HB 87: Enact Strategic Tax Opportunities for Raising Kids (STORK) Act

As Introduced

136th General Assembly Regular Session 2025-2026

H. B. No. 87

Representatives Click, Klopfenstein

Cosponsors: Representatives Deeter, Robb Blasdel, Teska, King, Lear, Claggett, Dean, John, Thomas, D., Gross, Williams

A B I L L

To amend sections 5739.02, 5747.01, and 5747.025 of 1
the Revised Code to authorize tax incentives for 2
conceived children and certain child care items 3
and to name this act the Strategic Tax 4
Opportunities for Raising Kids (STORK) Act. 5

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 5739.02, 5747.01, and 5747.025 of 6
the Revised Code be amended to read as follows: 7
Sec. 5739.02. For the purpose of providing revenue with 8
which to meet the needs of the state, for the use of the general 9
revenue fund of the state, for the purpose of securing a 10
thorough and efficient system of common schools throughout the 11
state, for the purpose of affording revenues, in addition to 12
those from general property taxes, permitted under 13
constitutional limitations, and from other sources, for the 14
support of local governmental functions, and for the purpose of 15
reimbursing the state for the expense of administering this 16
chapter, an excise tax is hereby levied on each retail sale made 17
in this state. 18

H. B. No. 87 As Introduced

(A)(1) The tax shall be collected as provided in section 19
5739.025 of the Revised Code. The rate of the tax shall be five 20
and three-fourths per cent. The tax applies and is collectible 21
when the sale is made, regardless of the time when the price is 22
paid or delivered. 23
(2) In the case of the lease or rental, with a fixed term 24
of more than thirty days or an indefinite term with a minimum 25
period of more than thirty days, of any motor vehicles designed 26
by the manufacturer to carry a load of not more than one ton, 27
watercraft, outboard motor, or aircraft, or of any tangible 28
personal property, other than motor vehicles designed by the 29
manufacturer to carry a load of more than one ton, to be used by 30
the lessee or renter primarily for business purposes, the tax 31
shall be collected by the vendor at the time the lease or rental 32
is consummated and shall be calculated by the vendor on the 33
basis of the total amount to be paid by the lessee or renter 34
under the lease agreement. If the total amount of the 35
consideration for the lease or rental includes amounts that are 36
not calculated at the time the lease or rental is executed, the 37
tax shall be calculated and collected by the vendor at the time 38
such amounts are billed to the lessee or renter. In the case of 39
an open-end lease or rental, the tax shall be calculated by the 40
vendor on the basis of the total amount to be paid during the 41
initial fixed term of the lease or rental, and for each 42
subsequent renewal period as it comes due. As used in this 43
division, "motor vehicle" has the same meaning as in section 44
4501.01 of the Revised Code, and "watercraft" includes an 45
outdrive unit attached to the watercraft. 46
A lease with a renewal clause and a termination penalty or 47
similar provision that applies if the renewal clause is not 48
exercised is presumed to be a sham transaction. In such a case, 49

H. B. No. 87 As Introduced

the tax shall be calculated and paid on the basis of the entire 50
length of the lease period, including any renewal periods, until 51
the termination penalty or similar provision no longer applies. 52
The taxpayer shall bear the burden, by a preponderance of the 53
evidence, that the transaction or series of transactions is not 54
a sham transaction. 55
(3) Except as provided in division (A)(2) of this section, 56
in the case of a sale, the price of which consists in whole or 57
in part of the lease or rental of tangible personal property, 58
the tax shall be measured by the installments of that lease or 59
rental. 60
(4) In the case of a sale of a physical fitness facility 61
service or recreation and sports club service, the price of 62
which consists in whole or in part of a membership for the 63
receipt of the benefit of the service, the tax applicable to the 64
sale shall be measured by the installments thereof. 65
(B) The tax does not apply to the following: 66
(1) Sales to the state or any of its political 67
subdivisions, or to any other state or its political 68
subdivisions if the laws of that state exempt from taxation 69
sales made to this state and its political subdivisions 70
including either of the following: 71
(a) Sales or rentals of tangible personal property by 72
construction contractors or subcontractors to provide temporary 73
traffic control or temporary structures, including material and 74
equipment used to comply with the Ohio manual of uniform traffic 75
control devices adopted pursuant to section 4511.09 of the 76
Revised Code, whereby the state or any of its political 77
subdivisions take title to, or permanent or temporary possession 78

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of, such tangible personal property for use by the state or any 79
of its political subdivisions, including for use by the general 80
public thereof; 81
(b) Sales of services by construction contractors or 82
subcontractors to provide temporary traffic control or 83
structures, including labor used to comply with the Ohio manual 84
of uniform traffic control devices adopted pursuant to section 85
4511.09 of the Revised Code, whereby the state or any of its 86
political subdivisions, including the general public thereof, 87
receive the benefit of such services. 88
As used in divisions (B)(1)(a) and (b) of this section, 89
"temporary structures" include temporary roads, bridges, drains, 90
and pavement. 91
(2) Sales of food for human consumption off the premises 92
where sold; 93
(3) Sales of food sold to students only in a cafeteria, 94
dormitory, fraternity, or sorority maintained in a private, 95
public, or parochial school, college, or university; 96
(4) Sales of newspapers and sales or transfers of 97
magazines distributed as controlled circulation publications; 98
(5) The furnishing, preparing, or serving of meals without 99
charge by an employer to an employee provided the employer 100
records the meals as part compensation for services performed or 101
work done; 102
(6)(a) Sales of motor fuel upon receipt, use, 103
distribution, or sale of which in this state a tax is imposed by 104
the law of this state, but this exemption shall not apply to the 105
sale of motor fuel on which a refund of the tax is allowable 106
under division (A) of section 5735.14 of the Revised Code; and 107

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the tax commissioner may deduct the amount of tax levied by this 108
section applicable to the price of motor fuel when granting a 109
refund of motor fuel tax pursuant to division (A) of section 110
5735.14 of the Revised Code and shall cause the amount deducted 111
to be paid into the general revenue fund of this state; 112
(b) Sales of motor fuel other than that described in 113
division (B)(6)(a) of this section and used for powering a 114
refrigeration unit on a vehicle other than one used primarily to 115
provide comfort to the operator or occupants of the vehicle. 116
(7) Sales of natural gas by a natural gas company or 117
municipal gas utility, of water by a water-works company, or of 118
steam by a heating company, if in each case the thing sold is 119
delivered to consumers through pipes or conduits, and all sales 120
of communications services by a telegraph company, all terms as 121
defined in section 5727.01 of the Revised Code, and sales of 122
electricity delivered through wires; 123
(8) Casual sales by a person, or auctioneer employed 124
directly by the person to conduct such sales, except as to such 125
sales of motor vehicles, watercraft or outboard motors required 126
to be titled under section 1548.06 of the Revised Code, 127
watercraft documented with the United States coast guard, 128
snowmobiles, and all-purpose vehicles as defined in section 129
4519.01 of the Revised Code; 130
(9)(a) Sales of services or tangible personal property, 131
other than motor vehicles, mobile homes, and manufactured homes, 132
by churches, organizations exempt from taxation under section 133
501(c)(3) of the Internal Revenue Code of 1986, or nonprofit 134
organizations operated exclusively for charitable purposes as 135
defined in division (B)(12) of this section, provided that the 136
number of days on which such tangible personal property or 137

H. B. No. 87 As Introduced

services, other than items never subject to the tax, are sold 138
does not exceed six in any calendar year, except as otherwise 139
provided in division (B)(9)(b) of this section. If the number of 140
days on which such sales are made exceeds six in any calendar 141
year, the church or organization shall be considered to be 142
engaged in business and all subsequent sales by it shall be 143
subject to the tax. In counting the number of days, all sales by 144
groups within a church or within an organization shall be 145
considered to be sales of that church or organization. 146
(b) The limitation on the number of days on which tax- 147
exempt sales may be made by a church or organization under 148
division (B)(9)(a) of this section does not apply to sales made 149
by student clubs and other groups of students of a primary or 150
secondary school, or a parent-teacher association, booster 151
group, or similar organization that raises money to support or 152
fund curricular or extracurricular activities of a primary or 153
secondary school. 154
(c) Divisions (B)(9)(a) and (b) of this section do not 155
apply to sales by a noncommercial educational radio or 156
television broadcasting station. 157
(10) Sales not within the taxing power of this state under 158
the Constitution or laws of the United States or the 159
Constitution of this state including either of the following: 160
(a) Sales or rentals of tangible personal property by 161
construction contractors or subcontractors to provide temporary 162
traffic control or temporary structures, including material and 163
equipment used to comply with the Ohio manual of uniform traffic 164
control devices adopted pursuant to section 4511.09 of the 165
Revised Code, whereby the United States takes title to, or 166
permanent or temporary possession of, such tangible personal 167

H. B. No. 87 As Introduced

property for use by the United States including for use by the 168
general public thereof; 169
(b) Sales of services by construction contractors or 170
subcontractors to provide temporary traffic control or 171
structures, including labor used to comply with the Ohio manual 172
of uniform traffic control devices adopted pursuant to section 173
4511.09 of the Revised Code, whereby the United States, 174
including the general public thereof, receives the benefit of 175
such services. 176
As used in divisions (B)(10)(a) and (b) of this section, 177
"temporary structures" include temporary roads, bridges, drains, 178
and pavement. 179
(11) Except for transactions that are sales under division 180
(B)(3)(p) of section 5739.01 of the Revised Code, the 181
transportation of persons or property, unless the transportation 182
is by a private investigation and security service; 183
(12) Sales of tangible personal property or services to 184
churches, to organizations exempt from taxation under section 185
501(c)(3) of the Internal Revenue Code of 1986, and to any other 186
nonprofit organizations operated exclusively for charitable 187
purposes in this state, no part of the net income of which 188
inures to the benefit of any private shareholder or individual, 189
and no substantial part of the activities of which consists of 190
carrying on propaganda or otherwise attempting to influence 191
legislation; sales to offices administering one or more homes 192
for the aged or one or more hospital facilities exempt under 193
section 140.08 of the Revised Code; and sales to organizations 194
described in division (D) of section 5709.12 of the Revised 195
Code. 196

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"Charitable purposes" means the relief of poverty; the 197
improvement of health through the alleviation of illness, 198
disease, or injury; the operation of an organization exclusively 199
for the provision of professional, laundry, printing, and 200
purchasing services to hospitals or charitable institutions; the 201
operation of a home for the aged, as defined in section 5701.13 202
of the Revised Code; the operation of a radio or television 203
broadcasting station that is licensed by the federal 204
communications commission as a noncommercial educational radio 205
or television station; the operation of a nonprofit animal 206
adoption service or a county humane society; the promotion of 207
education by an institution of learning that maintains a faculty 208
of qualified instructors, teaches regular continuous courses of 209
study, and confers a recognized diploma upon completion of a 210
specific curriculum; the operation of a parent-teacher 211
association, booster group, or similar organization primarily 212
engaged in the promotion and support of the curricular or 213
extracurricular activities of a primary or secondary school; the 214
operation of a community or area center in which presentations 215
in music, dramatics, the arts, and related fields are made in 216
order to foster public interest and education therein; the 217
production of performances in music, dramatics, and the arts; or 218
the promotion of education by an organization engaged in 219
carrying on research in, or the dissemination of, scientific and 220
technological knowledge and information primarily for the 221
public. 222
Nothing in this division shall be deemed to exempt sales 223
to any organization for use in the operation or carrying on of a 224
trade or business, or sales to a home for the aged for use in 225
the operation of independent living facilities as defined in 226
division (A) of section 5709.12 of the Revised Code. 227

H. B. No. 87 As Introduced

(13) Building and construction materials and services sold 228
to construction contractors for incorporation into a structure 229
or improvement to real property under a construction contract 230
with this state or a political subdivision of this state, or 231
with the United States government or any of its agencies; 232
building and construction materials and services sold to 233
construction contractors for incorporation into a structure or 234
improvement to real property that are accepted for ownership by 235
this state or any of its political subdivisions, or by the 236
United States government or any of its agencies at the time of 237
completion of the structures or improvements; building and 238
construction materials sold to construction contractors for 239
incorporation into a horticulture structure or livestock 240
structure for a person engaged in the business of horticulture 241
or producing livestock; building materials and services sold to 242
a construction contractor for incorporation into a house of 243
public worship or religious education, or a building used 244
exclusively for charitable purposes under a construction 245
contract with an organization whose purpose is as described in 246
division (B)(12) of this section; building materials and 247
services sold to a construction contractor for incorporation 248
into a building under a construction contract with an 249
organization exempt from taxation under section 501(c)(3) of the 250
Internal Revenue Code of 1986 when the building is to be used 251
exclusively for the organization's exempt purposes; tangible 252
personal property sold for incorporation into the construction 253
of a sports facility under section 307.696 of the Revised Code; 254
building and construction materials and services sold to a 255
construction contractor for incorporation into real property 256
outside this state if such materials and services, when sold to 257
a construction contractor in the state in which the real 258
property is located for incorporation into real property in that 259

