Bill Text: OH SB145 | 2009-2010 | 128th General Assembly | Introduced

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Bill Title: To create a tax credit for wages paid by employers to employees who have been convicted of felonies.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2009-06-16 - To Ways & Means & Economic Development [SB145 Detail]

Download: Ohio-2009-SB145-Introduced.html

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As Introduced

128th General Assembly Regular Session 2009-2010

S. B. No. 145

Senator Miller, R. 

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A BILL

To amend sections 5733.98 and 5747.98 and to enact

1

sections 5733.421 and 5747.391 of the Revised Code

2

to create a tax credit for wages paid by employers

3

to employees who have been convicted of felonies.

4

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

Section 1. That sections 5733.98 and 5747.98 be amended and	5
sections 5733.421 and 5747.391 of the Revised Code be enacted to	6
read as follows:	7

Sec. 5733.421.  (A) As used in this section:

8

(1) "Qualified reforming felon" means an individual who:

9

(a) Has been convicted of a felony under any statute of the	10
United States or any state;	11

(b) Was hired by a taxpayer within one year after the	12
conviction or, if sentenced to a term of incarceration, was hired	13
within one year after being released from incarceration; and	14

(c) Is a member of a family that, in the six months	15
immediately preceding the date of hiring, had an income that, on	16
an annual basis, would be seventy per cent or less of the most	17
recent lower living standard calculated by the federal bureau of	18
labor statistics.	19

(2) "Family" means an individual, an individual's spouse, and	20
children.	21

(3) "Wages" has the same meaning as in section 3306 of the	22
Internal Revenue Code.	23

(B)(1) Beginning in tax year 2009, a nonrefundable credit is	24
allowed against the tax imposed by section 5733.06 of the Revised	25
Code for the wages paid by a taxpayer to a qualified reforming	26
felon who works at least one hundred twenty hours for the taxpayer	27
during the taxpayer's taxable year. The amount of the credit shall	28
be calculated as follows:	29

(a) For each qualified reforming felon who works at least	30
four hundred hours during the taxable year, the credit equals	31
forty per cent of the wages paid to the qualified reforming felon,	32
but shall not exceed two thousand four hundred dollars per	33
qualified reforming felon.	34

(b) For each qualified reforming felon who works less than	35
four hundred hours but at least one hundred twenty hours during	36
the taxable year, the credit equals twenty-five per cent of the	37
wages paid to the qualified reforming felon, but shall not exceed	38
one thousand five hundred dollars per qualified reforming felon.	39

The credit shall be claimed in the order required under	40
section 5733.98 of the Revised Code. The credit, to the extent it	41
exceeds the taxpayer's tax liability for the tax year after	42
allowance for any other credits that precede the credit under that	43
section in that order, may be carried forward for the next five	44
succeeding tax years, but the amount of any excess credit allowed	45
in any such year shall be deducted from the balance carried	46
forward to the succeeding year.	47

(2) A taxpayer who received federally funded payments for	48
on-the-job training of a qualified reforming felon may not claim	49
the credit allowed under this section for any portion of the wages	50
paid to that qualified reforming felon.	51

(3) A taxpayer may not claim the credit allowed under this	52
section for any portion of the wages paid to a qualified reforming	53
felon for services that were the same as, or substantially similar	54
to, services that, but for a strike or lockout, would have been	55
performed by another employee.	56

(4) If a qualified reforming felon's employment is terminated	57
during the taxable year and the qualified reforming felon was	58
employed by the taxpayer for less than twelve months, the taxpayer	59
may not claim the full amount of the credit allowed under this	60
section unless the qualified reforming felon voluntarily	61
terminated employment; was unable to continue employment due to a	62
disability or death; or was terminated for cause. If a qualified	63
reforming felon's employment is terminated for any other reason,	64
the amount of the credit to which the taxpayer is entitled under	65
this section is reduced by a percentage equal to the percentage of	66
the taxable year that the qualified reforming felon was not	67
employed by the taxpayer.	68

(C) All files, statements, returns, reports, papers, or	69
documents of any kind relating to qualified reforming felons or	70
their families are not public records under section 149.43 of the	71
Revised Code.	72

Sec. 5733.98.  (A) To provide a uniform procedure for	73
calculating the amount of tax imposed by section 5733.06 of the	74
Revised Code that is due under this chapter, a taxpayer shall	75
claim any credits to which it is entitled in the following order,	76
except as otherwise provided in section 5733.058 of the Revised	77
Code:	78

