Ohio § 5725.33

§ 5725.33.

(A) Except as otherwise provided in this section, terms used in this section have the

same meaning as section 45D of the Internal Revenue Code , 1 any related proposed, temporary, or final regulations promulgated under the Internal

Revenue Code, 2 any rules or guidance of the internal revenue service or the United States department

of the treasury, and any related rules or guidance issued by the community development

financial institutions fund of the United States department of the treasury, as such

law, regulations, rules, and guidance exist on October 16, 2009. As used in this section: (1) “ Adjusted purchase price ” means the amount paid for the portion of a qualified equity investment approved

or certified by the director of development services for a qualified community development

entity in accordance with rules adopted under division (E) of this section. (2) “ Applicable percentage ” means zero per cent for each of the first two credit allowance dates, seven per

cent for the third credit allowance date, and eight per cent for the four following

credit allowance dates. (3) “ Credit allowance date ” means the date, on or after January 1, 2010, a qualified equity investment is made

and each of the six anniversary dates thereafter.  For qualified equity investments made after October 16, 2009, but before January

1, 2010, the initial credit allowance date is January 1, 2010, and each of the six

anniversary dates thereafter is on the first day of January of each year. (4) “ Qualified community development entity ” includes only entities: (a) That have entered into an allocation agreement with the community development financial

institutions fund of the United States department of the treasury with respect to

credits authorized by section 45D of the Internal Revenue Code ; (b) Whose service area includes any portion of this state;  and (c) That will designate an equity investment in such entities as a qualified equity investment

for purposes of both section 45D of the Internal Revenue Code and this section. (5) “ Qualified equity investment ” is limited to an equity investment in a qualified community development entity that: (a) Is acquired after October 16, 2009, at its original issuance solely in exchange for

cash; (b) Has at least eighty-five per cent of its cash purchase price used by the qualified

community development entity to make qualified low-income community investments in

qualified active low-income community businesses in this state, provided that in the

seventh year after a qualified equity investment is made, only seventy-five per cent

of such cash purchase price must be used by the qualified community development entity

to make qualified low-income community investments in those businesses;  and (c) Is designated by the issuer as a qualified equity investment. “ Qualified equity investment ” includes any equity investment that would, but for division (A)(5)(a) of this section,

be a qualified equity investment in the hands of the taxpayer if such investment was

a qualified equity investment in the hands of a prior holder. (B) There is hereby allowed a nonrefundable credit against the tax imposed by section 5725.18 of the Revised Code for an insurance company holding a qualified equity investment on the credit allowance

date occurring in the calendar year for which the tax is due.  The credit shall equal the applicable percentage of the adjusted purchase price,

subject to divisions (B)(1) and (2) of this section: (1) For the purpose of calculating the amount of qualified low-income community investments

held by a qualified community development entity, an investment shall be considered

held by a qualified community development entity even if the investment has been sold

or repaid, provided that, at any time before the seventh anniversary of the issuance

of the qualified equity investment, the qualified community development entity reinvests

an amount equal to the capital returned to or received or recovered by the qualified

community development entity from the original investment, exclusive of any profits

realized and costs incurred in the sale or repayment, in another qualified low-income

community investment in this state within twelve months of the receipt of such capital.  If the qualified low-income community investment is sold or repaid after the sixth

anniversary of the issuance of the qualified equity investment, the qualified low-income

community investment shall be considered held by the qualified community development

entity through the seventh anniversary of the qualified equity investment's issuance. (2) The qualified low-income community investment made in this state shall equal the

sum of the qualified low-income community investments in each qualified active low-income

community business in this state, not to exceed two million five hundred sixty-four

thousand dollars, in which the qualified community development entity invests, including

such investments in any such businesses in this state related to that qualified active

low-income community business through majority ownership or control. The credit shall be claimed in the order prescribed by section 5725.98 of the Revised Code .  If the amount of the credit exceeds the amount of tax otherwise due after deducting

all other credits in that order, the excess may be carried forward and applied to

the tax due for not more than four ensuing years. By claiming a tax credit under this section, an insurance company waives its rights

under section 5725.222 of the Revised Code with respect to the time limitation for the assessment of taxes as it relates to

credits claimed that later become subject to recapture under division (E) of this

section. (C) The aggregate amount of credit allocations made by the director of development services

under this section and sections 5726.54 , 5729.16 , and 5733.58 of the Revised Code each fiscal year shall not exceed ten million dollars. (D) If any amount of the federal tax credit allowed for a qualified equity investment

for which a credit was received under this section is recaptured under section 45D of the Internal Revenue Code , or if the director of development services determines that an investment for which

a tax credit is claimed under this section is not a qualified equity investment or

that the proceeds of an investment for which a tax credit is claimed under this section

are used to make qualified low-income community investments other than in a qualified

active low-income community business in this state, all or a portion of the credit

received on account of that investment shall be paid by the insurance company that

received the credit to the superintendent of insurance.  The amount to be recovered shall be determined by the director of development services

pursuant to rules adopted under division (E) of this section.  The director shall certify any amount due under this division to the superintendent

of insurance, and the superintendent shall notify the treasurer of state of the amount

due.  Upon notification, the treasurer shall invoice the insurance company for the amount

due.  The amount due is payable not later than thirty days after the date the treasurer

invoices the insurance company.  The amount due shall be considered to be tax due under section 5725.18 of the Revised Code , and may be collected by assessment without regard to the time limitations imposed

under section 5725.222 of the Revised Code for the assessment of taxes by the superintendent.  All amounts collected under this division shall be credited as revenue from the

tax levied under section 5725.18 of the Revised Code . (E) The tax credits authorized under this section and sections 5726.54 , 5729.16 , and 5733.58 of the Revised Code shall be administered by the development services agency.  The director of development services, in consultation with the tax commissioner

and the superintendent of insurance, pursuant to Chapter 119. of the Revised Code,

shall adopt rules for the administration of this section and sections 5726.54 , 5729.16 , and 5733.58 of the Revised Code .  The rules shall provide for determining the recovery of credits under division (D)

of this section and under sections 5726.54 , 5729.16 , and 5733.58 of the Revised Code , including prorating the amount of the credit to be recovered on any reasonable basis,

the manner in which credits may be allocated among claimants, and the amount of any

application or other fees to be charged in connection with a recovery. (F) The director of development services is authorized to charge reasonable application

and other fees in connection with the administration of tax credits authorized by

this section and sections 5726.54 , 5729.16 , and 5733.58 of the Revised Code .  Any such fees collected shall be credited to the tax incentives operating fund created

in section 122.174 of the Revised Code . (G) Tax credits earned or allocated to a pass-through entity, as that term is defined

in section 5733.04 of the Revised Code , under section 5725.33 , 5726.54 , 5729.16 , or 5733.58 of the Revised Code may be allocated to persons having a direct or indirect ownership interest in the

pass-through entity for such persons' direct use in accordance with the provisions

of any mutual agreement between such persons. 1

 26 U.S.C.A. § 45D. 2

 26 U.S.C.A. § 1 et seq.