Ohio Code § 718.81

§ 718.81.

If a term used in sections 718.80 to 718.95 of the Revised Code that is not otherwise defined in this chapter is used in a comparable context in

both the laws of the United States relating to federal income tax and in Title LVII

of the Revised Code and the use is not consistent, then the use of the term in the

laws of the United States relating to federal income tax shall have control over the

use of the term in Title LVII of the Revised Code, unless the term is defined in Chapter

5703. of the Revised Code, in which case the definition in that chapter shall control.  Any reference in this chapter to the Internal Revenue Code includes other laws of

the United States related to federal income taxes.  If a term is defined in both this section and section 718.01 of the Revised Code , the definition in this section shall control for all uses of that term in sections 718.80 through 718.95 of the Revised Code . As used in sections 718.80 to 718.95 of the Revised Code only: (A) “ Municipal taxable income ” means income apportioned or sitused to the municipal corporation under section 718.82 of the Revised Code , as applicable, reduced by any pre-2017 net operating loss carryforward available

to the person for the municipal corporation. (B) “ Adjusted federal taxable income ,” for a person required to file as a C corporation, or for a person that has elected

to be taxed as a C corporation as described in division (D)(5) of section 718.01 of the Revised Code , means a C corporation's federal taxable income before net operating losses and special

deductions as determined under the Internal Revenue Code, adjusted as follows: (1) Deduct intangible income to the extent included in federal taxable income.  The deduction shall be allowed regardless of whether the intangible income relates

to assets used in a trade or business or assets held for the production of income. (2) Add an amount equal to five per cent of intangible income deducted under division

(B)(1) of this section, but excluding that portion of intangible income directly related

to the sale, exchange, or other disposition of property described in section 1221 of the Internal Revenue Code . (3) Add any losses allowed as a deduction in the computation of federal taxable income

if the losses directly relate to the sale, exchange, or other disposition of an asset

described in section 1221 or 1231 of the Internal Revenue Code . (4)(a) Except as provided in division (B)(4)(b) of this section, deduct income and gain

included in federal taxable income to the extent the income and gain directly relate

to the sale, exchange, or other disposition of an asset described in section 1221 or 1231 of the Internal Revenue Code . (b) Division (B)(4)(a) of this section does not apply to the extent the income or gain

is income or gain described in section 1245 or 1250 of the Internal Revenue Code . (5) Add taxes on or measured by net income allowed as a deduction in the computation

of federal taxable income. (6) In the case of a real estate investment trust or regulated investment company, add

all amounts with respect to dividends to, distributions to, or amounts set aside for

or credited to the benefit of investors and allowed as a deduction in the computation

of federal taxable income. (7) Deduct, to the extent not otherwise deducted or excluded in computing federal taxable

income, any income derived from a transfer agreement or from the enterprise transferred

under that agreement under section 4313.02 of the Revised Code . (8) Deduct exempt income to the extent not otherwise deducted or excluded in computing

adjusted federal taxable income. (9) Deduct any net profit of a pass-through entity owned directly or indirectly by the

taxpayer and included in the taxpayer's federal taxable income unless an affiliated

group of corporations includes that net profit in the group's federal taxable income

in accordance with division (E)(3)(b) of section 718.86 of the Revised Code . (10) Add any loss incurred by a pass-through entity owned directly or indirectly by the

taxpayer and included in the taxpayer's federal taxable income unless an affiliated

group of corporations includes that loss in the group's federal taxable income in

accordance with division (E)(3)(b) of section 718.86 of the Revised Code . If the taxpayer is not a C corporation, is not a disregarded entity that has made

the election described in division (L)(2) of section 718.01 of the Revised Code , and is not a publicly traded partnership that has made the election described in division (D)(5) of section 718.01 of the Revised Code , the taxpayer shall compute adjusted federal taxable income under this section as

if the taxpayer were a C corporation, except guaranteed payments and other similar

amounts paid or accrued to a partner, former partner, shareholder, former shareholder,

member, or former member shall not be allowed as a deductible expense unless such

payments are a pension or retirement benefit payment paid to a retired partner, retired

shareholder, or retired member or are in consideration for the use of capital and

treated as payment of interest under section 469 of the Internal Revenue Code or United States treasury regulations.  Amounts paid or accrued to a qualified self-employed retirement plan with respect

to a partner, former partner, shareholder, former shareholder, member, or former member

of the taxpayer, amounts paid or accrued to or for health insurance for a partner,

former partner, shareholder, former shareholder, member, or former member, and amounts

paid or accrued to or for life insurance for a partner, former partner, shareholder,

former shareholder, member, or former member shall not be allowed as a deduction. Nothing in division (B) of this section shall be construed as allowing the taxpayer

to add or deduct any amount more than once or shall be construed as allowing any taxpayer

to deduct any amount paid to or accrued for purposes of federal self-employment tax. (C) “Taxpayer” has the same meaning as in section 718.01 of the Revised Code , except that “taxpayer” does not include natural persons or entities subject to the

tax imposed under Chapter 5745. of the Revised Code.  “ Taxpayer ” may include receivers, assignees, or trustees in bankruptcy when such persons are

required to assume the role of a taxpayer. (D) “ Tax return ” or “ return ” means the notifications and reports required to be filed pursuant to sections 718.80 to 718.95 of the Revised Code for the purpose of reporting municipal income taxes, and includes declarations of

estimated tax. (E) “ Assessment ” means a notice of underpayment or nonpayment of a tax issued pursuant to section 718.90 of the Revised Code .