122:16-1-04 Tax credit per cent and term.  

  • Text Box: ACTION: Original Text Box: DATE: 05/11/2016 2:47 PM

     

     

     

     

     

     

     

     

    NOTICE OF PUBLIC HEARING

     

    A public hearing will be held by the Ohio Development Services Agency on Monday, June 13, 2016 at 10:00 a.m. in Conference Room 1932 on the 19th Floor of the Vern Riffe Center, located at 77 South High St., Columbus, Ohio 43215. The purpose of the hearing is to solicit public comment on the following rules:

     

    Ohio Job Creation Tax Credit

     

    ·         122:7-1-01, titled "Definitions". This proposed rule amendment makes changes to program definitions necessitated by passage of HB 64 and provides additional clarifications for effective program management:

    o   Adds a definition for "affiliated entities" which was omitted from the previous rule

    changes;

    o   Removes the definition of "date of initial operations" which is no longer applicable to the

    program;

    o   In all places where applicable, replaced "department of development" with "development services agency";

    o   Adds a definition for "effective date";

    o   Adds a definition of "excess income tax revenue" for purposes of credit limits established

    by 122:7-1-06;

    o   Clarifies the defined term "fixed-asset investment";

    o   Adds a definition for "income tax revenue" for purposes of reporting;

    o   Clarifies the defined term "maintain operations";

    o   Removes the definition of "payroll" which is now defined by statute;

    o   Adds a definition for "project location";

    o   Clarifies the defined term "relocated employees";

    o   Adds a definition for "substantially meets" for purposes of recapture;

    o   Adds a definition for "substantially maintains" for purposes of recapture;

    o   Clarifies the defined terms "tax year" and "taxable year" as a result of the imposition of

    the CAT;

    o   Removes the definition of "transferred income tax revenue" which is no longer applicable

    to the program.

    ·         122:7-1-02, titled "Meetings of the tax credit authority". This proposed rule amendment updates

    the agency name from "department of development" to "development services agency".

    ·         122:7-1-03, titled "Officers".   This proposed rule amendment updates the agency name from

    "department of development" to "development services agency".

    ·         122:7-1-04, titled "Fees". This proposed rule amendment updates the agency name from "department of development" to "development services agency".

    ·         122:7-1-05, titled "Eligibility requirements". This proposed rule amendment makes the following

    changes:

     

     

     

     

     

     

    o   Updates the agency name from "department of development" to "development services agency";

    o   Clarifies eligibility requirements to both participate in the program and receive an annual tax credit certificate;

    o   Links the average hourly wage rate of new employees to 150% of the federal minimum wage at the time the authority approves the project;

    o   Clarifies that projects approved with a to-be-determined project location must receive a letter of local support from the jurisdiction chosen before entering into an agreement with the tax credit authority;

    o   Provides guidance regarding section 122.17(C) of the Revised Code, which is required by the Code but was omitted from previous rule submissions;

    o   Clarifies that taxpayers who become ineligible to receive a tax credit certificate are subject to remedial action as set forth by 122.17(E) of the Revised Code;

    o   Removes the requirement for applicants to certify the amount of income tax revenue for retained employees at the project location.

    ·         122-7-1-06, titled "Tax credit per cent and term". This proposed rule amendment makes the

    following changes:

    o   Indicates that the value of the incentive to the taxpayer shall not exceed 75% of the excess income tax revenue to be received by the state from new employees at the project location unless an extraordinary circumstance merits such an exception;

    o   Indicates that the value of the incentive to the taxpayer may not exceed 100% of the excess income tax revenue to be received by the state from new employees at the project location;

    o   Clarifies how the "pay increase factor" shall be determined annually by the tax credit authority, tying it directly to the average per cent change in a specific consumer price index based on available data.

    ·         122-7-1-07, titled "Reports". This proposed rule amendment makes the following changes:

    o   Removes the requirement to report baseline income tax revenue, excess income tax revenue, and transferred income tax revenue, and adds a requirement to report Ohio employee payroll;

    o   Requires the taxpayer to obtain the necessary information from professional employer organizations and requires professional employer organizations to maintain records for the same period of time as the taxpayer.