H. B. No. 87 As Introduced

state, would be exempt from a tax on sales levied by that state; 260
building and construction materials for incorporation into a 261
transportation facility pursuant to a public-private agreement 262
entered into under sections 5501.70 to 5501.83 of the Revised 263
Code; until one calendar year after the construction of a 264
convention center that qualifies for property tax exemption 265
under section 5709.084 of the Revised Code is completed, 266
building and construction materials and services sold to a 267
construction contractor for incorporation into the real property 268
comprising that convention center; and building and construction 269
materials sold for incorporation into a structure or improvement 270
to real property that is used primarily as, or primarily in 271
support of, a manufacturing facility or research and development 272
facility and that is to be owned by a megaproject operator upon 273
completion and located at the site of a megaproject that 274
satisfies the criteria described in division (A)(11)(a)(ii) of 275
section 122.17 of the Revised Code, provided that the sale 276
occurs during the period that the megaproject operator has an 277
agreement for such megaproject with the tax credit authority 278
under division (D) of section 122.17 of the Revised Code that 279
remains in effect and has not expired or been terminated. 280
(14) Sales of ships or vessels or rail rolling stock used 281
or to be used principally in interstate or foreign commerce, and 282
repairs, alterations, fuel, and lubricants for such ships or 283
vessels or rail rolling stock; 284
(15) Sales to persons primarily engaged in any of the 285
activities mentioned in division (B)(42)(a), (g), or (h) of this 286
section, to persons engaged in making retail sales, or to 287
persons who purchase for sale from a manufacturer tangible 288
personal property that was produced by the manufacturer in 289
accordance with specific designs provided by the purchaser, of 290

H. B. No. 87 As Introduced

packages, including material, labels, and parts for packages, 291
and of machinery, equipment, and material for use primarily in 292
packaging tangible personal property produced for sale, 293
including any machinery, equipment, and supplies used to make 294
labels or packages, to prepare packages or products for 295
labeling, or to label packages or products, by or on the order 296
of the person doing the packaging, or sold at retail. "Packages" 297
includes bags, baskets, cartons, crates, boxes, cans, bottles, 298
bindings, wrappings, and other similar devices and containers, 299
but does not include motor vehicles or bulk tanks, trailers, or 300
similar devices attached to motor vehicles. "Packaging" means 301
placing in a package. Division (B)(15) of this section does not 302
apply to persons engaged in highway transportation for hire. 303
(16) Sales of food to persons using supplemental nutrition 304
assistance program benefits to purchase the food. As used in 305
this division, "food" has the same meaning as in 7 U.S.C. 2012 306
and federal regulations adopted pursuant to the Food and 307
Nutrition Act of 2008. 308
(17) Sales to persons engaged in farming, agriculture, 309
horticulture, or floriculture, of tangible personal property for 310
use or consumption primarily in the production by farming, 311
agriculture, horticulture, or floriculture of other tangible 312
personal property for use or consumption primarily in the 313
production of tangible personal property for sale by farming, 314
agriculture, horticulture, or floriculture; or material and 315
parts for incorporation into any such tangible personal property 316
for use or consumption in production; and of tangible personal 317
property for such use or consumption in the conditioning or 318
holding of products produced by and for such use, consumption, 319
or sale by persons engaged in farming, agriculture, 320
horticulture, or floriculture, except where such property is 321

H. B. No. 87 As Introduced

incorporated into real property; 322
(18) Sales of drugs for a human being that may be 323
dispensed only pursuant to a prescription; insulin as recognized 324
in the official United States pharmacopoeia; urine and blood 325
testing materials when used by diabetics or persons with 326
hypoglycemia to test for glucose or acetone; hypodermic syringes 327
and needles when used by diabetics for insulin injections; 328
epoetin alfa when purchased for use in the treatment of persons 329
with medical disease; hospital beds when purchased by hospitals, 330
nursing homes, or other medical facilities; and medical oxygen 331
and medical oxygen-dispensing equipment when purchased by 332
hospitals, nursing homes, or other medical facilities; 333
(19) Sales of prosthetic devices, durable medical 334
equipment for home use, or mobility enhancing equipment, when 335
made pursuant to a prescription and when such devices or 336
equipment are for use by a human being. 337
(20) Sales of emergency and fire protection vehicles and 338
equipment to nonprofit organizations for use solely in providing 339
fire protection and emergency services, including trauma care 340
and emergency medical services, for political subdivisions of 341
the state; 342
(21) Sales of tangible personal property manufactured in 343
this state, if sold by the manufacturer in this state to a 344
retailer for use in the retail business of the retailer outside 345
of this state and if possession is taken from the manufacturer 346
by the purchaser within this state for the sole purpose of 347
immediately removing the same from this state in a vehicle owned 348
by the purchaser; 349
(22) Sales of services provided by the state or any of its 350

H. B. No. 87 As Introduced

political subdivisions, agencies, instrumentalities, 351
institutions, or authorities, or by governmental entities of the 352
state or any of its political subdivisions, agencies, 353
instrumentalities, institutions, or authorities; 354
(23) Sales of motor vehicles to nonresidents of this state 355
under the circumstances described in division (B) of section 356
5739.029 of the Revised Code; 357
(24) Sales to persons engaged in the preparation of eggs 358
for sale of tangible personal property used or consumed directly 359
in such preparation, including such tangible personal property 360
used for cleaning, sanitizing, preserving, grading, sorting, and 361
classifying by size; packages, including material and parts for 362
packages, and machinery, equipment, and material for use in 363
packaging eggs for sale; and handling and transportation 364
equipment and parts therefor, except motor vehicles licensed to 365
operate on public highways, used in intraplant or interplant 366
transfers or shipment of eggs in the process of preparation for 367
sale, when the plant or plants within or between which such 368
transfers or shipments occur are operated by the same person. 369
"Packages" includes containers, cases, baskets, flats, fillers, 370
filler flats, cartons, closure materials, labels, and labeling 371
materials, and "packaging" means placing therein. 372
(25)(a) Sales of water to a consumer for residential use; 373
(b) Sales of water by a nonprofit corporation engaged 374
exclusively in the treatment, distribution, and sale of water to 375
consumers, if such water is delivered to consumers through pipes 376
or tubing. 377
(26) Fees charged for inspection or reinspection of motor 378
vehicles under section 3704.14 of the Revised Code; 379

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(27) Sales to persons licensed to conduct a food service 380
operation pursuant to section 3717.43 of the Revised Code, of 381
tangible personal property primarily used directly for the 382
following: 383
(a) To prepare food for human consumption for sale; 384
(b) To preserve food that has been or will be prepared for 385
human consumption for sale by the food service operator, not 386
including tangible personal property used to display food for 387
selection by the consumer; 388
(c) To clean tangible personal property used to prepare or 389
serve food for human consumption for sale. 390
(28) Sales of animals by nonprofit animal adoption 391
services or county humane societies; 392
(29) Sales of services to a corporation described in 393
division (A) of section 5709.72 of the Revised Code, and sales 394
of tangible personal property that qualifies for exemption from 395
taxation under section 5709.72 of the Revised Code; 396
(30) Sales and installation of agricultural land tile, as 397
defined in division (B)(5)(a) of section 5739.01 of the Revised 398
Code; 399
(31) Sales and erection or installation of portable grain 400
bins, as defined in division (B)(5)(b) of section 5739.01 of the 401
Revised Code; 402
(32) The sale, lease, repair, and maintenance of, parts 403
for, or items attached to or incorporated in, motor vehicles 404
that are primarily used for transporting tangible personal 405
property belonging to others by a person engaged in highway 406
transportation for hire, except for packages and packaging used 407

H. B. No. 87 As Introduced

for the transportation of tangible personal property; 408

(33) Sales to the state headquarters of any veterans' 409
organization in this state that is either incorporated and 410
issued a charter by the congress of the United States or is 411
recognized by the United States veterans administration, for use 412
by the headquarters; 413

(34) Sales to a telecommunications service vendor, mobile telecommunications service vendor, or satellite broadcasting service vendor of tangible personal property and services used directly and primarily in transmitting, receiving, switching, or recording any interactive, one- or two-way electromagnetic communications, including voice, image, data, and information, through the use of any medium, including, but not limited to, poles, wires, cables, switching equipment, computers, and record storage devices and media, and component parts for the tangible personal property. The exemption provided in this division shall be in lieu of all other exemptions under division (B)(42)(a) or (n) of this section to which the vendor may otherwise be entitled, based upon the use of the thing purchased in providing the telecommunications, mobile telecommunications, or satellite broadcasting service.

(35)(a) Sales where the purpose of the consumer is to use 429
or consume the things transferred in making retail sales and 430
consisting of newspaper inserts, catalogues, coupons, flyers, 431
gift certificates, or other advertising material that prices and 432
describes tangible personal property offered for retail sale. 433
(b) Sales to direct marketing vendors of preliminary 434
materials such as photographs, artwork, and typesetting that 435
will be used in printing advertising material; and of printed 436
matter that offers free merchandise or chances to win sweepstake 437

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prizes and that is mailed to potential customers with 438
advertising material described in division (B)(35)(a) of this 439
section; 440
(c) Sales of equipment such as telephones, computers, 441
facsimile machines, and similar tangible personal property 442
primarily used to accept orders for direct marketing retail 443
sales. 444
(d) Sales of automatic food vending machines that preserve 445
food with a shelf life of forty-five days or less by 446
refrigeration and dispense it to the consumer. 447
For purposes of division (B)(35) of this section, "direct 448
marketing" means the method of selling where consumers order 449
tangible personal property by United States mail, delivery 450
service, or telecommunication and the vendor delivers or ships 451
the tangible personal property sold to the consumer from a 452
warehouse, catalogue distribution center, or similar fulfillment 453
facility by means of the United States mail, delivery service, 454
or common carrier. 455
(36) Sales to a person engaged in the business of 456
horticulture or producing livestock of materials to be 457
incorporated into a horticulture structure or livestock 458
structure; 459
(37) Sales of personal computers, computer monitors, 460
computer keyboards, modems, and other peripheral computer 461
equipment to an individual who is licensed or certified to teach 462
in an elementary or a secondary school in this state for use by 463
that individual in preparation for teaching elementary or 464
secondary school students; 465
(38) Sales of tangible personal property that is not 466

H. B. No. 87 As Introduced

required to be registered or licensed under the laws of this state to a citizen of a foreign nation that is not a citizen of the United States, provided the property is delivered to a person in this state that is not a related member of the purchaser, is physically present in this state for the sole purpose of temporary storage and package consolidation, and is subsequently delivered to the purchaser at a delivery address in a foreign nation. As used in division (B)(38) of this section, "related member" has the same meaning as in section 5733.042 of the Revised Code, and "temporary storage" means the storage of tangible personal property for a period of not more than sixty days.

(39) Sales of used manufactured homes and used mobile homes, as defined in section 5739.0210 of the Revised Code, made on or after January 1, 2000;

(40) Sales of tangible personal property and services to a 482
provider of electricity used or consumed directly and primarily 483
in generating, transmitting, or distributing electricity for use 484
by others, including property that is or is to be incorporated 485
into and will become a part of the consumer's production, 486
transmission, or distribution system and that retains its 487
classification as tangible personal property after 488
incorporation; fuel or power used in the production, 489
transmission, or distribution of electricity; energy conversion 490
equipment as defined in section 5727.01 of the Revised Code; and 491
tangible personal property and services used in the repair and 492
maintenance of the production, transmission, or distribution 493
system, including only those motor vehicles as are specially 494
designed and equipped for such use. The exemption provided in 495
this division shall be in lieu of all other exemptions in 496
division (B)(42)(a) or (n) of this section to which a provider 497

H. B. No. 87 As Introduced

of electricity may otherwise be entitled based on the use of the 498
tangible personal property or service purchased in generating, 499
transmitting, or distributing electricity. 500
(41) Sales to a person providing services under division 501
(B)(3)(p) of section 5739.01 of the Revised Code of tangible 502
personal property and services used directly and primarily in 503
providing taxable services under that section. 504
(42) Sales where the purpose of the purchaser is to do any 505
of the following: 506
(a) To incorporate the thing transferred as a material or 507
a part into tangible personal property to be produced for sale 508
by manufacturing, assembling, processing, or refining; or to use 509
or consume the thing transferred directly in producing tangible 510
personal property for sale by mining, including, without 511
limitation, the extraction from the earth of all substances that 512
are classed geologically as minerals, or directly in the 513
rendition of a public utility service, except that the sales tax 514
levied by this section shall be collected upon all meals, 515
drinks, and food for human consumption sold when transporting 516
persons. This paragraph does not exempt from "retail sale" or 517
"sales at retail" the sale of tangible personal property that is 518
to be incorporated into a structure or improvement to real 519
property. 520
(b) To hold the thing transferred as security for the 521
performance of an obligation of the vendor; 522
(c) To resell, hold, use, or consume the thing transferred 523
as evidence of a contract of insurance; 524
(d) To use or consume the thing directly in commercial 525
fishing; 526