(1) For tax year 2005, the credit for taxes paid by a	79
qualifying pass-through entity allowed under section 5733.0611 of	80
the Revised Code;	81

(2) The credit allowed for financial institutions under	82
section 5733.45 of the Revised Code;	83

(3) The credit for qualifying affiliated groups under section	84
5733.068 of the Revised Code;	85

(4) The subsidiary corporation credit under section 5733.067	86
of the Revised Code;	87

(5) The savings and loan assessment credit under section	88
5733.063 of the Revised Code;	89

(6) The credit for recycling and litter prevention donations	90
under section 5733.064 of the Revised Code;	91

(7) The credit for employers that enter into agreements with	92
child day-care centers under section 5733.36 of the Revised Code;	93

(8) The credit for employers that reimburse employee child	94
care expenses under section 5733.38 of the Revised Code;	95

(9) The credit for maintaining railroad active grade crossing	96
warning devices under section 5733.43 of the Revised Code;	97

(10) The credit for purchases of lights and reflectors under	98
section 5733.44 of the Revised Code;	99

(11) The job retention credit under division (B) of section	100
5733.0610 of the Revised Code;	101

(12) The credit for tax years 2008 and 2009 for selling	102
alternative fuel under section 5733.48 of the Revised Code;	103

(13) The second credit for purchases of new manufacturing	104
machinery and equipment under section 5733.33 of the Revised Code;	105

(14) The job training credit under section 5733.42 of the	106
Revised Code;	107

(15) The credit for qualified research expenses under section	108
5733.351 of the Revised Code;	109

(16) The enterprise zone credit under section 5709.66 of the	110
Revised Code;	111

(17) The credit for the eligible costs associated with a	112
voluntary action under section 5733.34 of the Revised Code;	113

(18) The credit for employers that establish on-site child	114
day-care centers under section 5733.37 of the Revised Code;	115

(19) The ethanol plant investment credit under section	116
5733.46 of the Revised Code;	117

(20) The credit for employers that employ qualified reforming	118
felons under section 5733.421 of the Revised Code;	119

(21) The credit for purchases of qualifying grape production	120
property under section 5733.32 of the Revised Code;	121

(21)(22) The export sales credit under section 5733.069 of	122
the Revised Code;	123

(22)(23) The credit for research and development and	124
technology transfer investors under section 5733.35 of the Revised	125
Code;	126

(23)(24) The enterprise zone credits under section 5709.65 of	127
the Revised Code;	128

(24)(25) The credit for using Ohio coal under section 5733.39	129
of the Revised Code;	130

(25)(26) The credit for small telephone companies under	131
section 5733.57 of the Revised Code;	132

(26)(27) The credit for eligible nonrecurring 9-1-1 charges	133
under section 5733.55 of the Revised Code;	134

(27)(28) For tax year 2005, the credit for providing programs	135
to aid the communicatively impaired under division (A) of section	136
5733.56 of the Revised Code;	137

(28)(29) The research and development credit under section	138
5733.352 of the Revised Code;	139

(29)(30) For tax years 2006 and subsequent tax years, the	140
credit for taxes paid by a qualifying pass-through entity allowed	141
under section 5733.0611 of the Revised Code;	142

(30)(31) The refundable credit for rehabilitating a historic	143
building under section 5733.47 of the Revised Code;	144

(31)(32) The refundable jobs creation credit under division	145
(A) of section 5733.0610 of the Revised Code;	146

(32)(33) The refundable credit for tax withheld under	147
division (B)(2) of section 5747.062 of the Revised Code;	148

(33)(34) The refundable credit under section 5733.49 of the	149
Revised Code for losses on loans made to the Ohio venture capital	150
program under sections 150.01 to 150.10 of the Revised Code;	151

(34)(35) For tax years 2006, 2007, and 2008, the refundable	152
credit allowable under division (B) of section 5733.56 of the	153
Revised Code.	154

(B) For any credit except the credits enumerated in divisions	155
(A)(30)(31) to (34)(35) of this section, the amount of the credit	156
for a tax year shall not exceed the tax due after allowing for	157
any other credit that precedes it in the order required under	158
this section. Any excess amount of a particular credit may be	159
carried forward if authorized under the section creating that	160
credit.	161

