5703-7-01. Determination of NAICS codes for the Ohio business income deduction

(A) Pursuant to division (L) of section 5747.08 of the Revised Code, a taxpayer will determine and report the appropriate six-digit North American industry classification system (NAICS) code for each business or professional activity from which income is included on form IT BUS using the applicable method outlined in paragraph (B) of this rule.

(B)

(1) If the taxpayer is an investor in a pass-through entity:

(a) The taxpayer will use the NAICS code reported to the taxpayer by the pass-through entity; or

(b) If the pass-through entity does not report a NAICS code to the taxpayer, the taxpayer will contact the pass-through entity to determine the business activity code used on the pass-through entity's federal filing, and then determine the NAICS code that most closely corresponds the pass-through entity's business activity code.

(2) If the taxpayer receives business income from a source other than a pass-through entity, or the pass-through entity does not provide the taxpayer with either its NAICS code or business activity code under paragraph (B)(1) of this rule, the taxpayer will:

(a) Find the two-digit NAICS code category that best describes the primary activity of the business;

(b) Select the activity within that category that best identifies the principal source of the business's sales or receipts; and

(c) Select the six-digit NAICS code assigned to that activity and list it, along with the business's corresponding federal employer identification number or social security number if the business does not have a federal employer identification number, on form IT BUS.

(C) A pass-through entity should provide a direct or indirect investor with its NAICS code or business activity code either when issuing an income statement to its investor or upon the investor's request.

(D) NAICS codes are published by the NAICS Association and are available on its website.

The department of taxation will provide a link to the NAICS Association's website on tax.ohio.gov.

Effective: 9/18/2020
Five Year Review (FYR) Dates: 09/18/2025
Promulgated Under: 119
Statutory Authority: 5703.05, 5747.08(L)
Rule Amplifies: 5747.08