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As Introduced
(e) To incorporate the thing transferred as a material or 527
a part into, or to use or consume the thing transferred directly 528
in the production of, magazines distributed as controlled 529
circulation publications; 530
(f) To use or consume the thing transferred in the 531
production and preparation in suitable condition for market and 532
sale of printed, imprinted, overprinted, lithographic, 533
multilithic, blueprinted, photostatic, or other productions or 534
reproductions of written or graphic matter; 535
(g) To use the thing transferred, as described in section 536
5739.011 of the Revised Code, primarily in a manufacturing 537
operation to produce tangible personal property for sale; 538
(h) To use the benefit of a warranty, maintenance or 539
service contract, or similar agreement, as described in division 540
(B)(7) of section 5739.01 of the Revised Code, to repair or 541
maintain tangible personal property, if all of the property that 542
is the subject of the warranty, contract, or agreement would not 543
be subject to the tax imposed by this section; 544
(i) To use the thing transferred as qualified research and 545
development equipment; 546
(j) To use or consume the thing transferred primarily in 547
storing, transporting, mailing, or otherwise handling purchased 548
sales inventory in a warehouse, distribution center, or similar 549
facility when the inventory is primarily distributed outside 550
this state to retail stores of the person who owns or controls 551
the warehouse, distribution center, or similar facility, to 552
retail stores of an affiliated group of which that person is a 553
member, or by means of direct marketing. This division does not 554
apply to motor vehicles registered for operation on the public 555

H. B. No. 87 As Introduced

highways. As used in this division, "affiliated group" has the 556
same meaning as in division (B)(3)(e) of section 5739.01 of the 557
Revised Code and "direct marketing" has the same meaning as in 558
division (B)(35) of this section. 559

(k) To use or consume the thing transferred to fulfill a contractual obligation incurred by a warrantor pursuant to a warranty provided as a part of the price of the tangible personal property sold or by a vendor of a warranty, maintenance or service contract, or similar agreement the provision of which is defined as a sale under division (B)(7) of section 5739.01 of the Revised Code;

(l) To use or consume the thing transferred in the 567
production of a newspaper for distribution to the public; 568
(m) To use tangible personal property to perform a service 569
listed in division (B)(3) of section 5739.01 of the Revised 570
Code, if the property is or is to be permanently transferred to 571
the consumer of the service as an integral part of the 572
performance of the service; 573

(n) To use or consume the thing transferred primarily in producing tangible personal property for sale by farming, agriculture, horticulture, or floriculture. Persons engaged in rendering farming, agriculture, horticulture, or floriculture services for others are deemed engaged primarily in farming, agriculture, horticulture, or floriculture. This paragraph does not exempt from "retail sale" or "sales at retail" the sale of tangible personal property that is to be incorporated into a structure or improvement to real property.

(o) To use or consume the thing transferred in acquiring, formatting, editing, storing, and disseminating data or

H. B. No. 87 As Introduced

information by electronic publishing; 585
(p) To provide the thing transferred to the owner or 586
lessee of a motor vehicle that is being repaired or serviced, if 587
the thing transferred is a rented motor vehicle and the 588
purchaser is reimbursed for the cost of the rented motor vehicle 589
by a manufacturer, warrantor, or provider of a maintenance, 590
service, or other similar contract or agreement, with respect to 591
the motor vehicle that is being repaired or serviced; 592
(q) To use or consume the thing transferred directly in 593
production of crude oil and natural gas for sale. Persons 594
engaged in rendering production services for others are deemed 595
engaged in production. 596
As used in division (B)(42)(q) of this section, 597
"production" means operations and tangible personal property 598
directly used to expose and evaluate an underground reservoir 599
that may contain hydrocarbon resources, prepare the wellbore for 600
production, and lift and control all substances yielded by the 601
reservoir to the surface of the earth. 602
(i) For the purposes of division (B)(42)(q) of this 603
section, the "thing transferred" includes, but is not limited 604
to, any of the following: 605
(I) Services provided in the construction of permanent 606
access roads, services provided in the construction of the well 607
site, and services provided in the construction of temporary 608
impoundments; 609
(II) Equipment and rigging used for the specific purpose 610
of creating with integrity a wellbore pathway to underground 611
reservoirs; 612
(III) Drilling and workover services used to work within a 613

H. B. No. 87 Page 22 As Introduced

subsurface wellbore, and tangible personal property directly 614
used in providing such services; 615
(IV) Casing, tubulars, and float and centralizing 616
equipment; 617
(V) Trailers to which production equipment is attached; 618
(VI) Well completion services, including cementing of 619
casing, and tangible personal property directly used in 620
providing such services; 621
(VII) Wireline evaluation, mud logging, and perforation 622
services, and tangible personal property directly used in 623
providing such services; 624
(VIII) Reservoir stimulation, hydraulic fracturing, and 625
acidizing services, and tangible personal property directly used 626
in providing such services, including all material pumped 627
downhole; 628
(IX) Pressure pumping equipment; 629
(X) Artificial lift systems equipment; 630
(XI) Wellhead equipment and well site equipment used to 631
separate, stabilize, and control hydrocarbon phases and produced 632
water; 633
(XII) Tangible personal property directly used to control 634
production equipment. 635
(ii) For the purposes of division (B)(42)(q) of this 636
section, the "thing transferred" does not include any of the 637
following: 638
(I) Tangible personal property used primarily in the 639
exploration and production of any mineral resource regulated 640

H. B. No. 87 As Introduced

under Chapter 1509. of the Revised Code other than oil or gas; 641
(II) Tangible personal property used primarily in storing, 642
holding, or delivering solutions or chemicals used in well 643
stimulation as defined in section 1509.01 of the Revised Code; 644
(III) Tangible personal property used primarily in 645
preparing, installing, or reclaiming foundations for drilling or 646
pumping equipment or well stimulation material tanks; 647
(IV) Tangible personal property used primarily in 648
transporting, delivering, or removing equipment to or from the 649
well site or storing such equipment before its use at the well 650
site; 651
(V) Tangible personal property used primarily in gathering 652
operations occurring off the well site, including gathering 653
pipelines transporting hydrocarbon gas or liquids away from a 654
crude oil or natural gas production facility; 655
(VI) Tangible personal property that is to be incorporated 656
into a structure or improvement to real property; 657
(VII) Well site fencing, lighting, or security systems; 658
(VIII) Communication devices or services; 659
(IX) Office supplies; 660
(X) Trailers used as offices or lodging; 661
(XI) Motor vehicles of any kind; 662
(XII) Tangible personal property used primarily for the 663
storage of drilling byproducts and fuel not used for production; 664
(XIII) Tangible personal property used primarily as a 665
safety device; 666

H. B. No. 87 As Introduced

(XIV) Data collection or monitoring devices; 667
(XV) Access ladders, stairs, or platforms attached to 668
storage tanks. 669
The enumeration of tangible personal property in division 670
(B)(42)(q)(ii) of this section is not intended to be exhaustive, 671
and any tangible personal property not so enumerated shall not 672
necessarily be construed to be a "thing transferred" for the 673
purposes of division (B)(42)(q) of this section. 674
The commissioner shall adopt and promulgate rules under 675
sections 119.01 to 119.13 of the Revised Code that the 676
commissioner deems necessary to administer division (B)(42)(q) 677
of this section. 678

As used in division (B)(42) of this section, "thing" includes all transactions included in divisions (B)(3)(a), (b), and (e) of section 5739.01 of the Revised Code.

(43) Sales conducted through a coin operated device that activates vacuum equipment or equipment that dispenses water, whether or not in combination with soap or other cleaning agents or wax, to the consumer for the consumer's use on the premises in washing, cleaning, or waxing a motor vehicle, provided no other personal property or personal service is provided as part of the transaction.

(44) Sales of replacement and modification parts for 689
engines, airframes, instruments, and interiors in, and paint 690
for, aircraft used primarily in a fractional aircraft ownership 691
program, and sales of services for the repair, modification, and 692
maintenance of such aircraft, and machinery, equipment, and 693
supplies primarily used to provide those services. 694

(45) Sales of telecommunications service that is used 695

H. B. No. 87 As Introduced

directly and primarily to perform the functions of a call 696
center. As used in this division, "call center" means any 697
physical location where telephone calls are placed or received 698
in high volume for the purpose of making sales, marketing, 699
customer service, technical support, or other specialized 700
business activity, and that employs at least fifty individuals 701
that engage in call center activities on a full-time basis, or 702
sufficient individuals to fill fifty full-time equivalent 703
positions. 704
(46) Sales by a telecommunications service vendor of 900 705
service to a subscriber. This division does not apply to 706
information services. 707
(47) Sales of value-added non-voice data service. This 708
division does not apply to any similar service that is not 709
otherwise a telecommunications service. 710
(48) Sales of feminine hygiene products. 711
(49) Sales of materials, parts, equipment, or engines used 712
in the repair or maintenance of aircraft or avionics systems of 713
such aircraft, and sales of repair, remodeling, replacement, or 714
maintenance services in this state performed on aircraft or on 715
an aircraft's avionics, engine, or component materials or parts. 716
As used in division (B)(49) of this section, "aircraft" means 717
aircraft of more than six thousand pounds maximum certified 718
takeoff weight or used exclusively in general aviation. 719
(50) Sales of full flight simulators that are used for 720
pilot or flight-crew training, sales of repair or replacement 721
parts or components, and sales of repair or maintenance services 722
for such full flight simulators. "Full flight simulator" means a 723
replica of a specific type, or make, model, and series of 724

H. B. No. 87 As Introduced

aircraft cockpit. It includes the assemblage of equipment and 725
computer programs necessary to represent aircraft operations in 726
ground and flight conditions, a visual system providing an out- 727
of-the-cockpit view, and a system that provides cues at least 728
equivalent to those of a three-degree-of-freedom motion system, 729
and has the full range of capabilities of the systems installed 730
in the device as described in appendices A and B of part 60 of 731
chapter 1 of title 14 of the Code of Federal Regulations. 732
(51) Any transfer or lease of tangible personal property 733
between the state and JobsOhio in accordance with section 734
4313.02 of the Revised Code. 735
(52)(a) Sales to a qualifying corporation. 736
(b) As used in division (B)(52) of this section: 737
(i) "Qualifying corporation" means a nonprofit corporation 738
organized in this state that leases from an eligible county 739
land, buildings, structures, fixtures, and improvements to the 740
land that are part of or used in a public recreational facility 741
used by a major league professional athletic team or a class A 742
to class AAA minor league affiliate of a major league 743
professional athletic team for a significant portion of the 744
team's home schedule, provided the following apply: 745
(I) The facility is leased from the eligible county 746
pursuant to a lease that requires substantially all of the 747
revenue from the operation of the business or activity conducted 748
by the nonprofit corporation at the facility in excess of 749
operating costs, capital expenditures, and reserves to be paid 750
to the eligible county at least once per calendar year. 751
(II) Upon dissolution and liquidation of the nonprofit 752
corporation, all of its net assets are distributable to the 753

H. B. No. 87 As Introduced

board of commissioners of the eligible county from which the 754
corporation leases the facility. 755
(ii) "Eligible county" has the same meaning as in section 756
307.695 of the Revised Code. 757
(53) Sales to or by a cable service provider, video 758
service provider, or radio or television broadcast station 759
regulated by the federal government of cable service or 760
programming, video service or programming, audio service or 761
programming, or electronically transferred digital audiovisual 762
or audio work. As used in division (B)(53) of this section, 763
"cable service" and "cable service provider" have the same 764
meanings as in section 1332.01 of the Revised Code, and "video 765
service," "video service provider," and "video programming" have 766
the same meanings as in section 1332.21 of the Revised Code. 767
(54) Sales of a digital audio work electronically 768
transferred for delivery through use of a machine, such as a 769
juke box, that does all of the following: 770
(a) Accepts direct payments to operate; 771
(b) Automatically plays a selected digital audio work for 772
a single play upon receipt of a payment described in division 773
(B)(54)(a) of this section; 774
(c) Operates exclusively for the purpose of playing 775
digital audio works in a commercial establishment. 776
(55)(a) Sales of the following occurring on the first 777
Friday of August and the following Saturday and Sunday of any 778
year, except in 2024 or any subsequent year in which a sales tax 779
holiday is held pursuant to section 5739.41 of the Revised Code: 780
(i) An item of clothing, the price of which is seventy- 781

H. B. No. 87 As Introduced

five dollars or less; 782

(ii) An item of school supplies, the price of which is 783
twenty dollars or less; 784
(iii) An item of school instructional material, the price 78
of which is twenty dollars or less. 78

As used in division (B)(55) of this section: 787

(i) "Clothing" means all human wearing apparel suitable 788
for general use. "Clothing" includes, but is not limited to, 789
aprons, household and shop; athletic supporters; baby receiving 790
blankets; bathing suits and caps; beach capes and coats; belts 791
and suspenders; boots; coats and jackets; costumes; diapers, 792
children and adult, including disposable diapers; earmuffs; 793
footlets; formal wear; garters and garter belts; girdles; gloves 794
and mittens for general use; hats and caps; hosiery; insoles for 795
shoes; lab coats; neckties; overshoes; pantyhose; rainwear; 796
rubber pants; sandals; scarves; shoes and shoe laces; slippers; 797
sneakers; socks and stockings; steel-toed shoes; underwear; 798
uniforms, athletic and nonathletic; and wedding apparel. 799
"Clothing" does not include items purchased for use in a trade 800
or business; clothing accessories or equipment; protective 801
equipment; sports or recreational equipment; belt buckles sold 802
separately; costume masks sold separately; patches and emblems 803
sold separately; sewing equipment and supplies including, but 804
not limited to, knitting needles, patterns, pins, scissors, 805
sewing machines, sewing needles, tape measures, and thimbles; 806
and sewing materials that become part of "clothing" including, 807
but not limited to, buttons, fabric, lace, thread, yarn, and 808
zippers. 809

(ii) "School supplies" means items commonly used by a

H. B. No. 87 As Introduced

student in a course of study. "School supplies" includes only the following items: binders; book bags; calculators; cellophane tape; blackboard chalk; compasses; composition books; crayons; erasers; folders, expandable, pocket, plastic, and manila; glue, paste, and paste sticks; highlighters; index cards; index card boxes; legal pads; lunch boxes; markers; notebooks; paper, loose-leaf ruled notebook paper, copy paper, graph paper, tracing paper, manila paper, colored paper, poster board, and construction paper; pencil boxes and other school supply boxes; pencil sharpeners; pencils; pens; protractors; rulers; scissors; and writing tablets. "School supplies" does not include any item purchased for use in a trade or business.