Sec. 5747.391.  (A) As used in this section:

162

(1) "Pass-through entity" has the same meaning as in section	163
5733.04 of the Revised Code and includes a sole proprietorship.	164

(2) "Qualified reforming felon" means an individual who:

165

(a) Has been convicted of a felony under any statute of the	166
United States or any state;	167

(b) Was hired by a pass-through entity within one year after	168
the conviction or, if sentenced to a term of incarceration, was	169
hired within one year after being released from incarceration;	170
and	171

(c) Is a member of a family that, in the six months	172
immediately preceding the date of hiring, had an income that, on	173
an annual basis, would be seventy per cent or less of the most	174
recent lower living standard calculated by the federal bureau of	175
labor statistics.	176

(3) "Family" means an individual, an individual's spouse, and	177
children.	178

(4) "Wages" has the same meaning as in section 3306 of the	179
Internal Revenue Code.	180

(B)(1) For taxable years beginning in 2009 or thereafter, a	181
nonrefundable credit is allowed against the tax imposed by section	182
5747.02 of the Revised Code for the wages paid by a pass-through	183
entity to a qualified reforming felon who works at least one	184
hundred twenty hours for the pass-through entity during the	185
entity's taxable year ending in or with the taxpayer's taxable	186
year. The amount of the credit shall be calculated as follows:	187

(a) For each qualified reforming felon who works at least	188
four hundred hours during the entity's taxable year, the credit	189
equals forty per cent of the wages paid to the qualified reforming	190
felon, but shall not exceed two thousand four hundred dollars per	191
qualified reforming felon.	192

(b) For each qualified reforming felon who works less than	193
four hundred hours but at least one hundred twenty hours during	194
the entity's taxable year, the credit equals twenty-five per cent	195
of the wages paid to the qualified reforming felon, but shall not	196
exceed one thousand five hundred dollars per qualified reforming	197
felon.	198

The amount of a taxpayer's credit is the taxpayer's	199
proportionate share of the credit distributed by the pass-through	200
entity. The credit shall be claimed in the order required under	201
section 5747.98 of the Revised Code. The credit, to the extent it	202
exceeds the taxpayer's tax liability for the taxable year after	203
allowance for any other credits that precede the credit under that	204
section in that order, may be carried forward for the next five	205
succeeding taxable years, but the amount of any excess credit	206
allowed in any such year shall be deducted from the balance	207
carried forward to the succeeding year.	208

(2) A taxpayer may not claim the credit allowed under this	209
section for any portion of the wages paid to a qualified reforming	210
felon for whom the pass-through entity received federally funded	211
payments for on-the-job training.	212

(3) A taxpayer may not claim the credit allowed under this	213
section for any portion of the wages paid to a qualified reforming	214
felon for services that were the same as, or substantially similar	215
to, services that, but for a strike or lockout, would have been	216
performed by another employee.	217

(4) If a qualified reforming felon's employment is terminated	218
during the pass-through entity's taxable year ending in or with	219
the taxpayer's taxable year and the qualified reforming felon was	220
employed by the pass-through entity for less than twelve months, a	221
taxpayer may not claim the full amount of the credit allowed under	222
this section unless the qualified reforming felon voluntarily	223
terminated employment; was unable to continue employment due to a	224
disability or death; or was terminated for cause. If a qualified	225
reforming felon's employment is terminated for any other reason,	226
the amount of the credit to which the taxpayer is entitled under	227
this section is reduced by a percentage equal to the percentage of	228
the taxable year that the qualified reforming felon was not	229
employed by the pass-through entity.	230

(C) All files, statements, returns, reports, papers, or	231
documents of any kind relating to qualified reforming felons or	232
their families are not public records under section 149.43 of the	233
Revised Code.	234

Sec. 5747.98.  (A) To provide a uniform procedure for	235
calculating the amount of tax due under section 5747.02 of the	236
Revised Code, a taxpayer shall claim any credits to which the	237
taxpayer is entitled in the following order:	238

(1) The retirement income credit under division (B) of	239
section 5747.055 of the Revised Code;	240

(2) The senior citizen credit under division (C) of section	241
5747.05 of the Revised Code;	242

(3) The lump sum distribution credit under division (D) of	243
section 5747.05 of the Revised Code;	244

(4) The dependent care credit under section 5747.054 of the	245
Revised Code;	246

