason:

Business Tax Division

• The R.C. 5733.12 franchise tax refund statute of limitations states

Corporation Franchise Tax Unit

that a refund claim must be ﬁ led within three years from the date

P.O. Box 2476

of the illegal, erroneous, or excessive payment.

Columbus, Ohio 43216-2476

• R.C. 5733.12 also provides for the payment of interest on

overpayments "as provided by section 5733.26 of the Revised

Please indicate that the report is amended by checking the

Code."

appropriate box on the front of the report. If the amended

• R.C. 5733.26 states that interest on an overpayment is paid from

report reﬂ ects an underpayment, please include payment

the date of the illegal, erroneous or excessive payment – the same

along with the applicable interest on the amount due. If the

term used in R.C. 5733.12.

amended report reﬂ ects an overpayment, please include

• In Nestle R&D Ctr., Inc. v. Levin Slip Opinion No. 2009-Ohio-

(i) an Application for Corporation Franchise Tax Refund

1929 the Ohio Supreme Court held that the date of the illegal,

(Ohio form FT REF) or (ii) a complete explanation of the

erroneous or excessive payment with respect to the refund statute

amendment. See Abitibi-Price Corporation and Subsidiaries

of limitations for the jobs creation tax credit is the date on which

v. Tracy, BTA No. 98-N-401 (3-12-01) and refer to general

the tax credit authority issues a tax credit certiﬁ cate for the amount

instruction #20.

of the credit.

• As such, the department will compute interest on overpayments

Note: An overpayment shown on an amended report

resulting from the jobs creation tax credit (and other franchise tax

cannot be credited against the tax liability for any other

credits that when claimed must be substantiated by a tax credit

year.

certiﬁ cate) from the date that the ODOD issued the tax credit

certiﬁ cate – not from the date that the taxpayer paid the tax.

D. EFT Method of Payment

A taxpayer must pay by electronic funds transfer (EFT) if for

In Nestle the Ohio Supreme Court held that Nestle’s 2001 franchise

the second preceding tax year the taxpayer’s total franchise

tax refund claim ﬁ led Jan. 6, 2005, based on a jobs creation tax credit

tax liability after reduction for nonrefundable credits exceeded

(JCTC) certiﬁ cate issued by the ODOD on Dec. 6, 2004, was timely

$50,000. Nevertheless, payments made with an amended

ﬁ led within the R.C. 5733.12 refund statute of limitations period

report cannot be made by EFT. For further EFT information

because the three-year refund statute of limitations with respect to

see the Department of Taxation’s July 31, 1994 franchise tax

Nestle’s JCTC for tax year 2001 began to run on the date that ODOD

information release entitled “Recently Enacted Legislation

issued the tax credit certiﬁ cate substantiating the credit amount.

Revises the Requirements for Corporations Paying Corporate

The court stated as follows: “ . . . the issuance on Dec. 6, 2004 of

Franchise Tax by Electronic Funds Transfer (EFT).” The infor-

the certiﬁ cate for taxable year 2000 retroactively established the

mation release is available on the Department of Taxation’s

illegal and excessive character of payments attributable to the tax

Web site. Please direct questions regarding the EFT payment

year 2001 up to the amount of the credit (and also that the taxpayer

program to the Ohio Treasurer of State’s ofﬁ ce at 30 East

would be entitled to collect the excess of credit over payments, if

Broad Street, 9

Floor, Columbus, Ohio 43215, or call that

any). At that point the refund claim accrued for purposes of the

ofﬁ ce toll-free at 1-877-338-6446.

limitations period and, as a result, the ﬁ ling of the refund claim in

January 2005 was timely.” See Nestle R&D Ctr., Inc. v. Levin Slip

10. Interest on Underpayments and Overpayments

Opinion No. 2009-Ohio-1929.

During calendar year 2012 interest on underpayments and

overpayments accrues at the rate of 3% per annum (based on

11. Penalties for Late Payment, Failure to File or Late Filing

the rounded federal short term rate of 0% plus the additional 3%

• Penalty may be imposed for failure to timely pay the tax (including

prescribed by R.C. 5703.47(B)). See the tax commissioner’s Oct. 14,

estimated tax). Late payment penalty may not exceed 15% of the

2011 administrative journal entry located at: tax.ohio.gov/divisions/

delinquent payment. See R.C. 5733.28(A)(2); also see “penalty

ohio_individual/individual/interest_rates.stm. Also see R.C 5703.47.

safe harbor for estimated payments” below.

• Penalty may be imposed for failure to ﬁ le or to timely ﬁ le a report.

If a corporation fails to pay the tax by the date payment is due,

The penalty imposed may not exceed the greater of (i) $50 per

interest accrues on the unpaid tax. In addition, penalties may be

month up to $500 or (ii) 5% per month of the tax due shown on

charged for late ﬁ ling, late payment or failure to ﬁ le. The period of

the report up to 50%.

the underpayment runs from the date payment was required to the

• Additional penalties may be imposed for ﬁ ling a fraudulent report

date on which payment is made. There is no safe-harbor from

and for ﬁ ling a fraudulent refund claim.

interest on the underpayment of estimated tax.

12. Penalty Safe Harbor for Estimated Payments

Interest on franchise tax overpayments runs from whichever of the

The following safe harbor applies to penalty (but not to interest) on

following dates is the latest until the date the refund is paid:

the underpayment of estimated tax:

• the date of payment,

•

With respect to estimated payments, the R.C. 5733.28(A)(2)

• the 90th day after the ﬁ nal date the franchise tax report was

failure to pay penalty applies to two periods: (1) “any period of

required to be ﬁ led, or

delinquency ending prior to the ﬁ rst day of June of the tax year”

• the 90th day after the date that the franchise tax report was ﬁ led.

and (2) “any period of delinquency commencing the ﬁ rst day of

Interest on overpayments with respect to those franchise

June of the tax year and concluding on the extended due date.”

tax credits that cannot be claimed until receipt of a tax credit

See R.C. 5733.021.

certiﬁ cate substantiating the credit amount is payable from

•

For purposes of determining the R.C. 5733.28(A)(2) failure to pay

the date that the tax credit certiﬁ cate is issued – not from the

penalty for any period of delinquency ending prior to the ﬁ rst day

date the taxpayer paid the tax. Examples of franchise tax credits

of June of the tax year, the commissioner may charge penalty on

that cannot be claimed until receipt of a credit certiﬁ cate include,

the delinquent portion of the estimated tax. “Estimated tax” for

but are not limited to, the jobs creation tax credit, the job retention

this purpose means the lesser of 100% of last year’s tax or 90%

credit, the historic building preservation credit and the research and

of this year’s tax. See R.C. 5733.021(C)(1).

development loan repayment credit.

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Instructions For Ohio Form Ft 1120fi - Ohio Corporation Franchise Tax Report - 2012 Page 7

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