Ohio § 5733.0510

§ 5733.0510.

(A) As used in this section: (1) “ Qualifying taxpayer ” means either of the following: (a) A person that is an electric company or a combined company, but only if the person

was subject to and paid the tax imposed by section 5727.30 of the Revised Code for gross receipts received during the period of May 1, 2000, through April 30, 2001; (b) Any taxpayer not described in division (A)(1)(a) of this section if a person described

in division (A)(1)(a) of this section transfers all or a portion of its assets or

equity directly or indirectly to the taxpayer, the transfer occurred as part of an

entity organization or reorganization, or subsequent entity organization or reorganization,

and the gain or loss with respect to the transfer is not recognized in whole or in

part for federal income tax purposes under the Internal Revenue Code on account of

a transfer as part of an equity organization or reorganization, or subsequent organization

or reorganization. (2) “ Qualifying taxable event ” means any event resulting in the recognition for federal income tax purposes of

gain or loss in connection with any direct or indirect sale, direct or indirect exchange,

direct or indirect transfer, or direct or indirect retirement of any qualifying asset. (3) “ Qualifying asset ” means any asset shown on the qualifying taxpayer's books and records on December

31, 2000, in accordance with generally accepted accounting principles, including the

cost of, or any portion of the cost of, any asset acquired after December 31, 2000,

where such asset was acquired as a result of a tax-free or tax-deferred exchange of

a qualifying asset. (4) “ Net income ” has the same meaning as in division (I) of section 5733.04 of the Revised Code . (5) “ Book-tax differential ” means the difference, if any, between an asset's net book value shown on the qualifying

taxpayer's books and records on December 31, 2000, in accordance with generally accepted

accounting principles, and such asset's adjusted basis on December 31, 2000.  The book-tax differential may be a negative number. (6) “ Qualifying regulatory asset ” means those qualifying assets that, as of December 31, 2000, are no longer included

in federal energy regulatory commission uniform system of accounts 101 through 106

or are deferred expenses for operation or maintenance, or deferred costs associated

with leaseback transactions on generating units, that have been authorized by a regulatory

agency for recovery from customers in a future period and that, as of December 31,

2000, are subject to transition cost recovery under Chapter 4928. of the Revised Code

or similar laws of another state. (B)(1) If, with respect to a qualifying asset, there occurs a qualifying taxable event and

if the gain or loss recognized is a type of gain or loss that is apportioned as provided

in division (B) of section 5733.05 of the Revised Code , the qualifying taxpayer shall reduce its net income by the amount of the book-tax

differential for that qualifying asset, if the book-tax differential is positive,

and the qualifying taxpayer shall increase its net income by the absolute value of

the amount of the book-tax differential for that qualifying asset, if the book-tax

differential is negative. (2) If, with respect to a qualifying asset, there occurs a qualifying taxable event and

if the gain or loss recognized is a type of gain or loss that is allocated to this

state as provided in section 5733.051 of the Revised Code , the qualifying taxpayer shall reduce its income allocated to this state by the amount

of the book-tax differential for that qualifying asset, if the book-tax differential

is positive, and the qualifying taxpayer shall increase its income allocated to this

state by the absolute value of the amount of the book-tax differential for that qualifying

asset, if the book-tax differential is negative. (3) If, with respect to a qualifying taxable event, the person uses the installment sales

method to recognize gain over more than one year, the adjustments required by divisions

(B)(1) and (2) of this section shall not be made entirely in the tax year immediately

following the taxable year in which the qualifying taxable event occurred but shall

be made in part in such tax year and in subsequent tax years in proportion to the

gain recognized for federal income tax purposes in each corresponding taxable year. (4) If the recognized gain or loss to which divisions (B)(1) and (2) of this section

refer is zero solely because at the time of the qualifying taxable event the amount

realized by the qualifying taxpayer with respect to that event equals the qualifying

asset's adjusted basis, then solely for the purposes of division (B) of this section,

the amount realized shall be deemed to be one dollar greater than the qualifying asset's

adjusted basis. (5) Whenever there is a qualifying taxable event, all qualifying regulatory assets directly

or indirectly associated with a qualifying asset in connection with that event shall

be considered to have been disposed of as part of the event for an amount realized

of one dollar. (C) Nothing in division (B) of this section shall be construed to allow for an adjustment

more than once with respect to the same qualifying asset. (D) Nothing in this section shall be construed to allow more than one corporation to

claim an adjustment with respect to the same qualifying asset.