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C. Place

Interest on overpayments with respect to those franchise

File the franchise report with the

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

Ohio Department of Taxation

certiﬁ cate substantiating the credit amount is payable from

P.O. Box 27

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

Columbus, Ohio 43216-0027.

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

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

However, if the report is an amended report, please do not send

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

the report to the above address. Instead, send the report to:

credit, the historic building preservation credit and the research and

Ohio Department of Taxation

development loan repayment credit.

Business Tax Division

Corporation Franchise Tax Unit

Reason:

P.O. Box 2476

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

Columbus, Ohio 43216-2476

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

of the illegal, erroneous, or excessive payment.

Please indicate that the report is amended by checking the

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

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

overpayments "as provided by section 5733.26 of the Revised

report reﬂ ects an underpayment, please include payment

Code."

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

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

amended report reﬂ ects an overpayment, please include

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

(i) an Application for Corporation Franchise Tax Refund

term used in R.C. 5733.12.

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

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

amendment. See Abitibi-Price Corporation and Subsidiaries

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

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

erroneous or excessive payment with respect to the refund statute

instruction #20.

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

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

Note: An overpayment shown on an amended report

of the credit.

cannot be credited against the tax liability for any other

• As such, the department will compute interest on overpayments

year.

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

credits that when claimed must be substantiated by a tax credit

D. EFT Method of Payment

certiﬁ cate) from the date that the Ohio Development Services

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

Agency (ODSA) issued the tax credit certiﬁ cate – not from the

the second preceding tax year the taxpayer’s total franchise

date that the taxpayer paid the tax.

tax liability after reduction for nonrefundable credits exceeded

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

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

report cannot be made by EFT. For further EFT information

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

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

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

information release entitled “Recently Enacted Legislation

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

Revises the Requirements for Corporations Paying Corporate

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

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

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

mation release is available on the Department of Taxation’s

issued the tax credit certiﬁ cate substantiating the credit amount.

Web site. Please direct questions regarding the EFT payment

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

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

the certiﬁ cate for taxable year 2000 retroactively established the

Broad Street, 9

Floor, Columbus, Ohio 43215, or call that

illegal and excessive character of payments attributable to the tax

ofﬁ ce toll-free at 1-877-338-6446.

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

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

10. Interest on Underpayments and Overpayments

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

During calendar year 2013 interest on underpayments and

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

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

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

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

Opinion No. 2009-Ohio-1929.

3% prescribed by R.C. 5703.47(B)). See the tax commissioner’s

Oct. 15, 2012 administrative journal entry located at: tax.ohio.

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

gov/ohio_individual/individual/interest_rates.aspx. Also see R.C

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

5703.47.

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

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

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

safe harbor for estimated payments” below.

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

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

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

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

the underpayment runs from the date payment was required to the

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

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

the report up to 50%.

interest on the underpayment of estimated tax.

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

Interest on franchise tax overpayments runs from whichever of the

and for ﬁ ling a fraudulent refund claim.

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

12. Penalty Safe Harbor for Estimated Payments

• the date of payment,

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

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

the underpayment of estimated tax:

required to be ﬁ led, or

•

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

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

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

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Form Ft 1120fi - Ohio Corporation Franchise Tax Instructions For Financial Institutions - 2013 Page 6

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