(iii) "School instructional material" means written material commonly used by a student in a course of study as a reference and to learn the subject being taught. "School instructional material" includes only the following items: reference books, reference maps and globes, textbooks, and workbooks. "School instructional material" does not include any material purchased for use in a trade or business.

(56)(a) Sales of adult diapers or incontinence underpads 830
sold pursuant to a prescription, for the benefit of a medicaid 831
recipient with a diagnosis of incontinence, and by a medicaid 832
provider that maintains a valid provider agreement under section 833
5164.30 of the Revised Code with the department of medicaid, 834
provided that the medicaid program covers diapers or 835
incontinence underpads as an incontinence garment. 836
(b) As used in division (B)(56)(a) of this section, 837
"incontinence underpad" means an absorbent product, not worn on 838
the body, designed to protect furniture or other tangible 839
personal property from soiling or damage due to human 840

H. B. No. 87 As Introduced

incontinence. 841

(57) Sales of investment metal bullion and investment coins. "Investment metal bullion" means any bullion described in section 408(m)(3)(B) of the Internal Revenue Code, regardless of whether that bullion is in the physical possession of a trustee. "Investment coin" means any coin composed primarily of gold, silver, platinum, or palladium.

844
845
846
847
(58) Sales of tangible personal property used primarily 848
for any of the following purposes by a megaproject operator at 849
the site of a megaproject that satisfies the criteria described 850
in division (A)(11)(a)(ii) of section 122.17 of the Revised 851
Code, provided that the sale occurs during the period that the 852
megaproject operator has an agreement for such megaproject with 853
the tax credit authority under division (D) of section 122.17 of 854
the Revised Code that remains in effect and has not expired or 855
been terminated: 856
(a) To store, transmit, convey, distribute, recycle, 857
circulate, or clean water, steam, or other gases used in or 858
produced as a result of manufacturing activity, including items 859
that support or aid in the operation of such property; 860
(b) To clean or prepare inventory, at any stage of storage 861
or production, or equipment used in a manufacturing activity, 862
including chemicals, solvents, catalysts, soaps, and other items 863
that support or aid in the operation of property; 864
(c) To regulate, treat, filter, condition, improve, clean, 865
maintain, or monitor environmental conditions within areas where 866
manufacturing activities take place; 867
(d) To handle, transport, or convey inventory during 868
production or manufacturing. 869

H. B. No. 87 As Introduced

(59) Documentary services charges imposed pursuant to 870
section 4517.261 or 4781.24 of the Revised Code. 871
(60) Sales of the following child care items: 872
(a) Infant clothing and children's diapers. 873
(61) Sales of therapeutic ; 874
(b) Therapeutic or preventative creams and wipes marketed 875
primarily for use on the skin of children. 876
(62) Sales of a ; 877
(c) Pacifiers, teething rings, and similar items; 878
(d) A child restraint device or booster seat that meets 879
the national highway traffic safety administration standard for 880
child restraint systems under 49 C.F.R. 571.213. 881
(63) Sales of cribs ; 882
(e) Cribs and bassinets intended to provide sleeping 883
accommodations for children that comply with the United States 884
consumer product safety commission's safety standard for full- 885
size baby cribs under 16 C.F.R. 1219 or the commission's safety 886
standard for , non-full-size baby cribs under 16 C.F.R. 1220. , 887
or bassinets under 16 C.F.R. 1218, along with sheets and 888
blankets designed and marketed for use with the same; 889
(f) Play yards that comply with the United States consumer 890
product safety commission's safety standard under 16 C.F.R. 891
1221; 892
(64) Sales of strollers (g) Strollers meant for 893
transporting children from infancy to about thirty-six months of 894
age that meet the United States consumer product safety 895
commission safety standard for carriages and strollers under 16 896

H. B. No. 87 As Introduced

C.F.R. 1227.2;
	(h) Breastfeeding items, including breast pumps, breast 898
	pump collection and storage supplies, breast pump kits, breast
pump parts, burping cloths, and baby bottles;
(i）) Baby monitors;	900 901
(j) Toys labeled as appropriate for infants.
	902
As used in division (B)(6o) of this section, "infant" means an individual aged 12 months or younger.	903 904
(65)(61) The fee imposed by section 3743.22 of the Revised Code, if it is separately stated on the invoice, bill of sale,	905
or similar document given by the vendor to the consumer for a	906
retail sale made in this state.	907 806
(66)(62) Sales of eligible tangible personal property	909
occurring during the period of a sales tax holiday held pursuant to section 5739.41 of the Revised Code.	910 911
a n () chapter, and to prevent the evasion of the tax, it is presumed	912
that all sales made in this state are subject to the tax until	913 914
the contrary is established.	915
(D） The tax collected by the vendor from the consumer under this chapter is not part of the price， but is a tax	916 917
collection for the benefit of the state, and of counties levying	918
an additional sales tax pursuant to section 5739.021 or 5739.026	919
	920
additional sales tax pursuant to section 5739.023 of the Revised	921
Code. Except for the discount authorized under section 5739.12	922
	923
section 5703.055 of the Revised Code, no person other than the	924

H. B. No. 87 As Introduced

state or such a county or transit authority shall derive any 925
benefit from the collection or payment of the tax levied by this 926
section or section 5739.021, 5739.023, or 5739.026 of the 927
Revised Code. 928
Sec. 5747.01. Except as otherwise expressly provided or 929
clearly appearing from the context, any term used in this 930
chapter that is not otherwise defined in this section has the 931
same meaning as when used in a comparable context in the laws of 932
the United States relating to federal income taxes or if not 933
used in a comparable context in those laws, has the same meaning 934
as in section 5733.40 of the Revised Code. Any reference in this 935
chapter to the Internal Revenue Code includes other laws of the 936
United States relating to federal income taxes. 937
As used in this chapter: 938
(A) "Adjusted gross income" or "Ohio adjusted gross 939
income" means federal adjusted gross income, as defined and used 940
in the Internal Revenue Code, adjusted as provided in this 941
section: 942
(1) Add interest or dividends on obligations or securities 943
of any state or of any political subdivision or authority of any 944
state, other than this state and its subdivisions and 945
authorities. 946
(2) Add interest or dividends on obligations of any 947
authority, commission, instrumentality, territory, or possession 948
of the United States to the extent that the interest or 949
dividends are exempt from federal income taxes but not from 950
state income taxes. 951
(3) Deduct interest or dividends on obligations of the 952
United States and its territories and possessions or of any 953

H. B. No. 87 As Introduced

authority, commission, or instrumentality of the United States 954
to the extent that the interest or dividends are included in 955
federal adjusted gross income but exempt from state income taxes 956
under the laws of the United States. 957
(4) Deduct disability and survivor's benefits to the 958
extent included in federal adjusted gross income. 959
(5) Deduct the following, to the extent not otherwise 960
deducted or excluded in computing federal or Ohio adjusted gross 961
income: 962
(a) Benefits under Title II of the Social Security Act and 963
tier 1 railroad retirement; 964
(b) Railroad retirement benefits, other than tier 1 965
railroad retirement benefits, to the extent such amounts are 966
exempt from state taxation under federal law. 967
(6) Deduct the amount of wages and salaries, if any, not 968
otherwise allowable as a deduction but that would have been 969
allowable as a deduction in computing federal adjusted gross 970
income for the taxable year, had the work opportunity tax credit 971
allowed and determined under sections 38, 51, and 52 of the 972
Internal Revenue Code not been in effect. 973
(7) Deduct any interest or interest equivalent on public 974
obligations and purchase obligations to the extent that the 975
interest or interest equivalent is included in federal adjusted 976
gross income. 977
(8) Add any loss or deduct any gain resulting from the 978
sale, exchange, or other disposition of public obligations to 979
the extent that the loss has been deducted or the gain has been 980
included in computing federal adjusted gross income. 981

H. B. No. 87 As Introduced

(9) Deduct or add amounts, as provided under section 982
5747.70 of the Revised Code, related to contributions made to or 983
tuition units purchased under a qualified tuition program 984
established pursuant to section 529 of the Internal Revenue 985
Code. 986
(10)(a) Deduct, to the extent not otherwise allowable as a 987
deduction or exclusion in computing federal or Ohio adjusted 988
gross income for the taxable year, the amount the taxpayer paid 989
during the taxable year for medical care insurance and qualified 990
long-term care insurance for the taxpayer, the taxpayer's 991
spouse, and dependents. No deduction for medical care insurance 992
under division (A)(10)(a) of this section shall be allowed 993
either to any taxpayer who is eligible to participate in any 994
subsidized health plan maintained by any employer of the 995
taxpayer or of the taxpayer's spouse, or to any taxpayer who is 996
entitled to, or on application would be entitled to, benefits 997
under part A of Title XVIII of the "Social Security Act," 49 998
Stat. 620 (1935), 42 U.S.C. 301, as amended. For the purposes of 999
division (A)(10)(a) of this section, "subsidized health plan" 1000
means a health plan for which the employer pays any portion of 1001
the plan's cost. The deduction allowed under division (A)(10)(a) 1002
of this section shall be the net of any related premium refunds, 1003
related premium reimbursements, or related insurance premium 1004
dividends received during the taxable year. 1005

(b) Deduct, to the extent not otherwise deducted or excluded in computing federal or Ohio adjusted gross income during the taxable year, the amount the taxpayer paid during the taxable year, not compensated for by any insurance or otherwise, for medical care of the taxpayer, the taxpayer's spouse, and dependents, to the extent the expenses exceed seven and one-half per cent of the taxpayer's federal adjusted gross income.

H. B. No. 87 As Introduced

(c) For purposes of division (A)(10) of this section, "medical care" has the meaning given in section 213 of the Internal Revenue Code, subject to the special rules, limitations, and exclusions set forth therein, and "qualified long-term care" has the same meaning given in section 7702B(c) of the Internal Revenue Code. Solely for purposes of division (A)(10)(a) of this section, "dependent" includes a person who otherwise would be a "qualifying relative" and thus a "dependent" under section 152 of the Internal Revenue Code but for the fact that the person fails to meet the income and support limitations under section 152(d)(1)(B) and (C) of the Internal Revenue Code.

(11)(a) Deduct any amount included in federal adjusted gross income solely because the amount represents a reimbursement or refund of expenses that in any year the taxpayer had deducted as an itemized deduction pursuant to section 63 of the Internal Revenue Code and applicable United States department of the treasury regulations. The deduction otherwise allowed under division (A)(11)(a) of this section shall be reduced to the extent the reimbursement is attributable to an amount the taxpayer deducted under this section in any taxable year.