    ·         122-7-1-08, titled "Remedies". This proposed rule amendment makes the following changes:

    o   Clarifies that remedial action can be taken against a taxpayer for failure to achieve either the new job or new payroll commitment identified in the agreement by the metric evaluation date;

    o   Clarifies that remedial action can be taken for violation of section 122.17(D)(8) even if certificates have not been issued to the taxpayer.

    ·         122:7-1-09, titled "Relocation of employees". This proposed rule amendment makes the following

    changes:

    o   Clarifies the reporting required when an employee relocates from another location in Ohio to the project location;

    o   Removes the requirement for taxpayers to notify the local authority if the relocation moves the employee within the same local jurisdiction.

    Ohio Job Retention Tax Credit

    ·         122:16-1-01, titled "Definitions". This proposed rule amendment makes changes to program definitions necessitated by passage of HB 64 and provides additional clarifications for effective program management:

    o   Adds a definition for "affiliated entities" which was omitted from the previous rule

    changes;

    o   In all places where applicable, replaced "department of development" with "development services agency";

    o   Adds a definition for "effective date";

    o   Adds a definition of "excess income tax revenue" for purposes of credit limits established

    by 122:16-1-04;

    o   Adds a definition for "income tax revenue" for purposes of reporting;

    o   Clarifies the defined term "maintain operations";

    o   Adds a definition for "metric evaluation date";

    o   Clarifies the defined term "relocated employees";

    o   Clarifies the defined term "significant retention" to match the statute;

    o   Adds a definition for "substantially maintain" for purposes of recapture;

    o   Clarifies the defined terms "tax year" and "taxable year" as a result of the imposition of the CAT;

    o   Adds a definition for "taxpayer".

    ·         122:16-1-02, titled "Fees". This proposed rule amendment corrects an error in the identified

    servicing fee amount.

    ·         122:16-1-03, titled "Eligibility requirements". This proposed rule amendment makes the following changes:

    o   Clarifies eligibility requirements to both participate in the program and receive an annual tax credit certificate;

    o   Clarifies that projects approved with a to-be-determined project location must receive a letter of local support from the jurisdiction chosen before entering into an agreement with the tax credit authority;

    o   Corrections have been made to match defined terms in 122:16-1-01 and statutory language.

    ·         122:16-1-04, titled "Tax credit per cent and term". This proposed rule amendment makes the following changes:

    o   Indicates that the value of the incentive to the taxpayer shall not exceed 75% of the excess income tax revenue to be received by the state from retained employees at the project location;

    o   Clarifies factors to be considered by the tax credit authority as a result of the conversion to a payroll-based incentive

    ·         122:16-1-05, titled "Reports". This proposed rule amendment makes the following changes:

    o   Removes the requirement to report baseline income tax revenue, excess income tax revenue, and transferred income tax revenue, and adds a requirement to report Ohio employee payroll;

    o   Requires the taxpayer to obtain the necessary information from professional employer organizations and requires professional employer organizations to maintain records for the same period of time as the taxpayer.

    ·         122:16-1-06, titled "Remedies". This proposed rule amendment fixes a grammatical error in the

    current version.

    ·         122:16-1-07, titled "Relocation of employees". This proposed rule amendment makes the following changes:

    o   Clarifies the reporting required when an employee relocates from another location in Ohio to the project location;

    o   Removes the requirement for taxpayers to notify the local authority if the relocation moves the employee within the same local jurisdiction;

    o   Adds the ability for the Director to recommend a remedial action if a taxpayer violates the provisions of the rule.

    All interested parties are invited to attend the hearing and present oral and/or written testimony. Written comments may also be submitted to the attention of Lisa Dinger, Compliance and Administration Officer, Ohio Development Services Agency, at 77 South High St., 29th floor, Columbus, Ohio 43215, or by electronic mail at Rule.Comment@development.ohio.gov.

Document Information

File Date:
2016-05-11
Five Year Review:
Yes
CSI:
Yes
Notice File:
122$16_NO_296459_20160511_1447.pdf
Rule File:
122$16-1-04_PH_OF_A_RU_20160511_1447.pdf
RSFA File:
122$16-1-04_PH_OF_A_RS_20160511_1447.pdf
Related Chapter/Rule NO.: (1)
Ill. Adm. Code 122:16-1-04. Tax credit per cent and term