(5) The lump sum retirement income credit under division (C)	247
of section 5747.055 of the Revised Code;	248

(6) The lump sum retirement income credit under division (D)	249
of section 5747.055 of the Revised Code;	250

(7) The lump sum retirement income credit under division (E)	251
of section 5747.055 of the Revised Code;	252

(8) The low-income credit under section 5747.056 of the	253
Revised Code;	254

(9) The credit for displaced workers who pay for job training	255
under section 5747.27 of the Revised Code;	256

(10) The campaign contribution credit under section 5747.29	257
of the Revised Code;	258

(11) The twenty-dollar personal exemption credit under	259
section 5747.022 of the Revised Code;	260

(12) The joint filing credit under division (G) of section	261
5747.05 of the Revised Code;	262

(13) The nonresident credit under division (A) of section	263
5747.05 of the Revised Code;	264

(14) The credit for a resident's out-of-state income under	265
division (B) of section 5747.05 of the Revised Code;	266

(15) The credit for employers that enter into agreements with	267
child day-care centers under section 5747.34 of the Revised Code;	268

(16) The credit for employers that reimburse employee child	269
care expenses under section 5747.36 of the Revised Code;	270

(17) The credit for adoption of a minor child under section	271
5747.37 of the Revised Code;	272

(18) The credit for purchases of lights and reflectors under	273
section 5747.38 of the Revised Code;	274

(19) The job retention credit under division (B) of section	275
5747.058 of the Revised Code;	276

(20) The credit for selling alternative fuel under section	277
5747.77 of the Revised Code;	278

(21) The second credit for purchases of new manufacturing	279
machinery and equipment and the credit for using Ohio coal under	280
section 5747.31 of the Revised Code;	281

(22) The job training credit under section 5747.39 of the	282
Revised Code;	283

(23) The enterprise zone credit under section 5709.66 of the	284
Revised Code;	285

(24) The credit for the eligible costs associated with a	286
voluntary action under section 5747.32 of the Revised Code;	287

(25) The credit for employers that establish on-site child	288
day-care centers under section 5747.35 of the Revised Code;	289

(26) The ethanol plant investment credit under section	290
5747.75 of the Revised Code;	291

(27) The credit for employers that employ qualified reforming	292
felons under section 5747.391 of the Revised Code;	293

(28) The credit for purchases of qualifying grape production	294
property under section 5747.28 of the Revised Code;	295

(28)(29) The export sales credit under section 5747.057 of	296
the Revised Code;	297

(29)(30) The credit for research and development and	298
technology transfer investors under section 5747.33 of the Revised	299
Code;	300

(30)(31) The enterprise zone credits under section 5709.65 of	301
the Revised Code;	302

(31)(32) The research and development credit under section	303
5747.331 of the Revised Code;	304

(32)(33) The credit for rehabilitating a historic building	305
under section 5747.76 of the Revised Code;	306

(33)(34) The refundable credit for rehabilitating a historic	307
building under section 5747.76 of the Revised Code;	308

(34)(35) The refundable jobs creation credit under division	309
(A) of section 5747.058 of the Revised Code;	310

(35)(36) The refundable credit for taxes paid by a qualifying	311
entity granted under section 5747.059 of the Revised Code;	312

(36)(37) The refundable credits for taxes paid by a	313
qualifying pass-through entity granted under division (J) of	314
section 5747.08 of the Revised Code;	315

(37)(38) The refundable credit for tax withheld under	316
division (B)(1) of section 5747.062 of the Revised Code;	317

(38)(39) The refundable credit under section 5747.80 of the	318
Revised Code for losses on loans made to the Ohio venture capital	319
program under sections 150.01 to 150.10 of the Revised Code.	320

(B) For any credit, except the credits enumerated in	321
divisions (A)(33)(34) to (38)(39) of this section and the credit	322
granted under division (I) of section 5747.08 of the Revised	323
Code, the amount of the credit for a taxable year shall not	324
exceed the tax due after allowing for any other credit that	325
precedes it in the order required under this section. Any excess	326
amount of a particular credit may be carried forward if	327
authorized under the section creating that credit. Nothing in	328
this chapter shall be construed to allow a taxpayer to claim,	329
directly or indirectly, a credit more than once for a taxable	330
year.	331

Section 2. That existing sections 5733.98 and 5747.98 of the	332
Revised Code are hereby repealed.	333