(b) Add any amount not otherwise included in Ohio adjusted 1035
gross income for any taxable year to the extent that the amount 1036
is attributable to the recovery during the taxable year of any 1037
amount deducted or excluded in computing federal or Ohio 1038
adjusted gross income in any taxable year. 1039
(12) Deduct any portion of the deduction described in 1040
section 1341(a)(2) of the Internal Revenue Code, for repaying 1041
previously reported income received under a claim of right, that 1042

H. B. No. 87 As Introduced

meets both of the following requirements: 1043
(a) It is allowable for repayment of an item that was 1044
included in the taxpayer's adjusted gross income for a prior 1045
taxable year and did not qualify for a credit under division (A) 1046
or (B) of section 5747.05 of the Revised Code for that year; 1047
(b) It does not otherwise reduce the taxpayer's adjusted 1048
gross income for the current or any other taxable year. 1049
(13) Deduct an amount equal to the deposits made to, and 1050
net investment earnings of, a medical savings account during the 1051
taxable year, in accordance with section 3924.66 of the Revised 1052
Code. The deduction allowed by division (A)(13) of this section 1053
does not apply to medical savings account deposits and earnings 1054
otherwise deducted or excluded for the current or any other 1055
taxable year from the taxpayer's federal adjusted gross income. 1056
(14)(a) Add an amount equal to the funds withdrawn from a 1057
medical savings account during the taxable year, and the net 1058
investment earnings on those funds, when the funds withdrawn 1059
were used for any purpose other than to reimburse an account 1060
holder for, or to pay, eligible medical expenses, in accordance 1061
with section 3924.66 of the Revised Code; 1062
(b) Add the amounts distributed from a medical savings 1063
account under division (A)(2) of section 3924.68 of the Revised 1064
Code during the taxable year. 1065
(15) Add any amount claimed as a credit under section 1066
5747.059 of the Revised Code to the extent that such amount 1067
satisfies either of the following: 1068
(a) The amount was deducted or excluded from the 1069
computation of the taxpayer's federal adjusted gross income as 1070
required to be reported for the taxpayer's taxable year under 1071

H. B. No. 87 As Introduced

the Internal Revenue Code; 1072
(b) The amount resulted in a reduction of the taxpayer's 1073
federal adjusted gross income as required to be reported for any 1074
taxpayer's taxable years under the Internal Revenue Code. 1075
(16) Deduct the amount contributed by the taxpayer to an 1076
individual development account program established by a county 1077
department of job and family services pursuant to sections 1078
to 329.14 of the Revised Code for the purpose of matching 1079
funds deposited by program participants. On request of the tax 1080
commissioner, the taxpayer shall provide any information that, 1081
in the tax commissioner's opinion, is necessary to establish the 1082
deducted under division (A)(16) of this section. 1083
(17)(a)(i) Subject to divisions (A)(17)(a)(iii), (iv), and 1084
this section, add five-sixths of the amount of 1085
depreciation expense allowed by subsection (k) of section 168 of 1086
ernal Revenue Code, including the taxpayer's 1087
proportionate or distributive share of the amount of 1088
ation expense allowed by that subsection to a pass- 1089
entity in which the taxpayer has a direct or indirect 1090
ownership interest. 1091
(ii) Subject to divisions (A)(17)(a)(iii), (iv), and (v) 1092
of this section, add five-sixths of the amount of qualifying 1093
179 depreciation expense, including the taxpayer's 1094
ionate or distributive share of the amount of qualifying 1095
section 179 depreciation expense allowed to any pass-through 1096
entity in which the taxpayer has a direct or indirect ownership 1097
interest. 1098
(iii) Subject to division (A)(17)(a)(v) of this section, 1099
for taxable years beginning in 2012 or thereafter, if the 1100

H. B. No. 87 As Introduced

increase in income taxes withheld by the taxpayer is equal to or 1101
greater than ten per cent of income taxes withheld by the 1102
taxpayer during the taxpayer's immediately preceding taxable 1103
year, "two-thirds" shall be substituted for "five-sixths" for 1104
the purpose of divisions (A)(17)(a)(i) and (ii) of this section. 1105
(iv) Subject to division (A)(17)(a)(v) of this section, 1106
for taxable years beginning in 2012 or thereafter, a taxpayer is 1107
not required to add an amount under division (A)(17) of this 1108
section if the increase in income taxes withheld by the taxpayer 1109
and by any pass-through entity in which the taxpayer has a 1110
direct or indirect ownership interest is equal to or greater 1111
than the sum of (I) the amount of qualifying section 179 1112
depreciation expense and (II) the amount of depreciation expense 1113
allowed to the taxpayer by subsection (k) of section 168 of the 1114
Internal Revenue Code, and including the taxpayer's 1115
proportionate or distributive shares of such amounts allowed to 1116
any such pass-through entities. 1117

(v) If a taxpayer directly or indirectly incurs a net operating loss for the taxable year for federal income tax purposes, to the extent such loss resulted from depreciation expense allowed by subsection (k) of section 168 of the Internal Revenue Code and by qualifying section 179 depreciation expense, "the entire" shall be substituted for "five-sixths of the" for the purpose of divisions (A)(17)(a)(i) and (ii) of this section.

The tax commissioner, under procedures established by the commissioner, may waive the add-backs related to a pass-through entity if the taxpayer owns, directly or indirectly, less than five per cent of the pass-through entity.

(b) Nothing in division (A)(17) of this section shall be construed to adjust or modify the adjusted basis of any asset.

H. B. No. 87 As Introduced

(c) To the extent the add-back required under division (A) 1131
(17)(a) of this section is attributable to property generating 1132
nonbusiness income or loss allocated under section 5747.20 of 1133
the Revised Code, the add-back shall be sitused to the same 1134
location as the nonbusiness income or loss generated by the 1135
property for the purpose of determining the credit under 1136
division (A) of section 5747.05 of the Revised Code. Otherwise, 1137
the add-back shall be apportioned, subject to one or more of the 1138
four alternative methods of apportionment enumerated in section 1139
5747.21 of the Revised Code. 1140
(d) For the purposes of division (A)(17)(a)(v) of this 1141
section, net operating loss carryback and carryforward shall not 1142
include the allowance of any net operating loss deduction 1143
carryback or carryforward to the taxable year to the extent such 1144
loss resulted from depreciation allowed by section 168(k) of the 1145
Internal Revenue Code and by the qualifying section 179 1146
depreciation expense amount. 1147
(e) For the purposes of divisions (A)(17) and (18) of this 1148
section: 1149
(i) "Income taxes withheld" means the total amount 1150
withheld and remitted under sections 5747.06 and 5747.07 of the 1151
Revised Code by an employer during the employer's taxable year. 1152
(ii) "Increase in income taxes withheld" means the amount 1153
by which the amount of income taxes withheld by an employer 1154
during the employer's current taxable year exceeds the amount of 1155
income taxes withheld by that employer during the employer's 1156
immediately preceding taxable year. 1157
(iii) "Qualifying section 179 depreciation expense" means 1158
the difference between (I) the amount of depreciation expense 1159

H. B. No. 87 As Introduced

directly or indirectly allowed to a taxpayer under section 179 1160 of the Internal Revised Code， and (II） the amount of 1161

1162

taxpayer under section 179 of the Internal Revenue Code as that 1163

section existed on December 31, 2002. 1164

zunowe ue ppe oa paxtnbat sem xaedxe aua J1 (e) (8t) 1165

under division (A)(l7)(a) of this section for a taxable year, 1166 deduct one of the following: 1167

(i） One-fifth of the amount so added for each of the five 1168

succeeding taxable years if the amount so added was five-sixths 1169

of qualifying section 179 depreciation expense or depreciation 1170

expense allowed by subsection (k) of section 168 of the Internal 1171 Revenue Code; 1172

a o o og a o -u () 1173

1174

of such depreciation expense; 1175

(iii） One-sixth of the amount so added for each of the six 1176

succeeding taxable years if the entire amount of such 1177

depreciation expense was so added. 1178

(b）If the amount deducted under division (A)(l8)(a)of 1179

this section is attributable to an add-back allocated under 1180

division (A)(l7)(c） of this section， the amount deducted shall 1181

be sitused to the same location. Otherwise, the add-back shall 1182

1183

year in which the deduction is taken, subject to one or more of 1184

the four alternative methods of apportionment enumerated in 1185

section 5747.21 of the Revised Code. 1186

(c） No deduction is available under division (A)(l8）(a） of 1187 o a o o 1188

H. B. No. 87

age4 AsIntroduced

a a a 1189

section 179 depreciation expense amount to the extent that such 1190

e a 1191

loss carryback or carryforward. If no such deduction is 1192

u mog 1o 1dxa '1 qx tog 1193

amount not deducted in such taxable year to the next taxable 1194

year and add that amount to any deduction otherwise available 1195

1196

year. The carryforward of amounts not so deducted shall continue 1197

1198

this section has been deducted. 1199

(19） Deduct, to the extent not otherwise deducted or 1200

1201

the taxable year, the amount the taxpayer received during the 1202

taxable year as reimbursement for life insurance premiums under 1203

section 5919.31 of the Revised Code. 1204

(20） Deduct， to the extent not otherwise deducted or 1205

1206

the taxable year, the amount the taxpayer received during the 1207

taxable year as a death benefit paid by the adjutant general 1208

under section 5919.33 of the Revised Code. 1209

(2l） Deduct, to the extent included in federal adjusted 1210

gross income and not otherwise allowable as a deduction or 1211

exclusion in computing federal or Ohio adjusted gross income for 1212

a aoa so d i ' x 1213

u o g 1214

United States army, air force, navy, marine corps, or coast 1215

1216

g o ou u 1217

received by the taxpayer while the taxpayer is stationed in this 1218

H. B. No. 87 As Introduced

state.		1219
	(22） Deduct, to the extent not otherwise allowable as a	1220
	deduction or exclusion in computing federal or Ohio adjusted	1221
	gross income for the taxable year and not otherwise compensated	1222
	for by any other source, the amount of qualified organ donation	1223
		1224
	to exceed ten thousand dollars. A taxpayer may deduct qualified	1225
	organ donation expenses only once for all taxable years	1226
		1227
	For the purposes of division (A)(22） of this section:	1228
	(a） "Human organ" means all or any portion of a human	1229
human bone marrow.	liver, pancreas, kidney, intestine, or lung, and any portion of	1230
		1231
	(b) "Qualified organ donation expenses" means travel	1232
	e Kq auobroy Ktetes pue sabem pue 'sasuadxe butbpot 'sasuadxa	1233
	taxpayer in connection with the taxpayer's donation, while	1234
human being.	ou on suo u dx n o o o uo o 'u1	1235
		1236
	(23） Deduct， to the extent not otherwise deducted or	1237
		1238
	the taxable year, amounts received by the taxpayer as retired	1239
		1240
		1241
		1242
	survivor benefit plan on account of such a taxpayer's death. If	1243
	the taxpayer receives income on account of retirement paid under	1244
		1245
	retirement system, or under any successor retirement program	1246
	enacted by the congress of the United States that is established	1247

H. B. No. 87 As Introduced

	and maintained for retired employees of the United States	1248
	government, and such retirement income is based, in whole or in	1249
	part, on credit for the taxpayer's uniformed service, the	1250
	deduction allowed under this division shall include only that	1251
	portion of such retirement income that is attributable to the	1252
	taxpayer's uniformed service, to the extent that portion of such	1253
	retirement income is otherwise included in federal adjusted	1254
	gross income and is not otherwise deducted under this section.	1255
	Any amount deducted under division (A)(23） of this section is	1256
		1257
	purposes of section 5747.055 of the Revised Code. No amount may	1258
	be deducted under division (A)(23） of this section on the basis	1259
	of which a credit was claimed under section 5747.055 of the	1260
Revised Code.		1261
	(24） Deduct, to the extent not otherwise deducted or	1262
		1263
	the taxable year, the amount the taxpayer received during the	1264
		1265
section 5902.05 of the Revised Code.		1266
	(25) Deduct， to the extent not otherwise deducted or	1267 1268
	the taxable year, the amount the taxpayer received as a veterans	1269
	bonus during the taxable year from the Ohio department of	1270
	veterans services as authorized by Section 2r of Article VIlI,	1271
Ohio Constitution.		1272
	(26） Deduct， to the extent not otherwise deducted or	1273
		1274
	the taxable year, any income derived from a transfer agreement	1275
		1276
section 4313.02 of the Revised Code.		1277

H. B. No. 87

AsIntroduced
(27） Deduct， to the extent not otherwise deducted or	1278
	1279
the taxable year, Ohio college opportunity or federal Pell grant	1280
	1281
dependent pursuant to section 3333.122 of the Revised Code 0r 20	1282
U.S.C. 1070a, et seq.， and used to pay room or board furnished	1283
by the educational institution for which the grant was awarded	1284
at the institution's facilities, including meal plans	1285
administered by the institution. For the purposes of this	1286
division, receipt of a grant includes the distribution of a	1287
grant directly to an educational institution and the crediting	1288
of the grant to the enrollee's account with the institution.	1289
(28) Deduct from the portion of an individual's federal	1290
adjusted gross income that is business income, to the extent not	1291
otherwise deducted or excluded in computing federal adjusted	1292
gross income for the taxable year, one hundred twenty-five	1293
thousand dollars for each spouse if spouses file separate	1294
returns under section 5747.08 of the Revised Code or two hundred	1295
fifty thousand dollars for all other individuals.	1296
(29) Deduct, as provided under section 5747.78 of the	1297
Revised Code, contributions to ABLE savings accounts made in	1298
	1299
	1300
excluded in computing federal or Ohio adjusted gross income	1301
during the taxable year, all of the following:	1302
(i) Compensation paid to a qualifying employee described	1303
in division (A)(l4)(a） of section 5703.94 of the Revised Code to	1304
the extent such compensation is for disaster work conducted in	1305
this state during a disaster response period pursuant to a	1306
	1307

