Ohio Code 5747.81 – Tax credit for holders of small business investment certificate
(A) Any term used in this section that is defined in section 122.86 of the Revised Code has the same meaning as defined in that section.
Terms Used In Ohio Code 5747.81
- Available: means information is such that a person is able to learn of the information by the due date plus extensions, if any, for filing the return for the taxable year in which the trust recognizes the gain or loss. See Ohio Code 5747.01
- Return: means the notifications and reports required to be filed pursuant to this chapter for the purpose of reporting the tax due and includes declarations of estimated tax when so required. See Ohio Code 5747.01
- state: means the state of Ohio. See Ohio Code 1.59
- Taxable year: means the calendar year or the taxpayer's fiscal year ending during the calendar year, or fractional part thereof, upon which the adjusted gross income is calculated pursuant to this chapter. See Ohio Code 5747.01
- Taxpayer: means any person subject to the tax imposed by section 5747. See Ohio Code 5747.01
(B) For the purpose of encouraging new capital investment in small businesses in this state and thereby promoting the economic welfare of all Ohioans, a nonrefundable credit is allowed against a taxpayer‘s aggregate tax liability under section 5747.02 of the Revised Code for a taxpayer to whom a small business investment certificate was issued under section 122.86 of the Revised Code if the taxpayer did not sell or otherwise dispose of the qualifying investment before the conclusion of the applicable holding period and if the small business enterprise on the basis of which the certificate was issued is included in the register maintained under division (D) of section 122.86 of the Revised Code.
The credit shall be claimed for the taxpayer’s taxable year that includes the last day of the holding period of the qualifying investment. If the certificate was issued to a pass-through entity that made the qualifying investment, a taxpayer that holds a direct or indirect equity interest in the pass-through entity on the last day of the entity’s taxable year that includes the last day of the holding period may claim the taxpayer’s distributive or proportionate share of the credit for the taxpayer’s taxable year that includes the last day of the entity’s taxable year.
The credit equals the amount of the taxpayer’s qualifying investment as indicated on the certificate multiplied by ten per cent. If a taxpayer claims a credit on the basis of more than one small business investment certificate issued for the same fiscal biennium, including a certificate issued to a pass-through entity in which the taxpayer owns an equity interest, the total amount of credit claimed by the taxpayer on the basis of all such certificates shall not exceed one million dollars. If a taxpayer and the taxpayer’s spouse file a joint return under section 5747.08 of the Revised Code, the credit shall be computed on the basis of the total qualifying investments made by both spouses or by any pass-through entities in which either spouse owns an equity interest, but the total amount of credit claimed on the basis of all certificates issued to the spouses or to such pass-through entities for a fiscal biennium shall not exceed two million dollars.
The credit shall be claimed in the order prescribed by section 5747.98 of the Revised Code. If the credit exceeds the aggregate amount of tax otherwise due for the taxable year, the excess may be carried forward and applied against the tax due for not more than seven succeeding taxable years, provided that the amount applied to the tax due for any taxable year shall be subtracted from the amount available to carry forward to succeeding years.