5751.032 Periodic review of tax collected - revenue limits - application of excess.
5751.032 Periodic review of tax collected - revenue limits - application of excess.
(A) As used in this section:
(1) “CAT” refers to the tax levied by this chapter.
(2) “CAT collected” means, with regard to a CAT test period, the net amount of CAT, exclusive of registration fees, received in the period after subtracting any CAT refunded in the period.
(3) “First CAT test period” means the twenty-four month period beginning July 1, 2005, and ending June 30, 2007.
(4) “Second CAT test period” means the twelve-month period beginning July 1, 2008, and ending June 30, 2009.
(5) “Third CAT test period” means the twelve-month period beginning July 1, 2010, and ending June 30, 2011.
(B) Not later than the last day of September immediately following the end of each CAT test period, the tax commissioner shall compute the amount of CAT collected during that test period. If the amount is greater than one hundred ten per cent of the prescribed CAT collections for that period, the commissioner shall proceed as provided in divisions (C) and (D) of this section. For the purposes of division (B) of this section, the prescribed CAT collections for the CAT test periods are as follows:
(1) For the first CAT test period, eight hundred fifteen million dollars;
(2) For the second CAT test period, one billion one hundred ninety million dollars less any amount credited to the commercial activity tax refund fund with regard to the first CAT test period;
(3) For the third CAT test period, one billion six hundred ten million dollars less any amount credited to the commercial activity tax refund fund with regard to the second CAT test period.
(C)(1) If the amount of CAT collected during a CAT test period exceeds one hundred ten per cent of the prescribed CAT collections for that test period, the tax commissioner shall determine a new tax rate equal to the tax rate that would have yielded the prescribed CAT collections during that test period less one-half of the amount of the excess that was certified to the director of budget and management for the test period under division (D) of this section. The tax rate shall be the rate that would have to be imposed under division (A) of section 5751.03 of the Revised Code before any applicable phase-in percentages under section 5751.031 of the Revised Code or otherwise provided by law to yield the prescribed CAT collection after applying any applicable phase-in percentages.
(2) A new tax rate computed under division (C)(1) of this section shall be expressed as a number of mills per dollar, rounded to the nearest one-hundredth of one mill. The rate shall be rounded upward by one-hundredth of one mill only if the next decimal digit is five or more.
(3) Not later than the last day of September following the end of the CAT test period on the basis of which a new tax rate is computed, the tax commissioner shall certify the new tax rate to the governor, the president of the senate, the speaker of the house of representatives, and all other members of the general assembly. The commissioner shall publish the new tax rate by journal entry and provide notice of the new tax rate to taxpayers. The new tax rate shall be the rate imposed under division (A) of section 5751.03 of the Revised Code beginning with the ensuing calendar year, and is subject to any applicable phase-in percentages provided for under section 5751.031 of the Revised Code.
(D) If the amount of CAT collected during a CAT test period exceeds one hundred ten per cent of the prescribed CAT collections for that test period, the tax commissioner shall certify the excess amount to the director of budget and management not later than the last day of September immediately following the end of that test period. The director shall forthwith transfer from the general revenue fund one-half of the amount of the excess so certified to the commercial activity tax refund fund, which is hereby created in the state treasury, and the remaining one-half of the amount of the excess to the budget stabilization fund. All money credited to the commercial activity tax refund fund shall be applied to reimburse the general revenue fund, school district tangible property tax replacement fund, and local government tangible property tax replacement fund for the diminution in revenue caused by the credit provided under division (D) of section 5751.03 of the Revised Code. On or before the last day of May, August, and October of the calendar year that begins after the end of the test period, and on or before the last day of February of the following calendar year, the director of budget and management shall transfer one-fourth of the amount that had been transferred to the commercial activity tax refund fund to each of those funds in the proportions specified under division (B) of section 5751.21 of the Revised Code.
In the calendar year that begins immediately after the year in which a transfer is made to the commercial activity tax refund fund, the tax commissioner shall compute the amount to be credited, under division (D) of section 5751.03 of the Revised Code, to each taxpayer that paid in full the tax imposed under this chapter for the calendar year in which the transfer was made. The credit allowed to each such taxpayer shall equal the amount transferred to the commercial activity tax refund fund multiplied by a fraction, the numerator of which is the amount of tax paid by that taxpayer for that calendar year and the denominator of which is the total of the taxes paid by all such taxpayers for which the credit is allowed. The credit applies only to the calendar year that begins immediately after the year in which a transfer is made to the commercial activity tax refund fund under this division.
(E) It is the intent of the General Assembly to conduct a review of the prescribed CAT collections and rate adjustments provided for under divisions (A) to (D) of this section every two years in conjunction with its biennial budget deliberations, and to establish lower prescribed CAT collections or reduce the rate of tax levied under this chapter on the basis of the following three factors:
(1) The revenue yield of the tax;
(2) The condition of the Ohio economy;
(3) Savings realized by ongoing reform to medicaid and other policy initiatives.
Effective Date: 06-30-2005; 03-30-2006; 2007 HB67 07-03-2007