H. B. No. 87 As Introduced

(ii) Compensation paid to a qualifying employee described 1308
in division (A)(14)(b) of section 5703.94 of the Revised Code to 1309

			s e o		1310
					1311
			on critical infrastructure owned or used by the employee's		1312
	employer;				1313
			(iii） Income received by an out-of-state disaster business		1314
			for disaster work conducted in this state during a disaster		1315
			response period, or, if the out-of-state disaster business is a		1316
			pass-through entity, a taxpayer's distributive share of the		1317
			pass-through entity's income from the business conducting		1318
			disaster work in this state during a disaster response period,		1319
				if， in either case, the disaster work is conducted pursuant to a	1320
			qualifying solicitation received by the business.		1321
			(b） All terms used in division (A)(3o） of this section		1322
			have the same meanings as in section 5703.94 of the Revised		1323
Code.					1324
			(3l） For a taxpayer who is a qualifying Ohio educator,		1325
					1326
	deduct, to the extent not otherwise deducted or excluded in				1327
					1328
	year， the lesser of two hundred fifty dollars or the amount of
	expenses described in subsections (a）(2）(D)(i）and(ii）of				1329
	section 62 of the Internal Revenue Code paid or incurred by the				1330
	taxpayer during the taxpayer's taxable year in excess of the				1331
					1332
	year under subsection (a)(2)(D) of that section.				1333
			(32） Deduct， to the extent not otherwise deducted or		1334
					1335
	the taxable year	amountsreceivedk
					1336

disability severance payment, computed under 10 U.S.C. 1212,

H. B. No. 87

AsIntroduced
following discharge or release under honorable conditions from	1338
the armed forces of the United States， as defined in section 5907.01 of the Revised Code.	1339
	1340
(33） Deduct， to the extent not otherwise deducted or	1341
excluded in computing federal adjusted gross income or Ohio	1342
adjusted gross income， amounts not subject to tax due to an	1343
agreement entered into under division (A)(2） of section 5747.05	1344
of the Revised Code.	1345
(34) Deduct amounts as provided under section 5747.79 of	1346
the Revised Code related to the taxpayer's qualifying capital gains and deductible payroll.	1347 1348
To the extent a qualifying capital gain described under	1349
division (A)(34） of this section is business income, the taxpayer shall deduct those gains under this division before	1350
	1351 1352
(35)(a) For taxable years beginning in or after 2026, deduct， to the extent not otherwise deducted or excluded in	1353 1354
	1355
year:	1356
(i) One hundred per cent of the capital gain received by	1357
the taxpayer in the taxable year from a qualifying interest in	1358
	1359
company's investments in Ohio businesses during the period for	1360
	1361
(ii) Fifty per cent of the capital gain received by the	1362
taxpayer in the taxable year from a qualifying interest in an	1363
Ohio venture capital operating company attributable to the	1364
company's investments in all other businesses during the period	1365
for which the company was an Ohio venture operating company.	1366

H. B. No. 87 As Introduced

1367

division (A)(35)(a） of this section if the director of 1368

1369

requirements for the deduction were not met. 1370

(c） All terms used in division (A)(35） of this section 1371

1372 Code.

1373

(d） To the extent a capital gain described in division (A) 1374

(35)(a) of this section is business income, the taxpayer shall 1375

apply that division before applying division (A)(28) of this 1376

section. 1377

(36） Add, to the extent not otherwise included in 1378

1379

year, the taxpayer's proportionate share of the amount of the 1380

tax levied under section 5747.38 of the Revised Code and paid by 1381

an electing pass-through entity for the taxable year. 1382

Notwithstanding any provision of the Revised Code to the 1383

contrary, the portion of the addition required by division (A) 1384

1385

of the pass-through entity shall be considered business income 1386

under division (B) of this Section. Such addition is eligible 1387

for the deduction in division (A）(28）of this section， subject 1388

to the applicable dollar limitations, and the tax rate 1389

prescribed by division (A)(4)(a) of section 5747.02 of the 1390

Revised Code. The taxpayer shall provide, upon request of the 1391

tax commissioner, any documentation necessary to verify the 1392

1393

division.

1394 (37） Deduct， to the extent not otherwise deducted or 1395

H. B. No. 87 As Introduced

excluded in computing federal or Ohio adjusted gross income for 1396
the taxable year, amounts delivered to a qualifying institution 1397
pursuant to section 3333.128 of the Revised Code for the benefit 1398
of the taxpayer or the taxpayer's spouse or dependent. 1399

(38) Deduct, to the extent not otherwise deducted or excluded in computing federal or Ohio adjusted gross income for the taxable year, amounts received under the Ohio adoption grant program pursuant to section 5101.191 of the Revised Code.

(39) Deduct, to the extent included in federal adjusted gross income, income attributable to amounts provided to a taxpayer for any of the purposes for which an exclusion would have been authorized under section 139 of the Internal Revenue Code if the train derailment near the city of East Palestine on February 3, 2023, had been a qualified disaster pursuant to that section, or to compensate for lost business resulting from that derailment, if such amounts are provided by any of the following:

(a) A federal, state, or local government agency; 1413
(b) A railroad company, as that term is defined in section 1414
5727.01 of the Revised Code; 1415
(c) Any subsidiary, insurer, or agent of a railroad 1416
company or any related person. 1417
Notwithstanding any provision to the contrary, the 1418
derailment is not required to meet the definition of a 1419
"qualified disaster" pursuant to section 139 of the Internal 1420
Revenue Code to qualify for the deduction under this section. 1421
(40) Deduct, to the extent included in federal adjusted 1422
gross income, income attributable to loan repayments on behalf 1423
of the taxpayer under the rural practice incentive program under 1424

H. B. No. 87 As Introduced

section 3333.135 of the Revised Code.

(41) Add any income taxes deducted in computing federal or Ohio adjusted gross income to the extent the income taxes were

1425
1426
1427

		the District of Columbia when such tax was enacted for purposes
		of complying with internal revenue service notice 2020-75.
	Notwithstanding any provision of the Revised Code to the
	contrary， the portion of the addition required by division (A)
	(4l） of this section related to the apportioned business income
	of the pass-through entity shall be considered business income
	1434 1435
under division (B) of this section. Such addition is eligible	for the deduction in division (A)(28） of this section， subject 1436
	1437
to the applicable dollar limitations, and the tax rate	1438
prescribed by division (A)(4)(a） of section 5747.02 of the
Revised Code. The taxpayer shall provide, upon request of the	1439
tax commissioner, any documentation necessary to verify the	1440
portion of the addition that is business income under this	1441
division.	1442
(42） Deduct amounts contributed to a homeownership savings	1443
	1444
section 5747.85 of the Revised Code.	1445
(43） If the taxpayer is the account owner, add the amount	1446
of funds withdrawn from a homeownership savings account not used	1447
for eligible expenses, regardless of who deposited those funds.	14 48
As used in division (A)(43） of this section, "homeownership	1449
savings account," "account owner," and "eligible expenses" have	1450
the same meanings as in section 5747.85 of the Revised Code.	1451
(B)"Business income" means income, including gain or	1452 1453
loss, arising from transactions, activities, and sources in the

H. B. No. 87 As Introduced

1454
1455
1456
1457

regular course of a trade or business and includes income, gain, or loss from real property, tangible property, and intangible property if the acquisition, rental, management, and disposition of the property constitute integral parts of the regular course of a trade or business operation. "Business income" includes income, including gain or loss, from a partial or complete liquidation of a business, including, but not limited to, gain or loss from the sale or other disposition of goodwill or the sale of an equity or ownership interest in a business.

1458
1459
1460
1461
1462
As used in this division, the "sale of an equity or 1463
ownership interest in a business" means sales to which either or 1464
both of the following apply: 1465
(1) The sale is treated for federal income tax purposes as 1466
the sale of assets. 1467
(2) The seller materially participated, as described in 26 1468
C.F.R. 1.469-5T, in the activities of the business during the 1469
taxable year in which the sale occurs or during any of the five 1470
preceding taxable years. 1471
(C) "Nonbusiness income" means all income other than 1472
business income and may include, but is not limited to, 1473
compensation, rents and royalties from real or tangible personal 1474
property, capital gains, interest, dividends and distributions, 1475
patent or copyright royalties, or lottery winnings, prizes, and 1476
awards. 1477
(D) "Compensation" means any form of remuneration paid to 1478
an employee for personal services. 1479
(E) "Fiduciary" means a guardian, trustee, executor, 1480
administrator, receiver, conservator, or any other person acting 1481
in any fiduciary capacity for any individual, trust, or estate. 1482

H. B. No. 87 As Introduced

(F) "Fiscal year" means an accounting period of twelve 1483
months ending on the last day of any month other than December. 1484
(G) "Individual" means any natural person. 1485
(H) "Internal Revenue Code" means the "Internal Revenue 1486
Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended. 1487
(I) "Resident" means any of the following: 1488
(1) An individual who is domiciled in this state, subject 1489
to section 5747.24 of the Revised Code; 1490
(2) The estate of a decedent who at the time of death was 1491
domiciled in this state. The domicile tests of section 5747.24 1492
of the Revised Code are not controlling for purposes of division 1493
(I)(2) of this section. 1494
(3) A trust that, in whole or part, resides in this state. 1495
If only part of a trust resides in this state, the trust is a 1496
resident only with respect to that part. 1497
For the purposes of division (I)(3) of this section: 1498
(a) A trust resides in this state for the trust's current 1499
taxable year to the extent, as described in division (I)(3)(d) 1500
of this section, that the trust consists directly or indirectly, 1501
in whole or in part, of assets, net of any related liabilities, 1502
that were transferred, or caused to be transferred, directly or 1503
indirectly, to the trust by any of the following: 1504
(i) A person, a court, or a governmental entity or 1505
instrumentality on account of the death of a decedent, but only 1506
if the trust is described in division (I)(3)(e)(i) or (ii) of 1507
this section; 1508
(ii) A person who was domiciled in this state for the 1509

H. B. No. 87 As Introduced

purposes of this chapter when the person directly or indirectly 1510
transferred assets to an irrevocable trust, but only if at least 1511
one of the trust's qualifying beneficiaries is domiciled in this 1512

	state for the purposes of this chapter during all or some
portion of the trust's current taxable year;
(iii） A person who was domiciled in this state for the	1515
purposes of this chapter when the trust document or instrument	1516
or part of the trust document or instrument became irrevocable,	1517
but only if at least one of the trust's qualifying beneficiaries	1518
n s n og i	1519
chapter during all or some portion of the trust's current	1520
taxable year. If a trust document or instrument became	1521
irrevocable upon the death of a person who at the time of death	1522
was domiciled in this state for purposes of this chapter, that	1523
	1524
section.	1525
(b） A trust is irrevocable to the extent that the	1526
transferor is not considered to be the owner of the net assets	1527
of the trust under sections 671 to 678 of the Internal Revenue	1528
Code.	1529
(c） With respect to a trust other than a charitable lead	1530
trust, "qualifying beneficiary" has the same meaning as	1531
	1532
of the Internal Revenue Code, and with respect to a charitable	1533
lead trust "qualifying beneficiary" is any current, future, or	1534
contingent beneficiary, but with respect to any trust	1535
	1536
entity or instrumentality to any of which a contribution would	1537
qualify for the charitable deduction under section 17o of the	1538
Internal Revenue Code.
	1539

H. B. No. 87 As Introduced

(d) For the purposes of division (I)(3)(a) of this section, the extent to which a trust consists directly or indirectly, in whole or in part, of assets, net of any related liabilities, that were transferred directly or indirectly, in whole or part, to the trust by any of the sources enumerated in that division shall be ascertained by multiplying the fair market value of the trust's assets, net of related liabilities, by the qualifying ratio, which shall be computed as follows:

(i) The first time the trust receives assets, the numerator of the qualifying ratio is the fair market value of those assets at that time, net of any related liabilities, from sources enumerated in division (I)(3)(a) of this section. The denominator of the qualifying ratio is the fair market value of all the trust's assets at that time, net of any related liabilities.

(ii) Each subsequent time the trust receives assets, a revised qualifying ratio shall be computed. The numerator of the revised qualifying ratio is the sum of (1) the fair market value of the trust's assets immediately prior to the subsequent transfer, net of any related liabilities, multiplied by the qualifying ratio last computed without regard to the subsequent transfer, and (2) the fair market value of the subsequently transferred assets at the time transferred, net of any related liabilities, from sources enumerated in division (I)(3)(a) of this section. The denominator of the revised qualifying ratio is the fair market value of all the trust's assets immediately after the subsequent transfer, net of any related liabilities.

(iii) Whether a transfer to the trust is by or from any of 1567
the sources enumerated in division (I)(3)(a) of this section 1568
shall be ascertained without regard to the domicile of the 1569

H. B. No. 87 As Introduced

trust's beneficiaries. 1570

(e) For the purposes of division (I)(3)(a)(i) of this section:

(i) A trust is described in division (I)(3)(e)(i) of this section if the trust is a testamentary trust and the testator of that testamentary trust was domiciled in this state at the time of the testator's death for purposes of the taxes levied under Chapter 5731. of the Revised Code.

(ii) A trust is described in division (I)(3)(e)(ii) of this section if the transfer is a qualifying transfer described in any of divisions (I)(3)(f)(i) to (vi) of this section, the trust is an irrevocable inter vivos trust, and at least one of the trust's qualifying beneficiaries is domiciled in this state for purposes of this chapter during all or some portion of the trust's current taxable year.

(f) For the purposes of division (I)(3)(e)(ii) of this section, a "qualifying transfer" is a transfer of assets, net of any related liabilities, directly or indirectly to a trust, if the transfer is described in any of the following:

(i) The transfer is made to a trust, created by the decedent before the decedent's death and while the decedent was domiciled in this state for the purposes of this chapter, and, prior to the death of the decedent, the trust became irrevocable while the decedent was domiciled in this state for the purposes of this chapter.

(ii) The transfer is made to a trust to which the decedent, prior to the decedent's death, had directly or indirectly transferred assets, net of any related liabilities, while the decedent was domiciled in this state for the purposes

H. B. No. 87 As Introduced

of this chapter, and prior to the death of the decedent the 1599

trust became irrevocable while the decedent was domiciled in 1600

this state for the purposes of this chapter. 1601

(iii）The transfer is made on account of a contractual 1602

relationship existing directly or indirectly between the 1603

transferor and either the decedent or the estate of the decedent 1604

at any time prior to the date of the decedent's death， and the 1605

decedent was domiciled in this state at the time of death for 1606

purposes of the taxes levied under Chapter 573l. of the Revised 1607

Code. 1608

(iv) The transfer is made to a trust on account of a 1609

contractual relationship existing directly or indirectly between 1610

the transferor and another person who at the time of the 1611

decedent's death was domiciled in this state for purposes of 1612

this chapter. 1613

(v） The transfer is made to a trust on account of the will 1614

of a testator who was domiciled in this state at the time of the 1615

1616

573l. of the Revised Code. 1617

(vi） The transfer is made to a trust created by or caused 1618

to be created by a court, and the trust was directly or 1619

indirectly created in connection with or as a result of the 1620

death of an individual who, for purposes of the taxes levied 1621

under Chapter 5731. of the Revised Code, was domiciled in this 1622

state at the time of the individual's death. 1623

(g) The tax commissioner may adopt rules to ascertain the 1624

part of a trust residing in this state. 1625

(J）"Nonresident" means an individual or estate that is 1626

not a resident. An individual who is a resident for only part of 1627

H. B. No. 87 As Introduced

a taxable year is a nonresident for the remainder of that 1628
taxable year. 1629
(K) "Pass-through entity" has the same meaning as in 1630
section 5733.04 of the Revised Code. 1631
(L) "Return" means the notifications and reports required 1632
to be filed pursuant to this chapter for the purpose of 1633
reporting the tax due and includes declarations of estimated tax 1634
when so required. 1635
(M) "Taxable year" means the calendar year or the 1636
taxpayer's fiscal year ending during the calendar year, or 1637
fractional part thereof, upon which the adjusted gross income is 1638
calculated pursuant to this chapter. 1639
(N) "Taxpayer" means any person subject to the tax imposed 1640
by section 5747.02 of the Revised Code or any pass-through 1641
entity that makes the election under division (D) of section 1642
5747.08 of the Revised Code. 1643
(O) "Dependents" means one of the following: 1644
(1) For taxable years beginning on or after January 1, 1645
2018, and before January 1, 2026, dependents as defined in the 1646
Internal Revenue Code; 1647
(2) For all other taxable years, dependents as defined in 1648
the Internal Revenue Code and as claimed in the taxpayer's 1649
federal income tax return for the taxable year or which the 1650
taxpayer would have been permitted to claim had the taxpayer 1651
filed a federal income tax return. 1652
"Dependents" shall include each child conceived, including 1653
each child conceived by assisted reproduction that has been 1654
placed inside the taxpayer or taxpayer's spouse's uterus or lost 1655

H.B.No.87 AsIntroduced	Page58
	1656
spouse during the taxable year, so long as:	1657
(a) The child is not also a qualifying child, as that term	1658
is defined in section l52 of the Internal Revenue Code，for the	1659
same taxable year.	1660
(b) The child's life was not terminated in an abortion,	1661
including by selective reduction.	1662
As used in division (o) of this section, "assisted	1663
reproduction" has the same meaning as in section 2907.13 of the	1664
	1665
as in section 2919.19 of the Revised Code.	1666
(P） "Principal county of employment" means, in the case of	1667
a nonresident, the county within the state in which a taxpayer	1668
	1669
a m '	1670
portion of the services are performed.	1671
(Q） As used in sections 5747.50 to 5747.55 of the Revised	1672
Code:	1673
'uoiodo douu 'uo u su uospqn ()	1674
park district, or township.	1675
	1676
	1677
	1678
charter adopted pursuant to the Ohio Constitution.	1679
(R) "overpayment" means any amount already paid that	1680
exceeds the figure determined to be the correct amount of the	1681
tax.	1682
o s " x o "o x ()	1683

H. B. No. 87 As Introduced

	to estates and trusts, and means federal taxable income, as	1684
	defined and used in the Internal Revenue Code, adjusted as	1685
follows:		1686
	(l） Add interest or dividends， net of ordinary， necessary;	1687
	and reasonable expenses not deducted in computing federal	1688
	taxable income, on obligations or securities of any state or of	1689
	any political subdivision or authority of any state, other than	1690
	this state and its subdivisions and authorities, but only to the	1691
	extent that such net amount is not otherwise includible in Ohio	1692
	taxable income and is described in either division (S)(l)(a） or	1693
(b) of this section:		1694
	(a） The net amount is not attributable to the S portion of	1695
an electing small business trust and has not been distributed to		1696
beneficiaries for the taxable year;		1697
	(b） The net amount is attributable to the S portion of an	1698
electing small business trust for the taxable year.		1699
	(2） Add interest or dividends, net of ordinary， necessary,	1700
and reasonable expenses not deducted in computing federal		1701
taxable income, on obligations of any authority, commission,		1702
instrumentality, territory, or possession of the United States		1703
to the extent that the interest or dividends are exempt from
	federal income taxes but not from state income taxes, but only	1704
		1705
	to the extent that such net amount is not otherwise includible	1706
		1707
(l)(a） or (b） of this section;		1708
		1709
estate pursuant to section 642(b) of the Internal Revenue Code;		1710
	(4） Deduct interest or dividends, net of related expenses	1711
deducted in computing federal taxable income, on obligations of		1712

H. B. No. 87 As Introduced

the United States and its territories and possessions or of any 1713
authority, commission, or instrumentality of the United States 1714
to the extent that the interest or dividends are exempt from 1715
state taxes under the laws of the United States, but only to the 1716
extent that such amount is included in federal taxable income 1717
and is described in either division (S)(1)(a) or (b) of this 1718
section; 1719

(5) Deduct the amount of wages and salaries, if any, not otherwise allowable as a deduction but that would have been allowable as a deduction in computing federal taxable income for the taxable year, had the work opportunity tax credit allowed under sections 38, 51, and 52 of the Internal Revenue Code not been in effect, but only to the extent such amount relates either to income included in federal taxable income for the taxable year or to income of the S portion of an electing small business trust for the taxable year;

1720
1721
1722
1723
1724
1725
1726
1727
1728
1729
1730
1731
1732
1733
1734
1735
1736
1737
1738
1739
1740
1741
1742

(6) Deduct any interest or interest equivalent, net of related expenses deducted in computing federal taxable income, on public obligations and purchase obligations, but only to the extent that such net amount relates either to income included in federal taxable income for the taxable year or to income of the S portion of an electing small business trust for the taxable year;

(7) Add any loss or deduct any gain resulting from sale, exchange, or other disposition of public obligations to the extent that such loss has been deducted or such gain has been included in computing either federal taxable income or income of the S portion of an electing small business trust for the taxable year;

(8) Except in the case of the final return of an estate,

H. B. No. 87 As Introduced

add any amount deducted by the taxpayer on both its ohio estate

tax return pursuant to section 5731.l4 of the Revised Code, and 1744 on its federal income tax return in determining federal taxable 1745

income; 1746

axi ipag ut apnoug unos u aonpa ()(o) 1747

income solely because the amount represents a reimbursement or 1748

refund of expenses that in a previous year the decedent had 1749

deducted as an itemized deduction pursuant to section 63 of the 1750

1751

deduction otherwise allowed under division (S)(9)(a） of this 1752

section shall be reduced to the extent the reimbursement is 1753

attributable to an amount the taxpayer or decedent deducted 1754

under this section in any taxable year. 1755

(b） Add any amount not otherwise included in Ohio taxable 1756

income for any taxable year to the extent that the amount is 1757

attributable to the recovery during the taxable year of any 1758

amount deducted or excluded in computing federal or Ohio taxable 1759

income in any taxable year, but only to the extent such amount 1760

has not been distributed to beneficiaries for the taxable year. 1761

(1o) Deduct any portion of the deduction described in 1762

section 1341(a）(2） of the Internal Revenue Code， for repaying 1763

previously reported income received under a claim of right, that 1764

meets both of the following requirements: 1765

(a) It is allowable for repayment of an item that was 1766

1767

adjusted gross income for a prior taxable year and did not 1768

qualify for a credit under division (A） or (B） of section 1769

5747.05 of the Revised Code for that year. 1770

(b） It does not otherwise reduce the taxpayer's taxable 1771

H. B. No. 87 As Introduced

income or the decedent's adjusted gross income for the current 1772
or any other taxable year. 1773
(11) Add any amount claimed as a credit under section 1774
5747.059 of the Revised Code to the extent that the amount 1775
satisfies either of the following: 1776
(a) The amount was deducted or excluded from the 1777
computation of the taxpayer's federal taxable income as required 1778
to be reported for the taxpayer's taxable year under the 1779
Internal Revenue Code; 1780
(b) The amount resulted in a reduction in the taxpayer's 1781
federal taxable income as required to be reported for any of the 1782
taxpayer's taxable years under the Internal Revenue Code. 1783
(12) Deduct any amount, net of related expenses deducted 1784
in computing federal taxable income, that a trust is required to 1785
report as farm income on its federal income tax return, but only 1786
if the assets of the trust include at least ten acres of land 1787
satisfying the definition of "land devoted exclusively to 1788
agricultural use" under section 5713.30 of the Revised Code, 1789
regardless of whether the land is valued for tax purposes as 1790
such land under sections 5713.30 to 5713.38 of the Revised Code. 1791
If the trust is a pass-through entity investor, section 5747.231 1792
of the Revised Code applies in ascertaining if the trust is 1793
eligible to claim the deduction provided by division (S)(12) of 1794
this section in connection with the pass-through entity's farm 1795
income. 1796
Except for farm income attributable to the S portion of an 1797
electing small business trust, the deduction provided by 1798
division (S)(12) of this section is allowed only to the extent 1799
that the trust has not distributed such farm income. 1800

H. B. No. 87 As Introduced

	(13） Add the net amount of income described in section	1801
	64l(c） of the Internal Revenue Code to the extent that amount is	1802
not included in federal taxable income.		1803
	(14) Deduct the amount the taxpayer would be required to	1804
	deduct under division (A)(l8） of this section if the taxpayer's	1805
	Ohio taxable income were was_computed in the same manner as an	1806
	individual's Ohio adjusted gross income is computed under this	1807
section.		1808
	(15) Add, to the extent not otherwise included in	1809
	computing taxable income or Ohio taxable income for any taxable	1810
	year, the taxpayer's proportionate share of the amount of the	1811
		1812
	an electing pass-through entity for the taxable year.	1813
	(16) Add any income taxes deducted in computing federal	1814
		1815
		1816
	another state or the District of Columbia when such tax was	1817
	enacted for purposes of complying with internal revenue service	1818
notice 2020-75.		1819
		1820
	tax" have the same meanings as in section 5748.0l of the Revised	1821
Code.		1822
	(U）As used in divisions(A)(7)，(A)(8)，(S)(6)，and(S)	1823
	(7） of this section, "public obligations," "purchase	1824
	obligations," and "interest or interest equivalent" have the	1825
same meanings as in section 5709.76 of the Revised Code.		1826
	" ()	1827 1828
	' d
		1829

H. B. No. 87 As Introduced

Chapter 1706. of the Revised Code, or the laws of any other 1830
state. 1831
(W) "Pass-through entity investor" means any person who, 1832
during any portion of a taxable year of a pass-through entity, 1833
is a partner, member, shareholder, or equity investor in that 1834
pass-through entity. 1835
(X) "Banking day" has the same meaning as in section 1836
1304.01 of the Revised Code. 1837
(Y) "Month" means a calendar month. 1838
(Z) "Quarter" means the first three months, the second 1839
three months, the third three months, or the last three months 1840
of the taxpayer's taxable year. 1841
(AA)(1) "Modified business income" means the business 1842
income included in a trust's Ohio taxable income after such 1843
taxable income is first reduced by the qualifying trust amount, 1844
if any. 1845
(2) "Qualifying trust amount" of a trust means capital 1846
gains and losses from the sale, exchange, or other disposition 1847
of equity or ownership interests in, or debt obligations of, a 1848
qualifying investee to the extent included in the trust's Ohio 1849
taxable income, but only if the following requirements are 1850
satisfied: 1851
(a) The book value of the qualifying investee's physical 1852
assets in this state and everywhere, as of the last day of the 1853
qualifying investee's fiscal or calendar year ending immediately 1854
prior to the date on which the trust recognizes the gain or 1855
loss, is available to the trust. 1856
(b) The requirements of section 5747.011 of the Revised 1857

H. B. No. 87 As Introduced

Code are satisfied for the trust's taxable year in which the 1858
trust recognizes the gain or loss. 1859
Any gain or loss that is not a qualifying trust amount is 1860
modified business income, qualifying investment income, or 1861
modified nonbusiness income, as the case may be. 1862
(3) "Modified nonbusiness income" means a trust's Ohio 1863
taxable income other than modified business income, other than 1864
the qualifying trust amount, and other than qualifying 1865
investment income, as defined in section 5747.012 of the Revised 1866
Code, to the extent such qualifying investment income is not 1867
otherwise part of modified business income. 1868
(4) "Modified Ohio taxable income" applies only to trusts, 1869
and means the sum of the amounts described in divisions (AA)(4) 1870
(a) to (c) of this section: 1871
(a) The fraction, calculated under section 5747.013, and 1872
applying section 5747.231 of the Revised Code, multiplied by the 1873
sum of the following amounts: 1874
(i) The trust's modified business income; 1875
(ii) The trust's qualifying investment income, as defined 1876
in section 5747.012 of the Revised Code, but only to the extent 1877
the qualifying investment income does not otherwise constitute 1878
modified business income and does not otherwise constitute a 1879
qualifying trust amount. 1880
(b) The qualifying trust amount multiplied by a fraction, 1881
the numerator of which is the sum of the book value of the 1882
qualifying investee's physical assets in this state on the last 1883
day of the qualifying investee's fiscal or calendar year ending 1884
immediately prior to the day on which the trust recognizes the 1885
qualifying trust amount, and the denominator of which is the sum 1886

H. B. No. 87 As Introduced

of the book value of the qualifying investee's total physical 1887
assets everywhere on the last day of the qualifying investee's 1888
fiscal or calendar year ending immediately prior to the day on 1889
which the trust recognizes the qualifying trust amount. If, for 1890
a taxable year, the trust recognizes a qualifying trust amount 1891
with respect to more than one qualifying investee, the amount 1892
described in division (AA)(4)(b) of this section shall equal the 1893
sum of the products so computed for each such qualifying 1894
investee. 1895
(c)(i) With respect to a trust or portion of a trust that 1896
is a resident as ascertained in accordance with division (I)(3) 1897
(d) of this section, its modified nonbusiness income. 1898
(ii) With respect to a trust or portion of a trust that is 1899
not a resident as ascertained in accordance with division (I)(3) 1900
(d) of this section, the amount of its modified nonbusiness 1901
income satisfying the descriptions in divisions (B)(2) to (5) of 1902
section 5747.20 of the Revised Code, except as otherwise 1903
provided in division (AA)(4)(c)(ii) of this section. With 1904
respect to a trust or portion of a trust that is not a resident 1905
as ascertained in accordance with division (I)(3)(d) of this 1906
section, the trust's portion of modified nonbusiness income 1907
recognized from the sale, exchange, or other disposition of a 1908
debt interest in or equity interest in a section 5747.212 1909
entity, as defined in section 5747.212 of the Revised Code, 1910
without regard to division (A) of that section, shall not be 1911
allocated to this state in accordance with section 5747.20 of 1912
the Revised Code but shall be apportioned to this state in 1913
accordance with division (B) of section 5747.212 of the Revised 1914
Code without regard to division (A) of that section. 1915
If the allocation and apportionment of a trust's income 1916

H. B. No. 87 As Introduced

under divisions (AA)(4）(a） and (c）of this section do not fairly
	1917
	1918
state, the alternative methods described in division (C) of	1919
section 5747.21 of the Revised Code may be applied in the manner	1920
and to the same extent provided in that section.	1921
(5）(a）Except as set forth in division (AA)(5)(b） of this	1922
section, "qualifying investee" means a person in which a trust	1923
has an equity or ownership interest， or a person or unit of	1924
government the debt obligations of either of which are owned by	1925
	1926
and for the purpose of computing the fraction described in	1927
division (AA)(4)(b） of this section, all of the following apply:	1928
u o 1 u u ()	1929
controlled group on the last day of the qualifying investee's	1930
fiscal or calendar year ending immediately prior to the date on	1931
' o	1932
investee" includes all persons in the qualifying controlled	1933
group on such last day.	1934
(ii） If the qualifying investee, or if the qualifying	1935
investee and any members of the qualifying controlled group of	1936
which the qualifying investee is a member on the last day of the	1937
qualifying investee's fiscal or calendar year ending immediately	1938
prior to the date on which the trust recognizes the gain or	1939
loss, separately or cumulatively own, directly or indirectly, on	1940
the last day of the qualifying investee's fiscal or calendar	1941
year ending immediately prior to the date on which the trust	1942
recognizes the qualifying trust amount, more than fifty per cent	1943
of the equity of a pass-through entity， then the qualifying	1944
investee and the other members are deemed to own the	1945
proportionate share of the pass-through entity's physical assets	1946

H. B. No. 87 As Introduced

which the pass-through entity directly or indirectly owns on the last day of the pass-through entity's calendar or fiscal year ending within or with the last day of the qualifying investee's fiscal or calendar year ending immediately prior to the date on which the trust recognizes the qualifying trust amount.

(iii) For the purposes of division (AA)(5)(a)(iii) of this section, "upper level pass-through entity" means a pass-through entity directly or indirectly owning any equity of another passthrough entity, and "lower level pass-through entity" means that other pass-through entity.

1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977

An upper level pass-through entity, whether or not it is also a qualifying investee, is deemed to own, on the last day of the upper level pass-through entity's calendar or fiscal year, the proportionate share of the lower level pass-through entity's physical assets that the lower level pass-through entity directly or indirectly owns on the last day of the lower level pass-through entity's calendar or fiscal year ending within or with the last day of the upper level pass-through entity's fiscal or calendar year. If the upper level pass-through entity directly and indirectly owns less than fifty per cent of the equity of the lower level pass-through entity on each day of the upper level pass-through entity's calendar or fiscal year in which or with which ends the calendar or fiscal year of the lower level pass-through entity and if, based upon clear and convincing evidence, complete information about the location and cost of the physical assets of the lower pass-through entity is not available to the upper level pass-through entity, then solely for purposes of ascertaining if a gain or loss constitutes a qualifying trust amount, the upper level passthrough entity shall be deemed as owning no equity of the lower level pass-through entity for each day during the upper level

H. B. No. 87 As Introduced

- which ends the lower level pass-through entity's calendar or fiscal year.Nothing in division (AA)(5)(a)(iii） of this Section

1979 1980

1981

computing any trust's Ohio taxable income. 1982

(b） With respect to a trust that is not a resident for the 1983

taxable year and with respect to a part of a trust that is not a 1984

resident for the taxable year, "qualifying investee" for that 1985

taxable year does not include a C corporation if both of the 1986

following apply: 1987

o () 1988

recognizes a gain or loss from the sale, exchange, or other 1989

disposition of equity or ownership interests in, or debt 1990

obligations of, the C corporation. 1991

(ii) Such gain or loss constitutes nonbusiness income. 1992

uod ia t uu (9) 1993

able to learn of the information by the due date plus 1994

extensions, if any, for filing the return for the taxable year 1995

in which the trust recognizes the gain or loss. 1996

buuau s u su dno1a ouo buno (a) 1997

in section 5733.04 of the Revised Code. 1998

1999

5733.042 of the Revised Code. 2000

() ()() 2001

uua auo uosiad u suw "uosiad butgimn () 2002

qualifying corporation. 2003

(b) "Qualifying corporation" means any person classified 2004

for federal income tax purposes as an association taxable as a 2005

H. B. No. 87 As Introduced

corporation, except either of the following: 2006
(i) A corporation that has made an election under 2007
subchapter S, chapter one, subtitle A, of the Internal Revenue 2008
Code for its taxable year ending within, or on the last day of, 2009
the investor's taxable year; 2010
(ii) A subsidiary that is wholly owned by any corporation 2011
that has made an election under subchapter S, chapter one, 2012
subtitle A of the Internal Revenue Code for its taxable year 2013
ending within, or on the last day of, the investor's taxable 2014
year. 2015
(2) For the purposes of this chapter, unless expressly 2016
stated otherwise, no qualifying person indirectly owns any asset 2017
directly or indirectly owned by any qualifying corporation. 2018
(EE) For purposes of this chapter and Chapter 5751. of the 2019
Revised Code: 2020
(1) "Trust" does not include a qualified pre-income tax 2021
trust. 2022
(2) A "qualified pre-income tax trust" is any pre-income 2023
tax trust that makes a qualifying pre-income tax trust election 2024
as described in division (EE)(3) of this section. 2025
(3) A "qualifying pre-income tax trust election" is an 2026
election by a pre-income tax trust to subject to the tax imposed 2027
by section 5751.02 of the Revised Code the pre-income tax trust 2028
and all pass-through entities of which the trust owns or 2029
controls, directly, indirectly, or constructively through 2030
related interests, five per cent or more of the ownership or 2031
equity interests. The trustee shall notify the tax commissioner 2032
in writing of the election on or before April 15, 2006. The 2033
election, if timely made, shall be effective on and after 2034

H. B. No. 87 As Introduced

January 1, 2006, and shall apply for all tax periods and tax 2035
years until revoked by the trustee of the trust. 2036
(4) A "pre-income tax trust" is a trust that satisfies all 2037
of the following requirements: 2038
(a) The document or instrument creating the trust was 2039
executed by the grantor before January 1, 1972; 2040
(b) The trust became irrevocable upon the creation of the 2041
trust; and 2042
(c) The grantor was domiciled in this state at the time 2043
the trust was created. 2044
(FF) "Uniformed services" means all of the following: 2045
(1) "Armed forces of the United States" as defined in 2046
section 5907.01 of the Revised Code; 2047
(2) The commissioned corps of the national oceanic and 2048
atmospheric administration; 2049
(3) The commissioned corps of the public health service. 2050
(GG) "Taxable business income" means the amount by which 2051
an individual's business income that is included in federal 2052
adjusted gross income exceeds the amount of business income the 2053
individual is authorized to deduct under division (A)(28) of 2054
this section for the taxable year. 2055
(HH) "Employer" does not include a franchisor with respect 2056
to the franchisor's relationship with a franchisee or an 2057
employee of a franchisee, unless the franchisor agrees to assume 2058
that role in writing or a court of competent jurisdiction 2059
determines that the franchisor exercises a type or degree of 2060
control over the franchisee or the franchisee's employees that 2061

H. B. No. 87 As Introduced

protecting the franchisor's trademark, brand, or both. For	2062
	2063
purposes of this division, "franchisor" and "franchisee" have	2064
the same meanings as in 16 C.F.R. 436.1.	2065
	2066
gross income plus any amount deducted under divisions (A)(28)	2067
and (34) of this section for the taxable year.	2068
(JJ) "Qualifying Ohio educator" means an individual who,	2069
for a taxable year, qualifies as an eligible educator， as that	2070
term is defined in section 62 of the Internal Revenue Code, and	2071
who holds a certificate, license, or permit described in Chapter	2072
3319. or section 3301.071 of the Revised Code.	2073
Sec. 5747.025. (A） The personal exemption for the	2074
taxpayer, the taxpayer's spouse, and each dependent shall be one	2075
of the following amounts:	2076
a i a ()	2077
taxpayer's modified adjusted gross income for the taxable year	2078
as shown on an individual or joint annual return is less than or	2079
equal to forty thousand dollars;	2080
	2081
modified adjusted gross income for the taxable year as shown on	2082
an individual or joint annual return is greater than forty	2083
	2084
dollars;	2085
a so ig uu auta usou u ()	2086
taxpayer's modified adjusted gross income for the taxable year	2087
as shown on an individual or joint annual return is greater than	2088
eighty thousand dollars.	2089
(B) For taxable years beginning in 2020 and thereafter,	2090

H. B. No. 87 As Introduced

the personal exemption amounts prescribed in division (A) of 2091
this section shall be adjusted each year in the manner 2092
prescribed in division (C) of this section. In the case of an 2093
individual with respect to whom an exemption under section 2094
5747.02 of the Revised Code is allowable to another taxpayer for 2095
a taxable year beginning in the calendar year in which the 2096
individual's taxable year begins, the exemption amount 2097
applicable to such individual for such individual's taxable year 2098
shall be zero. 2099

(C) Except as otherwise provided in this division, in August of each year, the tax commissioner shall determine the percentage increase in the gross domestic product deflator determined by the bureau of economic analysis of the United States department of commerce from the first day of January of the preceding calendar year to the last day of December of the preceding year, and make a new adjustment to the personal exemption amount for taxable years beginning in the current calendar year by multiplying that amount by the percentage increase in the gross domestic product deflator for that period; adding the resulting product to the personal exemption amount for taxable years beginning in the preceding calendar year; and rounding the resulting sum upward to the nearest multiple of fifty dollars. The adjusted amount applies to taxable years beginning in the calendar year in which the adjustment is made and to taxable years beginning in each ensuing calendar year until a calendar year in which a new adjustment is made pursuant to this division. The commissioner shall not make a new adjustment in any calendar year in which the amount resulting from the adjustment would be less than the amount resulting from the adjustment in the preceding calendar year.

(D) If the taxpayer and the taxpayer's spouse file

H. B. No. 87 As Introduced

separate returns, the exemption authorized under division (A) of this section for a conceived child may only be claimed by the expecting mother.

Section 2. That existing sections 5739.02, 5747.01, and 5747.025 of the Revised Code are hereby repealed.

Section 3. (A) The amendment by this act of sections 5747.01 and 5747.025 of the Revised Code applies to taxable years ending on or after January 1, 2026.

(B) The amendment by this act of section 5739.02 of the evised Code applies on and after January 1, 2026.

Section 4. This act shall be known as the Strategic Tax Opportunities for Raising Kids (STORK) Act.

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Section 5. Section 5747.01 of the Revised Code is presented in this act as a composite of the section as amended by both H.B. 101 and S.B. 154 of the 135th General Assembly. The General Assembly, applying the principle stated in division (B) of section 1.52 of the Revised Code that amendments are to be harmonized if reasonably capable of simultaneous operation, finds that the composite is the resulting version of the section in effect prior to the effective date of the section as presented in this act.